Weakness Seen in Industrial Economy and Wireless Supply Chain
AUSTIN, Texas — (BUSINESS WIRE) — April 4, 2016 — National Instruments (Nasdaq: NATI) today announced that its preliminary estimate for revenue in the first quarter of 2016 is $288 million, essentially flat year-over-year in U.S. dollar terms with core revenue up approximately 4 percent year-over-year. This preliminary GAAP revenue estimate is $2 million below the low end of the guidance the company provided on January 28, 2016. The company’s definition of core revenue is GAAP revenue excluding the impact of NI’s largest customer and the impact of foreign currency exchange. A reconciliation of GAAP revenue to core revenue is included with this news release.
On our earnings call in January, we anticipated an improvement in our year-over-year revenue growth in Q1. Unfortunately, we saw further weakness in the industrial economy with Q1 having the lowest Global PMI in three years. Additionally, we saw a marked slow-down in our semiconductor accounts that are part of the wireless supply chain. The weakness during the quarter was most pronounced in the Americas with revenue down approximately 5 percent year-over-year while in EMEIA revenues were down approximately 2 percent year-over-year. Revenue growth in Asia was strong at approximately 8 percent year-over-year.
“While it is clear that the industrial economy, especially in the U.S., experienced a slowdown in Q1, we believe the diversity of our business and the solid execution of our sales force allowed us to continue to gain market share,” said James Truchard, NI president, co-founder and CEO. “Going forward, we plan to be very disciplined in managing our expenses, while working to ensure that our highly differentiated platform and broad ecosystem continues to help engineers and scientists address their test, measurement and control needs.”
NI currently expects that GAAP fully diluted earnings per share (EPS) will be in the range of $0.06 to $0.07 per share for Q1 with non-GAAP fully diluted EPS to be in the range of $0.14 to $0.15 per share.
With $333M in cash and cash equivalents at the end of December, the company’s balance sheet continues to be very strong.
“In light of the uncertain outlook for the industrial economy, we plan to leverage the strategic investments we have already made, while managing expenses carefully,” said Alex Davern, NI COO and CFO. “Looking forward we will be focused on driving operating leverage while gaining market share through our differentiated platform.”
The company will provide final results and detailed guidance for Q2 2016 in its Q1 2016 earnings conference call on April 28, 2016, at 4:00 p.m. CT.
Conference Call Information and Availability of Presentation Materials
Interested parties can listen to the Q1 2016 preliminary earnings conference call with NI management today, April 4, at 4:00 p.m. CT at ni.com/call. Replay information is available by calling (855) 859-2056, confirmation code 84533078 shortly after the call through April 7, at 11:00 p.m. CT, or by visiting the company’s website at ni.com/call. Presentation materials referred to on the conference call can also be found at ni.com/nati.
Non-GAAP Presentation
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 preliminary estimates of GAAP and non-GAAP fully diluted EPS for Q1 2016.
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, and foreign exchange loss on acquisitions. 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 also discloses the company’s preliminary estimate of core revenue for the three-month period ending March 31, 2016. The company believes that including its core revenue assists investors in assessing the company’s operational performance. A reconciliation of GAAP revenue to core revenue is included with this news release.
Forward-Looking Statements
