National Instruments reports record business

Austin, Texas - National Instruments has reported an 11% year-on-year sales rise in 2008 to $831 million. The performance, it said, was based on record annual revenue for software, CompactRIO, data acquisition, machine vision, and PXI products. Annual net income at the company totalled $85 million.

“The diversity of our customers, markets, and geographies enabled our field sales engineers to continue to find business in areas where investment is still flowing and allowed us to deliver another record year in 2008, turning in 11 percent revenue growth in a tough environment for the industry,” said James Truchard, NI president, co-founder and CEO.

In Q4 2008, NI virtual instrumentation and graphical system design products, which constitute the vast majority of the company’s product portfolio, achieved 2% year-over-year revenue growth. Sales of NI instrument control products, which now represent approximately 7% of NI revenue, were down 29% year-over-year in Q4 2008.

NI instrument control products are the most economically sensitive portion of company revenue, and the company expects the revenue trend in instrument control to continue to deteriorate in Q1 2009. For the year, NI virtual instrumentation and graphical system design products saw 13 percent year-over-year revenue growth, and NI instrument control products were down 11 percent year-over-year.

Geographically, revenue in US dollar terms for Q4 2008 compared to Q4 2007 was up 4% in the Americas, down 2% in Europe and down 8% in Asia, equaling an overall revenue decline of 1%. The company’s revenue growth in the Americas was helped by the fact that the US economy weakened first, with the US.

“We will continue our investments in R&D and our field sales force which have been critical in allowing us to gain market share,” said Alex Davern, NI CFO. “Given the current deep industrial recession, we plan to prudently manage expenses in other areas of the business and as a result we have reduced 2009 budgeted expenses by $30 million since our call on Jan. 2 and are budgeting to reduce our total non-GAAP operating expenses by 3% in 2009.”

Looking ahead, NI said the volatility in the macroeconomic environment has created a great degree of uncertainty for the first half of 2009. Given that macroeconomic conditions will be the most important variable in predicting our results in Q1, it has delayed giving quantitative revenue or earnings per share guidance until a business update call scheduled for 5 March when the company expects to have a clearer picture of the quarter.

On the expense side, NI plans to sustain strategic investments in R&D and field sales, while significantly limiting expense growth elsewhere. The company has reduced its spending plans for the full year of 2009 by an additional $30 million, to better position the company to deal with the extended economic uncertainty.

For the full year of 2009, the company is now budgeting for a 3% year-over-year reduction in non-GAAP operating expenses compared to a 14% increase in 2008. For Q1 2009, NI is currently budgeting for a year-over-year increase of approximately 1% in total non-GAAP operating expenses.