Network Appliance Announces Revenues Up 90%, Net Income Up 92% in Second Fiscal Quarter; Company Announces 2-For-1 Stock Split
netapp.com
Sunnyvale, CA - November 16, 1999 -- Network Appliance, Inc. (NASDAQ: NTAP), the leading provider of network-attached data access and management solutions, today reported revenues of $124.7 million for the second fiscal quarter ended October 29, 1999, an increase of 90% compared to revenues of $65.6 million for the same period a year ago.
Net income for the quarter increased 92% to $16.0 million or $0.19 per share, compared to net income of $8.4 million, or $0.11 per share, for the same period a year ago.
Revenues for the first six months of the current fiscal year totaled $228.0 million, an increase of 85% compared to revenue of $123.0 million for the first six months of the prior fiscal year. For the first six months of the current fiscal year, net income increased 91% to $29.5 million, or $0.35 per share, compared to net income of $15.5 million, or $0.20 per share for the first six months of the prior fiscal year. Earnings per share for the first six months of the current fiscal year increased approximately 75% from the first six months of the prior fiscal year.
"The Internet is pacing the growth of the global economy and Network Appliance continues to benefit from our market leadership position in storage appliances and web caching," said Dan Warmenhoven, President and CEO of Network Appliance, Inc. "During the second quarter, demand for our filer and NetCache™ products accelerated across each of our geographic areas. We are especially pleased with the growing customer acceptance of our software products, which have become an increasing percentage of our business over the past year."
The Company also announced a two-for-one stock split of the Company's common stock to be distributed on or about December 20, 1999 to holders of record on December 10, 1999. After the split, the Company will have approximately 149,300,000 shares of its common stock outstanding based on shares outstanding at October 29, 1999.
About Network Appliance
Network Appliance, a veteran in network file serving and caching, has been providing data access solutions for over six years. Major corporations and ISPs, including Bear Stearns, Yahoo!, Siemens, Lockheed-Martin, Cisco, Motorola and Texas Instruments have deployed NetApp® solutions. NetApp file servers (called "filers") and Internet caching solutions (NetCache appliances) deliver fast, simple, reliable and cost-effective access to network-stored data and enable simultaneous shared file services for UNIX®, Windows® and the World Wide Web. The company pioneered the concept of the "network appliance," an extension of the industry trend toward dedicated, specialized products that perform a single function. Network Appliance™ filers and NetCache appliances are based on the company's patented data access solutions including Data ONTAP™ software and standards-compliant hardware.
Network Appliance, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 29, 1999
April 30, 1998
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 220,828 $ 221,284
Short-term investments 51,673 5,800
Accounts receivable, net 78,747 57,163
Inventories 17,542 13,581
Prepaid expenses and other assets 6,290 7,384
Deferred taxes 20,134 10,134
Total current assets 395,214 315,346
PROPERTY AND EQUIPMENT, net 27,080 19,271
DEPOSITS 7,170 7,000
OTHER ASSETS 4,840 4,730
$434,304 $346,347
LIABILITIES, AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 27,358 $ 15,126
Income taxes payable 460 1,108
Accrued compensation and related benefits 18,986 15,189
Other accrued liabilities 8,611 7,633
Deferred revenue 13,223 11,474
Total current liabilities 68,638 50,530
LONG-TERM OBLIGATIONS 52 93
SHAREHOLDERS' EQUITY $ 365,614 $ 295,724
$ 434,304 $ 346,347
NETWORK APPLIANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended Six Months Ended
October 29, 1999 October 30, 1998 October 29, 1999 October 30, 1998
NET SALES $ 124,712 $ 65,625 $ 227,991 $ 123,000
COST OF SALES 51,516 26,881 94,055 50,120
GROSS MARGIN 73,196 38,744 133,936 72,880
OPERATING EXPENSES
Sales and marketing 32,548 17,064 59,432 31,999
Research and development 13,462 6,722 24,682 12,803
General and administrative 4,487 2,552 8,305 4,437
Total operating expenses 50,497 26,338 92,419 49,239
INCOME FROM OPERATIONS 22,699 12,406 41,517 23,641
OTHER INCOME, net 2,181 995 4,244 1,116
INCOME BEFORE INCOME TAXES 24,880 13,401 45,761 24,757
PROVISION FOR INCOME TAXES 8,832 5,025 16,245 9,284
NET INCOME $ 16,048 $ 8,376 $ 29,516 $ 15,473
NET INCOME PER SHARE(1)
BASIC $ 0.22 $ 0.12 $ 0.40 $ 0.23
DILUTED $ 0.19 $ 0.11 $ 0.35 $ 0.20
SHARES USED IN PER SHARE CALCULATIONS(1)
BASIC 74,122 67,878 73,607 67,468
DILUTED 84,492 76,112 83,832 75,544
Safe Harbor/Forward-looking Statement
This press release may be deemed to contain forward-looking information. Any forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including without limitation, any statements as to future events or future financial results of Network Appliance, Inc., may be significantly and materially impacted by risks and uncertainties. In evaluating such statements, readers should specifically consider various factors that could cause actual events or results to differ materially from those indicated, including without limitation, factors 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. |
