Brocade CEO Klayko Plans Resignation, Will Leave Company On High Note


Michael Klayko has decided to resign his position as CEO of Brocade, but he is doing so on a high note as Brocade reported strong revenue and earnings growth for its third fiscal 2012 quarter.

Klayko was named CEO in early 2005 two years after Brocade acquired Rhapsody Networks, where he served as CEO and president.

His actual resignation, which was unveiled Thursday, is expected to happen once Brocade's Board of Directors names a successor and the transition to that successor is complete.

[Related: Brocade CEO Reyes Resigns]

Klayko in January 2005 took over as Brocade CEO at a time of upheaval at the company. His predecessor, Greg Reyes, resigned that month in the wake of a restating of financial results for the previous several years and an internal audit that found improprieties related to documentation of stock option grants.

However, he will leave the company on sound fiscal footing.

Brocade on Thursday reported third quarter fiscal 2012 revenue of $555.3 million, up 10 percent over the $503 million the company reported for the same quarter of 2011.

The company also reported earnings per share of 9 cents, up from break-even earnings per share last year.

Brocade's storage revenue rose 13 percent year-over-year to $377.6 million, while its Ethernet revenue rose 5 percent to $177.8 million. The company said 30 percent of its overall SAN sales, and 45 percent of its SAN director sales, featured 16-Gbit performance.

Brocade's Chairman, Dave House, in a prepared statement thanked Klayko for his seven-plus years as CEO of Brocade.

"[Klayko] has led us through two major acquisitions and has positioned us as a technology leader and world-class provider of networking solutions. We wish him the best and appreciate his continued service to Brocade as the Company works to identify the right leader to assume his role," House said in the statement.

The two "major acquisitions" House mentioned include Brocade's 2008 purchase of Foundry Networks and its 2005 purchase of McData.

Klayko, in his own prepared statement, said, "Decisions like these are never easy, but I believe it is the right time. The Company is in a great position financially, and our product pipeline will continue to strengthen and clearly separate Brocade from other networking providers."

PUBLISHED AUG. 16, 2012