National Instruments Reports Record Annual Revenue for 2013
03/02/2014 National Instruments Corporation (UK) Ltd
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.
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.
For more information, please contact:
National Instruments Corporation (UK) Ltd
Measurement House
Newbury Business Park |
Newbury
RG14 2PZ
Email: nati@ni.com
Web: www.ni.com
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