Brocade Communications (BRCD) Trims Q2 Outlook

In conjunction with the filing of a registration statement and exchange offer materials with the U.S. Securities and Exchange Commission associated with its previously announced proposal to acquire Ruckus Wireless, Inc., Brocade® (NASDAQ: BRCD) reported preliminary financial results for its second fiscal quarter ended April 30, 2016. The Company now expects second fiscal quarter total revenue to be within the range of $518 million to $528 million, compared with the range of $542 million to $562 million previously provided in the planning assumptions and outlook for the quarter on February 17, 2016. Non-GAAP diluted earnings per share for the second fiscal quarter is expected to be within the range of $0.21 to $0.23, compared with the range of $0.22 to $0.24 in the planning assumptions and outlook for the quarter previously provided on February 17, 2016.

*** The Street sees Q2 revenue of $551.8 million and EPS of $0.23.

"Consistent with the general softness in IT spending reported by many of our partners and peers, we expect revenue for the quarter to fall short of our original expectations," said Lloyd Carney, CEO of Brocade. "This is largely the result of weaker than anticipated SAN revenue. In addition, IP Networking headwinds, noted on our fiscal Q1 2016 earnings call in February, continue to negatively impact our sales, particularly in our service provider and U.S. federal business. We are addressing these near-term challenges by continuing our focus on sales execution in this weaker demand environment, maintaining prudent expense controls and managing our investments in line with our stated priorities. We continue to execute on our strategy to build a pure-play networking company for the digital transformation era that expands our market reach, diversifies our revenue mix, and creates exciting, incremental opportunities for growth."

Brocade management plans to report its full financial results and provide more details for its second fiscal quarter of 2016 on Thursday, May 19, 2016, following the close of the market. At 2:30 p.m. PT (5:30 p.m. ET) on May 19, Brocade management will host a webcast conference call. To access the webcast, please go to www.brcd.com/events.cfm. A replay of the conference call will be available at www.brcd.com.

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