Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 9, 2009
NETAPP, 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) | File Number) | Identification Number) |
495 East Java Drive
Sunnyvale, CA 94089
(Address of principal executive offices) (Zip Code)
Sunnyvale, CA 94089
(Address of principal executive offices) (Zip Code)
(408) 822-6000
(Registrant’s telephone number, including area code)
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Table of Contents
Item 2.02 Results of Operations and Financial Condition
On February 11, 2009, NetApp, Inc. (the “Company”) issued a press release announcing its
earnings for the third quarter of fiscal 2009. The press release is attached as an exhibit to this
Current Report on Form 8-K, and the information set forth therein is hereby incorporated by
reference into this Item 2.02.
The information in this Item 2.02 and Exhibit 99.1 of Item 9.01 in this Current Report on Form
8-K shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be deemed
incorporated by reference into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended.
Item 2.05 Costs Associated with Exit or Disposal Activities.
On February 11, 2009, the Company announced a restructuring of the Company’s worldwide
operations pursuant to which the Company expects to incur aggregate restructuring charges of
approximately $30 million to $35 million in the fourth quarter of fiscal 2009. The restructuring
was implemented in response to the worsening global macro-economic conditions and uncertainty about
IT spending during the 2009 calendar year. In connection with this restructuring, the Company
announced a workforce reduction of approximately 540 employees, or approximately 6%, of the
Company’s worldwide workforce. Of the aggregate restructuring charges noted above, the Company
estimates that it will incur charges of approximately $25 million to $28 million related to
termination and severance payments associated with the workforce restructuring, and an estimated
additional $5 million to $7 million in lease termination charges and other costs related to the
restructuring. Substantially all of the charges will result in future cash payments. The Company
expects to complete these restructuring actions before December 31,
2009.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers
Resignation of Director
On February 9, 2009, Carol Bartz notified the Company that she intends to resign from the Company’s
Board of Directors, including all committees, prior to the end of the Company’s fiscal year. The
Company intends to amend its bylaws to reduce the number of positions on the Board of Directors
from eleven (11) to ten (10) contemporaneously with the effective date of Ms. Bartz’s resignation.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
NetApp, Inc.’s February 11, 2009 press release is hereby furnished as Exhibit 99.1 on this
Current Report on Form 8-K in connection with the disclosures under Item 2.02 of this Current
Report on Form 8-K.
Table of Contents
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.
| NETAPP, INC. (Registrant) |
||||
February 11, 2009
|
By: | /s/ Andrew Kryder | ||
| Andrew Kryder | ||||
| Secretary, General Counsel, and | ||||
| Senior Vice President, Legal and Tax | ||||
Table of Contents
Index to Exhibits
| Exhibit | Description | |
99.1
|
Press release of NetApp, Inc. issued on February 11, 2009. |
Exhibit 99.1
Press Contact:
|
Investor Contacts: | |||
NetApp
|
NetApp | NetApp | ||
Jodi Baumann
|
Tara Dhillon | Billie Fagenstrom | ||
Ph: (408) 822-3974
|
Ph: (408) 822-6909 | Ph: (408) 822-6428 | ||
jodi@netapp.com
|
tara@netapp.com | billief@netapp.com |
NETAPP ANNOUNCES RESULTS FOR THIRD
QUARTER OF FISCAL YEAR 2009
QUARTER OF FISCAL YEAR 2009
SUNNYVALE, Calif. – February 11, 2009 — NetApp (NASDAQ: NTAP) today reported results for the third
fiscal quarter of 2009. Including the impact of a $128 million accrual to value a contingency
related to a dispute with the General Services Administration (GSA), GAAP revenues for the third
fiscal quarter of 2009 totaled $746 million compared to GAAP and Non-GAAP revenues of $884 million
for the same period a year ago. Non-GAAP revenues1 for the third fiscal quarter,
excluding the impact of the $128 million GSA accrual, totaled $874 million.
GAAP net loss for the third quarter of fiscal year 2009 was $75 million, or $0.23 per
share2 compared to GAAP net income of $102 million, or $0.29 per share for the same
period in the prior year. Non-GAAP net income3 for the third fiscal quarter of 2009 was
$93 million, or $0.28 per share, compared to non-GAAP net income of $132 million, or $0.37 per
share for the same period a year ago.
GAAP revenues for the first nine months of the current fiscal year totaled $2.5 billion
compared to GAAP and non-GAAP revenues of $2.4 billion for the first nine months of the prior
year, an increase of 7% year over year. Non-GAAP revenues for the first nine months of the
current fiscal year, excluding the impact of the $128 million GSA accrual, totaled $2.7
billion.
GAAP net income for the first nine months of the current fiscal year totaled $11 million,
or $0.03 per share, compared to GAAP net income of $220 million, or $0.60 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 $262 million, or $0.78 per share, compared
to non-GAAP net income of $324 million, or $0.89 per share for the first nine months of the
prior fiscal year.
“Business levels softened in January as many customers’ budgets contracted, resulting in lower
revenues than we had expected. At the same time, our storage efficiency value proposition resonates
in challenging economic times, and we gained a record number of new customers during the quarter,”
said Dan Warmenhoven, chairman and CEO. “Operationally, the NetApp team also did a stellar job,
decreasing non-GAAP operating expenses by $30 million in one quarter. However, we needed to make
further reductions in order to optimize our resource allocation for our strategic growth
initiatives. Therefore, we have implemented a restructuring that unfortunately includes the
elimination of approximately 6% of our global workforce. While this was a very difficult decision,
we believe our actions will best position the company for additional market share gains in the
future.”
Outlook
Given the reduced visibility caused by the recent changes in the macroeconomic environment, NetApp
will not be providing formal revenue guidance for the fourth quarter of fiscal year 2009.
| § | NetApp estimates non-GAAP gross margins for the fourth quarter of fiscal year 2009 to be approximately 60%. |
| § | NetApp estimates non-GAAP operating expenses for the fourth quarter of fiscal year 2009 to increase by about $5 million to $10 million from the third quarter of fiscal year 2009. |
| § | NetApp estimates the company will incur approximately $30 million to $35 million in GAAP severance and other charges associated with a business restructuring in the fourth fiscal quarter. |
Quarterly Highlights
In the third quarter of fiscal year 2009, NetApp introduced several new solutions to help
customers transform their data center architectures through greater storage efficiency, greater
power and space savings, and innovative data management techniques. The company also received
industry recognition for its environmental, product, and operational excellence.
During the quarter, NetApp was ranked number one by FORTUNE magazine on the “100 Best
Companies to Work For” list. This is the second year it has achieved a top-10 ranking and the third
consecutive year it has been named in the top 15. An egalitarian culture, competitive salaries,
unique benefits, and a down-to-earth management style are attributes that have catapulted the
company to the number-one spot for 2009. In addition, The Boston Globe named NetApp as one of the
Top Places to Work in Massachusetts.
This quarter, NetApp extended its 50% Virtualization Guarantee4 Program, previously
available only for VMware, to Citrix and Microsoft virtual environments. As part of the program,
NetApp is offering a guarantee that customers will use 50% less storage with NetApp compared to
traditional storage in Citrix XenServer and Microsoft Windows Server Hyper-V virtual environments.
Also this quarter, NetApp announced the availability of the FAS3160 and V3160, strengthening
its current series of midrange storage offerings. Additionally, the company announced availability
of SANscreen® 5.0, a new addition to the award-winning SANscreen product suite that provides
customers increased storage management capabilities for improved cost savings and data center
efficiencies. NetApp also introduced SnapManager® 3.0 for Oracle, providing customers who have
Oracle Database environments running on NetApp® enterprise storage systems significant improvements
in backup, restore, and cloning capabilities.
NetApp was also recognized by the following third parties for its environmental, product and
operational excellence:
| • | Pacific Gas and Electric Company (PG&E) presented NetApp with a rebate of $1.4 million under PG&E’s Non-Residential New Construction Program, which encourages PG&E’s commercial, industrial, high-technology, and agricultural customers to implement energy-efficient building and process design and construction. |
| • | Citrix Systems, Inc. honored NetApp with the Citrix Ready Solution of the Year award, which recognizes a company that excels in providing application delivery and virtualization solutions that are complementary to Citrix and drive Citrix adoption. |
| • | Baseline Magazine and Business Technology Management Corporation (BTM) presented NetApp with the Baseline/BTM 500 Award and recognized Marina Levinson, NetApp CIO, for Outstanding Technology Management at NetApp. |
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 11, 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 (800) 561-2693 in the United States and (617) 614-3523 outside the United States. The pass code for both numbers is 14751884. |
| § | 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 87373458. The Webcast replay will be posted on our Web site for at least one year. |
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 and metrics for the fourth quarter
of fiscal year 2009, our $128 million contingency for resolution of the GSA dispute and statements
regarding our future market share. 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 the material and adverse
global economic and market conditions that currently exist and that are expected to persist
throughout calendar 2009, the final outcome of our GSA dispute with the federal government, our
ability to build nondeferred backlog to levels consistent with our past results and to increase our
revenue over the next several quarters; risks associated with the anticipated growth in network
storage and content delivery markets; our ability to deliver new product architectures and
enterprise service offerings; competition risks, including our ability to design products and
services that compete effectively from a price and performance perspective; risks with new product
introductions; our reliance on a limited number of suppliers; our ability to accurately forecast
demand for our products and successfully manage our relationships with our contract manufacturers;
our ability to expand our direct sales operations and reseller distribution channels; our ability
to develop, maintain, and strengthen our relationships and product offerings with strategic
partners; risks associated with international operations; our ability to successfully acquire and
integrate complementary businesses and technologies; foreign currency exchange rate fluctuations;
and other important factors as described in NetApp reports and documents filed from time to time
with the Securities and Exchange Commission, 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 excludes the impact of the GSA accrual. | |
| 2 | Earnings per share is calculated using the diluted number of shares for all periods presented except for the third quarter of fiscal 2009, which is calculated using the basic number of shares. | |
| 3 | Non-GAAP results of operations exclude the reserve for the GSA accrual, restructuring charges, amortization of intangible assets, stock-based compensation expenses, asset impairment, acquisition related retention costs, prior acquisition related costs, net gain or loss on investments, and the related effects on income taxes as well as certain discrete GAAP provisions for income tax matters recognized ratably for non-GAAP purposes and the tax effect on sale of investments. |
| 4 | This guarantee and related program are limited to the terms set forth in the Program Guide and Acknowledgement for 50% Virtualization Guarantee Program. Please visit www.netapp.com/guarantee for more information. |
NetApp, the NetApp logo Go further, faster, SANscreen, and SnapManager are trademarks or registered
trademarks of NetApp, Inc. in the United States and/or other countries. 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 revenues excludes the impact of the GSA accrual. These non-GAAP results of
operations exclude the reserve for the GSA contingency, restructuring charges, amortization of
intangible assets, stock-based compensation expenses, asset impairment,
acquisition-related retention costs, prior acquisition-related costs, net gain or loss on
investments, and the related effects on income taxes as well as certain discrete GAAP provisions
for income tax matters recognized ratably for non-GAAP purposes and the tax effect on sale of
investments. 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 Use of Corporate Web Site
In accordance with SEC guidance published on August 22, 2008 (Release No. 34-58288), NetApp will
begin to disseminate material information about the company through its corporate Web site within
the next several fiscal quarters. NetApp intends to designate a separate portion of its corporate
Web site for purposes of these disclosures and will include a prominent link on
its Web site to allow visitors to locate this material information, which will be routinely
updated. The Web site will supplement, rather than replace, NetApp’s current existing channels of
information distribution.
NETAPP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| January 23, 2009 | April 25, 2008 | |||||||
ASSETS |
||||||||
CURRENT ASSETS: |
||||||||
Cash and cash equivalents |
$ | 1,708,200 | $ | 936,479 | ||||
Short-term investments |
871,846 | 227,911 | ||||||
Accounts receivable, net |
344,437 | 582,110 | ||||||
Inventories |
82,159 | 70,222 | ||||||
Prepaid expenses and other assets |
118,365 | 120,561 | ||||||
Short-term restricted cash |
2,281 | 2,953 | ||||||
Short-term deferred income taxes |
153,901 | 127,197 | ||||||
Total current assets |
3,281,189 | 2,067,433 | ||||||
PROPERTY AND EQUIPMENT, net |
705,153 | 693,792 | ||||||
GOODWILL |
680,054 | 680,054 | ||||||
INTANGIBLE ASSETS, net |
51,495 | 90,075 | ||||||
LONG-TERM INVESTMENTS AND RESTRICTED CASH |
80,215 | 331,105 | ||||||
LONG-TERM DEFERRED INCOME TAXES AND OTHER
ASSETS |
391,634 | 208,529 | ||||||
| $ | 5,189,740 | $ | 4,070,988 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
CURRENT LIABILITIES: |
||||||||
Accounts payable |
122,924 | 178,233 | ||||||
Accrued compensation and related benefits |
185,011 | 202,929 | ||||||
Other accrued liabilities |
159,925 | 154,331 | ||||||
GSA contingency accrual |
128,000 | — | ||||||
Income taxes payable |
6,389 | 6,245 | ||||||
Deferred revenue |
960,729 | 872,364 | ||||||
Total current liabilities |
1,562,978 | 1,414,102 | ||||||
LONG-TERM DEBT AND OTHER OBLIGATIONS |
1,430,687 | 318,658 | ||||||
LONG-TERM DEFERRED REVENUE |
668,682 | 637,889 | ||||||
| 3,662,347 | 2,370,649 | |||||||
STOCKHOLDERS’ EQUITY |
1,527,393 | 1,700,339 | ||||||
| $ | 5,189,740 | $ | 4,070,988 | |||||
NETAPP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except net income (loss) per share amounts)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except net income (loss) per share amounts)
(Unaudited)
| Quarter Ended | Nine Months Ended | |||||||||||||||
| January 23, 2009 | January 25, 2008 | January 23, 2009 | January 25, 2008 | |||||||||||||
REVENUES: |
||||||||||||||||
Product |
$ | 528,198 | $ | 608,138 | $ | 1,646,489 | $ | 1,612,864 | ||||||||
Software entitlements and maintenance |
156,546 | 125,568 | 453,680 | 350,628 | ||||||||||||
Service |
189,599 | 150,297 | 554,581 | 401,944 | ||||||||||||
Total revenues before reserve for GSA
contingency |
874,343 | 884,003 | 2,654,750 | 2,365,436 | ||||||||||||
Reserve for GSA contingency |
(128,000 | ) | — | (128,000 | ) | — | ||||||||||
Net revenues |
746,343 | 884,003 | 2,526,750 | 2,365,436 | ||||||||||||
COST OF REVENUES: |
||||||||||||||||
Cost of product |
252,327 | 256,842 | 762,437 | 673,121 | ||||||||||||
Cost of software entitlements and maintenance |
2,320 | 2,560 | 6,765 | 6,558 | ||||||||||||
Cost of service |
98,480 | 85,299 | 301,528 | 245,253 | ||||||||||||
Total cost of revenues |
353,127 | 344,701 | 1,070,730 | 924,932 | ||||||||||||
GROSS MARGIN |
393,216 | 539,302 | 1,456,020 | 1,440,504 | ||||||||||||
OPERATING EXPENSES: |
||||||||||||||||
Sales and marketing |
291,634 | 279,114 | 898,786 | 779,131 | ||||||||||||
Research and development |
122,661 | 111,717 | 373,509 | 327,237 | ||||||||||||
General and administrative |
51,049 | 42,787 | 151,523 | 123,743 | ||||||||||||
Restructuring charges |
18,955 | — | 18,955 | — | ||||||||||||
Total operating expenses |
484,299 | 433,618 | 1,442,773 | 1,230,111 | ||||||||||||
INCOME (LOSS) FROM OPERATIONS |
(91,083 | ) | 105,684 | 13,247 | 210,393 | |||||||||||
OTHER INCOME (EXPENSES), net: |
||||||||||||||||
Interest income |
12,799 | 16,964 | 45,894 | 50,295 | ||||||||||||
Interest expense |
(7,238 | ) | (3,639 | ) | (19,355 | ) | (6,130 | ) | ||||||||
Gain (loss) on investments, net |
(1,691 | ) | (1,005 | ) | (26,926 | ) | 12,614 | |||||||||
Other income (expenses), net |
(1,249 | ) | (619 | ) | (3,717 | ) | 443 | |||||||||
Total other income (expenses), net |
2,621 | 11,701 | (4,104 | ) | 57,222 | |||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
(88,462 | ) | 117,385 | 9,143 | 267,615 | |||||||||||
PROVISION (BENEFIT) FOR INCOME TAXES |
(13,070 | ) | 15,562 | (2,318 | ) | 47,697 | ||||||||||
NET INCOME (LOSS) |
($75,392 | ) | $ | 101,823 | $ | 11,461 | $ | 219,918 | ||||||||
NET INCOME (LOSS) PER SHARE: |
||||||||||||||||
BASIC |
$ | (0.23 | ) | $ | 0.30 | $ | 0.03 | $ | 0.62 | |||||||
DILUTED |
$ | (0.23 | ) | $ | 0.29 | $ | 0.03 | $ | 0.60 | |||||||
SHARES USED IN PER SHARE CALCULATION: |
||||||||||||||||
BASIC |
329,026 | 344,275 | 330,067 | 354,799 | ||||||||||||
DILUTED |
329,026 | 352,780 | 335,070 | 365,290 | ||||||||||||
NETAPP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
| Quarter Ended | Nine Months Ended | |||||||||||||||
| January 23, 2009 | January 25, 2008 | January 23, 2009 | January 25, 2008 | |||||||||||||
Cash Flows from Operating Activities: |
||||||||||||||||
Net income (loss) |
$ | (75,392 | ) | $ | 101,823 | $ | 11,461 | $ | 219,918 | |||||||
Adjustments to reconcile net income to net cash
provided by operating activities: |
||||||||||||||||
Depreciation |
37,108 | 28,905 | 106,171 | 83,921 | ||||||||||||
Amortization of intangible assets and patents |
7,259 | 6,743 | 23,663 | 20,431 | ||||||||||||
Stock-based compensation |
34,430 | 34,296 | 98,597 | 113,077 | ||||||||||||
Net loss (gain) on investments |
1,691 | 1,005 | 3,674 | (12,614 | ) | |||||||||||
Impairment on investments |
— | — | 13,953 | — | ||||||||||||
Asset impairment and other write-off |
26,165 | — | 26,165 | — | ||||||||||||
Net loss on disposal of equipment |
1,340 | 583 | 2,100 | 828 | ||||||||||||
Allowance for doubtful accounts |
199 | 107 | 1,903 | 355 | ||||||||||||
Deferred income taxes |
(30,634 | ) | (39,306 | ) | (71,480 | ) | (79,704 | ) | ||||||||
Deferred rent |
26 | 120 | 3,037 | 632 | ||||||||||||
Income tax benefit from stock-based compensation |
(4,816 | ) | 42,714 | 40,404 | 85,356 | |||||||||||
Excess tax benefit from stock-based compensation |
(617 | ) | (31,521 | ) | (34,928 | ) | (47,107 | ) | ||||||||
Changes in assets and liabilities: |
||||||||||||||||
Accounts receivable |
19,060 | (36,124 | ) | 230,267 | 86,509 | |||||||||||
Inventories |
(3,945 | ) | 2,519 | (11,959 | ) | (5,184 | ) | |||||||||
Prepaid expenses and other assets |
20,796 | (2,380 | ) | 2,668 | 19,476 | |||||||||||
Accounts payable |
(25,823 | ) | 6,312 | (42,156 | ) | (33,865 | ) | |||||||||
Accrued compensation and related benefits |
24,662 | 24,862 | (6,094 | ) | (5,022 | ) | ||||||||||
Other accrued liabilities |
13,807 | 13,759 | 18,716 | 4,829 | ||||||||||||
GSA contingency accrual |
128,000 | — | 128,000 | — | ||||||||||||
Income taxes payable |
863 | 2,975 | 327 | (41,014 | ) | |||||||||||
Other liabilities |
11,966 | 5,003 | 11,148 | 67,747 | ||||||||||||
Deferred revenue |
49,855 | 124,619 | 137,998 | 237,016 | ||||||||||||
Net cash provided by operating activities |
236,000 | 287,014 | 693,635 | 715,585 | ||||||||||||
Cash Flows from Investing Activities: |
||||||||||||||||
Purchases of investments |
(227,526 | ) | (489,993 | ) | (711,488 | ) | (929,983 | ) | ||||||||
Redemptions of investments |
144,131 | 511,137 | 407,774 | 1,138,701 | ||||||||||||
Partial redemptions of Reserve Primary Fund |
478,797 | — | 478,797 | — | ||||||||||||
Reclassification from cash and cash equivalents to short-term investments |
— | — | (597,974 | ) | — | |||||||||||
Change in restricted cash |
(1,126 | ) | 43 | (444 | ) | (1,400 | ) | |||||||||
Proceeds from sales of marketable securities |
— | — | — | 18,256 | ||||||||||||
Proceeds from sales of nonmarketable securities |
— | 898 | 1,057 | 898 | ||||||||||||
Purchases of property and equipment |
(50,934 | ) | (53,689 | ) | (154,901 | ) | (124,847 | ) | ||||||||
Purchases of nonmarketable securities |
— | (200 | ) | (250 | ) | (4,235 | ) | |||||||||
Goodwill adjustment on business acquisition |
— | 211 | — | 211 | ||||||||||||
Net cash provided by (used in) investing activities |
343,342 | (31,593 | ) | (577,429 | ) | 97,601 | ||||||||||
Cash Flows from Financing Activities: |
||||||||||||||||
Proceeds from sale of common stock related to
employee stock transactions |
27,851 | 34,120 | 73,417 | 100,187 | ||||||||||||
Tax withholding payments reimbursed by restricted stock |
(1,592 | ) | (649 | ) | (4,183 | ) | (5,851 | ) | ||||||||
Excess tax benefit from stock-based compensation |
617 | 31,521 | 34,928 | 47,107 | ||||||||||||
Proceeds from revolving credit facility |
— | 13,000 | — | 262,754 | ||||||||||||
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 debt |
— | (18,980 | ) | — | (56,320 | ) | ||||||||||
Repayment of revolving credit facility |
(65,349 | ) | (13,000 | ) | (172,600 | ) | (13,000 | ) | ||||||||
Repurchases of common stock |
— | (144,278 | ) | (399,982 | ) | (844,251 | ) | |||||||||
Net cash provided by (used in) financing activities |
(38,473 | ) | (98,266 | ) | 678,160 | (509,374 | ) | |||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents |
(3,698 | ) | (6,503 | ) | (22,645 | ) | (16,532 | ) | ||||||||
Net Increase in Cash and Cash Equivalents |
537,171 | 150,652 | 771,721 | 287,280 | ||||||||||||
Cash and Cash Equivalents: |
||||||||||||||||
Beginning of period |
1,171,029 | 625,707 | 936,479 | 489,079 | ||||||||||||
End of period |
$ | 1,708,200 | $ | 776,359 | $ | 1,708,200 | $ | 776,359 | ||||||||
NETAPP, INC.
SUPPLEMENTAL INFORMATION
(In thousands)
(Unaudited)
SUPPLEMENTAL INFORMATION
(In thousands)
(Unaudited)
| QUARTER ENDED JANUARY 23, 2009 | ||||||||||||||||||||||||||||||||||||
| Reserve for | Stock-based | Acquisition- | Prior | Loss (Gain) on | ||||||||||||||||||||||||||||||||
| GSA | Amortization of | Compensation | Asset | Related | Acquisition- | Restructuring | Investments, | |||||||||||||||||||||||||||||
| contingency | Intangible Assets | Expenses | Impairment | Retention Cost | related Costs | Charges | 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 charges |
— | — | — | — | — | — | 18,955 | — | 18,955 | |||||||||||||||||||||||||||
Loss (gain) on investments, net |
— | — | — | — | — | — | — | 1,691 | 1,691 | |||||||||||||||||||||||||||
Effect on pre-tax income |
$ | 128,000 | $ | 7,214 | $ | 34,430 | $ | 9,431 | — | — | $ | 18,955 | $ | 1,691 | $ | 199,721 | ||||||||||||||||||||
| NINE MONTHS ENDED JANUARY 23, 2009 | ||||||||||||||||||||||||||||||||||||
| Reserve for | Stock-based | Acquisition- | Prior | Loss (Gain) on | ||||||||||||||||||||||||||||||||
| GSA | Amortization of | Compensation | Asset | Related | Acquisition- | Restructuring | Investments, | |||||||||||||||||||||||||||||
| contingency | Intangible Assets | Expenses | Impairment | Retention Cost | related Costs | Charges | 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 charges |
— | — | — | — | — | — | 18,955 | — | 18,955 | |||||||||||||||||||||||||||
Loss (gain) on investments, net |
— | — | — | — | — | — | — | 26,926 | 26,926 | |||||||||||||||||||||||||||
Effect on pre-tax income |
$ | 128,000 | $ | 23,228 | $ | 98,597 | $ | 9,431 | — | — | $ | 18,955 | $ | 26,926 | $ | 305,137 | ||||||||||||||||||||
| QUARTER ENDED JANUARY 25, 2008 | ||||||||||||||||||||||||||||||||||||
| Reserve for | Stock-based | Acquisition- | Prior | Loss (Gain) on | ||||||||||||||||||||||||||||||||
| GSA | Amortization of | Compensation | Asset | Related | Acquisition- | Restructuring | Investments, | |||||||||||||||||||||||||||||
| contingency | Intangible Assets | Expenses | Impairment | Retention Cost | related Costs | Charges | Net | Total | ||||||||||||||||||||||||||||
Cost of product revenues |
— | 5,278 | $ | 802 | — | — | — | — | — | $ | 6,080 | |||||||||||||||||||||||||
Cost of service revenues |
— | — | 2,511 | — | — | — | — | — | 2,511 | |||||||||||||||||||||||||||
Sales and marketing expense |
— | 970 | 14,802 | — | 761 | — | — | — | 16,533 | |||||||||||||||||||||||||||
Research and development expense |
— | — | 10,815 | — | — | — | — | — | 10,815 | |||||||||||||||||||||||||||
General and administrative expense |
— | — | 5,366 | — | — | — | — | — | 5,366 | |||||||||||||||||||||||||||
Loss (gain) on investments, net |
— | — | — | — | — | — | — | 1,005 | 1,005 | |||||||||||||||||||||||||||
Effect on pre-tax income |
— | $ | 6,248 | $ | 34,296 | — | $ | 761 | — | — | $ | 1,005 | $ | 42,310 | ||||||||||||||||||||||
| NINE MONTHS ENDED JANUARY 25, 2008 | ||||||||||||||||||||||||||||||||||||
| Reserve for | Stock-based | Acquisition- | Prior | Loss (Gain) on | ||||||||||||||||||||||||||||||||
| GSA | Amortization of | Compensation | Asset | Related | Acquisition- | Restructuring | Investments, | |||||||||||||||||||||||||||||
| contingency | Intangible Assets | Expenses | Impairment | Retention Cost | related Costs | Charges | Net | Total | ||||||||||||||||||||||||||||
Cost of product revenues |
— | $ | 15,834 | $ | 2,514 | — | — | — | — | — | $ | 18,348 | ||||||||||||||||||||||||
Cost of service revenues |
— | — | 7,788 | — | — | — | — | — | 7,788 | |||||||||||||||||||||||||||
Sales and marketing expense |
— | 2,911 | 49,428 | — | 3,086 | — | — | — | 55,425 | |||||||||||||||||||||||||||
Research and development expense |
— | — | 36,323 | — | — | — | — | — | 36,323 | |||||||||||||||||||||||||||
General and administrative expense |
— | 200 | 17,024 | — | — | 2,800 | — | — | 20,024 | |||||||||||||||||||||||||||
Loss (gain) on investments, net |
— | — | — | — | — | — | — | (12,614 | ) | (12,614 | ) | |||||||||||||||||||||||||
Effect on pre-tax income |
— | $ | 18,945 | $ | 113,077 | — | $ | 3,086 | $ | 2,800 | — | ($12,614 | ) | $ | 125,294 | |||||||||||||||||||||
NETAPP, INC.
RECONCILIATION OF NON-GAAP AND GAAP
IN THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except net income per share amounts)
(Unaudited)
RECONCILIATION OF NON-GAAP AND GAAP
IN THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except net income per share amounts)
(Unaudited)
| Quarter Ended | Nine Months Ended | |||||||||||||||
| January 23, 2009 | January 25, 2008 | January 23, 2009 | January 25, 2008 | |||||||||||||
SUMMARY RECONCILIATION OF NET INCOME (LOSS) |
||||||||||||||||
NET INCOME (LOSS) |
($75,392 | ) | $ | 101,823 | $ | 11,461 | $ | 219,918 | ||||||||
Adjustments: |
||||||||||||||||
Reserve for GSA contingency |
128,000 | — | 128,000 | — | ||||||||||||
Amortization of intangible assets |
7,214 | 6,248 | 23,228 | 18,945 | ||||||||||||
Stock-based compensation expenses |
34,430 | 34,296 | 98,597 | 113,077 | ||||||||||||
Asset impairment |
9,431 | — | 9,431 | — | ||||||||||||
Acquisition-related retention cost |
— | 761 | — | 3,086 | ||||||||||||
Prior acquisition-related costs |
— | — | — | 2,800 | ||||||||||||
Restructuring charges |
18,955 | — | 18,955 | — | ||||||||||||
(Gain) loss on investments, net |
1,691 | 1,005 | 26,926 | (12,614 | ) | |||||||||||
Tax effect on sale of investments |
— | — | — | 5,477 | ||||||||||||
Discrete GAAP tax provision items |
(3,880 | ) | 59 | 428 | (625 | ) | ||||||||||
Income tax effect |
(26,992 | ) | (12,443 | ) | (55,521 | ) | (25,914 | ) | ||||||||
NON-GAAP NET INCOME (LOSS) |
$ | 93,457 | $ | 131,749 | $ | 261,505 | $ | 324,150 | ||||||||
NET INCOME (LOSS) PER SHARE |
($0.229 | ) | $ | 0.289 | $ | 0.034 | $ | 0.602 | ||||||||
Adjustments: |
||||||||||||||||
Reserve for GSA contingency |
0.388 | — | 0.382 | — | ||||||||||||
Amortization of intangible assets |
0.022 | 0.017 | 0.069 | 0.052 | ||||||||||||
Stock-based compensation expenses |
0.105 | 0.097 | 0.294 | 0.310 | ||||||||||||
Asset impairment |
0.029 | — | 0.028 | — | ||||||||||||
Acquisition-related retention cost |
— | 0.002 | — | 0.008 | ||||||||||||
Prior acquisition-related costs |
— | — | — | 0.008 | ||||||||||||
Restructuring charges |
0.058 | — | 0.057 | — | ||||||||||||
(Gain) loss on investments, net |
0.005 | 0.003 | 0.080 | (0.035 | ) | |||||||||||
Tax effect on sale of investments |
— | — | — | 0.015 | ||||||||||||
Discrete GAAP tax provision items |
(0.012 | ) | 0.001 | 0.001 | (0.002 | ) | ||||||||||
Income tax effect |
(0.082 | ) | (0.035 | ) | (0.166 | ) | (0.071 | ) | ||||||||
NON-GAAP NET INCOME (LOSS) PER SHARE |
$ | 0.284 | $ | 0.374 | $ | 0.779 | $ | 0.887 | ||||||||