BRCD 5/15...BROCADE Reports Record Revenues and Earnings for Second Quarter Fiscal 2000
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BROCADE Reports Record Revenues and Earnings for Second Quarter Fiscal 2000
SAN JOSE, Calif., May 15 /PRNewswire/ -- Brocade Communications Systems, Inc. (BROCADE©) (Nasdaq: BRCD - news), the leading supplier of Fibre Channel fabric solutions for Storage Area Networking, reported today net revenues for the second quarter of fiscal 2000 (Q2 00) of $62.1 million, a 489 percent increase over the $10.5 million reported for the second quarter of fiscal 1999 (Q2 99), and a 45 percent increase over the $42.7 million reported in the first quarter of fiscal 2000 (Q1 00).
Net income was $13.3 million in Q2 00, a $14.2 million increase over the net loss of $0.8 million reported for the same period in fiscal 1999, and an 82 percent increase over the $7.3 million reported in Q1 00. Diluted net income per share for Q2 00 was $0.11 compared to a net loss per share of $0.01 in Q2 99 and net income per share of $0.06 in Q1 00.
During Q2 00, BROCADE generated $15.1 million in cash, after purchasing $5.1 million of capital equipment and making equity investments of $5.0 million. Total cash and short-term investments at April 29, 2000 were $111.5 million. Accounts receivable days sales outstanding were 51 days at the end of Q2 00, which is the same as in Q1 00. Inventory represents approximately 11 days of sales on hand (annualized turns of 33 times per year). Annualized quarterly return on stockholder's equity increased from 31.4 percent in Q1 00 to 49.2 percent in Q2 00. Annualized quarterly return on assets rose from 21.6 percent in Q1 00 to 31.8 percent in Q2 00.
Gross margins increased during Q2 00 to 58 percent of net revenues from the 53 percent reported in Q1 00. The margin improvements were principally due to an increased level of shipments of the BROCADE SilkWorm© 2400 and 2800 products and an increased level of sales to the system integration channel. Operating income as a percentage of net revenues improved from 18.9 percent of revenues in Q1 00 to 25.2 percent in Q2 00. Financial results reflect an effective tax rate of 21 percent.
``We are pleased to deliver to our shareholders the fourth consecutive period of quarter over quarter revenue and earnings growth,'' said Greg Reyes, BROCADE President and Chief Executive Officer. ``As data storage requirements continue to increase at incredible rates, BROCADE has achieved a market leadership position in providing a scalable, standards-based networking infrastructure for storage area networks (SANs). The BROCADE brand is now recognized worldwide by customers as representing quality, performance and scalability.''
The award-winning BROCADE SilkWorm© family of Fibre Channel fabric switches and software connects servers with storage devices through a Fibre Channel SAN, enabling companies to access and share storage in a high-performance, manageable and scalable environment. With the completion of six new OEM partnerships this quarter with EMC Corporation, HP, IBM, Intergraph, NCR, and Unisys, the BROCADE SilkWorm switches are now sold by seventeen of the industry's leading providers of systems and storage, who provide more than 90 percent of the world's external storage.
In addition, with the certification of twelve new systems integrator partners this quarter, BROCADE's revenue from the systems integrator channel in Q2 00 accounted for more than 25 percent of total revenues, as compared to five percent of total revenues in Q2 99.
Reyes continued, ``This quarter, we have continued to deliver on all fronts. We have expanded our OEM channel with six new OEM partners, four of whom are shipping BROCADE-branded product. Our products are now available through more than 50 certified BROCADE Fabric Integrators across the world, including Hitachi Data Systems, with whom we have expanded our reseller relationship to offer BROCADE-branded products in 30 countries. In addition, this quarter's growth reflects our significant commitment to providing the highest quality SAN education to the market and our extensive investment in interoperability testing of SAN solutions in multi-vendor environments. With this continued execution, we believe that BROCADE is uniquely positioned to both facilitate the SAN industry's evolution and capitalize on it.''
To support the company's rapid growth and global expansion, BROCADE welcomed three new executive team members in newly-created positions: John Owen as vice president of software; Dave Smith as vice president of SAN Integration Applications and Support; and Jim Cates as CIO.
About Brocade Communications Systems, Inc.
BROCADE is the leading supplier of open Fibre Channel fabric solutions that provide the intelligent backbone for Storage Area Networks (SANs). The BROCADE SilkWorm© family of Fibre Channel switches and software is designed to optimize data availability in the storage enterprise. Using BROCADE solutions, companies can simplify the implementation of Storage Area Networks, reduce the total cost of ownership of data storage environments, and improve network and application efficiency and performance.
Leading systems, applications, and storage vendors have selected BROCADE to provide a networking foundation for their SAN solutions, including Amdahl, CNT, Compaq Computer, Data General, Dell Computer, EMC Corporation, Fujitsu Siemens Computers, Groupe Bull, HP, IBM, Intergraph Computer Systems, NCR, NEC, Network Appliance, SGI, StorageTek and Unisys. In addition, BROCADE counts industry leaders Computer Associates, Emulex, Highground Systems, Hitachi Data Systems Inc., Legato, LSI Logic, ONI Systems, QLogic, StorageNetworks, Tivoli Systems and VERITAS among its strategic partners. For more information, visit the BROCADE website at www.brocade.com or contact the company at info@brocade.com.
NOTE: BROCADE, SilkWorm, SilkWorm Express, Fabric Integrator, Fabric OS, Fabric Weaver, and QuickLoop are trademarks or registered trademarks of Brocade Communications Systems Inc., in the United States and/or in other countries. All other brands, products, or service names are or may be trademarks or service marks of, and are used to identify, products or services of their respective owners.
This news release contains forward-looking statements based on current expectations that involve risks and uncertainties. BROCADE's actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include risks surrounding the development of the emerging market for Storage Area Networks and for SAN switching products, the timely development, production and acceptance of new products and services, and BROCADE's ability to compete in a highly competitive and rapidly changing marketplace. These and other risks are detailed in the Form 10-K, for the year ended October 31, 1999, filed with the Securities and Exchange Commission. BROCADE assumes no obligation to update the forward-looking information contained in this press release.
Brocade Communications Systems, Inc.
Balance Sheets
(in thousands)
April 29, 2000 October 31,
2000 1999
Assets (unaudited)
Current assets:
Cash and cash equivalents $27,859 $25,536
Short-term investments 83,670 63,769
Total cash, cash equivalents and
short-term investments 111,529 89,305
Accounts receivable, net 34,892 17,139
Inventories 3,182 3,686
Prepaid expenses and other current assets 2,495 2,197
Total current assets 152,098 112,327
Property and equipment, net 10,346 4,947
Other assets 5,005 6
Total assets $167,449 $117,280
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $21,683 $10,664
Payroll related liabilities 9,194 4,414
Other accrued liabilities 19,615 9,830
Deferred revenue 8,522 7,688
Current portion of capital lease
obligations 232 478
Total current liabilities 59,246 33,074
Stockholders' equity:
Common stock 121,985 119,651
Deferred stock compensation (2,880) (3,440)
Notes receivable from stockholders (5,181) (5,660)
Accumulated deficit (5,721) (26,345)
Total stockholders' equity 108,203 84,206
Total liabilities and
stockholders' equity $167,449 $117,280
Brocade Communications Systems, Inc.
Statements of Operations
(in thousands, except per share data)
Three Months Ended Six Months Ended
April 29, April 30, April 29, April 30,
2000 1999 2000 1999
(unaudited) (unaudited) (unaudited) (unaudited)
Net revenues $62,053 $10,540 $104,793 $18,547
Cost of revenues 26,053 5,437 46,137 8,758
Gross margin 36,000 5,103 58,656 9,789
Operating expenses:
Research and
development 9,666 2,729 15,694 5,634
Sales and marketing 8,311 2,357 14,558 4,086
General and
administrative 2,080 674 4,116 1,415
Amortization of
deferred stock
compensation 280 220 560 1,377
Total operating
expenses 20,337 5,980 34,928 12,512
Income (loss) from
operations 15,663 (877) 23,728 (2,723)
Interest income, net 1,193 29 2,378 36
Income (loss) before
income taxes 16,856 (848) 26,106 (2,687)
Provision for income
taxes 3,540 -- 5,482 --
Net income (loss) $13,316 $(848) $20,624 $(2,687)
Pro forma diluted
net income (loss)
per share $0.11 $(0.01) $0.17 $(0.03)
Shares used in the
calculation of
pro forma diluted
net income (loss)
per share 120,930 78,544 119,349 76,772
SOURCE: Brocade Communications Systems, Inc |
