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National Instruments Announces Record Revenues for Second Quarter 1996


Operating Income Up 50 Percent Over Second Quarter Of 1995

Austin, Texas -- July 23, 1996 -- National Instruments (NASDAQ: NATI) today announced record revenues for the second quarter of fiscal year 1996 ended June 30, 1996. Revenues for the second quarter were $50.2 million, up 24 percent from $40.5 million in the second quarter of 1995, and up 8 percent from the $46.4 million reported in the first quarter of 1996. Including the effect of a $1.0 million charge for in-process research and development acquired during the quarter, income from operations was $8.2 million for the quarter ended June 30, 1996, compared with $5.4 million in 1995, a 50 percent increase. Net income in the quarter was $5.4 million, up 37 percent from $3.9 million a year ago, and down 1 percent from the $5.5 million reported in the immediately prior quarter.

National Instruments reported earnings per share of $0.25 on 21.9 million weighted shares outstanding, compared with earnings per share of $0.18 on 21.5 million weighted shares outstanding in the second quarter of 1995 and $0.25 on 21.7 million weighted average shares outstanding in the first quarter of 1996. The foregoing income from operations, net income and earnings per share amounts include a $1.0 million charge against earnings for the write-off of in-process research and development technology in conjunction with the acquisition of Georgetown Systems, Inc. on April 1, 1996. Excluding the effect of this charge, income from operations would have been $9.2 million, net income would have been $6.1 million, and earnings per share would have been $0.28.

For the six months ended June 30, 1996, revenues were $96.6 million, compared with $80.3 million in the six-month period a year earlier, a 20 percent increase. For the six months ended June 30, 1996, income from operations was $16.6 million, compared with $11.9 million in the six-month period a year earlier, a 40 percent increase. Results for the six-month period ended June 30, 1996 included net income of $10.9 million or $0.50 per share on 21.8 million weighted shares outstanding, compared with $8.1 million and $0.40 per share on 20.2 million weighted shares outstanding for the same period in 1995. Net income increased 34 percent from the six months ended June 30, 1995. Excluding the $1.0 million charge, income from operations for the six month period would have been $17.6 million with net income of $11.5, and earnings per share would have been $0.53.

The balance sheet remained strong, with cash and equivalents and short-term investments totaling $62.1 million, compared with $49.8 million at Dec. 31, 1995; total assets stood at $151.5 million at June 30, 1996 compared with $137.1 million at Dec. 31, 1995. Inventory turns of 4.0 at June 30, 1996 have improved over turns of 2.7 at Dec. 31, 1995.

In other Company news, Director Jim Smith has left the Board of National Instruments to accept the position of Executive Vice President and Chief Financial Officer for Alamo Group, Inc. (Seguin, Texas).

"We appreciate Jim's service and regret he chose to leave the Board. We wish him the best in his new position with Alamo Group," said Dr. James Truchard, President and Chief Executive Officer of National Instruments.

National Instruments manufactures software and hardware products for PCs and workstations that scientists and engineers use to build virtual instrumentation systems. These systems are used for research and industrial applications such as automated testing, laboratory automation, process monitoring and control, factory automation, physiological monitoring, numerical analysis, and data visualization.

National Instruments is traded on the NASDAQ National Market System under the symbol NATI. More information on National Instruments is available from the company's SEC filings or by contacting the company's Investor Relations Department at 6504 Bridge Point Parkway, Austin, Texas 78730-5039, (512) 349-5090. General company information can also be accessed through the National Instruments InstrumentationWeb at .

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

Product and company names listed are trademarks or tradenames of their respective companies.



National Instruments
Condensed Consolidated Balance Sheets
(in thousands)

June 30
1996
(unaudited)
December 31
1995
ASSETS
Current assets:
Cash and cash equivalents $ 23,575 $ 12,016
Marketable securities 38,508 37,765
Accounts receivable, net 32,429 28,789
Inventories 13,343 15,295
Other current assets 6,391 6,788
Total current assets 114,246 100,653
Intangibles and other assets 4,957 3,853
Property and equipment, net 32,254 32,596
Total assets $151,457 $137,102
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,995 $ 2,137
Accounts payable 10,368 9,783
Accrued expenses 17,294 14,187
Total current liabilities 29,657 26,107
Long-term debt 9,718 11,603
Deferred income taxes 629 656
Total liabilities 40,004 38,366
Stockholder's equity:
Common stock 216 215
Additional paid-in capital 43,431 41,277
Retained earnings 67,992 57,104
Other (186) 140
Total stockholders' equity 111,453 98,736
Total liabilities and stockholders' equity $151,457 $137,102

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

Three Months
Ended June 30,
(unaudited)
Six Months
Ended June 30,
1996 1995 1996 1995
Net sales $50,241 $40,477 $96,649 $80,321
Cost of sales 12,762 9,829 24,028 19,655
Gross profit 37,479 30,648 72,621 60,666
Operating expenses
Sales and marketing 18,077 16,467 35,642 31,945
Research and development 6,8525 5,071 11,827 9,939
General and administrative 4,388 3,673 8,562 6,905
Total operating expenses 29,317 25,211 56,031 48,789
Operating income 8,162 5,437 16,590 11,877
Interest income, net 314 340 571 352
Foreign exchange (loss) gain, net (287) 579 (665) 1,001
Income before income taxes 8,189 6,356 16,496 13,230
Provision for income taxes 2,784 2,414 5,608 5,094
Net income $5,405 $3,942 $ 10,888 $8,136
Earnings per share $ 0.25 $0.18 $ 0.50 $0.40
Weighted average shares outstanding 21,938 21,529 21,780 20,244

Contact:
Investor Relations
National Instruments
(512) 683-5090

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