Network Appliance Announces Results for Third Quarter Fiscal Year 2005
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SUNNYVALE, Calif. - February 15, 2005
-- Network Appliance, Inc. (NASDAQ: NTAP), the leader in
advanced networked storage solutions, today reported results for
the third quarter of fiscal year 2005. Revenues for the third
fiscal quarter were $412.7 million, an increase of 39% compared to
revenues of $297.3 million for the same period a year ago and a 10%
increase compared to $375.2 million in the prior quarter.
For the third fiscal quarter, GAAP net income
increased 50% to $60.1 million, or $0.16 per share1
compared to GAAP net income of $40.2 million, or $0.11 per share
for the same period in the prior year. Pro forma2 net
income for the third fiscal quarter increased 57% to $62.8 million,
or $0.16 per share, compared to pro forma net income of $40.1
million, or $0.11 per share for the same period a year ago.
Revenues for the first nine months of the
current fiscal year totaled $1.1 billion, compared to revenues of
$833.3 million for the first nine months of the prior fiscal year,
an increase of 38% year over year.
For the first nine months of the current
fiscal year, GAAP net income increased 40% to $162.3 million, or
$0.43 per share, compared with GAAP net income of $115.6 million,
or $0.32 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 $171.1 million, or $0.45 per share, compared to pro forma
net income of $102.4 million, or $0.28 per share for the first nine
months of the prior fiscal year.
"This quarter's strong, well-rounded results
demonstrate that our investments in sales, services and innovation
are paying off, both in product and services revenue growth," said
Dan Warmenhoven, CEO of Network Appliance. "Customers' increasing
need for data protection, including compliance, disk-to-disk
backup, and business continuity solutions, is one of the key
drivers of our growth this quarter. In addition, we expect our
leadership in emerging technologies such as iSCSI, virtualization,
and the storage grid to increasingly contribute to our growth over
the long term."
- Network Appliance estimates that revenue for
the fourth quarter will grow sequentially by 6% to 9%. This
projection reflects year over year growth rates of 30% to 33%.
- The company expects fourth quarter pro forma
earnings per share to finish at $0.16 to $0.17 per share. Fourth
quarter GAAP earnings per share are projected at $0.16 per
- For the full fiscal year 2005, Network
Appliance estimates that revenues will finish 35% to 36% higher
than fiscal year 2004.
- Network Appliance estimates full year pro
forma earnings per share to finish at $0.60 to $0.62 per share.
GAAP earnings per share are projected for fiscal year 2005 at $0.57
to $0.59 per share.
Throughout the third quarter of fiscal year 2005, Network Appliance
reinforced its leadership position by introducing the latest
version of its powerful enterprise storage software, expanding
partnerships, and continuing to demonstrate leadership in the iSCSI
market. Customers deploying NetApp® solutions during the
quarter for a variety of database, security, and other data center
and mission-critical applications included AIRBUS France, The Dow
Chemical Company, GlaxoSmithKline, IKON Digital Express, Mayo
Clinic, Mentor Graphics Corporation, NASA, Philips Semiconductors,
RadioShack Corporation, Synopsys, Inc., and Time Warner Cable.
Network Appliance achieved a critical
milestone in expanding and delivering its storage grid vision by
shipping the latest version of its powerful enterprise storage
Data ONTAP™ 7G, during the third quarter.
Customers using Data ONTAP 7G and its advanced virtualization
capabilities can double their storage utilization, dramatically
increase I/O performance for enterprise-class applications, and
significantly reduce storage management costs for multi-application
environments. The two primary new features of Data ONTAP 7G that
offer users compelling benefits are FlexVol™ and
FlexVol creates dynamically virtualized,
flexible data containers that eliminate performance and utilization
tradeoffs and renders obsolete the notion of storage volumes being
statically tied to specific physical or logical disks. In short,
FlexVol is the feature of Data ONTAP 7G that provides dynamic
virtualization. FlexClone enables the near-instantaneous creation
of multiple, independently writable images of FlexVol data sets,
with zero storage overhead. Competitive approaches for cloning data
take up the same amount of storage space as the full original data
set. FlexClone represents a breakthrough innovation for database
applications and modeling.
Additionally, the NetApp enterprise
gFiler™ storage systems will now provide Fibre Channel data
access and fully leverage the new enterprise storage virtualization
capabilities in Data ONTAP 7G for multi-vendor storage
environments. The NetApp gFiler solution has extended its storage
systems support to include the HP® StorageWorks XP Disk Array
family and the IBM® TotalStorage DS4000 series (formerly named
"FAStT"), complementing existing support for Hitachi Data
Systems®, Hitachi Limited®, Sun™ StorEdge®
9900 Disk Array family, and IBM Enterprise Storage Server disk
array systems. During the quarter, NetApp also introduced the next
addition to its data management software portfolio with
SnapValidator™. SnapValidator can now be applied across the
full line of NetApp storage systems, across any protocol,
supporting the Oracle® Databases, adding to a robust, highly
reliable, and available data environment.
In the iSCSI arena, NetApp continued to drive
iSCSI adoption. According to IDC, NetApp maintained a strong lead
storage market for the third quarter of calendar year 2004 (3Q04).
In its core NAS market, NetApp demonstrated continued leadership in
NAS hardware for 3Q04 in both revenue and terabytes shipped. Also
according to IDC, the company posted a 36.3% revenue market share,
with a 13.8% increase in revenue year over year (vs. the third
quarter of calendar 2003).
On the partner front, the company achieved
Gold Certified status in the Microsoft Partner Program with a
competency in Advanced Infrastructure Solutions recognizing NetApp
expertise and total impact in the technology marketplace. NetApp
also unveiled several new solution enhancements and partner
offerings with Alacritus Software, Atempo, CommVault Systems, Inc.,
NetEx, QLogic Corporation, Red Hat Inc., Secure Computing
Corporation, Sophos, and Syncsort, Inc. to address a variety of
data concerns, including Internet access and security, virtual
backup, data management, virus protection, data protection and
recovery, iSCSI software for Linux environments and other
business-critical initiatives facing enterprise customers.
In corporate news, NetApp executives, products
and the overall company were honored for a variety of achievements.
Chief Executive Officer Dan Warmenhoven was honored with the Ernst
& Young Entrepreneur Of The Year® 2004 Award in the
technology category for his outstanding vision, leadership, and
achievement as CEO of Network Appliance. Cited for its "unrivaled"
unified storage architecture and its "unmatched" flexibility,
scalability, and continuity in the storage industry, the Network
Appliance FAS270c was named "Best NAS Solution of the Year" in
InfoWorld's 2005 Technology of the Year honors. NetApp was also
honored by FORTUNE magazine as one of the "100 Best Companies to
Work For" for the third consecutive year. This year, NetApp ranked
at number 24, up from number 48 last year, reflecting the company's
specific emphasis on attracting and retaining the best talent in
the industry and continuing to demonstrate the values of what
NetApp CEO Dan Warmenhoven calls a "model company." The elite and
prestigious FORTUNE listing is largely determined by employee
Conference Call Information
The NetApp quarterly results conference call will be broadcast live
via the Internet at
http://investors.netapp.com/ on Tuesday, February 15,
2005, 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) 638-5439 in the United States and
(617) 614-3945 outside the United States. The passcode for both
numbers is 60737727.
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 34738667.
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
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"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 service and product growth, leadership in
emerging technologies, 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 enterprise service offerings, and our ability to
design products and services 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 represent
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
Network Appliance, Inc.
Ph: (408) 822-3974
Network Appliance, Inc.
Ph: (408) 822-6909
Network Appliance, Inc.
Ph: (408) 822-6428