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NetApp Annual Report, Year Ended Apr 30, 2005

Filing Date
Filed July 8, 2005
Period End
April 30, 2005
Security
NTAP
In the record · 2016–202610-K1110-Q328-K97

NTAP filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 97 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Dec ’16Dec ’16
  2. FY2019 annual report10-K · Jun ’19Jun ’19
  3. Leadership change8-K · Sep ’21Sep ’21
  4. Leadership change8-K · Sep ’25Sep ’25

01—Abstract

Summary

Summary of the 10-K filed July 8, 2005. Cited figures are marked; the original filing is the authoritative source.

Network Appliance, Inc. (now NetApp, Inc.) reported fiscal 2005 (year ended April 30, 2005) total revenues of $1,598.1 milliona, up from $1,170.3 million in fiscal 2004, and net income of $225.8 million, compared with $152.1 million a year earlier.

Income from operations rose to $253.2 millionb, and diluted earnings per share were $0.59 versus $0.42. Product revenue was $1,430.3 million and service revenue was $167.8 million. Overall gross margin was 61.0%, up from 60.2%, driven by a favorable product and add-on software mix and improved services margin.

Indirect channels accounted for 51.2% of fiscal 2005 business. The balance sheet remained debt-free apart from $4.5 millionc of long-term restructuring and deferred rent liabilities. Cash, cash equivalents and short-term investments totaled $1,170.0 million as of April 30, 2005, and operating cash flow was $462.1 million.

During fiscal 2005 the company repurchased $192.9 milliond of common stock, and its board approved an additional $300.0 million repurchase program on May 24, 2005. Deferred revenue grew to $449.2 million, reflecting a shift toward larger enterprise customers. Looking ahead, management expects revenue growth in fiscal 2006, with planned product refreshes, a next-generation operating system with enhanced storage grid functionality, and a comprehensive suite of data protection solutions.

The company also disclosed subsequent events: the May 2005 acquisition of Alacritus for about $11 million in cash, and a June 15, 2005 agreement to acquire Decru for approximately $265 million, 80% in stock and 20% in cash. Management expects service margin to be in the low 20% range in fiscal 2006.

02—Key points

Key Highlights

  1. Total revenues rose to $1.60 billion in fiscal 2005 from $1.17 billion in fiscal 2004, and product revenue increased 35.2%.
  2. Net income increased 48.4% to $225.8 million, and diluted EPS was $0.59 versus $0.42.
  3. Gross margin improved to 61.0% from 60.2%, helped by favorable product and add-on software mix and better services margin.
  4. Cash, cash equivalents and short-term investments were $1,170.0 million, with operating cash flow of $462.1 million and no debt other than $4.5 million of restructuring and deferred rent liabilities.
  5. The company repurchased $192.9 million of stock in fiscal 2005, and the board approved an additional $300.0 million buyback on May 24, 2005.
  6. Indirect channels generated 51.2% of business, and international revenues were $765.8 million, or 47.9% of total revenues.
  7. Pending acquisition of Decru for approximately $265 million (80% stock, 20% cash) was announced on June 15, 2005.

03—Questions

Frequently Asked Questions

  1. How did NetApp perform financially in fiscal 2005?

    Total revenues were $1,598.1 million, up from $1,170.3 million, and net income was $225.8 million, up from $152.1 million. Income from operations was $253.2 million, compared with $158.5 million in fiscal 2004.

  2. Does NetApp carry debt, and how much cash does it hold?

    The filing states the balance sheet remained debt-free except for $4.5 million of long-term restructuring and deferred rent liabilities. Cash, cash equivalents and short-term investments totaled $1,170.0 million as of April 30, 2005.

  3. What is the outlook for fiscal 2006?

    Management expects revenue to grow in fiscal 2006 and plans to refresh its product line, deliver a next-generation operating system with enhanced storage grid functionality, and offer a comprehensive suite of data protection solutions. It expects service margin to be in the low 20% range and research and development expenses to increase in absolute dollars.

  4. What acquisitions did NetApp complete or announce after fiscal year-end?

    NetApp acquired Alacritus, Inc. for approximately $11 million in cash, closing May 2, 2005. On June 15, 2005, it agreed to buy Decru, Inc. for about $265 million, 80% in common stock and 20% in cash, with closing expected in October 2005 subject to regulatory approvals.

  5. What are the main risks flagged in the filing?

    Key risks include intense competition from EMC, Hitachi Data Systems, HP, IBM and Sun, dependence on a limited number of suppliers and contract manufacturers, disk drive supply constraints and pricing pressure, reliance on indirect channels, and international operations, which generated 47.9% of revenue in fiscal 2005.

04—Continue

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