Brocade Reports Record Fourth Quarter and Year-End Revenues and Earnings For Fiscal 1999
SAN JOSE, Calif., Nov. 29 /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 fourth quarter of fiscal 1999 (Q4 99) of $30.1 million, a 457 percent increase over $5.4 million reported for the same quarter in fiscal 1998. For the year, Brocade reported net revenues of $68.7 million, a 183 percent increase over the $24.2 million reported in fiscal 1998.
Net income was $3.6 million in Q4 99, a $6.7 million increase over the net loss of $3.1 million reported for the same period in fiscal 1998. Net income per share for Q4 99 was $0.12.
Net income for fiscal 1999 was $2.5 million, a $17.6 million increase over the net loss of $15.1 million reported for fiscal 1998. Net income per share for fiscal 1999 was $.10. All per share amounts are computed on a pro forma diluted basis, which assumes conversion of the convertible preferred stock (using the if-converted method) from the original date of issuance.
During Q4 99, BROCADE generated $13.0 million of cash, increasing total cash and short-term investments at October 30, 1999 to $89.3 million. Accounts receivable days sales outstanding were 52 days at the end of Q4 99, consistent with Q3 99. Inventory represents approximately 23 days of sales on hand (annualized turns of 16 times per year) compared to 24 days (annualized turns of 15 times per year) for Q3 99.
Deferred revenue increased to $7.7 million from the $6.6 million reported at the end of Q3 99. The deferred revenue balance at the end of Q4 99 consists principally of revenue associated with the shipments of BROCADE's new SilkWorm© 2000 family of products to certain OEM customers that were made during the fourth quarter of fiscal 1999. The majority of this revenue is expected to be recognized during Q1 of fiscal 2000 when these OEM customers begin volume shipments of their solutions that incorporate the BROCADE SilkWorm 2000 family of products.
In addition, on November 8, BROCADE announced a two-for-one split of BROCADE Common Stock in the form of a stock dividend. Stockholders of record at the close of business on November 18, 1999 will receive one additional share for each one share of Common Stock held on that date. The stock will begin trading on a split-adjusted basis on December 3, 1999.
``BROCADE's fourth quarter and year-end results reflect our continued momentum as a driving force in storage area networking connectivity products,' commented Greg Reyes, BROCADE president and CEO. ``This quarter, we continued our aggressive channel expansion. We have invested heavily in expanding and training our systems integration channel worldwide to include more than 26 high-end value added channel partners. We also added three new major OEM partners during the quarter. In addition, BROCADE continued the acceleration of our product roadmap and expanded the BROCADE SilkWorm 2000 family of Fibre Channel fabric switches with a new entry-level product line. We now offer a broad family of products to meet our customers' diverse storage networking needs-from the enterprise to the entry-level.
``The Internet continues to drive the need for storage and high-performance network connectivity and BROCADE plays a crucial role in removing the historical performance bottleneck between servers and business-critical storage. We continue to deliver on all fronts to help our customers benefit from the performance, scalability, and cost-effectiveness of a networked model for storage. Through our expanded OEM and systems integration channel, our solutions are now available worldwide to provide high-performance networking connectivity to reduce the total cost of ownership of storage,' concluded Reyes.
In the fourth quarter of 1999, BROCADE announced OEM agreements with Silicon Graphics, the CLARiiON Storage Division of Data General (which was recently acquired by EMC), and NEC. In addition, BROCADE entered into a systems integration partnership with Hitachi Data Systems Canada to expand the channel in the North American market. With these announcements, the majority of the industry's leading systems, applications, and storage vendors have selected BROCADE as their Fibre Channel connectivity standard, including CNT, Compaq Computer, Data General, Dell Computer, Groupe Bull, Hewlett-Packard, IBM, NEC, Network Appliance, Sequent, Siemens Computer Systems, Silicon Graphics, and StorageTek.
This quarter BROCADE also announced the SilkWorm 2000 family of entry-level fabric switches, the SilkWorm 2010, 2040, and 2050. These new switches offer a high-performance, reliable, and manageable networking solution for entry-level SANs, as a cost-effective alternative to managed hubs. As with all BROCADE switches, the entry-level product line is software upgradeable to full-fabric support, providing customers with a highly reliable and cost-effective solution.
In addition, during the quarter, BROCADE initiated a comparison test of available 8-port Fibre Channel switches. The test was designed and performed by KeyLabs (www.keylabs.com), a premier, independent networking testing facility. BROCADE switches significantly outperformed competitive offerings in all categories tested: availability, scalability, migration support, manageability, and usability.
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