Quick10K

National Instruments

Price	41.94		EPS	1
Shares	133		P/E	54
MCap	5,573		P/FCF	37
Net Debt	-223		EBIT	126
TEV	5,351		TEV/EBIT	42
TTM 2019-09-30, in MM, except price, ratios

10-Q	2021-03-31	Filed 2021-05-03 Print
10-K	2020-12-31	Filed 2021-02-23 Print
10-Q	2020-09-30	Filed 2020-11-02 Print
10-Q	2020-06-30	Filed 2020-08-04 Print
10-Q	2020-03-31	Filed 2020-05-04 Print
10-K	2019-12-31	Filed 2020-02-20 Print
10-Q	2019-09-30	Filed 2019-10-31 Print
10-Q	2019-06-30	Filed 2019-08-02 Print
10-Q	2019-03-31	Filed 2019-05-01 Print
10-K	2018-12-31	Filed 2019-02-21 Print
10-Q	2018-09-30	Filed 2018-10-31 Print
10-Q	2018-06-30	Filed 2018-08-02 Print
10-Q	2018-03-31	Filed 2018-05-01 Print
10-K	2017-12-31	Filed 2018-02-22 Print
10-Q	2017-09-30	Filed 2017-10-31 Print
10-Q	2017-06-30	Filed 2017-08-01 Print
10-Q	2017-03-31	Filed 2017-05-01 Print
10-K	2016-12-31	Filed 2017-02-16 Print
10-Q	2016-09-30	Filed 2016-10-31 Print
10-Q	2016-06-30	Filed 2016-08-01 Print
10-Q	2016-03-31	Filed 2016-05-02 Print
10-K	2015-12-31	Filed 2016-02-19 Print
10-Q	2015-09-30	Filed 2015-10-30 Print
10-Q	2015-06-30	Filed 2015-07-31 Print
10-Q	2015-03-31	Filed 2015-05-01 Print
10-K	2014-12-31	Filed 2015-02-19 Print
10-Q	2014-09-30	Filed 2014-10-31 Print
10-Q	2014-06-30	Filed 2014-08-01 Print
10-Q	2014-03-31	Filed 2014-05-01 Print
10-K	2013-12-31	Filed 2014-02-20 Print
10-Q	2013-09-30	Filed 2013-11-01 Print
10-Q	2013-06-30	Filed 2013-08-01 Print
10-Q	2013-03-31	Filed 2013-05-02 Print
10-K	2012-12-31	Filed 2013-02-19 Print
10-Q	2012-09-30	Filed 2012-11-06 Print
10-Q	2012-06-30	Filed 2012-08-03 Print
10-Q	2012-03-31	Filed 2012-04-30 Print
10-K	2011-12-31	Filed 2012-02-07 Print
10-Q	2011-09-30	Filed 2011-10-27 Print
10-Q	2011-06-30	Filed 2011-07-29 Print
10-Q	2011-03-31	Filed 2011-04-29 Print
10-K	2010-12-31	Filed 2011-02-18 Print
10-Q	2010-09-30	Filed 2010-11-03 Print
10-Q	2010-06-30	Filed 2010-08-06 Print
10-Q	2010-03-31	Filed 2010-05-06 Print
10-K	2009-12-31	Filed 2010-02-17 Print

8-K	2020-10-30
8-K	2020-10-29
8-K	2020-07-30
8-K	2020-07-06
8-K	2020-06-15
8-K	2020-06-09
8-K	2020-06-02
8-K	2020-05-06
8-K	2020-04-30
8-K	2020-04-17
8-K	2020-04-02
8-K	2020-02-04
8-K	2020-01-30
8-K	2019-12-02
8-K	2019-11-01
8-K	2019-10-29
8-K	2019-07-30
8-K	2019-06-25
8-K	2019-05-14
8-K	2019-04-30
8-K	2019-02-01
8-K	2019-01-23
8-K	2019-01-22
8-K	2018-10-25
8-K	2018-10-25
8-K	2018-09-19
8-K	2018-07-26
8-K	2018-05-08
8-K	2018-04-26
8-K	2018-01-30

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Balance Sheet	Income Statement	Cash Flow
CopyHistoryView Assets, Equity	CopyHistoryView Rev, G Profit, Net Income	CopyHistoryView Ops, Inv, Fin

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PART I - FINANCIAL INFORMATION  

ITEM 1. Financial Statements

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Note 1 – Basis of presentation

  

The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2020, included in our annual report on Form 10-K (the "2020 Form 10-K") filed with the Securities and Exchange Commission (the "SEC"). In our opinion, the accompanying consolidated financial statements reflect all adjustments (consisting only of normal recurring items) considered necessary to present fairly our financial position at March 31, 2021 and December 31, 2020, the results of our operations and comprehensive income for the three months ended March 31, 2021 and 2020, the cash flows for the three months ended March 31, 2021 and 2020, and the statement of stockholders' equity for the three months ended March 31, 2021 and 2020. Our operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP").

Reclassifications

As further discussed below, certain prior period amounts have been reclassified to conform to the current period presentation. The reclassifications had no impact on our previously reported net income or cash flows:

•Before the second quarter of 2020, we included net sales attributable to our operations in India within the EMEIA region in Note 2 - Revenue of Notes to Consolidated Financial Statements. In the second quarter of 2020, we began including these amounts within the APAC (Australia, India, New Zealand, Southeast Asia, China, South Korea and Japan) geographic region, to reflect recent changes within our organizational structure. We have recast historical comparative information to conform to the March 31, 2021 presentation. Refer to Note 2 - Revenue of Notes to Consolidated Financial Statements for our revenue disaggregated by geographic region which now include the Americas (United States, Canada and Latin America), EMEA (Europe, Middle East, and Africa) and APAC.

•Before the second quarter of 2020, we presented “Interest income, ” "Net foreign exchange gain (loss), " and "Other income (loss)" separately on the consolidated statements of income. In the second quarter of 2020, we began presenting these amounts within “Other (expense) income” in the consolidated statements of income for all periods presented. Refer to "Other (expense) income" in Note 1 - Basis of Presentation of Notes to Consolidated Financial Statements for additional information on the amounts that comprise "Other (expense) income".

Recently Adopted Accounting Pronouncements

Clarification of Equity Method Transition

In January 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-01, “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815,” which clarifies the interaction of the accounting for equity investments under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. We adopted ASU 2020-01 on January 1, 2021, and the new standard did not have a material impact on our consolidated financial statements and related disclosures.

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Recently Issued Accounting Pronouncements

Reference Rate Reform

In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848)," which provides optional expedients for contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate ("LIBOR") or another rate expected to be discontinued at the end of 2021 due to reference rate reform. The update is effective immediately and may be applied prospectively to contracts and other transactions entered into or evaluated on or before December 31, 2022. We are currently evaluating the impact on our consolidated financial position, results of operations, and cash flows.

Summary of Significant Accounting Policies

There were no significant changes in our accounting policies during the three months ended March 31, 2021 compared to the significant accounting policies described in our 2020 Form 10-K.

Divestitures

AWR

On January 15, 2020, we completed the sale of our AWR Corporation subsidiary ("AWR") for approximately $161 million, subject to final working capital adjustments. We recognized a gain of approximately $160 million on the sale. The gain is included within "Gain on sale of business/assets" in the consolidated statements of income, which also included approximately $1 million of transaction costs.

The divestiture of AWR resulted in the derecognition of the following assets and liabilities (in thousands):

Copy History

Cash			$	1,027
Accounts receivable, net			7,233
Prepaid and other current assets			283
Goodwill			7,221
Other non-current assets			556
Total assets			$	16,320
Deferred revenue			$	15,296
Other current liabilities			940
Cumulative translation adjustment			(660)
Total liabilities and stockholders' equity			$	15,576
Total assets divested, net (including cash)			$	744

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Other (Expense) Income

Other (expense) income, net consisted of the following amounts (in thousands):

Copy History

			Three Months Ended March 31,
			(Unaudited)
			2021			2020
Interest income			$	161		$	2,299
Interest expense			(704)			(76)
Loss from equity-method investments			(4,173)			(1,025)
Net foreign exchange loss			(559)			(505)
Other			205			(133)
Other (expense) income, net			$	(5,070)		$	560

Other Current Liabilities

Other current liabilities on our consolidated balance sheet includes the following amounts (in thousands):

Copy History

			As of March 31, 2021			As of December 31,
			(unaudited)			2020
Income taxes payable - current			$	14,255		$	13,720
Hedge payable - current			8,553			13,031
Other			19,413			15,827
Total			$	42,221		$	42,578

Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during each period. Diluted EPS is computed by dividing net income by the weighted average number of common shares and common share equivalents outstanding (if dilutive) during each period. The number of common share equivalents, which includes restricted stock units ("RSUs"), is computed using the treasury stock method.    

The reconciliation of the denominators used to calculate basic EPS and diluted EPS for the three months ended March 31, 2021 and 2020, are as follows:

Copy History

						Three Months Ended March 31,
						(In thousands)
						(Unaudited)
						2021						2020
Weighted average shares outstanding-basic						131,483						130,613
Plus: Common share equivalents
RSUs						1,234						744
Weighted average shares outstanding-diluted						132,717						131,357

  

Shares issuable upon vesting of RSU awards for the three months ended March 31, 2021 and 2020 of 567,000 shares and 182,000 shares, respectively, were excluded in the computations of diluted EPS because the effect of including the RSU awards would have been anti-dilutive.

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Note 2 - Revenue

Revenue Recognition

Revenue is recognized upon transfer of control of the promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of our products or services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities.

Disaggregation of Revenues

We disaggregate revenue from contracts with customers based on the timing of transfer of goods or services to customers (point-in-time or over time) and geographic region based on the billing location of the customer. Before the second quarter of 2020, we included net sales attributable to our operations in India within the EMEIA region. In the second quarter of 2020, we began including these amounts within the APAC geographic region, to reflect recent changes within our organizational structure. We have recast historical comparative information to conform to the March 31, 2021 presentation. The geographic regions are now presented as the Americas, EMEA and APAC to reflect this change.

Total net sales based on the disaggregation criteria described above are as follows:

Copy History

									Three Months Ended March 31,
(In thousands)									(Unaudited)
						2021												2020
Net sales:						Point-in-Time(1)			Over Time			Total						Point-in-Time(1)			Over Time			Total
Americas						$	104,586		$	22,147		$	126,733					$	105,299		$	19,718		$	125,017
EMEA						64,237			21,285			85,522						67,822			18,907			86,729
APAC						112,630			10,297			122,927						87,189			10,446			97,635
Total net sales(1)						$	281,453		$	53,729		$	335,182					$	260,310		$	49,071		$	309,381
(1): Net sales contains hedging gains and losses, which do not represent revenues recognized from customers. See Note 5 - Derivative instruments and hedging activities of Notes to Consolidated Financial Statements for more information on the impact of our hedging activities on our results of operations

Information about Contract Balances

Amounts collected in advance of services being provided are accounted for as deferred revenue. Nearly all of our deferred revenue balance is related to extended hardware and software maintenance contracts. Payment terms and conditions vary by contract type, although payment is typically due within 30 to 90 days of contract inception. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers, such as invoicing at the beginning of a subscription term with a portion of the revenue recognized ratably over the contract period, or to provide customers with financing, such as multi-year on-premises licenses that are invoiced annually with revenue recognized upfront.

Changes in deferred revenue, current and non-current, during the three months ended March 31, 2021 were as follows:

Copy History

			Amount
			(In thousands)
Deferred Revenue at December 31, 2020			$	168,486
Deferral of revenue billed in current period, net of recognition			50,032
Recognition of revenue deferred in prior periods			(51,525)
Foreign currency translation impact			(3,188)
Balance as of March 31, 2021 (unaudited)			$	163,805

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For the three months ended March 31, 2021, revenue recognized from performance obligations satisfied in prior periods (for example, due to changes in transaction price) was not material. Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables. Unbilled receivables which are anticipated to be invoiced in the next twelve months are included in "other current assets" on the consolidated balance sheet. Based on the nature of our contracts with customers, we do not typically recognize unbilled receivables related to revenues recognized in excess of amounts billed. For the three months ended March 31, 2021 and December 31, 2020, amounts recognized related to unbilled receivables were not material.

Unsatisfied Performance Obligations

Revenue expected to be recognized in any future period related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, and contracts where revenue is recognized as invoiced, was approximately $61.7 million as of March 31, 2021. Because we typically invoice customers at contract inception, this amount is included in our current and non-current deferred revenue balances. As of March 31, 2021, we expect to recognize approximately 38% of the revenue related to these unsatisfied performance obligations during the remainder of 2021, 35% during 2022, and 27% thereafter.

Assets Recognized from the Costs to Obtain a Contract with a Customer

Note 3 – Investments 

  

The following tables summarize unrealized gains and losses related to our short-term investments designated as available-for-sale debt securities:

Copy History

						As of March 31, 2021
(In thousands)						(Unaudited)
												Gross						Gross
						Adjusted Cost						Unrealized Gain						Unrealized Loss						Fair Value
Corporate bonds						$	32,097					$	74					$	—					$	32,171
Total Short-term investments						$	32,097					$	74					$	—					$	32,171

Copy History

(In thousands)						As of December 31, 2020
												Gross						Gross
						Adjusted Cost						Unrealized Gain						Unrealized Loss						Fair Value
Corporate bonds						$	59,761					$	163					$	(1)					$	59,923
Total Short-term investments						$	59,761					$	163					$	(1)					$	59,923

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The following tables summarize the contractual maturities of our short-term investments designated as available-for-sale debt securities:

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						As of March 31, 2021
						(Unaudited)
(In thousands)						Adjusted Cost						Fair Value
Due in less than 1 year						$	32,097					$	32,171
Total available-for-sale debt securities						$	32,097					$	32,171
Due in less than 1 year						Adjusted Cost						Fair Value
Corporate bonds						$	32,097					$	32,171
Total available-for-sale debt securities						$	32,097					$	32,171

Equity-Method Investments

The carrying value of our equity method investments was $34 million and $25 million as of March 31, 2021 and December 31, 2020, respectively. During the three months ended March 31, 2021, we determined there was an other than temporary impairment for one of our equity-method investments, based on revised forecasts. We recorded a $3.5 million impairment loss related to this investment during the three months ended March 31, 2021. Our proportionate share of the income/(loss) from equity-method investments and related impairment charges are included within "Other (expense) income". Refer to Note 1 - Basis of Presentation of Notes to Consolidated Financial Statements for additional information on these amounts for the three months ended March 31, 2021 and 2020.

Note 4 – Fair value measurements 

  

We define fair value to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market that market participants may use when pricing the asset or liability.   

We follow a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value measurement is determined based on the lowest level input that is significant to the fair value measurement. The three values of the fair value hierarchy are the following:   

Level 1 – Quoted prices in active markets for identical assets or liabilities   

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly   

Level 3 – Inputs that are not based on observable market data   

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Assets and liabilities measured at fair value on a recurring basis are summarized below:

Copy History

						Fair Value Measurements at Reporting Date Using
(In thousands)						(Unaudited)
Description						March 31, 2021						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Assets
Cash and cash equivalents available for sale:
Money Market Funds						$	146,560					$	146,560					$	—					$	—
Short-term investments available for sale:
Corporate notes and bonds						32,171						—						32,171						—
Derivatives						7,712						—						7,712
Total Assets						$	186,443					$	146,560					$	39,883					$	—
Liabilities
Derivatives						$	(11,126)					$	—					$	(11,126)					$	—
Total Liabilities						$	(11,126)					$	—					$	(11,126)					$	—

Copy History

(In thousands)						Fair Value Measurements at Reporting Date Using
Description						December 31, 2020						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Assets
Cash and cash equivalents available for sale:
Money Market Funds						$	145,466					$	145,466					$	—					$	—
Short-term investments available for sale:
Corporate notes and bonds						59,923						—						59,923						—
Derivatives						6,124						—						6,124						—
Total Assets						$	211,513					$	145,466					$	66,047					$	—
Liabilities
Derivatives						$	(19,359)					$	—					$	(19,359)					$	—
Total Liabilities						$	(19,359)					$	—					$	(19,359)					$	—

We value our available-for-sale short-term investments based on pricing from third party pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. We classify all of our fixed income available-for-sale securities as having Level 2 inputs. The valuation techniques used to measure the fair value of our financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques. We believe all of these sources reflect the credit risk associated with each of our available-for-sale short-term investments. Short-term investments available-for-sale consists of debt securities issued by states of the U.S. and political subdivisions of the U.S., corporate debt securities and debt securities issued by U.S. government organizations and agencies. All of our short-term investments available-for-sale have contractual maturities of less than 60 months.  

  

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Our derivatives consist of foreign currency forward contracts. Our foreign currency forward contracts are valued using an income approach (Level 2) based on the spot rate less the contract rate multiplied by the notional amount. We consider counterparty credit risk in the valuation of our derivatives. However, counterparty credit risk did not impact the valuation of our derivatives during the three months ended March 31, 2021. There were no transfers in or out of Level 1 or Level 2 during the three months ended March 31, 2021.  

  

As of March 31, 2021, our short-term investments did not include any foreign sovereign debt. All of our short-term investments that are located outside of the U.S. are denominated in the U.S. dollar.

  

We did not have any items that were measured at fair value on a nonrecurring basis at March 31, 2021 and December 31, 2020. The carrying value of net accounts receivable, accounts payable, and long-term debt contained in the consolidated balance sheets approximates fair value.

Note 5 – Derivative instruments and hedging activities 

  

We recognize all of our derivative instruments as either assets or liabilities in our statement of financial position at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, we designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation.

We have direct operations in approximately 40 countries. Sales outside of the Americas accounted for approximately 62% and 60% of our net sales during the three months ended March 31, 2021 and 2020, respectively. Our activities expose us to a variety of market risks, including the effects of changes in foreign currency exchange rates. These financial risks are monitored and managed by us as an integral part of our overall risk management program.   

  

We maintain a foreign currency risk management strategy that uses derivative instruments (foreign currency forward contracts) to help protect our earnings and cash flows from fluctuations caused by the volatility in currency exchange rates. Movements in foreign currency exchange rates pose a risk to our operations and competitive position, in that exchange rate changes may affect our profitability and cash flow, and the business or pricing strategies of our non-U.S. based competitors.

 

The vast majority of our foreign sales are denominated in the customers’ local currency. We purchase foreign currency forward contracts as hedges of forecasted sales that are denominated in foreign currencies and as hedges of foreign currency denominated financial assets or liabilities. These contracts are entered into to help protect against the risk that the eventual dollar-net-cash inflows resulting from such sales or firm commitments will be adversely affected by changes in exchange rates. We also purchase foreign currency forward contracts as hedges of forecasted expenses that are denominated in foreign currencies. These contracts are entered into to help protect against the risk that the eventual dollar-net-cash outflows resulting from foreign currency operating and cost of sales expenses will be adversely affected by changes in exchange rates.

 

We designate foreign currency forward contracts as cash flow hedges of forecasted net sales or forecasted expenses. In addition, we hedge our foreign currency denominated balance sheet exposures using foreign currency forward contracts that are not designated as hedging instruments. None of our derivative instruments contain a credit-risk-related contingent feature.

 

 Cash flow hedges  

To help protect against the reduction in value caused by a fluctuation in foreign currency exchange rates of forecasted foreign currency cash flows resulting from international sales over the next one to three years, we have instituted a foreign currency cash flow hedging program. We hedge portions of our forecasted net sales and forecasted expenses denominated in foreign currencies with forward contracts. For forward contracts, when the dollar strengthens significantly against the foreign currencies, the change in the present value of future foreign currency cash flows may be offset by the change in the fair value of the forward contracts designated as hedges. We purchase foreign currency forward contracts for up to 100% of our forecasted exposures in selected currencies (primarily in Euro, Japanese yen, Hungarian forint, British pound, Malaysian ringgit, Chinese yuan, and Korean won) and limit the duration of these contracts to 40 months or less.  

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For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative is reported as a component of accumulated other comprehensive income ("OCI") and reclassified into earnings in the same line item (net sales, operating expenses, or cost of sales) associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings. Hedge effectiveness of foreign currency forwards designated as cash flow hedges are measured by comparing the hedging instrument’s cumulative change in fair value from inception to maturity to the forecasted transaction’s terminal value.  

We held forward contracts designated as cash flow hedges with the following notional amounts:

Copy History

(In thousands)						US Dollar Equivalent
						As of March 31, 2021						As of December 31,
						(Unaudited)						2020
Chinese yuan						$	52,702					$	45,553
Euro						187,833						219,115
Japanese yen						61,908						73,399
Hungarian forint