Brocade Reports First Quarter of Fiscal 2004 Results
Wednesday February 11, 4:15 pm ET
Revenues Increase 5% Sequentially and 18% Year Over Year
SAN JOSE, Calif., Feb. 11 /PRNewswire-FirstCall/ -- Brocade Communications Systems, Inc. (Brocade®) (Nasdaq: BRCD - News) reported today financial results for its first quarter of fiscal year 2004 (Q1 04) which ended January 24, 2004. Net revenues for Q1 04 were $145.0 million, an increase of five percent from $137.8 million reported in the fourth quarter of fiscal year 2003 (Q4 03) and an increase of 18 percent from $123.1 million reported in the first quarter of fiscal 2003 (Q1 03).
"Our first quarter was a good one, and fiscal 2004 is off to an excellent start for Brocade. During the first quarter, we saw revenue growth across our entire business," said Greg Reyes, Brocade Chairman and CEO. "This represents our 4th quarter in a row of improved revenue, gross margin and operating margin. With our upcoming product cycle and improving trends in the storage sector, we continue to be confident in our market position and future prospects."
Non-GAAP net income for Q1 04 was $8.0 million, or $0.03 per share, as compared to non-GAAP net income of $4.6 million, or $0.02 per share, reported in Q4 03 and non-GAAP net income of $0.0 million, or $0.00 per share, reported in Q1 03. Non-GAAP net income for Q1 04 excludes gains related to repurchases of convertible subordinated debt, deferred stock compensation expense related to the acquisition of Rhapsody Networks, Inc. (Rhapsody), and lease termination, facilities consolidation and other related costs. Non-GAAP net income for Q4 03 excludes gains related to repurchases of convertible subordinated debt, a gain on the disposition of private strategic investments, a reduction of previously recorded restructuring costs, and deferred stock compensation expense related to the acquisition of Rhapsody. Non-GAAP net income for Q1 03 excludes net gains on the disposition of private strategic investments and restructuring costs associated with a company-wide workforce reduction in Q1 03. A reconciliation between GAAP and non-GAAP information is contained in the tables below.
Reporting on a GAAP basis, net loss for Q1 04 was $36.8 million, or $(0.14) per share. This compares to GAAP net income for Q4 03 of $14.8 million, or $0.06 per share, and GAAP net loss for Q1 03 of $6.9 million, or $(0.03) per share.
Q1 04 Financial Highlights
-- Q1 04 net revenues of $145.0 million, an increase of 5% from Q4 03 and
18% from Q1 03
-- Q1 04 gross margin increased to 54.9%, an improvement from 54.6% in
Q4 03 and 53.7% in Q1 03
-- Q1 04 non-GAAP operating income (loss) as a percentage of revenues
increased to 6.5%, an improvement from 4.0% in Q4 03 and (1.3%) in
Q1 03. Q1 04 GAAP operating loss as a percentage of revenues was 45.5%
-- Non-GAAP earnings per share (EPS) increased to $0.03, an improvement
from $0.02 in Q4 03 and $0.00 in Q1 03
-- Excluding the $75.2 million charge for lease termination, facilities
lease losses and other related costs, cash flow from operations
increased to $19.6 million in Q1 04, compared to $17.0 million in
Q4 03. Q1 04 GAAP cash flow used in operations was $55.6 million
-- Cash and investments as of the end of Q1 04 totaled $731.2 million.
-- Day sales outstanding in accounts receivable were 49 days, an
improvement from 50 days in Q4 03 and 53 days in Q1 03
During Q1 04, Brocade purchased a building located at its San Jose, California, headquarters for $106.8 million in cash, plus transaction costs. The 194,000 square foot facility, which houses a portion of the Company's engineering organization and development, test and interoperability laboratories, was previously leased. As a result of the building purchase, in the first quarter of fiscal year 2004, Brocade recorded a non-recurring charge of $75.2 million primarily related to lease termination, facilities lease losses and other associated costs.
Also during Q1 04, Brocade purchased on the open market $9.2 million face value of its two percent convertible subordinated notes. Brocade paid an average of $0.93 cents on each dollar of face value for an aggregate cash purchase price of $8.6 million, which resulted in a pre-tax gain of $0.5 million. As of January 24, 2004, the remaining convertible debt outstanding was $433.7 million. |
