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8-K - NETAPP, INC. 8-K - NetApp, Inc. | netapp8k.htm |
EX-99.2 - EXHIBIT 99.2 - NetApp, Inc. | exh99_2.htm |
Exhibit
99.1
NetApp
Announces Results for Third Quarter of Fiscal Year 2010
Record
Revenues of $1.01 Billion; Non-GAAP EPS of $0.40
SUNNYVALE,
CA--(Marketwire - February 17, 2010) - NetApp (NASDAQ: NTAP) today reported
results for the third quarter of fiscal year 2010, which ended January 29, 2010.
GAAP revenues for the third quarter of fiscal 2010 were $1.01 billion, compared
to GAAP and non-GAAP revenues(1) of $746 million and $874 million, respectively,
for the same period one year ago.
For the
third fiscal quarter of 2010, GAAP net income was $108 million, or $0.30 per
share(2) compared to GAAP net loss of $82 million, or ($0.25) per share for the
same period in the prior year. Non-GAAP(3) net income for the third fiscal
quarter of 2010 was $144 million, or $0.40 per share, compared to non-GAAP net
income of $93 million, or $0.28 per share for the same period one year
ago.
GAAP
revenues for the first nine months of the current fiscal year totaled $2.76
billion, compared to GAAP and non-GAAP revenues of $2.5 billion and $2.7
billion, respectively, for the first nine months of the prior fiscal
year.
GAAP net
income for the first nine months of the current fiscal year totaled $255
million, or $0.73 per share, compared to GAAP net loss of $4 million, or $0.01
per share for the first nine months of the prior fiscal year. Non-GAAP net
income for the first nine months of the current fiscal year totaled $350
million, or $1.00 per share, compared to non-GAAP net income of $262 million, or
$0.78 per share for the first nine months of the prior fiscal year.
"The
NetApp team demonstrated remarkable execution this quarter. With record
revenues, record profits and record EPS, the company produced double-digit year
over year revenue growth and our operations team shipped a record number of
systems, despite persistent supply constraints," said Tom Georgens, president
and CEO. "I am very pleased with the breadth of our progress. Business levels
grew in every major geography, we gained momentum in both our channel and our
direct business, and clearly gained market share this quarter."
Outlook
·
|
NetApp
estimates revenue for the fourth quarter of fiscal year 2010 to be in the
range of $1.07 billion to $1.10
billion.
|
·
|
NetApp
estimates share count for the fourth quarter of fiscal year 2010 to
increase by about 6 million shares.
|
·
|
NetApp
estimates that the fourth quarter of fiscal year 2010 GAAP earnings per
share will be approximately $0.31 to $0.33 per share. NetApp estimates
that the fourth quarter fiscal year 2010 non-GAAP earnings per share to be
approximately $0.42 to $0.44 per
share.
|
Business
Highlights
In the
third quarter of fiscal year 2010, NetApp made several key announcements
regarding new and expanded alliances with top IT industry leaders, the delivery
of new products and solutions designed to drive greater efficiency in customers'
shared data center infrastructures, and several industry awards and accolades.
Key business highlights during the quarter included the following.
New and
Expanded Strategic Alliances
·
|
Cisco, NetApp, and VMware
Expand Longstanding Collaboration. Cisco, NetApp, and VMware
collaborated to deliver new design architectures that help customers make
their virtualized data centers more efficient, dynamic, and secure. The
companies introduced an end-to-end secure multi-tenancy design
architecture that provides enhanced security when sharing data center
resources across virtualized and enterprise cloud environments. Cisco,
NetApp, and VMware will also offer a cooperative support model for these
pretested and validated design architectures to help customers quickly
build a unified, virtualized
infrastructure.
|
·
|
Microsoft and NetApp Announce
Strategic Alliance. Microsoft and NetApp announced a new three-year
agreement to collaborate on and deliver technology solutions that span
virtualization, private cloud computing, and storage and data management.
This will enable customers to increase data center management
efficiencies, reduce costs, and improve business agility. The strategic
alliance will deepen product collaboration and technical integration and
will extend joint sales and marketing activities to customers
worldwide.
|
·
|
Fujitsu and NetApp Plan to
Expand Their Global Partnership. Fujitsu and NetApp announced their
intention to deepen their partnership globally and to provide more tightly
integrated and automated storage and data management solutions. The
companies intend to jointly develop integrated products and services
specifically in the areas of virtualization, storage and data management,
and storage services and solutions. The expanded relationship will enable
customers to derive greater value and efficiencies from their dynamic
infrastructures.
|
New
Products and Solutions
·
|
New Tools to Manage Virtual
Desktops in VMware Environments. NetApp introduced new tools and
support to help customers deploy and manage virtual desktops through
VMware® View™ 4. With the release of NetApp® Rapid Cloning Utility 3.0,
customers can simplify the way they provision VMware virtual machines and
streamline their business.
|
·
|
New Virtualization Solutions
for Microsoft Environments. NetApp unveiled NetApp SnapManager® for
Hyper-V™ and SnapManager 6.0 for Microsoft® Exchange Server to minimize
the complexity of physical and virtualized
infrastructures.
|
Industry
Awards and Accolades
·
|
NetApp Named a Great Place to
Work. NetApp was ranked #7 in FORTUNE magazine's "100 Best
Companies to Work For" list. This is the second consecutive year that
NetApp ranked in the top 10 and the fourth consecutive year it ranked in
the top 15.
|
·
|
Gartner Positions NetApp as
Leader in Midrange Enterprise Disk Array Magic Quadrant. NetApp was
positioned by Gartner, Inc. in the Leaders quadrant in its recently
released research note "Magic Quadrant for Midrange Enterprise Disk
Arrays."(4) Vendors in the Leaders quadrant have the highest scores for
their ability to execute and their completeness of
vision.
|
·
|
NetApp eBI Project Earns
InfoWorld 100 Award. NetApp's enterprise business intelligence
(eBI) project was honored as part of IDG's InfoWorld 100 Awards for 2009,
which recognize the 100 most innovative uses of IT initiatives that
further business goals.
|
·
|
NetApp Receives WRAP Award for
Waste Management Programs. The California Integrated Waste
Management Board honored NetApp with a 2009 Waste Reduction Awards Program
(WRAP) award. The award recognizes NetApp's corporate waste and recycling
program and its achievements in minimizing its environmental impact
through the conscientious use of products, activities, and
services.
|
Webcast and Conference Call
Information
The
NetApp quarterly results conference call will be broadcast live on the Internet
at http://investors.netapp.com on Wednesday, February 17, 2010, at 2:30 p.m.
Pacific Time. This press release and any other information related to the call
will also be posted on the Web site at that location. An audio replay Webcast
will also be available after 5:30 p.m. Pacific Time on our Web site at
http://investors.netapp.com.
Starting
this quarter, NetApp will use a new hybrid format for disclosing key financial
information associated with our quarterly results. Concurrent with this press
release, NetApp has posted and distributed a separate document with financial
commentary and statistics that previously were disclosed during our earnings
calls. These prepared remarks will now be available at
http://investors.netapp.com prior to the conference call in order to provide the
investment community with additional time to analyze our results. This
commentary will not be read during the earnings call.
About
NetApp
NetApp
creates innovative storage and data management solutions that accelerate
business breakthroughs and deliver outstanding cost efficiency. Discover
NetApp's passion for helping companies around the world go further, faster at
www.netapp.com.
"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 all
of the statements under the Outlook section relating to our forecasted operating
results, share count, and metrics for the fourth quarter of fiscal year 2010,
our expectations regarding our new partnership and strategic alliances and the
benefits that we expect our customers to realize from using our products and
those from our strategic alliances and partnerships. These forward-looking
statements involve risks and uncertainties, and actual results could vary.
Important factors that could cause actual results to differ materially from
those in the forward-looking statements include customer demand for our products
and services; our ability to increase revenue and manage our operating costs;
increased competition risks associated with the anticipated growth in network
storage market; our ability to deliver new product architectures and enterprise
service offerings; our ability to design products and services that compete
effectively from a price and performance perspective; our reliance on a limited
number of suppliers; our ability to accurately forecast demand for our products;
and other important factors as described in NetApp reports and documents filed
from time to time with the Securities and Exchange Commission (SEC), including
the factors described under the sections captioned "Risk Factors" in our most
recently submitted 10-K and 10-Q. We disclaim any obligation to update
information contained in these forward-looking statements whether as a result of
new information, future events, or otherwise.
(1)
Non-GAAP revenues for the third quarter and first nine months of fiscal year
2009 exclude the impact of the $128 million GSA settlement.
(2) GAAP
earnings per share is calculated using the diluted number of shares for all
periods presented except for the third quarter of fiscal year 2009, which is
calculated using the basic number of shares.
(3)
Non-GAAP results of operations exclude the GSA settlement, amortization of
intangible assets, stock-based compensation expenses, merger termination
proceeds (net of related expenses), restructuring and other charges, asset
impairment, noncash interest expense associated with our convertible debt, net
loss or gain on investments, and our GAAP tax provision, including discrete
items, but includes a non-GAAP tax provision based upon our projected annual
non-GAAP effective tax rate. Non-GAAP earnings per share is calculated using the
diluted number of shares for all periods presented.
(4)
"Magic Quadrant for Midrange Enterprise Disk Arrays" by Roger Cox, Stan Zaffos,
and Pushan Rinnen, November 2009.
NetApp,
the NetApp logo, Go further, faster, and SnapManager are trademarks or
registered trademarks of NetApp, Inc. in the United States and/or other
countries. VMware is a registered trademark of VMware, Inc. Microsoft is a
registered trademark and Hyper-V is a trademark of Microsoft Corporation. All
other brands or products are trademarks or registered trademarks of their
respective holders and should be treated as such.
NetApp
Usage of Non-GAAP Financials
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. Non-GAAP results of operations
exclude the GSA settlement, amortization of intangible assets, stock-based
compensation expenses, merger termination proceeds (net of related expenses),
restructuring and other charges, asset impairment, noncash interest expense
associated with our convertible debt, net loss or gain on investments, and our
GAAP tax provision, including discrete items, but includes a non-GAAP tax
provision based upon our projected annual non-GAAP effective tax rate. We have
excluded these items in order to enhance investors' understanding of our ongoing
operations. The use of these non-GAAP financial measures has material
limitations because they should not be used to evaluate our company without
reference to their corresponding GAAP financial measures. As such, we compensate
for these material limitations by using these non-GAAP financial measures in
conjunction with GAAP financial measures.
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, such as employee compensation
planning. 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.
NETAPP,
INC.
|
||||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
(In
thousands)
|
||||||||
(Unaudited)
|
||||||||
January
29, 2010
|
April
24, 2009
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS:
|
||||||||
Cash
and cash equivalents
|
$ | 1,975,826 | $ | 1,494,153 | ||||
Short-term
investments
|
1,257,445 | 1,110,053 | ||||||
Accounts
receivable, net
|
457,536 | 446,537 | ||||||
Inventories
|
72,048 | 61,104 | ||||||
Prepaid
expenses and other assets
|
143,950 | 119,887 | ||||||
Short-term
deferred income taxes
|
110,596 | 207,050 | ||||||
Total
current assets
|
4,017,401 | 3,438,784 | ||||||
PROPERTY
AND EQUIPMENT, net
|
797,961 | 807,923 | ||||||
GOODWILL
|
680,986 | 680,986 | ||||||
INTANGIBLE
ASSETS, net
|
30,024 | 45,744 | ||||||
LONG-TERM
INVESTMENTS AND RESTRICTED CASH
|
72,824 | 127,317 | ||||||
LONG-TERM
DEFERRED INCOME TAXES AND OTHER ASSETS
|
369,438 | 283,625 | ||||||
$ | 5,968,634 | $ | 5,384,379 | |||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Accounts
payable
|
$ | 139,145 | $ | 137,826 | ||||
Accrued
compensation and related benefits
|
269,816 | 204,168 | ||||||
Other
accrued liabilities
|
201,186 | 190,315 | ||||||
Accrual for GSA settlement | - | 128,715 | ||||||
Income
taxes payable
|
6,803 | 4,732 | ||||||
Deferred
revenue
|
1,064,579 | 1,013,569 | ||||||
Total
current liabilities
|
1,681,529 | 1,679,325 | ||||||
LONG-TERM
DEBT AND OTHER OBLIGATIONS
|
1,229,751 | 1,219,216 | ||||||
LONG-TERM
DEFERRED REVENUE
|
730,374 | 701,649 | ||||||
3,641,654 | 3,600,190 | |||||||
STOCKHOLDERS'
EQUITY
|
2,326,980 | 1,784,189 | ||||||
$ | 5,968,634 | $ | 5,384,379 |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
(In
thousands, except net income per share amounts)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
January
29, 2010
|
January
23, 2009
|
January
29, 2010
|
January
23, 2009
|
|||||||||||||
REVENUES:
|
||||||||||||||||
Product
|
$ | 618,955 | $ | 528,198 | $ | 1,622,349 | $ | 1,646,489 | ||||||||
Software
entitlements and maintenance
|
170,863 | 156,546 | 505,968 | 453,680 | ||||||||||||
Service
|
221,832 | 189,599 | 631,321 | 554,581 | ||||||||||||
GSA
settlement
|
- | (128,000 | ) | - | (128,000 | ) | ||||||||||
Net
revenues
|
1,011,650 | 746,343 | 2,759,638 | 2,526,750 | ||||||||||||
COST
OF REVENUES:
|
||||||||||||||||
Cost
of product
|
253,907 | 252,327 | 665,576 | 762,437 | ||||||||||||
Cost
of software entitlements and maintenance
|
2,944 | 2,320 | 9,162 | 6,765 | ||||||||||||
Cost
of service
|
113,259 | 98,480 | 314,186 | 301,528 | ||||||||||||
Total
cost of revenues
|
370,110 | 353,127 | 988,924 | 1,070,730 | ||||||||||||
GROSS
MARGIN
|
641,540 | 393,216 | 1,770,714 | 1,456,020 | ||||||||||||
OPERATING
EXPENSES:
|
||||||||||||||||
Sales
and marketing
|
324,768 | 291,634 | 927,036 | 898,786 | ||||||||||||
Research
and development
|
129,329 | 122,662 | 392,000 | 373,509 | ||||||||||||
General
and administrative
|
58,079 | 51,048 | 174,569 | 151,523 | ||||||||||||
Restructuring
and other charges
|
68 | 18,955 | 2,743 | 18,955 | ||||||||||||
Merger termination proceeds, net | - | - | (41,120 | ) | - | |||||||||||
Total
operating expenses
|
512,244 | 484,299 | 1,455,228 | 1,442,773 | ||||||||||||
INCOME
(LOSS) FROM OPERATIONS
|
129,296 | (91,083 | ) | 315,486 | 13,247 | |||||||||||
OTHER
INCOME (EXPENSES), net:
|
||||||||||||||||
Interest
income
|
7,464 | 12,799 | 23,060 | 45,894 | ||||||||||||
Interest
expense
|
(18,226 | ) | (17,674 | ) | (55,343 | ) | (44,993 | ) | ||||||||
Gain
(loss) on investments, net
|
733 | (1,691 | ) | 3,446 | (26,926 | ) | ||||||||||
Other
expenses, net
|
(1,369 | ) | (1,249 | ) | (3,587 | ) | (3,717 | ) | ||||||||
Total
other expenses, net
|
(11,398 | ) | (7,815 | ) | (32,424 | ) | (29,742 | ) | ||||||||
INCOME
(LOSS) BEFORE INCOME TAXES
|
117,898 | (98,898 | ) | 283,062 | (16,495 | ) | ||||||||||
PROVISION
(BENEFIT) FOR INCOME TAXES
|
10,018 | (17,275 | ) | 27,841 | (12,648 | ) | ||||||||||
NET
INCOME (LOSS)
|
$ | 107,880 | $ | (81,623 | ) | $ | 255,221 | $ | (3,847 | ) | ||||||
NET
INCOME (LOSS) PER SHARE:
|
||||||||||||||||
BASIC
|
$ | 0.32 | $ | (0.25 | ) | $ | 0.76 | $ | (0.01 | ) | ||||||
DILUTED
|
$ | 0.30 | $ | (0.25 | ) | $ | 0.73 | $ | (0.01 | ) | ||||||
SHARES
USED IN PER SHARE CALCULATION:
|
||||||||||||||||
BASIC
|
341,439 | 329,026 | 337,478 | 330,067 | ||||||||||||
DILUTED
|
360,321 | 329,026 | 349,438 | 330,067 | ||||||||||||
NETAPP,
INC.
|
||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL
INFORMATION
|
||||||||||||||||||||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||||||
Three
Months Ended January 29, 2010
|
||||||||||||||||||||||||||||||||||||
GSA
Settlement
|
Amortization
of Intangible Assets
|
Stock-based
Compensation Expenses
|
Asset
Impairment
|
Restructuring
and Other Charges
|
Mergers
Termination Proceeds, Net
|
Non-Cash
Interest Expense
|
(Gain)
Loss on Investments, Net
|
Total
|
||||||||||||||||||||||||||||
Cost
of product revenues
|
- | $ | 4,053 | $ | 1,017 | - | - | - | - | - | $ | 5,070 | ||||||||||||||||||||||||
Cost
of service revenues
|
- | - | 3,317 | - | - | - | - | - | 3,317 | |||||||||||||||||||||||||||
Sales
and marketing expense
|
- | 848 | 17,175 | - | - | - | - | - | 18,023 | |||||||||||||||||||||||||||
Research
and development expense
|
- | - | 8,906 | - | - | - | - | - | 8,906 | |||||||||||||||||||||||||||
General
and administrative expense
|
- | - | 6,243 | - | - | - | - | - | 6,243 | |||||||||||||||||||||||||||
Restructuring
and other charges
|
- | - | - | - | 68 | - | - | - | 68 | |||||||||||||||||||||||||||
Interest
expense
|
- | - | - | - | - | - | 12,464 | - | 12,464 | |||||||||||||||||||||||||||
(Gain)
loss on investments, net
|
- | - | - | - | - | - | - | (733 | ) | (733 | ) | |||||||||||||||||||||||||
Effect
on income before income taxes
|
- | $ | 4,901 | $ | 36,658 | - | $ | 68 | - | $ | 12,464 | $ | (733 | ) | $ | 53,358 | ||||||||||||||||||||
Nine
Months Ended January 29, 2010
|
||||||||||||||||||||||||||||||||||||
GSA
Settlement
|
Amortization
of Intangible Assets
|
Stock-based
Compensation Expenses
|
Asset
Impairment
|
Restructuring
and Other Charges
|
Mergers
Termination Proceeds, Net
|
Non-Cash
Interest Expense
|
(Gain)
Loss on Investments, Net
|
Total
|
||||||||||||||||||||||||||||
Cost
of product revenues
|
- | $ | 13,041 | $ | 2,747 | - | - | - | - | - | $ | 15,788 | ||||||||||||||||||||||||
Cost
of service revenues
|
- | - | 10,778 | - | - | - | - | - | 10,778 | |||||||||||||||||||||||||||
Sales
and marketing expense
|
- | 2,545 | 56,830 | - | - | - | - | - | 59,375 | |||||||||||||||||||||||||||
Research
and development expense
|
- | - | 29,531 | - | - | - | - | - | 29,531 | |||||||||||||||||||||||||||
General
and administrative expense
|
- | - | 22,201 | - | - | - | - | - | 22,201 | |||||||||||||||||||||||||||
Restructuring
and other charges
|
- | - | - | - | 2,743 | - | - | - | 2,743 | |||||||||||||||||||||||||||
Mergers
termination proceeds, net
|
- | - | - | - | - | (41,120 | ) | - | - | (41,120 | ) | |||||||||||||||||||||||||
Interest
expense
|
- | - | - | - | - | - | 37,755 | - | 37,755 | |||||||||||||||||||||||||||
(Gain)
loss on investments, net
|
- | - | - | - | - | - | - | (3,538 | ) | (3,538 | ) | |||||||||||||||||||||||||
Effect
on pre-tax income
|
- | $ | 15,586 | $ | 122,087 | - | $ | 2,743 | $ | (41,120 | ) | $ | 37,755 | $ | (3,538 | ) | $ | 133,513 | ||||||||||||||||||
Three
Months Ended January 23, 2009
|
||||||||||||||||||||||||||||||||||||
GSA
Settlement
|
Amortization
of Intangible Assets
|
Stock-based
Compensation Expenses
|
Asset
Impairment
|
Restructuring
and Other Charges
|
Mergers
Termination Proceeds, Net
|
Non-Cash
Interest Expense
|
(Gain)
Loss on Investments, Net
|
Total
|
||||||||||||||||||||||||||||
Total
revenues
|
$ | 128,000 | - | - | - | - | - | - | - | $ | 128,000 | |||||||||||||||||||||||||
Cost
of product revenues
|
- | 6,161 | 775 | - | - | - | - | - | 6,936 | |||||||||||||||||||||||||||
Cost
of service revenues
|
- | - | 2,889 | - | - | - | - | - | 2,889 | |||||||||||||||||||||||||||
Sales
and marketing expense
|
- | 1,053 | 15,787 | 9,431 | - | - | - | - | 26,271 | |||||||||||||||||||||||||||
Research
and development expense
|
- | - | 8,982 | - | - | - | - | - | 8,982 | |||||||||||||||||||||||||||
General
and administrative expense
|
- | - | 5,997 | - | - | - | - | - | 5,997 | |||||||||||||||||||||||||||
Restructuring
and other charges
|
- | - | - | - | 18,955 | - | - | - | 18,955 | |||||||||||||||||||||||||||
Interest
expense
|
- | - | - | - | - | - | 10,436 | - | 10,436 | |||||||||||||||||||||||||||
(Gain)
loss on investments, net
|
- | - | - | - | - | - | 1,691 | 1,691 | ||||||||||||||||||||||||||||
Effect
on income before income taxes
|
$ | 128,000 | $ | 7,214 | $ | 34,430 | $ | 9,431 | $ | 18,955 | - | $ | 10,436 | $ | 1,691 | $ | 210,157 | |||||||||||||||||||
Nine
Months Ended January 23, 2009
|
||||||||||||||||||||||||||||||||||||
GSA
Settlement
|
Amortization
of Intangible Assets
|
Stock-based
Compensation Expenses
|
Asset
Impairment
|
Restructuring
and Other Charges
|
Mergers
Termination Proceeds, Net
|
Non-Cash
Interest Expense
|
(Gain)
Loss on Investments, Net
|
Total
|
||||||||||||||||||||||||||||
Total
revenues
|
$ | 128,000 | - | - | - | - | - | - | - | $ | 128,000 | |||||||||||||||||||||||||
Cost
of product revenues
|
- | 19,657 | 2,347 | - | - | - | - | - | 22,004 | |||||||||||||||||||||||||||
Cost
of service revenues
|
- | - | 8,349 | - | - | - | - | - | 8,349 | |||||||||||||||||||||||||||
Sales
and marketing expense
|
- | 3,571 | 44,978 | 9,431 | - | - | - | - | 57,980 | |||||||||||||||||||||||||||
Research
and development expense
|
- | - | 26,651 | - | - | - | - | - | 26,651 | |||||||||||||||||||||||||||
General
and administrative expense
|
- | - | 16,272 | - | - | - | - | - | 16,272 | |||||||||||||||||||||||||||
Restructuring
and other charges
|
- | - | - | - | 18,955 | - | - | - | 18,955 | |||||||||||||||||||||||||||
Interest
expense
|
- | - | - | - | - | - | 25,638 | - | 25,638 | |||||||||||||||||||||||||||
(Gain)
loss on investments, net
|
- | - | - | - | - | - | - | 26,926 | 26,926 | |||||||||||||||||||||||||||
Effect
on pre-tax income
|
$ | 128,000 | $ | 23,228 | $ | 98,597 | $ | 9,431 | $ | 18,955 | - | $ | 25,638 | $ | 26,926 | $ | 330,775 |
NETAPP,
INC.
|
||||||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
January
29, 2010
|
January
23, 2009
|
January
29, 2010
|
January
23, 2009
|
|||||||||||||
Cash
Flows from Operating Activities:
|
||||||||||||||||
Net
income (loss)
|
$ | 107,880 | $ | (81,623 | ) | $ | 255,221 | $ | (3,847 | ) | ||||||
Adjustments
to reconcile net income to net cash
|
||||||||||||||||
provided
by operating activities:
|
||||||||||||||||
Depreciation
and amortization
|
40,774 | 44,367 | 125,963 | 129,834 | ||||||||||||
Stock-based
compensation
|
36,658 | 34,430 | 122,087 | 98,597 | ||||||||||||
(Gain)
loss on investments
|
108 | 1,691 | (2,429 | ) | 17,627 | |||||||||||
Asset
impairment and write-offs
|
577 | 27,505 | 1,717 | 28,265 | ||||||||||||
Allowance
for doubtful accounts
|
239 | 199 | 248 | 1,903 | ||||||||||||
Accretion
of discount and issue costs on notes
|
12,464 | 11,693 | 37,755 | 28,769 | ||||||||||||
Deferred
income taxes
|
(487 | ) | (35,043 | ) | (2,406 | ) | (82,343 | ) | ||||||||
Deferred
rent
|
(2,010 | ) | 26 | (2,839 | ) | 3,037 | ||||||||||
Tax
benefit from stock-based compensation
|
(17,135 | ) | (4,612 | ) | (2,725 | ) | 40,937 | |||||||||
Excess
tax benefit from stock-based compensation
|
323 | (617 | ) | (1,027 | ) | (34,928 | ) | |||||||||
Changes
in assets and liabilities:
|
||||||||||||||||
Accounts
receivable
|
(139,663 | ) | 19,060 | (7,946 | ) | 230,267 | ||||||||||
Inventories
|
(11,231 | ) | (3,945 | ) | (10,897 | ) | (11,959 | ) | ||||||||
Prepaid
expenses and other assets
|
(26,234 | ) | 19,539 | (27,305 | ) | (463 | ) | |||||||||
Accounts
payable
|
16,498 | (25,823 | ) | (360 | ) | (42,156 | ) | |||||||||
Accrued
compensation and related benefits
|
51,885 | 24,662 | 61,446 | (6,094 | ) | |||||||||||
Other
accrued liabilities
|
25,504 | 13,807 | 6,048 | 18,716 | ||||||||||||
Accrual
for GSA settlement
|
- | 128,000 | (128,715 | ) | 128,000 | |||||||||||
Income
taxes payable
|
3,727 | 863 | 2,119 | 327 | ||||||||||||
Long
term other liabilities
|
20,736 | 11,966 | 14,402 | 11,148 | ||||||||||||
Deferred
revenue
|
74,300 | 49,855 | 60,085 | 137,998 | ||||||||||||
Net
cash provided by operating activities
|
194,913 | 236,000 | 500,442 | 693,635 | ||||||||||||
Cash
Flows from Investing Activities:
|
||||||||||||||||
Purchases
of investments
|
(451,710 | ) | (227,526 | ) | (1,334,941 | ) | (711,488 | ) | ||||||||
Redemptions
of investments
|
462,688 | 622,928 | 1,243,496 | 886,571 | ||||||||||||
Reclassification
from cash and cash equivalents to short-term investments
|
- | - | - | (597,974 | ) | |||||||||||
Change
in restricted cash
|
173 | (1,126 | ) | (654 | ) | (444 | ) | |||||||||
Proceeds
from nonmarketable securities
|
306 | - | 4,786 | 807 | ||||||||||||
Purchases
of property and equipment
|
(49,732 | ) | (50,934 | ) | (97,222 | ) | (154,901 | ) | ||||||||
Net
cash provided by (used in) investing activities
|
(38,275 | ) | 343,342 | (184,535 | ) | (577,429 | ) | |||||||||
Cash
Flows from Financing Activities:
|
||||||||||||||||
Proceeds
from sale of common stock related to employee stock
transactions
|
103,491 | 27,852 | 169,379 | 73,417 | ||||||||||||
Tax
withholding payments reimbursed by employee stock
transactions
|
(6,981 | ) | (1,593 | ) | (12,698 | ) | (4,184 | ) | ||||||||
Excess
tax benefit from stock-based compensation
|
(323 | ) | 617 | 1,027 | 34,928 | |||||||||||
Proceeds
from issuance of convertible notes
|
- | - | - | 1,265,000 | ||||||||||||
Payment
of financing costs
|
- | - | - | (26,581 | ) | |||||||||||
Sale
of common stock warrants
|
- | - | - | 163,059 | ||||||||||||
Purchase
of note hedge
|
- | - | - | (254,898 | ) | |||||||||||
Repayment
of revolving credit facility
|
- | (65,349 | ) | - | (172,600 | ) | ||||||||||
Repurchases
of common stock
|
- | - | - | (399,981 | ) | |||||||||||
Net
cash provided by (used in) financing activities
|
96,187 | (38,473 | ) | 157,708 | 678,160 | |||||||||||
Effect
of Exchange Rate Changes on Cash and Cash Equivalents
|
(5,840 | ) | (3,698 | ) | 8,058 | (22,645 | ) | |||||||||
Net
Increase in Cash and Cash Equivalents
|
246,985 | 537,171 | 481,673 | 771,721 | ||||||||||||
Cash
and Cash Equivalents:
|
||||||||||||||||
Beginning
of period
|
1,728,841 | 1,171,029 | 1,494,153 | 936,479 | ||||||||||||
End
of period
|
$ | 1,975,826 | $ | 1,708,200 | $ | 1,975,826 | $ | 1,708,200 | ||||||||
NETAPP,
INC.
|
||||||||||||||||
RECONCILIATION
OF NON-GAAP AND GAAP
|
||||||||||||||||
IN
THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
(In
thousands, except net income per share amounts)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
January
29, 2010
|
January
23, 2009
|
January
29, 2010
|
January
23, 2009
|
|||||||||||||
SUMMARY RECONCILIATION OF NET
INCOME
|
||||||||||||||||
NET
INCOME (LOSS)
|
$ | 107,880 | $ | (81,623 | ) | $ | 255,221 | $ | (3,847 | ) | ||||||
Adjustments:
|
||||||||||||||||
GSA
settlement
|
- | 128,000 | - | 128,000 | ||||||||||||
Amortization
of intangible assets
|
4,901 | 7,214 | 15,586 | 23,228 | ||||||||||||
Stock-based
compensation expenses
|
36,658 | 34,430 | 122,087 | 98,597 | ||||||||||||
Asset
impairment
|
- | 9,431 | - | 9,431 | ||||||||||||
Restructuring
and other charges
|
68 | 18,955 | 2,743 | 18,955 | ||||||||||||
Merger
termination proceeds, net
|
- | - | (41,120 | ) | - | |||||||||||
Non-cash
interest expense
|
12,464 | 10,436 | 37,755 | 25,638 | ||||||||||||
(Gain)
loss on investments, net
|
(733 | ) | 1,691 | (3,538 | ) | 26,926 | ||||||||||
Discrete
GAAP tax provision items
|
572 | (3,880 | ) | (7,265 | ) | 428 | ||||||||||
Income
tax effect
|
(17,955 | ) | (31,197 | ) | (31,546 | ) | (65,851 | ) | ||||||||
NON-GAAP
NET INCOME
|
$ | 143,855 | $ | 93,457 | $ | 349,923 | $ | 261,505 | ||||||||
NET
INCOME (LOSS) PER SHARE
|
$ | 0.299 | $ | (0.248 | ) | $ | 0.730 | $ | (0.012 | ) | ||||||
Adjustments:
|
||||||||||||||||
GSA settlement
|
- | 0.387 | - | 0.382 | ||||||||||||
Amortization
of intangible assets
|
0.013 | 0.022 | 0.045 | 0.069 | ||||||||||||
Stock-based
compensation expenses
|
0.102 | 0.104 | 0.349 | 0.294 | ||||||||||||
Asset
impairment
|
- | 0.029 | - | 0.028 | ||||||||||||
Restructuring
and other charges
|
- | 0.057 | 0.008 | 0.057 | ||||||||||||
Merger
termination proceeds, net
|
- | - | (0.118 | ) | - | |||||||||||
Non-cash
interest expense
|
0.035 | 0.032 | 0.108 | 0.077 | ||||||||||||
(Gain)
loss on investments, net
|
(0.002 | ) | 0.005 | (0.010 | ) | 0.080 | ||||||||||
Discrete
GAAP tax provision items
|
0.002 | (0.012 | ) | (0.021 | ) | 0.001 | ||||||||||
Income
tax effect
|
(0.050 | ) | (0.094 | ) | (0.090 | ) | (0.197 | ) | ||||||||
NON-GAAP
NET INCOME PER SHARE
|
$ | 0.399 | $ | 0.282 | $ | 1.001 | $ | 0.779 |
NETAPP, INC. | ||||
RECONCILIATION OF NON GAAP GUIDANCE TO GAAP | ||||
EXPRESSED AS EARNINGS PER SHARE | ||||
FOURTH QUARTER 2010 | ||||
(Unaudited) | ||||
Fourth
Quarter
|
||||
2010
|
||||
Non-GAAP
Guidance
|
$ | 0.42 - $0.44 | ||
Adjustments
of Specific Items to
|
||||
Net
Income Per Share for the Fourth
|
||||
Quarter
2010:
|
||||
Stock
based compensation expense
|
(0.10 | ) | ||
Amortization
of intangible assets
|
(0.01 | ) | ||
Non
cash interest expense
|
(0.04 | ) | ||
Income
tax effect
|
0.04 | |||
Total
Adjustments
|
(0.11 | ) | ||
GAAP
Guidance -Net Income Per Share
|
$ | 0.31 - $0.33 |
Press
Contact:
NetApp
Jodi
Baumann
Ph: (408)
822-3974
Jodi.Baumann@netapp.com
Investor
Contacts:
NetApp
Tara
Dhillon
Ph: (408)
822-6909
tara@netapp.com
NetApp
Billie
Fagenstrom
Ph: (408)
822-6428
billief@netapp.com