NetApp: Fiscal 4Q13 Financial Results

NetApp, Inc. reported financial results for the fourth quarter and fiscal year 2013 ended April 26, 2013.

Total revenues for the fourth quarter of fiscal year 2013 were $1.717 billion.

GAAP net income for the fourth quarter of fiscal year 2013 was $174 million, or $0.47 per share,1 compared to GAAP net income of $181 million, or $0.47 per share, for the same period a year ago. Non-GAAP net income for the fourth quarter of fiscal year 2013 was $253 million, or $0.69 per share,2 compared to non-GAAP net income of $252 million, or $0.66 per share, for the same period a year ago.

Total revenues for fiscal year 2013 were $6.332 billion, compared to total revenues of $6.233 billion for fiscal year 2012. GAAP net income for fiscal year 2013 was $505 million, or $1.37 per share, compared to GAAP net income of $605 million, or $1.58 per share, for fiscal year 2012. Non-GAAP net income for fiscal year 2013 was $841 million, or $2.28 per share, compared to non-GAAP net income of $926 million, or $2.41 per share, for fiscal year 2012.

"The fourth quarter was highlighted by a continued strong uptake of clustered Data ONTAP, an expansion of our leadership position in Flash, and double digit growth in branded bookings," said Tom Georgens, president and CEO. "We are also pleased to announce enhancements to our capital allocation program, reflecting our confidence in our underlying business as well as our commitment to enhancing shareholder value."

Q1 Fiscal Year 2014 Outlook

• Revenues to be in the range of $1.475 billion to $1.575 billion.
• GAAP earnings per share to be approximately $0.13 to $0.18 and non-GAAP earnings per share to be approximately $0.45 to $0.50.
• Outstanding share count to decrease to approximately 367 million shares.

Capital Return to Shareholders
The company is increasing its current stock repurchase program, of which $1.4 billion remains outstanding, by an additional $1.6 billion. The company plans to complete the aggregate $3 billion program over the next 3 years. NetApp intends $2 billion of repurchases to be completed within the next 12 months, of which $1 billion is planned to be completed during the next 4 months. Under its stock repurchase program, NetApp can purchase shares of its outstanding common stock through open market and privately negotiated transactions at prices deemed appropriate by management.

Additionally, NetApp has initiated a quarterly cash dividend of $0.15 per share of the company’s common stock, which it intends to increase over time. The first dividend will be payable on July 23, 2013 to shareholders of record as of the close of business on July 11, 2013.

The timing and amount of repurchase transactions under the program and future dividends will depend on market conditions, corporate business and financial considerations, and regulatory requirements.

Resource Realignment
The company has undertaken a realignment of resources and restructuring which includes a global workforce reduction of approximately 900 employees. The company expects to recognize an estimated aggregate $50 – $60 million pretax charge relating to employee severance and other restructuring charges.

Quarterly Highlights
In its fourth quarter of fiscal year 2013, NetApp continued to support customer success across a range of IT environments through its product and technology innovation and deepened strategic relationships with partners.

NetApp expanded its flash portfolio with the availability of an all-flash array built on E-Series and previewed a new purpose-built all-flash storage architecture. It also unveiled enhancements to its FAS high-end storage systems and continued to see industry momentum for clustered Data ONTAP. Finally, it strengthened its partnerships with VMware and SAP through deeper integration and joint solution development.

NetApp Extends Enterprise Flash Storage
The new EF540 all-flash array is designed for performance-driven enterprise applications, while the purpose-built FlashRay product family is expected to deliver rich scale-out and storage efficiency features to maximize the benefits of all-flash arrays. With this flash portfolio, including intelligent caching technologies Flash Cache, Flash Pool, and Flash Accel, the new EF540 flash array and the forthcoming FlashRay family provide flexibility and choice and maximize the value of flash across the entire compute, network, and storage stack.

FAS and E-Series Innovation
Helps Customers Accelerate Business

• Enhanced FAS high-end systems deliver increased performance and value. The new FAS/V6200, FAS6250, and FAS6290 systems leverage clustered Data ONTAP and enable IT operations to achieve a greater ROI while delivering HA and scale for organizations’ most stringent application workloads. The new systems are flash enabled and can scale to over 65PB for increased agility.
• Big data and HPC customers accelerate time to market with new E-Series storage platform. With its seventh generation E-Series platform, the NetApp E5500 builds on the modular scalability and proven reliability of previous generations and provides customers with a new level of performance and efficiency. The platform’s high-performance architecture, improved storage density, and additional support enhancements enable OEMs and customers to overcome the speed, scale, and reliability challenges posed by big data and HPC environments.

Strengthened Partnerships
Help Customers Transition to the Cloud

• NetApp and SAP collaborate to support next-generation solutions. In an effort to accelerate the deployment and delivery of database, analytics, and application solutions, they will deepen their integration to support the SAP HANA platform and SAP NetWeaver Landscape Virtualization Management software. Through the expanded relationship, customers will have access to integrated solutions that reduce total cost of operations, drive business agility, and help them leverage the benefits of the cloud.
• NetApp and VMware deliver integrated cloud infrastructure and mobile computing solutions to customers. New solutions and technology integration combine the benefits of clustered Data ONTAP with VMware vCloud Suite and VMware Horizon Suite. The NetApp storage solution for VMware vCloud Suite enables enterprises and service providers to deliver a shared storage infrastructure for private cloud environments. The NetApp storage solution for VMware Horizon Suite delivers anytime access to desktops, applications, and data, and enables users to share the data securely.

NetApp Data ONTAP is Ranked
the World’s #1 Branded Storage OS
IDC ranked NetApp Data ONTAP as the world’s #1 branded storage OS3 for calendar year 2012 within the open networked disk storage systems market. IDC’s Branded Storage OS results measure the value of the worldwide external disk storage systems market by revenue and new capacity shipments based on the underlying storage OS in use. Data ONTAP ranked #1 in both categories. Built on more than 20 years of innovation, the Data ONTAP OS has evolved to meet the changing needs of customers and help drive their success. Clustered Data ONTAP is the latest version, combining rich data management feature sets with clustering for unlimited scale, operational efficiency, and non-disruptive operations.

NetApp Enables Revlon to Simplify IT Operations
Revlon turned to NetApp to help drive simplicity, agility, and cost efficiencies throughout all levels of its business, which ultimately helped the company make smarter IT decisions that help fuel company growth. By building on NetApp, Revlon successfully implemented a private cloud infrastructure that enabled the company to adapt to meet growing consumer demands. NetApp also helped Revlon harness its big data challenge, turning 3.6PB of data from a burden into a business driver.