Network Appliance Announces Results for First Quarter Fiscal Year 2003
SUNNYVALE, Calif.--(BUSINESS WIRE)--Aug. 13, 2002--Network Appliance, Inc. (Nasdaq:NTAP - FIN) today announced results for the first quarter of fiscal year 2003. Revenues for the first fiscal quarter were $206.8 million, compared to revenues of $200.4 million for the same period a year ago, and $204.9 million in the prior quarter.
Pro forma net income for the first quarter was $18.0 million, compared with $4.7 million for the same period a year ago. Pro forma earnings per share for the first quarter was $0.05 per share compared with $0.01 per share for the same period a year ago, and $0.04 per share in the prior quarter. For the first quarter, on an as-reported basis, net income for the quarter was $16.2 million, or $0.05 per share, compared with net loss of $0.5 million, or breakeven per share for the same period in the prior year.
"This quarter Network Appliance continued to expand our business across a solid base of new and existing enterprise customers. Geographically, business in North America and ICON improved this quarter, and customers demonstrated increased acceptance of our business continuance solutions and the NearStore(TM) R100," said Dan Warmenhoven, CEO of Network Appliance. "IT spending remains constrained as enterprise customers limit expenditures to business-critical projects with a high return on investment. We continue to satisfy customers' requirements by driving down the total cost of storage ownership with innovative approaches to networked storage and data management."
Quarterly Highlights
During the quarter, new key enterprise customers, including British Airways and Delta Air Lines, selected Network Appliance to provide the highest levels of reliability and availability in storing and managing their business-critical data. Other customers who selected Network Appliance(TM) solutions during the quarter include the United States Department of State in both the Bureau of Email and Bureau of Consular Affairs, the Oncology Therapeutics Network, the Commonwealth Bank of Australia, LandAmerica, and the Ministry of Education (MoE).
During the quarter, the company joined the SAS R&D Partner Program as a platinum level member, which will enable NetApp to collaborate on global technology research and development with SAS. The company also completed certification for Oracle9i Database with Real Application Clusters (Oracle9i RAC) on Red Hat Linux, delivering integrated data management and storage solutions that drive a lower cost of ownership through simplified deployments and collaborative support services.
Network Appliance continued to lead the emerging nearline storage market. Saudi Aramco, one of the world's leading energy companies, was among many customers who ordered the NearStore R100 during the quarter. Saudi Aramco has deployed NetApp® filer solutions for mission-critical geo-seismic data, and plans to mirror data to the R100 to provide maximum data availability.
Pro forma results exclude amortization of goodwill and intangible assets, stock compensation, impairment loss on investment, gain on sale of intangible asset and the related effects on income taxes.
Earnings per share represents the diluted number of shares for all periods presented.
The conference call will be broadcast live via the Internet from Network Appliance's Web site at http://investors.netapp.com. The conference call will also be available live in a listen-only format at (800) 218-0204 in the United States, and (303) 262-2141 outside the United States. A replay will be available by dialing (800) 405-2236 in the United States, and 303-590-3000 outside the United States, replay code 488205.
About Network Appliance
Network Appliance is a world leader in open network storage solutions for today's data-intensive enterprise. Since its inception in 1992, Network Appliance has pioneered technology, product, and partner firsts that continue to drive the evolution of storage. Information about Network Appliance solutions and services is available at www.netapp.com.
NetApp is a registered trademark and Network Appliance and NearStore are trademarks of Network Appliance, Inc. in the U.S. and other countries. All other brands or products are trademarks or registered trademarks of their respective holders and should be treated as such.
"Safe Harbor" Statement under U.S. Private Securities Litigation Reform Act of 1995
The statements regarding growth and acceptance trends toward the network storage solution are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statement regarding future events or the future financial performance of Network Appliance Inc. that involves risks or uncertainties. In evaluating these statements, readers should specifically consider various factors that could cause actual events or results to differ materially from those indicated, including without limitation; continuing decline in the general economic conditions, customer demand for products and services, customer acceptance of product architectures, increased competition, inherent risk in the international operations and other important factors as described in Network Appliance, Inc. reports and documents filed from time to time with the Securities and Exchange Commission, including its mostly recently submitted 10-K and 10-Q.
NETWORK APPLIANCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Quarter Ended
July 26, 2002 July 27, 2001
------------- -------------
REVENUES
Product revenue $ 186,740 $ 185,460
Service revenue 20,088 14,966
---------- ----------
Total revenues 206,828 200,426
---------- ----------
COST OF REVENUES
Cost of product revenue 62,269 75,383
Cost of service revenue 15,458 12,694
---------- ----------
Total cost of revenues 77,727 88,077
---------- ----------
GROSS MARGIN 129,101 112,349
---------- ----------
OPERATING EXPENSES:
Sales and marketing 71,902 71,642
Research and development 27,868 29,083
General and administrative 7,438 10,262
---------- ----------
Total operating expenses 107,208 110,987
---------- ----------
INCOME FROM OPERATIONS 21,893 1,362
OTHER INCOME, net 2,151 5,494
---------- ----------
INCOME BEFORE INCOME TAXES 24,044 6,856
PROVISION FOR INCOME TAXES 6,011 2,125
---------- ----------
NET INCOME $ 18,033 $ 4,731
========== ==========
NET INCOME PER SHARE:
BASIC $ 0.05 $ 0.01
========== ==========
DILUTED $ 0.05 $ 0.01
========== ==========
SHARES USED IN PER SHARE CALCULATION:
BASIC 335,783 329,336
========== ==========
DILUTED 350,122 349,667
========== ==========
(1) Pro forma results exclude amortization of goodwill and intangible
assets, stock compensation, impairment loss on investment, gain on
sale of intangible asset and the related effects on income taxes.
NETWORK APPLIANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per-share amounts)
(Unaudited)
Quarter Ended
July 26, 2002 July 27, 2001
------------- -------------
REVENUES
Product revenue $ 186,740 $ 185,460
Service revenue 20,088 14,966
---------- ----------
Total revenues $ 206,828 $ 200,426
---------- ----------
COST OF REVENUES
Cost of product revenue 62,269 75,383
Cost of service revenue 15,458 12,694
---------- ----------
Total cost of revenues 77,727 88,077
---------- ----------
GROSS MARGIN 129,101 112,349
---------- ----------
OPERATING EXPENSES:
Sales and marketing 71,902 71,642
Research and development 27,868 29,083
General and administrative 7,438 10,262
Amortization of goodwill and
intangible assets 1,386 5,226
Stock compensation 983 2,699
---------- ----------
Total operating expenses 109,577 118,912
---------- ----------
INCOME (LOSS) FROM OPERATIONS 19,524 (6,563)
OTHER INCOME (EXPENSE), net:
Interest income 3,151 5,482
Other income and (expense), net (1,000) 12
Impairment loss on investment (726) 0
Gain on sale of intangible asset 604 0
---------- ----------
Total other income, net 2,029 5,494
---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES 21,553 (1,069)
PROVISION (BENEFIT) FOR INCOME TAXES 5,388 (556)
---------- ----------
NET INCOME (LOSS) $ 16,165 $ (513)
========== ==========
NET INCOME (LOSS) PER SHARE:
BASIC $ 0.05 $ (0.00)
========== ==========
DILUTED $ 0.05 $ (0.00)
========== ==========
SHARES USED IN PER SHARE CALCULATION:
BASIC 335,783 329,336
========== ==========
DILUTED 350,122 329,336
========== ==========
SUPPLEMENTAL INFORMATION:
NET INCOME (LOSS) $ 16,165 $ (513)
Adjustments:
Amortization of goodwill - 3,794
Amortization of intangible assets 1,386 1,432
Stock compensation 983 2,699
Impairment loss on investment 726 0
Gain on sale of intangible asset (604) 0
Income tax effect (623) (2,681)
---------- ----------
PROFORMA NET INCOME $ 18,033 $ 4,731
========== ==========
DILUTED PRO FORMA NET
INCOME PER SHARE $ 0.05 $ 0.01
========== ==========
SHARES USED IN DILUTED PRO FORMA
NET INCOME PER SHARE CALCULATION: 350,122 349,667
========== ==========
--------------------------------------------------------------------------------
Contact:
Network Appliance
Marla Dierkes, 408/822-3580 (press)
marla@netapp.com
Rod Mathews, 408/822-6108 (investors)
rmathews@netapp.com
Billie Fagenstrom, 408/822-6428 (investors)
billief@netapp.com
http://biz.yahoo.com/bw/020813/130358_1.html
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