Contacts: Kimberly Allen Jennifer Howard-Brown
Investor Relations Manager Media Relations Manager
(512) 683-6873 (512) 683-8713
National Instruments Reports Fourth Consecutive Quarter of Revenue Growth
Company Announces First-Ever Dividend, Record Cash Balance
AUSTIN, Texas - July 23, 2003 - National Instruments (Nasdaq: NATI) today
announced revenue of $100.2 million for the second quarter of 2003, a seven
percent increase from the second quarter of 2002, and the fourth consecutive
quarter of year-over-year revenue growth. Fully diluted earnings per share (EPS)
for Q2 were 14 cents, including patent litigation expenses of $0.7 million,
which amounts to $0.01 per share. NI also reported net income of $7.4 million
and a record cash balance of $168 million for Q2 2003, up $10 million from last
quarter.
With more than 42 consecutive quarters of profitable operation, a record cash
balance and the recent reduction to the dividend tax rate, the NI Board of
Directors has declared the company's first-ever quarterly cash dividend of 5
cents per common share, payable Aug. 29, 2003 to shareholders of record Aug. 4,
2003.
"Our investment in R&D continues to pay off. In Q2, we released more new
products than in any quarter in the past six years, including LabVIEW 7 Express,
the most significant upgrade to our flagship software product in a decade.
LabVIEW 7 Express positions us for continued technical leadership well into the
next decade," said Dr. James Truchard, NI CEO. "Additionally, with the company's
track record of strong profitability, we are pleased to declare our first-ever
dividend payment as another way of delivering long-term value to our
shareholders."
Q2 2003 Highlights
Fourth consecutive quarter of year-over-year revenue growth; solid
profitability with diluted EPS of 14 cents
First-ever quarterly dividend payment of 5 cents per common share, record
cash balance of $168 million
Major product introductions, including entire LabVIEW 7 Express product
family, Compact Vision System for industrial machine vision and the NI ELVIS
instrumentation system for higher education
Record number of visits to ni.com and record revenue generated through the
Web store
Successful upgrade of North American ERP Systems to Oracle 11i
Court ruling confirmed jury verdict finding three LabVIEW patents valid and
infringed by The MathWorks Inc.'s Simulink product
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National Instruments Reports Fourth Consecutive Quarter of Revenue Growth
July 23, 2003
Page 2
"With almost $200 million in revenue for the first six months of this year, we
are on target to set a new revenue record in 2003," said Alex Davern, NI CFO.
"We are especially pleased to see our growth increase in Q2 given that U.S.
industrial production decreased at an annual rate of more than three percent in
Q2. We believe this growth is a result of our significant new product
introductions."
Geographically, the growth of revenue in U.S. dollar terms for Q2 2003 as
compared to Q2 2002 was as follows: Asia, up 32 percent; Europe, up seven
percent; and flat in the Americas giving overall growth of seven percent, up
from five percent last quarter. In local currency terms, revenue was up 40
percent in Asia, down seven percent in Europe, and flat in the Americas.
Given the continued uncertainty in global economic conditions, NI anticipates
mid to high single digit, year-over-year revenue growth in Q3 2003. In addition,
the company estimates earnings per share will be in the range of 12 to 16 cents
per share for Q3 2003. This EPS estimate is net of the $1 million NI expects in
patent litigation expenses in Q3.
In conjunction with NIWeek 2003, the company's annual customer and technology
conference, NI will host an analyst conference on Thurs., Aug. 14. More
information about the conference is available by contacting the NI investor
relations department at (512) 683-5242.
Interested parties can listen to a conference call today, July 23, 2003,
beginning at 4 p.m. CDT, at ni.com/call. Replay information will be available by
calling (719) 457-0820, confirmation code #764588, from 7 p.m. CDT July 23,
2003, through July 30, 2003, at 12 a.m. CDT.
This release contains "forward-looking statements," including the company's
ability to deliver record revenue, return on R&D investment, and expected
revenue, earnings, and litigation expenses. These are subject to a number of
risks and uncertainties, including the risk of adverse changes in the global
economy, delays in the release of new products, unforeseen developments in
litigation, fluctuations in customer demand for NI products, manufacturing
inefficiencies, and foreign exchange fluctuations. Actual results may differ
materially from the expected results. The company directs you to documents filed
with the SEC for other risks associated with the company's future performance.
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National Instruments Reports Fourth Consecutive Quarter of Revenue Growth
July 23, 2003
Page 3
About National Instruments
National Instruments (www.ni.com) is a technology pioneer and leader in virtual
instrumentation - a revolutionary concept that has changed the way engineers and
scientists approach measurement and automation. Leveraging the PC and its
related technologies, virtual instrumentation increases productivity and lowers
costs for customers worldwide through easy-to-integrate software, such as the NI
LabVIEW graphical development environment, and modular hardware, such as PXI
modules for data acquisition, instrument control and machine vision.
Headquartered in Austin, Texas, NI has more than 3,000 employees and direct
operations in 40 countries. In 2002, the company sold products to more than
25,000 different companies in more than 80 countries around the world. For the
past four consecutive years, FORTUNE magazine has named NI one of the 100 best
companies to work for in America.
Readers may obtain investment information from the company's investor relations
department at (512) 683-5090, by sending e-mail to nati@ni.com or on the Web at
www.ni.com/nati.
The condensed consolidated balance sheets, statements of income, and cash flows
to follow.
LabVIEW(TM), NI(TM) and ni.com(TM) are trademarks of National Instruments. Other
product and company names listed are trademarks or trade names of their
respective companies.
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National Instruments Reports Fourth Consecutive Quarter of Revenue Growth
July 23, 2003
Page 4
National Instruments
Condensed Consolidated Balance Sheets
(in thousands)
June 30, December 31,
2003 2002
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 28,062 $ 40,240
Short-term investments 140,029 113,638
Accounts receivable, net 61,760 62,981
Inventories 35,896 39,247
Other current assets 18,787 21,860
------------ ------------
Total current assets 284,534 277,966
Property and equipment, net 150,395 152,133
Intangibles, net and other assets 38,835 28,615
------------ ------------
Total assets $ 473,764 $ 458,714
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 25,436 $ 25,578
Accrued expenses 34,099 40,935
------------ ------------
Total current liabilities 59,535 66,513
Deferred income taxes 5,140 5,738
------------ ------------
Total liabilities 64,675 72,251
------------ ------------
Stockholders' equity:
Common stock 516 511
Additional paid-in capital 79,773 72,063
Retained earnings 335,980 321,813
Other (7,180) (7,924)
------------ ------------
Total stockholders' equity 409,089 386,463
------------ ------------
Total liabilities and
stockholders' equity $ 473,764 $ 458,714
============ ============
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National Instruments Reports Fourth Consecutive Quarter of Revenue Growth
July 23, 2003
Page 5
National Instruments
Condensed Consolidated Statements of Income
(in thousands, except per share data)
Three Months Six Months
Ended June 30, Ended June 30,
(unaudited) (unaudited)
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net sales $ 100,165 $ 93,505 $ 199,338 $ 188,244
Cost of sales 27,150 26,603 53,163 51,961
---------- ---------- ---------- ----------
Gross profit 73,015 66,902 146,175 136,283
---------- ---------- ---------- ----------
Sales and marketing 38,124 33,566 76,669 68,974
Research and development 16,876 15,734 32,127 31,667
General and administrative 8,469 7,528 16,806 14,809
Patent litigation 732 1,314 3,434 1,819
---------- ---------- ---------- ----------
Total operating expenses 64,201 58,142 129,036 117,269
---------- ---------- ---------- ----------
Operating income 8,814 8,760 17,139 19,014
Interest income, net 620 839 1,306 1,635
Foreign exchange loss, net 340 217 325 (677)
Other income, net 98 445 119 522
---------- ---------- ---------- ----------
Income before income taxes 9,872 10,261 18,889 20,494
Provision for income taxes 2,468 2,873 4,722 5,738
---------- ---------- ---------- ----------
Net income $ 7,404 $ 7,388 $ 14,167 $ 14,756
========== ========== ========== ==========
Earnings per share:
Basic $ 0.14 $ 0.14 $ 0.28 $ 0.29
========== ========== ========== ==========
Diluted $ 0.14 $ 0.14 $ 0.27 $ 0.27
========== ========== ========== ==========
Weighted average shares
Outstanding:
Basic 51,490 51,449 51,324 51,331
========== ========== ========== ==========
Diluted 53,633 53,974 53,453 53,966
========== ========== ========== ==========
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National Instruments Reports Fourth Consecutive Quarter of Revenue Growth
July 23, 2003
Page 6
National Instruments
Consolidated Statements of Cash Flows
(in thousands)
Six Months Ended
June 30,
(unaudited)
2003 2002
---------- ----------
Cash flow from operating activities:
Net income $ 14,167 $ 14,756
Adjustments to reconcile net income to cash
from operating activities:
Charges to income not requiring cash outlays:
Depreciation and amortization 12,390 9,922
Benefit from deferred income taxes (965) (3,620)
Tax benefit from stock option plans 1,315 1,011
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 1,221 (6,036)
Decrease in inventory 3,351 97
Decrease in prepaid expense and other assets 2,511 336
Increase (decrease) in current liabilities (6,978) 5,024
---------- ----------
Net cash provided by operating activities 27,012 21,490
---------- ----------
Cash flow from investing activities:
Capital expenditures (7,759) (15,607)
Capitalization of internally developed software (8,432) (1,386)
Additions to other intangibles (4,323) (1,489)
Purchases of short-term investments (77,042) (81,026)
Sales of short-term investments 50,651 83,414
---------- ----------
Net cash used in investing activities (46,905) (16,094)
---------- ----------
Cash flow from financing activities:
Proceeds from issuance of common stock, net of
repurchases 7,715 6,095
---------- ----------
Net cash provided by financing activities 7,715 6,095
---------- ----------
Net (decrease) increase in cash and cash equivalents (12,178) 11,491
Cash and cash equivalents at beginning of period 40,240 49,089
---------- ----------
Cash and cash equivalents at end of period $ 28,062 $ 60,580
========== ==========
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