National Instruments Reports Record Revenue for a Third Quarter

National Instruments Reports Record Revenue for a Third Quarter of $321 Million

The company directs readers to its Form 10-K for the year ended Dec. 31, 2016, its Form 10-Q for the quarter ended June 30, 2017 and the other documents it files with the SEC for other risks associated with the company’s future performance.

About NI

NI (ni.com) empowers engineers and scientists with a software-centric platform that incorporates modular hardware and an expansive ecosystem. This proven approach puts users firmly in control of defining what they need to accelerate their system design within test, measurement and control. NI’s solution helps build high-performance systems that exceed requirements, quickly adapt to change and ultimately improve the world.

(NATI-F)

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


National Instruments
Condensed Consolidated Balance Sheets
(in thousands)

	September 30,			December 31,
	2017			2016
	(unaudited)

Assets
Current assets:
Cash and cash equivalents	$	294,194		$	285,283
Short-term investments		91,223			73,117
Accounts receivable, net		235,177			228,686
Inventories, net		184,641			193,608
Prepaid expenses and other current assets		50,325			53,953
Total current assets		855,560			834,647

Property and equipment, net		254,918			260,456
Goodwill		265,091			253,197
Intangible assets, net		122,681			108,663
Other long-term assets		32,878			39,601
Total assets	$	1,531,128		$	1,496,564

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities	$	51,274		$	48,800
Accrued compensation		45,231			27,743
Deferred revenue - current		120,271			115,577
Other current liabilities		17,802			32,997
Other taxes payable		30,832			34,958
Total current liabilities		265,410			260,075

Long-term debt		15,000			25,000
Deferred income taxes		37,074			45,386
Liability for uncertain tax positions		9,284			11,719
Deferred revenue - long-term		31,405			29,752
Other long-term liabilities		9,156			10,413
Total liabilities		367,329			382,345

Stockholders' equity:
Preferred stock		—			—
Common stock		1,307			1,292
Additional paid-in capital		816,152			771,346
Retained earnings		365,021			376,202
Accumulated other comprehensive loss		(18,681	)		(34,621	)
Total stockholders' equity		1,163,799			1,114,219
Total liabilities and stockholders' equity	$	1,531,128		$	1,496,564


National Instruments
Condensed Consolidated Statements of Income
(in thousands, except per share data, unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016

Net sales:
Product	$	291,891		$	278,521		$	853,219		$	816,486
Software maintenance		29,030			27,843			86,416			83,161
Total net sales		320,921			306,364			939,635			899,647

Cost of sales:
Product		81,641			74,734			235,989			225,261
Software maintenance		2,110			1,998			6,744			5,126
Total cost of sales		83,751			76,732			242,733			230,387

Gross profit		237,170			229,632			696,902			669,260
		74	%		75	%		74	%		74	%
Operating expenses:
Sales and marketing		116,661			116,662			358,335			346,230
Research and development		56,526			59,066			171,701			178,244
General and administrative		26,468			24,537			78,400			74,308
Total operating expenses		199,655			200,265			608,436			598,782

Operating income		37,515			29,367			88,466			70,478
		12	%		10	%		9	%		8	%
Other income (expense):
Interest income		657			276			1,509			787
Net foreign exchange gain (loss)		1,096			(760	)		1,624			(1,471	)
Other (expense) income, net		(1,153	)		301			(957	)		(2,052	)

Income before income taxes		38,115			29,184			90,642			67,742

Provision for income taxes		4,726			4,695			13,949			14,155

Net income	$	33,389		$	24,489		$	76,693		$	53,587

Basic earnings per share	$	0.26		$	0.19		$	0.59		$	0.42
Diluted earnings per share	$	0.25		$	0.19		$	0.59		$	0.42

Weighted average shares outstanding -
basic		130,660			128,815			130,103			128,233
diluted		131,617			129,047			131,050			128,738

Dividends declared per share	$	0.21		$	0.20		$	0.63		$	0.60


National Instruments
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
	Nine Months Ended September 30,
	2017			2016

Cash flow from operating activities:
Net income	$	76,693		$	53,587
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		54,794			55,164
Stock-based compensation		21,272			19,635
Tax expense/(benefit) expense from deferred income taxes		(4,290	)		(7,321	)
Net change in operating assets and liabilities		(1,013	)		28,951
Net cash provided by operating activities		147,456			150,016

Cash flow from investing activities:
Capital expenditures		(24,084	)		(34,408	)
Capitalization of internally developed software		(34,406	)		(24,048	)
Additions to other intangibles		(1,379	)		(1,969	)
Acquisitions, net of cash received		—			(549	)
Purchases of short-term investments		(62,845	)		(9,054	)
Sales and maturities of short-term investments		45,582			38,566
Net cash used by investing activities		(77,132	)		(31,462	)

Cash flow from financing activities:
Proceeds from revolving line of credit		—			15,000
Principal payments on revolving line of credit		(10,000	)		(27,000	)
Proceeds from issuance of common stock		22,870			22,157
Repurchase of common stock		—			(5,635	)
Dividends paid		(82,051	)		(77,056	)
Net cash used by financing activities		(69,181	)		(72,534	)

Impact of changes in exchange rates on cash		7,768			3,503

Net change in cash and cash equivalents		8,911			49,523
Cash and cash equivalents at beginning of period		285,283			251,129
Cash and cash equivalents at end of period	$	294,194		$	300,652

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