National Instruments Corporation Net Income dropped on 11.4% while EBITDA Margin increased on 2.3 pp from 20.0% to 22.3%
01/28/2021 • About National Instruments Corporation (
$NATI) • By InTwits
National Instruments Corporation reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 22.3% in FY2020 vs. 20.0% in FY2019 vs. 15.7% in FY2016
- National Instruments Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.4%. At the same time it's in pair with industry average of 7.6%
- CAPEX is quite volatile: $85m in FY2020, $64m in FY2019, $63m in FY2018, $31m in FY2017, $19m in FY2016
- The company has highly profitable business model: ROIC is 14.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 4.9%. Annual revenue decline showed slowdown in FY20Q4 - revenue showed almost no change in FY20Q4. During the last 5 years Revenue growth topped in FY2018 at 5.4% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.3 pp from 20.0% to 22.3% in FY2020. EBITDA Margin followed a growing trend at 1.6 pp per annum in FY2016-FY2020.
Gross Margin decreased on 3.9 pp from 75.1% to 71.2% in FY2020. During FY2016-FY2020 Gross Margin topped in FY2018 at 75.4% and was declining since that time. SG&A as a % of Revenue increased on 2.2 pp from 44.1% to 46.3% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue bottomed in FY2018 at 43.5% and was growing since that time.
Net Income margin decreased slightly on 0.82 pp from 12.0% to 11.2% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 National Instruments Corporation had CAPEX/Revenue of 3.9%. CAPEX/Revenue increased slightly on 1.5 pp from 2.3% in FY2017 to 3.9% in FY2020. Average CAPEX/Revenue for the last three years was 3.6%.
Return on investment
The company operates at good ROIC (14.8%) while ROE is low (12.0%). ROIC increased slightly on 0.90 pp from 13.9% to 14.8% in FY2020. ROE decreased slightly on 1.5 pp from 13.4% to 12.0% in FY2020. ROIC stuck to a growing trend at 1.0 pp per annum in FY2016-FY2020.
Leverage (Debt)
Debt level is -0.4x Net Debt / EBITDA and 0.5x Debt / EBITDA. Debt surged on 175% while cash jumped on 33.7%.
National Instruments Corporation has no short term refinancing risk: cash is higher than short term debt (1,251.1%).
Valuation and dividends
National Instruments Corporation's trades at EV/EBITDA 19.1x and P/E 38.9x.
Management team
Eric Howard Starkloff is a National Instruments Corporation's CEO. Eric Howard Starkloff has spent 1 year with the company. National Instruments Corporation's CFO is Karen Rapp. Karen Rapp has 3 years tenure at the company.
Financial and operational results
National Instruments Corporation ($NATI) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 1,228 | 1,289 | 1,359 | 1,353 | 1,287 | -4.9% |
| Gross Profit | 915 | 961 | 1,025 | 1,016 | 916 | -9.9% |
| SG&A | 560 | 584 | 591 | 596 | 595 | -0.1% |
| EBITDA | 193 | 218 | 244 | 271 | 287 | 5.8% |
| EBIT | 120 | 146 | 173 | | | |
| Tax | 32 | 95 | 21 | | | |
| Net Income | 83 | 52 | 155 | 162 | 144 | -11.4% |
| Stock Based Compensation | 25 | 29 | 38 | | | |
Balance Sheet
|
|---|
| Cash | 285 | 290 | 259 | 195 | 260 | 33.7% |
| Accounts Receivable | 229 | 249 | 243 | | | |
| Inventory | 194 | 185 | 194 | | | |
| Accounts Payable | 49 | 50 | 48 | | | |
| Short Term Debt | 0 | 0 | 0 | 13 | 21 | 54.9% |
| Long Term Debt | 25 | 0 | 0 | 41 | 128 | 214.6% |
Cash flow
|
|---|
| Capex | 44 | 30 | 35 | 61 | 50 | -18.4% |
| Dividends | 103 | 110 | 122 | | | |
| Acquisitions | 1 | | 6 | | | |
Ratios
|
|---|
| Revenue growth | 0.2% | 5.0% | 5.4% | -0.4% | -4.9% | |
| EBITDA growth | -8.3% | 13.1% | 11.5% | 11.2% | 5.8% | |
|
|---|
| Gross Margin | 74.5% | 74.5% | 75.4% | 75.1% | 71.2% | -3.9% |
| EBITDA Margin | 15.7% | 16.9% | 17.9% | 20.0% | 22.3% | 2.3% |
| EBIT Margin | 9.7% | 11.3% | 12.7% | | |
| SG&A, % of revenue | 45.6% | 45.3% | 43.5% | 44.1% | 46.3% | 2.2% |
| SBC, % of revenue | 2.1% | 2.3% | 2.8% | | |
| Net Income Margin | 6.7% | 4.1% | 11.4% | 12.0% | 11.2% | -0.8% |
| CAPEX, % of revenue | 3.6% | 2.3% | 2.6% | 4.5% | 3.9% | -0.6% |
|
|---|
| ROIC | 10.3% | 12.5% | 14.2% | 13.9% | 14.8% | 0.9% |
| ROE | 7.5% | 4.7% | 13.1% | 13.4% | 12.0% | -1.5% |
| Net Debt/EBITDA | -1.3x | -1.3x | -1.1x | -0.5x | -0.4x | 0.1x |
People
|
|---|
| Insider ownership | 6.5% | 6.5% | 6.5% | | | |
| Employees | 7,522 | 7,412 | 7,263 | | | |
| Revenue/Employee, th. $ | 163 | 174 | 187 | | | |
National Instruments Corporation ($NATI) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 309 | 301 | 308 | 368 | | -0.5% | -9.8% | -9.5% | 0.1% |
| EBITDA | 197 | 41 | 26 | 39 | | 317.5% | -27.0% | -71.3% | -49.9% |
| Net Income | 133 | 11 | -5 | 5 | | 471.3% | -62.0% | -108.9% | -91.9% |
Balance Sheet
|
|---|
| Cash | 254 | 471 | 197 | 260 | | 11.2% | 145.7% | -11.4% | 33.7% |
| Short Term Debt | 14 | 17 | 20 | 21 | | -13.3% | 8.6% | 40.2% | 54.9% |
| Long Term Debt | 36 | 120 | 122 | 128 | | -4.5% | 210.9% | 268.6% | 214.6% |
Ratios
|
|---|
| Gross Margin | 72.9% | 71.5% | 70.1% | 70.3% | | -2.6% | -3.4% | -4.7% | -4.9% |
| EBITDA Margin | 63.6% | 13.6% | 8.3% | 10.7% | | 48.4% | -3.2% | -17.9% | -10.7% |
| Net Income Margin | 42.9% | 3.6% | -1.5% | 1.3% | | 35.4% | -5.0% | -16.7% | -14.7% |
Peers in Electronic Equipment & Instruments
Below we provide National Instruments Corporation benchmarking against other companies in Electronic Equipment & Instruments industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Intellicheck, Inc. ($IDN) | - | -6.3% | 23.2% | 72.9% | 40.1% |
| nLIGHT, Inc. ($LASR) | - | 36.8% | 38.1% | -7.7% | 26.1% |
| Luna Innovations Incorporated ($LUNA) | - | -21.0% | 29.7% | 64.3% | 17.3% |
| PAR Technology Corporation ($PAR) | - | 1.3% | -13.5% | -7.0% | 14.2% |
| Cognex Corporation ($CGNX) | - | 44.7% | 5.3% | -10.0% | 11.8% |
| |
|---|
| Median (26 companies) | -3.8% | 4.1% | 11.6% | 5.2% | -2.7% |
|---|
| National Instruments Corporation ($NATI) | - | 5.0% | 5.4% | -0.4% | -4.9% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Intellicheck, Inc. ($IDN) | 80.0% | 85.5% | 91.3% | 87.0% | 86.7% |
| Cognex Corporation ($CGNX) | 75.2% | 75.6% | 74.4% | 73.8% | 74.5% |
| Coda Octopus Group, Inc. ($CODA) | - | 66.4% | - | 65.6% | 63.5% |
| Applied DNA Sciences Inc ($APDN) | 82.2% | 77.3% | 69.1% | 83.7% | 62.7% |
| Keysight Technologies Inc. ($KEYS) | 55.7% | 53.4% | 54.7% | 58.9% | 60.0% |
| |
|---|
| Median (26 companies) | 39.4% | 41.0% | 40.4% | 42.2% | 42.9% |
|---|
| National Instruments Corporation ($NATI) | 74.5% | 74.5% | 75.4% | 75.1% | 71.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Keysight Technologies Inc. ($KEYS) | 18.5% | 14.6% | -0.9% | 23.7% | 27.0% |
| Cognex Corporation ($CGNX) | 31.9% | 36.0% | 30.1% | 24.0% | 25.3% |
| FLIR Systems, Inc. ($FLIR) | 21.3% | 20.0% | 21.7% | 20.6% | 22.0% |
| Badger Meter, Inc. ($BMI) | 18.6% | 20.1% | 18.7% | 21.1% | 21.2% |
| Track Group Inc ($TRCK) | -3.5% | -1.4% | 7.6% | 15.4% | 21.0% |
| |
|---|
| Median (26 companies) | 2.9% | 4.1% | 3.3% | 12.0% | 8.7% |
|---|
| National Instruments Corporation ($NATI) | 15.7% | 16.9% | 17.9% | 20.0% | 22.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Know Labs Inc ($KNWN) | 0.4% | 0.0% | 2.3% | 4.4% | 57.5% |
| Applied DNA Sciences Inc ($APDN) | 16.1% | 3.1% | 6.8% | 1.3% | 55.1% |
| nLIGHT, Inc. ($LASR) | 4.0% | 4.0% | 6.1% | 7.7% | 10.9% |
| Vishay Precision Group, Inc. ($VPG) | 4.6% | 2.7% | 4.8% | 3.9% | 8.5% |
| LightPath Technologies, Inc. ($LPTH) | 6.5% | 7.8% | 7.7% | 5.7% | 7.0% |
| |
|---|
| Median (25 companies) | 2.0% | 1.6% | 2.2% | 1.9% | 2.1% |
|---|
| National Instruments Corporation ($NATI) | 3.6% | 2.3% | 2.6% | 4.5% | 3.9% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Zebra Technologies Corporation ($ZBRA) | 2.2% | 10.2% | 20.8% | 23.2% | 20.0% |
| Badger Meter, Inc. ($BMI) | 16.9% | 18.2% | 17.6% | 18.7% | 18.5% |
| Keysight Technologies Inc. ($KEYS) | 16.9% | 6.8% | -8.0% | 15.6% | 15.1% |
| Cognex Corporation ($CGNX) | 17.7% | 25.6% | 20.1% | 11.9% | 13.9% |
| NAPCO Security Technologies, Inc. ($NSSC) | - | - | - | 19.8% | 13.6% |
| |
|---|
| Median (26 companies) | 2.1% | 2.6% | 0.9% | 7.8% | 3.4% |
|---|
| National Instruments Corporation ($NATI) | 10.3% | 12.5% | 14.2% | 13.9% | 14.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Identiv, Inc. ($INVE) | - | - | 2.1x | 1.9x | 9.0x |
| Itron, Inc. ($ITRI) | 1.0x | 2.0x | 12.3x | 3.2x | 7.3x |
| Track Group Inc ($TRCK) | - | - | 12.2x | 5.2x | 3.5x |
| Trimble Inc. ($TRMB) | 1.1x | 1.3x | 3.4x | 2.9x | 2.2x |
| Luna Innovations Incorporated ($LUNA) | -6.9x | -108.1x | -19.9x | -2.9x | 1.8x |
| |
|---|
| Median (16 companies) | -0.8x | -0.7x | -0.9x | 0.5x | 0.7x |
|---|
| National Instruments Corporation ($NATI) | -1.3x | -1.3x | -1.1x | -0.5x | -0.4x |
