Over 50% increase in year on year earnings for NI

National Instruments reports revenue for first quarter of 2007

National Instruments has reported quarterly revenue in the first quarter of $172 million, up 11 percent from Q1 2006.

Diluted earnings per share (EPS) for Q1 2007 was 23 cents with net income of $19 million.

This represents a 51 percent increase in net income compared to Q1 2006.

Non-GAAP (Generally Accepted Accounting Principles) diluted EPS in Q1 2007 was 28 cents with non-GAAP net income of $22.5 million, up 39 percent from Q1 2006.

For Q1 2007, non-GAAP operating margin was 15.5 percent, up from 13 percent in Q1 2006.

This 250 basis point increase in Q1 non-GAAP operating margin has positioned the company well to achieve its goal of 18 percent non-GAAP operating margin for the full year.

The company's non-GAAP results exclude the impact of both stock-based compensation and the amortization of acquisition-related intangibles.

NI virtual instrument and graphical system design products, which constitute the vast majority of the company's product portfolio, had 13.4 percent year-over-year revenue growth in Q1.

This represents the third consecutive quarter of strong revenue growth from these products despite three sequential quarterly declines in the Global Purchasing Managers Index.

NI believes this continued strong organic growth validates the company's strategy of increased investment in RandD to drive new product success.

Revenue from NI instrument control products declined by 6 percent year-over-year in Q1, compared to a 5 percent decline year-over-year in Q4 2006.

The company believes this decline in revenue from instrument control products reflects the recent slowdown in the traditional test and semiconductor test markets.

Instrument control represented less than 11 percent of NI revenue in Q1 2007, down from 13 percent in Q1 last year.

"I am very pleased with the strong revenue growth we saw in Q1 in the areas of LabVIEW FPGA, CompactRIO, USB data acquisition, modular instruments, RF and PXI," said Dr James Truchard, NI president and CEO.

"We believe our strategy of increased investment in RandD over the last six years has allowed us to significantly outperform our competitors during this weaker period for the industry".

Geographically, revenue in US dollar terms for Q1 2007 compared to Q1 2006 was up 4 percent in the Americas, up 14 percent in Europe and up 21 percent in Asia, equaling overall growth of 11 percent.

In local currency terms, revenue was up 6 percent in Europe and up 20 percent in Asia.

The company also announced that the board of directors declared a dividend of 7 cents per share on its common stock payable on June 4, 2007, to shareholders of record on May 14, 2007.

As of March 31, 2007, the company had $245 million in net cash and short-term investments.

During the quarter the company used $29 million to repurchase 1,057,000 shares of its common stock at an average price of $27.67 per share.

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