Here is the earnings press release....comments??
Network Appliance Announces Third Quarter Revenues of
$75.6 Million; Up 72% Over Prior Year
Santa Clara, CA - February 17, 1999 -- Network Appliance, Inc.
(NASDAQ: NTAP) today reported revenues of $75.6 million for the fiscal
third quarter ended January 29, 1999, an increase of 72% compared to
revenues of $44.0 million for the same period last year. Net income for the
quarter increased 69% to $9.4 million, or $0.12 per share, compared to net
income of $5.6 million, or $0.08 per share for the same period a year ago.
Earnings per share for the quarter increased 55% from the same period a
year ago.
Revenues for the first nine months of the current fiscal year totaled $198.6
million, an increase of 72% compared to revenues of $115.8 million for
the first nine months of the prior fiscal year. For the first nine months of the
current fiscal year, net income increased 70% to $24.9 million, or $0.32
per share, compared to net income of $14.7 million, or $0.21 per share for
the first nine months of the prior fiscal year. Earnings per share for the first
nine months increased 58% over the first nine months of the prior fiscal
year.
All earnings-per-share amounts represent diluted earnings per share as
defined within Statement of Financial Accounting Standards No. 128.
Earnings per share and the number of shares used in the per-share
calculation for all periods presented reflect the two-for-one stock split that
became effective December 21, 1998.
Commenting on the third quarter results, President and Chief Executive
Officer Dan Warmenhoven said, "We are pleased to report another quarter
of revenue growth in excess of 70%. Increased revenue was fueled by
Network Appliance's international sales growth in Europe and Asia, plus
increased worldwide shipments of our NetApp® cluster failover and
NetCache™ solutions. Overall, the appliance concept is gaining enhanced
credibility and attention in the marketplace. Network Appliance™
solutions are increasingly being deployed in enterprise environments for
faster data access over the corporate network as well as over the Internet."
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's file servers (called "filers") and Internet
caching solutions (NetCache) 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.
More information is available at netapp.com.
This press release contains certain forward-looking statements that involve
risks and uncertainties. Factors that could cause or contribute to such risks
and uncertainties include those discussed in the sub-section entitled "Other
Factors Affecting the Company" in NetApp's Annual Securities and
Exchange Commission Filings.
Network Appliance, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
January 29, 1999
(Unaudited)
April 24, 1998
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$ 59,886
$ 37,315
Short-term investments
8,150
10,800
Accounts receivable, net
50,735
34,313
Inventories
11,751
8,707
Prepaid expenses and other
3,235
2,524
Deferred taxes
9,963
5,280
Total current assets
143,720
98,939
PROPERTY AND EQUIPMENT, net
17,204
12,217
DEPOSITS
7,000
-
OTHER ASSETS
4,724
4,580
$172,648
$115,736
LIABILITIES, AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
$ 8,296
$ 10,041
Income taxes payable
1,384
1,782
Accrued compensation and related benefits
11,672
8,485
Other accrued liabilities
7,362
4,201
Deferred revenue
8,078
4,799
Total current liabilities
36,792
29,308
LONG-TERM OBLIGATIONS
116
163
SHAREHOLDERS' EQUITY
$ 135,740
$ 86,265
$ 172,648
$ 115,736
NETWORK APPLIANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended
Nine Months Ended
January 29, 1999
January 23, 1998
January 29, 1999
January 23, 1998
NET SALES
$ 75,616
$ 43,984
$ 198,616
$ 115,805
COST OF SALES
30,818
17,880
80,938
47,196
GROSS MARGIN
44,798
26,104
117,678
68,609
OPERATING EXPENSES
Sales and marketing
19,831
11,187
51,830
29,352
Research and development
7,815
4,420
20,618
11,738
General and administrative
2,655
1,852
7,092
4,701
Total operating expenses
30,301
17,459
79,540
45,791
INCOME FROM OPERATIONS
14,497
8,645
38,138
22,818
OTHER INCOME, net
542
243
1,658
640
INCOME BEFORE INCOME TAXES
15,039
8,888
39,796
23,458
PROVISION FOR INCOME TAXES
5,645
3,333
14,929
8,787
NET INCOME
$ 9,394
$ 5,555
$ 24,867
$ 14,661
NET INCOME PER SHARE (1): BASIC
$ 0.14
$ 0.08
$ 0.37
$ 0.23
DILUTED
$ 0.12
$ 0.08
$ 0.32
$ 0.21
SHARES USED IN PER SHARE
CALCULATION(1): BASIC
68,738
65,422
67,803
64,562
DILUTED
78,932
72,500
76,679
71,448
(1) Share and per share amounts have been adjusted to reflect the two-for-one stock split that was
effective December 21, 1998.
Company Contact:
Adam B. Trunkey
Network Appliance, Inc.
(408) 367-3644
atrunkey@netapp.com
Investor Contacts:
Jeff Allen
Network Appliance, Inc.
(408) 367-3212
jallen@netapp.com
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