Earnings reports

Brocade Looks to Weak Q2

SAN JOSE, Calif. -- Brocade Communications Systems, Inc. (Brocade®) (Nasdaq: BRCD - news) announced today preliminary results for the second quarter of fiscal 2001. Brocade expects to report total net revenue for the second quarter of fiscal 2001 (Q2 01) that will be approximately 30 percent less than the net revenue reported in the first quarter of fiscal 2001 (Q1 01). Diluted net income per share for Q2 01 is expected to be in the range of $0.05-$0.06 per share. During the second quarter, Brocade expects that gross margins will remain in the 60 percent range and will continue at those levels for the next several quarters. Additionally, Brocade expects that DSOs will be within the target range of 50 to 60 days.

Brocade will host a live a conference call today at 6:00 am Pacific Time to discuss the preliminary financial results. To listen to the call, dial 719-457-2650, or connect via the Brocade web site at www.brocade.com. A replay of the conference call will be available following the call. Details on the replay are available at www.broacade.com. Brocade plans to announce complete second quarter results on May 15, 2001 at 1:00 pm Pacific Time.

"We are sober about the affect that the economy has had on the enterprise technology marketplace and on our short-term business outlook. We are committed to doing what is right for the business and will continue to invest in engineering resources and quota-carrying sales personnel at a rate that will continue to outpace our competitors. We believe that our long-term prospects and competitive position in delivering the world's leading intelligent platform for networking storage have never been stronger. As enterprise capital spending continues to thaw, we are well positioned for growth in the latter part of fiscal 2001 and we expect our year-over-year revenue growth will be approximately 58 percent," said Greg Reyes, Brocade President and CEO.

Brocade Communications Systems Inc.
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