SOURCE: Brocade

Brocade

May 25, 2017 17:36 ET

Brocade Reports Fiscal Q2 2017 Results

SAN JOSE, CA--(Marketwired - May 25, 2017) - Brocade® (NASDAQ: BRCD) today reported financial results for its second fiscal quarter, ended April 29, 2017. Brocade reported second quarter revenue of $553 million, up 6% year-over-year and down 5% quarter-over-quarter. The Company reported a GAAP diluted loss per share of $0.03, down from diluted earnings per share (EPS) of $0.11 in Q2 2016 and down from a diluted loss per share of $0.01 in Q1 2017. Non-GAAP diluted EPS was $0.10 for Q2 2017, down from non-GAAP diluted EPS of $0.22 and $0.16 in Q2 2016 and Q1 2017, respectively. The year-over-year decline in both GAAP and non-GAAP diluted EPS is primarily due to lower SAN and wired IP Networking revenue and the incremental operating expenses associated with the Ruckus Wireless acquisition. In addition, the year-over-year decline in GAAP diluted EPS also reflects the inclusion of certain acquisition-related expenses that negatively impacted Q2 2017 results. The sequential decline in the GAAP diluted loss per share and non-GAAP diluted EPS is primarily due to seasonally lower SAN revenue.

In light of the pending acquisition of Brocade by Broadcom Limited, Brocade will not provide fiscal Q3 2017 guidance and will not hold a conference call to discuss these financial results.

Key Financial Metrics:

                   
  Q2 2017   Q1 2017   Q2 2016   Q2 2017 vs. Q1 2017   Q2 2017 vs. Q2 2016
Revenue $ 553 M   $ 581 M   $ 523 M   (5%)   6%
GAAP earnings (loss) per share--diluted $ (0.03 )   $ (0.01 )   $ 0.11     93%   (126%)
Non-GAAP EPS--diluted $ 0.10     $ 0.16     $ 0.22     (37%)   (52%)
GAAP gross margin   62.0 %     63.1 %     66.9 %   (1.1) pts   (4.9) pts
Non-GAAP gross margin   65.3 %     66.6 %     68.2 %   (1.3) pts   (2.9) pts
GAAP operating margin   (1.1 )%     0.7 %     15.8 %   (1.8) pts   (16.9) pts
Non-GAAP operating margin   11.1 %     15.5 %     22.4 %   (4.4) pts   (11.3) pts
                               

Please see important note of explanation about the use of non-GAAP financial measures below, including a detailed reconciliation between GAAP and non-GAAP information in the tables included herein.

Highlights:

  • SAN product revenue of $282 million was down 5% year-over-year. The decline was primarily the result of lower director and embedded switch sales, which declined 6% and 12% year-over-year, respectively. The year-over-year revenue performance was impacted by competition from alternative storage networking technologies and architectures, and customer uncertainty surrounding the pending acquisition of Brocade by Broadcom. Sequentially, SAN product revenue decreased 8%, consistent with historical seasonal revenue trends, with fixed-configuration and embedded switch revenues down 15% and 18%, respectively, partially offset by a 4% increase in director revenue.

  • IP Networking product revenue of $173 million, including $71 million of product revenue from Ruckus Wireless, was up 32% year-over-year. The increase was primarily due to added wireless revenue following the acquisition of Ruckus Wireless in the third quarter of fiscal year 2016, partially offset by lower wired switch and router revenue, due in part to Broadcom's planned divestiture of Brocade's IP Networking business. Sequentially, IP Networking product revenue was flat.

Board Declares Dividend:

  • The Brocade Board of Directors has declared a regular third fiscal quarter cash dividend of $0.055 per share of the Company's common stock. The dividend payment will be made on July 5, 2017, to stockholders of record at the close of market on June 12, 2017.

Other Q2 2017 product, customer, and partner announcements are available at http://newsroom.brocade.com/.

Brocade (www.brocade.com)
130 Holger Way, San Jose, CA 95134
T. 408.333.8000 F. 408.333.8101

Financial Highlights and Additional Financial Information

                 
  Q2 2017     Q1 2017     Q2 2016  
Routes to market as a % of total net revenues:                
  OEM revenues 55 %   57 %   63 %
  Channel/Direct revenues 45 %   43 %   37 %
                 
  10% or greater customer revenues 27 %   19 %   30 %
Geographic split as a % of total net revenues (1):                
  Domestic revenues 50 %   47 %   53 %
  International revenues 50 %   53 %   47 %
Segment split as a % of total net revenues:                
  SAN product revenues 51 %   53 %   57 %
  IP Networking product revenues 31 %   30 %   25 %
  Global Services revenues 18 %   17 %   18 %
                 
  SAN business revenues (2) 60 %   62 %   67 %
  IP Networking business revenues (2) 40 %   38 %   33 %
                   
Additional information:   Q2 2017   Q1 2017   Q2 2016
  GAAP net income (loss) attributable to Brocade   $ (11 )M   $ (6 )M   $ 43 M
  Non-GAAP net income attributable to Brocade   $ 43 M   $ 68 M   $ 89 M
  GAAP operating income (loss)   $ (6 )M   $ 4 M   $ 83 M
  Non-GAAP operating income   $ 61 M   $ 90 M   $ 117 M
  GAAP effective tax rate     44.2 %     45.6 %     41.6 %
  Non-GAAP effective tax rate     16.1 %     13.6 %     20.8 %
  Cash and cash equivalents   $ 1,300 M   $ 1,230 M   $ 1,428 M
  Capital expenditures   $ 8 M   $ 12 M   $ 19 M
  Cash provided by (used in) operations   $ 108 M   $ (3 )M   $ 112 M
  Days sales outstanding     43 days     41 days     36 days
  Employees at end of period     5,524     5,823     4,724
  SAN port shipments     0.8 M     0.9 M     0.8 M
  Share repurchases   $ -     $ -     $ 36.4 M
                           

Please see important note of explanation about the use of non-GAAP financial measures below, including a detailed reconciliation between GAAP and non-GAAP information in the tables included herein.

   
(1) Revenues are attributed to geographic areas based on known product delivery location. Since some OEM partners take delivery of Brocade products domestically and then ship internationally to their end users, the percentage of international revenues based on end-user location would likely be higher.
   
(2) SAN and IP Networking business revenues include hardware and software product, support, and services revenues.
   

Non-GAAP Financial Measures

To supplement financial information presented on a GAAP basis, Brocade provides information presented on a non-GAAP basis. These non-GAAP financial measures include non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP operating income, non-GAAP tax rate, non-GAAP net income, and non-GAAP EPS. These non-GAAP financial measures are not computed in accordance with, or as an alternative to, financial information presented on a GAAP basis. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. The most directly comparable GAAP information and a reconciliation between the GAAP and non-GAAP amounts is provided in the tables at the end of this press release.

Management believes that the non-GAAP financial measures used in this press release allow management to gain a better understanding of Brocade's comparative operating performance, both from period to period and relative to its competitors. These non-GAAP financial measures also help with the determination of Brocade's baseline performance before gains, losses or charges that are considered by management to be outside of ongoing operating results. Accordingly, management uses these non-GAAP financial measures for planning and forecasting of future periods and in making decisions regarding operations and the allocation of resources.

Management believes these non-GAAP financial measures, when read in conjunction with Brocade's GAAP financials, provide useful information to investors by offering:

  • the ability to make more meaningful period-to-period comparisons of Brocade's ongoing operating results;

  • the ability to make more meaningful comparisons of Brocade's operating performance relative to its competitors;

  • the ability to better identify trends in Brocade's underlying business and to perform related trend analyses; and

  • a better understanding of how management plans and measures Brocade's underlying business.

In determining non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP operating income, non-GAAP tax rate, non-GAAP net income and non-GAAP EPS, management excludes certain gains or losses and benefits or costs that are the result of events that arise outside the ordinary course of Brocade's continuing operations. Management believes that it is appropriate to evaluate Brocade's operating performance by excluding those items that are not indicative of ongoing operating results or limit comparability. Such items include, but are not limited to: (i) impact to cost of revenues from purchase accounting adjustments to inventory; and (ii) acquisition, divestiture, and integration costs.

Management also excludes the following non-cash charges in determining these non-GAAP financial measures: (i) stock-based compensation expense; (ii) amortization of purchased intangible assets; and (iii) non-cash interest expense related to the convertible debt.

Management believes that the exclusion of stock-based compensation allows for more accurate comparisons of Brocade's operating results to Brocade's peer companies. This is due to the varying use of valuation methodologies and subjective assumptions and the variety of award types. In addition, the exclusion of the expense associated with the amortization of acquisition-related intangible assets is appropriate because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have short lives, and the exclusion of amortization expense allows comparisons of operating results that are consistent over time for Brocade's newly acquired and long-held businesses. In connection with the convertible debt, under the relevant accounting guidance, a non-cash interest expense is recognized for the convertible debt as an imputed interest expense for the conversion feature. Management believes excluding the non-cash interest expense related to the convertible debt from its non-GAAP financial measures is useful for investors because the expense does not represent a cash outflow in the respective reporting periods and is not indicative of ongoing operating performance.

Finally, management believes that it is appropriate to exclude the tax effects of the items noted above and (i) tax charges and benefits related to unusual or infrequent intercompany transactions; (ii) tax charges or benefits that are a result of the implementation of restructuring plans; and (iii) tax charges resulting from the integration of intellectual property assets from acquisitions. Management believes that the exclusion of these items from its non-GAAP tax provision provides a more meaningful measure of Brocade's operational performance of non-GAAP net income and non-GAAP EPS.

Limitations: These non-GAAP financial measures have limitations because they do not include all items of income and expense that impact the company. In addition, these non-GAAP financial measures may not be comparable to similar measurements reported by other companies. Management compensates for these limitations by relying primarily on its GAAP results and using non-GAAP financial measures only supplementally. Management also provides robust and detailed reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure, and management encourages investors to review carefully those reconciliations.

Forward-Looking Statements

This press release contains forward-looking statements including, but not limited to, statements regarding Brocade's financial results, goals, plans, strategy, business outlook and prospects. These statements are based on current expectations as of the date of this press release and involve a number of risks, uncertainties and assumptions that may cause actual results to differ significantly. The risks, uncertainties and assumptions include, but are not limited to: the effect on Brocade of increasing market competition and changes in the industry; the impact on Brocade of conditions in the market for Storage Area Networking products; Brocade's ability to execute on its sales strategy and plans for future operations; the impact on Brocade of macroeconomic trends and events and changes in IT spending levels; Brocade's ability to introduce and achieve market acceptance of new products and support offerings on a timely basis; risks associated with Brocade's international operations; and integration and other risks associated with acquisitions, divestitures and strategic investments. The risks, uncertainties and assumptions also include, but are not limited to: the risk that the proposed acquisition by Broadcom may not be completed in a timely manner or at all, which may adversely affect Brocade's business and the price of the common stock of Brocade; the failure to satisfy any of the conditions to the consummation of the proposed transaction, including the receipt of certain governmental and regulatory approvals; the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; the effect of the announcement or pendency of the proposed transaction on Brocade's business relationships, operating results and business generally; risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the proposed transaction; risks related to diverting management's attention from Brocade's ongoing business operations; the outcome of legal proceedings that have been and may in the future be instituted against Brocade related to the merger agreement or the proposed transaction; and unexpected costs, charges or expenses resulting from the proposed transaction. Certain of these and other risks are set forth in more detail in Brocade's Form 10-Q for the fiscal quarter ended January 28, 2017, and in Brocade's Annual Report on Form 10-K for the fiscal year ended October 29, 2016. Brocade does not assume any obligation to update or revise any such forward-looking statements whether as the result of new developments or otherwise.

About Brocade

Brocade (NASDAQ: BRCD) networking solutions help the world's leading organizations turn their networks into platforms for business innovation. With solutions spanning public and private data centers to the network edge, Brocade is leading the industry in its transition to the New IP network infrastructures required for today's era of digital business. (www.brocade.com)

Brocade and the B-wing symbol are registered trademarks of Brocade Communications Systems, Inc., in the United States and many other countries. Other brands, products, or service names mentioned herein may be trademarks of Brocade or others. Additional information about Brocade's trademarks is available at: http://www.brocade.com/en/legal/brocade-Legal-intellectual-property/brocade-legal-trademarks.html.

© 2017 Brocade Communications Systems, Inc. All Rights Reserved.

   
BROCADE COMMUNICATIONS SYSTEMS, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(Unaudited)  
   
    Three Months Ended     Six Months Ended  
    April 29,
2017
    April 30,
2016
    April 29,
2017
    April 30,
2016
 
    (In thousands, except per share amounts)  
Net revenues:                                
  Product   $ 455,107     $ 428,193     $ 935,724     $ 909,360  
  Service     97,646       95,113       198,492       188,230  
    Total net revenues     552,753       523,306       1,134,216       1,097,590  
Cost of revenues:                                
  Product     164,738       132,208       331,393       276,305  
  Service     45,255       40,787       92,940       82,159  
    Total cost of revenues     209,993       172,995       424,333       358,464  
Gross margin     342,760       350,311       709,883       739,126  
Operating expenses:                                
  Research and development     119,545       89,263       243,048       182,520  
  Sales and marketing     172,315       148,933       352,516       300,760  
  General and administrative     31,016       22,791       64,513       45,220  
  Amortization of intangible assets     7,582       902       15,176       1,804  
  Acquisition, divestiture, and integration costs     18,236       5,757       36,273       5,757  
  Restructuring and other related benefits     -       -       -       (566 )
    Total operating expenses     348,694       267,646       711,526       535,495  
Income (loss) from operations     (5,934 )     82,665       (1,643 )     203,631  
Interest expense     (15,949 )     (9,955 )     (31,442 )     (19,820 )
Interest and other income, net     2,098       1,091       2,556       1,760  
Income (loss) before income tax     (19,785 )     73,801       (30,529 )     185,571  
Income tax expense (benefit)     (8,753 )     30,716       (13,653 )     48,840  
Net income (loss)   $ (11,032 )   $ 43,085     $ (16,876 )   $ 136,731  
Less: Net loss attributable to noncontrolling interest   $ (65 )   $ --     $ (228 )   $ --  
Net income (loss) attributable to Brocade Communications Systems, Inc.   $ (10,967 )   $ 43,085     $ (16,648 )   $ 136,731  
Net income (loss) per share--basic attributable to Brocade Communications Systems, Inc. stockholders   $ (0.03 )   $ 0.11     $ (0.04 )   $ 0.34  
Net income (loss) per share--diluted attributable to Brocade Communications Systems, Inc. stockholders   $ (0.03 )   $ 0.11     $ (0.04 )   $ 0.33  
Shares used in per share calculation--basic     408,589       400,554       406,792       404,228  
Shares used in per share calculation--diluted     408,589       408,748       406,792       411,917  
                                 
Cash dividends declared per share   $ 0.055     $ 0.045     $ 0.110     $ 0.090  
                                 
                                 
                                 
BROCADE COMMUNICATIONS SYSTEMS, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)  
(Unaudited)  
   
  Three Months Ended   Six Months Ended  
  April 29,
2017
    April 30,
2016
  April 29,
2017
    April 30,
2016
 
  (In thousands)  
Net income (loss) $ (11,032 )   $ 43,085   $ (16,876 )   $ 136,731  
Other comprehensive income and loss, net of tax:                            
  Unrealized gains (losses) on cash flow hedges:                            
    Change in unrealized gains and losses   576       1,964     167       (336 )
    Net gains and losses reclassified into earnings   251       724     436       1,350  
  Net unrealized gains on cash flow hedges   827       2,688     603       1,014  
  Foreign currency translation adjustments   2,023       2,070     663       (133 )
Total other comprehensive income   2,850       4,758     1,266       881  
Total comprehensive income (loss) $ (8,182 )   $ 47,843   $ (15,610 )   $ 137,612  
Less: Net loss attributable to noncontrolling interest   (65 )     --     (228 )     --  
Less: Total other comprehensive loss attributable to noncontrolling interest   (4 )     --     (72 )     --  
Total comprehensive income (loss) attributable to Brocade Communications Systems, Inc. $ (8,113 )   $ 47,843   $ (15,310 )   $ 137,612  
                             
                             
                             
BROCADE COMMUNICATIONS SYSTEMS, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(Unaudited)  
   
  April 29,
2017
    October 29,
2016
 
  (In thousands, except par value)  
ASSETS              
Current assets:              
  Cash and cash equivalents $ 1,299,660     $ 1,257,075  
  Accounts receivable, net of allowances for doubtful accounts of $1,965, and $1,736 as of April 29, 2017, and October 29, 2016, respectively   260,343       284,344  
  Inventories   78,467       69,355  
  Prepaid expenses and other current assets   69,100       62,236  
    Total current assets   1,707,570       1,673,010  
Property and equipment, net   434,795       455,326  
Goodwill   2,291,246       2,295,184  
Core/developed technology intangible assets, net   227,199       248,938  
Other intangible assets, net   182,152       200,840  
Non-current deferred tax assets   27,995       12,736  
Other assets   46,273       53,777  
    Total assets $ 4,917,230     $ 4,939,811  
LIABILITIES AND STOCKHOLDERS' EQUITY              
Current liabilities:              
  Accounts payable $ 111,980     $ 128,685  
  Accrued employee compensation   163,949       154,165  
  Deferred revenue   214,103       221,940  
  Current portion of long-term debt   76,765       76,692  
  Other accrued liabilities   121,805       113,170  
    Total current liabilities   688,602       694,652  
Long-term debt, net of current portion   1,472,501       1,502,063  
Non-current deferred revenue   87,352       90,051  
Non-current income tax liability   91,964       102,100  
Other non-current liabilities   4,538       5,370  
    Total liabilities   2,344,957       2,394,236  
Commitments and contingencies              
Stockholders' equity:              
Brocade stockholders' equity:              
  Preferred stock, $0.001 par value, 5,000 shares authorized, no shares issued and outstanding   --       --  
  Common stock, $0.001 par value, 800,000 shares authorized:              
    Issued and outstanding: 409,865 and 401,748 shares as of April 29, 2017, and October 29, 2016, respectively   410       402  
  Additional paid-in capital   1,601,809       1,514,730  
  Accumulated other comprehensive loss   (26,147 )     (27,413 )
  Retained earnings   993,767       1,055,194  
    Total Brocade stockholders' equity   2,569,839       2,542,913  
Noncontrolling interest   2,434       2,662  
    Total stockholders' equity $ 2,572,273     $ 2,545,575  
    Total liabilities and stockholders' equity $ 4,917,230     $ 4,939,811  
                   
                   
                   
BROCADE COMMUNICATIONS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
   
  Six Months Ended  
  April 29,
2017
    April 30,
2016
 
  (In thousands)  
Cash flows from operating activities:              
  Net income (loss) $ (16,876 )   $ 136,731  
  Adjustments to reconcile net income (loss) to net cash provided by operating activities:              
    Excess tax benefits from stock-based compensation   (2,220 )     (10,987 )
    Depreciation and amortization   82,643       45,839  
    Loss on disposal of property and equipment   464       437  
    Amortization of debt issuance costs and debt discount   10,511       8,704  
    Provision (recovery) for doubtful accounts receivable and sales allowances   2,320       (1,083 )
    Non-cash purchase accounting adjustments to inventory   3,921       --  
    Non-cash stock-based compensation expense   70,745       48,833  
  Changes in assets and liabilities, net of acquisitions:              
    Accounts receivable   21,681       32,051  
    Inventories   (2,177 )     (424 )
    Prepaid expenses and other assets   602       (1,882 )
    Deferred tax assets   48       (74 )
    Accounts payable   (24,986 )     (5,127 )
    Accrued employee compensation   (9,858 )     (21,136 )
    Deferred revenue   (11,536 )     (11,715 )
    Other accrued liabilities   (19,708 )     5,500  
    Restructuring liabilities   (330 )     (1,035 )
      Net cash provided by operating activities   105,244       224,632  
Cash flows from investing activities:              
  Purchases of non-marketable equity and debt investments   --       (2,000 )
  Purchases of property and equipment   (19,851 )     (42,425 )
  Net cash paid in connection with acquisitions   --       (8,061 )
  Proceeds from collection of note receivable   250       250  
      Net cash used in investing activities   (19,601 )     (52,236 )
Cash flows from financing activities:              
  Payment of principal related to the term loan   (40,000 )     --  
  Payment of principal related to capital leases   --       (197 )
  Common stock repurchases   --       (180,848 )
  Proceeds from issuance of common stock   39,693       20,512  
  Payment of cash dividends to stockholders   (44,780 )     (36,445 )
  Excess tax benefits from stock-based compensation   2,220       10,987  
      Net cash used in financing activities   (42,867 )     (185,991 )
  Effect of exchange rate fluctuations on cash and cash equivalents   (191 )     356  
  Net increase (decrease) in cash and cash equivalents   42,585       (13,239 )
  Cash and cash equivalents, beginning of period   1,257,075       1,440,882  
  Cash and cash equivalents, end of period $ 1,299,660     $ 1,427,643  
                   
                   
                   
BROCADE COMMUNICATIONS SYSTEMS, INC.
RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES
(Unaudited)
 
   
  Three Months Ended  
  April 29,
2017
    January 28,
2017
    April 30,
2016
 
  (In thousands, except per share amounts)  
Non-GAAP adjustments                      
  Stock-based compensation expense included in cost of revenues $ 3,234     $ 5,650     $ 3,531  
  Amortization of intangible assets expense included in cost of revenues   12,679       13,060       3,193  
  Purchase accounting adjustments to inventory   2,384       1,537       -  
    Total gross margin impact from non-GAAP adjustments   18,297       20,247       6,724  
                       
  Stock-based compensation expense included in research and development   6,631       12,074       5,123  
  Stock-based compensation expense included in sales and marketing   9,779       16,815       11,052  
  Stock-based compensation expense included in general and administrative   6,645       10,975       5,083  
  Amortization of intangible assets expense included in operating expenses   7,582       7,594       902  
  Acquisition, divestiture, and integration costs   18,236       18,037       5,757  
    Total operating income impact from non-GAAP adjustments   67,170       85,742       34,641  
                       
  Convertible debt interest   4,018       3,968       3,824  
  Effects of certain intercompany transactions on the tax provision   -       -       13,670  
  Income tax effect of non-GAAP adjustments   (17,029 )     (15,639 )     (6,329 )
    Total net income impact from non-GAAP adjustments $ 54,159     $ 74,071     $ 45,806  
                       
Gross margin reconciliation                      
  GAAP gross margin $ 342,760     $ 367,123     $ 350,311  
  Total gross margin impact from non-GAAP adjustments   18,297       20,247       6,724  
    Non-GAAP gross margin $ 361,057     $ 387,370     $ 357,035  
  GAAP gross margin, as a percentage of total net revenues   62.0 %     63.1 %     66.9 %
  Non-GAAP gross margin, as a percentage of total net revenues   65.3 %     66.6 %     68.2 %
                       
Operating income reconciliation                      
  GAAP operating income (loss) $ (5,934 )   $ 4,291     $ 82,665  
  Total operating income impact from non-GAAP adjustments   67,170       85,742       34,641  
    Non-GAAP operating income $ 61,236     $ 90,033     $ 117,306  
  GAAP operating income (loss), as a percentage of total net revenues   (1.1 )%     0.7 %     15.8 %
  Non-GAAP operating income, as a percentage of total net revenues   11.1 %     15.5 %     22.4 %
                       
Net income (loss) and net income (loss) per share attributable to Brocade reconciliation                      
  Net income (loss) attributable to Brocade on a GAAP basis $ (10,967 )   $ (5,681 )   $ 43,085  
  Total net income impact from non-GAAP adjustments   54,159       74,071       45,806  
    Non-GAAP net income attributable to Brocade $ 43,192     $ 68,390     $ 88,891  
                       
  GAAP net income (loss) per share--basic attributable to Brocade $ (0.03 )   $ (0.01 )   $ 0.11  
  Total impact on net income (loss) per share--basic from non-GAAP adjustments   0.14       0.18       0.11  
    Non-GAAP net income per share--basic attributable to Brocade $ 0.11     $ 0.17     $ 0.22  
                       
  GAAP net income (loss) per share--diluted attributable to Brocade $ (0.03 )   $ (0.01 )   $ 0.11  
  Total impact on net income (loss) per share--diluted from non-GAAP adjustments   0.13       0.17       0.11  
    Non-GAAP net income per share--diluted attributable to Brocade $ 0.10     $ 0.16     $ 0.22  
                       
  Shares used in GAAP and non-GAAP per share calculation--basic   408,589       404,995       400,554  
  Shares used in GAAP per share calculation--diluted   408,589       404,995       408,748  
  Shares used in non-GAAP per share calculation--diluted   419,614       415,861       408,748  
                       
Effective tax rate reconciliation                      
  GAAP income (loss) before income tax   (19,785 )     (10,744 )     73,801  
  Total operating income impact from non-GAAP adjustments   67,170       85,742       34,641  
  Convertible debt interest   4,018       3,968       3,824  
    Non-GAAP income before income tax   51,403       78,966       112,266  
                       
  GAAP income tax expense (benefit)   (8,753 )     (4,900 )     30,716  
  Effects of certain intercompany transactions on the tax provision   -       -       (13,670 )
  Income tax effect of non-GAAP adjustments   17,029       15,639       6,329  
    Non-GAAP income tax expense   8,276       10,739       23,375  
                       
  GAAP income (loss) before income tax   (19,785 )     (10,744 )     73,801  
  GAAP income tax expense (benefit)   (8,753 )     (4,900 )     30,716  
  GAAP effective tax rate   44.2 %     45.6 %     41.6 %
                       
  Non-GAAP income before income tax   51,403       78,966       112,266  
  Non-GAAP income tax expense   8,276       10,739       23,375  
  Non-GAAP effective tax rate   16.1 %     13.6 %     20.8 %
                         

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