Delaware
|
000-25426
|
74-1871327
|
||
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer
Identification No.) |
Emerging growth company
|
☐
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
|
☐
|
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/ Alex M. Davern
|
||
Name: Alex M. Davern
Title: Chief Executive Officer
|
Contact:
|
Marissa Vidaurri
|
|
Investor Relations
|
||
(512) 683-5215
|
• |
Revenue of $311 million, flat year over year, with increased backlog of $10
million
|
• |
GAAP gross margin of 76 percent and non-GAAP gross margin of 78 percent
|
• |
GAAP net income of $23 million, down 4 percent year over year
|
• |
Non-GAAP net income of $40 million, up 21 percent year over year
|
• |
Fully diluted GAAP EPS of $0.17, and fully diluted non-GAAP EPS of $0.30 which was at the midpoint of our guidance
|
• |
EBITDA of $42 million
|
• |
Cash and short-term investments of $480 million as of March 31, 2019
|
• |
Cash flow from operating activities of $277 million for the twelve months ended March 31, 2019, up 27 percent year over year
|
• |
1.035 million shares of common stock repurchased at approximately $45 per share
|
National Instruments
|
||||||||
Condensed Consolidated Balance Sheets
|
||||||||
(in thousands)
|
||||||||
March 31,
|
December 31, | |||||||
2019
|
2018 | |||||||
(unaudited)
|
||||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
228,766
|
$
|
259,386
|
||||
Short-term investments
|
251,297
|
271,396
|
||||||
Accounts receivable, net
|
215,012
|
242,955
|
||||||
Inventories, net
|
204,710
|
194,146
|
||||||
Prepaid expenses and other current assets
|
66,434
|
54,337
|
||||||
Total current assets
|
966,219
|
1,022,220
|
||||||
Property and equipment, net
|
228,164
|
245,201
|
||||||
Goodwill
|
262,384
|
264,530
|
||||||
Intangible assets, net
|
104,066
|
110,783
|
||||||
Operating lease ROU assets
|
70,861
|
—
|
||||||
Other long-term assets
|
39,644
|
28,501
|
||||||
Total assets
|
$
|
1,671,338
|
$
|
1,671,235
|
||||
Liabilities and Stockholders' Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$
|
50,576
|
$
|
48,388
|
||||
Accrued compensation
|
35,148
|
45,821
|
||||||
Deferred revenue - current
|
130,336
|
127,288
|
||||||
Operating lease liabilities - current
|
16,088
|
—
|
||||||
Other current liabilities
|
27,807
|
25,913
|
||||||
Other taxes payable
|
28,001
|
35,574
|
||||||
Total current liabilities
|
287,956
|
282,984
|
||||||
Deferred income taxes
|
24,268
|
25,457
|
||||||
Liability for uncertain tax positions
|
8,025
|
9,775
|
||||||
Income tax payable - non-current
|
74,546
|
74,546
|
||||||
Deferred revenue - non-current
|
32,393
|
32,636
|
||||||
Operating lease liabilities - non-current
|
38,154
|
—
|
||||||
Other long-term liabilities
|
4,743
|
7,479
|
||||||
Total liabilities
|
$
|
470,085
|
$
|
432,877
|
||||
Stockholders' equity:
|
||||||||
Preferred stock
|
$
|
—
|
$
|
—
|
||||
Common stock
|
1,319
|
1,327
|
||||||
Additional paid-in capital
|
910,602
|
897,544
|
||||||
Retained earnings
|
307,153
|
356,418
|
||||||
Accumulated other comprehensive loss
|
(17,821
|
)
|
(16,931
|
)
|
||||
Total stockholders' equity
|
1,201,253
|
1,238,358
|
||||||
Total liabilities and stockholders' equity
|
$
|
1,671,338
|
$
|
1,671,235
|
National Instruments
|
||||||||
Condensed Consolidated Statements of Income
|
||||||||
(in thousands, except per share data, unaudited)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2018
|
|||||||
Net sales:
|
||||||||
Product
|
$
|
277,702
|
$
|
280,359
|
||||
Software maintenance
|
33,372
|
31,538
|
||||||
Total net sales
|
311,074
|
311,897
|
||||||
Cost of sales:
|
||||||||
Product
|
74,188
|
72,317
|
||||||
Software maintenance
|
1,887
|
2,206
|
||||||
Total cost of sales
|
76,075
|
74,523
|
||||||
Gross profit
|
234,999
|
237,374
|
||||||
Operating expenses:
|
||||||||
Sales and marketing
|
117,551
|
120,117
|
||||||
Research and development
|
66,166
|
61,843
|
||||||
General and administrative
|
27,883
|
27,277
|
||||||
Total operating expenses
|
211,600
|
209,237
|
||||||
Operating income
|
23,399
|
28,137
|
||||||
Other income (expense):
|
||||||||
Interest income
|
2,234
|
1,015
|
||||||
Net foreign exchange gain
|
366
|
979
|
||||||
Other loss, net
|
(24
|
)
|
(519
|
)
|
||||
Income before income taxes
|
25,975
|
29,612
|
||||||
Provision for income taxes
|
2,755
|
5,344
|
||||||
Net income
|
$
|
23,220
|
$
|
24,268
|
||||
Basic earnings per share
|
$
|
0.18
|
$
|
0.19
|
||||
Diluted earnings per share
|
$
|
0.17
|
$
|
0.18
|
||||
Weighted average shares outstanding -
|
||||||||
Basic
|
132,252
|
131,127
|
||||||
Diluted
|
133,367
|
132,624
|
||||||
Dividends declared per share
|
$
|
0.25
|
$ |
0.23
|
National Instruments
|
||||||||
Condensed Consolidated Statements of Cash Flows
|
||||||||
(in thousands, unaudited)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2018
|
|||||||
Cash flow from operating activities:
|
||||||||
Net income
|
$
|
23,220
|
$
|
24,268
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
18,012
|
17,436
|
||||||
Stock-based compensation
|
11,034
|
8,204
|
||||||
Tax benefit from deferred income taxes
|
(1,650
|
)
|
(2,046
|
)
|
||||
Net change in operating assets and liabilities
|
(8,469
|
)
|
(7,879
|
)
|
||||
Net cash provided by operating activities
|
42,147
|
39,983
|
||||||
Cash flow from investing activities:
|
||||||||
Capital expenditures
|
(10,936
|
)
|
(8,115
|
)
|
||||
Capitalization of internally developed software
|
(2,279
|
)
|
(7,668
|
)
|
||||
Additions to other intangibles
|
(106
|
)
|
(2,855
|
)
|
||||
Acquisition of equity-method investment
|
(9,784
|
)
|
—
|
|||||
Purchases of short-term investments
|
(60,094
|
)
|
(52,355
|
)
|
||||
Sales and maturities of short-term investments
|
81,151
|
10,211
|
||||||
Net cash used by investing activities
|
(2,048
|
)
|
(60,782
|
)
|
||||
Cash flow from financing activities:
|
||||||||
Proceeds from issuance of common stock
|
9,213
|
8,600
|
||||||
Repurchase of common stock
|
(46,404
|
)
|
—
|
|||||
Dividends paid
|
(33,110
|
)
|
(30,177
|
)
|
||||
Net cash used by financing activities
|
(70,301
|
)
|
(21,577
|
)
|
||||
Impact of changes in exchange rates on cash
|
(418
|
)
|
2,577
|
|||||
Net change in cash and cash equivalents
|
(30,620
|
)
|
(39,799
|
)
|
||||
Cash and cash equivalents at beginning of period
|
259,386
|
290,164
|
||||||
Cash and cash equivalents at end of period
|
$
|
228,766
|
$
|
250,365
|
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, restructuring charges, and capitalization and amortization of internally developed software costs that were recorded in the line items indicated below
(unaudited) (in thousands)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2018
|
|||||||
Stock-based compensation
|
||||||||
Cost of sales
|
$
|
793
|
$
|
724
|
||||
Sales and marketing
|
4,375
|
3,338
|
||||||
Research and development
|
3,550
|
2,518
|
||||||
General and administrative
|
2,316
|
1,623
|
||||||
Provision for income taxes
|
(1,836
|
)
|
(1,658
|
)
|
||||
Total
|
$
|
9,198
|
$
|
6,545
|
||||
Amortization of acquisition intangibles
|
||||||||
Cost of sales
|
$
|
851
|
$
|
902
|
||||
Sales and marketing
|
499
|
537
|
||||||
Research and development
|
28
|
28
|
||||||
Provision for income taxes
|
(194
|
)
|
(192
|
)
|
||||
Total
|
$
|
1,184
|
$
|
1,275
|
||||
Acquisition transaction costs, restructuring charges, and other
|
||||||||
Cost of sales
|
$
|
—
|
$
|
28
|
||||
Sales and marketing
|
2,143
|
1,645
|
||||||
Research and development
|
345
|
209
|
||||||
General and administrative
|
912
|
612
|
||||||
Provision for income taxes
|
(840
|
)
|
(553
|
)
|
||||
Total
|
$
|
2,560
|
$
|
1,941
|
||||
Capitalization and amortization of internally developed software costs
|
||||||||
Cost of Sales
|
$
|
6,582
|
$
|
5,829
|
||||
Research and Development
|
(2,280
|
)
|
(7,667
|
)
|
||||
Provision for income taxes
|
(903
|
)
|
386
|
|||||
Total
|
$
|
3,399
|
$
|
(1,452
|
)
|
National Instruments
Reconciliation of GAAP to Non-GAAP Measures
(in thousands, unaudited)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2018
|
|||||||
Reconciliation of Gross Profit to Non-GAAP Gross Profit
|
||||||||
Gross profit, as reported
|
$
|
234,999
|
$
|
237,374
|
||||
Stock-based compensation
|
793
|
724
|
||||||
Amortization of acquisition intangibles
|
851
|
902
|
||||||
Acquisition transaction costs, restructuring charges, and other
|
—
|
28
|
||||||
Amortization of internally developed software costs
|
6,582
|
5,829
|
||||||
Non-GAAP gross profit
|
$
|
243,225
|
$
|
244,857
|
||||
Non-GAAP gross margin
|
78.2
|
%
|
78.5
|
%
|
||||
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses
|
||||||||
Operating expenses, as reported
|
$
|
211,600
|
$
|
209,237
|
||||
Stock-based compensation
|
(10,241
|
)
|
(7,479
|
)
|
||||
Amortization of acquisition intangibles
|
(527
|
)
|
(565
|
)
|
||||
Acquisition transaction costs, restructuring charges, and other
|
(3,400
|
)
|
(2,466
|
)
|
||||
Capitalization of internally developed software costs
|
2,280
|
7,667
|
||||||
Non-GAAP operating expenses
|
$
|
199,712
|
$
|
206,394
|
||||
Reconciliation of Operating Income to Non-GAAP Operating Income
|
||||||||
Operating income, as reported
|
$
|
23,399
|
$
|
28,137
|
||||
Stock-based compensation
|
11,034
|
8,203
|
||||||
Amortization of acquisition intangibles
|
1,378
|
1,467
|
||||||
Acquisition transaction costs, restructuring charges, and other
|
3,400
|
2,494
|
||||||
Net amortization (capitalization) of internally developed software costs
|
4,302
|
(1,838
|
)
|
|||||
Non-GAAP operating income
|
$
|
43,513
|
$
|
38,463
|
||||
Non-GAAP operating margin
|
14.0
|
%
|
12.3
|
%
|
||||
Reconciliation of Income before income taxes to Non-GAAP Income before income taxes
|
||||||||
Income before income taxes, as reported
|
$
|
25,975
|
$
|
29,612
|
||||
Stock-based compensation
|
11,034
|
8,203
|
||||||
Amortization of acquisition intangibles
|
1,378
|
1,467
|
||||||
Acquisition transaction costs, restructuring charges, and other
|
3,400
|
2,494
|
||||||
Net amortization (capitalization) of internally developed software costs
|
4,302
|
(1,838
|
)
|
|||||
Non-GAAP income before income taxes
|
$
|
46,089
|
$
|
39,938
|
||||
Reconciliation of Provision for income taxes to Non-GAAP Provision for income taxes
|
||||||||
Provision for income taxes, as reported
|
$
|
2,755
|
$
|
5,344
|
||||
Stock-based compensation
|
1,836
|
1,658
|
||||||
Amortization of acquisition intangibles
|
194
|
192
|
||||||
Acquisition transaction costs, restructuring charges, and other
|
840
|
553
|
||||||
Capitalization and amortization, net of tax
|
903
|
(386
|
)
|
|||||
Non-GAAP provision for income taxes
|
$
|
6,528
|
$
|
7,361
|
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,
|
||||||||
2019
|
2018
|
|||||||
Net income, as reported
|
$
|
23,220
|
$
|
24,268
|
||||
Adjustments to reconcile net income to non-GAAP net income:
|
||||||||
Stock-based compensation, net of tax effect
|
9,198
|
6,545
|
||||||
Amortization of acquisition intangibles, net of tax effect
|
1,184
|
1,275
|
||||||
Acquisition transaction costs, restructuring, and other, net of tax effect
|
2,560
|
1,941
|
||||||
Net amortization/(capitalization) of internally developed software costs, net of tax
|
3,399
|
(1,452
|
)
|
|||||
Non-GAAP net income
|
$
|
39,561
|
$
|
32,577
|
||||
Basic EPS, as reported
|
$
|
0.18
|
$
|
0.19
|
||||
Adjustment to reconcile basic EPS to non-GAAP
|
||||||||
basic EPS:
|
||||||||
Impact of stock-based compensation, net of tax effect
|
0.07
|
0.05
|
||||||
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
|
0.01
|
||||||
Impact of (capitalization)/amortization of internally developed software costs, net of tax effect
|
0.02
|
(0.01
|
)
|
|||||
Non-GAAP basic EPS
|
$
|
0.30
|
$
|
0.25
|
||||
Diluted EPS, as reported
|
$
|
0.17
|
$
|
0.18
|
||||
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS
|
||||||||
Impact of stock-based compensation, net of tax effect
|
0.07
|
0.05
|
||||||
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
|
||||||
Impact of amortization/(capitalization) of internally developed software costs, net of tax effect
|
0.03
|
(0.01
|
)
|
|||||
Non-GAAP diluted EPS
|
$
|
0.30
|
$
|
0.25
|
||||
Weighted average shares outstanding -
|
||||||||
Basic
|
132,252
|
131,127
|
||||||
Diluted
|
133,367
|
132,624
|
National Instruments
Reconciliation of Net Income to EBITDA
(in thousands, unaudited)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2018
|
|||||||
Net income, as reported
|
$
|
23,220
|
$
|
24,268
|
||||
Adjustments to reconcile net income to EBITDA:
|
||||||||
Interest income, net
|
(2,220
|
)
|
(927
|
)
|
||||
Tax expense
|
2,755
|
5,344
|
||||||
Depreciation and amortization
|
18,012
|
17,436
|
||||||
EBITDA
|
$
|
41,767
|
$
|
46,121
|
||||
Weighted average shares outstanding - Diluted
|
133,367
|
132,624
|
||||||
Reconciliation of Cash Flow from Operations to Non-GAAP Free Cash Flow
(in thousands, unaudited)
|
||||||||
TTM1 Ended
|
||||||||
March 31,
|
||||||||
2019
|
2018
|
|||||||
Cash Flow From Operations, as reported
|
$
|
276,744
|
$
|
217,748
|
||||
Less: Capital Expenditures, as reported
|
(40,130
|
)
|
(32,274
|
)
|
||||
Non-GAAP Free Cash Flow
|
$
|
236,614
|
$
|
185,474
|
||||
1 TTM represents trailing twelve months and a simple summation of the current and the immediate past three quarters
information.
|
||||||||
Reconciliation of GAAP to Non-GAAP EPS Guidance
|
||||||||
(unaudited)
|
||||||||
Three Months Ended
|
||||||||
June 30, 2019
|
||||||||
Low
|
High
|
|||||||
GAAP Fully Diluted EPS, guidance
|
$
|
0.16
|
$ |
0.30
|
||||
Adjustment to reconcile diluted EPS to non-GAAP
|
||||||||
diluted EPS:
|
||||||||
Impact of stock-based compensation, net of tax effect
|
0.07
|
0.07
|
||||||
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
|
0.02
|
0.02
|
||||||
Impact of capitalization and amortization of internally developed software costs, net of tax effect
|
0.02
|
0.02
|
||||||
Non-GAAP diluted EPS, guidance
|
$
|
0.28
|
$
|
0.42
|