NetApp Announces Results for Third Quarter of Fiscal Year 2009
Mumbai
,
India - February 17, 2009 -- NetApp
(NASDAQ: NTAP) today reported results for the third fiscal quarter
of 2009. Including the impact of a $128 million accrual to value a
contingency related to a dispute with the General Services
Administration (GSA), GAAP revenues for the third fiscal quarter of
2009 totaled $746 million compared to GAAP and Non-GAAP revenues of
$884 million for the same period a year ago. Non-GAAP revenues for
the third fiscal quarter, excluding the impact of the $128 million
GSA accrual, totaled $874 million.
GAAP net loss for the third quarter of fiscal
year 2009 was $75 million, or $0.23 per share compared to GAAP net
income of $102 million, or $0.29 per share for the same period in
the prior year. Non-GAAP net income for the third fiscal quarter of
2009 was $93 million, or $0.28 per share, compared to non-GAAP net
income of $132 million, or $0.37 per share for the same period a
year ago.
GAAP revenues for the first nine months of
the current fiscal year totaled $2.5 billion compared to GAAP and
non-GAAP revenues of $2.4 billion for the first nine months of the
prior year, an increase of 7% year over year. Non-GAAP revenues for
the first nine months of the current fiscal year, excluding the
impact of the $128 million GSA accrual, totaled $2.7 billion.
GAAP net income for the first nine months of
the current fiscal year totaled $11 million, or $0.03 per share,
compared to GAAP net income of $220 million, or $0.60 per share for
the first nine months of the prior fiscal year. Non-GAAP net income
for the first nine months of the current fiscal year totaled $262
million, or $0.78 per share, compared to non-GAAP net income of
$324 million, or $0.89 per share for the first nine months of the
prior fiscal year.
"Business levels softened in January as many
customers' budgets contracted, resulting in lower revenues than we
had expected. At the same time, our storage efficiency value
proposition resonates in challenging economic times, and we gained
a record number of new customers during the quarter," said Dan
Warmenhoven, chairman and CEO. "Operationally, the NetApp team also
did a stellar job, decreasing non-GAAP operating expenses by $30
million in one quarter. However, we needed to make further
reductions in order to optimize our resource allocation for our
strategic growth initiatives. Therefore, we have implemented a
restructuring that unfortunately includes the elimination of
approximately 6% of our global workforce. While this was a very
difficult decision, we believe our actions will best position the
company for additional market share gains in the future."
Outlook
Given the reduced visibility caused by the recent changes in the
macroeconomic environment, NetApp will not be providing formal
revenue guidance for the fourth quarter of fiscal year 2009.
- NetApp estimates non-GAAP gross margins for the fourth quarter
of fiscal year 2009 to be approximately 60%.
- NetApp estimates non-GAAP operating expenses for the fourth
quarter of fiscal year 2009 to increase by about $5 million to $10
million from the third quarter of fiscal year 2009.
- NetApp estimates the company will incur approximately $30
million to $35 million in GAAP severance and other charges
associated with a business restructuring in the fourth fiscal
quarter.
Quarterly Highlights
In the third 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 environmental,
product, and operational excellence.
During the quarter, NetApp was ranked number
one by FORTUNE magazine on the "100 Best Companies to Work
For" list. This is the second year it has achieved a top-10 ranking
and the third consecutive year it has been named in the top 15. An
egalitarian culture, competitive salaries, unique benefits, and a
down-to-earth management style are attributes that have catapulted
the company to the number-one spot for 2009. In addition, The
Boston Globe named NetApp as one of the Top Places to Work in
Massachusetts.
This quarter, NetApp extended its 50%
Virtualization Guarantee Program, previously available only for
VMware, to Citrix and Microsoft virtual environments. As part of
the program, NetApp is offering a guarantee that customers will use
50% less storage with NetApp compared to traditional storage in
Citrix XenServer and Microsoft Windows Server Hyper-V virtual
environments.
Also this quarter, NetApp announced the
availability of the FAS3160 and V3160, strengthening its current
series of midrange storage offerings. Additionally, the company
announced availability of SANscreen® 5.0, a new addition to
the award-winning SANscreen product suite that provides customers
increased storage management capabilities for improved cost savings
and data center efficiencies. NetApp also introduced
SnapManager® 3.0 for Oracle, providing customers who have
Oracle Database environments running on NetApp® enterprise
storage systems significant improvements in backup, restore, and
cloning capabilities.
NetApp was also recognized by the following
third parties for its environmental, product and operational
excellence:
- Pacific Gas and Electric Company (PG&E)
presented NetApp with a rebate of $1.4 million under PG&E's
Non-Residential New Construction Program, which encourages
PG&E's commercial, industrial, high-technology, and
agricultural customers to implement energy-efficient building and
process design and construction.
- Citrix Systems, Inc. honored NetApp with the
Citrix Ready Solution of the Year award, which recognizes a company
that excels in providing application delivery and virtualization
solutions that are complementary to Citrix and drive Citrix
adoption.
- Baseline Magazine and Business Technology
Management Corporation (BTM) presented NetApp with the
Baseline/BTM 500 Award and recognized Marina Levinson,
NetApp CIO, for Outstanding Technology Management at NetApp.
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,
February 11, 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) 561-2693 in the United States and (617)
614-3523 outside the United States. The pass code for both numbers
is 14751884.
- 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 87373458. 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/in.
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 excludes the impact of the GSA
accrual. These non-GAAP results of operations exclude the reserve
for the GSA contingency, restructuring charges, amortization of
intangible assets, stock-based compensation expenses, asset
impairment, acquisition-related retention costs, prior
acquisition-related costs, net gain or loss on investments, and the
related effects on income taxes as well as certain discrete GAAP
provisions for income tax matters recognized ratably for non-GAAP
purposes 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.
Press Contact:
NetApp
Arati Bam
(080) 4184 3000
arati.bam@netapp.com