Brocade Communications Systems
GAAP numbers don't always tell the whole story, but this share price jump was justified any way you look at it. Hey, there's nothing wrong with growth by acquisition. The trick is to have the capital to spend when the market is right.
In plain GAAP terms, Brocade grew sales 43% year over year. If you back out the contributions of recently acquired Foundry Networks, you'd end up pretty much even with last year's $355 million. That's still not bad when you consider that enterprise storage rival EMC
So stable sales on a comparable basis ain't bad at all, and the Foundry buyout added that extra oomph. Management gave credit to distribution deal with massive partners like Hewlett Packard
Adding Foundry to Brocade has enabled the company to reach for new markets where Ethernet switches and storage connections make a natural pairing. Having plenty of cash on hand plus a $1.1 billion credit line lined up before the financial crisis hit full force gave Brocade the opportunity to grow by acquisition when natural growth all but dried up. And as a result, the combined force looks ready and able to keep growing for years to come.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.