Contacts: Kimberly Allen Jennifer Howard-Brown
Investor Relations Manager Media Relations Manager
(512) 683-6873 (512) 683-8713
National Instruments Reports All-Time Record Revenue for Quarter and Year
Company Declares 3-for-2 Stock Split
AUSTIN, Texas - Jan. 21, 2004 - National Instruments (Nasdaq: NATI) reported
record fourth quarter revenue of $122 million, an increase of 14 percent
compared to the fourth quarter of 2002 and a 16 percent sequential increase.
This represents the highest quarterly revenue in NI history. Fully diluted
earnings per share (EPS) for Q4 were 21 cents with a net income of $11.2 million
up 13 percent from Q4 2002 and up 41 percent sequentially. In Q4 of 2003, NI
took a $3.8 million charge to accrue for the expected legal costs of taking the
company's most recent patent dispute to trial in early 2005. The after tax
impact of this charge is equivalent to 5 cents per share.
For 2003, revenue totaled $426 million, up 9 percent from $391 million in 2002,
marking record annual revenue for National Instruments and the 26th year of
growth in the company's 27-year history.
The company also announced that the National Instruments Board of Directors
declared a 3-for-2 stock split and a quarterly dividend of 5 cents per share on
the company's common stock payable on Feb. 20, 2004, to holders of record on
Feb. 5, 2004. All per-share data are presented prior to this split.
"Given our strong profitability, we made a strategic decision to aggressively
increase our investments in R&D during the economic downturn," said Dr. James
Truchard, NI CEO. "This strategy clearly paid off in 2003 with the highest
number of new products introduced in the history of the company, resulting in
the highest revenue in any year in our history."
Q4 2003 and FY 2003 Highlights
o Record quarterly revenue for Q4 2003, up 14 percent from Q4 2002 and up 16
percent sequentially
o Record annual revenue for 2003 of $426 million
o Strong investment in R&D produces record output of new products in 2003
o NI LabVIEW 7 Express awarded prestigious honors from: Control Engineering,
Evaluation Engineering, Design News, EDN, Industrial Automation News and
Electronics Products
o Strong adoption of LabVIEW 7 Express by new customers
o Record cash and short-term investments of $195 million
o NI named to FORTUNE magazine's 100 Best Companies to Work For list for
fifth consecutive year
"We are pleased to once again announce quarterly and annual records with fourth
quarter revenue up 16 percent sequentially and net income up 41 percent
sequentially," said Alex Davern, NI CFO. "With continued strong annual cash flow
from operations of $63 million, we have increased our cash and short term
investments to a record of $195 million and have demonstrated the outstanding
operating leverage in our business."
Geographically, the growth of revenue in U.S. dollar terms for Q4 2003 as
compared to Q4 2002 was as follows: up 10 percent in the Americas, up 15 percent
in Europe and up 22 percent in Asia giving overall growth of 14 percent. In
local currency terms, revenue was up 3 percent in Europe and 30 percent in Asia,
for an overall growth of 11 percent.
For Q1 2004, NI currently expects revenue to increase by approximately 20
percent year-over-year and estimates fully diluted earnings per share will be in
the range of 21 to 25 cents per share, compared to 13 cents per share in Q1
2003. All per-share data are presented prior to the stock split.
Interested parties can listen to a conference call today, Jan. 21, 2004,
beginning at 4:00 p.m. CDT, at ni.com/call. Replay information will be available
by calling (719) 457-0820, confirmation code #711190, from Jan. 21, 2004 at 7:00
p.m. CDT, through Jan. 28, 2004 at 12:00 a.m. CDT.
This release contains "forward-looking statements," including R&D investment as
a driver for growth, potential future operating leverage, and the company's
expectations regarding record revenue for the year, revenue growth for the
quarter, and estimated earnings for the 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.
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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 2003, the company sold products to more than
25,000 different companies in more than 80 countries around the world. For the
past five 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, NI and ni.com 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
Condensed Consolidated Balance Sheets
(in thousands)
December 31, December 31,
2003 2002
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 53,446 $ 40,240
Short-term investments 141,227 113,638
Accounts receivable, net 77,970 62,981
Inventories 38,813 39,247
Other current assets 19,669 21,860
------------ ------------
Total current assets 331,125 277,966
Property and equipment, net 151,612 152,133
Intangibles and other assets 42,414 28,615
------------ ------------
Total assets $ 525,151 $ 458,714
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 29,567 $ 25,578
Accrued expenses 46,228 40,935
------------ ------------
Total current liabilities 75,795 66,513
Deferred income taxes 9,904 5,738
------------ ------------
Total liabilities 85,699 72,251
------------ ------------
Stockholders' equity:
Common stock 522 511
Additional paid-in capital 95,331 72,063
Retained earnings 349,994 321,813
Accumulated other comprehensive loss (6,395) (7,924)
------------ ------------
Total stockholders' equity 439,452 386,463
------------ ------------
Total liabilities and stockholders'
equity $ 525,151 $ 458,714
============ ============
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National Instruments
Condensed Consolidated Statements of Income
(in thousands, except per share data)
Three Months Year Ended
Ended December 31, Ended December 31,
(unaudited) (unaudited)
----------------------------- -----------------------------
Percent Percent
2003 2002 Inc/(Dec) 2003 2002 Inc/(Dec)
-------- -------- --------- -------- -------- ---------
Net sales $121,910 $106,525 14% $425,892 $390,790 9%
Cost of sales 31,074 27,928 11% 111,672 105,086 6%
-------- -------- -------- --------
Gross profit 90,836 78,597 16% 314,220 285,704 10%
-------- -------- -------- --------
Operating expenses:
Sales and marketing 43,528 40,018 9% 160,478 145,671 10%
Research and development 20,398 16,201 26% 70,896 63,964 11%
General and administrative 9,314 8,453 10% 34,543 31,011 11%
Patent litigation 4,143 1,190 248% 7,954 4,703 69%
-------- -------- -------- --------
Total operating expenses 77,383 65,862 17% 273,871 245,349 12%
-------- -------- -------- --------
Operating income 13,453 12,735 6% 40,349 40,355 --
Interest income, net 573 748 (23%) 2,449 3,167 (23%)
Net foreign exchange
gain (loss) 1,008 565 78% 1,125 (724) 255%
Other income expense (37) (208) 82% 568 820 (31%)
-------- -------- -------- --------
Income before income taxes 14,997 13,840 8% 44,491 43,618 2%
Provision for income taxes 3,749 3,875 (3%) 11,123 12,213 (9%)
-------- -------- -------- --------
Net income $ 11,248 $ 9,965 13% $ 33,368 $ 31,405 6%
======== ======== ======== ========
Basic earnings per share $ 0.22 $ 0.20 10% $ 0.65 $ 0.61 7%
======== ======== ======== ========
Diluted earnings per share $ 0.21 $ 0.19 11% $ 0.62 $ 0.59 5%
======== ======== ======== ========
Dividends per share $ 0.05 $ -- N/A $ 0.10 $ -- N/A
======== ======== ======== ========
Weighted average shares
outstanding--basic 51,869 51,013 2% 51,625 51,219 1%
======== ======== ======== ========
Weighted average shares
outstanding--diluted 54,408 52,875 3% 53,964 53,411 1%
======== ======== ======== ========
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National Instruments
Consolidated Statements of Cash Flows
(in thousands)
Year Ended
December 31,
(unaudited)
2003 2002
---------- ----------
Cash flow from operating activities:
Net income $ 33,368 $ 31,405
Adjustments to reconcile net income to cash provided
by operating activities:
Charges to income not requiring cash outlays:
Depreciation and amortization 24,774 20,748
Provision (benefit) for deferred income taxes 2,329 (207)
Tax benefit from stock option plans 3,849 1,835
Changes in operating assets and liabilities:
Increase in accounts receivable (14,989) (9,357)
Decrease (increase) in inventory 434 (6,640)
Decrease in prepaid expense and other assets 4,049 1,823
Increase in current liabilities 9,282 9,526
---------- ----------
Net cash provided by operating activities 63,096 49,133
---------- ----------
Cash flow from investing activities:
Payments for acquisitions, net of cash received (6,324) --
Capital expenditures (17,983) (30,817)
Capitalization of internally developed software (9,717) (5,757)
Additions to intangibles (2,520) (2,993)
Purchases of short-term investments (143,991) (134,434)
Sales/maturities of short-term investments 116,402 122,218
---------- ----------
Net cash used in investing activities (64,133) (51,783)
---------- ----------
Cash flow from financing activities:
Proceeds from issuance of common stock 19,430 13,424
Repurchase of common stock -- (19,623)
Dividends paid (5,187) --
---------- ----------
Net cash provided by (used in) financing activities 14,243 (6,199)
---------- ----------
Net increase (decrease) in cash and cash equivalents 13,206 (8,849)
Cash and cash equivalents at beginning of period 40,240 49,089
---------- ----------
Cash and cash equivalents at end of period $ 53,446 $ 40,240