NetApp Announces Selected Preliminary First Quarter of Fiscal Year 2020 Results
Selected Preliminary First Quarter of Fiscal Year 2020 Results
Preliminarily, first quarter of fiscal year 2020 net revenues are expected to be between
Revised Full Fiscal Year 2020 Outlook
Our revised expectation for full fiscal year 2020 is that net revenues will be down between 5% and 10% year-over-year, below the company’s previously stated full fiscal year 2020 guidance issued on
“While we are disappointed that our preliminary results for the first quarter are lower than we had previously anticipated, we remain confident in our long-term strategy and the health of our business model,” said
Webcast and Conference Call Information
About
“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, but are not limited to, statements about our preliminary first quarter of fiscal year 2020 results, all of the statements made under the Revised Full Fiscal Year 2020 Outlook section, and statements about our long-term strategy and business model and our ability to return to growth by reallocating investments. All of these forward-looking statements involve risk and uncertainty. Actual results may differ materially from these statements for a variety of reasons, including, without limitation, general global macroeconomic and market conditions, changes in U.S. government spending, the capital spending environment and matters specific to our business, such as our ability to expand our total available market, acquire new accounts, expand existing accounts, our ability to successfully execute on our Data Fabric strategy and consistently execute to generate profitable growth and stockholder return and our ability to manage our gross profit margins. These and other equally important factors are described in reports and documents we file from time to time with the
Footnotes
1GAAP net income per share and non-GAAP net income per share are calculated using the diluted number of shares.
2Non-GAAP net income excludes, when applicable, (a) amortization of intangible assets, (b) stock-based compensation expenses, (c) litigation settlements, (d) acquisition-related expenses, (e) restructuring charges, (f) asset impairments, (g) gains/losses on the sale or derecognition of assets, and (h) our GAAP tax provision, but includes a non-GAAP tax provision based upon our projected annual non-GAAP effective tax rate for the first three quarters of the fiscal year and an actual non-GAAP tax provision for the fourth quarter of the fiscal year.
NetApp Usage of Non-GAAP Financial Information
To supplement NetApp’s condensed consolidated financial statement information presented in accordance with generally accepted accounting principles in
NetApp’s management uses these non-GAAP measures in making operating decisions because it believes the measurements provide meaningful supplemental information regarding NetApp’s ongoing operational performance. These non-GAAP financial measures are used to: (1) measure company performance against historical results, (2) facilitate comparisons to our competitors’ operating results and (3) allow greater transparency with respect to information used by management in financial and operational decision making.
A. Amortization of intangible assets.
B. Stock-based compensation expenses.
C. Litigation settlements.
D. Acquisition-related expenses.
E. Restructuring charges. These charges consist of restructuring charges that are incurred based on the particular facts and circumstances of restructuring decisions, including employment and contractual settlement terms, and other related charges, and can vary in size and frequency. We therefore exclude them in our assessment of operational performance.
F. Asset impairments. These are non-cash charges to write down assets when there is an indication that the asset has become impaired. Management finds it useful to exclude these non-cash charges due to the unpredictability of these events in its assessment of operational performance.
G. Gains/losses on the sale or derecognition of assets. These are gains/losses from the sale of our properties and other transactions in which we transfer control of assets to a third party. Management believes that these transactions do not reflect the results of our underlying, on-going business and, therefore, cannot be relied upon for future planning or forecasting.
H. Income tax adjustments. NetApp’s non-GAAP tax provision is based upon a projected annual non-GAAP effective tax rate for the first three quarters of the fiscal year and an actual non-GAAP tax provision for the fourth quarter of the fiscal year. The non-GAAP tax provision also excludes, when applicable, (a) tax charges or benefits in the current period that relate to one or more prior fiscal periods that are a result of events such as changes in tax legislation, authoritative guidance, income tax audit settlements and/or court decisions, (b) tax charges or benefits that are attributable to unusual or non-recurring book and/or tax accounting method changes, (c) tax charges that are a result of a non-routine foreign cash repatriation, (d) tax charges or benefits that are a result of infrequent restructuring of the Company’s tax structure, (e) tax charges or benefits that are a result of a change in valuation allowance, and (f) tax charges resulting from the integration of intellectual properties from acquisitions. Management believes that the use of non-GAAP tax provisions provides a more meaningful measure of the Company’s operational performance.
These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles.
NETAPP, INC. |
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RECONCILIATION OF NON-GAAP TO GAAP |
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PRELIMINARY EARNINGS PER SHARE |
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FIRST QUARTER FISCAL 2020 |
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First Quarter |
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Fiscal 2020 |
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Non-GAAP Guidance - Net Income Per Share |
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$0.55 - $0.60 |
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Adjustments of Specific Items to Net Income |
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Per Share for the First Quarter Fiscal 2020: |
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Amortization of intangible assets |
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(0.04 |
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Stock-based compensation expense |
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(0.17 |
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Restructuring charges |
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(0.09 |
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Income tax effects |
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0.05 |
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Total Adjustments |
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(0.25 |
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GAAP Guidance - Net Income Per Share |
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$0.30 - $0.35 |
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View source version on businesswire.com: https://www.businesswire.com/news/home/20190801005995/en/
Source:
(Press)
Amelia Vierra
1 408 822 6403
amelia.vierra@netapp.com
(Investors)
Lance Berger
1 408 822 6628
lance.berger@netapp.com