NetApp Announces Results for Fourth Quarter of Fiscal Year 2009
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Sunnyvale, Calif. - May 20, 2009 --
NetApp (NASDAQ: NTAP) today reported results for the fourth fiscal
quarter and fiscal year 2009. Revenues for the fourth fiscal
quarter of 2009 totaled $880 million compared to revenues of $938
million for the same period a year ago.
For the fourth fiscal quarter, GAAP net
income was $75 million, or $0.23 per share1 compared to
GAAP net income of $90 million, or $0.26 per share for the same
period in the prior year. Non-GAAP2 net income for the
fourth fiscal quarter was $103 million, or $0.31 per share,
compared to non-GAAP net income of $131 million, or $0.38 per share
for the same period a year ago.
For fiscal year 2009, GAAP revenues totaled
$3.4 billion, an increase of 3% compared to GAAP revenues of $3.3
billion for fiscal year 2008. Non-GAAP revenues for fiscal year
2009, excluding the impact of the $129 million GSA settlement, were
$3.5 billion. For fiscal year 2009, GAAP net income was $87
million, or $0.26 per share, compared to GAAP net income of $310
million, or $0.86 per share for fiscal year 2008. Non-GAAP net
income for fiscal year 2009 was $364 million, or $1.09 per share,
compared to non-GAAP net income of $455 million, or $1.26 per share
for fiscal year 2008.
"The NetApp team performed admirably to close
a challenging fiscal year 2009," said Dan Warmenhoven, chairman and
CEO. "With revenues up and expenses well contained, NetApp has
delivered three consecutive quarters of increasing operating
margins. Storage efficiency and storage for virtual server
environments continue to be the primary demand drivers during this
difficult economic period. Customers are increasingly turning to
NetApp for help solving their storage and data management
challenges in the face of shrinking budgets."
Outlook
Given the reduced visibility caused by the recent changes in the
macroeconomic environment, NetApp will not be providing revenue
guidance for the first quarter of fiscal year 2010.
- NetApp estimates non-GAAP gross margins for the first quarter
of fiscal year 2010 to be around 61%.
- NetApp estimates non-GAAP operating expenses for the first
quarter of fiscal year 2010 to increase by about $10 million to $15
million from the $426 million reported in the fourth quarter of
fiscal year 2009.
- NetApp estimates non-GAAP operating expense levels for the
second and third quarters of fiscal year 2010 to average
approximately $405 to $410 million.
Quarterly Highlights
In the fourth quarter of fiscal year 2009, NetApp introduced
several new solutions to help customers transform their data center
architectures through greater storage efficiency, greater power and
space savings, and innovative data management techniques. The
company also received industry recognition for its market
leadership, product performance, and channel success.
This quarter, NetApp and Cisco announced that
they are teaming up to provide customers with unified, dynamic data
center solutions that are based on the Cisco Unified Computing
System and NetApp® unified storage architecture.
NetApp announced new storage and data
management advances for VMware® View™ to help customers
deploy and operate virtual desktop environments faster and more
efficiently, including NetApp's new Rapid Cloning Utility 2.0,
which simplifies the way administrators clone VMware virtual
machines and datastores. NetApp also announced the integration and
certification of its storage platforms with VMware vSphere™
4, which provides a path to virtualized data centers and cloud
computing.
During the quarter, NetApp extended its
virtualization guarantee to include EMC, IBM, HP, and HDS storage
systems by offering a guarantee3 that customers will
decrease their non-NetApp primary storage capacity for virtual
server environments by 35% using NetApp V-Series and deduplication
technology. NetApp deduplication has been delivered to more than
5,000 customers worldwide, comprising more than 30,000 systems
containing 385PB of storage capacity.
NetApp unveiled V-Series support for Texas
Memory Systems' RamSan-500 solid-state disk (SSD) array. NetApp
V-Series and Texas Memory Systems combine the full benefits of the
NetApp Data ONTAP® operating system with SSD storage to
improve application performance and offer advanced features such as
thin provisioning, Snapshot™ copies, and deduplication to
improve storage efficiency and management.
Also this quarter, NetApp introduced new
functionalities for NetApp MetroCluster that offer customers
continuous data availability in virtualized environments, the
ability to perform nondisruptive software and hardware upgrades,
and integration with NetApp deduplication technology for enhanced
storage efficiency.
During the quarter, NetApp received the
following third party recognitions:
- "Magic Quadrant for Midrange and High-End NAS
Solutions4" - Gartner, Inc. positioned NetApp in the
Leaders quadrant for Midrange and High-End NAS Solutions.
- Network World's 2009 Best of the Tests Awards - Citing
consistently higher performance, a mix of NAS and SAN features,
high availability, and NetApp Snapshot™ capabilities,
Network World's Lab Alliance members named the FAS2050 the
best of the 12 systems they tested during year-long trials.
- 2009 Everything Channel Five-Star Partner Program
Guide Certification - NetApp was recognized as one of North
America's top information technology (IT) vendors for its VIP
Partner Program and US Public Sector VIP Partner Program.
- 2009 CRN Channel Champion - NetApp was named a 2009
CRN Channel Champion in the category of Network
Storage.
- 2009 Channel Chiefs by the Everything Channel's CRN -
NetApp executives Julie Parrish, vice president of Worldwide
Channel Sales, and Todd Palmer, vice president of Americas Channel
Sales, were named 2009 Channel Chiefs by the Everything
Channel's CRN.
- Best Workplaces in France - NetApp ranked number 14 on a list
of the Best Workplaces in France published by
Réussir/L'EXPRESS, based on a survey by the Great
Place to Work® Institute France.
Webcast and Conference Call
Information
The NetApp quarterly results conference call will be broadcast live
on the Internet at http://investors.netapp.com on
Wednesday, May 20, 2009, at 2:00 p.m. Pacific Time. This press
release and any other information related to the call will also be
posted on the Web site at that location. The conference call will
also be available live in a listen-only format at (800) 638-4930 in
the United States and (617) 614-3944 outside the United States. The
pass code for both numbers is 57400475. A replay will be available
for 72 hours following the completion of the live call by dialing
(888) 286-8010 in the United States and (617) 801-6888 outside the
United States, using replay code 92143343. The Webcast replay will
be posted on our Web site for at least one year.
About NetApp
NetApp creates innovative storage and data management solutions
that accelerate business breakthroughs and deliver outstanding cost
efficiency. Discover NetApp's passion for helping companies around
the world go further, faster at www.netapp.com.
"Safe Harbor" Statement Under U.S.
Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These statements include all of the statements under the Outlook
section relating to our forecasted operating results and metrics
for the first quarter of fiscal year 2010 and the benefits that we
expect our customers to realize from using our products. These
forward-looking statements involve risks and uncertainties, and
actual results could vary. Important factors that could cause
actual results to differ materially from those in the
forward-looking statements include the material and adverse global
economic and market conditions that currently exist and that are
expected to persist throughout calendar 2009; our ability to build
nondeferred backlog to levels consistent with our past results and
to increase our revenue over the next several quarters; risks
associated with the anticipated growth in network storage and
content delivery markets; our ability to deliver new product
architectures and enterprise service offerings; competition risks,
including our ability to design products and services that compete
effectively from a price and performance perspective; risks with
new product introductions; our reliance on a limited number of
suppliers; our ability to accurately forecast demand for our
products and successfully manage our relationships with our
contract manufacturers; our ability to expand our direct sales
operations and reseller distribution channels; our ability to
develop, maintain, and strengthen our relationships and product
offerings with strategic partners; risks associated with
international operations; our ability to successfully acquire and
integrate complementary businesses and technologies, including our
ability to consummate our acquisition of Data Domain and integrate
its operations into ours; foreign currency exchange rate
fluctuations; and other important factors as described in NetApp
reports and documents filed from time to time with the Securities
and Exchange Commission (SEC), including the factors described
under the sections captioned "Risk Factors" in our most recently
submitted 10-K and 10-Q. We disclaim any obligation to update
information contained in these forward-looking statements whether
as a result of new information, future events, or otherwise.
1 Earnings per share is calculated
using the diluted number of shares for all periods presented.
2 Non-GAAP results of operations exclude the GSA
settlement, amortization of intangible assets, stock-based
compensation expenses, asset impairment, acquisition related costs,
prior acquisition related costs, restructuring and other charges,
net gain or loss on investments, and the related effects on income
taxes, as well as certain discrete GAAP tax provision items and the
tax effect on sale of investments.
3 This guarantee and related program are limited to the
terms set forth in www.netapp.com/guarantee
applicable only to prospective orders placed after the program
effective date and are dependent upon your compliance with the
terms and conditions set forth in this document and any of the
instruction sets and specifications set forth in the referenced
documents. NetApp's sole and exclusive liability and your sole and
exclusive remedy associated with the terms of this guarantee and
related program is the provision by NetApp of the additional
storage capacity as set forth in this guarantee and related
Program.
4 Gartner "Magic Quadrant for Midrange and High-End NAS
Solutions" by Pushan Rinnen, Robert E. Passmore, and Roger W. Cox,
March 2, 2009.
NetApp, the NetApp logo Go further, faster,
Data ONTAP, and Snapshot are trademarks or registered trademarks of
NetApp, Inc. in the United States and/or other countries. All other
brands or products are trademarks or registered trademarks of their
respective holders and should be treated as such.
NetApp Usage of Non-GAAP
Financials
The Company refers to the non-GAAP financial measures cited above
in making operating decisions because they provide meaningful
supplemental information regarding the Company's operational
performance. Non-GAAP revenues exclude the GSA settlement. Non-GAAP
results of operations exclude the GSA settlement, amortization of
intangible assets, stock-based compensation expenses, asset
impairment, acquisition related costs, prior acquisition related
costs, restructuring and other charges, net gain or loss on
investments, and the related effects on income taxes, as well as
certain discrete GAAP tax provision items and the tax effect on
sale of investments. We have excluded these items in order to
enhance investors' understanding of our ongoing operations. The use
of these non-GAAP financial measures has material limitations
because they should not be used to evaluate our company without
reference to their corresponding GAAP financial measures. As such,
we compensate for these material limitations by using these
non-GAAP financial measures in conjunction with GAAP financial
measures.
These non-GAAP financial measures facilitate
management's internal comparisons to the Company's historical
operating results and comparisons to competitors' operating
results. We include these non-GAAP financial measures in our
earnings announcement because we believe they are useful to
investors in allowing for greater transparency with respect to
supplemental information used by management in its financial and
operational decision making, such as employee compensation
planning. In addition, we have historically reported similar
non-GAAP financial measures to our investors and believe that the
inclusion of comparative numbers provides consistency in our
financial reporting at this time.
NetApp Use of Corporate Web
Site
In accordance with SEC guidance published on August 22, 2008
(Release No. 34-58288), NetApp will begin to disseminate
material information about the company through its corporate Web
site within the next several fiscal quarters. NetApp intends to
designate a separate portion of its corporate Web site for purposes
of these disclosures and will include a prominent link on its Web
site to allow visitors to locate this material information, which
will be routinely updated. The Web site will supplement, rather
than replace, NetApp's current existing channels of information
distribution.
Additional Information and Where to
Find It
NetApp plans to file with the SEC a Registration Statement on Form
S-4 in connection with the transaction and Data Domain plans to
file with the SEC and mail to its stockholders a Proxy
Statement/Prospectus in connection with the transaction. The
Registration Statement and the Proxy Statement/Prospectus will
contain important information about NetApp, Data Domain, the
transaction and related matters. Investors and security holders are
urged to read the Registration Statement and the Proxy
Statement/Prospectus carefully when they are available. Investors
and security holders will be able to obtain free copies of the
Registration Statement and the Proxy Statement/Prospectus and other
documents filed with the SEC by NetApp and Data Domain through the
web site maintained by the SEC at www.sec.gov and by contacting NetApp
Investor Relations at (408) 822-7098 or Data Domain Investor
Relations at (408) 980-4909. In addition, investors and security
holders will be able to obtain free copies of the documents filed
with the SEC on NetApp's website at www.NetApp.com and on Data Domain's
website at www.datadomain.com.
Participants in the Acquisition of
Data Domain
NetApp, Data Domain and their respective directors, executive
officers and certain other members of management and employees may
be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction. Information regarding these
persons who may, under the rules of the SEC, be considered
participants in the solicitation of Data Domain stockholders in
connection with the proposed transaction will be set forth in the
Proxy Statement/Prospectus described above when it is filed with
the SEC. Additional information regarding NetApp's executive
officers and directors is included in NetApp's definitive proxy
statement, which was filed with the SEC on July 14, 2008, ad
additional information regarding Data Domain's executive officers
and directors is included in Data Domain's Annual Report on Form
10-K/A for fiscal year ended December 31, 2008, which was filed
with the SEC on April 30, 2009. You can obtain free copies of these
documents from NetApp or Data Domain using the contact information
above.
Press Contact:
NetApp
Jodi Baumann
Ph: (408) 822-3974
jodi@netapp.com
Investor Contacts:
NetApp
Tara Dhillon
Ph: (408) 822-6909
tara@netapp.com
NetApp
Billie Fagenstrom
Ph: (408) 822-6428
billief@netapp.com