National Instruments Reports Record Annual Revenue for 2013 - Hawaii News Now - KGMB and KHNL

National Instruments Reports Record Annual Revenue for 2013

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SOURCE National Instruments

Company Continues Disciplined Expense Management and Improves Operating Margin in Q4

Q4 2013 Highlights

- Fourth quarter revenue of $301 million, flat year-over-year

- Continued revenue growth in LabVIEW, academic, CompactRIO and NI CompactDAQ products

- Fully diluted GAAP EPS of $0.25 and fully diluted non-GAAP EPS of $0.31

- EBITDA of $56 million or $0.44 per share

- Cash balance increased by $49 million to $393 million

- Dividend increased from $0.14 per share to $0.15 per share

AUSTIN, Texas, Jan. 30, 2014 /PRNewswire/ -- National Instruments (Nasdaq: NATI) today announced Q4 revenue of $301 million, flat year-over year. The company's orders under $20,000 grew approximately 3 percent year-over-year; orders between $20,000 and $100,000 increased approximately 1 percent year-over-year; and orders above $100,000 decreased about 9 percent year-over-year. In Q4 2013, NI recognized $4 million in revenue from its largest customer, compared with approximately $16 million recognized in Q4 2012.

GAAP net income for Q4 was $32 million, with fully diluted earnings per share (EPS) of $0.25, and non-GAAP net income was $39 million, with non-GAAP fully diluted EPS of $0.31. EBITDA, or Earnings Before Interest, Taxes, Depreciation and Amortization, was $56 million, or $0.44 per share for Q4.

In Q4, GAAP gross margin increased to 75 percent and non-GAAP gross margin was 76 percent, up 70 basis points from Q3 2013. Total GAAP operating expenses were down 4 percent sequentially and were down 6 percent year-over-year. Total non-GAAP operating expenses were down approximately 4 percent sequentially and were down 3 percent year-over-year.

GAAP operating margin was 13 percent in Q4, with GAAP operating income of $40 million, up 93 percent sequentially and up 42 percent year-over-year. Non-GAAP operating margin was 17 percent in Q4, with non-GAAP operating income of $51 million, up 56 percent sequentially and up 12 percent year-over-year.

The company's non-GAAP results exclude the impact of stock-based compensation, amortization of acquisition-related intangibles, acquisition accounting for deferred revenue, acquisition-related adjustments and acquisition-related transaction costs. Reconciliations of the company's GAAP and non-GAAP results are included as part of this news release.

"In 2013, NI continued to advance our software-based approach for test and measurement and deliver our 35th year of growth despite weakness in the industry," said Dr. James Truchard, NI president, CEO and co-founder. "I believe we have made the investments necessary to build on our highly differentiated platform and I am focused on developing our high-performance management team in our quest to reach our goal of $2 billion in annual revenue."  

Geographic revenue in U.S. dollar terms for Q4 2013 compared to Q4 2012 was up 6 percent in the Americas and up 14 percent in Europe. However, revenue declined 15 percent in East Asia because the majority of revenue from the company's largest customer is recognized in this region, and revenue was down 20 percent year-over-year in Emerging Markets primarily from a significant decline in orders over $100,000. In local currency terms, revenue was up 11 percent in Europe, down 13 percent in East Asia and down 14 percent in Emerging Markets.

As of Dec. 31, NI had $393 million in cash and short-term investments, up $49 million from Sept. 30, 2013. The NI Board of Directors also approved an increase in the quarterly dividend to $0.15 per share on the company's common stock payable on March 10 to stockholders of record on Feb. 18.

FY 2013 Highlights

  • Record revenue of $1.17 billion, up 3 percent year-over-year
  • Strong growth in RF and CompactRIO products
  • Fully diluted GAAP EPS of $0.64 and fully diluted non-GAAP EPS of $0.88
  • NI named to the Great Place to Work Institute's 25 Best Multinational Companies to Work For list for the third consecutive year and its 100 Best Companies to Work For list for the 15th consecutive year
  • EBITDA of $164 million, or $1.31 per share
  • Dividend of $0.56 per share

Full-year 2013 revenue was $1.17 billion, up 3 percent year-over-year. GAAP net income for 2013 was $81 million, with fully diluted GAAP EPS of $0.64, and non-GAAP net income was $110 million, with fully diluted EPS of $0.88.

"We believe our ability to gain market share despite challenges in the test and measurement industry demonstrated the strength of our disruptive approach," said Alex Davern, NI COO and CFO. "Our goals for 2014 are to continue to leverage the investments we have already made to drive sustained revenue growth and to continue to drive toward our long-term target of 18 percent non-GAAP operating margin."

Guidance for Q1 2014
Though pleased to see the recent recovery in the Global PMI, NI continues to be conservative in planning for the first half of 2014 because it believes customers are being cautious about their capital spending. NI currently expects revenue for Q1 2014 to be between $272 million and $302 million. NI expects fully diluted EPS to be in the range of $0.09 to $0.21 for Q1, with non-GAAP fully diluted EPS expected to be in the range of $0.15 to $0.27. The company's non-GAAP tax rate in Q1 2013 was 10 percent as a result of the retroactive renewal of the R&D tax credit in January 2013. For 2014, the R&D tax credit has not yet been approved and as a result, NI expects its non-GAAP effective tax rate for Q1 2014 to be approximately 24 percent.

Non-GAAP Presentation
In addition to disclosing results determined in accordance with GAAP, NI discloses certain non-GAAP operating results and non-GAAP information that exclude certain charges. In this news release, the company has presented its gross profit, gross margin, operating expenses, operating income, operating margin, income before income taxes, provision for income taxes, net income and basic and fully diluted EPS for the three- and 12-month periods ending Dec. 31, 2013 and 2012, on a GAAP and non-GAAP basis. NI is also providing guidance on its non-GAAP fully diluted EPS.

When presenting non-GAAP information, the company includes a reconciliation of the non-GAAP results to the GAAP results. Management believes that including the non-GAAP results assists investors in assessing the company's operational performance and its performance relative to its competitors. The company presents these non-GAAP results as a complement to results provided in accordance with GAAP, and these results should not be regarded as a substitute for GAAP. Management uses these non-GAAP measures to manage and assess the profitability and performance of its business and does not consider stock-based compensation expense, amortization of acquisition-related intangibles, acquisition accounting for deferred revenue, acquisition-related adjustments and acquisition-related transaction costs in managing its operations. Specifically, management uses non-GAAP measures to plan and forecast future periods, to establish operational goals, to compare with its business plan and individual operating budgets, to measure management performance for the purposes of executive compensation including payments to be made under bonus plans, to assist the public in measuring the company's performance relative to the company's long-term public performance goals, to allocate resources and, relative to the company's historical financial performance, to enable comparability between periods. Management also considers such non-GAAP results to be an important supplemental measure of its performance.

This news release also discloses the company's EBITDA and EBITDA diluted EPS for the three- and 12-month periods ending Dec. 31, 2013 and 2012. The company also believes that including the EBITDA results assists investors in assessing the company's operational performance relative to its competitors. A reconciliation of EBITDA and EBITDA diluted EPS to GAAP net income and GAAP diluted EPS is included with this news release.

Conference Call Information and Availability of Presentation Materials
Interested parties can listen to the Q4 2013 conference call today, Jan. 30, at 4:00 p.m. CT at ni.com/call. Replay information is available by calling (855) 859-2056, confirmation code # 29987892, shortly after the call through Feb. 4 at 3:00 p.m. CT, or by visiting the company's website at ni.com/call. You may also view certain presentation materials that we may refer to on the conference call at ni.com/nati.

Forward-Looking Statements
This release contains "forward-looking statements," including statements regarding NI making the investments necessary to build on its highly differentiated platform; the company's focus on developing its high-performance management team in its quest to reach its goal of $2 billion in annual revenue; the strength of the company's disruptive approach; goals to continue to leverage investments it already made to drive sustained revenue growth; NI's drive toward its long-term goal of 18 percent non-GAAP operating margin; the company being conservative in planning for the first half of 2014; customers being cautious in their capital spending; and NI's Q1 guidance for revenue, GAAP and non-GAAP EPS, and non-GAAP tax rate. These statements are subject to a number of risks and uncertainties, including the risk of adverse changes or fluctuations in the global economy, U.S. budgetary or debt issues, foreign exchange fluctuations, component shortages, delays in the release of new products, fluctuations in customer demand for NI products including orders from NI's
largest customer, fluctuations in average order size and customer mix, the company's ability to effectively manage its operating expenses, manufacturing inefficiencies and the level of capacity utilization and the impact of any acquisitions by NI. Actual results may differ materially from the expected results.

The company directs readers to its Form 10-K for the fiscal year ended Dec. 31, 2012; its Form 10-Q for the quarter ended Sept. 30, 2013; and the other documents it files with the SEC for other risks associated with the company's future performance.

About National Instruments
Since 1976, National Instruments (www.ni.com) has equipped engineers and scientists with tools that accelerate productivity, innovation and discovery. NI's graphical system design approach to engineering provides an integrated software and hardware platform that speeds the development of any system needing measurement and control. The company's long-term vision and focus on improving society through its technology supports the success of its customers, employees, suppliers and shareholders. Readers can obtain investment information from the company's investor relations department by calling (512) 683-5090, emailing nati@ni.com or visiting www.ni.com/nati. (NATI-F)

CompactRIO, LabVIEW, National Instruments, NI, ni.com and NICompactDAQ are trademarks of National Instruments. Other product and company names listed are trademarks or trade names of their respective companies.

Contact:      Caitlin Gursslin, Investor Relations, caitlin.gursslin@ni.com

 


National Instruments

Condensed Consolidated Balance Sheets

(in thousands)








Dec. 31,


Dec. 31,



2013


2012



(unaudited)



Assets





Current assets:





Cash and cash equivalents

$

230,263

$

161,996

Short-term investments


163,149


173,166

Accounts receivable, net


180,680


187,060

Inventories, net


172,109


169,990

Prepaid expenses and other current assets


49,001


48,009

Deferred income taxes, net


33,393


27,479

Total current assets


828,595


767,700






Property and equipment, net


260,568


249,721

Goodwill


146,520


147,258

Intangible assets, net


82,310


93,913

Other long-term assets


25,558


26,177

Total assets

$

1,343,551

$

1,284,769






Liabilities and Stockholders' Equity





Current liabilities:





Accounts payable

$

56,614

$

65,080

Accrued compensation


25,189


29,978

Deferred revenue – current


96,117


90,714

Accrued expenses and other liabilities


17,627


34,373

Other taxes payable


29,808


24,811

Total current liabilities


225,355


244,956






Deferred income taxes


44,620


47,630

Liability for uncertain tax positions


23,572


20,920

Deferred revenue – long-term


21,389


20,446

Other long-term liabilities


5,531


11,689

Total liabilities

$

320,467

$

345,641






Stockholders' equity:





Preferred stock


-


-

Common stock


1,257


1,229

Additional paid-in capital


604,330


532,845

Retained earnings


414,947


404,210

Accumulated other comprehensive income


2,550


844

Total stockholders' equity

$

1,023,084

$

939,128

Total liabilities and stockholders' equity

$

1,343,551

$

1,284,769

 


 

National Instruments

Condensed Consolidated Statements of Income

(in thousands, except per share data)






Three Months Ended


12 Months Ended



Dec. 31,


Dec. 31,



2013


2012


2013


2012



(unaudited)


(unaudited)



Net sales:









Product

$

280,523

$

278,641

$

1,091,186

$

1,054,849

Software maintenance


20,283


21,685


81,372


87,494

GSA accrual


-


-


-


1,349

Total net sales


300,806


300,326


1,172,558


1,143,692










Cost of sales:









Product


74,900


73,465


299,854


274,839

Software maintenance


1,082


1,116


5,389


5,435

Total cost of sales


75,982


74,581


305,243


280,274










Gross profit


224,824


225,745


867,315


863,418










Operating expenses:









Sales and marketing


109,916


111,447


447,800


431,468

Research and development


54,276


58,066


234,796


222,994

General and administrative


21,055


21,649


87,418


85,239

Acquisition-related adjustment


-


6,783


(1,316)


6,783

Total operating expenses


185,247


197,945


768,698


746,484










Operating income


39,577


27,800


98,617


116,934










Other income (expense):









Interest income


184


221


679


716

Net foreign exchange loss


(521)


(107)


(2,578)


(2,246)

Other income (expense), net


(278)


77


450


(567)










Income before income taxes


38,962


27,991


97,168


114,837










Provision for income taxes


7,234


7,278


16,655


24,700










Net income

$

31,728

$

20,713

$

80,513

$

90,137










Basic earnings per share

$

0.25

$

0.17

$

0.65

$

0.74

Diluted earnings per share

$

0.25

$

0.17

$

0.64

$

0.73










Weighted average shares outstanding –









Basic


125,489


122,754


124,558


121,973

Diluted


126,217


123,375


125,571


122,977










Dividends declared per share

$

0.14

$

$       0.14

$

0.56

$

$        0.56










 


National Instruments

Condensed Consolidated Statements of Cash Flows

(in thousands)






12 months ended



Dec. 31,



2013


2012



(unaudited)



Cash flow from operating activities:





Net income

$

80,513

$

90,137

Adjustments to reconcile net income to net cash provided





by operating activities:





Depreciation and amortization


67,974


58,686

Stock-based compensation


28,992


27,796

Tax (benefit) expense from deferred income taxes


(4,353)


1,853

Tax benefit from stock option plans


(2,407)


(2,198)

Changes in operating assets and liabilities:





Accounts receivable


6,820


(26,007)

Inventories


(1,563)


(36,154)

Prepaid expenses and other assets


(1,767)


(7,037)

Accounts payable


(8,604)


23,419

Deferred revenue


6,346


21,050

Taxes and other liabilities


(2,427)


(19,029)

Net cash provided by operating activities


169,524


132,516






Cash flow from investing activities:





Capital expenditures


(47,796)


(89,073)

Capitalization of internally developed software


(14,883)


(11,721)

Additions to other intangibles


(5,182)


(1,890)

Acquisitions, net of cash received


-


(25,481)

Purchases of short-term investments


(70,354)


(188,098)

Sales and maturities of short-term investments


80,371


238,436

Net cash used by investing activities


(57,844)


(77,827)






Cash flow from financing activities:





Proceeds from issuance of common stock


39,319


30,902

Deferred acquisition payments


(15,318)


-

Dividends paid


(69,821)


(68,401)

Tax benefit from stock option plans


2,407


2,198

Net cash used by financing activities


(43,413)


(35,301)






Net change in cash and cash equivalents


68,267


19,388

Cash and cash equivalents at beginning of period


161,996


142,608

Cash and cash equivalents at end of period

$

230,263

$

161,996






 


 

National Instruments

Detail of GAAP Charges Related to Revenue, Stock-Based Compensation,

Amortization of Acquisition Intangibles and Acquisition-Related Transaction Costs

(in thousands)

(unaudited)








Three Months Ended


12 Months Ended



Dec. 31,


Dec. 31,



2013


2012


2013


2012

Revenue









Acquisition-related deferred revenue

$

-

$

-

$

-

$

2,156

GSA accrual


-


-


-


(1,349)

Provision for income taxes


-


-


-


(282)

Total

$

-

$

-

$

-

$

525










Stock-Based Compensation









Cost of sales

$

439

$

430

$

1,658

$

1,719

Sales and marketing


2,882


3,033


11,789


11,612

Research and development


2,728


2,919


11,864


10,909

General and administrative


890


908


3,624


3,556

Provision for income taxes


(3,216)


(2,193)


(9,801)


(7,579)

Total

$

3,723

$

5,097

$

19,134

$

20,217










Amortization of Acquisition Intangibles









Cost of sales

$

2,673

$

2,165

$

10,718

$

8,926

Sales and marketing


482


476


1,988


1,819

Research and development


405


217


2,043


217

Other income, net


185


194


751


765

Provision for income taxes


(1,231)


(964)


(5,081)


(3,717)

Total


2,514

$

2,088

$

10,419

$

8,010










Acquisition-Related Adjustment and Transaction Costs









Cost of sales

$

21

$

(56)

$

28

$

(24)

Sales and marketing


189


177


595


606

Research and development


410


165


1,101


360

General and administrative


80


355


326


393

Acquisition-related adjustment


-


6,783


(1,316)


6,783

Provision for income taxes


(133)


(105)


(545)


(348)

Total

$

567

$

7,319

$

189

$

7,770










 


 

National Instruments

Reconciliation of GAAP to Non-GAAP Measures

(in thousands, except per share data)

(unaudited)




Three Months Ended


12 Months Ended



Dec. 31,


Dec. 31,












2013


2012


2013


2012

Reconciliation of Net Sales to Non-GAAP Net Sales









Net sales, as reported

$

300,806

$

300,326

$

1,172,558

$

1,143,692

Acquisition-related deferred revenue


-


-


-


2,156

GSA accrual


-


-


-


(1,349)

Non-GAAP net sales

$

300,806

$

300,326

$

1,172,558

$

1,144,499










Reconciliation of Gross Profit to Non-GAAP Gross Profit

Gross profit, as reported

$

224,824

$

225,745

$

867,315

$

863,418

Acquisition-related deferred revenue


-


-


-


807

Stock-based compensation


439


430


1,658


1,719

Amortization of acquisition intangibles


2,673


2,165


10,718


8,926

Acquisition-related transaction costs


21


(56)


28


(24)

Non-GAAP gross profit

$

227,957

$

228,284

$

879,719

$

874,846

Non-GAAP gross margin


76%


76%


75%


76%










Reconciliation of Operating Expenses to Non-GAAP Operating Expenses

Operating expenses, as reported

$

185,247

$

197,945

$

768,698

$

746,484

Stock-based compensation


(6,500)


(6,860)


(27,277)


(26,077)

Amortization of acquisition intangibles


(887)


(693)


(4,031)


(2,036)

Acquisition-related adjustment


-


(6,783)


1,316


(6,783)

Acquisition-related transaction costs


(679)


(697)


(2,022)


(1,359)

Non-GAAP operating expenses

$

177,181

$

182,912

$

736,684

$

710,229


Reconciliation of Operating Income to Non-GAAP Operating Income

Operating income, as reported

$

39,577

$

27,800

$

98,617

$

116,934

Acquisition-related deferred revenue


-


-


-


807

Stock-based compensation


6,939


7,290


28,935


27,796

Amortization of acquisition intangibles


3,560


2,858


14,749


10,962

Acquisition-related adjustment


-


6,783


(1,316)


6,783

Acquisition-related transaction costs


700


641


2,050


1,335

Non-GAAP operating income

$

50,776

$

45,372

$

143,035

$

164,617

Non-GAAP operating margin


17%


15%


12%


14%










Reconciliation of Income Before Income Taxes to Non-GAAP Income Before Income Taxes

Income before income taxes, as reported

$

38,962

$

27,991

$

97,168

$

114,837

Acquisition-related deferred revenue


-


-


-


807

Stock-based compensation


6,939


7,290


28,935


27,796

Amortization of acquisition intangibles


3,745


3,052


15,500


11,727

Acquisition-related adjustment


-


6,783


(1,316)


6,783

Acquisition-related transaction costs


700


641


2,050


1,335

Non-GAAP income before income taxes

$

50,346

$

45,757

$

142,337

$

163,285










Reconciliation of Provision for Income Taxes to Non-GAAP Provision for Income Taxes

Provision for income taxes, as reported

$

7,234

$

7,278

$

16,655

$

24,700

Acquisition-related deferred revenue


-


-


-


282

Stock-based compensation


3,216


2,193


9,801


7,579

Amortization of acquisition intangibles


1,231


964


5,081


3,717

Acquisition-related adjustment and transaction costs


133


105


545


348

Non-GAAP provision for income taxes

$

11,814

$

10,540

$

32,082

$

36,626

 


 

National Instruments

Reconciliation of GAAP Net Income, Basic EPS and Diluted EPS to Non-GAAP Net Income, Basic EPS and Diluted EPS

(in thousands, except per share data)

(unaudited)








Three Months Ended


12 Months Ended



Dec. 31,


Dec. 31,



2013


2012


2013


2012










Net income, as reported

$

31,728

$

20,713

$

80,513

$

90,137

Adjustments to reconcile net income to non-GAAP net income:









Acquisition-related deferred revenue, net of tax effect


-


-


-


525

Stock-based compensation, net of tax effect


3,723


5,097


19,134


20,217

Amortization of acquisition intangibles, net of tax effect


2,514


2,088


10,419


8,010

Acquisition-related adjustment


-


6,783


(1,316)


6,783

Acquisition-related transaction costs, net of tax effect


567


536


1,505


987

Non-GAAP net income

$

38,532

$

35,217

$

110,255

$

126,659










Basic EPS, as reported

$

0.25

$

0.17

$

0.65

$

0.74

Adjustment to reconcile basic EPS to non-GAAP basic EPS:









Impact of acquisition-related deferred revenue, net of tax effect

$

-

$

-

$

-

$

-

Impact of stock-based compensation, net of tax effect


0.03


0.04


0.16


0.16

Impact of amortization of acquisition intangibles, net of tax effect


0.02


0.02


0.08


0.07

Acquisition-related adjustment


-


0.06


(0.01)


0.06

Impact of acquisition-related transaction costs, net of tax effect


0.01


-


0.01


0.01

Non-GAAP basic EPS

$

0.31

$

0.29

$

0.89

$

1.04



















Diluted EPS, as reported

$

0.25

$

0.17

$

0.64

$

0.73

Adjustment to reconcile diluted EPS to non-GAAP diluted EPS









Impact of acquisition-related deferred revenue, net of tax effect

$

-

$

-

$

-

$

-

Impact of stock-based compensation, net of tax effect


0.03


0.04


0.16


0.16

Impact of amortization of acquisition intangibles, net of tax effect


0.02


0.02


0.08


0.07

Acquisition-related adjustment


-


0.06


(0.01)


0.06

Impact of acquisition-related transaction costs, net of tax effect


0.01


-


0.01


0.01

Non-GAAP diluted EPS

$

0.31

$

0.29

$

0.88

$

1.03










Weighted average shares outstanding –









Basic


125,489


122,754


124,558


121,973

Diluted


126,217


123,375


125,571


122,977










 


 

National Instruments

Reconciliation of Net Income and Diluted EPS to EBITDA and EBITDA Diluted EPS

(unaudited)






Three Months Ended


12 Months Ended



Dec. 31,


Dec. 31,



2013


2012


2013


2012

Net income, as reported

$

31,728

$

20,713

$

80,513

$

90,137

Adjustments to reconcile net income to EBITDA:









Interest income


(184)


(221)


(679)


(716)

Tax expense


7,234


7,278


16,655


24,700

Depreciation and amortization


17,077


17,657


67,974


58,686

EBITDA

$

55,855

$

45,427

$

164,463

$

172,807










Diluted EPS, as reported

$

0.25

$

0.17

$

0.64

$

0.73

Adjustment to reconcile diluted EPS to EBITDA









Interest income


-


-


-


-

Taxes


0.05


0.06


0.13


0.20

Depreciation and amortization


0.14


0.14


0.54


0.48

EBITDA diluted EPS

$

0.44

$

0.37

$

1.31

$

1.41










Weighted average shares outstanding – diluted


126,217


123,375


125,571


122,977










 

Reconciliation of GAAP to Non-GAAP EPS Guidance

(unaudited)




Three Months Ended


March 31, 2014








Low


High

GAAP fully diluted EPS, guidance

$

0.09

$

0.21

Adjustment to reconcile diluted EPS to non-GAAP





diluted EPS:





Impact of stock-based compensation, net of tax effect


0.04


0.04

Impact of amortization of acquisition intangibles, net of tax effect


0.02


0.02






Non-GAAP diluted EPS, guidance

$

0.15

$

0.27






 

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