Recent product releases include NI VeriStand software for real-time testing and simulation; the NI TestStand 4.2 automated test management environment including support for Python scripts; a new family of fault insertion units; NI-XNET high-performance CAN and FlexRay bus interfaces optimized for HIL applications; ARINC 429, MIL-STD-1553 and AFDX (ARINC 663) military and aerospace avionics bus interfaces; low-cost and high-performance real-time processor cards; and several other I/O interfaces. To ensure that applications can easily scale and meet evolving requirements, the NI HIL simulation platform supports third-party hardware interfaces and integrates with C, C++, .NET and Python programming languages. In addition to integrating seamlessly with the NI LabVIEW graphical system design environment, the platform works with a variety of modeling environments such as The MathWorks, Inc. Simulink((R) )software; ITI SimulationX; Maplesoft MapleSim; and Gamma Technologies GT-POWER.

Engineers can increase their system performance and flexibility while reducing overall costs by taking advantage of the open PXI hardware standard, advanced multicore technology and graphically programmed FPGA interfaces. Additionally, the platform's software-defined instrumentation approach makes it possible for HIL applications created with NI products to scale from low-cost desktop validation systems to multiprocessor distributed simulators, a benefit that provides engineers a flexible and cost-effective toolset for all HIL testing applications.

The platform delivers commercial off-the-shelf (COTS) solutions that offer alternatives to complex proprietary configurations and bulky, inefficient traditional simulation systems. In today's challenging economic climate, NI HIL simulation products are ideal for making projects more efficient and cost-effective for design engineers in multiple industries, from aerospace, alternative energy, automotive and consumer electronics to government, industrial transportation, mechatronics, medical technology and semiconductor manufacturing.

Readers can visit www.ni.com/hil to learn more about specific NI HIL simulation platform solutions.

About National Instruments

National Instruments (www.ni.com) is transforming the way engineers and scientists design, prototype and deploy systems for measurement, automation and embedded applications. NI empowers customers with off-the-shelf software such as NI LabVIEW and modular cost-effective hardware, and sells to a broad base of more than 30,000 different companies worldwide, with no one customer representing more than 3 percent of revenue and no one industry representing more than 15 percent of revenue. Headquartered in Austin, Texas, NI has more than 5,000 employees and direct operations in more than 40 countries. For the past 10 years, FORTUNE magazine has named NI one of the 100 best companies to work for in America. Readers can obtain investment information from the company's investor relations department by calling (512) 683-5090, e-mailing nati@ni.com or visiting www.ni.com/nati.

LabVIEW, National Instruments, NI, ni.com, NI TestStand and NI VeriStand are trademarks of National Instruments. Other product and company names listed are trademarks or trade names of their respective companies. Simulink((R)) is a registered trademark of The MathWorks, Inc.

    Editor Contact:     Hilary Marchbanks, (512) 683-5937
    Reader Contact:     Ernest Martinez, (800) 258-7022

SOURCE National Instruments

http://www.ni.com

"I am optimistic that National Instruments will emerge in a stronger leadership position because of our long-term focus through the recession," said Dr. James Truchard, NI president and CEO. "I believe our continued investment in innovation and new product development has further differentiated National Instruments from other players in the markets we serve, expanding our opportunity to grow as did our investment in the 2001 recession."

With Q3 2008 representing the highest revenue quarter in company history, NI had its toughest revenue compare in Q3 2009, and revenue was down 23 percent from a year-over-year perspective. In Q3 2009, NI virtual instrumentation and graphical system design products, which constitute the majority of the company's product portfolio, experienced a 23 percent year-over-year revenue decline. NI instrument control product sales, which represent approximately 7 percent of NI revenue, were down 28 percent year-over-year, and up sequentially by more than 20 percent, after four quarters of sequential decline. The strong sequential increase in NI instrument control revenue indicates that the overall test and measurement industry may have bottomed out in Q2 and begun a sequential recovery in Q3. Product revenue was $152 million, down 24 percent from Q3 2008, and software maintenance revenue was $13 million, down 9 percent year-over-year.

"We are pleased with how our business progressed in Q3, and it appears that the demand environment has improved meaningfully," said Alex Davern, NI CFO. "With that said, we remain cognizant that the industrial economy remains well below prior levels, and we will continue to focus on gaining market share and driving profit recovery."

Geographically, the company saw the effects of the slowdown worldwide. Revenue in U.S. dollar terms for Q3 2009 compared to Q3 2008 was down 22 percent in the Americas, down 30 percent in Europe and down 16 percent in Asia, equaling an overall revenue decline of 23 percent. In local currency terms, revenue was down 20 percent in Europe and down 13 percent in Asia, for an overall local currency decline of 19 percent year-over-year.

Total operating expenses for the quarter were down $20 million year-over-year, illustrating the strong fiscal discipline that has been exercised throughout the organization in response to the severe downturn in the global industrial economy. Included in Q3 operating expenses is a $2 million reduction of the company's accrual for litigation costs which resulted in a non-cash increase to income. At the NI investor conference at NIWeek in August, the company laid out its spending plans relative to various growth scenarios for 2010 and 2011. NI intends to drive operating leverage until the company's revenues recover to the record levels seen in 2008.

As of Sept. 30, total headcount was 5,169, a 3 percent year-over-year increase and an increase of 34 positions since June 30, 2009. The primary focus for headcount additions has been in R&D and field sales. These areas increased by 49 in Q3, while headcount in the rest of the company fell by 15 in Q3.

Cash flow from operations continued to be strong at $90 million for the first nine months of the year. As of Sept. 30, 2009, NI had $276 million in net cash and short-term investments, up $26 million from June 30, 2009. During Q3 2009, the company paid $9 million in dividends and used $3.3 million to repurchase 131,000 shares of its common stock at an average price of $25.09 per share. National Instruments announced that its Board of Directors declared a dividend of $0.12 per share on its common stock payable on Nov 30, 2009, to shareholders of record on Nov 9, 2009.

Q3 2009 Highlights

    --  Quarterly revenue of $165 million, up 8 percent sequentially
    --  Net income of $10 million
    --  Non-GAAP net income of $15.4 million
    --  Cash and short-term investments of $276 million
    --  Total operating expenses for the quarter down $20 million year-over-year
    --  New product releases, including, LabVIEW 2009, X Series data
        acquisition, and NI wireless sensor networks

    --  Record attendance at NIWeek 2009

Outlook and Specific Guidance for Q4 2009

After reaching a record low in Q1 2009, the quarterly average of the global Purchasing Managers Index (PMI) improved to 52 in Q3 indicating that the industrial economy expanded sequentially in Q3. However, the dramatic year-over-year decline in the global industrial economy over the last year and the current high levels of excess capacity suggest that it may take a considerable period of economic expansion for the industrial economy to recover fully to the levels seen a year ago.

For Q4, NI expects strong Q4 sequential revenue growth, with revenue expected to be between $190 million and $200 million. The company expects GAAP fully diluted EPS between $0.22 and $0.30, with non-GAAP fully diluted EPS expected to be between $0.30 and $0.38.

NI guidance assumes a non-GAAP effective tax rate of approximately 30 percent for Q4, which is significantly greater than the overall 2009 effective rate as the company now expects Q4 profit to be significantly greater than was anticipated earlier in the year. The increase in Q4 profit expectations results in a greater than anticipated concentration of the NI tax charge in Q4. For 2010, the company anticipates that its non-GAAP effective tax rate will be between 18 percent and 22 percent, and the company is using 20 percent for internal modeling.

In Q4, the GAAP to non-GAAP net adjustment is also expected to be elevated due to the high effective tax rate, and the adjustment is estimated to be $0.08 per share. In Q1 2010, the company anticipates that the GAAP to non-GAAP adjustment will return to a more normal level of approximately $0.06 per share.

Non-GAAP Results and Guidance Presentation

In addition to disclosing results determined in accordance with GAAP, NI discloses certain non-GAAP operating results and non-GAAP guidance that exclude certain charges. In this news release, the company has presented its net income and EPS for Q3 2009 and its guidance for Q4 2009 on a GAAP and non-GAAP basis. When presenting non-GAAP information, the company includes a reconciliation of the non-GAAP data to the GAAP data. 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 or amortization of acquired intangibles that are all non-cash charges 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 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.

Conference Call Information

Interested parties can listen to the Q3 2009 conference call today, Oct. 27, beginning at 4:00 p.m. CDT, at www.ni.com/call. Replay information is available by calling (888) 203-1112, confirmation code # 7611546, from Oct. 27 at 7:00 p.m. CDT through Nov. 2 at midnight CST.

Upcoming Events With the Financial Community

National Instruments will be participating in the following events with the financial community: a Non-Deal Roadshow with JPMorgan on Dec. 1 in Boston, Mass., the NASDAQ OMX 23rd Investor Program on Dec. 2 in London and the Credit Suisse Annual Technology Conference on Dec. 2 in Scottsdale, Ariz.

Forward-Looking Statements

This release contains "forward-looking statements," including statements related to emerging in a stronger leadership position as our business model has allowed us to continue to make strategic investments through the recession, our continued investment having further differentiated us from other players, creating a large opportunity for us to grow and gain market share in the recovery, overall test and measurement industry bottoming in Q2 and beginning a recovery in Q3, driving operating leverage until our revenues recover, that it may take a considerable amount of time for the industrial economy to recover fully, demand environment has improved meaningfully, focusing on gaining market share and driving profit recovery, our guidance for Q4 2009 with respect to revenue, GAAP and Non-GAAP EPS, the impact of stock based compensation and amortization of acquisition related intangibles and non-GAAP effective tax rate for Q4 2009 and 2010. These statements are subject to a number of risks and uncertainties, including the risk of further weakness or unexpected fluctuations in the global economy, delays in the release of new products, fluctuations in customer demand for NI products, our ability to continue to control our operating expenses, manufacturing inefficiencies and foreign exchange fluctuations. Actual results may differ materially from the expected results. The company directs readers to documents it files with the SEC for other risks associated with the company's future performance.

About National Instruments

National Instruments (www.ni.com) is transforming the way engineers and scientists design, prototype and deploy systems for measurement, automation and embedded applications. NI empowers customers with off-the-shelf software such as NI LabVIEW and modular cost-effective hardware, and sells to a broad base of more than 30,000 different companies worldwide, with no one customer representing more than 3 percent of revenue and no one industry representing more than 15 percent of revenue. Headquartered in Austin, Texas, NI has more than 5,000 employees and direct operations in more than 40 countries. For the past 10 years, FORTUNE magazine has named NI one of the 100 best companies to work for in America. Readers can obtain investment information from the company's investor relations department by calling (512) 683-5090, e-mailing nati@ni.com or visiting www.ni.com/nati. (NATI-F)

LabVIEW, National Instruments, NI, ni.com, and NIWeek are trademarks of National Instruments. Other product and company names listed are trademarks or trade names of their respective companies.

    Contact:  Veronica Garza
              Investor Relations
              (512) 683-6873



                               National Instruments
                      Condensed Consolidated Balance Sheets
                                  (in thousands)

                                             September 30,  December 31,
                                                  2009          2008
                                              (unaudited)
                                              -----------       ----
    Assets
    Current assets:
    Cash and cash equivalents                   $232,700      $229,400
    Short-term investments                        43,663         6,220
    Accounts receivable, net                      90,790       121,548
    Inventories, net                              88,726       107,358
    Prepaid expenses and other current assets     40,721        43,062
    Deferred income taxes, net                    21,875        21,435
                                                  ------        ------
    Total current assets                         518,475       529,023

    Long-term investments                          1,900        10,500
    Property and equipment, net                  150,532       154,477
    Goodwill, net                                 64,960        64,561
    Intangible assets, net                        44,980        41,915
    Other long-term assets                        35,684        32,115
                                                  ------        ------
    Total assets                                $816,531      $832,591
                                                ========      ========

    Liabilities and Stockholders' Equity
    Current liabilities:
    Accounts payable                             $25,432       $30,876
    Accrued compensation                          16,230        22,012
    Deferred revenue                              49,102        45,514
    Accrued expenses and other liabilities        10,641        18,848
    Other taxes payable                           13,827        13,481
                                                  ------        ------
    Total current liabilities                    115,232       130,731

    Deferred income taxes                         23,599        25,157
    Other long-term liabilities                   12,274        12,265
                                                  ------        ------
    Total liabilities                           $151,105      $168,153
                                                ========      ========

    Stockholders' equity:
    Preferred stock                                    -             -
    Common stock                                     777           772
    Additional paid-in capital                   328,196       300,352
    Retained earnings                            324,785       352,831
    Accumulated other comprehensive income        11,668        10,483
                                                  ------        ------
    Total stockholders' equity                   665,426       664,438
                                                 -------       -------
    Total liabilities and stockholders' equity  $816,531      $832,591
                                                ========      ========

                    Condensed Consolidated Statements of Income
                       (in thousands, except per share data)

                                 Three Months Ended         Nine Months Ended
                                    September 30,             September 30,
                                2009            2008        2009        2008
                                ----            ----        ----        ----
                                    (unaudited)               (unaudited)
    Net sales:
    Product                  $152,106        $200,871    $435,348    $578,222
    Software maintenance       12,929          14,167      39,649      40,208
                               ------          ------      ------      ------
    Total net sales           165,035         215,038     474,997     618,430

    Cost of sales:
    Product                    40,476          52,957     119,234     152,487
    Software maintenance        1,423           1,550       4,034       4,529
                                -----           -----       -----       -----
    Total cost of sales        41,899          54,507     123,268     157,016
                               ------          ------     -------     -------
    Gross profit              123,136         160,531     351,729     461,414
                              -------         -------     -------     -------

    Operating expenses:
    Sales and marketing        65,126          78,392     199,089     230,638
    Research and development   35,016          37,016      99,252     105,808
    General and
     administrative            14,312          17,177      44,844      51,122
    Patent litigation          (2,006)              -      (2,006)          -
                               ------             ---      ------         ---
    Total operating expenses  112,448         132,585     341,179     387,568
                              -------         -------     -------     -------

    Operating income           10,688          27,946      10,550      73,846

    Other income (expense):
    Interest income               339           1,374       1,335       5,025
    Net foreign exchange
     gain (loss)                  940          (3,025)      1,301      (1,791)
    Other income (expense),
     net                          482              80         979          13
                                  ---             ---         ---         ---

    Income before income
     taxes                     12,449          26,375      14,165      77,093

    Provision for (benefit
     from) income taxes         2,518           3,216        (554)     11,584

    Net income                 $9,931         $23,159     $14,719     $65,509
                               ------         -------     -------     -------

    Basic earnings per share    $0.13           $0.29       $0.19       $0.83
                                -----           -----       -----       -----
    Diluted earnings per
     share                      $0.13           $0.29       $0.19       $0.82
                                -----           -----       -----       -----

    Weighted average shares
     outstanding -
    Basic                      77,653          78,834      77,497      78,701
    Diluted                    78,103          79,841      77,842      79,773

    Dividends declared per
     share                      $0.12           $0.11       $0.36       $0.33

                                    National Instruments
                      Condensed Consolidated Statements of Cash Flows
                                       (in thousands)

                                                      Nine Months Ended
                                                        September 30,
                                                   2009                2008
                                               (unaudited)         (unaudited)
                                                ----------          ----------
    Cash flow from operating activities:
    Net income                                    $14,719             $65,509
    Adjustments to reconcile net income to
     net cash provided by operating activities:
    Depreciation and amortization                  28,536              27,901
    Stock-based compensation                       15,238              14,690
    Provision for (benefit from) deferred
     income taxes                                  (6,802)              3,008
    Tax expense (benefit from) stock
     option plans                                   1,445              (1,243)
    Changes in operating assets and
     liabilities:
    Accounts receivable                            30,758              10,611
    Inventories                                    18,632             (16,954)
    Prepaid expenses and other assets               3,920             (12,895)
    Accounts payable                               (5,444)             (4,791)
    Deferred revenue                                3,588               5,985
    Taxes and other liabilities                   (14,245)             14,138
                                                  -------              ------
    Net cash provided by operating
     activities                                    90,345             105,959
                                                   ------             -------

    Cash flow from investing activities:
    Capital expenditures                          (12,331)            (21,115)
    Capitalization of internally developed
     software                                     (10,611)             (8,687)
    Additions to other intangibles                 (4,009)             (2,603)
    Acquisition, net of cash received                   -             (17,310)
    Purchases of short-term and long-term
     investments                                  (38,876)            (17,315)
    Sales and maturities of short-term and
     long-term investments                         10,034              39,080
    Purchases of foreign currency option
     contracts                                          -              (2,784)
                                                      ---              ------
    Net cash (used by) provided by
     investing activities                         (55,793)            (30,734)
                                                  -------             -------

    Cash flow from financing activities:
    Proceeds from issuance of common stock         16,351              26,628
    Repurchase of common stock                    (18,200)            (58,215)
    Dividends paid                                (27,958)            (26,055)
    Tax expense (benefit from) stock
     option plans                                  (1,445)              1,243
                                                   ------               -----
    Net cash (used by) financing
     activities                                   (31,252)            (56,399)
                                                  -------             -------

    Net change in cash and cash
     equivalents                                    3,300              18,826
    Cash and cash equivalents at beginning
     of period                                    229,400             194,839
                                                  -------             -------
    Cash and cash equivalents at end of
     period                                      $232,700            $213,665
                                                 ========            ========

           Detail of GAAP charges related to stock-based compensation and
                 amortization of acquisition intangibles (unaudited)

                         Three Months Ended         Nine Months Ended
                            September 30,             September 30,
                          2009         2008         2009         2008
                          ----         ----         ----         ----
                             (unaudited)               (unaudited)
    Stock-based
     compensation
    Cost of sales         $335         $295         $975         $810
     Sales and
     marketing           2,210        2,114        6,626        6,204
    Research and
     development         1,929        1,867        5,349        5,160
    General and
     administrative        728          800        2,288        2,351
                           ---          ---        -----        -----
    Provision for
     income taxes         (409)      (1,364)      (5,288)      (3,588)
                          ----       ------       ------       ------
    Total               $4,793       $3,712       $9,950      $10,937
                        ------       ------       ------      -------


    Amortization of
     acquisition
     intangibles
    Cost of sales         $853         $937       $2,593       $2,725
    Sales and
     marketing             125          139          377          435
    Research and
     development             -            -            -           14
    General and
     administrative          -            -            -            -
                           ---          ---          ---          ---
    Provision for
     income taxes         (277)        (285)        (834)        (846)
                          ----        -----        -----        -----
    Total                 $701         $791       $2,136       $2,328
                          ----         ----       ------       ------

                                  National Instruments
                      Reconciliation of GAAP to Non-GAAP Measures
                         (in thousands, except per share data)
                                      (unaudited)

    Reconciliation of Gross Profit to Non-GAAP Gross Profit

                          Three Months Ended         Nine Months Ended
                             September 30,             September 30,
                           2009         2008         2009         2008
                           ----         ----         ----         ----

    Gross profit,
     as reported       $123,136     $160,531     $351,729     $461,414
    Stock-based
     compensation           335          295          975          810
    Amortization of
     acquisition
     intangibles            853          937        2,593        2,725
                            ---          ---        -----        -----

    Non-GAAP gross
     profit            $124,324     $161,763     $355,297     $464,949
                       ========     ========     ========     ========


    Reconciliation of Operating Expense to Non-GAAP Operating Expenses

                          Three Months Ended         Nine Months Ended
                             September 30,             September 30,
                           2009         2008         2009         2008
                           ----         ----         ----         ----

    Operating
     expense, as
     reported          $112,448     $132,585     $341,179     $387,568
    Stock-based
     compensation        (4,867)      (4,781)     (14,263)     (13,715)
    Amortization of
     acquisition
     intangibles           (125)        (139)        (377)        (449)
                           ----         ----         ----         ----

    Non-GAAP operating
     expenses          $107,456     $127,665     $326,539     $373,404
                       ========     ========     ========     ========

    Reconciliation of Operating Income to Non-GAAP Operating Income

                         Three Months Ended      Nine Months Ended
                            September 30,          September 30,

                          2009        2008         2009     2008
                          ----        ----         ----     ----

    Operating
     income, as
     reported          $10,688     $27,946      $10,550  $73,846
    Stock-based
     compensation        5,202       5,076       15,238   14,525
    Amortization of
     acquisition
     intangibles           978       1,076        2,970    3,174
                           ---       -----        -----    -----

    Non-GAAP operating
     income            $16,868     $34,098      $28,758  $91,545
                       =======     =======      =======  =======


    Reconciliation of Income before income taxes to Non-GAAP Income before
     income taxes

                         Three Months Ended       Nine Months Ended
                            September 30,           September 30,

                          2009        2008         2009     2008
                          ----        ----         ----     ----

    Income before
     income taxes,
     as reported       $12,449     $26,375      $14,165  $77,093
    Stock-based
     compensation        5,202       5,076       15,238   14,525
    Amortization of
     acquisition
     intangibles           978       1,076        2,970    3,174
                           ---       -----        -----    -----

    Non-GAAP income
     before income
     taxes             $18,629     $32,527      $32,373  $94,792
                       =======     =======      =======  =======


    Reconciliation of Provision for Income Taxes to Non-GAAP Provision for
     Income Taxes

                         Three Months Ended       Nine Months Ended
                            September 30,           September 30,

                          2009        2008         2009     2008
                          ----        ----         ----     ----

    Provision for
     income taxes,
     as reported        $2,518      $3,216        $(554) $11,584
    Stock-based
     compensation          409       1,364        5,288    3,588
    Amortization of
     acquisition
     intangibles           277         285          834      846
                           ---         ---          ---      ---

    Non-GAAP
     provision for
     income taxes       $3,204      $4,865       $5,568  $16,018
                        ======      ======       ======  =======

       Reconciliation of Net Income and Diluted EPS to Non-GAAP Net
                     Income and Non-GAAP Diluted EPS


                               Three Months Ended   Nine Months Ended
                                  September 30,        September 30,
                                2009         2008     2009     2008
                                ----         ----     ----     ----

    Net income, as
     reported                  $9,931      $23,159  $14,719  $65,509
    Adjustments to
     reconcile net income
     to non-GAAP net income:
      Stock-based
       compensation, net
       of tax effect            4,793        3,712    9,950   10,937
      Amortization of
       acquisition
       intangibles, net
       of tax effect              701          791    2,136    2,328
                                  ---          ---    -----    -----
    Non-GAAP net income       $15,425      $27,662  $26,805  $78,774
                              =======      =======  =======  =======
    Basic EPS, as
     reported                   $0.13        $0.29    $0.19    $0.83
    Adjustment to
     reconcile basic
     EPS to non-GAAP basic EPS:
      Impact of stock-based
       compensation, net
       of tax effect            $0.06        $0.05    $0.13    $0.14
      Impact of
       amortization of
       acquisition
       intangibles, net of
       tax effect               $0.01        $0.01    $0.03    $0.03
                                -----        -----    -----    -----
    Non-GAAP basic EPS          $0.20        $0.35    $0.35    $1.00
                                =====        =====    =====    =====
    Diluted EPS, as
     reported                   $0.13        $0.29    $0.19    $0.82
    Adjustment to
     reconcile diluted
     EPS to non-GAAP
     diluted EPS:
      Impact of
       stock-based
       compensation, net
       of tax effect            $0.06        $0.05    $0.13    $0.14
      Impact of
       amortization of
       acquisition
       intangibles, net of
       tax effect               $0.01        $0.01    $0.03    $0.03
                                -----        -----    -----    -----
    Non-GAAP diluted EPS        $0.20        $0.35    $0.35    $0.99
                                =====        =====    =====    =====

    Weighted average
     shares outstanding -
    Basic                      77,653       78,834   77,497   78,701
                               ------       ------   ------   ------
    Diluted                    78,103       79,841   77,842   79,773
                               ------       ------   ------   ------

           Reconciliation of Estimated GAAP Fully Diluted EPS to Non-GAAP
                               Fully Diluted EPS

                                           Three months ended
                                            December 31, 2009
                                            Low          High
    GAAP Fully Diluted EPS, estimated      $0.22         $0.30
    Adjustment to reconcile
     diluted EPS to non-GAAP
     diluted EPS:
      Impact of stock-based
       compensation, net of tax effect      0.07          0.07
      Impact of amortization of
       acquisition intangibles, net
       of tax effect                        0.01          0.01
                                            ----          ----
    Non-GAAP diluted EPS, estimated        $0.30         $0.38
                                           =====         =====

                              National Instruments
                   Reconciliation of GAAP to Non-GAAP Measures
                      (in thousands, except per share data)
                                   (unaudited)

    Reconciliation of estimated effective tax rates

                                                   Three Months Ended
                                                       December 31,
                                                           2009
                                                           ----

    GAAP forecasted effective tax rate                       36%
    Stock-based compensation and
     amortization of acquisition intangibles                 -6%
                                                            ---
    Non-GAAP forecasted effective tax rate                   30%
                                                            ===



                                                             Estimated Year
                                                                  2010

                                                             Low       High
    GAAP forecasted effective tax rate                       16%        20%
    Stock-based compensation and
     amortization of acquisition intangibles                  2%         2%
                                                            ---        ---
    Non-GAAP forecasted effective tax rate                   18%        22%
                                                            ===        ===

SOURCE National Instruments

http://www.ni.com

The new PXI Express digital video analyzer makes it possible for engineers to test multimedia devices with High-Definition Multimedia Interfaces (HDMIs). The new solution supports the analysis of HDMI signals with Full HD resolution up to 1080p/60 Hz, High-bandwidth Digital Content Protection (HDCP) and deep color with up to 12-bit color depth. The VideoMASTER digital video analyzer solution also includes more than 160 automated video measurements to eliminate the need for manual testing of HDMI devices such as set-top boxes, Blu-ray players and video recorders. Using VideoMASTER 3.0, engineers can perform more than 100 video measurements in less than four seconds. This high-performance functionality helps engineers achieve higher test throughput without sacrificing test quality.

VideoMASTER 3.0 also features improved support for analog video interfaces including composite, S-video and component video. With support for the latest versions of NI LabVIEW graphical system development software and NI TestStand as well as improved run-time performance, VideoMASTER 3.0 delivers a fast and powerful test solution for automated video test. VideoMASTER solutions are available in a variety of hardware-software bundles to meet diverse test requirements.

To view pricing and specifications and learn more about configuring a multimedia test system with VideoMASTER 3.0, readers can visit www.ni.com/videomaster.

About National Instruments

National Instruments (www.ni.com) is transforming the way engineers and scientists design, prototype and deploy systems for measurement, automation and embedded applications. NI empowers customers with off-the-shelf software such as NI LabVIEW and modular cost-effective hardware, and sells to a broad base of more than 30,000 different companies worldwide, with no one customer representing more than 3 percent of revenue and no one industry representing more than 15 percent of revenue. Headquartered in Austin, Texas, NI has more than 5,000 employees and direct operations in more than 40 countries. For the past 10 years, FORTUNE magazine has named NI one of the 100 best companies to work for in America. Readers can obtain investment information from the company's investor relations department by calling (512) 683-5090, e-mailing nati@ni.com or visiting www.ni.com/nati.

LabVIEW, National Instruments, NI, ni.com and NI TestStand are trademarks of National Instruments. Other product and company names listed are trademarks or trade names of their respective companies.

    Editor Contact:  Hilary Marchbanks, (512) 683-5937
    Reader Contact:  Ernest Martinez, (800) 258-7022

SOURCE National Instruments

http://www.ni.com

First released in 2006, LEGO MINDSTORMS NXT has been used by children around the world both at home and in the classroom. The hands-on system engages student curiosity and helps teach problem-solving and analytical skills that are vital in the 21st century workplace. NXT 2.0 software creates the possibility for new types of robotic customization so that no two robots are alike. Software features include support for a new color recognition sensor, which helps robots perform color-matching tasks and sense light levels, and programmatic Bluetooth support. Additionally, new sound and image editors can load images and sounds into the robot's memory for display on the LCD screen or to play back the sound of choice. Children also can share project files with friends using the new Pack-N-Go project packager. The LEGO MINDSTORMS education version, which launched this past January, includes such features as an easy-to-use data logging tool.

"LEGO and NI share a vision of inspiring today's students to be tomorrow's innovators," said Ray Almgren, vice president of academic relations at National Instruments. "We believe that LEGO MINDSTORMS NXT, powered by LabVIEW graphical programming, helps children explore technology and provides an important hands-on learning platform that develops creativity and ingenuity in today's students."

The LEGO Group and National Instruments have a long-standing relationship that began in 1998 with the development of the programming software for the original LEGO MINDSTORMS for Schools product and continued with the introduction of LEGO MINDSTORMS NXT in 2006 and the LEGO Education WeDo(TM) platform in 2009. NI and LEGO are committed to inspiring creativity and innovation in children and have worked together to ensure that this "NXT" generation of MINDSTORMS is smarter, stronger and more intuitive than ever. Today, the intuitive LabVIEW software platform powers a robotics continuum of products for all ages, delivering age-appropriate software from grade school to graduate school and into industry.

The LEGO MINDSTORMS NXT 2.0 robotics kit for retail is available through retailers that carry LEGO products. The education version of the kit, which is specifically designed for use in classrooms, is available through LEGO Education distributors.

To learn more about the NI collaboration with LEGO on MINDSTORMS NXT software, readers can visit www.ni.com/academic/mindstorms.

National Instruments in Academia

National Instruments is committed to enhancing engineering and science education worldwide by providing educators and students with powerful graphical system design software and modular hardware to connect the curriculum with the real world. Professors and students benefit from powerful, professional tools such as NI LabVIEW graphical development software, which helps students visualize and implement engineering concepts. The integration of LabVIEW in the classroom creates an effective, dynamic learning environment - from LEGO MINDSTORMS NXT in primary schools to research laboratories in universities. For more information about NI academic products, curriculum resources and discounts, visit www.ni.com/academic.

About National Instruments

National Instruments (www.ni.com) is transforming the way engineers and scientists design, prototype and deploy systems for measurement, automation and embedded applications. NI empowers customers with off-the-shelf software such as NI LabVIEW and modular cost-effective hardware, and sells to a broad base of more than 30,000 different companies worldwide, with no one customer representing more than 3 percent of revenue and no one industry representing more than 15 percent of revenue. Headquartered in Austin, Texas, NI has more than 5,000 employees and direct operations in more than 40 countries. For the past 10 years, FORTUNE magazine has named NI one of the 100 best companies to work for in America. Readers can obtain investment information from the company's investor relations department by calling (512) 683-5090, e-mailing nati@ni.com or visiting www.ni.com/nati.

LabVIEW, National Instruments, NI and ni.com are trademarks of National Instruments. LEGO, MINDSTORMS and WEDO are trademarks of the LEGO Group. Other product and company names listed are trademarks or trade names of their respective companies.

Editor Contact: Hilary Marchbanks, (512) 683-5937

SOURCE National Instruments

http://www.ni.com