-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KBh0YHfA1UcKrSukUN+GaagEJemeVuiZROf+kRVEfI38vl015TH39VX9IMxJ9vJs 0awhxYK+w21rsLgtxxWN4Q== 0001157523-03-001865.txt : 20030513 0001157523-03-001865.hdr.sgml : 20030513 20030513161814 ACCESSION NUMBER: 0001157523-03-001865 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030513 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NETWORK APPLIANCE INC CENTRAL INDEX KEY: 0001002047 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER STORAGE DEVICES [3572] IRS NUMBER: 770307520 STATE OF INCORPORATION: CA FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27130 FILM NUMBER: 03695812 BUSINESS ADDRESS: STREET 1: 495 EAST JAVA DR CITY: SUNNYVALE STATE: CA ZIP: 94089 BUSINESS PHONE: 4088226000 MAIL ADDRESS: STREET 1: 495 EAST JAVA DR CITY: SUNNYVALE STATE: CA ZIP: 94089 8-K 1 a4395987.txt NETWORK APPLIANCE, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): May 13, 2003 ---------------- Network Appliance, Inc. (Exact name of Registrant as specified in its charter) Delaware 0-27130 77-0307520 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation or organization) File Number) Identification Number) 495 East Java Drive Sunnyvale, CA 94089 (Address of principal executive offices) (Zip Code) (408) 822-6000 (Registrant's telephone number, including area code) Item 9. The information contained in Item 9 of this Current Report is being furnished pursuant to "Item 12. Results of Operations and Financial Condition" in accordance with SEC Release No. 33-8216 (March 27, 2003). On May 13, 2003, Network Appliance, Inc. issued a press release announcing its earnings for the fourth quarter and fiscal year ended April 30, 2003. The press release, attached hereto as Exhibit 99.1, is being furnished on this Form 8-K. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. May 13, 2003 By: /s/ Steven Gomo --------------------------- Steven J. Gomo Chief Financial Officer Index to Exhibits Exhibit Description - ------- ----------- 99.1 Press release of Network Appliance, Inc. issued on May 13, 2003. EX-99 3 a4395987ex991.txt EXHIBIT 99.1 Exhibit 99.1 Network Appliance Announces Results for Fourth Quarter and Fiscal Year End 2003; Sixth Consecutive Quarter of Growth SUNNYVALE, Calif.--(BUSINESS WIRE)--May 13, 2003--Network Appliance, Inc. (Nasdaq:NTAP) today announced results for the fourth quarter and fiscal year 2003. Revenues for the fourth fiscal quarter were $241.6 million, an increase of 18% compared to revenues of $204.9 million for the same period a year ago, and a 6% increase compared to $228.5 million in the prior quarter. For the fourth quarter, GAAP net income increased 219% to $24.8 million, or $0.07 per share, compared to GAAP net income of $7.8 million, or $0.02 per share for the same period in the prior year. Pro forma net income for the fourth quarter increased 75% to $25.5 million, or $0.07 per share, compared to pro forma net income of $14.6 million, or $0.04 per share for the same period a year ago. Revenues for fiscal year 2003 were $892.1 million, an increase of 12% compared to revenues of $798.4 million for fiscal year 2002. For fiscal year 2003, GAAP net income was $76.5 million, or $0.22 per share, compared to GAAP net income of $3.0 million, or $0.01 per share for fiscal year 2002. Pro forma net income for fiscal year 2003 increased 97% to $83.8 million, or $0.24 per share, compared to pro forma net income of $42.5 million, or $0.12 per share for fiscal year 2002. "We are pleased with our performance for the quarter, particularly with our cash generation and the continued strength of the balance sheet. Our 12% increase in revenue over the last fiscal year is a direct reflection of our strong sales and operational performance," said Dan Warmenhoven, CEO of Network Appliance. "NetApp remains an industry market leader with our innovative products being recognized by eWeek and Network Magazine for best products of the year." Quarterly Highlights Throughout the fourth quarter and fiscal year 2003, Network Appliance accelerated its momentum by developing new storage solutions, expanding its customer base, strengthening its partnerships, and gaining market acceptance for its new and expanded unified storage, NearStore(TM), and NetCache(R) families. Product milestones for the fourth quarter included the launch of Network Appliance's first native iSCSI storage solution in the form of iSCSI protocol support and host attach kits for NetApp(R) unified storage systems. The company also has extended its heterogeneous data protection and storage consolidation portfolio with the debut of the NearStore R150 system, SnapVault(TM) software, MetroCluster software, and a certified NearStore and VERITAS Volume Replicator offering. In addition, Network Appliance announced SnapLock(TM), an open access data retention solution targeted at regulated data industries such as financial services, healthcare, pharmaceuticals, and government. On other product-related milestones, Network Appliance won two awards in the fourth quarter including Best Enterprise IT Product of the Year for its FAS900 by eWeek, and Best Product of the Year for its NetApp NearStore R100 by Network Magazine. During the fourth quarter, customers from a variety of industries worldwide selected Network Appliance to store, manage and consolidate their business- and mission-critical data in the fourth quarter. Unified and SAN storage wins include B. Braun Medical France, Brocade Communications Systems, Inc., L'Oreal, Nationwide Insurance, and SAS. Other enterprise customer wins include Emerson, Honda, Krispy Kreme Doughnuts, Inovant, Statoil, and the U.S. Army. NearStore customer wins included Affymetrix, Johnson Controls and The Home Depot. Also during the fourth quarter, Network Appliance continued to expand its unified storage strategy and solution initiatives through partnerships with key industry leaders. NetApp and HDS announced the availability of their co-developed, co-branded HDS NetApp Enterprise NAS Gateway. NetApp and Intel announced their partnership to co-develop and market standards-compliant iSCSI solutions. Network Appliance also announced today that the Board of Directors has approved a $150 million stock repurchase program to purchase shares of its outstanding common stock. Network Appliance's fiscal year 2004 will be a 53-week year with the extra week falling into the first quarter. The company's targeted quarterly results dates for the fiscal year are August 19, 2003, November 18, 2003, February 17, 2004 and May 18, 2004. Pro forma results exclude amortization of goodwill and intangible assets, stock compensation, restructuring charges, net loss on investments, gain on sale of intangible assets, and the related effects on income taxes. Earnings per share represents the diluted number of shares for all periods presented. The conference call will be broadcast live via the Internet from the investors section of Network Appliance's Web site at http://investors.netapp.com on Tuesday, May 13, 2003 at 2:00 p.m. Pacific Time. The conference call will also be available live in a listen-only format at 800/218-0530 in the United States, and 212/329-1452 outside the United States. A replay will be available for 72 hours following completion of the live call by dialing 800/405-2236 in the United States, and 303/590-3000 outside the United States, replay code 534799. About Network Appliance Network Appliance is a world leader in unified storage solutions for today's data-intensive enterprise. Since its inception in 1992, Network Appliance has delivered technology, product, and partner firsts that continue to drive the evolution of storage. Information about Network Appliance(TM) solutions and services is available at www.netapp.com. NetApp and NetCache are registered trademarks. Network Appliance, NearStore, SnapVault, and SnapLock 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. Network Appliance Usage of Pro forma 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. In addition, 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. 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. "Safe Harbor" Statement under U.S. Private Securities Litigation Reform Act of 1995 The statement regarding the stock repurchase program is a forward-looking statement within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statement regarding future events or the future financial performance of Network Appliance Inc. that involves risks or uncertainties. In evaluating these statements, readers should specifically consider various factors that could cause actual events or results to differ materially from those indicated, including without limitation: continuing decline in the general economic conditions, customer demand for products and services, customer acceptance of product architectures, increased competition, inherent risk in the international operations, and other important factors as 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. Note to editors: tables to follow Note to Shareholder.com: NTAP - FIN NETWORK APPLIANCE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) April 30, 2003 April 30, 2002 ---------------- ---------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 284,161 $ 210,756 Short-term investments 334,677 243,371 Accounts receivable, net 151,637 146,511 Inventories 31,559 23,849 Prepaid expenses and other 24,014 22,112 Deferred income taxes 27,444 32,529 ---------------- ---------------- Total current assets 853,492 679,128 PROPERTY AND EQUIPMENT, net 362,862 345,195 GOODWILL 48,212 49,422 INTANGIBLE ASSETS, net 2,954 8,828 OTHER ASSETS 51,653 26,233 ---------------- ---------------- $1,319,173 $1,108,806 ================ ================ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 39,600 $ 40,243 Income taxes payable 30,256 17,073 Accrued compensation and related benefits 40,647 39,434 Other accrued liabilities 43,841 42,671 Deferred revenue 110,672 76,139 ---------------- ---------------- Total current liabilities 265,016 215,560 LONG-TERM DEFERRED REVENUE 63,698 31,036 LONG-TERM OBLIGATIONS 3,102 3,734 ---------------- ---------------- 331,816 250,330 ---------------- ---------------- STOCKHOLDERS' EQUITY 987,357 858,476 ---------------- ---------------- $1,319,173 $1,108,806 ================ ================ NETWORK APPLIANCE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Quarter Ended Year Ended ---------------------- ---------------------- April 30, April 30, April 30, April 30, 2003 2002 2003 2002 ----------- --------- --------- ---------- REVENUES Product revenue $217,138 $185,263 $802,281 $729,916 Service revenue 24,467 19,616 89,787 68,453 ----------- --------- --------- ---------- Total revenues 241,605 204,879 892,068 798,369 ----------- --------- --------- ---------- COST OF REVENUES Cost of product revenue 74,427 58,725 274,211 261,857 Cost of service revenue 18,781 15,048 65,953 55,989 ----------- --------- --------- ---------- Total cost of revenues 93,208 73,773 340,164 317,846 ----------- --------- --------- ---------- GROSS MARGIN 148,397 131,106 551,904 480,523 ----------- --------- --------- ---------- OPERATING EXPENSES: Sales and marketing 79,158 75,065 304,236 284,355 Research and development 28,333 30,837 112,863 116,725 General and administrative 10,419 8,781 36,822 40,182 Amortization of goodwill and intangible assets 1,364 5,217 5,478 20,895 Stock compensation 536 1,447 3,642 7,202 Restructuring charges -- 4,246 1,257 12,226 ----------- --------- --------- ---------- Total operating expenses 119,810 125,593 464,298 481,585 ----------- --------- --------- ---------- INCOME (LOSS) FROM OPERATIONS 28,587 5,513 87,606 (1,062) OTHER INCOME (EXPENSE), net: Interest income 3,116 3,839 12,215 18,507 Other expense, net (462) (1,039) (1,381) (1,904) Net loss on investments (503) -- (1,229) (13,008) Gain on sale of intangible asset -- -- 604 -- ----------- --------- --------- ---------- Total other income, net 2,151 2,800 10,209 3,595 ----------- --------- --------- ---------- INCOME BEFORE INCOME TAXES 30,738 8,313 97,815 2,533 PROVISION (BENEFIT) FOR INCOME TAXES 5,915 540 21,343 (500) ----------- --------- --------- ---------- NET INCOME $ 24,823 $ 7,773 $ 76,472 $ 3,033 =========== ========= ========= ========== NET INCOME PER SHARE: BASIC $ 0.07 $ 0.02 $ 0.23 $ 0.01 =========== ========= ========= ========== DILUTED $ 0.07 $ 0.02 $ 0.22 $ 0.01 =========== ========= ========= ========== SHARES USED IN PER SHARE CALCULATION: BASIC 339,854 334,401 337,647 331,645 =========== ========= ========= ========== DILUTED 352,144 353,841 350,122 350,498 =========== ========= ========= ========== SUPPLEMENTAL INFORMATION: NET INCOME $ 24,823 $ 7,773 $ 76,472 $ 3,033 Adjustments: Amortization of goodwill -- 3,786 -- 15,169 Amortization of intangible assets 1,364 1,431 5,478 5,726 Stock compensation 536 1,447 3,642 7,202 Restructuring charges 0 4,246 1,257 12,226 Net loss on investments 503 -- 1,229 13,008 Gain on sale of intangible asset -- -- (604) -- Income tax effect (1,707) (4,073) (3,685) (13,907) ----------- --------- --------- ---------- PROFORMA NET INCOME $ 25,519 $ 14,610 $ 83,789 $ 42,457 =========== ========= ========= ========== DILUTED PRO FORMA NET INCOME PER SHARE $ 0.07 $ 0.04 $ 0.24 $ 0.12 =========== ========= ========= ========== SHARES USED IN DILUTED PRO FORMA NET INCOME PER SHARE CALCULATION: 352,144 353,841 350,122 350,498 =========== ========= ========= ========== NETWORK APPLIANCE, INC. PRO FORMA (1) CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Quarter Ended Year Ended --------------------- ---------------------- April 30, April 30, April 30, April 30, 2003 2002 2003 2002 --------- --------- --------- --------- REVENUES Product revenue $217,138 $185,263 $802,281 $729,916 Service revenue 24,467 19,616 89,787 68,453 --------- --------- --------- --------- Total revenues 241,605 204,879 892,068 798,369 --------- --------- --------- --------- COST OF REVENUES Cost of product revenue 74,427 58,725 274,211 261,857 Cost of service revenue 18,781 15,048 65,953 55,989 --------- --------- --------- --------- Total cost of revenues 93,208 73,773 340,164 317,846 --------- --------- --------- --------- GROSS MARGIN 148,397 131,106 551,904 480,523 --------- --------- --------- --------- OPERATING EXPENSES: Sales and marketing 79,158 75,065 304,236 284,355 Research and development 28,333 30,837 112,863 116,725 General and administrative 10,419 8,781 36,822 40,182 --------- --------- --------- --------- Total operating expenses 117,910 114,683 453,921 441,262 --------- --------- --------- --------- INCOME FROM OPERATIONS 30,487 16,423 97,983 39,261 OTHER INCOME, net 2,654 2,800 10,834 16,603 --------- --------- --------- --------- INCOME BEFORE INCOME TAXES 33,141 19,223 108,817 55,864 PROVISION FOR INCOME TAXES 7,622 4,613 25,028 13,407 --------- --------- --------- --------- NET INCOME $ 25,519 $14,610 $ 83,789 $ 42,457 ========= ========= ========= ========= NET INCOME PER SHARE: BASIC $ 0.08 $0.04 $ 0.25 $ 0.13 ========= ========= ========= ========= DILUTED $ 0.07 $0.04 $ 0.24 $ 0.12 ========= ========= ========= ========= SHARES USED IN PER SHARE CALCULATION: BASIC 339,854 334,401 337,647 331,645 ========= ========= ========= ========= DILUTED 352,144 353,841 350,122 350,498 ========= ========= ========= ========= (1) Pro forma results of operations exclude amortization of goodwill and intangible assets, stock compensation, restructuring charges, net loss on investments, gain on sale of intangible asset and the related effects on income taxes. CONTACT: Network Appliance Marla Dierkes, 408/822-3580 (Press) marla@netapp.com Rod Mathews, 408/822-6108 (Investor) rmathews@netapp.com Billie Fagenstrom, 408/822-6428 (Investor) billief@netapp.com -----END PRIVACY-ENHANCED MESSAGE-----