Network Appliance Announces Results for Second Quarter Fiscal Year 2005
SUNNYVALE, Calif. -- November 16, 2004
-- Network Appliance, Inc. (NASDAQ: NTAP), the leader in
advanced networked storage solutions, today reported results for
the second quarter of fiscal year 2005. Revenues for the second
fiscal quarter were $375.2 million; an increase of 36% compared to
revenues of $275.6 million for the same period a year ago and a 5%
increase compared to $358.4 million in the prior quarter.
For the second fiscal quarter, GAAP net income
increased 14% to $55.3 million, or $0.15 per share1
compared to GAAP net income of $48.4 million, or $0.13 per share
for the same period in the prior year. Pro forma2 net
income for the second fiscal quarter increased 74% to $58.4
million, or $0.16 per share, compared to pro forma net income of
$33.6 million, or $0.09 per share for the same period a year
Revenues for the first six months of the
current fiscal year totaled $733.6 million, compared to revenues of
$536.1 million for the first six months of the prior fiscal year,
an increase of 37% year over year.
For the first six months of the current fiscal
year, GAAP net income increased 35% to $102.2 million, or $0.27 per
share, compared with GAAP net income of $75.5 million, or $0.21 per
share for the same period in the prior year. Pro forma net income
for the first six months of the current fiscal year totaled $108.2
million, or $0.29 per share, compared to pro forma net income of
$62.4 million, or $0.17 per share for the first six months of the
prior fiscal year.
achieved strong growth across all product lines, segments, and
geographies," said Dan Warmenhoven, CEO of Network Appliance.
"NetApp is gaining momentum in the highest growth segments of the
storage market by offering innovative and cost-effective solutions
for today's IT challenges. Data ONTAP™ 7G, our
next generation operating system announced yesterday, is an example
of unique, breakthrough technology which empowers customers to do
more with less. Data ONTAP 7G provides dynamic storage
virtualization capabilities unmatched in the industry."
- Network Appliance estimates that revenue for
the third quarter will grow sequentially by 7% to 9%. This
projection reflects year over year growth rates of 35% to 38%.
- The company expects third quarter pro forma
earnings per share to finish at $0.15 to $0.16 per share. Third
quarter GAAP earnings per share are projected to round to $0.15 per
- For the full fiscal year 2005, Network
Appliance estimates that revenues will finish 35% to 37% higher
than fiscal year 2004.
- Network Appliance estimates full year pro
forma earnings per share to finish at $0.60 to $0.61 per share.
GAAP earnings per share are projected for fiscal year 2005 at $0.57
to $0.58 per share.
Throughout the second quarter of fiscal year 2005, Network
Appliance reinforced its leadership position by introducing new
security and compliance solutions, expanding partnerships, and
continuing to grow iSCSI deployments. Customers deploying
NetApp® solutions during the quarter for a variety
of database, security, and other data center and mission-critical
applications included Alyeska Pipeline, Anadarko, China Netcom,
Consol Energy, Constellation Energy, the Federal Trade Commission,
FMC Subsea Kongsberg, the General Services Administration,
HypoVereinsbank, Jet Propulsion Labs (JPL), Nexan, Nokia, Rakuten,
Saudi Aramco, Shamrock Foods, Siemens Business Services, Square
Enix, The Times of India, Trader Media, the United States Air Force
(USAF), and Voca Limited.
A wide range of enterprise customers have
chosen to deploy NetApp for a variety of reasons-reduced
complexity, a low total cost of ownership (TCO), and advanced
management capabilities made possible through Data ONTAP and a
range of additional storage software packages that unleash the
value of enterprise data.
On the partners front, NetApp unveiled several
new solution enhancements and partner offerings with Computer
Associates, Decru, FalconStor, Novell, Smartronix, Symantec,
Vignette, and Websense to address a variety of data concerns,
including Internet access and security, interoperability, data
protection and recovery, storage and server consolidation and other
business-critical initiatives facing enterprise customers.
To help companies meet stringent data storage
regulations, including regulations mandated by U.S. SEC Rule 17a-4,
NetApp introduced a new software
product-LockVault™. LockVault delivers powerful
backup, disaster recovery, and data permanence capabilities for
unstructured data, enabling customers to address both backup and
compliance challenges with a single comprehensive solution.
Companies can now leverage the same infrastructure to meet both
their backup and compliance requirements.
In the Internet security arena, NetApp
released NetCache® 6.0 software to further enhance
and strengthen its market-leading Internet access and security
solution. NetCache 6.0 software helps guard against security
threats, expands support for industry-leading security partners,
minimizes virus and hacking risks, and accelerates and improves
management of customers' Web and application information providing
security, cost savings, and flexibility.
Another iSCSI milestone was achieved this
quarter with Siemens Corporate Research (SCR), a division of
Siemens AG, becoming the 750th iSCSI customer deployment in IP SAN
(storage area network) configurations. NetApp IP SAN solutions are
an excellent choice for companies seeking to consolidate storage
and server resources, maximize existing IT investments and
headcount, and reduce complexity in the data center.
The company was also honored by the Triangle
Business Journal (North Carolina) as "one of the best companies to
work for in the Triangle." Network Appliance employees based in
Research Triangle Park (RTP), North Carolina, responding to a
survey from the publication, gave the company high marks for its
positive work environment, exceptional benefits package, strong
executive leadership, and effective manager relationships.
Conference Call Information
The NetApp quarterly results conference call will be broadcast live
via the Internet at
http://investors.netapp.com/ on Tuesday, November 16,
2004, at 2:00 p.m. Pacific time. This press release and any other
information related to the call will also be posted to the Web site
at that location. The conference call will also be available live
in a listen-only format at (800) 510-9834 in the United States and
(617) 614-3669 outside the United States. The passcode for both
numbers is 10326317.
A replay will be available for 72 hours
following completion of the live call by dialing (888) 286-8010 in
the United States and (617) 801-6888 outside the United States,
with replay code 28877055.
About Network Appliance
Network Appliance is a world leader in unified storage solutions
for today's data-intensive enterprise. Since its inception in 1992,
Network Appliance has delivered technology, product, and partner
firsts that continue to drive "The evolution of storage.™"
Information about Network Appliance™ solutions and services
is available at
"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 market and market share trends that
benefit the Company, continued customer acceptance of the Company's
products, and all of the statements under the Outlook section.
These forward-looking statements involve risks and uncertainties,
and actual results could vary. Factors that could impact our
ability to achieve our goals include general economic and industry
conditions, including expenditure trends for storage-related
products; our ability to deliver new product architectures and
products that meet market acceptance; our ability to design
products that compete effectively from a price and performance
perspective; and other important factors as described in Network
Appliance, Inc.'s reports and documents filed from time to time
with the Securities and Exchange Commission, including our most
recently submitted 10-K and 10-Q.
1Earnings per share represents
the diluted number of shares for all periods presented.
2Pro forma results for all periods presented and the
projections in the Outlook section exclude amortization of
intangible assets, stock compensation, restructuring charges, net
gain/loss on investments, and the related effects on income taxes,
as well as an income tax benefit from a nonrecurring foreign tax
NetApp and NetCache are registered
trademarks and Network Appliance, Data ONTAP, LockVault and The
evolution of storage 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.
Network Appliance Usage of Pro Forma
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. In addition, 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.
Ph: (650) 228-5163
Network Appliance, Inc.
Ph: (408) 822-6909
Network Appliance, Inc.
Ph: (408) 822-6428
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