Contacts: Kimberly Allen Jennifer Howard-Brown
Investor Relations Manager Media Relations Manager
(512) 683-6873 (512) 683-8713
National Instruments Reports Record Third Quarter Revenue,
19% Growth in Net Income
LabVIEW 7 Express Drives Double-Digit Software Growth
AUSTIN, Texas - Oct. 23, 2003 - National Instruments (Nasdaq: NATI) today
reported net income of $8 million, up 19 percent from Q3 2002. Third quarter
revenue was a record $105 million, a 9 percent increase from the third quarter
of 2002, and the fifth consecutive quarter of year-over-year revenue growth.
Fully diluted earnings per share (EPS) for Q3 were 15 cents.
"Our commitment to investing in R&D remains a key driver for our growth," said
Dr. James Truchard, NI CEO. "More than 350 man-years of development on LabVIEW 7
Express and next-generation DAQmx driver software has paid off this quarter with
strong double-digit software growth. With many new products and record sales for
data acquisition, modular instrumentation and distributed I/O products, we
delivered 9 percent growth in revenue and 19 percent growth in profitability."
Q3 2003 Highlights
Record third quarter revenue, fifth consecutive quarter of year-over-year
revenue growth
Revenue up 9 percent, net income up 19 percent year-over-year
Double-digit growth for software sales and record quarterly sales of data
acquisition, modular instrumentation and distributed I/O products
Major product releases, including PXI 100 MS/s mixed-signal suite,
TestStand 3.0, LabWindows/CVI 7.0, Measurement Studio 7.0 and MATRIXx 6.3
Record cash and short term investments of $172 million
Cash dividend of 5 cents per common share
"We were pleased to see our growth improve in Q3 and believe this was a result
of our strong new product output and an early stage recovery in global
manufacturing," said Alex Davern, NI CFO. "We reported record revenue for the
first nine months of the year, reinforcing our expectation of record revenue for
the year."
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National Instruments Reports Record Third Quarter Revenue, 19% Growth in Net
Income
Oct. 23, 2003
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Geographically, the growth of revenue in U.S. dollar terms for Q3 2003 as
compared to Q3 2002 was as follows: Europe, up 18 percent; Asia, up 18 percent;
and Americas, up 1 percent, giving overall growth of 9 percent, up from 7
percent last quarter. In local currency terms, revenue was up 3 percent in
Europe, up 33 percent in Asia, up 1 percent in the Americas, giving overall
local currency growth of 7 percent, up from 3 percent last quarter.
NI anticipates record revenue for 2003 and expects high single-digit,
year-over-year revenue growth in Q4 2003. In addition, the company estimates
earnings per share will be in the range of 20 to 23 cents per share for Q4 2003.
Interested parties can listen to a conference call today, Oct. 23, 2003,
beginning at 4:00 p.m. CDT, at ni.com/call. Replay information will be available
by calling (719) 457-0820, confirmation code #262922, from Oct. 23, 2003 at 7:00
p.m. CDT, through Oct. 30, 2003 at 12:00 a.m. CDT.
This release contains "forward-looking statements," including R&D investment as
a driver for growth, recovery in global manufacturing, and the company's
expectations regarding record revenue for the year, revenue growth for the
fourth quarter, and estimated earnings for the fourth quarter. These statements
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,
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.
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.
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National Instruments Reports Record Third Quarter Revenue, 19% Growth in Net
Income
Oct. 23, 2003
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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, NI, ni.com, MATRIXx, Measurement Studio and TestStand 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 Record Third Quarter Revenue, 19% Growth in Net
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Oct. 23, 2003
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National Instruments
Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2003 2002
------------- ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 34,015 $ 40,240
Short-term investments 138,210 113,638
Accounts receivable, net 68,313 62,981
Inventories 38,448 39,247
Other current assets 18,199 21,860
------------- ------------
Total current assets 297,185 277,966
Property and equipment, net 151,126 152,133
Intangibles, net and other assets 40,365 28,615
------------- ------------
Total assets $ 488,676 $ 458,714
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 26,108 $ 25,578
Accrued expenses 36,021 40,935
------------- ------------
Total current liabilities 62,129 66,513
Deferred income taxes 5,402 5,738
------------- ------------
Total liabilities 67,531 72,251
------------- ------------
Stockholders' equity:
Common stock 518 511
Additional paid-in capital 86,097 72,063
Retained earnings 341,349 321,813
Other (6,819) (7,924)
------------- ------------
Total stockholders' equity 421,145 386,463
------------- ------------
Total liabilities and stockholders' equity $ 488,676 $ 458,714
============= ============
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National Instruments Reports Record Third Quarter Revenue, 19% Growth in Net
Income
Oct. 23, 2003
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National Instruments
Condensed Consolidated Statements of Income
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net sales $ 104,644 $ 96,020 $ 303,983 $ 284,264
Cost of sales 27,434 25,196 80,598 77,157
---------- ---------- ---------- ----------
Gross profit 77,210 70,824 223,385 207,107
---------- ---------- ---------- ----------
Sales and marketing 40,282 36,679 116,951 105,653
Research and development 18,370 16,095 50,497 47,762
General and administrative 8,438 8,224 25,244 22,559
Patent litigation 362 1,220 3,796 3,513
---------- ---------- ---------- ----------
Total operating expenses 67,452 62,218 196,488 179,487
---------- ---------- ---------- ----------
Operating income 9,758 8,606 26,897 27,620
Interest income, net 570 785 1,876 2,419
Foreign exchange, net (209) (612) 116 (1,288)
Other income, net 486 506 606 1,028
---------- ---------- ---------- ----------
Income before income taxes 10,605 9,285 29,495 29,779
Provision for income taxes 2,651 2,600 7,374 8,338
---------- ---------- ---------- ----------
Net income $ 7,954 $ 6,685 $ 22,121 $ 21,441
========== ========== ========== ==========
Earnings per share:
Basic $ 0.15 $ 0.13 $ 0.43 $ 0.42
========== ========== ========== ==========
Diluted $ 0.15 $ 0.13 $ 0.41 $ 0.40
========== ========== ========== ==========
Weighted average shares outstanding:
Basic 51,532 51,195 51,468 51,286
========== ========== ========== ==========
Diluted 53,932 52,906 53,719 53,603
========== ========== ========== ==========
Dividends declared per share $ 0.05 $ -- $ 0.05 $ --
========== ========== ========== ==========
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National Instruments Reports Record Third Quarter Revenue, 19% Growth in Net
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Oct. 23, 2003
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National Instruments
Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended
September 30,
----------------------
2003 2002
---------- ----------
Cash flow from operating activities:
Net income $ 22,121 $ 21,441
Adjustments to reconcile net income to net cash
provided by operating activities:
Charges to income not requiring cash outlays:
Depreciation and amortization 18,787 14,862
Benefit from deferred income taxes (514) (3,769)
Tax benefit from stock option plans 2,565 1,164
Changes in operating assets and liabilities:
Increase in accounts receivable (5,332) (1,894)
Decrease (increase) in inventory 799 (7,015)
Decrease in prepaid expense and other assets 4,071 3,154
(Decrease) increase in current liabilities (4,384) 5,677
---------- ----------
Net cash provided by operating activities 38,113 33,620
---------- ----------
Cash flow from investing activities:
Payment for acquisitions, net of cash received (5,316) --
Capital expenditures (12,870) (24,753)
Capitalization of internally developed software (9,449) (3,025)
Additions to other intangibles (1,022) (2,214)
Purchases of short-term investments (105,626) (106,294)
Sales/maturities of short-term investments 81,054 130,531
---------- ----------
Net cash used in investing activities (53,229) (5,755)
---------- ----------
Cash flow from financing activities:
Proceeds from issuance of common stock 11,476 6,666
Repurchase of common stock -- (17,420)
Dividends paid (2,585) --
---------- ----------
Net cash provided by (used in) financing
activities 8,891 (10,754)
---------- ----------
Net increase (decrease) in cash and cash equivalents (6,225) 17,111
Cash and cash equivalents at beginning of period 40,240 49,089
---------- ----------
Cash and cash equivalents at end of period $ 34,015 $ 66,200
========== ==========
Non-cash financing activities:
Accrued liability for repurchase of common stock $ -- $ 2,203
========== ==========
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