National Instruments Corp. (NATI, Financial) filed Quarterly Report for the period ended 2011-03-31.
National Instruments Corp. has a market cap of $3.84 billion; its shares were traded at around $32.31 with a P/E ratio of 34.6 and P/S ratio of 4.4. The dividend yield of National Instruments Corp. stocks is 1.3%. National Instruments Corp. had an annual average earning growth of 15.6% over the past 10 years. GuruFocus rated National Instruments Corp. the business predictability rank of 2.5-star.
For the three month periods ended March 31, 2011 and 2010, net sales in the Americas were $97 million and $79 million respectively, an increase of 23%. Sales in the Americas, as a percentage of consolidated sales were 41% in both 2011 and 2010. In Europe, net sales were $71 million and $58 million in 2011 and 2010, respectively, an increase of 23%. Sales in Europe, as a percentage of consolidated sales were 30% in both 2011 and 2010. In Asia, net sales were $69 million and $54 million in 2011 and 2010, respectively, an increase of 29%. Sales in Asia, as a percentage of consolidated sales were 29% and 28% in 2011 and 2010, respectively. We anticipate that sales growth in Asia will continue to outpace growth in the Americas and Europe and continue to grow as a percent of our total net sales.
Almost all of the sales made by our direct sales offices in the Americas, outside of the U.S., in Europe and in Asia Pacific are denominated in local currencies, and accordingly, the U.S. dollar equivalent of these sales is affected by changes in foreign currency exchange rates. For the three month period ended March 31, 2011, in local currency terms, our consolidated net sales increased by $49 million or 26%, Americas sales increased by $18 million or 23%, European sales increased by $15 million or 26%, and sales in Asia Pacific increased by $16 million or 29%, compared to the three month period ended March 31, 2010. During this same period, the change in exchange rates had the effect of decreasing our consolidated sales by $1.0 million or 0.5%, decreasing Americas sales by $3,000 or 0.0%, decreasing European sales by $1.1 million or 2%, and increasing sales in Asia Pacific by $14,000 or 0.0%.
Operating Expenses. For the three month periods ended March 31, 2011 and 2010, operating expenses were $149 million and $128 million, respectively, an increase of 16%. This increase in our operating expenses was due to higher personnel related expenses of $8 million which included commissions, variable compensation and benefits. The increase in personnel expenses is related to a net increase in our overall headcount of 355 employees as well as the fact that temporary cost cutting measures enacted in 2009 were still in place in January of 2010. In addition, this increase is attributed to higher expenses related to marketing and outside services of $6 million, higher expenses for building and equipment of $2.7 million and higher travel related expenses of $2.6 million. The net impact of changes in foreign currency exchange rates increased our operating expense by $1.1 million. For the three month periods ended March 31, 2011 and 2010, charges related to acquisition related intangibles and stock based compensation included in operating expenses were $4.4 million and $4.7 million, respectively.
Our cash and cash equivalent balances are held in numerous financial institutions throughout the world, including substantial amounts held outside of the U.S., however, the majority of our cash and investments that are located outside of the U.S. are denominated in the U.S. dollar with the exception of $35 million U.S. dollar equivalent that is denominated in Euro. At March 31, 2011, we had $385 million in cash, cash equivalents and short-term investments. Approximately $196 million or 51% of these amounts were held in domestic accounts with various financial institutions and $189 million or 49% was held in accounts outside of the U.S. with various financial institutions. Of our short-term investments $61 million or 47% is held in our investment accounts in the U.S. and $69 million or 53% is held in investment accounts of our foreign subsidiaries. Most of the amounts held outside of the U.S. could be repatriated to the U.S., but under current law, would be subject to U.S. federal income taxes, less applicable foreign tax credits. We have provided for the U.S. federal tax liability on these amounts for financial statement purposes, except for foreign earnings that are considered indefinitely reinvested outside of the U.S. Repatriation could result in additional U.S. federal income tax payments in future years. We utilize a variety of tax planning and financing strategies with the objective of having our worldwide cash available in the locations in which it is needed.
Investing activities used cash of $13 million during the three months ended March 31, 2011, as the result of the purchase of property and equipment of $10 million, and capitalization of internally developed software of $4 million. Investing activities used cash of $38 million during the three months ended March 31, 2010, which was the result of the net purchase of $27 million of short-term investments, the purchase of property and equipment of $5 million, and capitalization of internally developed software of $3.4 million.
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National Instruments Corp. has a market cap of $3.84 billion; its shares were traded at around $32.31 with a P/E ratio of 34.6 and P/S ratio of 4.4. The dividend yield of National Instruments Corp. stocks is 1.3%. National Instruments Corp. had an annual average earning growth of 15.6% over the past 10 years. GuruFocus rated National Instruments Corp. the business predictability rank of 2.5-star.
Highlight of Business Operations:
Net Sales. Our consolidated net sales were $238 million and $191 million for the three month periods ended March 31, 2011 and 2010, respectively, an increase of 24%. For the same periods, product sales were $219 million and $175 million, an increase of 25% and software maintenance sales were $19 million and $16 million an increase of 23%. Products in the areas of virtual instrumentation and graphical system design, which comprised approximately 93% of our revenue in the three months ended March 31, 2011, saw a year-over-year revenue increase of 25%. Instrument control products, which comprised approximately 7% of our revenues in the three months ended March 31, 2011, saw a year-over-year revenue increase of 18%. Products in the areas of virtual instrumentation and graphical system design, which comprised approximately 92% of our revenue in the three months ended March 31, 2010, saw a year-over-year revenue increase of 19%. Instrument control products, which comprised approximately 8% of our revenues in the three months ended March 31, 2010, saw a year-over-year revenue increase of 48%. Revenues from our instrument control products are the most sensitive to the cycles of the global industrial economy. The increase in 2011 and 2010 are attributed to increases in sales volume across all geographic regions of our business. We did not take any significant action with regard to pricing during the three month periods ended March 31, 2011 and 2010.For the three month periods ended March 31, 2011 and 2010, net sales in the Americas were $97 million and $79 million respectively, an increase of 23%. Sales in the Americas, as a percentage of consolidated sales were 41% in both 2011 and 2010. In Europe, net sales were $71 million and $58 million in 2011 and 2010, respectively, an increase of 23%. Sales in Europe, as a percentage of consolidated sales were 30% in both 2011 and 2010. In Asia, net sales were $69 million and $54 million in 2011 and 2010, respectively, an increase of 29%. Sales in Asia, as a percentage of consolidated sales were 29% and 28% in 2011 and 2010, respectively. We anticipate that sales growth in Asia will continue to outpace growth in the Americas and Europe and continue to grow as a percent of our total net sales.
Almost all of the sales made by our direct sales offices in the Americas, outside of the U.S., in Europe and in Asia Pacific are denominated in local currencies, and accordingly, the U.S. dollar equivalent of these sales is affected by changes in foreign currency exchange rates. For the three month period ended March 31, 2011, in local currency terms, our consolidated net sales increased by $49 million or 26%, Americas sales increased by $18 million or 23%, European sales increased by $15 million or 26%, and sales in Asia Pacific increased by $16 million or 29%, compared to the three month period ended March 31, 2010. During this same period, the change in exchange rates had the effect of decreasing our consolidated sales by $1.0 million or 0.5%, decreasing Americas sales by $3,000 or 0.0%, decreasing European sales by $1.1 million or 2%, and increasing sales in Asia Pacific by $14,000 or 0.0%.
Operating Expenses. For the three month periods ended March 31, 2011 and 2010, operating expenses were $149 million and $128 million, respectively, an increase of 16%. This increase in our operating expenses was due to higher personnel related expenses of $8 million which included commissions, variable compensation and benefits. The increase in personnel expenses is related to a net increase in our overall headcount of 355 employees as well as the fact that temporary cost cutting measures enacted in 2009 were still in place in January of 2010. In addition, this increase is attributed to higher expenses related to marketing and outside services of $6 million, higher expenses for building and equipment of $2.7 million and higher travel related expenses of $2.6 million. The net impact of changes in foreign currency exchange rates increased our operating expense by $1.1 million. For the three month periods ended March 31, 2011 and 2010, charges related to acquisition related intangibles and stock based compensation included in operating expenses were $4.4 million and $4.7 million, respectively.
Our cash and cash equivalent balances are held in numerous financial institutions throughout the world, including substantial amounts held outside of the U.S., however, the majority of our cash and investments that are located outside of the U.S. are denominated in the U.S. dollar with the exception of $35 million U.S. dollar equivalent that is denominated in Euro. At March 31, 2011, we had $385 million in cash, cash equivalents and short-term investments. Approximately $196 million or 51% of these amounts were held in domestic accounts with various financial institutions and $189 million or 49% was held in accounts outside of the U.S. with various financial institutions. Of our short-term investments $61 million or 47% is held in our investment accounts in the U.S. and $69 million or 53% is held in investment accounts of our foreign subsidiaries. Most of the amounts held outside of the U.S. could be repatriated to the U.S., but under current law, would be subject to U.S. federal income taxes, less applicable foreign tax credits. We have provided for the U.S. federal tax liability on these amounts for financial statement purposes, except for foreign earnings that are considered indefinitely reinvested outside of the U.S. Repatriation could result in additional U.S. federal income tax payments in future years. We utilize a variety of tax planning and financing strategies with the objective of having our worldwide cash available in the locations in which it is needed.
Investing activities used cash of $13 million during the three months ended March 31, 2011, as the result of the purchase of property and equipment of $10 million, and capitalization of internally developed software of $4 million. Investing activities used cash of $38 million during the three months ended March 31, 2010, which was the result of the net purchase of $27 million of short-term investments, the purchase of property and equipment of $5 million, and capitalization of internally developed software of $3.4 million.
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