Brocade Reports 3rd Quarter Results, Revenues Down

Brocade Communications Systems, Inc.(Brocade(R)) reported today financial results for the third quarter of fiscal 2001 (Q3 01).

According to Brocade, Net income for Q3 01 was $12.0 million as compared to the $20.1 million reported in Q3 00, a reduction of 40%, and the $12.0 million reported in Q2 01. Diluted net income per share for Q3 01 was $0.05 as compared to the $0.08 reported in Q3 00 and the $0.05 reported in Q2 01. During the third quarter, gross margins remained at 60 percent, an improvement over the 58.6 percent reported in Q3 00 and consistent with Q2 01.

The company says that for Q3 01, net revenues were $116.3 million, a $24.2 million increase from the $92.1 million reported in the third quarter of fiscal 2000 (Q3 00) and a $1.1 million increase from the second quarter of fiscal 2001 (Q2 01). Brocade exited the quarter with $13.4 million in deferred revenue, an increase of $7.7 million over the $5.7 million reported in Q2 01.

Greg Reyes, Brocade Chairman and CEO, commented on the quarter: “We are pleased with our results for the third quarter, which demonstrate our ability to manage well through a challenging economic environment. As the amount of data that companies need to store, move, administer, and manage continues to grow at an exponential rate, companies are challenged to keep pace with this data growth within tight IT budgets. With IT projects being prioritized on their Return On Investment (ROI) and their effect on the business bottom line, companies are turning to Storage Area Networks (SANs) to dramatically reduce the cost of managing their data, optimize their investments in compute, storage, and personnel resources, and achieve a rapid ROI. Using Brocade SAN infrastructure, companies can now cost-effectively connect servers and storage subsystems, scale them independently of one another, consolidate and share server and storage resources, and centralize and simplify the labor-intensive aspects of data management.”

Reyes continued, “We continue to be mindful about the effect that the economy is having on IT budgets. However, we believe that we are uniquely positioned to take advantage of the massive market opportunity as companies seek to get more out of their compute, storage, and personnel resources by networking storage and expanding initial SAN deployments into heterogeneous, enterprise storage networks. We are at the forefront of a new products cycle that will continue to raise the bar for the competition, and we are continuing to invest in all aspects of our business to position for growth in 2002. We believe that the powerful combination of our new hardware and software products-including the Brocade SilkWorm(R) 12000 Core Fabric Switch-will further accelerate Brocade’s leadership position as the storage infrastructure of choice.”

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