- Although National Instruments’ results in the first quarter of 2020 were consistent with those of fiscal 2020, the Texas-based company expects the COVID-19 pandemic to impact its business in the second quarter.
- With limited visibility on how the situation will evolve, National Instruments (NI) is announcing measures to address the situation.
In the first quarter, only Greater China was affected by the pandemic. While measures to restrict movement and containment have since March been extended to European countries and the United States in particular, the American firm’s managers believe that the impact of Covid-19 on the economy is still very difficult to assess. Eric Starkloff, CEO of NI (photo), and Karen Rapp, its CFO, believe that their company will be able to cope with the situation while taking measures to deal with it.
Eric Starkloff expressed his satisfaction with « delivering results in line with expectations for the first quarter, in a period of crisis due to COVID-19 ». In the face of market uncertainties in the coming weeks and even months, he believes that the company nevertheless has “the experience of sailing through difficult times, necessary to maintain the stability of its results in the short term while remaining focused on its long-term growth ambitions ».
Despite closing the first quarter “within expectations during this unprecedented crisis”, Karen Rapp nevertheless remains cautious about the future, which presents “a high degree of uncertainty for the industrial economy”. In 2020, she plans to “preserve strategic investments while continuing to demonstrate disciplined spending management”.
In the face of the uncertainties for 2020, NI’s objective is to focus on profitability while maintaining its ability to accelerate our growth in the future. The U.S. company will continue to exercise prudent expense management. It is announcing several measures to address the situation: significant hiring restraint, reduction in discretionary spending, shifting marketing from in-person events to a more virtual experience, temporarily reducing executive pay, pushing out merit cycle to 2021 and priority given to travel for customer visits. In addition, variable compensation will be adjusted to reflect actual business results.
National Instrument believes that these measures will enable it to avoid layoffs and maintain its capacity to accelerate growth in the future. In particular, operating expenses for the second quarter are expected to decline by 1-2% compared to the previous quarter.