The company directs readers to its Form 10-K for the fiscal year ended Dec. 31, 2013, and its Form 10-Q for the quarter ended September 30, 2014, and the other documents it files with the SEC for other risks associated with the company’s future performance.
About NI
Since 1976, NI ( www.ni.com) has made it possible for engineers and scientists to solve the world’s greatest engineering challenges with powerful, flexible technology solutions that accelerate productivity and drive rapid innovation. Customers from a wide variety of industries – from healthcare to automotive and from consumer electronics to particle physics – use NI’s integrated hardware and software platform to improve the world we live in. (NATI-F)
CompactRIO, 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.
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National Instruments |
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| Condensed Consolidated Balance Sheets | ||||||||
| (in thousands, unaudited) | ||||||||
| December 31, | December 31, | |||||||
| 2014 | 2013 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 274,030 | $ | 230,263 | ||||
| Short-term investments | 197,163 | 163,149 | ||||||
| Accounts receivable, net | 202,329 | 180,680 | ||||||
| Inventories, net | 173,052 | 172,109 | ||||||
| Prepaid expenses and other current assets | 70,075 | 49,001 | ||||||
| Deferred income taxes, net | 31,171 | 33,393 | ||||||
| Total current assets | 947,820 | 828,595 | ||||||
| Property and equipment, net | 264,086 | 260,568 | ||||||
| Goodwill | 144,325 | 146,520 | ||||||
| Intangible assets, net | 78,282 | 82,310 | ||||||
| Other long-term assets | 20,978 | 25,558 | ||||||
| Total assets | $ | 1,455,491 | $ | 1,343,551 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 58,603 | $ | 56,614 | ||||
| Accrued compensation | 33,774 | 25,189 | ||||||
| Deferred revenue - current | 105,964 | 96,117 | ||||||
| Accrued expenses and other liabilities | 14,714 | 17,627 | ||||||
| Other taxes payable | 34,602 | 29,808 | ||||||
| Total current liabilities | 247,657 | 225,355 | ||||||
| Deferred income taxes | 47,406 | 44,620 | ||||||
| Liability for uncertain tax positions | 10,127 | 23,572 | ||||||
| Deferred revenue - long-term | 26,452 | 21,389 | ||||||
| Other long-term liabilities | 6,353 | 5,531 | ||||||
| Total liabilities | 337,995 | 320,467 | ||||||
| Stockholders' equity: | ||||||||
| Preferred stock | - | - | ||||||
| Common stock | 1,278 | 1,257 | ||||||
| Additional paid-in capital | 662,889 | 604,330 | ||||||
| Retained earnings | 464,993 | 414,947 | ||||||
| Accumulated other comprehensive (loss) income | (11,664 | ) | 2,550 | |||||
| Total stockholders' equity | 1,117,496 | 1,023,084 | ||||||
| Total liabilities and stockholders' equity | $ | 1,455,491 | $ | 1,343,551 | ||||
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National Instruments |
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| Condensed Consolidated Statements of Income | |||||||||||||||||
| (in thousands, except per share data, unaudited) | |||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||
| Net sales: | |||||||||||||||||
| Product | $ | 305,176 | $ | 280,523 | $ | 1,143,000 | $ | 1,091,186 | |||||||||
| Software maintenance | 27,600 | 20,283 | 100,862 | 81,372 | |||||||||||||
| Total net sales | 332,776 | 300,806 | 1,243,862 | 1,172,558 | |||||||||||||
| Cost of sales: | |||||||||||||||||
| Product | 83,094 | 74,900 | 312,623 | 299,854 | |||||||||||||
| Software maintenance | 1,066 | 1,082 | 5,509 | 5,389 | |||||||||||||
| Total cost of sales | 84,160 | 75,982 | 318,132 | 305,243 | |||||||||||||
| Gross profit | 248,616 | 224,824 | 925,730 | 867,315 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Sales and marketing | 113,819 | 109,916 | 461,845 | 447,800 | |||||||||||||
| Research and development | 57,351 | 54,276 | 227,433 | 234,796 | |||||||||||||
| General and administrative | 22,411 | 21,055 | 91,265 | 87,418 | |||||||||||||
| Acquisition related adjustment | - | - | - | (1,316 | ) | ||||||||||||
| Total operating expenses | 193,581 | 185,247 | 780,543 | 768,698 | |||||||||||||
| Operating income | 55,035 | 39,577 | 145,187 | 98,617 | |||||||||||||
| Other income (expense): | |||||||||||||||||
| Interest income | 340 | 184 | 1,133 | 679 | |||||||||||||
| Net foreign exchange loss | (1,245 | ) | (521 | ) | (2,250 | ) | (2,578 | ) | |||||||||
| Other (loss) income, net | (352 | ) | (278 | ) | (69 | ) | 450 | ||||||||||
| Income before income taxes | 53,778 | 38,962 | 144,001 | 97,168 | |||||||||||||
| Provision for income taxes | 10,393 | 7,234 | 17,668 | 16,655 | |||||||||||||
| Net income | $ | 43,385 | $ | 31,728 | $ | 126,333 | $ | 80,513 | |||||||||
| Basic earnings per share | $ | 0.34 | $ | 0.25 | $ | 0.99 | $ | 0.65 | |||||||||
| Diluted earnings per share | $ | 0.34 | $ | 0.25 | $ | 0.99 | $ | 0.64 | |||||||||
| Weighted average shares outstanding - | |||||||||||||||||
| basic | 127,755 | 125,489 | 127,030 | 124,558 | |||||||||||||
| diluted | 128,233 | 126,217 | 127,799 | 125,571 | |||||||||||||
| Dividends declared per share | $ | 0.15 | $ | 0.14 | $ | 0.60 | $ | 0.56 | |||||||||
| National Instruments | |||||||||
| Condensed Consolidated Statements of Cash Flows | |||||||||
| (in thousands, unaudited) | |||||||||
| Year Ended December 31, | |||||||||
| 2014 | 2013 | ||||||||
| Cash flow from operating activities: | |||||||||
| Net income | $ | 126,333 | $ | 80,513 | |||||
| Adjustments to reconcile net income to net cash provided | |||||||||
| by operating activities: | |||||||||
| Depreciation and amortization | 70,206 | 67,974 | |||||||
| Stock-based compensation | 25,759 | 28,992 | |||||||
| Tax expense/(benefit) from deferred income taxes | 5,886 | (4,353 | ) | ||||||
| Tax benefit from stock option plans | (1,242 | ) | (2,407 | ) | |||||
| Changes in operating assets and liabilities: | |||||||||
| Accounts receivable | (21,649 | ) | 6,820 | ||||||
| Inventories | (943 | ) | (1,563 | ) | |||||
| Prepaid expenses and other assets | (25,046 | ) | (1,767 | ) | |||||
| Accounts payable | 1,989 | (8,604 | ) | ||||||
| Deferred revenue | 14,910 | 6,346 | |||||||
| Taxes and other liabilities | (1,097 | ) | (2,472 | ) | |||||
| Net cash provided by operating activities | 195,106 | 169,479 | |||||||
| Cash flow from investing activities: | |||||||||
| Capital expenditures | (44,944 | ) | (47,796 | ) | |||||
| Capitalization of internally developed software | (25,781 | ) | (14,883 | ) | |||||
| Additions to other intangibles | (2,834 | ) | (5,182 | ) | |||||
| Purchases of short-term investments | (123,849 | ) | (70,354 | ) | |||||
| Sales and maturities of short-term investments | 89,835 | 80,371 | |||||||
| Net cash used in investing activities | (107,573 | ) | (57,844 | ) | |||||
| Cash flow from financing activities: | |||||||||
| Proceeds from issuance of common stock | 31,277 | 39,319 | |||||||
| AWR earnout payment | - | (15,318 | ) | ||||||
| Dividends paid | (76,285 | ) | (69,776 | ) | |||||
| Tax benefit from stock option plans | 1,242 | 2,407 | |||||||
| Net cash used in financing activities | (43,766 | ) | (43,368 | ) | |||||
| Net change in cash and cash equivalents | 43,767 | 68,267 | |||||||
| Cash and cash equivalents at beginning of period | 230,263 | 161,996 | |||||||
| Cash and cash equivalents at end of period | $ | 274,030 | $ | 230,263 | |||||
| National Instruments | |||||||||||||||||
| Detail of GAAP charges related to revenue, stock-based compensation, amortization of acquisition intangibles and acquisition transaction costs and restructuring charges | |||||||||||||||||
| (in thousands, unaudited) | |||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||
| Stock-based compensation | |||||||||||||||||
| Cost of sales | $ | 447 | $ | 439 | $ | 1,711 | $ | 1,658 | |||||||||
| Sales and marketing | 2,597 | 2,882 | 10,931 | 11,789 | |||||||||||||
| Research and development | 2,428 | 2,728 | 9,649 | 11,864 | |||||||||||||
| General and administrative | 810 | 890 | 3,467 | 3,624 | |||||||||||||
| Provision for income taxes | (1,497 | ) | (3,216 | ) | (7,414 | ) | (9,801 | ) | |||||||||
| Total | $ | 4,785 | $ | 3,723 | $ | 18,344 | $ | 19,134 | |||||||||
| Amortization of acquisition intangibles | |||||||||||||||||
| Cost of sales | $ | 2,660 | $ | 2,673 | $ | 10,651 | $ | 10,718 | |||||||||
| Sales and marketing | 433 | 482 | 1,784 | 1,988 | |||||||||||||
| Research and development | 369 | 405 | 1,567 | 2,043 | |||||||||||||
| Other income, net | 165 | 185 | 672 | 751 | |||||||||||||
| Provision for income taxes | (1,199 | ) | (1,231 | ) | (4,846 | ) | (5,081 | ) | |||||||||
| Total | $ | 2,428 | $ | 2,514 | $ | 9,828 | $ | 10,419 | |||||||||
| Acquisition related transaction costs and restructuring charges | |||||||||||||||||
| Cost of sales | $ | 742 | $ | 21 | $ | 1,289 | $ | 28 | |||||||||
| Sales and marketing | 37 | 189 | 189 | 595 | |||||||||||||
| Research and development | 178 | 410 | 442 | 1,101 | |||||||||||||
| General and administrative | 96 | 80 | 241 | 326 | |||||||||||||
| Acquisition related adjustment | - | - | - | (1,316 | ) | ||||||||||||
| Provision for income taxes | (286 | ) | (133 | ) | (674 | ) | (545 | ) | |||||||||
| Total | $ | 767 | $ | 567 | $ | 1,487 | $ | 189 | |||||||||
| National Instruments | |||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Measures | |||||||||||||||||
| (in thousands, unaudited) | |||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||
| Reconciliation of Gross Profit to Non-GAAP Gross Profit | |||||||||||||||||
| Gross profit, as reported | $ | 248,616 | $ | 224,824 | $ | 925,730 | $ | 867,315 | |||||||||
| Stock-based compensation | 447 | 439 | 1,711 | 1,658 | |||||||||||||
| Amortization of acquisition intangibles | 2,660 | 2,673 | 10,651 | 10,718 | |||||||||||||
| Acquisition transaction costs and restructuring charges | 742 | 21 | 1,289 | 28 | |||||||||||||
| Non-GAAP gross profit | $ | 252,465 | $ | 227,957 | $ | 939,381 | $ | 879,719 | |||||||||
| Non-GAAP gross margin | 76 | % | 76 | % | 76 | % | 75 | % | |||||||||
| Reconciliation of Operating Expenses to Non-GAAP Operating Expenses | |||||||||||||||||
| Operating expenses, as reported | $ | 193,581 | $ | 185,247 | $ | 780,543 | $ | 768,698 | |||||||||
| Stock-based compensation | (5,835 | ) | (6,500 | ) | (24,047 | ) | (27,277 | ) | |||||||||
| Amortization of acquisition intangibles | (802 | ) | (887 | ) | (3,351 | ) | (4,031 | ) | |||||||||
| Acquisition related adjustment | - | - | - | 1,316 | |||||||||||||
| Acquisition transaction costs and restructuring charges | (311 | ) | (679 | ) | (872 | ) | (2,022 | ) | |||||||||
| Non-GAAP operating expenses | $ | 186,633 | $ | 177,181 | $ | 752,273 | $ | 736,684 | |||||||||
| Reconciliation of Operating Income to Non-GAAP Operating Income | |||||||||||||||||
| Operating income, as reported | $ | 55,035 | $ | 39,577 | $ | 145,187 | $ | 98,617 | |||||||||
| Stock-based compensation | 6,282 | 6,939 | 25,758 | 28,935 | |||||||||||||
| Amortization of acquisition intangibles | 3,462 | 3,560 | 14,002 | 14,749 | |||||||||||||
| Acquisition related adjustment | - | - | - | (1,316 | ) | ||||||||||||
| Acquisition transaction costs and restructuring charges | 1,053 | 700 | 2,161 | 2,050 | |||||||||||||
| Non-GAAP operating income | $ | 65,832 | $ | 50,776 | $ | 187,108 | $ | 143,035 | |||||||||
| Non-GAAP operating margin | 20 | % | 17 | % | 15 | % | 12 | % | |||||||||
| Reconciliation of Income before income taxes to Non-GAAP Income before income taxes | |||||||||||||||||
| Income before income taxes, as reported | $ | 53,778 | $ | 38,962 | $ | 144,001 | $ | 97,168 | |||||||||
| Stock-based compensation | 6,282 | 6,939 | 25,758 | 28,935 | |||||||||||||
| Amortization of acquisition intangibles | 3,627 | 3,745 | 14,674 | 15,500 | |||||||||||||
| Acquisition related adjustment | - | - | - | (1,316 | ) | ||||||||||||
| Acquisition transaction costs and restructuring charges | 1,053 | 700 | 2,161 | 2,050 | |||||||||||||
| Non-GAAP income before income taxes | $ | 64,740 | $ | 50,346 | $ | 186,594 | $ | 142,337 | |||||||||
| Reconciliation of Provision for income taxes to Non-GAAP Provision for income taxes | |||||||||||||||||
| Provision for income taxes, as reported | $ | 10,393 | $ | 7,234 | $ | 17,668 | $ | 16,655 | |||||||||
| Stock-based compensation | 1,497 | 3,216 | 7,414 | 9,801 | |||||||||||||
| Amortization of acquisition intangibles | 1,199 | 1,231 | 4,846 | 5,081 | |||||||||||||
| Acquisition transaction costs and restructuring charges | 286 | 133 | 674 | 545 | |||||||||||||
| Non-GAAP provision for income taxes | $ | 13,375 | $ | 11,814 | $ | 30,602 | $ | 32,082 | |||||||||
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National Instruments |
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| 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 | Year Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||
| Net income, as reported | $ | 43,385 | $ | 31,728 | $ | 126,333 | $ | 80,513 | ||||||
| Adjustments to reconcile net income to non-GAAP net income: | ||||||||||||||
| Stock-based compensation, net of tax effect | 4,785 | 3,723 | 18,344 | 19,134 | ||||||||||
| Amortization of acquisition intangibles, net of tax effect | 2,428 | 2,514 | 9,828 | 10,419 | ||||||||||
| Acquisition related adjustment | - | - | - | (1,316 | ) | |||||||||
| Acquisition transaction costs and restructuring charges, net of tax effect | 767 | 567 | 1,487 | 1,505 | ||||||||||
| Non-GAAP net income | $ | 51,365 | $ | 38,532 | $ | 155,992 | $ | 110,255 | ||||||
| Basic EPS, as reported | $ | 0.34 | $ | 0.25 | $ | 0.99 | $ | 0.65 | ||||||
| Adjustment to reconcile basic EPS to non-GAAP basic EPS | ||||||||||||||
| Impact of stock-based compensation, net of tax effect | 0.04 | 0.03 | 0.15 | 0.16 | ||||||||||
| Impact of amortization of acquisition intangibles, net of tax effect | 0.02 | 0.02 | 0.08 | 0.08 | ||||||||||
| Acquisition related adjustment | - | - | - | (0.01 | ) | |||||||||
| Impact of acquisition transaction costs and restructuring charges, net of tax effect | - | 0.01 | 0.01 | 0.01 | ||||||||||
| Non-GAAP basic EPS | $ | 0.40 | $ | 0.31 | $ | 1.23 | $ | 0.89 | ||||||
| Diluted EPS, as reported | $ | 0.34 | $ | 0.25 | $ | 0.99 | $ | 0.64 | ||||||
| Adjustment to reconcile diluted EPS to non-GAAP diluted EPS | ||||||||||||||
| Impact of stock-based compensation, net of tax effect | 0.04 | 0.03 | 0.14 | 0.16 | ||||||||||
| Impact of amortization of acquisition intangibles, net of tax effect | 0.02 | 0.02 | 0.08 | 0.08 | ||||||||||
| Acquisition related adjustment | - | - | - | (0.01 | ) | |||||||||
| Impact of acquisition transaction costs and restructuring charges, net of tax effect | - | 0.01 | 0.01 | 0.01 | ||||||||||
| Non-GAAP diluted EPS | $ | 0.40 | $ | 0.31 | $ | 1.22 | $ | 0.88 | ||||||
| Weighted average shares outstanding - | ||||||||||||||
| Basic | 127,755 | 125,489 | 127,030 | 124,558 | ||||||||||
| Diluted | 128,233 | 126,217 | 127,799 | 125,571 | ||||||||||
| National Instruments | |||||||||||||||||
| Reconciliation of Net Income and Diluted EPS to EBITDA and EBITDA Diluted EPS | |||||||||||||||||
| (in thousands, except per share data, unaudited) | |||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||
| Net income, as reported | $ | 43,385 | $ | 31,728 | $ | 126,333 | $ | 80,513 | |||||||||
| Adjustments to reconcile net income to EBITDA: | |||||||||||||||||
| Interest income | (340 | ) | (184 | ) | (1,133 | ) | (679 | ) | |||||||||
| Tax expense | 10,393 | 7,234 | 17,668 | 16,655 | |||||||||||||
| Depreciation and amortization | 19,195 | 17,077 | 70,206 | 67,974 | |||||||||||||
| EBITDA | $ | 72,633 | $ | 55,855 | $ | 213,074 | $ | 164,463 | |||||||||
| Diluted EPS, as reported | $ | 0.34 | $ | 0.25 | $ | 0.99 | $ | 0.64 | |||||||||
| Adjustment to reconcile diluted EPS to EBITDA | |||||||||||||||||
| Interest income | - | - | (0.01 | ) | - | ||||||||||||
| Taxes | 0.08 | 0.05 | 0.14 | 0.13 | |||||||||||||
| Depreciation and amortization | 0.15 | 0.14 | 0.55 | 0.54 | |||||||||||||
| EBITDA diluted EPS | $ | 0.57 | $ | 0.44 | $ | 1.67 | $ | 1.31 | |||||||||
| Weighted average shares outstanding - Diluted | 128,233 | 126,217 | 127,799 | 125,571 | |||||||||||||
| Reconciliation of GAAP to Non-GAAP EPS Guidance | |||||||
| (unaudited) | |||||||
| Three months ended | |||||||
| March 31, 2015 | |||||||
| Low | High | ||||||
| GAAP Fully Diluted EPS, guidance | $ |
0.11 |
$ |
0.23 |
|||
|
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, net of tax effect | 0.02 | 0.02 | |||||
| Non-GAAP diluted EPS, guidance | $ |
0.17 |
$ |
0.29 |
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