Network Appliance Announces Results for Second Quarter Fiscal Year 2003

View Financial Tables

- Download PDF

Sunnyvale, CA - November 12, 2002 --Network Appliance, Inc. (NASDAQ: NTAP) today announced results for the second quarter of fiscal year 2003. Revenues for the second quarter were $215.2 million, compared to revenues of $194.7 million for the same period a year ago, and $206.8 million in the prior quarter.

For the second quarter, GAAP net income was $15.8 million, or $0.05 per share, compared to net loss of $11.2 million, or $0.03 net loss per share for the same period in the prior year. Pro forma net income for the second quarter was $17.5 million, compared with $7.7 million for the same period a year ago. Pro forma earnings per share for the second quarter was $0.05 per share compared with $0.02 per share for the same period a year ago.

Revenues for the first six months of the current fiscal year totaled $422.0 million, compared to revenue of $395.1 million for the first six months of the prior fiscal year.

For the first six months of the current fiscal year, GAAP net income was $32.0 million, or $0.09 per share, compared with net loss of $11.7 million, or $0.04 net loss 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 $35.5 million, or $0.10 per share, compared to pro forma net income of $12.4 million, or $0.04 per share for the first six months of the prior fiscal year.

"We are encouraged by our growth during this quarter despite constrained IT spending. In October, we expanded our solutions portfolio by announcing the first unified storage platform, the FAS900 series, establishing Network Appliance as one of the leading full-line storage vendors," said Dan Warmenhoven, CEO of Network Appliance. "Key initiatives through partnerships, programs, and services also enabled us to broaden our enterprise customer base within our target vertical markets."

Quarterly Highlights
During the quarter, Network Appliance unveiled new products that significantly expand the company's solutions offering, including the FAS900 series, the company's new flagship storage platform and a key element in the NetApp® unified storage portfolio. Network Appliance also debuted new and expanded corporate partnerships with Brocade, Oracle, and VERITAS Software. These partnerships allow Network Appliance to offer customers enhanced service, support, sales, and technology in the Fibre Channel SAN market. Finally, Network Appliance unveiled enhanced or new open management products: DataFabric™ Manager 2.1, SnapDrive™ 2.0, and VFM™ (Virtual File Manager); the DataFabric Management Services program and Manage ONTAP™ solutions; and expanded relationships with open management partners including BMC Software and Computer Associates (CA).

New customers from a variety of verticals selected Network Appliance to provide the highest levels of performance, reliability, and availability in storing and managing their business- or mission-critical data. Key wins of the second quarter include the Australian Department of Defense, Siemens AG I & S, Bertelsmann Mediasystems/RTL, Bank of Cyprus, Nissan, Tularik Inc., Petrobras, Enmax Corporation, Host Marriott, Vodafone, Western and Southern Financial Group, Invesco, and the FBI. Network Appliance also continued leading the emerging nearline storage market with NearStore™ customer wins including, Fletcher Allen Health Care, Los Alamos National Lab, Motorola Cellular, Placeware, Retek, Susquehanna International Group, and the U.S. General Services Administration.

Network Appliance grew its channel programs by developing the "STAR" Storage Authorized Reseller Program and expanding the Platinum Reseller Program to enable STAR partners to help their customers achieve competitive advantage, improved profitability, and faster time-to-market. New partners include Datalink Corporation and Forsythe Solutions Group Inc.

Pro forma results exclude amortization of goodwill and intangible assets, stock compensation, restructuring charges, 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 the investors section of Network Appliance's Web site at The conference call will also be available live in a listen-only format at (877) 278-8649 in the United States, and (706) 643-1699 outside the United States. A replay will be available by dialing (800) 642-1687 in the United States, and (706) 645-9291 outside the United States, replay code 6343910.

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 provided technology, product, and partner solutions that continue to drive the evolution of storage. Information about Network Appliance™ solutions and services is available at

NetApp is a registered trademark and Network Appliance, DataFabric, SnapDrive, Manage ONTAP, VFM, 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 solutions 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.