Contact:
 
Marissa Vidaurri
   
Investor Relations
   
(512) 683-6873

 
National Instruments Reports Record Revenue and Record Net Income for a Third Quarter
NI well positioned for long-term growth driven by major market trends


Q3 2018 Highlights
Revenue of $346 million, up 8 percent year over year
GAAP gross margin of 74 percent
Non-GAAP gross margin of 77 percent
Fully diluted GAAP EPS of $0.32 and fully diluted non-GAAP EPS of $0.45
GAAP net income of $43 million, up 29 percent year over year
Non-GAAP net income of $60 million, up 53 percent year over year
EBITDA of $65 million
Cash and short-term investments of $482 million as of September 30, 2018

First 9 Months 2018 Highlights
Revenue of $999 million, up 6 percent year over year
GAAP net income up 28 percent year over year
Non-GAAP net income up 49 percent year over year
 
AUSTIN, Texas - October 25, 2018 - National Instruments (Nasdaq: NATI) today announced Q3 2018 revenue of $346 million, up 8 percent year over year.

In Q3 2018, the value of the company's total orders was up 13 percent year over year; orders under $20,000 were up 5 percent year over year; and orders over $20,000 were up 21 percent year over year.

In Q3, GAAP gross margin was 74 percent and non-GAAP gross margin was 77 percent. Total GAAP operating expenses were $211 million, up 6 percent year over year. Total non-GAAP operating expenses were flat year over year at $199 million in Q3. GAAP operating margin was 13 percent in Q3, with GAAP operating income of $46 million, up 23 percent year over year. Non-GAAP operating margin was 20 percent in Q3, with non-GAAP operating income of $68 million, up 50 percent year over year.

For the first three quarters of 2018, GAAP operating income was $111 million, up 26 percent year over year, and non-GAAP operating income was $162 million, up 48 percent year over year.

GAAP net income for Q3 was $43 million, with fully diluted earnings per share (EPS) of $0.32, and non-GAAP net income was $60 million, with non-GAAP fully diluted EPS of $0.45. EBITDA, or Earnings Before Interest, Taxes, Depreciation and Amortization, was $65 million for Q3.

"I expect to achieve our target non-GAAP operating margin for 2018 and I am excited by the multi-year growth opportunities we see in areas like 5G semiconductors, electric and autonomous vehicles," said Alex Davern, NI CEO. "We will continue to drive aligned execution through sales, marketing, and R&D to accelerate growth - both organically and inorganically - in the target industries where our platform is most highly differentiated."

"I am proud of our continued progress on growth and profitability. We believe from focus comes growth and with leadership's implementation of our Core Strategic Vision, we have driven alignment to the top priorities we believe will provide the most opportunities for growth," said Karen Rapp, NI CFO. "With the entire company focused in one direction, we have increased operational efficiency and delivered a 49 percent year over year increase in non-GAAP net income through the first three quarters of 2018. We also increased backlog equivalent to 4 percent of revenue this quarter, improving our future visibility."

Geographic revenue in U.S. dollar terms for Q3 2018 compared with Q3 2017 was up 7 percent in the Americas, up 10 percent in APAC and up 7 percent in EMEIA. Excluding the impact of foreign currency exchange, revenue was up 7 percent in the Americas, up 9 percent in APAC and up 6 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, 2018, NI had $482 million in cash and short-term investments. During the third quarter, NI paid $30 million in dividends. The NI Board of Directors approved a quarterly dividend of $0.23 per share payable on December 3, 2018, to stockholders of record on November 12, 2018.

The company's non-GAAP results exclude the impact of stock-based compensation, amortization of acquisition-related intangibles, acquisition-related transaction costs, restructuring charges, and capitalization and amortization of internally developed software costs, tax reform charges and other. 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 $360 million to $390 million, which would be a new Q4 record at the midpoint. The company currently expects that GAAP fully diluted EPS will be in the range of $0.35 to $0.49 for Q4, with non-GAAP fully diluted EPS expected to be in the range of $0.46 to $0.60.

Non-GAAP Presentation
In the quarter ended June 30, 2018, NI began moving toward more frequent releases for many of its software products. Specifically, for many of its software development projects, NI started applying agile development methodologies, which are characterized by a more dynamic development process with more frequent and iterative revisions to a product releases features and functions as the software is being developed. Due to the shorter development cycle and focus on rapid production associated with agile development, NI expects that for a significant majority of its software development projects the costs incurred subsequent to the achievement of technological feasibility will be immaterial in future periods and it expects to record significantly less capitalized software development costs than under its historical software development approaches. NI also expects amortization of previously capitalized software development costs to steadily decline as previously capitalized software development costs become fully amortized over the next four years.

As a result, beginning with its non-GAAP metrics for the three months ended June 30, 2018, NI has been excluding the net effects of capitalization and amortization of software development costs from its non-GAAP operating results, along with its previously excluded non-GAAP items, and providing a reconciliation of such non-GAAP results to its GAAP results. NI believes these changes are useful to investors as they provide greater comparability between its R&D spend in future periods. NI also makes available on its website its historical non-GAAP results, excluding the effects of software capitalization and amortization together with other applicable non-GAAP adjustments, for the fiscal quarters ended March 31, 2005 through June 30, 2018.

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, 2018 and 2017, 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, restructuring charges, capitalization and amortization of internally developed software costs, and tax reform 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 discloses the company's EBITDA for the three and nine months ended September 30, 2018 and 2017. 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 and Availability of Presentation Materials
Interested parties can listen to the Q3 2018 earnings conference call with NI management today, October 25, at 4:00 p.m. CT at www.ni.com/call. Replay information is available by calling (855) 212-2361, confirmation code 3644097, shortly after the call through October 28 at 10:00 p.m. CT or by visiting the company's website at www.ni.com/call. Presentation materials referred to on the conference call can be found at www.ni.com/nati.
 
Forward-Looking Statements
This release contains "forward-looking statements" including statements regarding NI well positioned for long-term growth driven by major market trends, expecting to achieve our target non-GAAP operating margin for 2018, being excited by the multi-year growth opportunities we see in areas like 5G semiconductors, electric and autonomous vehicles, we will continue to drive aligned execution through sales, marketing, and R&D to accelerate growth -  both organically and inorganically - in the target industries where our platform is most highly differentiated, believing from focus comes growth and with leadership's implementation of our Core Strategic Vision, we have driven alignment to the top priorities we believe will provide the most opportunities for growth, improving our future visibility, expecting  Q4 revenue to be in the range of $360 million to $390 million, expecting that GAAP fully diluted EPS will be in the range of $0.35 to $0.49 for Q4, with non-GAAP fully diluted EPS expected to be in the range of $0.46 to $0.60, that for a significant majority of its software development projects the costs incurred subsequent to the achievement of technological feasibility will be immaterial in future periods, that NI expects to record significantly less capitalized software development costs than under its historical software development approaches and that NI expects amortization of previously capitalized software development costs to steadily decline as previously capitalized software development costs become fully amortized over the next four years.  These statements are subject to a number of risks and uncertainties, including the risk of adverse changes or fluctuations in the global economy, 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, adverse effects of price changes or effective tax rates or the impact of the Tax Cuts and Jobs Act. Actual results may differ materially from the expected results.

The company directs readers to its Form 10-K for the year ended Dec. 31, 2017, its Form 10-Q for the quarter ended June 30, 2018 and the other documents it files with the SEC for other risks associated with the company's future performance.

About NI
NI (ni.com) empowers engineers and scientists with a software-centric platform that incorporates modular hardware and an expansive ecosystem. This proven approach puts users firmly in control of defining what they need to accelerate their system design within test, measurement and control. NI's solution helps build high-performance systems that exceed requirements, quickly adapt to change and ultimately improve the world. (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,
 
   
2018
   
2017
 
   
(unaudited)
       
             
Assets
           
Current assets:
           
Cash and cash equivalents
 
$
311,381
   
$
290,164
 
Short-term investments
   
171,028
     
121,888
 
Accounts receivable, net
   
239,468
     
248,825
 
Inventories, net
   
192,412
     
184,592
 
Prepaid expenses and other current assets
   
62,447
     
48,621
 
Total current assets
   
976,736
     
894,090
 
                 
Property and equipment, net
   
245,898
     
249,715
 
Goodwill
   
263,119
     
266,783
 
Intangible assets, net
   
116,061
     
123,293
 
Other long-term assets
   
28,106
     
32,553
 
Total assets
 
$
1,629,920
   
$
1,566,434
 
                 
Liabilities and Stockholders' Equity
               
Current liabilities:
               
Accounts payable and accrued expenses
 
$
51,321
   
$
49,733
 
Accrued compensation
   
52,182
     
43,309
 
Deferred revenue - current
   
120,398
     
120,638
 
Other current liabilities
   
17,508
     
23,782
 
Other taxes payable
   
34,654
     
31,793
 
Total current liabilities
   
276,063
     
269,255
 
                 
                 
Deferred income taxes
   
36,638
     
33,609
 
Liability for uncertain tax positions
   
9,045
     
10,158
 
Income tax payable - long-term
   
74,015
     
81,515
 
Deferred revenue - long-term
   
31,762
     
33,742
 
Other long-term liabilities
   
5,488
     
10,134
 
Total liabilities
   
433,011
     
438,413
 
                 
Stockholders' equity:
               
Preferred stock
   
     
 
Common stock
   
1,324
     
1,310
 
Additional paid-in capital
   
881,417
     
829,979
 
Retained earnings
   
329,342
     
313,241
 
Accumulated other comprehensive loss
   
(15,174
)
   
(16,509
)
Total stockholders' equity
   
1,196,909
     
1,128,021
 
Total liabilities and stockholders' equity
 
$
1,629,920
   
$
1,566,434
 



National Instruments
 
Condensed Consolidated Statements of Income
 
(in thousands, except per share data, unaudited)
 
                   
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2018
   
2017
   
2018
   
2017
 
                         
Net sales:
                       
Product
 
$
310,216
   
$
291,891
   
$
897,355
   
$
853,219
 
Software maintenance
   
35,911
     
29,030
     
101,678
     
86,416
 
Total net sales
   
346,127
     
320,921
     
999,033
     
939,635
 
                                 
Cost of sales:
                               
Product
   
87,082
     
81,641
     
239,205
     
235,989
 
Software maintenance
   
1,933
     
2,110
     
6,493
     
6,744
 
Total cost of sales
   
89,015
     
83,751
     
245,698
     
242,733
 
                                 
Gross profit
   
257,112
     
237,170
     
753,335
     
696,902
 
     
74.3
%
   
73.9
%
   
75.4
%
   
74.2
%
Operating expenses:
                               
Sales and marketing
   
118,220
     
116,661
     
365,474
     
358,335
 
Research and development
   
66,170
     
56,526
     
194,921
     
171,701
 
General and administrative
   
26,712
     
26,468
     
81,882
     
78,400
 
Total operating expenses
   
211,102
     
199,655
     
642,277
     
608,436
 
                                 
Operating income
   
46,010
     
37,515
     
111,058
     
88,466
 
     
13.3
%
   
11.7
%
   
11.1
%
   
9.4
%
Other income (expense):
                               
Interest income
   
1,539
     
657
     
3,845
     
1,509
 
Net foreign exchange gain (loss)
   
(956
)
   
1,096
     
(2,082
)
   
1,624
 
Other income (loss), net
   
1,782
     
(1,153
)
   
169
     
(957
)
                                 
Income before income taxes
   
48,375
     
38,115
     
112,990
     
90,642
 
                                 
Provision for income taxes
   
5,181
     
4,726
     
14,474
     
13,949
 
                                 
Net income
 
$
43,194
   
$
33,389
   
$
98,516
   
$
76,693
 
                                 
Basic earnings per share
 
$
0.33
   
$
0.26
   
$
0.75
   
$
0.59
 
Diluted earnings per share
 
$
0.32
   
$
0.25
   
$
0.74
   
$
0.59
 
                                 
Weighted average shares outstanding -
                               
basic
   
132,357
     
130,660
     
131,792
     
130,103
 
diluted
   
133,197
     
131,617
     
133,067
     
131,050
 
                                 
Dividends declared per share
 
$
0.23
   
$
0.21
   
$
0.69
   
$
0.63
 



 
National Instruments
 
Condensed Consolidated Statements of Cash Flows
 
(in thousands, unaudited)
 
   
Nine Months Ended September 30,
 
   
2018
   
2017
 
       
Cash flow from operating activities:
           
Net income
 
$
98,516
   
$
76,693
 
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
   
53,735
     
54,794
 
Stock-based compensation
   
27,492
     
21,272
 
Deferred income taxes
   
732
     
(4,290
)
Net change in operating assets and liabilities
   
6,862
     
(1,013
)
Net cash provided by operating activities
   
187,337
     
147,456
 
                 
Cash flow from investing activities:
               
Capital expenditures
   
(27,373
)
   
(24,084
)
Capitalization of internally developed software
   
(13,152
)
   
(34,406
)
Additions to other intangibles
   
(5,165
)
   
(1,379
)
Purchases of short-term investments
   
(172,462
)
   
(62,845
)
Sales and maturities of short-term investments
   
122,726
     
45,582
 
Net cash used by investing activities
   
(95,426
)
   
(77,132
)
                 
Cash flow from financing activities:
               
Principal payments on revolving line of credit
   
     
(10,000
)
Proceeds from issuance of common stock
   
24,424
     
22,870
 
Dividends paid
   
(91,034
)
   
(82,051
)
Net cash used by financing activities
   
(66,610
)
   
(69,181
)
                 
Impact of changes in exchange rates on cash
   
(4,084
)
   
7,768
 
                 
Net change in cash and cash equivalents
   
21,217
     
8,911
 
Cash and cash equivalents at beginning of period
   
290,164
     
285,283
 
Cash and cash equivalents at end of period
 
$
311,381
   
$
294,194
 

 

 
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, and restructuring charges that were recorded in the line items indicated below (unaudited) (in thousands)
 
                         
                         
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
                         
   
2018
   
2017
   
2018
   
2017
 
Stock-based compensation
                       
Cost of sales
 
$
844
   
$
689
   
$
2,415
   
$
1,914
 
Sales and marketing
   
3,452
     
3,014
     
10,408
     
8,523
 
Research and development
   
3,318
     
2,328
     
9,091
     
6,552
 
General and administrative
   
1,942
     
1,514
     
5,578
     
4,358
 
Provision for income taxes
   
(1,455
)
   
(2,369
)
   
(6,115
)
   
(7,388
)
Total
 
$
8,101
   
$
5,176
   
$
21,377
   
$
13,959
 
                                 
Amortization of acquisition intangibles
                               
Cost of sales
 
$
701
   
$
1,502
   
$
2,448
   
$
4,648
 
Sales and marketing
   
510
     
515
     
1,580
     
1,479
 
Research and development
   
28
     
283
     
84
     
813
 
Provision for income taxes
   
(149
)
   
(546
)
   
(518
)
   
(1,656
)
Total
 
$
1,090
   
$
1,754
   
$
3,594
   
$
5,284
 
                                 
Acquisition transaction costs, restructuring charges, and other
                               
Cost of sales
 
$
1,784
   
$
79
   
$
1,813
   
$
988
 
Sales and marketing
   
3,676
     
1,618
     
8,354
     
8,018
 
Research and development
   
692
     
235
     
1,794
     
1,816
 
General and administrative
   
373
     
207
     
1,538
     
803
 
Other income (loss), net
   
     
     
709
     
 
Provision for income taxes
   
(1,800
)
   
(720
)
   
(3,983
)
   
(3,655
)
Total
 
$
4,725
   
$
1,419
   
$
10,225
   
$
7,970
 
   
Capitalization and amortization of internally developed software costs
                               
Cost of sales
 
$
6,412
   
$
5,332
   
$
18,736
   
$
15,521
 
Research and development
   
(1,808
)
   
(9,590
)
   
(13,152
)
   
(34,406
)
Provision for income taxes
   
(967
)
   
1,490
     
(1,173
)
   
6,610
 
Total
 
$
3,637
   
$
(2,768
)
 
$
4,411
   
$
(12,275
)
 

National Instruments
 
Reconciliation of GAAP to Non-GAAP Measures
 
(in thousands, unaudited)
 
                         
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2018
   
2017
   
2018
   
2017
 
                         
Reconciliation of Gross Profit to Non-GAAP Gross Profit
             
Gross profit, as reported
 
$
257,112
   
$
237,170
   
$
753,335
   
$
696,902
 
Stock-based compensation
   
844
     
689
     
2,415
     
1,914
 
Amortization of acquisition intangibles
   
701
     
1,502
     
2,448
     
4,648
 
Acquisition transaction costs and restructuring charges
   
1,784
     
79
     
1,813
     
988
 
Amortization of internally developed software costs
   
6,412
     
5,332
     
18,736
     
15,521
 
Non-GAAP gross profit
 
$
266,853
   
$
244,772
   
$
778,747
   
$
719,973
 
Non-GAAP gross margin
   
77.1
%
   
76.3
%
   
78.0
%
   
76.6
%
                                 
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses
                 
Operating expenses, as reported
 
$
211,102
   
$
199,655
   
$
642,277
   
$
608,436
 
Stock-based compensation
   
(8,712
)
   
(6,856
)
   
(25,077
)
   
(19,433
)
Amortization of acquisition intangibles
   
(538
)
   
(798
)
   
(1,664
)
   
(2,292
)
Acquisition transaction costs and restructuring charges
   
(4,741
)
   
(2,060
)
   
(11,686
)
   
(10,637
)
Capitalization of internally developed software costs
   
1,808
     
9,590
     
13,152
     
34,406
 
Non-GAAP operating expenses
 
$
198,919
   
$
199,531
   
$
617,002
   
$
610,480
 
                                 
Reconciliation of Operating Income to Non-GAAP Operating Income
                 
Operating income, as reported
 
$
46,010
   
$
37,515
   
$
111,058
   
$
88,466
 
Stock-based compensation
   
9,556
     
7,545
     
27,492
     
21,347
 
Amortization of acquisition intangibles
   
1,239
     
2,300
     
4,112
     
6,940
 
Acquisition transaction costs and restructuring charges
   
6,525
     
2,139
     
13,499
     
11,625
 
Net (capitalization) and amortization of internally developed software costs
   
4,604
     
(4,258
)
   
5,584
     
(18,885
)
Non-GAAP operating income
 
$
67,934
   
$
45,241
   
$
161,745
   
$
109,493
 
Non-GAAP operating margin
   
19.6
%
   
14.1
%
   
16.2
%
   
11.7
%
                                 
Reconciliation of Income before income taxes to Non-GAAP Income before income taxes
                 
Income before income taxes, as reported
 
$
48,375
   
$
38,115
   
$
112,990
   
$
90,642
 
Stock-based compensation
   
9,556
     
7,545
     
27,492
     
21,347
 
Amortization of acquisition intangibles
   
1,239
     
2,300
     
4,112
     
6,940
 
Acquisition transaction costs and restructuring charges
   
6,525
     
2,139
     
14,208
     
11,625
 
Net (capitalization) amortization of internally developed software costs
   
4,604
     
(4,258
)
   
5,584
     
(18,885
)
Non-GAAP income before income taxes
 
$
70,299
   
$
45,841
   
$
164,386
   
$
111,669
 
                                 
Reconciliation of Provision for income taxes to Non-GAAP Provision for income taxes
                 
Provision for income taxes, as reported
 
$
5,181
   
$
4,726
   
$
14,474
   
$
13,949
 
Stock-based compensation
   
1,455
     
2,369
     
6,115
     
7,388
 
Amortization of acquisition intangibles
   
149
     
546
     
518
     
1,656
 
Acquisition transaction costs, restructuring charges, and other
   
1,800
     
720
     
3,983
     
3,655
 
Net (capitalization) amortization of internally developed software costs
   
967
     
(1,490
)
   
1,173
     
(6,610
)
Tax reform charge
   
1,146
     
     
1,146
     
 
Non-GAAP provision for income taxes
 
$
10,698
   
$
6,871
   
$
27,409
   
$
20,038
 
                                 


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,
 
   
2018
   
2017
   
2018
   
2017
 
                         
Net income, as reported
 
$
43,194
   
$
33,389
   
$
98,516
   
$
76,693
 
Adjustments to reconcile net income to non-GAAP net income:
                               
  Stock-based compensation, net of tax effect
   
8,101
     
5,176
     
21,377
     
13,959
 
  Amortization of acquisition intangibles, net of tax effect
   
1,090
     
1,754
     
3,594
     
5,284
 
  Acquisition transaction costs, restructuring, and other, net of tax effect
   
4,725
     
1,419
     
10,225
     
7,970
 
  Net (capitalization)/amortization of internally developed software costs, net of tax
   
3,637
     
(2,768
)
   
4,411
     
(12,275
)
Tax reform charge
   
(1,146
)
   
     
(1,146
)
   
 
Non-GAAP net income
 
$
59,601
   
$
38,970
   
$
136,977
   
$
91,631
 
                                 
Basic EPS, as reported
 
$
0.33
   
$
0.26
   
$
0.75
   
$
0.59
 
Adjustment to reconcile basic EPS to non-GAAP
                               
basic EPS:
                               
  Impact of stock-based compensation, net of tax effect
   
0.06
     
0.04
     
0.16
     
0.11
 
  Impact of amortization of acquisition intangibles, net of tax effect
   
     
0.01
     
0.03
     
0.04
 
  Impact of acquisition transaction costs, restructuring, and other, net of tax effect
   
0.04
     
0.01
     
0.08
     
0.05
 
  Impact of (capitalization)/amortization of internally developed software costs, net
   
0.03
     
(0.02
)
   
0.03
     
(0.09
)
Impact of tax reform charge
   
(0.01
)
   
     
(0.01
)
   
 
Non-GAAP basic EPS
 
$
0.45
   
$
0.30
   
$
1.04
   
$
0.70
 
                                 
                                 
Diluted EPS, as reported
 
$
0.32
   
$
0.25
   
$
0.74
   
$
0.59
 
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS
                               
  Impact of stock-based compensation, net of tax effect
   
0.06
     
0.04
     
0.16
     
0.11
 
  Impact of amortization of acquisition intangibles, net of tax effect
   
0.01
     
0.02
     
0.03
     
0.04
 
  Impact of acquisition transaction costs, restructuring, and other, net of tax effect
   
0.04
     
0.01
     
0.08
     
0.05
 
  Impact of (capitalization)/amortization of internally developed software costs, net of tax effect
   
0.03
     
(0.02
)
   
0.03
     
(0.09
)
Impact of tax reform charge
   
(0.01
)
   
     
(0.01
)
   
 
Non-GAAP diluted EPS
 
$
0.45
   
$
0.30
   
$
1.03
   
$
0.70
 
                                 
Weighted average shares outstanding -
                               
Basic
   
132,357
     
130,660
     
131,792
     
130,103
 
Diluted
   
133,197
     
131,617
     
133,067
     
131,050
 

 

 
National Instruments
 
Reconciliation of Net Income to EBITDA
 
(in thousands, unaudited)
 
                         
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2018
   
2017
   
2018
   
2017
 
Net income, as reported
 
$
43,194
   
$
33,389
   
$
98,516
   
$
76,693
 
Adjustments to reconcile net income to EBITDA:
                               
     Interest income, net
   
(1,525
)
   
(464
)
   
(3,705
)
   
(863
)
     Tax expense
   
5,181
     
4,726
     
14,474
     
13,949
 
     Depreciation and amortization
   
18,637
     
18,879
     
53,735
     
54,794
 
EBITDA
 
$
65,487
   
$
56,530
   
$
163,020
   
$
144,573
 
Weighted average shares outstanding - Diluted
   
133,197
     
131,617
     
133,067
     
131,050
 
                                 


Reconciliation of GAAP to Non-GAAP EPS Guidance
 
(unaudited)
 
   
Three Months Ended
 
   
December 31, 2018
 
             
   
Low
   
High
 
GAAP Diluted EPS, guidance
 
$
0.35
   
$
0.49
 
Adjustment to reconcile diluted EPS to non-GAAP
               
diluted EPS:
               
  Impact of stock-based compensation, net of tax effect
   
0.06
     
0.06
 
  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/amortization of software development costs, net of tax effect
   
0.03
     
0.03
 
Non-GAAP Diluted EPS, guidance
 
$
0.46
   
$
0.60
 
 

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