Network Appliance Announces Record Fiscal Third Quarter Results as Revenues Grow 30% Year-Over-Year
Sunnyvale, Calif. - February 17, 2004
-- Network Appliance, Inc. (NASDAQ: NTAP) today announced results
for the third quarter of fiscal year 2004. Revenues for the third
fiscal quarter were $297.3 million, an increase of 30% compared to
revenues of $228.5 million for the same period a year ago and an 8%
increase compared to $275.6 million in the prior quarter.
For the third fiscal quarter, GAAP net income increased 104% to
$40.2 million, or $0.11 per share(1) compared to GAAP net income of
$19.7 million, or $0.06 per share for the same period in the prior
year. Pro forma(2) net income for the third fiscal quarter
increased 76% to $40.1 million, or $0.11 per share, compared to pro
forma net income of $22.7 million, or $0.06 per share for the same
period a year ago.
Revenues for the first nine months of the current fiscal year
totaled $833.3 million, compared to revenues of $650.5 million for
the first nine months of the prior fiscal year.
For the first nine months of the current fiscal year, GAAP net
income was $115.6 million, or $0.32 per share, compared with income
of $51.6 million, or $0.15 per share for the same period in the
prior year. Pro forma net income for the first nine months of the
current fiscal year totaled $102.4 million, or $0.28 per share,
compared to pro forma net income of $58.3 million, or $0.17 per
share for the first nine months of the prior fiscal year.
"I am extremely pleased with our performance this quarter. Revenue
for the third fiscal quarter grew year-over-year by 30% to record
levels and we also achieved our highest-ever net profit level,"
said Dan Warmenhoven, CEO of Network Appliance. "Our results this
quarter mark the return to our target business model, and we remain
confident about the market opportunity ahead of us."
In the third quarter of fiscal year 2004, Network Appliance
continued to reinforce its position as a storage leader by
expanding its unified storage, iSCSI, and NearStore®
solutions, extending its partnerships, and winning enterprise
customers across all target industries.
The company announced its Storage Grid strategy to enable customers
to leverage more value from their storage and data infrastructures.
As part of the strategy, Network Appliance announced the FAS980 and
FAS980c, the newest members of the NetApp® FAS900 platform,
along with key elements in extending the NetApp unified storage
systems into the high-end. Also unveiled during the quarter, the
NetApp NearStore R200 storage system and SnapVault™ software
solution for backup, compliance, reference, archive, and
"secondary" data needs. NetApp also announced the integration of
RAID-DP (double-disk parity) into its full line of enterprise
storage systems to increase data protection in the event of
multiple storage-related disk failures. In addition, the company
announced that its NetApp gFiler™ supports unified NAS and
SAN consolidation for IBM storage system platforms.
During the third quarter of fiscal year 2004, Network Appliance
also announced deeper and more strategic partnerships with Cisco,
VERITAS, FileNet, IXOS Software, and Princeton Softech to address a
variety of data management, information life cycle management
(ILM), backup and recovery, and compliance/retention issues central
to enterprise customers today.
Global customers from a variety of industries worldwide also
selected Network Appliance to store, manage, and consolidate their
business- and mission-critical data in the third quarter. Unified
storage, iSCSI, SAN, NAS, and NetCache® wins included
AutoNation Inc., Bibliotheque nationale de France, Inc., HDFC
Standard Life, Interval International, Kimberly-Clark, Oracle,
Telefonica de Argentina, and Volvo IT AB. NearStore customer wins
included Centraal Bureau voor de Statistiek, Cisco, Dassault
Systemes, E.ON, First Assist, Inc., and Nielsen//NetRatings.
The company reaffirmed its commitment to iSCSI technology by
completing Microsoft's Design for Windows Logo testing for the
NetApp FAS960, FAS960c, FAS940c, F825, F825c, FAS250, and NearStore
R150 to ensure that they meet Microsoft standards for iSCSI
compatibility and interoperability with the Windows® platform.
In addition, Network Appliance extended support for IBM Lotus
applications by announcing iSCSI support for NetApp
SnapManager® for Lotus Domino.
Network Appliance also furthered its Linux® strategy by
joining the Open Source Development Labs, a global consortium
dedicated to accelerating the adoption of Linux.
Also during the quarter, Network Appliance announced its intention
to acquire Spinnaker Networks, Inc., a privately held company based
in Pittsburgh, Pennsylvania. The proposed software technology
acquisition reaffirms the Network Appliance business model and
accelerates the company's vision for a Storage Grid future.
1. Earnings per share represents the diluted number of shares for
all periods presented.
2. Pro forma results for all periods presented exclude amortization
of intangible assets, stock compensation, restructuring charges,
net gain or loss on investments, gain on sale of intangible assets,
and the related effects on income taxes, as well as an income tax
benefit from a nonrecurring foreign tax ruling.
Conference Call Information
The NetApp quarterly results conference call
will be broadcast live via the Internet from the investors section
of Network Appliance's Web site at
http://investors.netapp.com/ on Tuesday, February 17,
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) 867-1054 in the United States and
(303) 262-2175 outside the United States. A replay will be
available for 72 hours following completion of the live call by
dialing (800) 405-2236 in the United States, and (303) 590-3000
outside the United States, replay code 568756.
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
NetApp, NearStore, SnapManager, and
NetCache are registered trademarks and Network Appliance, gFiler,
SnapVault, 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. 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.
"Safe Harbor" Statement under U.S. Private
Securities Litigation Reform Act of 1995
This press release contains forward-looking
statements within the meeting of the Private Securities Litigation
Reform Act of 1995. These statements include comments regarding:
the return to our target business model and our confidence in the
opportunity ahead of us; our Storage Grid strategy; the nature and
goals of our strategic partnerships; our proposed acquisition of
Spinnaker Networks and the expected benefits thereof; and our
vision for a Storage Grid future. 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 which meet market acceptance;
our ability to design products which compete effectively from a
price and performance perspective, our ability to successfully
complete and integrate our proposed acquisition of Spinnaker
Networks; 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.