SOURCE: Brocade

Brocade

May 19, 2011 16:05 ET

Brocade Reports Q2 FY2011 Results

Revenues Grow Nearly 10% Year-Over-Year Driven by Storage and Enterprise/Service Provider Ethernet Businesses

SAN JOSE, CA--(Marketwire - May 19, 2011) - Brocade® (NASDAQ: BRCD) today reported financial results for its second fiscal quarter ended April 30, 2011. Brocade recorded quarterly revenues of $550 million, representing an increase of 9.8% year-over-year and resulting in diluted earnings per share (EPS) of $0.06 on a GAAP basis and $0.13 on a non-GAAP basis.

In the quarter, Brocade saw product revenue growth of 17% year-over-year in its storage networking business driven by strong revenues across the product portfolio that included over 20% growth for both backbone/director and Server product revenues. Brocade also saw its Enterprise and Service Provider Ethernet businesses revenue grow 24% year-over-year led by its EMEA, Americas and Asia Pacific geographies. Overall Ethernet business revenue was up 1% year-over-year as lower Federal Ethernet revenue offset the growth in Enterprise and Service Provider businesses. Brocade exceeded its expectations for non-GAAP EPS and non-GAAP operating margin in the quarter.

"Brocade executed well in Q2 delivering nearly 10 percent growth year-over-year in revenue driven by strong performances in our Ethernet business among enterprises and service providers and stronger-than-expected performance in our SAN business," said Michael Klayko, CEO of Brocade. "We are excited about our opportunities going forward as there is no doubt that the networking industry is in the beginning stages of a new innovation cycle driven by the IT imperatives of virtualization and cloud computing. We believe that Brocade has established a clear leadership position by out-innovating the rest of the industry and delivering purpose-built solutions to customers well-ahead of the competition."

In addition to this press release, Brocade management has posted prepared comments and slides on its Fiscal Q2 results and Fiscal Q3 outlook at www.brcd.com. Brocade will host a live webcast conference call to answer questions from investors and analysts today at 2:30 p.m. Pacific time. Questions may also be submitted in advance to ir@brocade.com.

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

Financial Highlights and Additional Financial Information

                                        Q2 2011      Q1 2011      Q2 2010
                                      ----------   ----------   ----------
Revenue                               $     550M   $     546M   $     501M
GAAP net income                       $      28M   $      27M   $      22M
Non-GAAP net income                   $      63M   $      61M   $      63M
GAAP EPS - diluted                    $     0.06   $     0.06   $     0.05
Non-GAAP EPS - diluted                $     0.13   $     0.12   $     0.13
Non-GAAP gross margin (1)                   63.5%        62.0%        62.7%
Non-GAAP operating margin                   18.2%        17.1%        20.5%
Adjusted EBITDA (2)                   $     123M   $     114M   $     116M
Cash provided by operations           $     114M   $     118M   $     68M


--  Q2 effective GAAP tax rate was (2.3)% and non-GAAP effective tax rate
    was 20.7%.
--  Q2 total Storage Area Networking (SAN) port shipments were
    approximately 1.2 million.

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


                                        Q2 2011      Q1 2011      Q2 2010
As a % of total revenues              ----------   ----------   ----------
OEM revenues                                  64%          66%          63%
Channel/Direct revenues                       36%          34%          37%
10% or greater customer revenues              53%          47%          44%
Domestic revenues                             62%          59%          65%
International revenues                        38%          41%          35%
Data Storage Revenues                         60%          61%          56%
Ethernet Products Revenues                    23%          23%          26%
Global Services Revenue                       17%          16%          18%
Ethernet Business Revenues (3)                29%          28%          31%
As a % of Ethernet Business Revenues (3):
Enterprise, excluding Federal                 61%          61%          47%
Federal                                       12%          13%          28%
Service Provider                              27%          26%          25%


                                        Q2 2011      Q1 2011      Q2 2010
                                      ----------   ----------   ----------
Cash, cash equivalents and
 investments                          $      466M  $      416M  $      290M
Deferred revenues                     $      272M  $      265M  $      247M
Capital expenditures                  $       27M  $       23M  $       62M
Total debt, net of discount           $      836M  $      892M  $      981M
Days sales outstanding                    50 days      46 days      54 days
Employees at end of period                  4,762        4,721        4,245

1) Q2 2010 is as adjusted due to the reclassification of system engineer
   costs from cost of revenues to sales and marketing expenses.
2) Adjusted EBITDA is as defined in the Term Debt Credit Agreement.
3) Ethernet Business revenues include product and support revenues.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures. In evaluating Brocade's performance, management uses certain non-GAAP financial measures to supplement consolidated financial statements prepared under GAAP.

Management believes that 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 to its competitors' operating results. Management also believes these non-GAAP financial measures help indicate Brocade's baseline performance before gains, losses or charges that are considered by management to be outside ongoing operating results. Accordingly, management uses these non-GAAP financial measures for planning and forecasting of future periods and in making decisions regarding operations performance 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 against industry and competitor companies;
--  the ability to better identify trends in Brocade's underlying business
    and to perform related trend analysis;
--  a better understanding of how management plans and measures Brocade's
    underlying business; and
--  an easier way to compare Brocade's most recent results of operations
    against investor and analyst financial models.

Management excludes certain gains or losses and benefits or costs in determining non-GAAP net income that are the result of infrequent events or 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: (i) legal fees associated with certain pre-acquisition litigation, (ii) legal fees associated with indemnification obligations and other related costs, net, (iii) acquisition and integration costs, (iv) loss on sale of property, and (v) interest expense related to adoption of new standard relating to convertible debt instruments.

Management also excludes the following non-cash charges in determining non-GAAP net income (i) stock-based compensation expense and (ii) amortization of purchased intangible assets. Because of varying available valuation methodologies, subjective assumptions and the variety of award types, management believes that the exclusion of stock-based compensation allows for more accurate comparisons of our operating results to our peer companies. Management believes that the expense associated with the amortization of acquisition-related intangible assets is appropriate to be excluded because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have short lives and exclusion of the amortization expense allows comparisons of operating results that are consistent over time for Brocade's newly acquired and long-held businesses.

Finally, management believes that it is appropriate to exclude the tax effects of the items noted above in order to present a more meaningful measure of non-GAAP net income.

Limitations These non-GAAP financial measures have limitations, however, because they do not include all items of income and expense that impact the Company. Management compensates for these limitations by also considering Brocade's GAAP results. The non-GAAP financial measures that Brocade uses are not prepared in accordance with, and should not be considered an alternative to measurements required by GAAP, such as operating income, net income and net income per share, and should not be considered measurements of Brocade's liquidity. 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. In addition, these non-GAAP financial measures may not be comparable to similar measurements reported by other companies.

Cautionary Statement

This press release contains statements that are forward-looking in nature, including statements regarding the networking industry, Brocade's Ethernet fabric solutions and competitor offerings, and business in the Federal sector. These statements are based on current expectations on the date of this press release and involve a number of risks and uncertainties which may cause actual results to differ significantly from such estimates. The risks include, but are not limited to, Brocade's ability to capitalize on new Brocade sales and marketing initiatives, including expanded go-to-market activities in our Ethernet business, customer adoption of Brocade's Ethernet fabric solutions, changes in IT spending levels in one or more of our target markets including the government sector, Brocade's ability to continue to successfully innovate new products and services on a timely basis and achieve widespread market acceptance, and the effect of increasing market competition and changes in the industry. Certain of these and other risks are set forth in more detail in "Item 1A. Risk Factors" in Brocade's Quarterly Report on Form 10-Q for the fiscal quarter ended January 29, 2011. 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) develops extraordinary networking solutions that enable today's complex, data-intensive businesses to optimize information connectivity and maximize the business value of their data. For more information, visit www.brocade.com.

Brocade (NASDAQ: BRCD) networking solutions help the world's leading organizations transition smoothly to a world where applications and information reside anywhere. (www.brocade.com) Brocade, the B-wing symbol, BigIron, DCFM, DCX, Fabric OS, FastIron, IronView, NetIron, SAN Health, ServerIron, TurboIron, and Wingspan are registered trademarks, and Brocade Assurance, Brocade NET Health, Brocade One, Extraordinary Networks, MyBrocade, VCS, and VDX are trademarks of Brocade Communications Systems, Inc., in the United States and/or in other countries. Other brands, products, or service names mentioned are or may be trademarks or service marks of their respective owners.

© 2011 Brocade Communications Systems, Inc. All Rights Reserved.

                    BROCADE COMMUNICATIONS SYSTEMS, INC.
            GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                (in thousands, except per share amounts)
                              (unaudited)

                                 Three Months Ended     Six Months Ended
                                --------------------  --------------------
                                 Apr 30,    May 1,     Apr 30,    May 1,
                                  2011       2010       2011       2010
                                ---------  ---------  ---------  ---------
Net revenues
  Product                       $ 459,028  $ 409,885  $ 916,318  $ 858,970
  Service                          90,869     91,098    179,596    181,505
                                ---------  ---------  ---------  ---------
    Total net revenues            549,897    500,983  1,095,914  1,040,475
Cost of revenues (1)
  Product (1)                     171,075    161,042    348,691    326,819
  Service (1)                      48,680     44,451     95,937     89,028
                                ---------  ---------  ---------  ---------
    Total cost of revenues        219,755    205,493    444,628    415,847
                                ---------  ---------  ---------  ---------
      Gross margin                330,142    295,490    651,286    624,628
Operating expenses:
  Research and development         91,941     89,351    183,349    179,433
  Sales and marketing (1)         156,979    132,019    309,646    254,079
  General and administrative       18,469     15,941     36,559     32,180
  Legal fees associated with
   indemnification obligations
   and other related costs, net        --        277        124        578
  Amortization of intangible
   assets                          15,023     16,190     31,213     33,242
  Acquisition and integration
   costs                               --         --         --        204
                                ---------  ---------  ---------  ---------
    Total operating expenses      282,412    253,778    560,891    499,716
                                ---------  ---------  ---------  ---------
Income from operations             47,730     41,712     90,395    124,912
Interest and other income
 (loss), net                           27       (903)       376       (831)
Interest expense                  (20,745)   (19,522)   (42,291)   (41,595)
Gain (loss) on sale of
 investments and property, net        (11)       253        (17)    (8,575)
                                ---------  ---------  ---------  ---------
Income before income tax
 provision (benefit)               27,001     21,540     48,463     73,911
Income tax provision (benefit)       (612)      (840)    (6,329)       436
                                ---------  ---------  ---------  ---------
Net income                      $  27,613  $  22,380  $  54,792  $  73,475
                                =========  =========  =========  =========
Net income per share - basic    $    0.06  $    0.05  $    0.12  $    0.17
                                =========  =========  =========  =========
Net income per share - diluted  $    0.06  $    0.05  $    0.11  $    0.15
                                =========  =========  =========  =========
Shares used in per share
 calculation - basic              473,209    442,816    469,158    440,948
                                =========  =========  =========  =========
Shares used in per share
 calculation - diluted            501,511    479,166    496,338    481,714
                                =========  =========  =========  =========


(1) The three and six months ended May 1, 2010 is as adjusted due to the
    reclassification of system engineer costs from cost of revenues to
    sales and marketing expenses.



                  BROCADE COMMUNICATIONS SYSTEMS, INC.
              GAAP CONDENSED CONSOLIDATED BALANCE SHEETS
                            (in thousands)
                             (unaudited)


                                                   Apr 30,      Oct 30,
                                                     2011         2010
                                                 -----------  ------------
Assets
Current assets:
  Cash and cash equivalents                      $   463,562  $    333,984
  Short-term investments                               2,027         1,998
                                                 -----------  ------------
    Total cash, cash equivalents and short-term
     investments                                     465,589       335,982
  Accounts receivable, net                           302,784       329,564
  Inventories                                         93,163        76,808
  Deferred tax assets                                 67,145        67,080
  Prepaid expenses and other current assets           68,390        65,017
                                                 -----------  ------------
    Total current assets                             997,071       874,451

Property and equipment, net                          539,300       539,117
Goodwill                                           1,638,931     1,644,950
Intangible assets, net                               283,854       344,000
Non-current deferred tax assets                      222,994       203,454
Other assets                                          47,787        48,203
                                                 -----------  ------------
      Total assets                               $ 3,729,937  $  3,654,175
                                                 ===========  ============

Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable                               $   138,530  $    147,130
  Accrued employee compensation                      117,480        91,688
  Deferred revenue                                   205,187       185,623
  Current liabilities associated with facilities
   lease losses                                        4,566         5,992
  Current portion of capital lease obligations         1,813         1,761
  Current portion of term loan                        34,542        28,779
  Other accrued liabilities                          101,357       108,310
                                                 -----------  ------------
    Total current liabilities                        603,475       569,283

Non-current capital lease obligations, net of
 current portion                                       5,862         6,782
Term loan, net of current portion                    197,767       297,118
Senior Secured Notes                                 595,584       595,373
Non-current liabilities associated with
 facilities lease losses                               2,557         3,984
Non-current deferred revenue                          66,848        65,242
Non-current income tax liability                      64,377        61,421
Other non-current liabilities                          9,165         8,671
                                                 -----------  ------------
      Total liabilities                            1,545,635     1,607,874
                                                 -----------  ------------

Stockholders' equity:
  Common stock                                           477           461
  Additional paid-in capital                       2,130,417     2,047,563
  Accumulated other comprehensive loss                (2,488)       (2,827)
  Retained earnings                                   55,896         1,104
                                                 -----------  ------------
    Total stockholders' equity                     2,184,302     2,046,301
                                                 -----------  ------------
      Total liabilities and stockholders'
       equity                                    $ 3,729,937  $  3,654,175
                                                 ===========  ============




                  BROCADE COMMUNICATIONS SYSTEMS, INC.
        GAAP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
      For the Three Months Ended Apr 30, 2011 and May 1, 2010
                          (in thousands)
                           (unaudited)

                                                      Three Months Ended
                                                    ----------------------
                                                     Apr 30,      May 1,
                                                      2011         2010
                                                    ----------  ----------
Cash flows from operating activities:        
  Net income                                        $   27,613  $   22,380
  Adjustments to reconcile net income to net cash
   provided by operating activities:

    Excess tax benefits or detriments from
     stock-based compensation                              877         (63)
    Depreciation and amortization                       51,712      46,600
    Loss on disposal of property and equipment           1,734         645
    Amortization of debt issuance costs and
     original issue discount                             4,466       5,121
    Net (gains) losses on investments                        6        (385)
    Provision for doubtful accounts receivable
     and sales allowances                                2,643       2,823
    Non-cash compensation expense                       22,530      30,146
    Capitalization of interest cost                         --      (3,720)
  Changes in assets and liabilities:
    Restricted Cash                                         --      12,500
    Accounts receivable                                (27,576)    (23,691)
    Inventories                                         (7,345)     (4,067)
    Prepaid expenses and other assets                   (3,889)      5,576
    Deferred tax assets                                    (24)         --
    Accounts payable                                     8,329     (28,909)
    Accrued employee compensation                       29,130      18,675
    Deferred revenue                                     6,552      10,339
    Other accrued liabilities                           (1,899)    (23,235)
    Liabilities associated with facilities lease
     losses                                             (1,154)     (3,013)
                                                    ----------  ----------
      Net cash provided by operating activities        113,705      67,722
                                                    ----------  ----------

Cash flows from investing activities:
  Purchases of short-term investments                      (13)         --
  Proceeds from maturities and sale of short-term
   investments                                               1       1,787
  Purchases of property and equipment                  (27,180)    (62,070)
                                                    ----------  ----------
      Net cash used in investing activities            (27,192)    (60,283)
                                                    ----------  ----------

Cash flows from financing activities:

  Payment of debt issuance fees related to the
   Senior Secured Notes                                     --      (3,002)
  Payment of principal related to the revolving
   credit facility                                          --     (14,050)
  Payment of principal related to convertible
   subordinate debt                                         --    (172,500)
  Payment of principal related to the term loan        (58,892)    (15,699)
  Common stock repurchases                                  --     (20,003)
  Payment of principal related to capital leases          (437)         --
  Proceeds from issuance of common stock, net           21,911       9,788
  Excess tax benefits or detriments from
   stock-based compensation                               (877)         63
                                                    ----------  ----------
      Net cash used in financing activities            (38,295)   (215,403)
                                                    ----------  ----------
Effect of exchange rate fluctuations on cash and
 cash equivalents                                        1,161      (1,386)
                                                    ----------  ----------

Net increase (decrease) in cash and cash
 equivalents                                            49,379    (209,350)
Cash and cash equivalents, beginning of period         414,183     496,583
                                                    ----------  ----------
Cash and cash equivalents, end of period            $  463,562  $  287,233
                                                    ==========  ==========




                    BROCADE COMMUNICATIONS SYSTEMS, INC.
           GAAP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
           For the Six Months Ended Apr 30, 2011 and May 1, 2010
                              (in thousands)
                               (unaudited)

                                                       Six Months Ended
                                                    ----------------------
                                                     Apr 30,      May 1,
                                                      2011         2010
                                                    ----------  ----------
Cash flows from operating activities:
  Net income                                        $   54,792  $   73,475
  Adjustments to reconcile net income to net cash
   provided by operating activities:

    Excess tax benefits or detriments from
     stock-based compensation                              877         (63)
    Depreciation and amortization                      104,234      97,613
    Loss on disposal of property and equipment           1,910       9,459
    Amortization of debt issuance costs and
     original issue discount                             9,195      11,784
    Net gains on investments                               (10)       (217)
    Provision for doubtful accounts receivable and
     sales allowances                                    5,071       5,867
    Non-cash compensation expense                       42,436      51,668
    Capitalization of interest cost                         --      (7,035)
  Changes in assets and liabilities:
    Restricted Cash                                         --      12,502
    Accounts receivable                                 22,236      (5,588)
    Inventories                                        (17,664)     (4,668)
    Prepaid expenses and other assets                   (6,907)     10,557
    Deferred tax assets                                    (30)         --
    Accounts payable                                   (10,253)    (68,644)
    Accrued employee compensation                       19,714     (48,480)
    Deferred revenue                                    21,169      11,274
    Other accrued liabilities                          (11,975)     (7,199)
    Liabilities associated with facilities lease
     losses                                             (2,854)     (5,476)
                                                    ----------  ----------
      Net cash provided by operating activities        231,941     136,829
                                                    ----------  ----------

Cash flows from investing activities:
  Purchases of short-term investments                      (38)        (24)
  Proceeds from maturities and sale of short-term
   investments                                              20       1,788
  Proceeds from sale of property                            --      30,185
  Purchases of property and equipment                  (50,575)   (109,387)
                                                    ----------  ----------
      Net cash used in investing activities            (50,593)    (77,438)
                                                    ----------  ----------

Cash flows from financing activities:

  Payment of debt issuance fees related to the
   Senior Secured Notes                                     --      (3,002)
  Payment of principal related to the revolving
   credit facility                                          --     (14,050)
  Payment of principal related to convertible
   subordinate debt                                         --    (172,500)
  Payment of principal related to the term loan        (98,640)   (522,244)
  Common stock repurchases                                  --     (20,003)
  Payment of principal related to capital leases          (868)         --
  Proceeds from Senior Secured Notes                        --     587,968
  Proceeds from issuance of common stock, net           47,388      39,819
  Excess tax benefits or detriments from
   stock-based compensation                               (877)         63
                                                    ----------  ----------
      Net cash used in financing activities            (52,997)   (103,949)
                                                    ----------  ----------
Effect of exchange rate fluctuations on cash and
 cash equivalents                                        1,227      (2,402)
                                                    ----------  ----------

Net increase (decrease) in cash and cash
 equivalents                                           129,578     (46,960)
Cash and cash equivalents, beginning of period         333,984     334,193
                                                    ----------  ----------
Cash and cash equivalents, end of period            $  463,562  $  287,233
                                                    ==========  ==========




                  BROCADE COMMUNICATIONS SYSTEMS, INC.
          RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME
               (in thousands, except per share amounts)
                             (unaudited)


                                                     Three Months Ended
                                                  ------------------------
                                                     Apr 30,     May 1,
                                                      2011        2010
                                                  -----------  -----------

Net income on a GAAP basis                        $    27,613  $    22,380
Adjustments:
  Stock-based compensation expense included in
   cost of revenues                                     4,167        4,136
  Amortization of intangible assets expense
   included in cost of revenues                        14,466       14,467
  Legal fees associated with certain
   pre-acquisition litigation                             216           17
                                                  -----------  -----------
      Total gross margin adjustments                   18,849       18,620
                                                  -----------  -----------
  Legal fees associated with indemnification
   obligations and other related costs, net                --          277
  Stock-based compensation expense included in
   research and development                             5,111        8,933
  Stock-based compensation expense included in
   sales and marketing                                  9,619       13,144
  Stock-based compensation expense included in
   general and administrative                           3,633        3,933
  Amortization of intangible assets expense
   included in operating expenses                      15,023       16,190
                                                  -----------  -----------
    Total operating expense adjustments                33,386       42,477
                                                  -----------  -----------
      Total operating income adjustments               52,235       61,097
  Loss on sale of property                                 --          (47)
  Interest expense related to adoption of new
   standards relating to convertible debt
   instruments                                             --          348
  Income tax effect of adjustments                    (17,037)     (21,044)
                                                  -----------  -----------
Non-GAAP net income                               $    62,811  $    62,734
                                                  ===========  ===========


Non-GAAP net income per share - basic             $      0.13  $      0.14
                                                  ===========  ===========
Non-GAAP net income per share - diluted           $      0.13  $      0.13
                                                  ===========  ===========
Shares used in non-GAAP per share calculation -
 basic                                                473,209      442,816
                                                  ===========  ===========
Shares used in non-GAAP per share calculation -
 diluted                                              501,511      481,290
                                                  ===========  ===========


      See explanation of non-GAAP information included herein.




                BROCADE COMMUNICATIONS SYSTEMS, INC.
        RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME
             (in thousands, except per share amounts)
                          (unaudited)


                                                      Six Months Ended
                                                  ------------------------
                                                     Apr 30,     May 1,
                                                      2011        2010
                                                  -----------  -----------

Net income on a GAAP basis                        $    54,792  $    73,475
Adjustments:
  Stock-based compensation expense included in
   cost of revenues                                     7,027        7,049
  Amortization of intangible assets expense
   included in cost of revenues                        28,932       32,316
  Legal fees associated with certain
   pre-acquisition litigation                             293          317
                                                  -----------  -----------
      Total gross margin adjustments                   36,252       39,682
                                                  -----------  -----------
  Legal fees associated with indemnification
   obligations and other related costs, net               124          578
  Stock-based compensation expense included in
   research and development                             9,394       15,116
  Stock-based compensation expense included in
   sales and marketing                                 18,411       22,843
  Stock-based compensation expense included in
   general and administrative                           7,604        6,660
  Amortization of intangible assets expense
   included in operating expenses                      31,213       33,243
  Acquisition and integration costs                        --          204
                                                  -----------  -----------
    Total operating expense adjustments                66,746       78,644
                                                  -----------  -----------
      Total operating income adjustments              102,998      118,326
  Loss on sale of property                                 --        8,737
  Interest expense related to adoption of new
   standards relating to convertible debt
   instruments                                             --        2,490
  Income tax effect of adjustments                    (34,245)     (46,284)
                                                  -----------  -----------
Non-GAAP net income                               $   123,545  $   156,744
                                                  ===========  ===========


Non-GAAP net income per share - basic             $      0.26  $      0.36
                                                  ===========  ===========
Non-GAAP net income per share - diluted           $      0.25  $      0.32
                                                  ===========  ===========
Shares used in non-GAAP per share calculation -
 basic                                                469,158      440,948
                                                  ===========  ===========
Shares used in non-GAAP per share calculation -
 diluted                                              496,338      488,818
                                                  ===========  ===========


      See explanation of non-GAAP information included herein.

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