-----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, RGkmnSvcOPeF3UTGBZ9Fnc/8afvsmokTVv3fU/Eozm6+oh0Bu6McIZipdAm+4+mM V//pSdS/su9CZEngM7/M0w== 0001157523-03-004392.txt : 20030819 0001157523-03-004392.hdr.sgml : 20030819 20030819165034 ACCESSION NUMBER: 0001157523-03-004392 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030819 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030819 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: 03856195 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 a4457669.txt NETWORK APPLIANCE 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): August 19, 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 12. The information is furnished pursuant to "Item 12. Results of Operations and Financial Condition" in accordance with SEC Release No. 33-8216 (March 27, 2003). On August 19, 2003, Network Appliance, Inc. issued a press release announcing its earnings for the first quarter fiscal year 2004. 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. August 19, 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 August 19, 2003. EX-99 3 a4457669_ex991.txt NETWORK APPLIANCE EXHIBIT 99.1 Exhibit 99.1 Network Appliance Announces Results for First Quarter Fiscal Year 2004; Strong Growth and Improved Operating Leverage SUNNYVALE, Calif.--(BUSINESS WIRE)--Aug. 19, 2003--Network Appliance, Inc. (Nasdaq:NTAP), today announced results for the first quarter of fiscal year 2004. Revenues for the first fiscal quarter were $260.5 million, an increase of 26% compared to revenues of $206.8 million for the same period a year ago and an 8% increase compared to $241.6 million in the prior quarter. For the first quarter, GAAP net income increased 67% to $27.1 million, or $0.08 per share (1), compared to GAAP net income of $16.2 million, or $0.05 per share for the same period in the prior year. Pro forma (2) net income for the first quarter increased 59% to $28.7 million, or $0.08 per share, compared to pro forma net income of $18.0 million, or $0.05 per share for the same period a year ago. "This quarter's results were highlighted by strong revenue growth and continued improvement in the operating profit margin," said Dan Warmenhoven, CEO of Network Appliance. "We continue to focus on our partnerships, innovative technology, and service and support solutions to help our customers meet their ever-increasing storage and storage management requirements." Quarterly Highlights In the first quarter of fiscal year 2004, Network Appliance continued to enhance its enterprise solutions, broaden its customer portfolio, expand its partnerships with other industry leaders, and gain market acceptance for its unified storage, iSCSI, NearStore(TM) and NetCache(R) solutions. The company reinforced its commitment to interoperable management solutions by releasing the Manage ONTAP(TM) API Suite and Software Developers' Kit, which provides developers open access to Network Appliance(TM) application programming interfaces, enabling partners to more tightly integrate and synergize their management applications for optimal performance in NetApp(R) environments. During the first quarter, customers from a variety of industries worldwide selected Network Appliance to store, manage and consolidate their business- and mission-critical data. Network Appliance enterprise storage and service wins include Ball State University; Continental Airlines; Siemens Business Services; Skidmore, Owings & Merrill LLP; Ticketmaster; and Visa Debit Processing Services. NearStore customer wins included EDS; Ford Motor Europe; and Jefferson Pilot Financial. Network Appliance also expanded its channel strategy by signing distribution agreements with the North American Computer Products group of Arrow Electronics and Avnet Hall-Mark. The agreements enable new Network Appliance distributors to provide value-added resellers the tools, training, marketing, sales, and technical services to build and expand their storage businesses and open up greater market penetration opportunities for Network Appliance. Network Appliance extended its strategic alliances with Oracle Corporation and Fujitsu Siemens Computers to offer low-cost, scalable, integrated server and storage platform solutions optimized for Oracle9i Database with Oracle9i Real Application Clusters (RAC) for Linux(R). Network Appliance, Oracle, and Fujitsu Siemens Computers also opened Europe's first Enterprise Technology Center dedicated to assisting users with implementing enterprise solutions. More than 500 customers have downloaded NetApp iSCSI protocols to test in their enterprise environments, and Network Appliance continues to take a leadership position in iSCSI. In addition, IBM announced support of Network Appliance's iSCSI solutions in IBM DB2 Universal Database environments, helping customers leverage the benefits of a simple and more affordable storage area network infrastructure. In other partner-related news, Network Appliance extended its partnership with McDATA Corporation to deliver optimized networked storage solutions for companies of all sizes. NetApp also expanded its leadership efforts in Linux technology by partnering with Red Hat and SuSE Linux to develop enterprise storage solutions on Linux technology. FOOTNOTE (1) Earnings per share represents the diluted number of shares for all periods presented. (2) Pro forma results exclude amortization of intangible assets, stock compensation, restructuring charges, net gain or loss on investments, gain on sale of intangible assets, and the related effects on income taxes. Conference Call Information The NetApp quarterly results 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, August 19, 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 547054. 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(TM)" Information about Network Appliance solutions and services is available at www.netapp.com. NetApp and NetCache are registered trademarks and Network Appliance, NearStore, Manage ONTAP and The evolution of storage 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 market acceptance of unified storage and other NetApp solutions 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: 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) August 1, 2003 April 30, 2003 ---------------- ---------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $320,679 $284,161 Short-term investments 329,426 334,677 Accounts receivable, net 142,290 151,637 Inventories 36,694 31,559 Prepaid expenses and other 24,225 24,014 Deferred income taxes 27,906 27,444 ---------------- ---------------- Total current assets 881,220 853,492 PROPERTY AND EQUIPMENT, net 363,677 362,862 GOODWILL 48,212 48,212 INTANGIBLE ASSETS, net 10,455 2,954 OTHER ASSETS 53,787 51,653 ---------------- ---------------- $1,357,351 $1,319,173 ================ ================ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $41,802 $39,600 Income taxes payable 22,984 30,256 Accrued compensation and related benefits 35,376 40,647 Other accrued liabilities 50,220 43,841 Deferred revenue 110,247 110,672 ---------------- ---------------- Total current liabilities 260,629 265,016 LONG-TERM DEFERRED REVENUE 79,035 63,698 LONG-TERM OBLIGATIONS 3,254 3,102 ---------------- ---------------- 342,918 331,816 ---------------- ---------------- STOCKHOLDERS' EQUITY 1,014,433 987,357 ---------------- ---------------- $1,357,351 $1,319,173 ================ ================ NETWORK APPLIANCE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Quarter Ended ------------- August 1, 2003 July 26, 2002 ---------------- --------------- REVENUES: Product revenue $235,786 $186,740 Service revenue 24,723 20,088 ---------------- --------------- Total revenues 260,509 206,828 ---------------- --------------- COST OF REVENUES: Cost of product revenue 85,039 63,655 Cost of service revenue 19,347 15,458 ---------------- --------------- Total cost of revenues 104,386 79,113 ---------------- --------------- GROSS MARGIN 156,123 127,715 ---------------- --------------- OPERATING EXPENSES: Sales and marketing 79,356 71,902 Research and development 31,541 27,868 General and administrative 12,265 7,438 Stock compensation 654 983 ---------------- --------------- Total operating expenses 123,816 108,191 ---------------- --------------- INCOME FROM OPERATIONS 32,307 19,524 OTHER INCOME (EXPENSE), net: Interest income 3,045 3,151 Other expense, net (47) (1,000) Net gain/(loss) on investments 145 (726) Gain on sale of intangible asset -- 604 ---------------- --------------- Total other income, net 3,143 2,029 ---------------- --------------- INCOME BEFORE INCOME TAXES 35,450 21,553 PROVISION FOR INCOME TAXES 8,377 5,388 ---------------- --------------- NET INCOME $27,073 $16,165 ================ =============== NET INCOME PER SHARE: BASIC $0.08 $0.05 ================ =============== DILUTED $0.08 $0.05 ================ =============== SHARES USED IN PER SHARE CALCULATION: BASIC 341,687 335,783 ================ =============== DILUTED 358,497 350,122 ================ =============== NETWORK APPLIANCE, INC. RECONCILIATION OF NON-GAAP AND GAAP IN THE CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Quarter Ended ------------- August 1, 2003 July 26, 2002 ---------------- --------------- SUPPLEMENTAL INFORMATION: NET INCOME $27,073 $16,165 Adjustments: Amortization of intangible assets 1,364 1,386 Stock compensation 654 983 Net (gain)/loss on investments (145) 726 Gain on sale of intangible asset -- (604) Income tax effect (207) (623) ---------------- --------------- PROFORMA NET INCOME $28,739 $18,033 ================ =============== DILUTED PRO FORMA NET INCOME PER SHARE $0.08 $0.05 ================ =============== SHARES USED IN DILUTED PRO FORMA NET INCOME PER SHARE CALCULATION 358,497 350,122 ================ =============== NETWORK APPLIANCE, INC. PRO FORMA (1) CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Quarter Ended ------------- August 1, 2003 July 26, 2002 --------------- -------------- REVENUES: Product revenue $235,786 $186,740 Service revenue 24,723 20,088 --------------- -------------- Total revenues 260,509 206,828 --------------- -------------- COST OF REVENUES: Cost of product revenue 83,675 62,269 Cost of service revenue 19,347 15,458 --------------- -------------- Total cost of revenues 103,022 77,727 --------------- -------------- GROSS MARGIN 157,487 129,101 --------------- -------------- OPERATING EXPENSES: Sales and marketing 79,356 71,902 Research and development 31,541 27,868 General and administrative 12,265 7,438 --------------- -------------- Total operating expenses 123,162 107,208 --------------- -------------- INCOME FROM OPERATIONS 34,325 21,893 OTHER INCOME, net 2,998 2,151 --------------- -------------- INCOME BEFORE INCOME TAXES 37,323 24,044 PROVISION FOR INCOME TAXES 8,584 6,011 --------------- -------------- NET INCOME $28,739 $18,033 =============== ============== NET INCOME PER SHARE: BASIC $0.08 $0.05 =============== ============== DILUTED $0.08 $0.05 =============== ============== SHARES USED IN PER SHARE CALCULATION: BASIC 341,687 335,783 =============== ============== DILUTED 358,497 350,122 =============== ============== (1) Pro forma results of operations exclude amortization of intangible assets, stock compensation, net gain/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-----