National Instruments reports 4Q revenue of $250M
National Instruments announced 4Q10 revenue of $250 million, a new quarterly revenue record and a 24% increase compared to 4Q09.
Company reports record quarterly and annual profit, declares 3-for-2 stock split
National Instruments (Nasdaq: NATI; Austin, TX, USA) announced 4Q10 revenue of $250 million, a new quarterly revenue record and a 24% increase compared to 4Q09. This exceeded the company's guidance of between $230 million and $244 million, which was provided on Oct. 25, 2010. In 4Q10, the company's large order business, defined as orders greater than $20,000, grew 22% sequentially. Backlog increased by $5 million from Sept. 30 to Dec. 31, 2010.
GAAP and non-GAAP operating income were all-time quarterly records, and operating margins improved significantly over 4Q09. Net income for 4Q10 was $38 million, with GAAP fully diluted earnings per share (EPS) of $0.48. Non-GAAP net income was $42 million, with non-GAAP fully diluted EPS of $0.53. When comparing these results to 2009, investors should recall that the company incurred a $21.6 million noncash tax charge that reduced both GAAP and non-GAAP EPS by $0.28 in 4Q09.
In 4Q10, GAAP gross margin increased 60 basis points year-over-year to 77.5%. Non-GAAP gross margin increased by 50 basis points year-over-year to 78.0%.
The company's non-GAAP results exclude the impact of both stock-based compensation and the amortization of acquisition-related intangibles. Reconciliations of the company's GAAP and non-GAAP results are included as part of this release.
"I am extremely pleased with the significant demand we saw for our products through 2010," said Dr. James Truchard, co-founder, president and CEO. "I believe our long-term focus on innovation and our expandingproduct and services portfolio have created significant new opportunities for NI, and I believe our customers are seeing great value in our integrated platforms such as NI LabVIEW, PXI and CompactRIO."
National Instruments’ virtual instrumentation and graphical system design product sales were up 24% year-over-year. NI instrument control product sales were up 20% year-over-year in 4Q10. Product revenue was $234 million, up 24% year-over-year, and software maintenance revenue was $16 million, up 21% year-over-year.
Geographically, revenue in US dollar terms for 4Q10 compared to 4Q09 was up 16% in the Americas, up 24% in Europe and up 37% in Asia. In local currency terms, revenue was up 28% in Europe and up 27% in Asia.
As of Dec. 31, NI had a record $351 million in cash and short-term investments, up $12 million from Sept. 30. The National Instruments board of directors declared a 3-for-2 stock split and increased the quarterly dividend to $0.15 per share on the company's common stock payable on Feb. 21 to shareholders of record on Feb. 4. All per-share data, including dividends and guidance, in this release is presented prior to this split.
-- Record revenue of $873 million, up 29% year-over-year
-- GAAP operating margin of 14.7%
-- Non-GAAP operating margin of 17.3%
-- Fully diluted GAAP EPS of $1.38
-- Fully diluted non-GAAP EPS of $1.58
-- Record annual revenue for NI CompactRIO, RF and PXI modular instruments
-- Record cash flow from operating activities of $145 million
-- Record EBITDA of $165 million or $2.08 per share
-- NI named to FORTUNE magazine's 100 Best Companies to Work For list for 12th consecutive year
Full-year 2010 revenue was $873 million, up 29% year-over-year. Annual GAAP net income was $109.1 million, with fully diluted EPS of $1.38, and annual non-GAAP net income was $124.6 million, with non-GAAP fully diluted EPS of $1.58.
Guidance for 1Q11
"We are extremely pleased by our impressive finish to 2010, and this increases our confidence in aggressively investing in long-term growth," said Alex Davern, EVP, COO and CFO. "As part of our investment for 2011, we are budgeting to increase our R&D personnel by 19 percent and our field sales force by 24%. Overall headcount is budgeted to increase by 17%; however, the incremental cost of these additions will be partially offset by an expected reduction in our variable compensation in 2011."
National Instruments expects strong 1Q11 year-over-year revenue growth, with revenue expected to be between $230 million and $244 million. The company expects fully diluted EPS between $0.33 and $0.41, with non-GAAP fully diluted EPS expected to be between $0.38 and $0.46. For 2011, the company anticipates that its non-GAAP effective tax rate will be approximately 20%.
In 1Q11, the company anticipates that the GAAP to non-GAAP EPS adjustment will be approximately $0.05 per share.
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, operating expenses, operating income, 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, 2010 and 2009, on a GAAP and non-GAAP basis. 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 or amortization of acquired intangibles that are non-cash charges 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 earnings before interest, taxes, depreciation and amortization (EBITDA) and EBITDA diluted EPS for the three- and 12-month periods ended Dec. 31, 2010 and 2009. 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.
-- Posted byVision Systems Design