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National Instruments Announces Record Revenues and 22 Percent Growth


Earnings Up 26 Percent Excluding Acquisition Charges

AUSTIN, Texas -- Oct. 21, 1999 -- National Instruments (NASDAQ:NATI) today announced record revenues of $82.7 million and record earnings of $11.4 million for the third quarter of 1999, excluding acquisition charges.

"In addition to our record revenues, we are pleased to deliver 22 percent growth, which is in line with our historical track record and surpasses our minimum Company goal of 20 percent," said James Truchard, President and CEO of National Instruments. "We feel our increased investments in R&D, sales, and marketing spurred our success and I look forward to leading National Instruments in exploiting our future opportunities."

Revenues for the third quarter were $82.7 million, up 22 percent from $67.9 million in the third quarter of 1998. Geographically, the breakdown of revenue growth for the quarter compared to the third quarter of 1998 was as follows: Americas 20 percent revenue growth; Europe 25 percent revenue growth; and Asia/Pacific 23 percent revenue growth.

Excluding acquisition charges of $2.1 million in Q3 1999 and $750,000 in Q3 1998, net income was $11.4 million for Q3 1999 compared to $9.0 million for Q3 1998, an increase of 26 percent. Excluding these acquisition charges, basic earnings per share for Q3 1999 was $0.23, compared to $0.18 in the same period last year and fully diluted earnings per share for Q3 1999 was $0.22, compared with $0.18 per share for Q3 1998.

Including these acquisition charges, net income for the quarter increased by 17 percent to $9.9 million, or $0.20 basic earnings per share, compared to net income of $8.5 million, or $0.17 basic earnings per share, in the third quarter of 1998. Including these acquisition charges, fully diluted earnings per share was $0.19 for the third quarter of 1999 compared to $0.17 for the same period last year.

"The acquisition of GFS on September 1, 1999 allows us to further penetrate the automotive industry with our software and hardware products by building on the success GFS has established in their nearly 20 years of service to the German automotive industry," said Alex Davern, Chief Financial Officer of National Instruments. "We are excited by the technology that GFS brings to National Instruments and are looking forward to seeing the results of their current development initiatives."

About National Instruments
National Instruments, a leading supplier of computer-based measurement and automation products, manufactures hundreds of software and hardware products which, when combined with industry-standard computers, are used for test, measurement, and industrial automation applications.

National Instruments stock is traded on the Nasdaq National Market System under the symbol NATI. Investment information may be obtained from the company's Investor Relations Department by visiting the company's Web site at www.ni.com/nati, sending e-mail to nati@ni.com or by calling (512) 683-5090.

On Thursday, Oct. 21 at 4:00 p.m. CDT, interested parties may listen to the National Instruments quarterly conference call live on the Web by registering on the Company's Web site at www.ni.com/nati Beginning Thursday, Oct. 21 at 7:00 p.m. CDT through Thursday, Oct. 28 at 12:00 a.m. CDT, interested parties may also listen to a replay of the National Instruments quarterly conference call by visiting the company's Web site at www.ni.com/nati or by calling (719) 457-0820; confirmation code # 762731.

This release may contain "forward-looking statements" (as defined under securities laws), which are subject to a number of risks and uncertainties. Actual results may differ materially from the expected results. The Company directs you to documents filed with the SEC for risks associated with the company's future performance.

The condensed consolidated statement of income and balance sheets to follow.



National Instruments
Condensed Consolidated Balance Sheets
(in thousands)

September 30,
1999
(unaudited)
December 31,
1998
ASSETS
Current assets:
 Cash and cash equivalents

$54,674

$51,538

 Short-term investments

66,562

49,158

 Accounts receivable, net

53,914

45,622

 Inventories

20,664

16,454

 Other current assets

14,477

11,624

  Total current assets

210,291

174,396

Property and equipment, net

69,358

66,131

Intangibles and other assets

17,826

9,259

Total assets

297,475

$249,786

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Current portion of long-term debt

$880

$849

 Accounts payable

22,116

17,242

 Accrued expenses

30,799

22,795

  Total current liabilities

53,795

40,886

Long-term debt

5,841

4,379

Deferred income taxes

675

337

  Total liabilities

60,311

45,602

Stockholders' equity:
 Common stock

499

329

 Additional paid-in capital

55,986

51,662

 Retained earnings

184,813

153,601

 Accumulated other comprehensive loss

(4,134)

(1,408)

  Total stockholders' equity

237,164

204,184

  Total liabilities and stockholders' equity

$297,475

$249,786


National Instruments
Condensed Consolidated Statements of Income
(in thousands, except per share data)

Three Months
Ended September 30,
(Unaudited)
Nine Months
Ended September 30,
(Unaudited)
1999 1998 1999 1998
Net sales

$82,724

$67,874

$236,186

$200,997

Cost of sales

19,548

16,286

54,607

47,944

  Gross profit

63,176

51,588

181,579

153,053

Operating expenses:
 Sales and marketing

30,982

24,971

86,679

73,995

 Research and development

13,133

9,603

33,597

26,306

 General and administrative

6,220

5,020

17,413

14,941

  Total operating expenses

50,335

39,594

137,689

115,242

Operating income

12,841

11,994

43,890

37,811

Interest income, net

1,161

651

2,917

2,083

Net foreign exchange gain
 (loss) and other

625

82

(97)

(259)

Income before income taxes
 and cumulative effect of
 accounting change

14,627

12,727

46,710

39,635

Provision for income taxes

4,681

4,200

14,947

13,079

Income before cumulative
 effect of accounting change

9,946

8,527

31,763

26,556

Cumulative effect of
 accounting change
--
--

(552)

--
Net income

$9,946

$8,527

$31,211

$26,556

Basic earnings per share

$0.20

$0.17

$0.63

$0.54

Weighted average shares
outstanding -- basic

49,860

49,275

49,690

49,200

Diluted earnings per share

$0.19

$0.17

$0.60

$0.52

Weighted average shares
outstanding -- diluted

52,570

50,925

51,950

51,150

Contact:

Tara Mason
Investor Relations
National Instruments
(512) 683-6873
Alex Davern
CFO/CIO
National Instruments
(512) 683-6977


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