Delaware
|
000-25426
|
74-1871327
|
||
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer
Identification No.) |
Emerging growth company
|
☐
|
☐
|
Item 2.02.
|
Results of Operations and Financial Condition.
|
Item 9.01.
|
Financial Statements and Exhibits
|
Exhibit No.
|
Description
|
|
99.1
|
NATIONAL INSTRUMENTS CORPORATION
|
|||
By:
|
/s/ DAVID G. HUGLEY
|
||
David G. Hugley
Vice President & General Counsel; Secretary
|
Contact:
|
Marissa Vidaurri
|
|
Investor Relations
|
||
(512) 683-5215
|
• |
Revenue of $312 million, up 4 percent year over year
|
• |
GAAP gross margin of 76 percent and non-GAAP gross margin of 77 percent
|
• |
GAAP net income of $24 million, up 34 percent year over year
|
• |
Non-GAAP net income of $34 million, up 26 percent year over year
|
• |
Fully diluted GAAP EPS of $0.18 and fully diluted non-GAAP EPS of $0.26
|
• |
EBITDA of $46 million
|
• |
Cash and short-term investments of $415 million as of March 31, 2018
|
National Instruments
|
||||||||
Condensed Consolidated Balance Sheets
|
||||||||
(in thousands)
|
||||||||
March 31,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
(unaudited)
|
||||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
250,365
|
$
|
290,164
|
||||
Short-term investments
|
164,159
|
121,888
|
||||||
Accounts receivable, net
|
242,291
|
248,825
|
||||||
Inventories, net
|
193,273
|
184,592
|
||||||
Prepaid expenses and other current assets
|
65,701
|
48,621
|
||||||
Total current assets
|
915,789
|
894,090
|
||||||
Property and equipment, net
|
248,799
|
249,715
|
||||||
Goodwill
|
269,620
|
266,783
|
||||||
Intangible assets, net
|
126,242
|
123,293
|
||||||
Other long-term assets
|
31,155
|
32,553
|
||||||
Total assets
|
$
|
1,591,605
|
$
|
1,566,434
|
||||
Liabilities and Stockholders' Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$
|
52,856
|
$
|
49,733
|
||||
Accrued compensation
|
34,640
|
43,309
|
||||||
Deferred revenue - current
|
127,766
|
120,638
|
||||||
Other current liabilities
|
32,478
|
23,782
|
||||||
Other taxes payable
|
28,229
|
31,793
|
||||||
Total current liabilities
|
275,969
|
269,255
|
||||||
Deferred income taxes
|
32,774
|
33,609
|
||||||
Liability for uncertain tax positions
|
10,486
|
10,158
|
||||||
Income tax payable - long-term
|
81,515
|
81,515
|
||||||
Deferred revenue - long-term
|
31,021
|
33,742
|
||||||
Other long-term liabilities
|
10,134
|
10,134
|
||||||
Total liabilities
|
$
|
441,899
|
$
|
438,413
|
||||
Stockholders' equity:
|
||||||||
Preferred stock
|
$
|
—
|
$
|
—
|
||||
Common stock
|
1,312
|
1,310
|
||||||
Additional paid-in capital
|
846,743
|
829,979
|
||||||
Retained earnings
|
315,951
|
313,241
|
||||||
Accumulated other comprehensive loss
|
(14,300
|
)
|
(16,509
|
)
|
||||
Total stockholders' equity
|
1,149,706
|
1,128,021
|
||||||
Total liabilities and stockholders' equity
|
$
|
1,591,605
|
$
|
1,566,434
|
National Instruments
|
||||||||
Condensed Consolidated Statements of Income
|
||||||||
(in thousands, except per share data, unaudited)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
2018
|
2017
|
|||||||
Net sales:
|
||||||||
Product
|
$
|
280,359
|
$
|
271,512
|
||||
Software maintenance
|
31,538
|
28,594
|
||||||
Total net sales
|
311,897
|
300,106
|
||||||
Cost of sales:
|
||||||||
Product
|
72,317
|
75,196
|
||||||
Software maintenance
|
2,206
|
1,328
|
||||||
Total cost of sales
|
74,523
|
76,524
|
||||||
Gross profit
|
237,374
|
223,582
|
||||||
Operating expenses:
|
||||||||
Sales and marketing
|
120,117
|
117,258
|
||||||
Research and development
|
61,843
|
58,263
|
||||||
General and administrative
|
27,277
|
25,743
|
||||||
Total operating expenses
|
209,237
|
201,264
|
||||||
Operating income
|
28,137
|
22,318
|
||||||
Other income (expense):
|
||||||||
Interest income
|
1,015
|
343
|
||||||
Net foreign exchange (loss) gain
|
979
|
82
|
||||||
Other (expense) income, net
|
(519
|
)
|
431
|
|||||
Income before income taxes
|
29,612
|
23,174
|
||||||
Provision for income taxes
|
5,344
|
5,026
|
||||||
Net income
|
$
|
24,268
|
$
|
18,148
|
||||
Basic earnings per share
|
$
|
0.19
|
$
|
0.14
|
||||
Diluted earnings per share
|
$
|
0.18
|
$
|
0.14
|
||||
Weighted average shares outstanding -
|
||||||||
Basic
|
131,127
|
129,438
|
||||||
Diluted
|
132,624
|
130,108
|
||||||
Dividends declared per share
|
$
|
0.23
|
$
|
0.21
|
National Instruments
|
||||||||
Condensed Consolidated Statements of Cash Flows
|
||||||||
(in thousands, unaudited)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
2018
|
2017
|
|||||||
Cash flow from operating activities:
|
||||||||
Net income
|
$
|
24,268
|
$
|
18,148
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
17,436
|
18,669
|
||||||
Stock-based compensation
|
8,204
|
6,402
|
||||||
Tax benefit from deferred income taxes
|
(2,046
|
)
|
(2,984
|
)
|
||||
Net change in operating assets and liabilities
|
(7,879
|
)
|
6,441
|
|||||
Net cash provided by operating activities
|
39,983
|
46,676
|
||||||
Cash flow from investing activities:
|
||||||||
Capital expenditures
|
(8,115
|
)
|
(10,811
|
)
|
||||
Capitalization of internally developed software
|
(7,668
|
)
|
(11,624
|
)
|
||||
Additions to other intangibles
|
(2,855
|
)
|
(525
|
)
|
||||
Purchases of short-term investments
|
(52,355
|
)
|
(25,253
|
)
|
||||
Sales and maturities of short-term investments
|
10,211
|
11,931
|
||||||
Net cash used by investing activities
|
(60,782
|
)
|
(36,282
|
)
|
||||
Cash flow from financing activities:
|
||||||||
Proceeds from issuance of common stock
|
8,600
|
7,817
|
||||||
Dividends paid
|
(30,177
|
)
|
(27,201
|
)
|
||||
Net cash used by financing activities
|
(21,577
|
)
|
(19,384
|
)
|
||||
Impact of changes in exchange rates on cash
|
2,577
|
2,715
|
||||||
Net change in cash and cash equivalents
|
(39,799
|
)
|
(6,275
|
)
|
||||
Cash and cash equivalents at beginning of period
|
290,164
|
285,283
|
||||||
Cash and cash equivalents at end of period
|
$
|
250,365
|
$
|
279,008
|
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, and restructuring charges that were recorded in the line items indicated below (unaudited) (in thousands)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
2018
|
2017
|
|||||||
Stock-based compensation
|
||||||||
Cost of sales
|
$
|
724
|
$
|
575
|
||||
Sales and marketing
|
3,338
|
2,626
|
||||||
Research and development
|
2,518
|
2,054
|
||||||
General and administrative
|
1,623
|
1,224
|
||||||
Provision for income taxes
|
(1,658
|
)
|
(1,675
|
)
|
||||
Total
|
$
|
6,545
|
$
|
4,804
|
||||
Amortization of acquisition intangibles
|
||||||||
Cost of sales
|
$
|
902
|
$
|
1,590
|
||||
Sales and marketing
|
537
|
478
|
||||||
Research and development
|
28
|
263
|
||||||
Provision for income taxes
|
(192
|
)
|
(554
|
)
|
||||
Total
|
$
|
1,275
|
$
|
1,777
|
||||
Acquisition transaction costs, restructuring charges, and other
|
||||||||
Cost of sales
|
$
|
28
|
$
|
336
|
||||
Sales and marketing
|
1,645
|
2,375
|
||||||
Research and development
|
209
|
399
|
||||||
General and administrative
|
612
|
177
|
||||||
Provision for income taxes
|
(553
|
)
|
(1,065
|
)
|
||||
Total
|
$
|
1,941
|
$
|
2,222
|
National Instruments
Reconciliation of GAAP to Non-GAAP Measures
(in thousands, unaudited)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
2018
|
2017
|
|||||||
Reconciliation of Gross Profit to Non-GAAP Gross Profit
|
||||||||
Gross profit, as reported
|
$
|
237,374
|
$
|
223,582
|
||||
Stock-based compensation
|
724
|
575
|
||||||
Amortization of acquisition intangibles
|
902
|
1,590
|
||||||
Acquisition transaction costs, restructuring charges, and other
|
28
|
336
|
||||||
Non-GAAP gross profit
|
$
|
239,028
|
$
|
226,083
|
||||
Non-GAAP gross margin
|
76.6
|
%
|
75.3
|
%
|
||||
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses
|
||||||||
Operating expenses, as reported
|
$
|
209,237
|
$
|
201,264
|
||||
Stock-based compensation
|
(7,479
|
)
|
(5,904
|
)
|
||||
Amortization of acquisition intangibles
|
(565
|
)
|
(741
|
)
|
||||
Acquisition transaction costs, restructuring charges, and other
|
(2,466
|
)
|
(2,951
|
)
|
||||
Non-GAAP operating expenses
|
$
|
198,727
|
$
|
191,668
|
||||
Reconciliation of Operating Income to Non-GAAP Operating Income
|
||||||||
Operating income, as reported
|
$
|
28,137
|
$
|
22,318
|
||||
Stock-based compensation
|
8,203
|
6,479
|
||||||
Amortization of acquisition intangibles
|
1,467
|
2,331
|
||||||
Acquisition transaction costs, restructuring charges, and other
|
2,494
|
3,287
|
||||||
Non-GAAP operating income
|
$
|
40,301
|
$
|
34,415
|
||||
Non-GAAP operating margin
|
12.9
|
%
|
11.5
|
%
|
||||
Reconciliation of Income before income taxes to Non-GAAP Income before income taxes
|
||||||||
Income before income taxes, as reported
|
$
|
29,612
|
$
|
23,174
|
||||
Stock-based compensation
|
8,203
|
6,479
|
||||||
Amortization of acquisition intangibles
|
1,467
|
2,331
|
||||||
Acquisition transaction costs, restructuring charges, and other
|
2,494
|
3,287
|
||||||
Non-GAAP income before income taxes
|
$
|
41,776
|
$
|
35,271
|
||||
Reconciliation of Provision for income taxes to Non-GAAP Provision for income taxes
|
||||||||
Provision for income taxes, as reported
|
$
|
5,344
|
$
|
5,026
|
||||
Stock-based compensation
|
1,658
|
1,675
|
||||||
Amortization of acquisition intangibles
|
192
|
554
|
||||||
Acquisition transaction costs, restructuring charges, and other
|
553
|
1,065
|
||||||
Non-GAAP provision for income taxes
|
$
|
7,747
|
$
|
8,320
|
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
|
||||||||
March 31,
|
||||||||
2018
|
2017
|
|||||||
Net income, as reported
|
$
|
24,268
|
$
|
18,148
|
||||
Adjustments to reconcile net income to non-GAAP net income:
|
||||||||
Stock-based compensation, net of tax effect
|
6,545
|
4,804
|
||||||
Amortization of acquisition intangibles, net of tax effect
|
1,275
|
1,777
|
||||||
Acquisition transaction costs, restructuring, and other, net of tax effect
|
1,941
|
2,222
|
||||||
Acquisition-related fair value adjustments
|
—
|
—
|
||||||
Non-GAAP net income
|
$
|
34,029
|
$
|
26,951
|
||||
Basic EPS, as reported
|
$
|
0.19
|
$
|
0.14
|
||||
Adjustment to reconcile basic EPS to non-GAAP
|
||||||||
basic EPS:
|
||||||||
Impact of stock-based compensation, net of tax effect
|
0.05
|
0.04
|
||||||
Impact of amortization of acquisition intangibles, net of tax effect
|
0.01
|
0.01
|
||||||
Impact of acquisition transaction costs, restructuring, and other, net of tax effect
|
0.01
|
0.02
|
||||||
Non-GAAP basic EPS
|
$
|
0.26
|
$
|
0.21
|
||||
Diluted EPS, as reported
|
$
|
0.18
|
$
|
0.14
|
||||
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS
|
||||||||
Impact of stock-based compensation, net of tax effect
|
0.05
|
0.04
|
||||||
Impact of amortization of acquisition intangibles, net of tax effect
|
0.01
|
0.01
|
||||||
Impact of acquisition transaction costs, restructuring, and other, net of tax effect
|
0.02
|
0.02
|
||||||
Non-GAAP diluted EPS
|
$
|
0.26
|
$
|
0.21
|
||||
Weighted average shares outstanding -
|
||||||||
Basic
|
131,127
|
129,438
|
||||||
Diluted
|
132,624
|
130,108
|
National Instruments
Reconciliation of Net Income to EBITDA
(in thousands, unaudited)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
2018
|
2,017
|
|||||||
Net income, as reported
|
$
|
24,268
|
$
|
18,148
|
||||
Adjustments to reconcile net income to EBITDA:
|
||||||||
Interest income, net
|
(927
|
)
|
(86
|
)
|
||||
Tax expense
|
5,344
|
5,026
|
||||||
Depreciation and amortization
|
17,436
|
18,669
|
||||||
EBITDA
|
$
|
46,121
|
$
|
41,757
|
||||
Weighted average shares outstanding - Diluted
|
132,624
|
130,108
|
||||||
Reconciliation of GAAP to Non-GAAP EPS Guidance
|
||||||||
(unaudited)
|
||||||||
Three Months Ended
|
||||||||
June 30, 2018
|
||||||||
Low
|
High
|
|||||||
GAAP Fully Diluted EPS, guidance
|
$
|
0.15
|
$ |
0.29
|
||||
Adjustment to reconcile diluted EPS to non-GAAP
|
||||||||
diluted EPS:
|
||||||||
Impact of stock-based compensation, net of tax effect
|
0.04
|
0.04
|
||||||
Impact of amortization of acquisition intangibles and acquisition accounting adjustments, net of tax effect
|
0.01
|
0.01
|
||||||
Impact of acquisition transaction costs, restructuring, and other, net of tax effect
|
0.01
|
0.01
|
||||||
Impact of capitalization and amortization of internally developed software costs, net of tax effect
|
0.02
|
0.02
|
||||||
Non-GAAP diluted EPS, guidance
|
$
|
0.23
|
$
|
0.37
|
Schedule of Impact of Adoption of ASC 606 on Q1 2018 Results
(in thousands, unaudited, except per share data)
|
||||||||
For the three month period ended March 31, 2018
|
||||||||
As Reported
|
Without Adoption of ASC Topic 606
|
Effect of Adoption Increase/(Decrease)
|
||||||
Net Sales
|
||||||||
Products
|
$
|
280,359
|
$ |
273,947
|
$
|
6,412
|
||
Software Maintenance
|
31,538
|
31,538
|
—
|
|||||
Total net sales
|
311,897
|
305,485
|
6,412
|
|||||
Operating Expenses
|
209,237
|
209,260
|
(23
|
)
|
||||
Operating Income
|
28,137
|
21,702
|
6,435
|
|||||
Provision for income taxes
|
5,344
|
4,186
|
1,158
|
|||||
Net income
|
$
|
24,268
|
$ |
18,991
|
$
|
5,277
|
||
—
|
||||||||
Basic earnings per share
|
$
|
0.19
|
$ |
0.15
|
$
|
0.04
|
||
Diluted earnings per share
|
$
|
0.18
|
$ |
0.14
|
$
|
0.04
|