Exhibit 99.1
Network Appliance Announces Results for Third Quarter Fiscal Year 2005;
Generates a Record $148.5 Million in Cash from Operations
SUNNYVALE, Calif.--(BUSINESS WIRE)--Feb. 15, 2005--Network Appliance, Inc.
(Nasdaq:NTAP), the leader in advanced networked storage solutions, today
reported results for the third quarter of fiscal year 2005. Revenues for the
third fiscal quarter were $412.7 million, an increase of 39% compared to
revenues of $297.3 million for the same period a year ago and a 10% increase
compared to $375.2 million in the prior quarter.
For the third fiscal quarter, GAAP net income increased 50% to $60.1
million, or $0.16 per share(1) compared to GAAP net income of $40.2 million, or
$0.11 per share for the same period in the prior year. Pro forma(2) net income
for the third fiscal quarter increased 57% to $62.8 million, or $0.16 per share,
compared to pro forma net income of $40.1 million, or $0.11 per share for the
same period a year ago.
Revenues for the first nine months of the current fiscal year totaled $1.1
billion, compared to revenues of $833.3 million for the first nine months of the
prior fiscal year, an increase of 38% year over year.
For the first nine months of the current fiscal year, GAAP net income
increased 40% to $162.3 million, or $0.43 per share, compared with GAAP net
income of $115.6 million, or $0.32 per share for the same period in the prior
year. Pro forma net income for the first nine months of the current fiscal year
totaled $171.1 million, or $0.45 per share, compared to pro forma net income of
$102.4 million, or $0.28 per share for the first nine months of the prior fiscal
year.
"This quarter's strong, well-rounded results demonstrate that our
investments in sales, services and innovation are paying off, both in product
and services revenue growth," said Dan Warmenhoven, CEO of Network Appliance.
"Customers' increasing need for data protection, including compliance,
disk-to-disk backup, and business continuity solutions, is one of the key
drivers of our growth this quarter. In addition, we expect our leadership in
emerging technologies such as iSCSI, virtualization, and the storage grid to
increasingly contribute to our growth over the long term."
Outlook
-- Network Appliance estimates that revenue for the fourth quarter will
grow sequentially by 6% to 9%. This projection reflects year over year
growth rates of 30% to 33%.
-- The company expects fourth quarter pro forma earnings per share to
finish at $0.16 to $0.17 per share. Fourth quarter GAAP earnings per
share are projected at $0.16 per share.
-- For the full fiscal year 2005, Network Appliance estimates that
revenues will finish 35% to 36% higher than fiscal year 2004.
-- Network Appliance estimates full year pro forma earnings per share to
finish at $0.60 to $0.62 per share. GAAP earnings per share are
projected for fiscal year 2005 at $0.57 to $0.59 per share.
Quarterly Highlights
Throughout the third quarter of fiscal year 2005, Network Appliance
reinforced its leadership position by introducing the latest version of its
powerful enterprise storage software, expanding partnerships, and continuing to
demonstrate leadership in the iSCSI market. Customers deploying NetApp(R)
solutions during the quarter for a variety of database, security, and other data
center and mission-critical applications included AIRBUS France, Defense Finance
and Accounting Service, The Dow Chemical Company, GlaxoSmithKline, IKON Digital
Express, Mayo Clinic, Mentor Graphics Corporation, NASA, Philips Semiconductors,
RadioShack Corporation, Synopsys, Inc., and Time Warner Cable.
Network Appliance achieved a critical milestone in expanding and delivering
its storage grid vision by shipping the latest version of its powerful
enterprise storage software, Data ONTAP(TM) 7G, during the third quarter.
Customers using Data ONTAP 7G and its advanced virtualization capabilities can
double their storage utilization, dramatically increase I/O performance for
enterprise-class applications, and significantly reduce storage management costs
for multi-application environments. The two primary new features of Data ONTAP
7G that offer users compelling benefits are FlexVol(TM) and FlexClone(TM)
software.
FlexVol creates dynamically virtualized, flexible data containers that
eliminate performance and utilization tradeoffs and renders obsolete the notion
of storage volumes being statically tied to specific physical or logical disks.
In short, FlexVol is the feature of Data ONTAP 7G that provides dynamic
virtualization. FlexClone enables the near-instantaneous creation of multiple,
independently writable images of FlexVol data sets, with zero storage overhead.
Competitive approaches for cloning data take up the same amount of storage space
as the full original data set. FlexClone represents a breakthrough innovation
for database applications and modeling.
Additionally, the NetApp enterprise gFiler(TM) storage systems will now
provide Fibre Channel data access and fully leverage the new enterprise storage
virtualization capabilities in Data ONTAP 7G for multi-vendor storage
environments. The NetApp gFiler solution has extended its storage systems
support to include the HP(R) StorageWorks XP Disk Array family and the IBM(R)
TotalStorage DS4000 series (formerly named "FAStT"), complementing existing
support for Hitachi Data Systems(R), Hitachi Limited(R), Sun(TM) StorEdge(R)
9900 Disk Array family, and IBM Enterprise Storage Server disk array systems.
During the quarter, NetApp also introduced the next addition to its data
management software portfolio with SnapValidator(TM). SnapValidator can now be
applied across the full line of NetApp storage systems, across any protocol,
supporting the Oracle(R) Databases, adding to a robust, highly reliable, and
available data environment.
In the iSCSI arena, NetApp continued to drive iSCSI adoption. According to
IDC, NetApp maintained a strong lead in the iSCSI SAN storage market for the
third quarter of calendar year 2004 (3Q04). In its core NAS market, NetApp
demonstrated continued leadership in NAS hardware for 3Q04 in both revenue and
terabytes shipped. Also according to IDC, the company posted a 36.3% revenue
market share, with a 13.8% increase in revenue year over year (vs. the third
quarter of calendar 2003).
On the partner front, the company achieved Gold Certified status in the
Microsoft Partner Program with a competency in Advanced Infrastructure Solutions
recognizing NetApp expertise and total impact in the technology marketplace.
NetApp also unveiled several new solution enhancements and partner offerings
with Alacritus Software, Atempo, CommVault Systems, Inc., NetEx, QLogic
Corporation, Red Hat Inc., Secure Computing Corporation, Sophos, and Syncsort,
Inc. to address a variety of data concerns, including Internet access and
security, virtual backup, data management, virus protection, data protection and
recovery, iSCSI software for Linux environments and other business-critical
initiatives facing enterprise customers.
In corporate news, NetApp executives, products and the overall company were
honored for a variety of achievements. Chief Executive Officer Dan Warmenhoven
was honored with the Ernst & Young Entrepreneur Of The Year(R) 2004 Award in the
technology category for his outstanding vision, leadership, and achievement as
CEO of Network Appliance. Cited for its "unrivaled" unified storage architecture
and its "unmatched" flexibility, scalability, and continuity in the storage
industry, the Network Appliance FAS270c was named "Best NAS Solution of the
Year" in InfoWorld's 2005 Technology of the Year honors. NetApp was also honored
by FORTUNE magazine as one of the "100 Best Companies to Work For" for the third
consecutive year. This year, NetApp ranked at number 24, up from number 48 last
year, reflecting the company's specific emphasis on attracting and retaining the
best talent in the industry and continuing to demonstrate the values of what
NetApp CEO Dan Warmenhoven calls a "model company." The elite and prestigious
FORTUNE listing is largely determined by employee feedback.
Conference Call Information
-- The NetApp quarterly results conference call will be broadcast live
via the Internet at http://investors.netapp.com/ on Tuesday, February
15, 2005, at 2:00 p.m. Pacific time. This press release and any other
information related to the call will also be posted to the Web site at
that location. The conference call will also be available live in a
listen-only format at 800-638-5439 in the United States and
617-614-3945 outside the United States. The passcode for both numbers
is 60737727.
-- A replay will be available for 72 hours following completion of the
live call by dialing 888-286-8010 in the United States and
617-801-6888 outside the United States, with replay code 34738667.
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.
"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 service and product growth, leadership in emerging technologies, and all
of the statements under the Outlook section. These forward-looking statements
involve risks and uncertainties, and actual results could vary. Factors that
could impact our ability to achieve our goals include general economic and
industry conditions, including expenditure trends for storage-related products;
our ability to deliver new product architectures and enterprise service
offerings, and our ability to design products and services that compete
effectively from a price and performance perspective; and other important
factors as described in Network Appliance, Inc.'s reports and documents filed
from time to time with the Securities and Exchange Commission, including our
most recently submitted 10-K and 10-Q.
(1) Earnings per share represent the diluted number of shares for all
periods presented.
(2) Pro forma results for all periods presented and the projections in the
Outlook section exclude amortization of intangible assets, stock compensation,
restructuring charges, net gain/loss on investments, and the related effects on
income taxes, as well as an income tax benefit from a nonrecurring foreign tax
ruling.
NetApp is a registered trademark and Network Appliance, Data ONTAP,
FlexVol, FlexClone, gFiler, SnapValidator 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 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.
NETWORK APPLIANCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
January 28, April 30,
2005 2004
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (1) $181,373 $92,328
Short-term investments (1) 925,061 715,637
Accounts receivable, net 234,339 193,942
Inventories 38,024 34,109
Prepaid expenses and other 35,764 29,057
Deferred income taxes 34,260 24,163
------------ ------------
Total current assets 1,448,821 1,089,236
PROPERTY AND EQUIPMENT, net 405,907 370,717
GOODWILL 291,816 291,816
INTANGIBLE ASSETS, net 23,367 31,718
OTHER ASSETS 73,855 93,779
------------ ------------
2,243,766 1,877,266
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $68,501 $52,719
Income taxes payable 12,879 16,033
Accrued compensation and related benefits 83,261 65,186
Other accrued liabilities 55,734 43,683
Deferred revenue 228,996 166,602
------------ ------------
Total current liabilities 449,371 344,223
LONG-TERM DEFERRED REVENUE 161,340 112,337
LONG-TERM OBLIGATIONS 4,525 4,858
------------ ------------
615,236 461,418
------------ ------------
STOCKHOLDERS' EQUITY 1,628,530 1,415,848
------------ ------------
2,243,766 1,877,266
============ ============
(1) In the third quarter, the Company began to classify its investment
in auction-rate securities as short term investments. These
investments were included in cash and equivalents in previous periods
($148.8 million at April 30, 2004), and such amounts have been
reclassified in the accompanying interim financial statements to
conform to the current period classification. This change in
classification had no effect on the amounts of total current assets,
total assets, net income or cash flow from operations of the Company.
NETWORK APPLIANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended Nine Months Ended
----------------------- -----------------------
January 28, January 30, January 28, January 30,
2005 2004 2005 2004
----------- ----------- ----------- -----------
REVENUES:
Product revenue $367,903 $268,955 $1,029,334 $754,273
Service revenue 44,803 28,332 116,969 79,073
----------- ----------- ----------- -----------
Total revenues 412,706 297,287 1,146,303 833,346
----------- ----------- ----------- -----------
COST OF REVENUES:
Cost of product
revenue 127,118 93,442 353,060 266,571
Cost of service
revenue 33,454 23,722 94,990 65,466
----------- ----------- ----------- -----------
Total cost of
revenues 160,572 117,164 448,050 332,037
----------- ----------- ----------- -----------
GROSS MARGIN 252,134 180,123 698,253 501,309
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Sales and marketing 118,668 85,975 331,087 247,516
Research and
development 43,603 32,948 122,957 96,002
General and
administrative 20,136 13,744 54,888 38,737
Stock compensation 2,189 465 6,432 2,012
Restructuring
charges (270) - (270) 1,110
----------- ----------- ----------- -----------
Total operating
expenses 184,326 133,132 515,094 385,377
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS 67,808 46,991 183,159 115,932
OTHER INCOME
(EXPENSES), net:
Interest income 6,031 3,862 16,216 9,737
Other expenses, net (500) (833) (1,322) (2,089)
Net gain on
investments 41 217 41 362
----------- ----------- ----------- -----------
Total other
income, net 5,572 3,246 14,935 8,010
----------- ----------- ----------- -----------
INCOME BEFORE INCOME
TAXES 73,380 50,237 198,094 123,942
PROVISION FOR INCOME
TAXES 13,253 10,085 35,776 8,304
----------- ----------- ----------- -----------
NET INCOME $60,127 $40,152 $162,318 $115,638
=========== =========== =========== ===========
NET INCOME PER SHARE:
BASIC $0.17 $0.12 $0.45 $0.34
=========== =========== =========== ===========
DILUTED $0.16 $0.11 $0.43 $0.32
=========== =========== =========== ===========
SHARES USED IN PER
SHARE CALCULATION:
BASIC 362,563 346,305 359,031 343,906
=========== =========== =========== ===========
DILUTED 385,869 366,429 377,972 363,214
=========== =========== =========== ===========
NETWORK APPLIANCE, INC.
PRO FORMA (1) CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended Nine Months Ended
----------------------- -----------------------
January 28, January 30, January 28, January 30,
2005 2004 2005 2004
----------- ----------- ----------- -----------
REVENUES:
Product revenue $367,903 $268,955 $1,029,334 $754,273
Service revenue 44,803 28,332 116,969 79,073
----------- ----------- ----------- -----------
Total revenues 412,706 297,287 1,146,303 833,346
----------- ----------- ----------- -----------
COST OF REVENUES:
Cost of product
revenue 126,260 93,215 350,486 263,616
Cost of service
revenue 33,454 23,722 94,990 65,466
----------- ----------- ----------- -----------
Total cost of
revenues 159,714 116,937 445,476 329,082
----------- ----------- ----------- -----------
GROSS MARGIN 252,992 180,350 700,827 504,264
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Sales and marketing 118,461 85,975 330,467 247,516
Research and
development 43,603 32,948 122,957 96,002
General and
administrative 18,868 13,744 51,083 38,737
----------- ----------- ----------- -----------
Total operating
expenses 180,932 132,667 504,507 382,255
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS 72,060 47,683 196,320 122,009
OTHER INCOME
(EXPENSES), net 5,531 3,029 14,894 7,648
----------- ----------- ----------- -----------
INCOME BEFORE INCOME
TAXES 77,591 50,712 211,214 129,657
PROVISION FOR INCOME
TAXES 14,742 10,649 40,131 27,228
----------- ----------- ----------- -----------
NET INCOME $62,849 $40,063 $171,083 $102,429
=========== =========== =========== ===========
NET INCOME PER SHARE:
BASIC $0.17 $0.12 $0.48 $0.30
=========== =========== =========== ===========
DILUTED $0.16 $0.11 $0.45 $0.28
=========== =========== =========== ===========
SHARES USED IN PER
SHARE CALCULATION:
BASIC 362,563 346,305 359,031 343,906
=========== =========== =========== ===========
DILUTED 385,869 366,429 377,972 363,214
=========== =========== =========== ===========
(1) Pro forma results of operations exclude amortization of intangible
assets, stock compensation, restructuring charges, net gain/loss on
investments and the related effects on income taxes, as well as an
income tax benefit from a non-recurring foreign tax ruling.
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 Nine Months Ended
----------------------- -----------------------
January 28, January 30, January 28, January 30,
2005 2004 2005 2004
----------- ----------- ----------- -----------
SUMMARY RECONCILIATION
OF NET INCOME
NET INCOME $60,127 $40,152 $162,318 $115,638
Adjustments:
Amortization of
intangible assets 2,333 227 6,999 2,955
Stock compensation 2,189 465 6,432 2,012
Restructuring
charges (270) - (270) 1,110
Net gain on
investments (41) (217) (41) (362)
Income tax effect (1,489) (564) (4,355) (2,093)
Income tax benefit
from foreign tax
ruling - - - (16,831)
----------- ----------- ----------- -----------
PROFORMA NET INCOME $62,849 $40,063 $171,083 $102,429
=========== =========== =========== ===========
DILUTED PRO FORMA NET
INCOME PER SHARE $0.16 $0.11 $0.45 $0.28
=========== =========== =========== ===========
SHARES USED IN DILUTED
PRO FORMA NET INCOME
PER SHARE
CALCULATION: 385,869 366,429 377,972 363,214
=========== =========== =========== ===========
DETAILED
RECONCILIATION OF
SPECIFIC ITEMS:
COST OF REVENUES $160,572 $117,164 $448,050 $332,037
Adjustment:
Amortization of
intangible assets (858) (227) (2,574) (2,955)
----------- ----------- ----------- -----------
PRO FORMA COST OF
REVENUES $159,714 $116,937 $445,476 $329,082
=========== =========== =========== ===========
GROSS MARGIN $252,134 $180,123 $698,253 $501,309
Adjustment:
Amortization of
intangible assets 858 227 2,574 2,955
----------- ----------- ----------- -----------
PRO FORMA GROSS MARGIN $252,992 $180,350 $700,827 $504,264
=========== =========== =========== ===========
SALES AND MARKETING
EXPENSES $118,668 $85,975 $331,087 $247,516
Adjustments:
Amortization of
intangible assets (207) - (620) -
----------- ----------- ----------- -----------
PRO FORMA SALES AND
MARKETING EXPENSES $118,461 $85,975 $330,467 $247,516
=========== =========== =========== ===========
GENERAL AND
ADMINISTRATIVE
EXPENSES $20,136 $13,744 $54,888 $38,737
Adjustments:
Amortization of
intangible assets (1,268) - (3,805) -
----------- ----------- ----------- -----------
PRO FORMA GENERAL AND
ADMINISTRATIVE
EXPENSES $18,868 $13,744 $51,083 $38,737
=========== =========== =========== ===========
OPERATING EXPENSES $184,326 $133,132 $515,094 $385,377
Adjustments:
Stock compensation (2,189) (465) (6,432) (2,012)
Amortization of
intangible assets (1,475) - (4,425) -
Restructuring
charges 270 - 270 (1,110)
----------- ----------- ----------- -----------
PRO FORMA OPERATING
EXPENSES $180,932 $132,667 $504,507 $382,255
=========== =========== =========== ===========
INCOME FROM OPERATIONS $67,808 $46,991 $183,159 $115,932
Adjustments:
Amortization of
intangible assets 2,333 227 6,999 2,955
Stock compensation 2,189 465 6,432 2,012
Restructuring
charges (270) - (270) 1,110
----------- ----------- ----------- -----------
PRO FORMA INCOME FROM
OPERATIONS $72,060 $47,683 $196,320 $122,009
=========== =========== =========== ===========
TOTAL OTHER INCOME
(EXPENSES), NET $5,572 $3,246 $14,935 $8,010
Adjustments:
Net gain on
investments (41) (217) (41) (362)
----------- ----------- ----------- -----------
PRO FORMA TOTAL OTHER
INCOME (EXPENSES),
NET $5,531 $3,029 $14,894 $7,648
=========== =========== =========== ===========
INCOME BEFORE INCOME
TAXES $73,380 $50,237 $198,094 $123,942
Adjustments:
Amortization of
intangible assets 2,333 227 6,999 2,955
Stock compensation 2,189 465 6,432 2,012
Restructuring
charges (270) 0 (270) 1,110
Net gain on
investments (41) (217) (41) (362)
----------- ----------- ----------- -----------
PRO FORMA INCOME
BEFORE INCOME TAXES $77,591 $50,712 $211,214 $129,657
=========== =========== =========== ===========
PROVISION FOR INCOME
TAXES $13,253 $10,085 $35,776 $8,304
Adjustments:
Income tax effect 1,489 564 4,355 2,093
Income tax benefit
from foreign tax
ruling - - - 16,831
----------- ----------- ----------- -----------
PRO FORMA PROVISION
FOR INCOME TAXES $14,742 $10,649 $40,131 $27,228
=========== =========== =========== ===========
NETWORK APPLIANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
Nine Months Ended
-----------------------
January 28, January 30,
2005 2004
----------- -----------
Cash Flows from Operating Activities:
Net income $162,318 $115,638
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 39,761 40,016
Amortization of patents 1,352 1,052
Amortization of intangible assets 6,999 2,954
Stock compensation 6,432 2,012
Net gain on investments (70) (362)
Net loss on disposal of equipment 907 5
Allowance for doubtful accounts 325 (221)
Deferred income taxes 726 (16,184)
Deferred rent 228 142
Changes in assets and liabilities:
Accounts receivable (40,722) (42,416)
Inventories (12,383) (13,170)
Prepaid expenses and other assets 446 (14,610)
Accounts payable 15,782 3,400
Income taxes payable 24,632 22,589
Accrued compensation and related benefits 18,075 14,640
Other accrued liabilities 11,621 (192)
Deferred revenue 111,397 62,424
----------- -----------
Net cash provided by operating
activities 347,826 177,717
----------- -----------
Cash Flows from Investing Activities:
Net purchases of short and long-term
investments (213,176) (119,144)
Purchases of property and equipment (66,294) (35,609)
Proceeds from disposal of property and
equipment - 105
Proceeds from sales of investments 347 636
Purchase of patents - (9,015)
Purchases of equity securities (125) (325)
----------- -----------
Net cash used in investing activities (279,248) (163,352)
----------- -----------
Cash Flows from Financing Activities:
Proceeds from sale of common stock related to
employee stock transactions 153,460 71,213
Repurchases of common stock (132,993) (44,862)
----------- -----------
Net cash provided by financing
activities 20,467 26,351
----------- -----------
Net Increase (Decrease) in Cash and Cash
Equivalents 89,045 40,716
Cash and Cash Equivalents:
Beginning of period 92,328 91,866
----------- -----------
End of period $181,373 $132,582
=========== ===========
Noncash Investing and Financing Activities:
Deferred stock compensation, net of reversals $512 $2,387
Conversion of evaluation inventory to fixed
assets $8,468 $6,025
Income tax benefit from employee stock
transactions $27,786 $48,003
Supplemental cash flow information:
Income taxes paid $11,975 $9,280
Income taxes refund $10,588 $10,361
NETWORK APPLIANCE, INC.
RECONCILIATION OF NON GAAP GUIDANCE TO GAAP
EXPRESSED AS EARNINGS PER SHARE
Q4 OF FISCAL YEAR 2005
(Unaudited)
Projected Fourth Projected Annual
Quarter Revenue FY05 Revenue
Growth Range Growth Range
----------------- -----------------
6% 9% 35% 36%
-------- -------- -------- --------
ADJUSTMENTS OF SPECIFIC ITEMS TO
EARNINGS PER SHARE FOR Q4 OF
FISCAL YEAR 2005 ($) :
COST OF REVENUES
Adjustment:
Amortization of intangible
assets (0.0022) (0.0022) (0.0090) (0.0090)
OPERATING EXPENSES
Adjustments:
Stock compensation (0.0054) (0.0054) (0.0216) (0.0216)
Amortization of intangible
assets (0.0038) (0.0038) (0.0155) (0.0155)
Restructuring charges - - - -
TOTAL OTHER INCOME (EXPENSES), NET
Adjustments:
Net (gain)/loss on investments - - - -
PROVISION FOR INCOME TAXES
Adjustments:
Income tax effect 0.0040 0.0042 0.0158 0.0160
Income tax benefit from foreign
tax ruling - - - -
-------- -------- -------- --------
NET DECREASE IN EARNINGS PER SHARE (0.0075) (0.0073) (0.0304) (0.0302)
======== ======== ======== ========
CONTACT: Network Appliance, Inc.
Jodi Baumann, 408-822-3974 (press)
jodi@netapp.com
Tara Calhoun, 408-822-6909 (investors)
tara@netapp.com
Billie Fagenstrom, 408-822-6428 (investors)
billief@netapp.com