Network Appliance Announces Revenues Up 109% and Pro Forma
Net Income Up 128% in Second Fiscal Quarter
SUNNYVALE, Calif.--(BUSINESS WIRE)--Nov. 14, 2000--Network Appliance(TM), Inc. (NASDAQ: NTAP - news), today reported
revenues of $260.8 million for the second fiscal quarter ended October 27, 2000, an increase of 109% compared to revenues of $124.7 million for
the same period a year ago.
Pro forma net income for the quarter increased 128% to $36.6 million, or $0.10 per share, compared to pro forma net income of $16.1 million, or
$0.05 per share for the same period a year ago. Pro forma net income was up 13% from the $32.3 million reported in the first quarter of fiscal year
2001. Actual net income for the quarter was $35.4 million, or $0.10 per share, compared with $16.0 million, or $0.05 per share for the same period
a year ago.
Revenues for the first six months of the current fiscal year totaled $491.9 million, an increase of 116% compared to revenue of $228.0 million for the
first six months of the prior fiscal year. For the first six months of the current fiscal year, pro forma net income increased 133% to $69.0 million, or
$0.19 per share, compared to pro forma net income of $29.6 million, or $0.09 per share for the first six months of the prior fiscal year. Pro forma
earnings per share for the first six months of the current fiscal year increased approximately 111% from the first six months of the prior fiscal year.
``Overall demand for Network Appliance products continued to grow during the quarter. We delivered new hardware and software essential to our
market strategy of becoming the leading provider of scalable, end-to-end storage networking and content delivery platforms for Fortune 2000
businesses,'' said Dan Warmenhoven, CEO of Network Appliance. ``Our customers depend on NetApp® to supply the infrastructure building
blocks for their business -- systems that simplify the storage, management, access and delivery of enterprise data on a global basis.''
Quarterly Highlights
In the second quarter, NetApp announced the acquisition of WebManage, a provider of content management and distribution software, based in
Chelmsford, Mass. The acquisition positions NetApp as the only end-to-end data management and content delivery provider for enterprises, telcos,
web hosting and streaming media customers.
For the second year in a row, Fortune Magazine ranked Network Appliance as the fourth fastest growing company in the U.S., validating our
business management strategy and technology leadership position.
Network Appliance added 40 new ``Powered by Network Appliance'' partners during the quarter. Key NetApp filer customer wins this quarter
included BP Alaska, Continental Airlines and Landmark Graphics. New NetCache(TM) customers added this quarter include Yahoo! Broadcast,
Clearnet and Telmex (Uninet).
Product and Technology Highlights
During the quarter NetApp shipped the F840 and F840c filers, its highest performance enterprise-class systems, which now can support up to 12
terabytes of storage capacity. Also launched this quarter was Data ONTAP(TM) 6.0, the leading operating system for network attached storage
(NAS) appliances. The new release combines several enhancements in NetApp Snapshot(TM), SnapMirror(TM) and SnapRestore(TM) software,
resulting in new enterprise-class levels of performance for instantaneous file recovery, data mirroring for remote replication and disaster recovery.
NetApp expanded its end-to-end solutions for Content Delivery Networks (CDNs) by shipping the NetCache C6100 and C1105, both supporting
new NetCache 5.0 software, creating the industry's first content management and edge delivery platform for live and on-demand video. Also
announced during the quarter were ContentReporter(TM) and ContentDirector(TM), two easy-to-use software tools from WebManage, for
optimizing and managing content distribution systems.
To meet the future performance requirements of NetApp customers, the company continued to support and drive industry developments and
protocols like the DAFS Collaborative, Open Storage Networking, Internet Content Adaptation Protocol (ICAP), and Network Data Management
Protocol (NDMP). Network Appliance also became a charter member of the Cisco Systems Content Alliance.
The DAFS Collaborative (www.dafscollaborative.org) released its first software developers kit (SDK), and doubled membership to 55 companies
during the quarter. The DAFS Collaborative is working to define a new high-speed, memory-to-memory file access standard for storage networks.
Pro forma results exclude the impact of amortization of intangible assets and acquired in-process research and development expenses.
Diluted earnings per share and the number of shares used in the per-share calculation of all periods presented reflect the two-for-one stock splits that
were effective December 20, 1999 and March 22, 2000.
About Network Appliance
Network Appliance, Inc., a leader in network file storage and content delivery, has been providing data access solutions since 1992, and is a member
of both the S&P 500 and NASDAQ 100 index. Major corporations and service providers, including Lycos, Yahoo!, Citicorp Securities, Siemens,
Lockheed, Cisco, Motorola, and Texas Instruments have deployed NetApp solutions.
The company pioneered the concept of the ``network appliance,'' an extension of the industry trend toward dedicated, specialized products that
perform a single function. NetApp storage and content delivery platforms (filers and NetCache appliances) are coupled with powerful content
distribution and reporting software. This end-to-end solution offers seamless data management from the back-end data center to the edge of the
network quickly, simply, and reliably. The Network Appliance product portfolio utilizes the company's innovative data access software, known as the
Data ONTAP operating system, as well as standards-compliant hardware. It also offers multiprotocol support and transparent integration for
UNIX® and Windows® environments.
Note to Editors: NetApp is a registered trademark in the U.S. and Network Appliance, Data ONTAP, NetCache, Snapshot, SnapMirror,
SnapRestore, ContentReporter and ContentDirector 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/Forward-looking Statement
This press release may be deemed to contain forward-looking statements. 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.
NETWORK APPLIANCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 27, April 30,
2000 2000
-------- --------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $305,831 $279,014
Short-term investments 142,244 74,477
Accounts receivable, net 161,917 108,902
Inventories 22,867 20,434
Prepaid expenses and other 21,955 27,958
Deferred income taxes 25,477 22,215
------- -------
Total current assets 680,291 533,000
RESTRICTED CASH 63,150 --
PROPERTY AND EQUIPMENT, net 81,595 47,949
INTANGIBLE ASSETS, net 22,636 389
OTHER ASSETS 9,681 10,895
-------- -------
$857,353 $592,233
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 58,523 $ 34,061
Accrued compensation and related benefits 66,025 34,902
Other accrued liabilities 35,015 21,288
Deferred revenue 45,913 23,182
-------- -------
Total current liabilities 205,476 113,433
-------- -------
LONG-TERM OBLIGATIONS 52 54
-------- -------
SHAREHOLDERS' EQUITY 651,825 478,746
-------- -------
$857,353 $592,233
NETWORK APPLIANCE, INC.
PRO FORMA (1) CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
Quarter Ended Six Months Ended
Oct. 27, Oct. 29, Oct. 27, Oct. 29,
2000 1999 2000 1999
-------- -------- -------- --------
NET SALES $260,777 $124,712 $491,936 $227,991
COST OF SALES 99,314 51,516 188,771 94,055
-------- -------- -------- --------
GROSS MARGIN 161,463 73,196 303,165 133,936
-------- -------- -------- --------
OPERATING EXPENSES:
Sales and marketing 72,445 32,548 136,504 59,432
Research and development 28,357 13,462 52,062 24,682
General and administrative 10,244 4,437 19,229 8,205
-------- -------- -------- --------
Total operating expenses 111,046 50,447 207,795 92,319
-------- -------- -------- --------
INCOME FROM OPERATIONS 50,417 22,749 95,370 41,617
OTHER INCOME, net 5,511 2,181 9,891 4,244
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 55,928 24,930 105,261 45,861
PROVISION FOR INCOME TAXES 19,295 8,832 36,298 16,245
-------- -------- -------- --------
NET INCOME $ 36,633 $ 16,098 $ 68,963 $ 29,616
-------- -------- -------- --------
NET INCOME PER SHARE (2):
BASIC $ 0.12 $ 0.05 $ 0.22 $ 0.10
DILUTED $ 0.10 $ 0.05 $ 0.19 $ 0.09
SHARES USED IN PER SHARE
CALCULATION (1):
BASIC 318,223 296,488 315,891 294,432
DILUTED 364,035 337,968 361,906 335,332
(1) Net Income excludes in-process research and development and
amortization of intangible assets.
(2) Share and per share amounts have been adjusted to reflect the
two-for-one stock splits which were effective December 20, 1999 and
March 22, 2000.
NETWORK APPLIANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
Quarter Ended Six Months Ended
Oct. 27, Oct. 29, Oct. 27, Oct. 29,
2000 1999 2000 1999
-------- -------- -------- --------
NET SALES $260,777 $124,712 $491,936 $227,991
COST OF SALES 99,314 51,516 188,771 94,055
-------- -------- -------- --------
GROSS MARGIN 161,463 73,196 303,165 133,936
-------- -------- -------- --------
OPERATING EXPENSES:
Sales and marketing 72,445 32,548 136,504 59,432
Research and development 28,357 13,462 52,062 24,682
General and administrative 10,244 4,437 19,229 8,205
Amortization of
intangible assets 1,273 50 1,939 100
In-process research and
development -- -- 26,688 --
-------- -------- -------- --------
Total operating expenses 112,319 50,497 236,422 92,419
-------- -------- -------- --------
INCOME FROM OPERATIONS 49,144 22,699 66,743 41,517
OTHER INCOME, net 5,511 2,181 9,891 4,244
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 54,655 24,880 76,634 45,761
PROVISION FOR INCOME TAXES 19,295 8,832 36,298 16,245
-------- -------- -------- --------
NET INCOME $ 35,360 $ 16,048 $ 40,336 $ 29,516
-------- -------- -------- --------
NET INCOME PER SHARE:
BASIC $ 0.11 $ 0.05 $ 0.13 $ 0.10
DILUTED $ 0.10 $ 0.05 $ 0.11 $ 0.09
SHARES USED IN PER SHARE
CALCULATION (1):
BASIC 318,223 296,488 315,891 294,432
DILUTED 364,035 337,968 361,906 335,332
(1) Share and per share amounts have been adjusted to reflect the
two-for-one stock splits which were effective December 20, 1999 and
March 22, 2000. |
