National Instruments Reports Third Quarter Revenue of $340 Million
Company delivers record non-GAAP net margin for a first nine months
Q3 2019 Highlights
- Revenue of $340 million, down 2 percent year over year and up 2 percent sequentially
- GAAP gross margin of 75 percent
- Non-GAAP gross margin of 77 percent
- Fully diluted GAAP EPS of $0.39 and fully diluted non-GAAP EPS of $0.44
- GAAP net income of $52 million, up 20 percent year over year
- Non-GAAP net income of $58 million, down 3 percent year over year
- GAAP net margin of 15 percent
- Non-GAAP net margin of 17 percent
- GAAP net income up 5 percent year over year through first nine months
- Non-GAAP net income up 5 percent year over year through first nine months
- EBITDA of $84 million for a third quarter
- Cash and short-term investments of $432 million as of September 30, 2019
AUSTIN, Texas--(BUSINESS WIRE)-- National Instruments (Nasdaq: NATI) today announced Q3 2019 revenue of $340 million, down 2 percent year over year and up 2 percent sequentially.
In Q3 2019, the value of the company's total orders was down 5 percent year over year; orders under $20,000 were down 6 percent year over year; and orders over $20,000 were down 4 percent year over year.
In Q3, GAAP gross margin was 75 percent and non-GAAP gross margin was 77 percent. Total GAAP operating expenses were $189 million, down 10 percent year over year. During Q3, the company recognized a gain of $27 million related to the sale of an office building in Austin, TX and incurred a $7 million expense related to donating a portion of the proceeds to a donor-advised fund to support our corporate social responsibility efforts. Total non-GAAP operating expenses were down 2 percent year over year at $195 million. GAAP operating margin was 19 percent in Q3, with GAAP operating income of $65 million, up 42 percent year over year. Non-GAAP operating margin was 20 percent in Q3, with non-GAAP operating income of $69 million, up 1 percent year over year. For the first nine months of 2019, GAAP operating expenses were $619 million, down 4 percent year over year, and non-GAAP operating expenses were $597 million, down 3 percent year over year. GAAP operating income for the first nine months of 2019 was $121 million, up 9 percent year over year, and non-GAAP operating income for the first nine months of 2019 was $168 million, up 4 percent year over year.
GAAP net income for Q3 was $52 million, with fully diluted earnings per share (EPS) of $0.39, and non-GAAP net income was $58 million, with non-GAAP fully diluted EPS of $0.44. EBITDA, or Earnings Before Interest, Taxes, Depreciation and Amortization, was $84 million for Q3.
“In this difficult business environment, we remain focused on our long-term growth strategy. We believe the differentiation and flexibility of our software-centric platform will enable us to increase market share as customers look for new options to meet market demands,” said Alex Davern, NI CEO. “We remain committed to our goal of delivering structurally higher profitability and believe we are on track to achieve our 18 percent non-GAAP operating margin goal in 2019. With our clear focus on industries coupled with our strong balance sheet, we believe we are in a position to accelerate growth when the market recovers.”
“I am pleased to see the significant impact our company realignment is having on our profitability. Our culture of operational excellence and increased scalability led to strong earnings performance in the third quarter,” said Karen Rapp, NI CFO. “Our ability to deliver record operating margin for a third quarter in a tough industrial economy is a testament to our confidence in achieving our 18 percent non-GAAP operating margin goal in 2019 and through the cycle.”
“Today, we also announced Eric Starkloff as CEO effective February 1, 2020. His leadership over the last 22 years at NI and his passion for innovation make him the right choice to take our business forward to become the leader in software-defined automated test and automated measurement,” said Alex Davern, NI CEO.
For more information on the leadership transition, please visit ni.com/nati/news
Geographic revenue in U.S. dollar terms for Q3 2019, compared with Q3 2018, was flat in the Americas, down 2 percent in APAC and down 4 percent in EMEIA. Excluding the impact of foreign currency exchange, revenue was flat in the Americas, flat in APAC and down 2 percent in EMEIA. Historical revenue from these three regions can be found on NI’s investor website at www.ni.com/nati.
As of September 30, 2019, NI had $432 million in cash and short-term investments. During the third quarter, NI paid $33 million in dividends and repurchased 1.1 million shares of our common stock at an average price of $42.42. The NI Board of Directors approved a quarterly dividend of $0.25 per share, payable on December 2, 2019, to stockholders of record on November 11, 2019. In October 2019, the NI Board of Directors increased the number of shares authorized for repurchase by NI under its stock repurchase program by 3 million shares.
The company’s non-GAAP results exclude, as applicable, the impact of stock-based compensation, amortization of acquisition-related intangibles, acquisition-related transaction costs, taxes levied on the transfer of acquired intellectual property, foreign exchange loss on acquisitions, restructuring charges, tax reform charges, disposal gains on buildings and related charitable contributions, and capitalization and amortization of internally developed software costs. Reconciliations of the company’s GAAP and non-GAAP results are included as part of this news release.
Guidance
NI currently expects Q4 revenue to be in the range of $345 million to $375 million. The company currently expects that GAAP fully diluted EPS will be in the range of $0.25 to $0.39 for Q4, with non-GAAP fully diluted EPS expected to be in the range of $0.43 to $0.57.
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 nine months ended September 30, 2019 and 2018, 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-related transaction costs, taxes levied on the transfer of acquired intellectual property, foreign exchange loss on acquisitions, restructuring charges, tax reform charges, disposal gains on buildings and related charitable contributions, and capitalization and amortization of internally developed software 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 discloses the company’s EBITDA for the three and nine months ended September 30, 2019 and 2018. The company believes that including the EBITDA results assists investors in assessing the company’s operational performance relative to its competitors. A reconciliation of EBITDA to GAAP net income is included with this news release.
Conference Call Information
Interested parties can listen to the Q3 2019 earnings conference call with NI management today, October 29, at 4:00 p.m. CT at ni.com/call or by dialing 855-212-2361 and entering confirmation code 9485738 ten minutes prior to the call start time. Replay information is available by calling (855) 859-2056 and entering confirmation code 9485738, shortly after the call through November 2 at 10:00 p.m. CT or by visiting the company’s website at ni.com/call.
Forward-Looking Statements
This release contains “forward-looking statements” including statements regarding remaining focused on our long-term growth strategy, believing the differentiation and flexibility of our software-centric platform will enable us to increase market share as customers look to new options to meet market demands, remaining committed to our goal of delivering structurally higher profitability, believing we are on track to achieve our 18 percent non-GAAP operating margin goal in 2019, believing we are in a position to accelerate growth when the market recovers, the significant impact our company realignment is having on our profitability, our confidence in achieving our 18 percent non-GAAP operating margin goal in 2019 and through the cycle, being the right choice to take our business forward to become the leader in software-defined automated test and automated measurement, expecting Q4 revenue to be in the range of $345 million to $375 million, and expecting that GAAP fully diluted EPS will be in the range of $0.25 to $0.39 for Q4, with non-GAAP fully diluted EPS expected to be in the range of $0.43 to $0.57. These statements are subject to a number of risks and uncertainties, including the risk of adverse changes or fluctuations in the global economy, further adverse fluctuations in our industry, foreign exchange fluctuations, fluctuations in demand for NI products including orders from NI’s large customers, component shortages, delays in the release of new products, the company’s ability to effectively manage its operating expenses, manufacturing inefficiencies and the level of capacity utilization, the impact of any recent or future acquisitions by NI, expense overruns, and adverse effects of price changes or effective tax rates. Actual results may differ materially from the expected results.
The company directs readers to its Form 10-K for the year ended Dec. 31, 2018, its Form 10-Q for the quarter ended June 30, 2019 and the other documents it files with the SEC for other risks associated with the company’s future performance.
About NI
NI (ni.com) develops high-performance automated test and automated measurement systems to help you solve your engineering challenges now and into the future. Our open, software-defined platform uses modular hardware and an expansive ecosystem to help you turn powerful possibilities into real solutions. (NATI-F)
LabVIEW, 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, |
||||
|
|
|
2019 |
|
|
2018 |
||||
|
|
|
(unaudited) |
|
|
|
||||
Assets |
|
|
|
|
|
|
||||
Current assets: |
|
|
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
222,773 |
|
|
$ |
259,386 |
|
||
Short-term investments |
|
|
209,416 |
|
|
|
271,396 |
|
||
Accounts receivable, net |
|
|
224,305 |
|
|
|
242,955 |
|
||
Inventories, net |
|
|
206,727 |
|
|
|
194,146 |
|
||
Prepaid expenses and other current assets |
|
|
66,313 |
|
|
|
54,337 |
|
||
Total current assets |
|
|
929,534 |
|
|
|
1,022,220 |
|
||
|
|
|
|
|
|
|
||||
Property and equipment, net |
|
|
239,140 |
|
|
|
245,201 |
|
||
Goodwill |
|
|
259,430 |
|
|
|
264,530 |
|
||
Intangible assets, net |
|
|
91,162 |
|
|
|
110,783 |
|
||
Operating lease right-of-use assets |
|
|
63,766 |
|
|
|
— |
|
||
Other long-term assets |
|
|
45,289 |
|
|
|
28,501 |
|
||
Total assets |
|
$ |
1,628,321 |
|
|
$ |
1,671,235 |
|
||
|
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
||||
Current liabilities: |
|
|
|
|
|
|
||||
Accounts payable and accrued expenses |
|
$ |
56,839 |
|
|
$ |
48,388 |
|
||
Accrued compensation |
|
|
43,109 |
|
|
|
45,821 |
|
||
Deferred revenue - current |
|
|
124,386 |
|
|
|
127,288 |
|
||
Operating lease liabilities - current |
|
|
14,038 |
|
|
|
— |
|
||
Other current liabilities |
|
|
22,761 |
|
|
|
25,913 |
|
||
Other taxes payable |
|
|
31,958 |
|
|
|
35,574 |
|
||
Total current liabilities |
|
|
293,091 |
|
|
|
282,984 |
|
||
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
||||
Deferred income taxes |
|
|
25,949 |
|
|
|
25,457 |
|
||
Liability for uncertain tax positions |
|
|
7,631 |
|
|
|
9,775 |
|
||
Income tax payable - non-current |
|
|
67,046 |
|
|
|
74,546 |
|
||
Deferred revenue - non-current |
|
|
31,920 |
|
|
|
32,636 |
|
||
Operating lease liabilities - non-current |
|
|
33,112 |
|
|
|
— |
|
||
Other long-term liabilities |
|
|
7,411 |
|
|
|
7,479 |
|
||
Total liabilities |
|
|
466,160 |
|
|
|
432,877 |
|
||
|
|
|
|
|
|
|
||||
Stockholders' equity: |
|
|
|
|
|
|
||||
Common stock |
|
|
1,311 |
|
|
|
1,327 |
|
||
Additional paid-in capital |
|
|
939,121 |
|
|
|
897,544 |
|
||
Retained earnings |
|
|
245,465 |
|
|
|
356,418 |
|
||
Accumulated other comprehensive loss |
|
|
(23,736 |
) |
|
|
(16,931 |
) |
||
Total stockholders' equity |
|
|
1,162,161 |
|
|
|
1,238,358 |
|
||
Total liabilities and stockholders' equity |
|
$ |
1,628,321 |
|
|
$ |
1,671,235 |
|
||
National Instruments |
||||||||||||||||||||||
Condensed Consolidated Statements of Income |
||||||||||||||||||||||
(in thousands, except per share data, unaudited) |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
||||||||||||||||
|
|
|
September 30, |
|
|
September 30, |
||||||||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
||||||||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product |
|
$ |
305,247 |
|
|
$ |
310,216 |
|
|
$ |
882,747 |
|
|
$ |
897,355 |
|
||||||
Software maintenance |
|
|
35,195 |
|
|
|
35,911 |
|
|
|
103,000 |
|
|
|
101,678 |
|
||||||
Total net sales |
|
|
340,442 |
|
|
|
346,127 |
|
|
|
985,747 |
|
|
|
999,033 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product |
|
|
84,127 |
|
|
|
87,082 |
|
|
|
240,056 |
|
|
|
239,205 |
|
||||||
Software maintenance |
|
|
1,788 |
|
|
|
1,933 |
|
|
|
5,700 |
|
|
|
6,493 |
|
||||||
Total cost of sales |
|
|
85,915 |
|
|
|
89,015 |
|
|
|
245,756 |
|
|
|
245,698 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit |
|
|
254,527 |
|
|
|
257,112 |
|
|
|
739,991 |
|
|
|
753,335 |
|
||||||
|
|
|
74.8% |
|
|
74.3% |
|
|
75.1% |
|
|
75.4% |
||||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and marketing |
|
|
113,922 |
|
|
|
118,220 |
|
|
|
352,340 |
|
|
|
365,474 |
|
||||||
Research and development |
|
|
66,558 |
|
|
|
66,170 |
|
|
|
200,981 |
|
|
|
194,921 |
|
||||||
General and administrative |
|
|
35,711 |
|
|
|
26,712 |
|
|
|
92,639 |
|
|
|
81,882 |
|
||||||
Gain on sale of assets |
|
|
(26,842 |
) |
|
|
— |
|
|
|
(26,842 |
) |
|
|
— |
|
||||||
Total operating expenses |
|
|
189,349 |
|
|
|
211,102 |
|
|
|
619,118 |
|
|
|
642,277 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income |
|
|
65,178 |
|
|
|
46,010 |
|
|
|
120,873 |
|
|
|
111,058 |
|
||||||
|
|
|
19.1% |
|
|
13.3% |
|
|
12.3% |
|
|
11.1% |
||||||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income |
|
|
1,930 |
|
|
|
1,539 |
|
|
|
6,187 |
|
|
|
3,845 |
|
||||||
Net foreign exchange loss |
|
|
(378 |
) |
|
|
(956 |
) |
|
|
(1,623 |
) |
|
|
(2,082 |
) |
||||||
Other gain, net |
|
|
697 |
|
|
|
1,782 |
|
|
|
815 |
|
|
|
169 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes |
|
|
67,427 |
|
|
|
48,375 |
|
|
|
126,252 |
|
|
|
112,990 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Provision for income taxes |
|
|
15,783 |
|
|
|
5,181 |
|
|
|
22,697 |
|
|
|
14,474 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income |
|
$ |
51,644 |
|
|
$ |
43,194 |
|
|
$ |
103,555 |
|
|
$ |
98,516 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per share |
|
$ |
0.39 |
|
|
$ |
0.33 |
|
|
$ |
0.79 |
|
|
$ |
0.75 |
|
||||||
Diluted earnings per share |
|
$ |
0.39 |
|
|
$ |
0.32 |
|
|
$ |
0.78 |
|
|
$ |
0.74 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding - |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
|
131,385 |
|
|
|
132,357 |
|
|
|
131,896 |
|
|
|
131,792 |
|
||||||
Diluted |
|
|
131,889 |
|
|
|
133,197 |
|
|
|
132,890 |
|
|
|
133,067 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends declared per share |
|
$ |
0.25 |
|
|
|
0.23 |
|
|
|
0.75 |
|
|
|
0.69 |
|
||||||
National Instruments |
||||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||||
(in thousands, unaudited) |
||||||||||
|
|
|
Nine Months Ended September 30, |
|||||||
|
|
|
2019 |
|
|
2018 |
||||
|
|
|
|
|||||||
Cash flow from operating activities: |
|
|
|
|
|
|
||||
Net income |
|
$ |
103,555 |
|
|
$ |
98,516 |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
54,546 |
|
|
|
53,735 |
|
||
Stock-based compensation |
|
|
38,054 |
|
|
|
27,492 |
|
||
Gain on sale of assets |
|
|
(26,842 |
) |
|
|
— |
|
||
Deferred income taxes |
|
|
(1,461 |
) |
|
|
732 |
|
||
Net change in operating assets and liabilities |
|
|
(18,507 |
) |
|
|
6,862 |
|
||
Net cash provided by operating activities |
|
|
149,345 |
|
|
|
187,337 |
|
||
|
|
|
|
|
|
|
||||
Cash flow from investing activities: |
|
|
|
|
|
|
||||
Capital expenditures |
|
|
(47,183 |
) |
|
|
(27,373 |
) |
||
Proceeds from sale of building |
|
|
32,492 |
|
|
|
— |
|
||
Capitalization of internally developed software |
|
|
(7,179 |
) |
|
|
(13,152 |
) |
||
Additions to other intangibles |
|
|
(1,132 |
) |
|
|
(5,165 |
) |
||
Acquisitions of equity-method investments |
|
|
(13,670 |
) |
|
|
— |
|
||
Purchases of short-term investments |
|
|
(141,074 |
) |
|
|
(172,462 |
) |
||
Sales and maturities of short-term investments |
|
|
204,046 |
|
|
|
122,726 |
|
||
Net cash provided by (used by) investing activities |
|
|
26,300 |
|
|
|
(95,426 |
) |
||
|
|
|
|
|
|
|
||||
Cash flow from financing activities: |
|
|
|
|
|
|
||||
Proceeds from issuance of common stock |
|
|
25,823 |
|
|
|
24,424 |
|
||
Repurchase of common stock |
|
|
(137,171 |
) |
|
|
— |
|
||
Dividends paid |
|
|
(99,083 |
) |
|
|
(91,034 |
) |
||
Net cash used by financing activities |
|
|
(210,431 |
) |
|
|
(66,610 |
) |
||
|
|
|
|
|
|
|
||||
Impact of changes in exchange rates on cash |
|
|
(1,827 |
) |
|
|
(4,084 |
) |
||
|
|
|
|
|
|
|
||||
Net change in cash and cash equivalents |
|
|
(36,613 |
) |
|
|
21,217 |
|
||
Cash and cash equivalents at beginning of period |
|
|
259,386 |
|
|
|
290,164 |
|
||
Cash and cash equivalents at end of period |
|
$ |
222,773 |
|
|
$ |
311,381 |
|
||
The following tables provide details with respect to the amount of GAAP charges related to stock-based compensation, amortization of acquisition-related intangibles, acquisition-related transaction costs, capitalization and amortization of internally developed software costs, restructuring charges, disposal gains on office buildings and related charitable contributions, and other that were recorded in the line items indicated below (unaudited) (in thousands)
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
||||||||||||||
|
|
|
September 30, |
|
|
September 30, |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
||||||||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales |
|
$ |
904 |
|
|
$ |
844 |
|
|
$ |
2,587 |
|
|
$ |
2,415 |
|
||||
Sales and marketing |
|
|
5,231 |
|
|
|
3,452 |
|
|
|
14,745 |
|
|
|
10,408 |
|
||||
Research and development |
|
|
4,099 |
|
|
|
3,318 |
|
|
|
12,029 |
|
|
|
9,091 |
|
||||
General and administrative |
|
|
3,158 |
|
|
|
1,942 |
|
|
|
8,693 |
|
|
|
5,578 |
|
||||
Provision for income taxes |
|
|
(2,128 |
) |
|
|
(1,455 |
) |
|
|
(7,904 |
) |
|
|
(6,115 |
) |
||||
Total |
|
$ |
11,264 |
|
|
|
8,101 |
|
|
|
30,150 |
|
|
|
21,377 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of acquisition intangibles |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales |
|
$ |
833 |
|
|
$ |
701 |
|
|
$ |
2,525 |
|
|
$ |
2,448 |
|
||||
Sales and marketing |
|
|
492 |
|
|
|
510 |
|
|
|
1,485 |
|
|
|
1,580 |
|
||||
Research and development |
|
|
28 |
|
|
|
28 |
|
|
|
84 |
|
|
|
84 |
|
||||
Other loss, net |
|
|
124 |
|
|
|
— |
|
|
|
285 |
|
|
|
— |
|
||||
Provision for income taxes |
|
|
(190 |
) |
|
|
(149 |
) |
|
|
(576 |
) |
|
|
(518 |
) |
||||
Total |
|
$ |
1,287 |
|
|
$ |
1,090 |
|
|
$ |
3,803 |
|
|
$ |
3,594 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Acquisition transaction costs, restructuring charges, and other |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales |
|
$ |
— |
|
|
$ |
1,784 |
|
|
$ |
— |
|
|
$ |
1,813 |
|
||||
Sales and marketing |
|
|
2,993 |
|
|
|
3,676 |
|
|
|
8,290 |
|
|
|
8,354 |
|
||||
Research and development |
|
|
244 |
|
|
|
692 |
|
|
|
899 |
|
|
|
1,794 |
|
||||
General and administrative (1) |
|
|
7,998 |
|
|
|
373 |
|
|
|
9,525 |
|
|
|
1,538 |
|
||||
Gain on sale of assets (1) |
|
|
(26,842 |
) |
|
|
— |
|
|
|
(26,842 |
) |
|
|
— |
|
||||
Other loss, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
709 |
|
||||
Provision for income taxes |
|
|
3,090 |
|
|
|
(1,800 |
) |
|
|
1,240 |
|
|
|
(3,983 |
) |
||||
Total |
|
$ |
(12,517 |
) |
|
$ |
4,725 |
|
|
$ |
(6,888 |
) |
|
$ |
10,225 |
|
||||
(1): During the third quarter of 2019, the company recognized a gain of $27 million related to the sale of an office building, presented within "Gain on sale of assets". The company also recognized a charitable contribution expense of $7 million related to a donation using a portion of the proceeds from the sale of the building, presented within "General and administrative". |
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||
Capitalization and amortization of internally developed software costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales |
|
$ |
6,954 |
|
|
$ |
6,412 |
|
|
$ |
20,073 |
|
|
$ |
18,736 |
|
||||
Research and development |
|
|
(2,682 |
) |
|
|
(1,808 |
) |
|
|
(7,179 |
) |
|
|
(13,152 |
) |
||||
Provision for income taxes |
|
|
(897 |
) |
|
|
(967 |
) |
|
|
(2,708 |
) |
|
|
(1,173 |
) |
||||
Total |
|
$ |
3,375 |
|
|
$ |
3,637 |
|
|
$ |
10,186 |
|
|
$ |
4,411 |
|
||||
National Instruments |
||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures |
||||||||||||||||||
(in thousands, unaudited) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
||||||||||||
|
|
|
September 30, |
|
|
September 30, |
||||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Reconciliation of Gross Profit to Non-GAAP Gross Profit |
||||||||||||||||||
Gross profit, as reported |
|
$ |
254,527 |
|
|
$ |
257,112 |
|
|
$ |
739,991 |
|
|
$ |
753,335 |
|
||
Stock-based compensation |
|
|
904 |
|
|
|
844 |
|
|
|
2,587 |
|
|
|
2,415 |
|
||
Amortization of acquisition intangibles |
|
|
833 |
|
|
|
701 |
|
|
|
2,525 |
|
|
|
2,448 |
|
||
Acquisition transaction costs and restructuring charges |
|
|
— |
|
|
|
1,784 |
|
|
|
— |
|
|
|
1,813 |
|
||
Amortization of internally developed software costs |
|
|
6,954 |
|
|
|
6,412 |
|
|
|
20,073 |
|
|
|
18,736 |
|
||
Non-GAAP gross profit |
|
$ |
263,218 |
|
|
$ |
266,853 |
|
|
$ |
765,176 |
|
|
$ |
778,747 |
|
||
Non-GAAP gross margin |
|
|
77.3 |
% |
|
|
77.1 |
% |
|
|
77.6 |
% |
|
|
78.0 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses |
||||||||||||||||||
Operating expenses, as reported |
|
$ |
189,349 |
|
|
$ |
211,102 |
|
|
$ |
619,118 |
|
|
$ |
642,277 |
|
||
Stock-based compensation |
|
|
(12,488 |
) |
|
|
(8,712 |
) |
|
|
(35,467 |
) |
|
|
(25,077 |
) |
||
Amortization of acquisition intangibles |
|
|
(520 |
) |
|
|
(538 |
) |
|
|
(1,569 |
) |
|
|
(1,664 |
) |
||
Acquisition transaction costs and restructuring charges |
|
|
(4,235 |
) |
|
|
(4,741 |
) |
|
|
(11,714 |
) |
|
|
(11,686 |
) |
||
Capitalization of internally developed software costs |
|
|
2,682 |
|
|
|
1,808 |
|
|
|
7,179 |
|
|
|
13,152 |
|
||
Gain on sale of assets and other |
|
|
19,842 |
|
|
|
— |
|
|
|
19,842 |
|
|
|
— |
|
||
Non-GAAP operating expenses |
|
$ |
194,630 |
|
|
$ |
198,919 |
|
|
$ |
597,389 |
|
|
$ |
617,002 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Reconciliation of Operating Income to Non-GAAP Operating Income |
||||||||||||||||||
Operating income, as reported |
|
$ |
65,178 |
|
|
$ |
46,010 |
|
|
$ |
120,873 |
|
|
$ |
111,058 |
|
||
Stock-based compensation |
|
|
13,392 |
|
|
|
9,556 |
|
|
|
38,054 |
|
|
|
27,492 |
|
||
Amortization of acquisition intangibles |
|
|
1,353 |
|
|
|
1,239 |
|
|
|
4,094 |
|
|
|
4,112 |
|
||
Acquisition transaction costs and restructuring charges |
|
|
4,235 |
|
|
|
6,525 |
|
|
|
11,714 |
|
|
|
13,499 |
|
||
Net amortization of internally developed software costs |
|
|
4,272 |
|
|
|
4,604 |
|
|
|
12,894 |
|
|
|
5,584 |
|
||
Gain on sale of assets and other |
|
|
(19,842 |
) |
|
|
— |
|
|
|
(19,842 |
) |
|
|
— |
|
||
Non-GAAP operating income |
|
$ |
68,588 |
|
|
$ |
67,934 |
|
|
$ |
167,787 |
|
|
$ |
161,745 |
|
||
Non-GAAP operating margin |
|
|
20.1 |
% |
|
|
19.6 |
% |
|
|
17.0 |
% |
|
|
16.2 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Reconciliation of Income before income taxes to Non-GAAP Income before income taxes |
||||||||||||||||||
Income before income taxes, as reported |
|
$ |
67,427 |
|
|
$ |
48,375 |
|
|
$ |
126,252 |
|
|
$ |
112,990 |
|
||
Stock-based compensation |
|
|
13,392 |
|
|
|
9,556 |
|
|
|
38,054 |
|
|
|
27,492 |
|
||
Amortization of acquisition intangibles |
|
|
1,477 |
|
|
|
1,239 |
|
|
|
4,379 |
|
|
|
4,112 |
|
||
Acquisition transaction costs and restructuring charges |
|
|
4,235 |
|
|
|
6,525 |
|
|
|
11,714 |
|
|
|
14,208 |
|
||
Net amortization of internally developed software costs |
|
|
4,272 |
|
|
|
4,604 |
|
|
|
12,894 |
|
|
|
5,584 |
|
||
Gain on sale of assets and other |
|
|
(19,842 |
) |
|
|
— |
|
|
|
(19,842 |
) |
|
|
— |
|
||
Non-GAAP income before income taxes |
|
$ |
70,961 |
|
|
$ |
70,299 |
|
|
$ |
173,451 |
|
|
$ |
164,386 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Reconciliation of Provision for income taxes to Non-GAAP Provision for income taxes |
||||||||||||||||||
Provision for income taxes, as reported |
|
$ |
15,783 |
|
|
$ |
5,181 |
|
|
$ |
22,697 |
|
|
$ |
14,474 |
|
||
Stock-based compensation |
|
|
2,128 |
|
|
|
1,455 |
|
|
|
7,904 |
|
|
|
6,115 |
|
||
Amortization of acquisition intangibles |
|
|
190 |
|
|
|
149 |
|
|
|
576 |
|
|
|
518 |
|
||
Acquisition transaction costs and restructuring charges |
|
|
1,117 |
|
|
|
1,800 |
|
|
|
2,967 |
|
|
|
3,983 |
|
||
Net amortization of internally developed software costs |
|
|
897 |
|
|
|
967 |
|
|
|
2,708 |
|
|
|
1,173 |
|
||
Gain on sale of assets and other |
|
|
(4,207 |
) |
|
|
— |
|
|
|
(4,207 |
) |
|
|
— |
|
||
Tax reform charge |
|
|
(2,774 |
) |
|
|
1,146 |
|
|
|
(2,774 |
) |
|
|
1,146 |
|
||
Non-GAAP provision for income taxes |
|
$ |
13,134 |
|
|
$ |
10,698 |
|
|
$ |
29,871 |
|
|
$ |
27,409 |
|
||
Reconciliation of GAAP Net Income, Basic EPS and Diluted EPS to Non-GAAP Net Income, Non-GAAP Basic EPS and Non-GAAP Diluted EPS |
||||||||||||||||
(in thousands, except per share data, unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
||||||||||
|
|
|
September 30, |
|
|
September 30, |
||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income, as reported |
|
$ |
51,644 |
|
|
$ |
43,194 |
|
|
$ |
103,555 |
|
|
$ |
98,516 |
|
Adjustments to reconcile net income to non-GAAP net income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock-based compensation, net of tax effect |
|
|
11,264 |
|
|
|
8,101 |
|
|
|
30,150 |
|
|
|
21,377 |
|
Amortization of acquisition intangibles, net of tax effect |
|
|
1,287 |
|
|
|
1,090 |
|
|
|
3,803 |
|
|
|
3,594 |
|
Acquisition transaction costs and restructuring charges, net of tax effect |
|
|
3,118 |
|
|
|
4,725 |
|
|
|
8,747 |
|
|
|
10,225 |
|
Net amortization of internally developed software costs, net of tax effect |
|
|
3,375 |
|
|
|
3,637 |
|
|
|
10,186 |
|
|
|
4,411 |
|
Gain on sale of assets and other(1), net of tax effect |
|
|
(15,635 |
) |
|
|
— |
|
|
|
(15,635 |
) |
|
|
— |
|
Tax reform charge |
|
|
2,774 |
|
|
|
(1,146 |
) |
|
|
2,774 |
|
|
|
(1,146 |
) |
Non-GAAP net income |
|
$ |
57,827 |
|
|
$ |
59,601 |
|
|
$ |
143,580 |
|
|
$ |
136,977 |
|
|
||||||||||||||||
Basic EPS, as reported |
|
$ |
0.39 |
|
|
$ |
0.33 |
|
|
$ |
0.79 |
|
|
$ |
0.75 |
|
Adjustment to reconcile basic EPS to non-GAAP basic EPS: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Impact of stock-based compensation, net of tax effect |
|
|
0.09 |
|
|
|
0.06 |
|
|
|
0.22 |
|
|
|
0.16 |
|
Impact of amortization of acquisition intangibles, net of tax effect |
|
|
0.01 |
|
|
|
— |
|
|
|
0.03 |
|
|
|
0.03 |
|
Impact of acquisition transaction costs and restructuring charges, net of tax effect |
|
|
0.02 |
|
|
|
0.04 |
|
|
|
0.07 |
|
|
|
0.08 |
|
Impact of net amortization of internally developed software costs, net of tax effect |
|
|
0.03 |
|
|
|
0.03 |
|
|
|
0.08 |
|
|
|
0.03 |
|
Impact of gain on sale of assets and other(1), net of tax effect |
|
|
(0.12 |
) |
|
|
— |
|
|
|
(0.12 |
) |
|
|
— |
|
Impact of tax reform charge |
|
|
0.02 |
|
|
|
(0.01 |
) |
|
|
0.02 |
|
|
|
(0.01 |
) |
Non-GAAP basic EPS |
|
$ |
0.44 |
|
|
$ |
0.45 |
|
|
$ |
1.09 |
|
|
$ |
1.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted EPS, as reported |
|
$ |
0.39 |
|
|
$ |
0.32 |
|
|
$ |
0.78 |
|
|
$ |
0.74 |
|
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Impact of stock-based compensation, net of tax effect |
|
|
0.09 |
|
|
|
0.06 |
|
|
|
0.22 |
|
|
|
0.16 |
|
Impact of amortization of acquisition intangibles, net of tax effect |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.03 |
|
|
|
0.03 |
|
Impact of acquisition transaction costs and restructuring charges, net of tax effect |
|
|
0.02 |
|
|
|
0.04 |
|
|
|
0.07 |
|
|
|
0.08 |
|
Impact of net amortization of internally developed software costs, net of tax effect |
|
|
0.03 |
|
|
|
0.03 |
|
|
|
0.08 |
|
|
|
0.03 |
|
Impact of gain on sale of assets and other(1), net of tax effect |
|
|
(0.12 |
) |
|
|
— |
|
|
|
(0.12 |
) |
|
|
— |
|
Impact of tax reform charge |
|
|
0.02 |
|
|
|
(0.01 |
) |
|
|
0.02 |
|
|
|
(0.01 |
) |
Non-GAAP diluted EPS |
|
$ |
0.44 |
|
|
$ |
0.45 |
|
|
$ |
1.08 |
|
|
$ |
1.03 |
|
(1): During the third quarter of 2019, the company recognized a gain of $27 million related to the sale of an office building, presented within "Gain on sale of assets". The company also recognized a charitable contribution expense of $7 million related to a donation using a portion of the proceeds from the sale of the building, presented within "General and administrative". |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding - |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
131,385 |
|
|
|
132,357 |
|
|
|
131,896 |
|
|
|
131,792 |
|
Diluted |
|
|
131,889 |
|
|
|
133,197 |
|
|
|
132,890 |
|
|
|
133,067 |
|
National Instruments |
||||||||||||||||
Reconciliation of Net Income to EBITDA |
||||||||||||||||
(in thousands, unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
||||||||||
|
|
|
September 30, |
|
|
September 30, |
||||||||||
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
||||
Net income, as reported |
|
$ |
51,644 |
|
|
$ |
43,194 |
|
|
$ |
103,555 |
|
|
$ |
98,516 |
|
Adjustments to reconcile net income to EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income, net |
|
|
(1,923 |
) |
|
|
(1,525 |
) |
|
|
(6,155 |
) |
|
|
(3,705 |
) |
Tax expense |
|
|
15,783 |
|
|
|
5,181 |
|
|
|
22,697 |
|
|
|
14,474 |
|
Depreciation and amortization |
|
|
18,562 |
|
|
|
18,637 |
|
|
|
54,546 |
|
|
|
53,735 |
|
EBITDA |
|
$ |
84,066 |
|
|
$ |
65,487 |
|
|
$ |
174,643 |
|
|
$ |
163,020 |
|
Weighted average shares outstanding - Diluted |
|
|
131,889 |
|
|
|
133,197 |
|
|
|
132,890 |
|
|
|
133,067 |
|
Reconciliation of GAAP to Non-GAAP EPS Guidance |
||||||||
(unaudited) |
||||||||
|
|
|
Three Months Ended |
|||||
|
|
|
December 31, 2019 |
|||||
|
|
|
|
|
|
|
||
|
|
|
Low |
|
|
High |
||
GAAP Diluted EPS, guidance |
|
$ |
0.25 |
|
|
$ |
0.39 |
|
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS: |
|
|
|
|
|
|
||
Impact of stock-based compensation, net of tax effect |
|
|
0.09 |
|
|
|
0.09 |
|
Impact of amortization of acquisition intangibles, net of tax effect |
|
|
0.01 |
|
|
|
0.01 |
|
Impact of acquisition transaction costs, restructuring charges, and other, net of tax effect |
|
|
0.04 |
|
|
|
0.04 |
|
Impact of net amortization of software development costs, net of tax effect |
|
|
0.04 |
|
|
|
0.04 |
|
Non-GAAP Diluted EPS, guidance |
|
$ |
0.43 |
|
|
$ |
0.57 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20191029006037/en/
Marissa Vidaurri
Head of Investor Relations
(512) 683-5215
Source: National Instruments