- NetApp estimates non-GAAP gross margins for the second quarter of
fiscal year 2010 to be between 62.5% and 63.0%.
- NetApp estimates non-GAAP operating expense levels for the second
quarter of fiscal year 2010 to be in a range around $425
million.
- NetApp estimates non-GAAP other income for the second quarter of fiscal year 2010 to remain at similar levels to those reported in the first quarter of fiscal year 2010.
- Microsoft 2009 Storage Solutions Partner of the Year: NetApp was named the Microsoft 2009 Partner of the Year in the Advanced Infrastructure, Storage Solutions category. This award reflects NetApp's long-standing partnership with Microsoft and its commitment to and success helping Microsoft customers do more with less in Microsoft Exchange, SharePoint® Server, SQL Server®, and Hyper-V environments.
- Best Companies to Work for Awards: In addition to NetApp U.S.
being named number one in FORTUNE magazine's 2009 "Best Companies to Work
For" list in January 2009, the company also ranked in the top 15 in the
following regional and global areas:
- D.C. Area: Number two in the Best Place to Work in the D.C. Area by the Washington Business Journal
- Australia: Number two in the "2009 Best Companies" list compiled by the Great Place to Work® Institute Australia
- United Kingdom: Number four in the UK's "50 Best Workplaces"
- India: Number nine in India's "Best Companies to Work For"
- Germany: Number nine in the "Best Workplaces in Germany" by the Great Place to Work Institute Germany
- Europe: Number 11 in the "50 Best Large Workplaces in Europe"
- Netherlands: Number 11 in the "25 Best Places to Work" by the Great Place to Work Institute Netherlands
- CIO 100 Award Honorees: IDG's CIO magazine awarded NetApp a 2009 CIO 100 award, which recognizes organizations around the world that exemplify the highest level of operational and strategic excellence in information technology.
- 2009 Uptime Institute Global Green 100 List: NetApp was named to the Global Green 100 List for 2009 by the Uptime Institute in recognition of its integral commitment to and progress toward reducing its energy consumption and carbon footprint.
- Service Capability & Performance (SCP) Standards: NetApp's Technical Support Center achieved certification under the prestigious Service Capability & Performance Standards after an extensive audit of its Research Triangle Park, North Carolina, support center.
- The NetApp quarterly results conference call will be broadcast live on
the Internet at http://investors.netapp.com on Wednesday, August 19, 2009,
at 2:00 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.
- The conference call will also be available live in a listen-only format
at (866) 272-9941 in the United States and (617) 213-8895 outside the
United States. The pass code for both numbers is 36316245.
- A replay will be available for 72 hours following the completion of the live call by dialing (888) 286-8010 in the United States and (617) 801-6888 outside the United States, using replay code 96418102. The Webcast replay will be posted on our Web site for at least one year.
NETAPP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
July 31, April 24,
2009 2009 (1)
----------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,784,388 $ 1,494,153
Short-term investments 878,409 1,110,053
Accounts receivable, net 331,661 446,537
Inventories 61,655 61,104
Prepaid expenses and other assets 112,660 119,887
Short-term deferred income taxes 164,934 207,050
----------- -----------
Total current assets 3,333,707 3,438,784
PROPERTY AND EQUIPMENT, net 796,266 807,923
GOODWILL 680,986 680,986
INTANGIBLE ASSETS, net 40,136 45,744
LONG-TERM INVESTMENTS AND RESTRICTED CASH 128,502 127,317
LONG-TERM DEFERRED INCOME TAXES AND OTHER ASSETS 335,295 283,625
----------- -----------
$ 5,314,892 $ 5,384,379
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 122,187 $ 137,826
Accrued compensation and related benefits 135,810 204,168
Other accrued liabilities 189,251 203,597
Accrual for GSA settlement - 128,715
Income taxes payable 2,073 4,732
Deferred revenue 1,028,851 1,013,569
----------- -----------
Total current liabilities 1,478,172 1,692,607
----------- -----------
LONG-TERM DEBT AND OTHER OBLIGATIONS 1,201,816 1,205,934
LONG-TERM DEFERRED REVENUE 685,771 701,649
----------- -----------
3,365,759 3,600,190
----------- -----------
STOCKHOLDERS' EQUITY 1,949,133 1,784,189
----------- -----------
$ 5,314,892 $ 5,384,379
=========== ===========
(1) Adjusted for the retrospective adoption of FSP APB No.14-1. See
accompanying note to the financial information.
NETAPP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except net income per share amounts)
(Unaudited)
Three Months Ended
----------------------
July 31, July 25,
2009 2008 (1)
---------- ----------
REVENUES:
Product $ 478,246 $ 547,855
Software entitlements and maintenance 165,290 144,412
Service 194,425 176,509
---------- ----------
Net revenues 837,961 868,776
---------- ----------
COST OF REVENUES:
Cost of product 212,535 249,778
Cost of software entitlements and maintenance 3,112 2,186
Cost of service 99,821 100,164
---------- ----------
Total cost of revenues 315,468 352,128
---------- ----------
GROSS MARGIN 522,493 516,648
---------- ----------
OPERATING EXPENSES:
Sales and marketing 301,433 303,108
Research and development 130,317 125,352
General and administrative 59,551 49,463
Restructuring and other charges 1,496 -
Merger termination proceeds, net (41,120) -
---------- ----------
Total operating expenses 451,677 477,923
---------- ----------
INCOME FROM OPERATIONS 70,816 38,725
OTHER INCOME (EXPENSES), net:
Interest income 8,617 15,476
Interest expense (19,201) (9,513)
Loss on investments, net (92) (2,621)
Other expenses, net (948) (1,989)
---------- ----------
Total other income (expenses), net (11,624) 1,353
---------- ----------
INCOME BEFORE INCOME TAXES 59,192 40,078
PROVISION FOR INCOME TAXES 7,528 5,355
---------- ----------
NET INCOME $ 51,664 $ 34,723
========== ==========
NET INCOME PER SHARE:
BASIC $ 0.15 $ 0.10
========== ==========
DILUTED $ 0.15 $ 0.10
========== ==========
SHARES USED IN PER SHARE CALCULATION:
BASIC 334,537 333,855
========== ==========
DILUTED 338,875 341,120
========== ==========
(1) Adjusted for the retrospective adoption of FSP APB No.14-1. See
accompanying note to the financial information.
NETAPP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
Three Months Ended
------------------------
July 31, July 25,
2009 2008 (1)
----------- -----------
Cash Flows from Operating Activities:
Net income $ 51,664 $ 34,723
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 43,041 41,549
Stock-based compensation 52,184 36,405
Loss on investments 298 2,621
Asset impairment and write-offs 294 179
Allowance for doubtful accounts (135) (36)
Accretion of discount and issue costs on notes 13,080 4,937
Deferred income taxes (2,082) (11,259)
Deferred rent (395) 827
Income tax benefit from stock-based
compensation 19,048 19,859
Excess tax benefit from stock-based
compensation - (10,142)
Changes in assets and liabilities:
Accounts receivable 117,255 150,292
Inventories (440) 6,742
Prepaid expenses and other assets 12,276 10,132
Accounts payable (14,501) (30,073)
Accrued compensation and related benefits (73,018) (54,439)
Other accrued liabilities (26,630) (1,403)
Accrual for GSA settlement (128,715) -
Income taxes payable (2,578) (2,393)
Long term other liabilities (12,568) (1,220)
Deferred revenue (9,844) 52,894
----------- -----------
Net cash provided by operating activities 38,234 250,195
----------- -----------
Cash Flows from Investing Activities:
Purchases of investments (160,897) (264,938)
Redemptions of investments 394,520 107,932
Change in restricted cash (1,794) 225
Purchases of nonmarketable securities - (125)
Proceeds from sales of nonmarketable securities 1,365 -
Purchases of property and equipment (24,714) (76,613)
----------- -----------
Net cash provided by (used in) investing
activities 208,480 (233,519)
----------- -----------
Cash Flows from Financing Activities:
Proceeds from sale of common stock related to
employee stock transactions 38,503 35,527
Tax withholding payments reimbursed by employee
stock transactions (5,227) (2,554)
Excess tax benefit from stock-based compensation - 10,142
Proceeds from issuance of convertible notes - 1,265,000
Payment of financing costs - (25,445)
Sale of common stock warrants - 163,059
Purchase of note hedge - (254,898)
Repayment of revolving credit facility - (41,835)
Repurchases of common stock - (399,981)
----------- -----------
Net cash provided by financing activities 33,276 749,015
----------- -----------
Effect of Exchange Rate Changes on Cash and Cash
Equivalents 10,245 225
Net Increase in Cash and Cash Equivalents 290,235 765,916
Cash and Cash Equivalents:
Beginning of period 1,494,153 936,479
----------- -----------
End of period $ 1,784,388 $ 1,702,395
=========== ===========
(1) Adjusted for the retrospective adoption of FSP APB No.14-1. See
accompanying note to the financial information.
NETAPP, INC.
SUPPLEMENTAL INFORMATION
(In thousands)
(Unaudited)
Three Months Ended July 31, 2009
----------------------------------------------------------
Amorti-
zation Stock- Mergers Restru-
of based Termina- cturing Non- Loss on
Intang- Compen- tion and Cash Invest-
ible sation Proceeds, Other Interest ments,
Assets Expenses Net Charges Expense Net Total
------- ------- -------- ------- ------- ------- -------
Cost of product
revenues 4,715 1,220 - - - - 5,935
Cost of service
revenues - 4,519 - - - - 4,519
Sales and
marketing
expense 848 23,965 - - - - 24,813
Research and
development
expense - 12,716 - - - - 12,716
General and
administrative
expense - 9,764 - - - - 9,764
Mergers
termination
proceeds, net - - (41,120) - - - (41,120)
Restructuring
and other
charges - - - 1,496 - - 1,496
Interest expense - - - - 13,080 - 13,080
------- ------- -------- ------- ------- ------- -------
Effect on income
before income
taxes $ 5,563 $52,184 ($41,120) $ 1,496 $13,080 - $31,203
Three Months Ended July 25, 2008
----------------------------------------------------------
Amorti-
zation Stock- Mergers Restru- Non-
of based Termina- cturing Cash Loss on
Intang- Compen- tion and Interest Invest-
ible sation Proceeds, Other Expense ments,
Assets Expenses Net Charges (1) Net Total
------- ------- -------- ------- ------- ------- -------
Cost of product
revenues $ 6,748 $ 948 - - - - $ 7,696
Cost of service
revenues - 3,041 - - - - 3,041
Sales and
marketing
expense 1,259 16,342 - - - - 17,601
Research and
development
expense - 10,188 - - - - 10,188
General and
administrative
expense - 5,886 - - - - 5,886
Interest expense - - - - 4,937 - 4,937
Loss on
investments,
net - - - - - 2,621 2,621
------- ------- -------- ------- ------- ------- -------
Effect on income
before income
taxes $ 8,007 $36,405 - - $ 4,937 $ 2,621 $51,970
(1) Adjusted for the retrospective adoption of FSP APB No.14-1. See
accompanying note to the financial information.
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
------------------------
July 31, July 25,
2009 2008 (1)
----------- -----------
SUMMARY RECONCILIATION OF NET INCOME
NET INCOME $ 51,664 $ 34,723
Adjustments:
Amortization of intangible assets 5,563 8,007
Stock-based compensation expenses 52,184 36,405
Merger termination proceeds, net (41,120) -
Restructuring and other charges 1,496 -
Non-cash interest expense 13,080 4,937
Loss on investments, net - 2,621
Discrete GAAP tax provision items (7,192) 492
Income tax effect 257 (11,245)
----------- -----------
NON-GAAP NET INCOME $ 75,932 $ 75,940
=========== ===========
NET INCOME PER SHARE $ 0.152 $ 0.102
Adjustments:
Amortization of intangible assets 0.016 0.023
Stock-based compensation expenses 0.154 0.107
Merger termination proceeds, net (0.121) -
Restructuring and other charges 0.004 -
Non-cash interest expense 0.039 0.014
Loss on investments, net - 0.008
Discrete GAAP tax provision items (0.021) 0.001
Income tax effect 0.001 (0.033)
----------- -----------
NON-GAAP NET INCOME PER SHARE $ 0.224 $ 0.222
=========== ===========
(1) Adjusted for the retrospective adoption of FSP APB No.14-1. See
accompanying note to the financial information.
NETAPP, INC.
NOTE TO FINANCIAL INFORMATION
(1) Effective April 25, 2009, we adopted FASB Staff Position No. APB 14-1,
"Accounting for Convertible Debt Instruments That May Be Settled in
Cash upon Conversion (Including Partial Cash Settlement)"
("FSP APB 14-1"), which was required to be applied retrospectively.
We have adjusted prior year financial information to reflect our
adoption of FSP APB 14-1.
Contact Information: 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