EX-99.1 2 ex99-1.htm PRESS RELEASE ex99-1.htm
 
Contacts:
Veronica Garza
Investor Relations
(512) 683-6873

 
National Instruments Reports Record Operating Income in Q4
Quarterly Revenue Increases 22 Percent on a Sequential Basis
 
Q4 2009 Highlights
 
·  
Revenue of $202 million, flat year-over-year and up 22 percent sequentially
 
·  
GAAP gross margin of 76.9 percent
 
·  
Non-GAAP gross margin of 77.5 percent
 
·  
GAAP and non-GAAP operating income reached all-time record
 
·  
Fully diluted GAAP EPS of $0.03 including a $0.28 per share non-cash tax charge
 
·  
Non-GAAP fully diluted EPS of $0.12 including a $0.28 per share non-cash tax charge
 
·  
EBITDA reaches a record of $46 million, or $0.58 per share, and was up 56 percent year-over-year
 
·  
Cash from operating activities reaches a record of $45 million
 
·  
Cash and short-term investments of $289 million as of Dec. 31, 2009
 
AUSTIN, Texas – Jan. 26, 2010 – National Instruments (Nasdaq: NATI) reported quarterly revenue of $202 million, which represents a 22 percent sequential increase and is flat year-over-year. Orders returned to year-over-year growth in Q4, up 2 percent, and the average order size reached a new quarterly record of approximately $3,800. Revenue growth in the quarter was lower than year-over-year order growth due to a record $8 million net increase in deferred revenue, primarily resulting from strong sequential growth in software sales in Q4, which is expected to benefit revenue in future quarters.
 
In Q4, gross margin increased by 2.3 percentage points sequentially and increased 1.7 percentage points year-over-year to 76.9 percent in Q4. Non-GAAP gross margin increased by 2.2 percentage points sequentially and increased by 1.7 percentage points year-over-year to 77.5 percent. Inventory declined by $2 million sequentially in Q4.
 
Q4 2009 operating income and non-GAAP operating income both set quarterly records. Operating income was $36 million, a 65 percent increase over Q4 2008. The non-GAAP operating income of $42 million was up 50 percent compared to Q4 2008, and represents a non-GAAP operating margin of 21 percent. The company’s non-GAAP results exclude the impact of both stock-based compensation and the amortization of acquisition-related intangibles.
 
 
National Instruments Reports Record Operating Income in Q4
Jan. 26, 2010
Page 2
 
 
“While 2009 presented one of the most difficult economic environments in company history, our investments in R&D and field sales and the strength of our execution throughout the organization allowed National Instruments to recover rapidly, outperform the industry and position ourselves well for long-term success,” said James Truchard, NI president, co-founder and CEO. “I would like to congratulate our employees for making National Instruments one of FORTUNE’s 100 Best Places to Work for an 11th consecutive year and to thank everyone in the company for their expense management and commitment to innovation throughout 2009.”
 
In Q4, NI virtual instrumentation and graphical system design product sales, which constitute the majority of the company’s product portfolio, were up 23 percent from Q3 2009. NI instrument control product sales, which represent approximately 7 percent of NI revenue, were flat year-over-year and were up sequentially for a second quarter. NI CompactRIO hardware, modular instruments and academic products all set quarterly revenue records in Q4. The strong sequential increase in NI instrument control revenue in Q4 indicates that the overall test and measurement industry likely continued the sequential recovery that began in Q3. Product revenue was $188 million, up 1 percent from Q4 2008, and software maintenance revenue was $13 million, down 11 percent year-over-year.
 
 
Geographically, revenue in U.S. dollar terms for Q4 2009 compared to Q4 2008 was down 6 percent in the Americas, down 3 percent in Europe and up 15 percent in Asia. In local currency terms, revenue was up 1 percent in Europe and up 10 percent in Asia.
 
In Q4 2009, the company incurred a non-cash tax charge related to an opportunity benefit created by a new corporate income tax law in Hungary, which became effective on Jan. 1, 2010. Under the new law, National Instruments will receive a double tax deduction for qualified R&D expenses starting in 2010. As a result, NI has taken a non-cash charge to write off $21.6 million in other tax assets that NI had on its balance sheet related to Hungary but now does not expect to use. The $21.6 million charge reduced both the company’s GAAP and non-GAAP earnings per share (EPS) by $0.28.  For historical comparison, note that in Q4 2007, NI recognized an $18.3 million non-cash tax credit related to its Hungarian operations.
 
Including the impact of the $21.6 million, or $0.28 per share non-cash tax charge, net income for Q4 was $2.4 million, with fully diluted EPS of $0.03, and non-GAAP net income was $9.7 million, with non-GAAP fully diluted EPS of $0.12. A reconciliation of the company’s GAAP and non-GAAP results is included in this earnings press release.
 
The NI commitment to innovation and customer success is evident in the continued growth in R&D and field sales, which were up by 63 people in 2009. As of Dec. 31, total headcount was 5,120, a 1 percent year-over-year decline.
 
 
National Instruments Reports Record Operating Income in Q4
Jan. 26, 2010
Page 3
 
 
Cash flow from operations continued to be strong at $136 million for the year. As of Dec. 31, 2009, NI had $289 million in net cash and short-term investments, up $12 million from Sept. 30, 2009. During Q4 2009, the company paid $9 million in dividends and used $16.4 million to repurchase 574,000 shares of its common stock at an average price of $28.55 per share. During the difficult two years since the start of the recession in December 2007, NI generated $257 million in net cash provided by operating activities, paid out $72 million in dividends and used $138 million for the purchase of 5.6 million shares of NI common stock at an average price of $24.89 per share.
 
National Instruments announced that its Board of Directors approved an 8 percent sequential increase in the quarterly dividend to $0.13 per share. This dividend is payable on March 1, 2010, to shareholders of record on Feb. 8, 2010.
 
FY 2009 Highlights
 
·  
Revenue of $677 million, down 18 percent year-over-year
 
·  
GAAP operating margin of 6.9 percent
 
·  
Non-GAAP operating margin of 10.5 percent
 
·  
Fully diluted GAAP EPS of $0.22 including a $0.28 per share non-cash tax charge
 
·  
Non-GAAP fully diluted EPS of $0.47 including a $0.28 per share non-cash tax charge
 
·  
Record annual revenue for NI CompactRIO, RF, and academic products
 
·  
Cash flow from operating activities of $136 million
 
·  
EBITDA of $87 million or $1.11 per share
 
·  
NI named to FORTUNE magazine’s 100 Best Companies to Work For list for 11th consecutive year
 
Full-year 2009 revenue was $677 million, down 18 percent year-over-year in U.S. dollar terms. Including the impact of the $21.6 million or $0.28 per share non-cash tax charge, annual net income was $17 million, with fully diluted EPS of $0.22, and annual non-GAAP net income was $36 million, with non-GAAP fully diluted EPS of $0.47. 
 
Guidance for Q1 2010
 
“We are very pleased with the rapid recovery in our business despite the continued severe weakness in industrial capacity utilization,” said Alex Davern, NI CFO. “Our goals are to maintain the market share gains we have achieved in the recession and to focus on delivering significant operating leverage in the recovery. Our guidance anticipates significant year-over-year revenue and profit growth in Q1, with the midpoint of both revenue and earnings per share guidance, representing new all-time records for a first quarter.”
 
National Instruments Reports Record Operating Income in Q4
Jan. 26, 2010
Page 4
 
 
NI expects strong Q1 year-over-year revenue growth, with revenue expected to be between $192 million and $202 million. The company expects fully diluted EPS between $0.24 and $0.32, with non-GAAP fully diluted EPS expected to be between $0.30 and $0.38. This guidance includes the full restoration of employee salaries, generally effective Feb. 1, and the automatic variable pay increase that will result from the significant year-over-year growth assumed by the company’s guidance.
 
For 2010, the company anticipates that its non-GAAP effective tax rate will be between 18 percent and 22 percent, and the company is using 20 percent for internal modeling.
 
In Q1 2010, the company anticipates that the GAAP to non-GAAP EPS adjustment will be approximately $0.06 per share. For the full year, the company anticipates that the GAAP to non-GAAP EPS adjustment will be approximately $0.22 per share.
 
Non-GAAP Earnings Presentation and Non-GAAP Earnings Guidance
 
In addition to disclosing results determined in accordance with GAAP, NI discloses certain non-GAAP operating results that exclude certain charges. In this news release, the company has presented its results for 2009 and for Q4 2009 on a GAAP and non-GAAP basis. When presenting non-GAAP results, the company includes a reconciliation of the non-GAAP data to the data under GAAP.
 
National Instruments Reports Record Operating Income in Q4
Jan. 26, 2010
Page 5
 
 
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 all 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 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 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 NI’s earnings before interest, taxes, depreciation and amortization (EBITDA) for 2009 and Q4 2009 and comparative EBITDA results for 2008 and Q4 2008. Management also 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 Q4 2009 conference call today, Jan. 26, beginning at 4:00 p.m. CT, at www.ni.com/call. Replay information is available by calling (888) 203-1112, confirmation code #8926744, from Jan. 26 at 7:00 p.m. CT through Feb. 5 at midnight CT.
 
National Instruments Reports Record Operating Income in Q4
Jan. 26, 2010
Page 6
 
 
Forward-Looking Statements
 
This release contains “forward-looking statements,” including statements related to deferred revenue benefitting revenue in future quarters, positioning the company for long-term success, not expecting to use other tax assets in Hungary, maintaining market share gains, significant operating leverage and the company’s guidance for Q1 2010 with respect to revenue and GAAP and non-GAAP EPS, guidance assumptions, non-GAAP tax rate for 2010 and expected GAAP and non-GAAP adjustments for Q1 2010 and 2010. These statements are subject to a number of risks and uncertainties, including the risk of unexpected adverse changes or fluctuations in the global economy as a result of conditions in the global credit and equity markets, delays in the release of new products, fluctuations in customer demand for NI products, manufacturing inefficiencies, competitive conditions in NI markets, further tax law changes in Hungary and foreign exchange fluctuations. Actual results may differ materially from the expected results. The company directs readers to its quarterly reports on Form 10-Q and the other documents it files with the SEC for other risks associated with the company’s future performance.
 
About National Instruments
 
National Instruments (www.ni.com) is transforming the way engineers and scientists design, prototype and deploy systems for measurement, automation and embedded applications. NI empowers customers with off-the-shelf software such as NI LabVIEW and modular cost-effective hardware, and sells to a broad base of more than 30,000 different companies worldwide, with no one customer representing more than 3 percent of revenue and no one industry representing more than 15 percent of revenue. Headquartered in Austin, Texas, NI has more than 5,000 employees and direct operations in more than 40 countries. For the past 11 years, FORTUNE magazine has named NI one of the 100 best companies to work for in America. Readers can obtain investment information from the company’s investor relations department by calling (512) 683-5090, e-mailing nati@ni.com or visiting www.ni.com/nati.
 
CompactRIO, 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 Reports Record Operating Income in Q4
Jan. 26, 2010
Page 7
 
National Instruments
Condensed Consolidated Balance Sheets
(in thousands)
           
     
December 31,
  
 December 31,
     
2009
  
2008
     
(unaudited)
    
Assets
          
Current assets:
          
Cash and cash equivalents
  
$
              201,465
$
              229,400
Short-term investments
    
                87,196
  
                  6,220
Accounts receivable, net
    
              103,957
  
              121,548
Inventories, net
    
                86,515
  
              107,358
Prepaid expenses and other current assets
    
                36,523
  
                43,062
Deferred income taxes, net
    
                16,522
  
                21,435
Total current assets
    
              532,178
  
              529,023
           
Long-term investments
    
                         -
  
                10,500
Property and equipment, net
    
              153,265
  
              154,477
Goodwill, net
    
                64,779
  
                64,561
Intangible assets, net
    
                43,390
  
                41,915
Other long-term assets
    
                19,417
  
                32,115
Total assets
  
$
              813,029
$
              832,591
           
Liabilities and Stockholders' Equity
          
Current liabilities:
          
Accounts payable
  
$
                23,502
$
                30,876
Accrued compensation
    
                14,934
  
                22,012
Deferred revenue
    
                57,242
  
                45,514
Accrued expenses and other liabilities
    
                  8,560
  
                18,848
Other taxes payable
    
                14,181
  
                13,481
Total current liabilities
    
              118,419
  
              130,731
           
Deferred income taxes
    
                25,012
  
                25,157
Liability for uncertain tax positions
    
                11,062
  
                  9,364
Other long-term liabilities
    
                  4,116
  
                  2,901
Total liabilities
  
$
              158,609
$
              168,153
           
Stockholders' equity:
          
Preferred stock
    
                         -
  
                         -
Common stock
    
                     774
  
                     772
Additional paid-in capital
    
              336,446
  
              300,352
Retained earnings
    
              303,655
  
              352,831
Accumulated other comprehensive income
    
                13,545
  
                10,483
Total stockholders' equity
  
$
              654,420
$
              664,438
Total liabilities and stockholders' equity
  
$
              813,029
$
              832,591
 
National Instruments Reports Record Operating Income in Q4
Jan. 26, 2010
Page 8
National Instruments
Condensed Consolidated Statements of Income
(in thousands, except per share data)
                   
     
Three Months Ended
  
Twelve Months Ended
     
December 31,
  
December 31,
     
2009
  
2008
  
2009
  
2008
     
(unaudited)
      
(unaudited)
    
Net sales:
                  
Product
  
$
              188,388
$
              187,219
$
              623,736
$
              765,441
Software maintenance
    
                 13,209
  
                 14,888
  
                 52,858
  
                 55,096
Total net sales
    
              201,597
  
              202,107
  
              676,594
  
              820,537
                   
Cost of sales:
                  
Product
  
$
                 45,466
$
                 48,577
$
              164,700
$
              201,064
Software maintenance
    
                    1,150
  
                    1,516
  
                    5,184
  
                    6,045
Total cost of sales
    
                 46,616
  
                 50,093
  
              169,884
  
              207,109
                   
Gross profit
  
$
              154,981
$
              152,014
$
              506,710
$
              613,428
                   
Operating expenses:
                  
Sales and marketing
  
$
                 70,178
$
                 76,771
$
              269,267
$
              307,409
Research and development
    
                 33,722
  
                 37,332
  
              132,974
  
              143,140
General and administrative
    
                 15,100
  
                 16,040
  
                 57,938
  
                 67,162
Total operating expenses
  
$
              119,000
$
              130,143
$
              460,179
$
              517,711
                   
Operating income
    
                 35,981
  
                 21,871
  
                 46,531
  
                 95,717
                   
Other income (expense):
                  
Interest income
  
$
                         294
$
                         971
$
                    1,629
$
                    5,996
Net foreign exchange gain (loss)
    
                       (567)
  
                  (1,946)
  
                         734
  
                  (3,737)
Other income (expense), net
    
                         372
  
                         148
  
                    1,351
  
                         161
                   
Income before income taxes
  
$
                 36,080
$
                 21,044
$
                 50,245
$
                 98,137
                   
Provision for (benefit from) income taxes
    
                 33,714
  
                    1,726
  
                 33,160
  
                 13,310
                   
Net income
  
$
                    2,366
$
                 19,318
$
                 17,085
$
                 84,827
                   
Basic earnings per share
  
$
                       0.03
$
                       0.25
$
                       0.22
$
                       1.08
Diluted earnings per share
  
$
                       0.03
$
                       0.25
$
                       0.22
$
                       1.07
                   
Weighted average shares outstanding -
                  
basic
    
                 77,589
  
                 78,110
  
                 77,520
  
                 78,567
diluted
    
                 78,325
  
                 78,522
  
                 78,026
  
                 79,515
                   
Dividends declared per share
  
$
                       0.12
$
                       0.11
$
                       0.48
$
                       0.44
 
National Instruments Reports Record Operating Income in Q4
Jan. 26, 2010
Page 9
 
National Instruments
Condensed Consolidated Statements of Cash Flows
(in thousands)
           
     
Twelve Months Ended
     
December 31,
     
2009
  
2008
     
(unaudited)
    
Cash flow from operating activities:
          
Net income
  
$
           17,085
$
           84,827
Adjustments to reconcile net income to net cash provided
          
by operating activities:
          
Depreciation and amortization
    
           38,365
  
           37,103
Stock-based compensation
    
           20,299
  
           19,854
Provision for (benefit from) deferred income taxes
    
           17,196
  
           (4,475)
Tax expense (benefit from) stock option plans
    
             1,450
  
           (1,213)
Changes in operating assets and liabilities:
          
Accounts receivable
    
           17,591
  
           12,159
Inventories
    
           20,843
  
         (24,578)
Prepaid expenses and other assets
    
12,740
  
         (10,340)
Accounts payable
    
           (7,374)
  
           (5,648)
Deferred revenue
    
           11,728
  
             9,423
Taxes and other liabilities
    
         (14,272)
  
             4,706
Net cash provided by operating activities
  
$
         135,651
$
         121,818
           
Cash flow from investing activities:
          
Capital expenditures
    
         (20,847)
  
         (25,771)
Capitalization of internally developed software
    
         (12,583)
  
           (9,487)
Additions to other intangibles
    
           (4,602)
  
           (3,010)
Acquisition, net of cash received
    
                     -
  
         (17,310)
Purchases of short-term and long-term investments
    
         (93,087)
  
           (9,061)
Sales and maturities of short-term and long-term investments
    
           19,204
  
           86,179
Purchases of foreign currency option contracts
    
                     -
  
           (2,784)
Net cash (used by) provided by investing activities
  
$
       (111,915)
$
           18,756
           
Cash flow from financing activities:
          
Proceeds from issuance of common stock
    
           21,666
  
           31,150
Repurchase of common stock
    
         (34,579)
  
       (103,641)
Dividends paid
    
         (37,308)
  
         (34,735)
Tax expense (benefit from) stock option plans
    
           (1,450)
  
             1,213
Net cash (used by) financing activities
  
$
         (51,671)
$
       (106,013)
           
Net change in cash and cash equivalents
    
         (27,935)
  
           34,561
Cash and cash equivalents at beginning of period
  
$
         229,400
$
         194,839
Cash and cash equivalents at end of period
  
$
         201,465
$
         229,400
 
National Instruments Reports Record Operating Income in Q4
Jan. 26, 2010
Page 10
 
Detail of GAAP charges related to stock-based compensation and
amortization of acquisition intangibles (unaudited)
                   
     
Three Months Ended
  
Twelve Months Ended
     
December 31,
  
December 31,
     
2009
  
2008
  
2009
  
2008
           
Stock-based compensation
                  
Cost of sales
  
$
           309
$
           253
$
        1,284
$
        1,063
Sales and marketing
    
        2,148
  
        2,275
  
        8,774
  
        8,479
Research and development
    
        1,887
  
        1,961
  
        7,236
  
        7,121
General and administrative
    
           717
  
           733
  
        3,005
  
        3,084
Provision for income taxes
    
        1,523
  
       (1,013)
  
       (3,765)
  
       (4,601)
Total
  
$
        6,584
$
        4,209
$
      16,534
$
      15,146
                   
                   
Amortization of acquisition intangibles
                
Cost of sales
  
$
           852
$
           862
$
        3,445
$
        3,587
Sales and marketing
    
           126
  
           131
  
           503
  
           566
Research and development
    
                -
  
                -
  
                -
  
             14
General and administrative
    
                -
  
                -
  
                -
  
                -
Provision for income taxes
    
          (277)
  
          (281)
  
       (1,111)
  
       (1,127)
Total
  
$
           701
$
           712
$
        2,837
$
        3,040

 
National Instruments Reports Record Operating Income in Q4
Jan. 26, 2010
Page 11
 
National Instruments
Reconciliation of GAAP to Non-GAAP Measures
(in thousands, except per share data)
(unaudited)
                   
Reconciliation of Gross Profit to Non-GAAP Gross Profit
        
                   
     
Three Months Ended
  
Twelve Months Ended
     
December 31,
  
December 31,
     
2009
  
2008
  
2009
  
2008
                   
Gross profit, as reported
  
$
               154,981
$
            152,014
$
               506,710
$
               613,428
Stock-based compensation
    
                      309
  
                   253
  
                   1,284
  
                   1,063
Amortization of acquisition intangibles
    
                      852
  
                   862
  
                   3,445
  
                   3,587
                   
Non-GAAP gross profit
  
$
               156,142
$
            153,129
$
               511,439
$
               618,078
                   
                   
Reconciliation of Operating Expense to Non-GAAP Operating Expenses
        
                   
     
Three Months Ended
  
Twelve Months Ended
     
December 31,
  
December 31,
     
2009
  
2008
  
2009
  
2008
                   
Operating expense, as reported
  
$
               119,000
$
            130,143
$
               460,179
$
               517,711
Stock-based compensation
    
                 (4,752)
  
               (4,969)
  
               (19,015)
  
               (18,684)
Amortization of acquisition intangibles
    
                    (126)
  
                  (131)
  
                    (503)
  
                    (580)
                   
Non-GAAP operating expenses
  
$
               114,122
$
            125,043
$
               440,661
$
               498,447
                   
                   
Reconciliation of Operating Income to Non-GAAP Operating Income
        
                   
     
Three Months Ended
  
Twelve Months Ended
     
December 31,
  
December 31,
     
2009
  
2008
  
2009
  
2008
                   
Operating income, as reported
  
$
                 35,981
$
              21,871
$
                 46,531
$
                 95,717
Stock-based compensation
    
                   5,061
  
                5,222
  
                 20,299
  
                 19,747
Amortization of acquisition intangibles
    
                      978
  
                   993
  
                   3,948
  
                   4,167
                   
Non-GAAP operating income
  
$
                 42,020
$
              28,086
$
                 70,778
$
               119,631
 
National Instruments Reports Record Operating Income in Q4
Jan. 26, 2010
Page 12
 
Reconciliation of Income before income taxes to Non-GAAP Income before income taxes
        
                   
     
Three Months Ended
  
Twelve Months Ended
     
December 31,
  
December 31,
     
2009
  
2008
  
2009
  
2008
                   
Income before income taxes, as reported
  
$
                 36,080
$
              21,044
$
                 50,245
$
                 98,137
Stock-based compensation
    
                   5,061
  
                5,222
  
                 20,299
  
                 19,747
Amortization of acquisition intangibles
    
                      978
  
                   993
  
                   3,948
  
                   4,167
                   
Non-GAAP income before income taxes
  
$
                 42,119
$
              27,259
$
                 74,492
$
               122,051
                   
                   
Reconciliation of Provision for Income Taxes to Non-GAAP Provision for Income Taxes
        
                   
     
Three Months Ended
  
Twelve Months Ended
     
December 31,
  
December 31,
     
2009
  
2008
  
2009
  
2008
                   
Provision for income taxes, as reported
  
$
                 33,714
$
                1,726
$
                 33,160
$
                 13,310
Stock-based compensation
    
                 (1,523)
  
                1,013
  
                   3,765
  
                   4,601
Amortization of acquisition intangibles
    
                      277
  
                   281
  
                   1,111
  
                   1,127
                   
Non-GAAP provision for income taxes
  
$
                 32,468
$
                3,020
$
                 38,036
$
                 19,038
 
 
 
 

National Instruments Reports Record Operating Income in Q4
Jan. 26, 2010
Page 13
 
Reconciliation of Net Income and Diluted EPS to Non-GAAP Net Income and Non-GAAP
Diluted EPS
                   
     
Three Months Ended
  
Twelve Months Ended
     
December 31,
  
December 31,
     
2009
  
2008
  
2009
  
2008
Net income, as reported
  
$
               2,366
$
             19,318
$
             17,085
$
                   84,827
Adjustments to reconcile net income to non-GAAP net income:
                  
  Stock-based compensation, net of tax effect
    
               6,584
  
               4,209
  
             16,534
  
                   15,146
  Amortization of acquisition intangibles, net of tax effect
    
                  701
  
                  712
  
               2,837
  
                     3,040
                   
Non-GAAP net income
  
$
               9,651
$
             24,239
$
             36,456
$
                 103,013
                   
Basic EPS, as reported
  
$
                 0.03
$
                 0.25
$
                 0.22
$
                       1.08
Adjustment to reconcile basic EPS to non-GAAP
                  
basic EPS:
                  
  Impact of stock-based compensation, net of tax effect
  
$
                 0.08
$
                 0.05
$
                 0.21
$
                       0.19
  Impact of amortization of acquisition intangibles, net of tax effect
  
$
                 0.01
$
                 0.01
$
                 0.04
$
                       0.04
                   
Non-GAAP basic EPS
  
$
                 0.12
$
                 0.31
$
                 0.47
$
                       1.31
                   
                   
Diluted EPS, as reported
  
$
                 0.03
$
                 0.25
$
                 0.22
$
                       1.07
Adjustment to reconcile diluted EPS to non-GAAP
                  
diluted EPS:
                  
  Impact of stock-based compensation, net of tax effect
  
$
                 0.08
$
                 0.05
$
                 0.21
$
                       0.19
  Impact of amortization of acquisition intangibles, net of tax effect
  
$
                 0.01
$
                 0.01
$
                 0.04
$
                       0.04
                   
Non-GAAP diluted EPS
  
$
                 0.12
$
                 0.31
$
                 0.47
$
                       1.30
                   
Weighted average shares outstanding -
                  
Basic
    
             77,589
  
             78,110
  
             77,520
  
                   78,567
Diluted
    
             78,325
  
             78,522
  
             78,026
  
                   79,515
 
 
National Instruments Reports Record Operating Income in Q4
Jan. 26, 2010
Page 14

 
 
Reconciliation of Net Income and Diluted EPS to EBITDA and EBITDA Diluted EPS
                   
     
Three Months Ended
  
Twelve Months Ended
     
December 31,
  
December 31,
     
2009
  
2008
  
2009
  
2008
Net income, as reported
  
$
               2,366
$
             19,318
$
             17,085
$
                   84,827
Adjustments to reconcile net income to EBITDA:
                  
     Interest income
    
                 (294)
  
                 (971)
  
              (1,629)
  
                   (5,996)
     Taxes
    
             33,714
  
               1,726
  
             33,160
  
                   13,310
     Depreciation and amortization
    
               9,829
  
               9,202
  
             38,365
  
                   37,103
EBITDA
  
$
             45,615
$
             29,275
$
             86,981
$
                 129,244
                   
Diluted EPS, as reported
  
$
                 0.03
$
                 0.25
$
                 0.22
$
                       1.07
Adjustment to reconcile diluted EPS to EBITDA
                  
     Interest income
  
$
                 0.00
$
                (0.01)
$
                (0.02)
$
                     (0.08)
     Taxes
  
$
                 0.43
$
                 0.02
$
                 0.42
$
                       0.17
     Depreciation and amortization
  
$
                 0.12
$
                 0.11
$
                 0.49
$
                       0.47
EBITDA diluted EPS
  
$
                 0.58
$
                 0.37
$
                 1.11
$
                       1.63
                   
Diluted
    
             78,325
  
             78,522
  
             78,026
  
                   79,515
 
 
 
 

National Instruments Reports Record Operating Income in Q4
Jan. 26, 2010
Page 15
 
 
National Instruments
  
Reconciliation of GAAP to Non-GAAP Estimated Measures
  
(in thousands, except per share data)
  
(unaudited)
  
             
Reconciliation of Estimated GAAP Fully Diluted EPS to Non-GAAP Fully Diluted EPS
  
             
   
Three months ended
  
   
March 31, 2010
  
             
   
Low
    
High
  
GAAP Fully Diluted EPS, estimated
   $ 0.24     $ 0.32  
Adjustment to reconcile diluted EPS to non-GAAP
                
diluted EPS:
                
  Impact of stock-based compensation, net of tax effect
   $ 0.05     $ 0.05  
  Impact of amortization of acquisition intangibles, net of tax effect
   $ 0.01     $ 0.01  
                 
Non-GAAP diluted EPS, estimated
   $ 0.30     $ 0.38