UNITED STATES
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
Date of Report (Date of earliest event reported):
December 30, 2015
NetApp, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware |
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0-27130 |
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77-0307520 |
(State or other jurisdiction
of incorporation) |
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(Commission File Number) |
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(IRS Employer
Identification No.) |
495 East Java Drive
Sunnyvale, CA 94089
(Address of principal executive offices) (Zip Code)
(408) 822-6000
(Registrants telephone number, including area code)
Not Applicable
(Former
name or former address, if changed since last report.)
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):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Resignation of Chief Financial Officer
On December 30, 2015, Nicholas R. Noviello, the principal financial officer and principal accounting officer of NetApp, Inc.
(NetApp or the Company), resigned as Executive Vice President, Finance and Operations and Chief Financial Officer. Mr. Noviello will remain with the Company to assist with transition matters until January 14, 2016.
Appointment of Interim Chief Financial Officer
On January 4, 2016, Jeffrey K. Bergmann was appointed as interim Chief Financial Officer, effective immediately. Mr. Bergmann will
act as the companys principal financial officer and principal accounting officer. From August 2015 to January 2015, Mr. Bergmann served as Vice President of corporate finance of the Company, overseeing all aspects of corporate financial
planning and analysis, product operations finance, operations finance, global tax and treasury. Mr. Bergmann joined NetApp in June 2009 as the vice president of global tax and subsequently assumed responsibility for treasury and enterprise
risk management. From 2003 to 2008, Mr. Bergmann was senior vice president of tax and finance administration at VeriSign, Inc., a global provider of domain name registry services and Internet security, where he was responsible for global
tax, treasury, internal audit, enterprise risk management and other finance administration functions. Prior to 2003, Mr. Bergmann was a federal tax partner at KPMG LLP, an international accounting firm. Mr. Bergmann holds a BSC
degree in accounting from Santa Clara University and an MBA from Golden Gate University, and he is a certified public accountant.
No new
compensatory arrangements were entered into with Mr. Bergmann in connection with his appointment as interim Chief Financial Officer.
Mr. Bergmann does not have a family relationship with any of the officers or directors of the Company.
There are no related party transactions with Mr. Bergmann reportable under Item 5.02 of Current Report on Form 8-K and
Item 404(a) of Regulation S-K.
Item 7.01. Regulation FD Disclosure.
On January 6, 2016, the Company issued a press release regarding the foregoing matters. A copy of the press release is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
The information contained herein and in the accompanying exhibits shall not be
incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing. The
information in this Item 7.01, including the exhibits hereto, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the
liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.
Non-GAAP Financial Measures
The attached exhibit provides investors with certain non-GAAP measures, including, but not limited to, non-GAAP earnings per share.
NetApp believes that the presentation of this non-GAAP information provides useful information to investors and management regarding financial
and business trends relating to its financial condition and results of operations.
For purposes of internal planning, performance
measurement and resource allocation, NetApps management uses non-GAAP measures of net income that exclude, as applicable: (a) amortization of intangible assets, (b) stock-based compensation expenses, (c) acquisition-related
income and expenses, (d) restructuring and other charges, (e) asset impairments, (f) non-cash interest expense associated with debt, (g) net losses or gains on investments, and (h) GAAP tax provision, but includes a non-GAAP
tax provision based upon 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 makes additional adjustments to the non-GAAP
tax provision for certain tax matters as described below. NetApps management uses these non-GAAP measures in making operating decisions because it believes the measurements provide meaningful supplemental information regarding NetApps
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. In addition, these non-GAAP financial measures are used to measure Company performance for the purposes of determining employee incentive plan
compensation.
As described above, NetApp excludes the following items from its non-GAAP measures when applicable:
A. Amortization of intangible assets. NetApp records amortization of intangible assets that were acquired in connection with its
business combinations. The amortization of intangible assets varies depending on the level of acquisition activity. Management finds it useful to exclude these charges to assess the appropriate level of various operating expenses to assist in
budgeting, planning and forecasting future periods and in measuring operational performance.
B. Stock-based compensation expenses.
NetApp excludes stock-based compensation expenses from its non-GAAP measures primarily because they are non-cash expenses. While management views stock-based compensation as a key element of employee retention and long-term incentives, it does not
view it as an expense to be used in evaluating operational performance in any given period. In addition, the valuation of stock-based awards and associated expense are based on factors and assumptions that management believes are, in large part,
outside of managements control.
C. Acquisition-related income and expenses. NetApp excludes acquisition-related income and
expenses, including (a) merger termination proceeds, (b) due diligence, legal and other one-time integration charges, (c) the impact of inventory step-ups, and (d) write down of assets acquired that NetApp does not intend to use
in its ongoing business, from its non-GAAP measures primarily because they are not related to our on-going business or cost base and, therefore, cannot be relied upon for future planning and forecasting.
D. Restructuring and other charges. These charges include 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. These items are not ordinarily included in our annual operating plan and related budget
due to the unpredictability of the timing and size of these events. We therefore exclude them in our assessment of operational performance.
E. 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.
F. Non-cash interest expense. These are non-cash charges from the amortization of debt discount and issuance costs. Management does not
believe that these charges reflect the underlying performance of our business.
G. Net losses or gains. These include realized gains
and losses on and other-than-temporary impairments of our investments related to significant investment impairments or liquidation events. Management believes that these gains and losses do not reflect the results of our underlying, on-going
business and, therefore, finds it useful to exclude them in assessing our performance.
H. Income tax adjustments. NetApps
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-reoccurring 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 Companys tax structure, (e) tax charges or benefits that are a result of a change in valuation allowance, and (f) the impact of a temporary lapse of tax law,
such as the federal R&D credit, if such extensions have routinely been granted based on past legislative history and are expected to be reinstated in the near future. Management believes that the use of non-GAAP tax provisions provides a more
meaningful measure of the companys operational performance.
Non-GAAP measures are not in accordance with, or an alternative for,
measures prepared in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies. In addition, non-GAAP measures are not based on any comprehensive set of accounting rules or
principles. NetApp believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Companys results of operations as determined in accordance with GAAP. NetApp management compensates for
these limitations by analyzing current and projected results on a GAAP basis as well as a non-GAAP
basis. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with
generally accepted accounting principles in the United States. The non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, GAAP financial measures.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No. |
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Description. |
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99.1 |
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Press release, dated January 6, 2016. |
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 hereunto duly authorized.
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NETAPP, INC. |
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Date: January 6, 2016 |
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By: |
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/s/ Matthew K. Fawcett |
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Matthew K. Fawcett |
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Senior Vice President, General Counsel and
Corporate Secretary |
Exhibit Index
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Exhibit No. |
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Description |
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99.1 |
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Press release, dated January 6, 2016. |
Exhibit 99.1
FOR IMMEDIATE RELEASE
NetApp
Reorganizes Finance and Operations Functions
Appoints Jeffrey Bergmann as Interim Chief Financial Officer; Reaffirms Third Quarter
Guidance
Sunnyvale, Calif. January 6, 2015 NetApp, Inc. (NASDAQ: NTAP) today announced organizational changes that will flatten
and streamline the structure and enable focused execution in driving efficiency and velocity in the business. As part of this reorganization, Cynthia Stoddard, NetApps Chief Information Officer and Kris Newton, VP of Investor Relations, now
report directly to CEO George Kurian, and Bill Berg, NetApps SVP of Operations will report to EVP Joel Reich, among other changes. These changes are effective immediately.
NetApp also announced that Nick Noviello has decided to pursue another opportunity. Effective immediately, Jeffrey Bergmann, vice president of corporate
finance, will assume the role of interim chief financial officer. Mr. Bergmann brings over 30 years of experience to the role, including six years in finance leadership positions at NetApp.
NetApp has a deep bench of talented leaders and I am excited to welcome Cynthia and Kris to my staff. Combining Bills manufacturing operations
team with Joels product operations team reflects synergies and connections and will help us drive greater efficiencies this fiscal year, said George Kurian, chief executive officer. As we said in our last earnings call, we continue
to assess every aspect of our business and are committed to taking decisive action to reduce complexity and drive efficiency. We believe todays announcement will optimize our organizational structure around our priorities as we continue to
pivot towards the growth areas of the market. Our acquisition of Solid Fire will extend our leadership in flash and is further evidence of this pivot. With the strength of our enhanced flash portfolio, we will be well equipped to address new and
growing customer needs, while the adoption of clustered Data ONTAP continues to gain ground in traditional workloads and use cases. We are confident we have the right portfolio to help customers navigate their IT transformations.
Mr. Kurian continued, On behalf of the NetApp Board and management team, I want to thank Nick for his financial leadership and substantial
contributions over the past eight years, overseeing several of its most important functions. We wish him well as he pursues the next chapter in his career. NetApp has a rigorous succession planning process, and a deep bench of leaders, and we are
pleased that Jeff has agreed to serve as interim CFO. As part of the leadership team for the last six years, Jeff has a solid understanding of NetApps business and my full confidence.
NetApp has initiated a search process to identify a permanent CFO and will consider both internal and external candidates.
NetApp also today reaffirmed the financial guidance for the third quarter of fiscal year 2016 provided on its November 18, 2015, earnings conference call
and reiterated on its December 21, 2015 conference call announcing the acquisition of SolidFire. NetApp provided the following financial guidance for the third quarter of fiscal year 2016:
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Net revenues are expected to be in the range of $1.40 billion to $1.50 billion. |
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GAAP earnings per share is expected to be in the range of $0.47 to $0.52 per share. |
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Non-GAAP earnings per share is expected to be in the range of $0.66 to $0.71 per share. |
NetApp reaffirmed that it will pay its next cash dividend of $0.18 per share of NetApp stock on January 20,
2016, to shareholders of record as of the close of business on January 8, 2016.
About Jeffrey Bergmann
Jeffrey Bergmann joined NetApp in June 2009 as vice president of global tax. Since August 2015, Mr. Bergman has served as NetApps vice president of
corporate finance, overseeing all aspects of corporate financial planning and analysis, product operations finance, operations finance, global tax and treasury. From 2003 to 2008, Mr. Bergman was senior vice president, tax and administration at
Verisign, Inc. Prior to 2003, Mr. Bergmann was a federal tax partner at KPMG LLP, an international accounting firm.
About NetApp
Leading organizations worldwide count on NetApp for software, systems and services to manage and store their data. Customers value our teamwork, expertise and
passion for helping them succeed now and into the future. To learn more, visit www.netapp.com.
NetApp and the NetApp logo are trademarks of
NetApp, Inc. All other marks are the property of their respective owners.
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 regarding conducting a CFO search; statements regarding our pending acquisition of SolidFire; statements regarding NetApps expected financial results for the third quarter of fiscal
year 2016; and statements regarding expected dividend policy. Actual results, including with respect to NetApps financial targets and business prospects, could differ materially due to a number of factors, including but not limited to: general
economic and market conditions; the closing of the SolidFire acquisition, including obtaining customary U.S. regulatory approval; the ability to effectively integrate the SolidFire acquisition; the results of NetApps structural changes;
changes in U.S. government spending; revenue seasonality; foreign exchange impacts; and matters specific to our business, such as customer demand for and acceptance of our products, services, execution by our sales organization, changes in storage
consumption models, and our ability to continue to generate operating cash flow. These and other equally important factors are described in reports and documents we file from time to time with the Securities and Exchange Commission, including the
factors described under the section titled Risk Factors in our most recently submitted Annual Report on Form 10-K. We disclaim any obligation to update information contained in this press release whether as a result of new
information, future events, or otherwise.
Press Contact
Meghan Fintland
NetApp Inc.
1 925 785 9192
xdl-uspr@netapp.com
Investor Contact
Kris Newton
NetApp Inc.
1 408 822 3312
kris.newton@netapp.com
NETAPP, INC.
RECONCILIATION OF NON-GAAP GUIDANCE TO GAAP
EXPRESSED AS EARNINGS PER SHARE
THIRD QUARTER FISCAL 2016
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Third Quarter Fiscal 2016 |
Non-GAAP Guidance Net Income Per Share |
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$0.66 - $0.71 |
Adjustments of Specific Items to Net Income |
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Per Share for the Third Quarter Fiscal 2016: |
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Amortization of intangible assets |
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(0.05) |
Stock-based compensation expense |
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(0.19) |
Income tax effect of non-GAAP adjustments |
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0.05 |
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Total Adjustments |
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(0.19) |
GAAP Guidance Net Income Per Share |
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$0.47 - $0.52 |
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