AUSTIN, Texas, April 29, 2014 /PRNewswire/ -- National Instruments (Nasdaq: NATI) today announced Q1 revenue of $285 million, down 1 percent year-over-year. Backlog increased by $7.5 million and deferred revenue increased by $6 million in the first quarter. The company's orders under $20,000 grew 4 percent year-over-year; orders between $20,000 and $100,000 increased 5 percent year-over-year; and orders above $100,000 decreased 10 percent year-over-year. In Q1 2014, NI recognized $7 million in revenue from its largest customer, compared with approximately $4 million recognized in Q1 2013.
GAAP net income for Q1 was $19 million, with fully diluted earnings per share (EPS) of $0.15, and non-GAAP net income was $26 million, with non-GAAP fully diluted EPS of $0.21. EBITDA, or Earnings Before Interest, Taxes, Depreciation and Amortization, was $41million, or $0.32 per share for Q1.
In Q1, GAAP gross margin was 75 percent and non-GAAP gross margin was 76 percent, up 30 basis points from Q4 2013. Total GAAP operating expenses were up 2 percent sequentially and were down 4 percent year-over-year. Total non-GAAP operating expenses were $182 million, up 3 percent sequentially and down 4 percent year-over-year.
GAAP operating margin was 8 percent in Q1, with GAAP operating income of $24million, up 23 percent year-over-year. Non-GAAP operating margin was 12 percent in Q1, with non-GAAP operating income of $34million, up 16 percent year-over-year.
The company's non-GAAP results exclude the impact of stock-based compensation, amortization of acquisition-related intangibles, acquisition-related adjustments and acquisition-related transaction costs. Reconciliations of the company's GAAP and non-GAAP results are included as part of this news release.
"Although Q1 remained challenging, we received record orders for a first quarter, which indicates continued strong interest from customers in our software-based modular platform," said Dr. James Truchard, NI president, CEO and co-founder. "We remained focused on spending discipline as well as leveraging our investments to further our platform offering so customers can continue to solve the toughest engineering challenges."
Geographic revenue in U.S. dollar terms for Q1 2014 compared to Q1 2013 was down 4 percent in the Americas, up 6 percent in Europe, up 1 percent in East Asia and down 10 percent in Emerging Markets. In local currency terms, revenue was up 4percent in Europe, up 3 percent in East Asia and flat in Emerging Markets.
As of March 31, NI had a record $410 million in cash and short-term investments, up $17 million from Dec. 31, 2013. The company paid $19 million in dividends in the first quarter. The NI Board of Directors also approved a quarterly dividend of $0.15 per share on the company's common stock payable on June 2 to stockholders of record on May 12.
Guidance for Q2 2014 "We believe our ability to continue to gain market share in a challenging environment continues to validate our disruptive approach," said Alex Davern, NI COO and CFO. "Improvement in the Global PMI over the last six months gives us increased confidence in the continued recovery of the industrial economy. This confidence combined with our continued commitment to deliver on our leverage plan leads us to expect improved operating margins in Q2."
NI currently expects revenue for Q2 2014 to be between $296 million and $324 million. NI expects fully diluted EPS to be in the range of $0.13 to $0.25 for Q2, with non-GAAP fully diluted EPS expected to be in the range of $0.19 to $0.31.
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 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-month periods ending March 31, 2014 and 2013, on a GAAP and non-GAAP basis. NI is also providing guidance on its non-GAAP operating margin and 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 adjustments and acquisition-related transaction costs 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 also discloses the company's EBITDA and EBITDA diluted EPS for the three-month periods ending March 31, 2014 and 2013. The company also believes that including the EBITDA results assists investors in assessing the company's operational performance relative to its competitors. A reconciliation of EBITDA and EBITDA diluted EPS to GAAP net income and GAAP diluted EPS is included with this news release.
Conference Call Information and Availability of Presentation Materials Interested parties can listen to the Q1 2014 conference call today, April 29, at 4:00 p.m. CT at ni.com/call. Replay information is available by calling (855) 859-2056, confirmation code #20262052, shortly after the call through May 4 at 11:00 p.m. CT, or by visiting the company's website at ni.com/call. You may also view certain presentation materials that we may refer to on the conference call at ni.com/nati.
Forward-Looking Statements This release contains "forward-looking statements," including statements regarding furthering our platform offering so customers can continue to solve the toughest engineering challenges, continuing to gain market share in a challenging environment continues to validate our disruptive approach, increased confidence in the continued recovery, expecting improved operating margins in Q2 and NI's Q2 guidance for revenue and GAAP and non-GAAP EPS. 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, component shortages, delays in the release of new products, fluctuations in customer demand for NI products including orders from NI's largest customer, fluctuations in average order size and customer mix, the company's ability to effectively manage its operating expenses, manufacturing inefficiencies and the level of capacity utilization, and the impact of any acquisitions by NI. Actual results may differ materially from the expected results.
The company directs readers to its Form 10-K for the fiscal year ended Dec. 31, 2013, 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 equipped engineers and scientists with tools that accelerate productivity, innovation and discovery. NI's graphical system design approach to engineering provides an integrated software and hardware platform that speeds the development of any system needing measurement and control. The company's long-term vision and focus on improving society through its technology supports the success of its customers, employees, suppliers and shareholders. Readers can obtain investment information from the company's investor relations department by calling (512) 683-5090, emailing [email protected] or visiting www.ni.com/nati. (NATI-F)
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