SAN JOSE, Calif., June 2, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- Brocade Communications
Systems, Inc. (Nasdaq: BRCD) today announced that it has reached an agreement
in principle with lead plaintiffs to settle the federal securities
class-action lawsuit originally filed in May 2005 in the United States
District Court for the Northern District of California against the Company and
certain former directors and officers. The litigation relates to the Company's
restatement of certain financial results in 2005 due to stock-based
compensation accounting issues.
Under the terms of the preliminary settlement, Brocade will pay $160
million to the plaintiff class in exchange for the dismissal with prejudice of
all claims against all defendants in the litigation. The settlement is subject
to final documentation and approval by the federal district court.
Based on the preliminary settlement, Brocade recorded an estimated
settlement expense of $160 million on a pre-tax basis. This expense has been
included in the Company's results of operations for the three and six months
ended April 26, 2008 and will be reflected in its Quarterly Report on Form
10-Q for the quarter ended April 26, 2008, which Brocade expects to file no
later than Thursday, June 5, 2008. This expense is not expected to impact the
Company's non-GAAP results of operations.
Brocade believes that this settlement is in the best interest of its
shareholders and the Company as it significantly reduces the uncertainty
associated with this ongoing litigation. Further, this resolution enables the
Company to put the class action behind it and continue to focus on the
business of developing and delivering industry-leading data center solutions
for its customers worldwide.
This press release contains statements regarding the preliminary
settlement in connection with the federal securities class action and other
litigation matters that are forward-looking in nature. These statements are
based on current expectations as of 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,
approval by the parties of the final settlement documentation and whether the
settlement is finally approved by the United States District Court. Certain
of these and other risks are set forth in more detail in "Item 1A. Risk
Factors" of Brocade's Quarterly Report on Form 10-Q for the fiscal quarter
ended January 26, 2008 and Annual Report on Form 10-K for the fiscal year
ended October 27, 2007. Brocade does not assume any obligation to update or
revise any such forward-looking statements, whether as the result of new
developments or otherwise.
Brocade is a leading provider of data center networking solutions that
help organizations connect, share, and manage their information in the most
efficient manner. Organizations that use Brocade products and services are
better able to optimize their IT infrastructures and ensure compliant data
management. For more information, visit the Brocade Web site at
http://www.brocade.com or contact the company at firstname.lastname@example.org.
SOURCE Brocade Communications Systems, Inc.