Umsatzwarnung bei Extreme Networks - 500 Beiträge pro Seite

[Nachrichten [wO]]

Aufgrund der schwachen Konjunkturentwicklung rechnet der Netzwerkausrüster Extreme Networks nicht mehr damit, die Prognosen der Analysten für das aktuell Quartal einhalten zu können.

Das Management geht jetzt nur noch davon aus, einen Umsatz in Höhe von 100 Mio. Dollar zu erreichen. Damit würde ein Verlust von 3 bis 4 Cents je Aktie anfallen. Analysten hatten bisher mit einem Umsatz in Höhe von 115 Mio. Dollar und einem Gewinn von 4 Cents je Aktie gerechnet.

Im Vorjahreszeitraum konnte das Unternehmen noch den Break Even erreichen und einen Umsatz in Höhe von 108 Mio. Dollar erzielen.

Die Aktie beendete den Handel am Freitag bei 3,86 Dollar.

Wertpapiere des Artikels:
EXTREME NETWORKS DL-,001


Autor: (© wallstreet:online AG / SmartHouse Media GmbH),13:10 30.09.2002

[rotty]

POSITVES zu Extreme Network extr/exm - Neuer umfangreicher Deal mit u.a. NORTEL - gestriges Abschluß-ASK bereits auf 4,6$:

---->
Das EXTR (Extreme Network) aufgrund des miesen Umfeldes in der Kommunikationsbranche auch Federn lassen mußte, war klar.
ABER Extr/Exm ist deutlich besser aufgestellt und hat gestern das Rennen um den großen Contract mit NORTEL (Deal-Abschluß auf breit aufgestellten internationalen Nivau, mit guten Aussichten auf entspr. Earnings)- gegenüber den Konkurrenten siw Sun u.A.
Vor Börsenschluß stieg das Papier um mehr als 9% (ebenfalls weiter nachbörslich) mit entspr. ASK auf gar 4,6$ an der Nas. Entsprechend dürfte heute die US-Eröffnung am Markt aussehen.

Ich stelle Euch hierzu jetzt die Deal-Meldung (orginal) mit NORTEL rein, damit Ihr Euch selbst ein Bild machen könnt, desgl. die äußerst umfangreiche Fundamentalanalysen von Schaeffer´s Midday Options & besonders von Item 7. Managements Discussion an Analysis of Financial Coditions an Results of Operations (detailiert und umfangreich):

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Nr. 1.:
NORTEL NETWORKS: Nortel Networks, Extreme Networks announce settlement


TORONTO, Sep 30, 2002 (M2 PRESSWIRE via COMTEX) -- Nortel Networks* Limited
[NYSE/TSX: NT] and Extreme Networks, Inc. [NASDAQ: EXTR] announced that they
have entered into a patent cross license agreement, the terms and conditions of
which are confidential. The pending lawsuit between Nortel Networks Limited,
Nortel Networks, Inc., the U.S. subsidiary of Nortel Networks Limited, and
Extreme Networks in the United States District Court for the District of
Massachusetts, Civil Action No. 01-10443, has been dismissed.

Extreme Networks provides the most effective applications and services
infrastructure by creating networks that are faster, less complex and more
cost-effective than conventional solutions. Headquartered in Santa Clara,
Calif., Extreme Networks sells its award-winning switching solutions in more
than 50 countries.

For more information, visit www.extremenetworks.com.

Nortel Networks is an industry leader and innovator focused on transforming how
the world communicates and exchanges information. The company is supplying its
service provider and enterprise customers with communications technology and
infrastructure to enable value-added IP data, voice and multimedia services
spanning Metro and Enterprise Networks, Wireless Networks and Optical Networks.
As a global company, Nortel Networks does business in more than 150 countries.

More information about Nortel Networks can be found on the Web at
www.nortelnetworks.com.

Certain information included in this press release is forward-looking and is
subject to important risks and uncertainties. The results or events predicted in
these statements may differ materially from actual results or events. Factors
which could cause results or events to differ from current expectations include,
among other things: the severity and duration of the industry adjustment; the
sufficiency of our restructuring activities, including the potential for higher
actual costs to be incurred in connection with restructuring actions compared to
the estimated costs of such actions; fluctuations in operating results and
general industry, economic and market conditions and growth rates; the ability
to recruit and retain qualified employees; fluctuations in cash flow, the level
of outstanding debt and debt ratings; the ability to meet financial covenants
contained in our credit agreements; the ability to make acquisitions and/or
integrate the operations and technologies of acquired businesses in an effective
manner; the impact of rapid technological and market change; the impact of price
and product competition; international growth and global economic conditions,
particularly in emerging markets and including interest rate and currency
exchange rate fluctuations; the impact of rationalization in the
telecommunications industry; the dependence on new product development; the
uncertainties of the Internet; the impact of the credit risks of our customers
and the impact of increased provision of customer financing and commitments;
stock market volatility; the entrance into an increased number of supply,
turnkey, and outsourcing contracts which contain delivery, installation, and
performance provisions, which, if not met, could result in the payment of
substantial penalties or liquidated damages; the ability to obtain timely,
adequate and reasonably priced component parts from suppliers and internal
manufacturing capacity; the future success of our strategic alliances; and the
adverse resolution of litigation. For additional information with respect to
certain of these and other factors, see the reports filed by Nortel Networks
Corporation and Nortel Networks Limited with the United States Securities and
Exchange Commission. Unless otherwise required by applicable securities laws,
Nortel Networks Corporation and Nortel Networks Limited disclaim any intention
or obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

* Nortel Networks, the Nortel Networks logo and the Globemark are trademarks of
Nortel Networks.

CONTACT: David Chamberlin, Nortel Networks Tel: [phone] e-mail:
[e-mail]

M2 Communications Ltd disclaims all liability for information provided within M2
PressWIRE. Data supplied by named party/parties. Further information on M2
PressWIRE can be obtained at http://www.presswire.net on the world wide web.
Inquiries to [e-mail].


__________________________

Nr. 2:
Nortel Networks, Extreme Networks Announce Settlement


TORONTO, ONTARIO, Sep 30, 2002 (CCNMatthews via COMTEX) -- Nortel Networks
Limited (NYSE:NT) (TSX:NT.) and Extreme Networks, Inc. (Nasdaq: EXTR) today
announced that they have entered into a patent cross license agreement, the
terms and conditions of which are confidential. The pending lawsuit between
Nortel Networks Limited, Nortel Networks, Inc., the U.S. subsidiary of Nortel
Networks Limited, and Extreme Networks in the United States District Court for
the District of Massachusetts, Civil Action No. 01-10443, has been dismissed.

Extreme Networks provides the most effective applications and services
infrastructure by creating networks that are faster, less complex and more
cost-effective than conventional solutions. Headquartered in Santa Clara,
Calif., Extreme Networks sells its award-winning switching solutions in more
than 50 countries. For more information, visit www.extremenetworks.com.

Nortel Networks is an industry leader and innovator focused on transforming how
the world communicates and exchanges information. The company is supplying its
service provider and enterprise customers with communications technology and
infrastructure to enable value-added IP data, voice and multimedia services
spanning Metro and Enterprise Networks, Wireless Networks and Optical Networks.
As a global company, Nortel Networks does business in more than 150 countries.
More information about Nortel Networks can be found on the Web at
www.nortelnetworks.com.

Certain information included in this press release is forward-looking and is
subject to important risks and uncertainties. The results or events predicted in
these statements may differ materially from actual results or events. Factors
which could cause results or events to differ from current expectations include,
among other things: the severity and duration of the industry adjustment; the
sufficiency of our restructuring activities, including the potential for higher
actual costs to be incurred in connection with restructuring actions compared to
the estimated costs of such actions; fluctuations in operating results and
general industry, economic and market conditions and growth rates; the ability
to recruit and retain qualified employees; fluctuations in cash flow, the level
of outstanding debt and debt ratings; the ability to meet financial covenants
contained in our credit agreements; the ability to make acquisitions and/or
integrate the operations and technologies of acquired businesses in an effective
manner; the impact of rapid technological and market change; the impact of price
and product competition; international growth and global economic conditions,
particularly in emerging markets and including interest rate and currency
exchange rate fluctuations; the impact of rationalization in the
telecommunications industry; the dependence on new product development; the
uncertainties of the Internet; the impact of the credit risks of our customers
and the impact of increased provision of customer financing and commitments;
stock market volatility; the entrance into an increased number of supply,
turnkey, and outsourcing contracts which contain delivery, installation, and
performance provisions, which, if not met, could result in the payment of
substantial penalties or liquidated damages; the ability to obtain timely,
adequate and reasonably priced component parts from suppliers and internal
manufacturing capacity; the future success of our strategic alliances; and the
adverse resolution of litigation. For additional information with respect to
certain of these and other factors, see the reports filed by Nortel Networks
Corporation and Nortel Networks Limited with the United States Securities and
Exchange Commission. Unless otherwise required by applicable securities laws,
Nortel Networks Corporation and Nortel Networks Limited disclaim any intention
or obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

Nortel Networks, the Nortel Networks logo and the Globemark are trademarks of
Nortel Networks.



CONTACT: Nortel Networks

Business media:

Tina Warren

[phone]

[e-mail]

or

Investors:

[phone]

[phone]

[e-mail]


________________________________

Nr. 3 Schaeffer´s....:
Schaeffer`s Midday Options Update Features EXTR


CINCINNATI, Sep 30, 2002 /PRNewswire via COMTEX/ -- Today`s Schaeffer`s Midday
Options Update features Extreme Networks (Nasdaq: EXTR). The Midday Options
Update contains a brief commentary on the day`s most notable activity and a
table listing the most active calls and puts for the day. The Midday Options
Update is published every day at www.SchaeffersResearch.com -- the home of
Bernie Schaeffer and Schaeffer`s Investment Research. For additional information
about this report or to have it delivered to you free via email every day click
on the following link: http://www.schaeffersresearch.com/addinfo" target="_blank" rel="nofollow ugc noopener">http://www.schaeffersresearch.com/addinfo .



(Photo: http://www.newscom.com/cgi-bin/prnh/20020725/SCHAEFFERLOGO )

Schaeffer`s Midday Options Update:

Weak economic news has sent the market lower for the last day of trading for the
quarter. The September Chicago Purchasing Managers Index fell to 48.1, reaching
the lowest level since January. This reading compares to August`s 54.9 reading
and the Street estimate at 53.3 percent. In addition, August personal income
rose 0.4 percent versus the Street estimate of 0.50 percent and personal
spending rose 0.3 percent compared to the consensus expectation for a
0.6-percent rise. Today`s losses have caused the Dow Jones to slip below its
July lows for the first time, joining the Nasdaq Composite, which fell below
those lows last week.

At 12:34 p.m. eastern time, the Dow Jones Industrial Average (INDU - 7555.2) and
the S&P 500 Index (SPX - 811.21) are down 1.90 and 1.95 percent, respectively.
The Nasdaq Composite (COMP - 1172.9) is lower by 2.19 percent. On the options
front, at 12:36 p.m., total equity call volume checked in at 831,984 while total
equity put volume numbered 781,280. The composite put/call ratio across all
exchanges is 0.94. Breaking out the numbers a bit further, the CBOE put/call
ratio is sitting at 0.91.

Extreme Networks (Nasdaq: EXTR) is seeing some heavy option volume at its March
5.00 call. More than 7,300 contracts have changed hands at this strike, which
had only 251 contracts in open interest prior to today`s activity. The majority
of this volume crossed the tape in a block of 7,350 contracts at a bid price of
0.75. If this were a straight put sell, the investor would collect a total
premium of $551,250. The seller of these contracts would then need the shares to
close above the five level by the March expiration for the contracts to expire
worthless, allowing him/her to retain the entire premium.

Sentiment toward the security is fairly mixed, with calls more than doubling
puts in the front three months of options. EXTR`s Schaeffer`s put/call open
interest ratio is lower than 59.2 percent of those taken over the past 52 weeks.
In addition, the number of EXTR shares sold short dropped 32 percent since July
to 7.6 million shares. At the equity`s average daily trading volume, all the
short positions can be covered in roughly three days. Wall Street is split on
the stock, as 11 analysts rate it a "buy" or better, 10 rate it a "hold," and
two rate the shares a "strong sell," according to Zacks.

The network infrastructure equipment provider warned this morning that it would
fall short of first-quarter earnings estimates. The company now expects to
report revenue of $100 million, or a loss of three cents per share. The Street
had been anticipating earnings of $115 million, or a profit of four cents per
share. EXTR cited the continued weak economy for the earnings shortfall. The
stock dropped to hit a new all-time low at 3.41 on the news, but has since
rebounded on heavy trading volume back up to the four level. The shares still
remain well below their declining 10-day moving average at the 5.80 level.

Click the following link to see the Daily Chart of EXTR since August 2002 with
10-Day Moving Average: http://www.schaeffersresearch.com/wire?ID=6264" target="_blank" rel="nofollow ugc noopener">http://www.schaeffersresearch.com/wire?ID=6264 .

The best way to take advantage of the timely Schaeffer commentaries is to sign
up to receive their free e-newsletters -- Opening View, Midday Report, Market
Recap and Monday Morning Outlook. Click here to have the Schaeffer`s
commentaries delivered to you free via email every day:
http://www.schaeffersresearch.com/addinfo" target="_blank" rel="nofollow ugc noopener">http://www.schaeffersresearch.com/addinfo .

About Schaeffer`s Investment Research ( www.SchaeffersResearch.com )

Schaeffer`s Investment Research, founded by Bernie Schaeffer in 1981, is a
diversified financial information and trading resources company with subscribers
in over 110 countries. It publishes Bernie Schaeffer`s Option Advisor, the
nation`s leading subscription newsletter devoted to options, as well as many
other educational, bulletin and alert services. The firm`s website,
www.SchaeffersResearch.com , is recognized as one of the leading information
sources for stock and options traders and was cited as the top options website
by both Forbes and Barron`s.

Contact: Tom Godich at Schaeffer`s, Phone: [phone]; Email:
[e-mail]



MAKE YOUR OPINION COUNT - Click Here

http://tbutton.prnewswire.com/prn/11690X78445063

SOURCE Schaeffer`s Investment Research



CONTACT: Tom Godich of Schaeffer`s Investment Research, [phone],

or [e-mail]

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AP Archive: http://photoarchive.ap.org

PRN Photo Desk, [phone] or [phone]



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Copyright (C) 2002 PR Newswire. All rights reserved.





KEYWORD: Ohio

INDUSTRY KEYWORD: FIN

PUB

SUBJECT CODE: INO
________________________________________

Nr. 4 Neue Ratings von StockPickReport.com:
StockPickReport.com Announces Stock Evaluation Ratings: New Ratings on CIENA Corp., Extreme Networks, AT&T Wireless Services, Texas Instruments, Johnson & Johnson


SHREVEPORT, La., Sep 30, 2002 (BUSINESS WIRE) -- StockPickReport.Com
(IARD#119079 - http://www.stockpickreport.com/?src=pz ) makes these stock
evaluations for the short term:



CIENA Corp. (Nasdaq: CIEN) - Underperform

Extreme Networks (Nasdaq: EXTR) - Outperform

AT&T Wireless Services (NYSE:AWE) - Outperform

Texas Instruments (NYSE:TXN) - Underperform

Johnson & Johnson (NYSE:JNJ) - Underperform

WHAT THESE RATINGS MEAN:

StockPickReport.Com ranks stocks with a proprietary unbiased system of technical
analysis. These ratings do not indicate a "long term" view of any company
listed. These are ratings that reflect our opinion of a stock`s PRICE movement
versus the SP 500 over the short term.

You can get a FREE trial at: http://www.stockpickreport.com/?src=pzb


_________________________________-


Nr. 5 Rsults Extr und Sonstige:
Extreme Networks Announces Preliminary First Quarter Results
9/30/02 3:01 AM
Source: PR Newswire

SANTA CLARA, Calif., Sept. 30 /PRNewswire-FirstCall/ -- Citing weak economic conditions, Extreme Networks, Inc. (Nasdaq: EXTR) today announced that it expects revenue for the first quarter ended Sept. 29, 2002 to be approximately $100 million, as compared to $113 million in revenue in the quarter ended June 30, 2002. Based on this revenue level, the Company expects to report a loss of approximately $0.03 to $0.04 per share for the quarter on a GAAP basis.

"With the strong focus on our core enterprise market, Extreme maintains its leadership position in building high-performance networks that offer organizations a significant return on investment with lower cost of ownership," said Gordon Stitt, CEO of Extreme Networks. "We have enhanced our distribution channel programs and service capabilities extending our reach around the world."

Extreme Networks has a cash balance of approximately $400 million and is generating positive cash flow from operations. For the quarter ended Sept. 29, 2002 the Company expects its book-to-bill ratio to be above 1.0 and its backlog to be within its normal range.

Extreme Networks will host a conference call to further discuss these preliminary results at 8:30 a.m. Eastern Time today. The conference call may include additional material information and investors are encouraged to attend or review the conference call on our website. To listen to the call, use either of the following web links: www.extremenetworks.com/aboutus/investor or www.shareholder.com/extr/medialist.cfm Additionally, the call can be accessed by dialing 888-245-7013, or 973-582-2767. Replay information will also be available at www.extremenetworks.com. Final results for the fiscal first quarter 2003 are scheduled to be released on October 16, 2002.

Extreme Networks, Inc.

Extreme Networks provides the most effective applications and services infrastructure by creating networks that are faster, less complex and more cost-effective than conventional solutions. Headquartered in Santa Clara, Calif., Extreme Networks sells it awarding-winning switching solutions in more than 50 countries. For more information, visit www.extremenetworks.com.

This announcement contains forward-looking statements that involve risks and uncertainties, including statements about expected quarterly results and plans to lower costs, and other statements that include the words "expect", "anticipate" or similar words. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including, changes that may result as we review and assess the actual quarterly results and the other risks that affect our business, including but not limited to: (i) our rapid growth and potential risks associated with this growth, and a limited operating history and limited history of profitability that make it more difficult to predict results; (ii) current economic trends in worldwide markets; (iii) fluctuations in demand for our products and services; (iv) a highly competitive business environment for network switching equipment; and (v) the possibility that we might experience delays in the development of new technology and products. More information about potential factors that could affect our business and financial results is included in our Annual Report on Form 10-K for the year ended June 30, 2001 and our Annual Report on Form 10-K for the fiscal year ended June 30, 2002, to be filed on the date of the press release, under the captions: "Management`s Discussion and Analysis of Financial Condition and Results of Operations," and "Risk Factors," which are on file with the Securities and Exchange Commission.


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SOURCE Extreme Networks, Inc.

+++++ Positives i.Zushg. mt Valdero (KOOPERATION Nr 2 neben Nortel):

Valdero`s Intelligent Supply Chain Control Selected By Extreme Networks
9/30/02 3:00 AM
Source: Business Wire

PALO ALTO, Calif.--(BUSINESS WIRE)--Sept. 30, 2002-- Network Equipment Provider Selects Valdero`s Latest Version -- 2.0 -- for Dynamic Supply Demand Matching and Collaboration, Enhanced Supply

Chain Execution

Valdero(TM) Corporation, the leader in Intelligent Supply Chain Control, today announced that Extreme Networks Inc. (Nasdaq: EXTR), a provider of award-winning switching solutions for global networks, has chosen Valdero 2.0 to enhance key relationships with suppliers and drive the overall performance of its manufacturing supply chain. Valdero 2.0, the latest version of its flagship application suite, bridges the gap between planning and execution in supply chain management, dramatically improving execution by providing real-time visibility and control over changes in collaborative supply chains.

With Valdero 2.0, Extreme Networks and other manufacturing companies can dramatically decrease process and inventory costs while improving performance across multi-tiered supply chains. Valdero 2.0 allows companies to realize significant cost savings in a matter of weeks by making it easy for them to continuously identify changes across the extended supply chain; analyze the business impact of those changes; receive guidance on appropriate responses; and act based on their approved procedures, business rules, trends and business objectives.

"The biggest issue enterprises face today is intelligent visibility of their supply chains-both upstream and down. Valdero addresses the demons of real-time visibility to improve execution for global manufacturers," said Ann Grackin, vice president supply chain strategies at AMR Research.

Addresses Business Pains with Visibility and Collaboration

Through Valdero`s new supply demand match engine and collaboration platform, Extreme will gain visibility across its global supply chain, allowing it to meet aggressive goals for customer service and operational excellence through continued improvement of its supply chain execution. "We are working to create a highly efficient and responsive supply chain that will strengthen the competitive advantage we`ve already established through superior products," said Diane Pewitt, Extreme Networks` vice president of operations. "By allowing easy access to changes across the entire supply chain, Valdero gives us the opportunity to dramatically reduce our inventory and process costs. And, by simplifying what used to be the most time-intensive part of managing our supply chain, Valdero enables us to raise the bar on other, more sophisticated elements, such as customer fulfillment and long-term supply positioning."

Changing Requirements for Supply Chain Control

Valdero is specifically designed for companies relying on collaborative supply chains to meet variable customer demand for their products. The complexity of managing multi-tiered supply chains with multiple partners means that these companies have limited visibility into remote operations, high latency in communicating changes in supply and demand, poor responsiveness to disruptions, and a high liability for poor execution. All of these problems result in high inventory costs, high liabilities and missed revenue opportunities.

"Valdero gives manufacturers and their supply chain partners a common platform for executing on key processes based on shared, real-time information and agreed-upon metrics, plans and performance thresholds," said S. Singh Mecker, Valdero`s president and CEO. "By offering true collaborative resolution, rather than simple information sharing, we`re allowing businesses to react quickly to changes and achieve closed-loop control over their supply chain performance."

About The Valdero Supply Chain Control Suite

The Valdero Supply Chain Control Suite comprises four applications

Inventory Control, Demand Control, Planning and Fulfillment Control, and Product Change Control -- that allow businesses to dramatically reduce inventory, production and process costs by giving them a single transparent view of the supply chain, proactive performance measurement, management by exception, continuous supply demand balancing and guided resolution.

About Valdero

Valdero Corporation (www.valdero.com) is the leading provider of enterprise-class software solutions for intelligent supply chain control. Valdero gives companies real-time visibility into and resolution of changes in collaborative supply chains. With Valdero, businesses can create high-velocity supply chains that are able to respond quickly and efficiently to constant variations in supply, product configuration and customer demand. Valdero has corporate headquarters in Palo Alto, Calif.

Valdero is a trademark of Valdero Corporation. All other brand, product, and company names used herein may be trademarks or registered trademarks of their respective owners.

--30--jb/sf* CONTACT: Valdero Corporation
Caroline Savoie, 650/404-2234
[e-mail]
or
B3 Communications
Bonnie Harris, 415/332-5816
[e-mail]

___________________________________-

Nr. 6 Item 7. Managements Discussion an Analysis of Financial Coditions an Results of Operations (detailiert und umfangreich):

EXTREME NETWORKS INC
Filed on Sep 30 2002

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Critical Accounting Policies and Estimates

Our significant accounting policies are more fully described in Note 1 of Notes to Consolidated Financial Statements included in this Form 10-K. The preparation of our consolidated financial statements in accordance with generally accepted accounting principles requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the period reported. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty. We base our estimates and judgments on historical experience, market trends, and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe the critical accounting policies stated below, among others, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

We derive the majority of our revenue from sales of our stackable and chassis-based networking equipment, with the remaining revenue generated from service fees relating to our products, including installation, maintenance and training. Our revenue recognition policy follows SEC Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements. We generally recognize product revenue from our end-user and reseller customers at the time of shipment, provided that persuasive evidence of an arrangement exists, the price is fixed or determinable and collectibility of sales proceeds is reasonably assured. When significant obligations remain after products are delivered, such as installation or customer acceptance, revenue and related costs are deferred until such obligations are fulfilled. Revenue from service obligations under maintenance contracts is deferred and recognized on a straight-line basis over the contractual period, which is typically 12 months.

We make certain sales to partners in two-tier distribution channels. The first tier consists of a limited number of independent distributors that sell primarily to resellers and, on occasion, to end-user customers. Under specified conditions, we grant the right to these distributors to return a portion of unsold inventory to us for the purpose of stock rotation. Therefore, we defer recognition of revenue on sales to distributors until the distributors sell the product, as evidenced by a monthly sales-out report that each distributor provides us. The second tier of the distribution channel consists of a large number of third-party resellers that sell directly to end-users and are not granted return privileges, except for defective products.

We provide an allowance for sales returns based on our historical returns, analysis of credit memo data and return policies which has been netted against net revenue in the accompanying consolidated statements of operations. If the historical data used by us to calculate the estimated sales returns and allowances does not properly reflect future returns, these estimates would have to be modified, thus resulting in an impact to net revenue.

Inventories

The networking industry is characterized by rapid technological change, frequent new product introductions, changes in customer requirements, and evolving industry standards. We perform a detailed assessment of


Table of Contents inventory at each balance sheet date, which includes a review of, among other factors, demand requirements, product lifecycle and product development plans and quality issues. Based on this analysis, we record adjustments, when appropriate, to reflect inventory at net realizable value. In recent quarters, demand for our products has been adversely affected by the downturn in the United States economy and reduced telecommunications and infrastructure capital spending. Although we make every effort to ensure the accuracy of our forecasts of product demand, any significant unanticipated changes in demand or technological developments would significantly impact the value of our inventory and our reported operating results. In the future, if we find that our estimates are too optimistic and we determine that our inventory needs to be written down, we will be required to recognize such costs in our cost of revenue at the time of such determination. Conversely, if we find our estimates are too pessimistic and we subsequently sell product that has previously been written down, our operating margin in that period will be unusually favorable.

Warranty Reserves

Networking products can contain undetected software or hardware errors when new products or new versions or updates of existing products are released to the marketplace. We have experienced such errors in connection with new products and product upgrades. Our hardware warranty period is typically 12 months from the date of shipment to the end user and 14 months from the date of shipment to channel partners. Upon shipment of products to our customers, including both end users and channel partners, we estimate expenses for the cost to repair or replace products that may be returned under warranty and accrue the amount as revenue is recognized. Our determination of our warranty requirements is based on our actual historical experience with the product or product family, the frequency of new product introductions and product upgrades anticipated during the period, an estimate of repair and replacement costs and any product warranty problems that are identified after shipment. We adjust these accruals at each balance sheet date in accordance with changes in these factors. While we believe that our warranty accrual is adequate and that the judgment applied in calculating this accrual is appropriate, the assumptions used are based on estimates and estimated amounts could differ materially from our actual warranty expenses in the future.

Allowance for Doubtful Accounts

We continually monitor and evaluate the collectibility of our trade receivables based on a combination of factors. We record specific allowances for bad debts in general and administrative expense when we become aware of a specific customer’s inability to meet its financial obligation to us, such as in the case of bankruptcy filings or deterioration of financial position. Estimates are used in determining our allowances for all other customers based on factors such as current trends in the length of time the receivables are past due and historical collection experience. We mitigate some collection risk by requiring most of our customers in the Asian region, excluding Japan, to secure letters of credit prior to placing an order with us. During the year ended June 30, 2002, we increased our allowance for doubtful accounts, reflecting the adverse economic conditions affecting our customer base. While we believe that our current allowance for doubtful accounts receivable is appropriate, a change in the financial condition of specific customers may result in further adjustment to our estimates of the recoverability of receivables.

Deferred Tax Asset Valuation Allowance

We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities. Significant management judgment is required in determining our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. We make an assessment of the likelihood that our deferred tax assets will be recovered from future taxable income, and to the extent that recovery is not believed to be likely, a valuation allowance is established. For fiscal 2002 and 2001, we did not record a valuation allowance to reduce our deferred tax assets because we believed the amount was more likely than not to be realized. In the event we are unable to realize some or all of the deferred tax assets in the future, an adjustment to the deferred tax assets will be charged to income in the period such determination is made.


Table of Contents

Purchase Commitments

Currently, we have strategic partnerships with three contract manufacturers for the manufacture of our products. Our agreements allow them to procure long lead-time component inventory on our behalf based upon a rolling production forecast provided by us. We are contractually obligated to the purchase of long lead-time component inventory that our contract manufacturers procure in accordance with the forecast, unless we give notice of order cancellation outside of applicable component leadtimes. As of June 30, 2002, we were committed to purchase approximately $1.0 million of such inventory over the next four months. If actual demand of our products is below these projections, we may have excess inventory as a result of our purchase commitments of long lead-time components with our contract manufacturers. As a consequence, we may then need to record a charge to cost of revenue to reflect the impact of such excess purchase commitments.

Legal Contingencies

We are currently involved in various claims and legal proceedings. Periodically, we review the status of each significant matter and assess our potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be estimated, we accrue a liability for the estimated loss. Because of uncertainties related to these matters, accruals, if any, are based only on the most current and dependable information available at any given time. As additional information becomes available, we may reassess the potential liability from pending claims and litigation and the probability of claims being successfully asserted against us. As a result, we may revise our estimates related to these pending claims and litigation. Such revisions in the estimates of the potential liabilities could have a material impact on our consolidated results of operations, financial position and cash flows in the future. For further detail, see Note 4 of Notes to Consolidated Financial Statements for a description of legal proceedings.

First Quarter Fiscal 2003

On September 30, 2002, we announced that we expected revenue for the first quarter ended September 29, 2002 to be approximately $100 million. Based on this revenue level, we expect to report a loss of approximately $0.03 to $0.04 per share for the quarter on a GAAP basis.

Results of Operations

Net Revenue

Net revenue was $441.6 million in fiscal 2002, $491.2 million in fiscal 2001 and $262.0 million in fiscal 2000, representing a decrease of 10.1% in fiscal 2002 from fiscal 2001 and an increase of 87.5% in fiscal 2001 from fiscal 2000. The decrease in net revenue in fiscal 2002 compared to fiscal 2001 was primarily due to a decline in revenue in the United States, as our business was negatively impacted by the cautious purchasing behavior of customers in the difficult economic environment during fiscal 2002, offset in part by an increase in revenue from customers in Japan. The increase in net revenue for fiscal 2001 resulted primarily from a higher volume of sales due to an increase in market acceptance of our products.

Sales outside of the United States accounted for 67%, 57% and 44% of net revenue in fiscal 2002, fiscal 2001 and fiscal 2000, respectively. The decrease in United States sales in fiscal 2002 as a percentage of total sales was primarily attributable to reduced sales within the United States in the first half of 2002 as a result of the events of September 11, 2001. Sales within the United States in the second half of fiscal 2002 steadily increased as a percentage of total sales. We expect that export sales will continue to represent a significant portion of net revenue, although export sales may decline as a percentage of net revenue. All sales transactions are currently denominated in United States dollars.

During fiscal 2002, the United States economy experienced a rapid and increasingly severe downturn. This adversely affected our product demand and made it increasingly difficult to accurately forecast future production requirements. Our revenue for the first quarter of fiscal 2003 will be adversely affected by the continuing weakness and uncertainty in the economies of the United States and other industrialized countries. While we


Table of Contents expect this economic downturn to continue for the remainder of calendar year 2002, we cannot predict the extent, severity or length of this economic downturn in the United States or in the other geographic regions where we currently sell our products.

We expect to experience some erosion of average selling prices of our products due to a number of factors, including competitive pricing pressures, promotional pricing and rapid technological change. Our revenue is derived primarily from sales of our Summit, BlackDiamond and Alpine products and fees for services relating to our products, including installation maintenance and training. The level of sales to any customer may vary from period to period; however, we expect that significant customer concentration will continue for the foreseeable future. One customer, who is a distributor of our products, accounted for 15% and 16%, respectively, of our net revenue in fiscal 2002 and fiscal 2001. No customer accounted for more than 10% of our net revenue in fiscal 2000.

Cost of Revenue

Cost of revenue includes costs of raw materials, direct labor, manufacturing overhead and amounts paid to third-party contract manufacturers, and other costs related to warranty and contractual obligations. Net revenue less cost of revenue (gross profit) was $207.1 million in fiscal 2002, $210.0 million in fiscal 2001 and $135.0 million in fiscal 2000, representing a decrease of 1.4% in fiscal 2002 from fiscal 2001 and an increase of 55.5% in fiscal 2001 from fiscal 2000. The decrease in fiscal 2002 was primarily due to the related decrease in revenue, and the increase in fiscal 2001 was primarily due to an increase in revenue. Gross margin (gross profit as a percentage of net revenue) was 46.9% in fiscal 2002, 42.7% in fiscal 2001 and 51.6% in fiscal year 2000. The increase in gross margin in fiscal 2002 over fiscal 2001 resulted primarily from a shift in product mix and a decrease in the net charges related to contract manufacturers and other costs associated with the carrying value of inventory, including a benefit to cost of revenue in fiscal 2002 of $4.8 million relating to products sold that were written off in fiscal 2001. This increase in gross margin in fiscal 2002 over fiscal 2001 was adversely affected by a significant increase in warranty expense. During fiscal 2002 we experienced a higher than normal rate of warranty expense due to problems with various component parts within our products and our election, in some cases, to address those problems by replacing such products with new rather than refurbished replacements. We continued to experience higher than normal rates of warranty expense in the first quarter of fiscal 2003. We intend to reduce these expenses in the future, however our gross margin will continue to be adversely affected until we have completed the implementation of operational changes designed to reduce these expenses.

The decrease in gross margin in fiscal 2001 over fiscal 2000 was primarily due to a $40.3 million charge for excess and obsolete inventory, non-cancelable purchase commitments and warranty expenses.

Inventory purchases and commitments are based upon our forecast of future sales. To mitigate the component supply constraints that have existed in the past, we built inventory levels for certain components with long lead times and entered into long-term commitments for certain components. Due to a sudden and significant decrease in demand for our products that became apparent in the third quarter of fiscal 2001, inventory levels, including non-cancelable purchase commitments, exceeded our requirements based on our forecast of expected demand. This additional excess inventory charge was calculated based on the inventory levels in excess of our forecast of expected demand for each product. Based on our future demand forecast, we do not currently anticipate that the excess inventory subject to these provisions will be used at a later date. Furthermore, we may be required to take additional write-downs in the future related to excess inventory.

Our gross margin is variable and dependent on many factors, some of which are outside of our control. Some of the primary factors affecting gross margin include demand for our products, changes in our pricing policies and those of our competitors, and the mix of products sold. Our gross margin may be adversely affected by increases in material or labor costs, increases in warranty expense, heightened price competition, obsolescence charges and higher inventory balances. In addition, our gross margin may fluctuate due to the mix of distribution channels through which our products are sold, including the effects of our two-tier distribution model. Any significant decline in sales to our resellers, distributors or end-user customers, or the loss of any of our resellers, distributors or end-user customers could have a material adverse effect on our business, operating results and financial condition. In addition, an increase in distribution channels generally makes it more difficult to forecast the mix of products sold


Table of Contents and the timing of orders from our customers. New product introductions may result in excess or obsolete inventories, which may also reduce our gross margin. Furthermore, if product or related warranty costs associated with these new products are greater than we have experienced, gross margin may be adversely affected.

Cost of revenue includes the cost of our manufacturing overhead. We outsource the majority of our manufacturing and supply chain management operations, and we conduct quality assurance, manufacturing engineering, document control and repairs at our facility in Santa Clara, California. Accordingly, a significant portion of our cost of revenue consists of payments to our contract manufacturers: Flextronics International, Ltd., Plexus Corp. and Solectron Corporation. As part of our business relationship with MCMS, Inc., the predecessor-in-interest to Plexus Corp., in September 2000, we entered into a $9.0 million operating equipment lease for manufacturing equipment with a third-party financing company; we, in turn, subleased the equipment to MCMS. Due to the liquidity problems at MCMS and its voluntary bankruptcy filing for protection under Chapter 11 on September 18, 2001, we recorded a charge of $9.0 million related to the equipment lease in the first quarter of fiscal 2002. On January 8, 2002, MCMS completed an agreement to sell a majority of its assets to Plexus Corp. for $45.0 million.

We expect to realize lower per-unit product costs from our contract manufacturers as a result of volume efficiencies if and as volumes increase. However, we do not know if or when such price reductions will occur. The failure to obtain these price reductions could have a material adverse effect upon our gross margin and operating results.

Sales, Marketing and Service Expenses

Sales, marketing and service expenses consist of salaries, commissions and related expenses for personnel engaged in marketing, sales and customer support and service functions, as well as trade shows and promotional expenses. Sales, marketing and service expenses were $141.0 million in fiscal 2002, $154.6 million in fiscal 2001 and $67.1 million in fiscal 2000, representing a decrease of 8.8% in fiscal 2002 from fiscal 2001 and an increase of 130.2% in fiscal 2001 from fiscal 2000. The decrease in fiscal 2002 was primarily due to lower aggregate sales commissions and a reduction of approximately 80 people in our sales, marketing and support organization. As a percentage of net revenue, sales, marketing and service expenses increased to 31.9% in fiscal 2002 from 31.5% in fiscal 2001. This percentage increase was primarily the result of a decrease in our net revenue in fiscal 2002. As a percentage of net revenue, sales, marketing and service expenses increased to 31.5% in fiscal 2001, compared with 25.6% in fiscal 2000. This increase was primarily due to the hiring of additional sales, marketing and customer support personnel, increased sales commission expenses resulting from increased net revenue and increased promotional expenses. Service expenses were $23.1 million, $17.4 million and $5.6 million in fiscal 2002, 2001 and 2000, respectively. These increases were due to increased staffing and new programs for our distributors and resellers. The rate of future spending increases in our sales, marketing and service expenses, if any, will depend on the pace of recovery in the market for networking products.

Research and Development Expenses

Research and development expenses consist principally of salaries and related personnel expenses, consultant fees and prototype expenses related to the design, development, testing and enhancement of our products. Research and development expenses were $61.5 million in fiscal 2002, $57.9 million in fiscal 2001 and $33.0 million in fiscal 2000, representing an increase of 6.2% in fiscal 2002 from fiscal 2001 and an increase of 75.4% in fiscal 2001 from fiscal 2000. These increases were primarily due to higher payroll and related personnel expenses associated with the addition of new personnel, partly through acquisitions, to support our multiple product development efforts as well as non-recurring engineering charges and prototype costs. As a percentage of net revenue, research and development expenses increased to 13.9% in fiscal 2002 from 11.8% in fiscal 2001. This percentage increase was primarily the result of a decrease in our net revenue in fiscal 2002. As a percentage of revenue, research and development expenses decreased to 11.8% in fiscal 2001 from 12.6% in fiscal 2000. This percentage decrease was primarily the result of an increase in our net revenue in fiscal 2001. We expense all research and development expenses as incurred. We believe that continued investment in research and development is critical to attaining our strategic objectives.


Table of Contents General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related expenses for executive, finance and administrative personnel, professional fees and other general corporate expenses. General and administrative expenses were $26.9 million in fiscal 2002, $25.8 million in fiscal 2001 and $11.9 million in fiscal 2000, representing an increase of 4.3% in fiscal 2002 from fiscal 2001 and an increase of 116.8% in fiscal 2001 from fiscal 2000. The increase in fiscal 2002 was due primarily to increased professional fees and directors and officers insurance premiums. From fiscal 2001 to fiscal 2002, general and administrative expenses increased as a percentage of net revenue to 6.1% in fiscal 2002 from 5.2% in fiscal 2001 and 4.5% in fiscal 2000. The percentage increase in fiscal 2002 from fiscal 2001 was primarily the result of a decrease in our net revenue. The percentage increase in fiscal 2001 from fiscal 2000 was due primarily to an increase in bad debt expense, the hiring of additional finance, information technology, legal and administrative personnel and increased professional fees. The rate of any future spending increases in our general and administrative expenses, if any, will depend on the pace of recovery in the market for networking products.

Impairment of Acquired Intangible Assets

In the third quarter of fiscal 2002, we recorded in operating expenses asset impairment charges totaling $89.8 million against certain acquired intangible assets and goodwill. The acquired intangible assets and goodwill that were impaired originated primarily from the acquisitions of Optranet in January 2001 and Webstacks in March 2001.

Optranet’s products were originally targeted at the building local exchange carrier, or BLEC, and multi-tenant unit, or MTU, markets. It was believed that, by incorporating Optranet’s technology into our Alpine product family, we would be able to expand our presence in customer networks and give metropolitan service providers an advanced Ethernet service-provisioning platform for Ethernet access over several transport systems. We believed we would be able to exploit the synergies and growth opportunities of Optranet’s in-process products due to their complementary nature to our strategy and compatibility with our products. However, following the acquisition date, demand for Optranet’s products fell sharply, as the majority of Optranet’s targeted customers either entered into bankruptcy or dissolved. Based on industry analysis, the BLEC and MTU markets are not expected to recover in the next few years, and in the event that a recovery eventually occurs, BLEC and MTU service providers may likely require different solutions. As of the impairment valuation date of March 31, 2002, the Optranet products were repositioned to address the remote and branch office access needs of enterprise customers. However, this secondary market has also slowed due to decreased information technology spending and has largely been addressed by competing products based on legacy technologies.

Webstacks’ products were originally targeted at the e-business and hosting facility markets. We acquired Webstacks in an effort to expand our IP services to provide robust Layer 4 ~ Layer 7 switching solutions required for building high-performance content-aware networks. We believed that we would be able to exploit the growth opportunities of Webstacks’ products by complementing our Layer 3 product focus with high-end Layer 4 ~ Layer 7 networking devices. However, demand for higher-cost Layer 4 ~ Layer 7 switches in these markets did not materialize, largely due to worsening economic conditions. E-business customers continued to rely on slower speed networking devices and host facilities have not yet grown to a scale that necessitates data transfer at gigabit speeds. As of the impairment valuation date of March 31, 2002, the Webstacks products were repositioned to address enterprise data center needs, including security products. Although this market has slowed since the acquisition date, based on industry analysis, we believe there continues to be potential for moderate growth in this market.

Based on the foregoing impairment factors, we worked with valuation experts to perform asset impairment tests at the lowest operational level that had separately identifiable cash flows related to the Webstacks and Optranet intangible assets and goodwill. The tests were performed by comparing the expected undiscounted cash flows over 57-month periods for each of Webstacks and Optranet to the carrying amount of the long-lived assets


Table of Contents resulting from the acquisitions. We found that the sum of the undiscounted cash flows attributable to the Webstacks and Optranet intangible assets and goodwill was less than their carrying value and thus we needed to record an impairment loss. The impairment loss was measured as the amount by which the carrying values of such assets exceeded their fair value. The fair value was calculated based on analyses of the discounted future cash flows for each of Webstacks and Optranet. In performing these analyses, we used the best information available under the circumstances, including reasonable and supportable assumptions and projections of future operating results. The discount rates used in the analyses were 20% for each of Webstacks and Optranet, which were based on historical risk premiums that investors required for companies of our size, industry and capital structure and included risk factors specific to the sectors in which the two companies operated. These amounts are based on our best estimate of future results. As a result of our analysis, we recorded a charge to reduce goodwill and purchased intangible assets by $89.8 million in the third quarter of fiscal 2002.

Amortization of Deferred Stock Compensation, Goodwill and Purchased Intangible Assets

Amortization of deferred stock compensation was $10.2 million in fiscal 2002, $4.1 million in fiscal 2001 and $0.1 million in fiscal 2000, representing an increase of $6.1 million in fiscal 2002 from fiscal 2001 and an increase of $4.0 million in fiscal 2001 from fiscal 2000. The amortization of deferred stock compensation relates primarily to options awarded to employees that were assumed in the Optranet and Webstacks acquisitions in fiscal 2001, primarily in research and development.

Amortization of goodwill and purchased intangible assets was $37.2 million in fiscal 2002, $33.4 million in fiscal 2001 and $6.7 million in fiscal 2000, representing an increase of $3.8 million in fiscal 2002 from fiscal 2001 and an increase of $26.7 million in fiscal 2001 from fiscal 2000. The increases in fiscal 2002 were due to the amortization related to the Optranet and Webstacks acquisitions in fiscal 2001. In fiscal 2001, amortization of goodwill arising from warrants issued in April 2000 increased by $20.4 million to $27.2 million and amortization of goodwill and purchased intangible assets related to the Optranet and Webstacks acquisitions was $5.5 million. See Note 3 of Notes to Consolidated Financial Statements.

We review our intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. This review could result in a charge to earnings in the period any impairment is determined. Amortization of purchased intangible assets and deferred stock compensation may continue to increase if we acquire companies and technologies. We will no longer record amortization of goodwill in future periods because under Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets, goodwill is not amortized, but rather is periodically evaluated for impairment. See “New Accounting Pronouncements.”

Restructuring and Special Charges

During the third quarter of fiscal 2002, we implemented a restructuring plan to lower our overall cost structure. Restructuring and special charges in fiscal 2002 included a charge related to the purchase of leased properties of $39.0 million, a write-off of excess facilities of $25.4 million and a write-off related to asset impairments of $9.1 million, as described below.

We incurred a $39.0 million charge in fiscal 2002 relating to two property leases we entered into in June 2000, as described in Note 4 of Notes to Financial Statements. Effective May 7, 2002, we exercised the option to purchase the leased properties for an aggregate of $77.0 million, which represented the residual value guarantee under the lease arrangement of $80.0 million, net of a $3.0 million improvement allowance. The appraised fair value of the land and buildings at the time of the option exercise was $38.0 million. Accordingly, we recognized a charge of $39.0 million. Upon completion of this transaction the purchased land and buildings were categorized as property and equipment on our balance sheet and the buildings are being depreciated over their estimated useful lives of 25 years.

Excess facilities charges for fiscal 2002 were $25.4 million. These costs are the result of our decision to permanently reduce the space occupied or to vacate certain domestic and international facilities. The estimated


Table of Contents facilities costs are based on current comparable rates for leases in the respective markets or estimated termination fees. The actual loss could differ from this estimate if we are unsuccessful in negotiating affordable termination fees on certain facilities, if facility operating lease rental rates continue to decrease in these markets, if it takes longer than expected to find a suitable tenant to sublease these facilities, or if other estimates and assumptions change. We anticipate that we will continue to make cash outlays to meet lease obligations for these facilities through 2011 unless estimates and assumptions change or we are able to negotiate to terminate the leases prior to 2011. The following is a summary of the excess facility charges (in millions):


Location Reduced / Vacated Amount
---------------- ------------------------------------------------ -------
Santa Clara, CA Reduced February 2001 $ 9.4
Pleasanton, CA Never occupied — facility relates to Optranet
acquisition 9.3
Pleasanton, CA Reduced March 2002 4.6
Others Various 2.1
-- ----
$ 25.4
-- ----


Asset impairments were $9.1 million for fiscal 2002. This charge represented the unamortized amount of the assets at the date a decision was made to discontinue use and these assets were not utilized subsequently and were not held for sale. See Note 9 of Notes to Consolidated Financial Statements.

In fiscal 2001, restructuring and special charges included a write-off of acquired in-process research and development of $30.2 million and a restructuring charge of $5.9 million, as described below.

We recorded in-process research and development charges of $13.4 million related to the purchase of Optranet in January 2001 and $16.8 million related to the purchase of Webstacks in March 2001. The value assigned to purchased in-process research and development was determined through valuation techniques generally used by appraisers in the high-technology industry and was immediately expensed in the period of acquisition because technological feasibility had not been established and no alternative use had been identified. The charges are discussed in detail in Note 3 of Notes to Consolidated Financial Statements.

In March 2001, we implemented a restructuring plan in order to lower our overall cost structure. In connection with the restructuring, we reduced our headcount and consolidated facilities. Restructuring charges included in other operating expenses were $3.8 million in the quarter ended March 31, 2001 and $2.1 million in the quarter ended June 30, 2001. The restructuring expense included $1.8 million for severance and benefits for approximately 100 terminated employees, $2.3 million for the write-off and write-down in carrying value of Summit equipment and $1.8 million in facility closure expenses. As of June 30, 2002, all liabilities related to the restructuring plan have been paid.

Interest Income

Interest income was $11.7 million in fiscal 2002, $15.5 million in fiscal 2001 and $14.6 million in fiscal 2000, representing a decrease of $3.8 million in fiscal 2002 from fiscal 2001 and an increase of $0.9 million in fiscal 2001 from fiscal 2000. The decrease in fiscal 2002 from fiscal 2001 was due to lower interest rates, offset by an increase in our available investment balances due to the net proceeds we received from the issuance of convertible subordinated notes in December 2001. The increase in fiscal 2001 from fiscal 2000 was due to the increased amount of cash and cash equivalents, short-term investments, restricted investments and marketable securities from the net proceeds we received from our initial public offering in April 1999 and our secondary public offering in October 1999.

Interest Expense

Interest expense was $4.5 million in fiscal 2002, $0.4 million in fiscal 2001 and $0.5 million in fiscal 2000, representing an increase of $4.1 million in fiscal 2002 from fiscal 2001 and a decrease of $0.1 million in fiscal


Table of Contents 2001 from fiscal 2000. The increase in fiscal 2002 from fiscal 2001 was due to interest expense on the convertible subordinated notes issued in December 2001.

Other Expense

Other expense was $11.1 million in fiscal 2002, $4.7 million in fiscal 2001 and $33,000 in fiscal 2000. The increase in fiscal 2002 from fiscal 2001 was primarily due to write-downs of investments in privately-held companies that are being accounted for under the cost method. The increase in fiscal 2001 from fiscal 2000 was primarily due to our share of losses from companies in which we had a minority interest which were accounted for under the equity method of accounting of $2.9 million and write-downs of investments accounted for under the cost method of accounting of $1.8 million.

Income Taxes

We recorded a tax benefit of $52.8 million for fiscal 2002. The benefit for fiscal 2002 results in an effective tax benefit rate of 22.3%, which consists primarily of federal and state income tax benefits offset by nondeductible goodwill. SFAS No. 109, Accounting for Income Taxes, provides for the recognition of deferred tax assets if realization of such assets is more likely than not. We evaluate the realizability of the deferred tax assets on a quarterly basis. We recorded a tax benefit of $22.7 million for fiscal 2001, which consisted primarily of federal and state income tax benefits, offset by foreign taxes, nondeductible in-process research and development and goodwill. We recorded a tax provision of $10.3 million for fiscal 2000, which consisted primarily of federal taxes, state income taxes and foreign taxes, offset by the recognition of deferred tax assets.

Liquidity and Capital Resources

Cash and cash equivalents and total investments were $400.1 million and $271.5 million at June 30, 2002 and 2001, respectively, representing an increase of $128.6 million. This increase was primarily due to the net proceeds of $193.5 million from the issuance of convertible subordinated notes in December 2001 and cash provided by operating activities of $20.5 million, offset by capital expenditures of $82.8 million and payments for acquisitions of $14.9 million.

We generated $20.5 million in cash from operations in fiscal 2002 despite a net loss of $184.0 million. The net loss included significant non-cash charges, offset somewhat by the effect of deferred taxes. The principal non-cash charges were for impairment of goodwill and purchased intangible assets of $89.8 million, restructuring and special charges of $73.1 million and depreciation and amortization of $68.6 million. Accounts rece

[rotty]

EXTREME NETWORK - NEUE RATINGS:

`help` - zu Eurer Information: ich/wir haben die Redaktion angeschrieben, daß die endlich mal wieder ihre "Hausaufgaben" u.a. bzgl. dieses Wertes machen und werde für Euch hier letztmals die neuesten Informationen reinstellen. Sollte sich an der Qualität der `Datenpflege` nichts änderen weicht nach LYCOS oder freerealtime aus!

EXTR fällt und fällt zwar momentan, daß einem hier Angst werden könnte - aber wie gesagt es sind hier die Shorties dran. Es ist aber jetzt abzusehen, wann dieser Wert für die ausgereitzt sein dürfte.
Ich/wir haben Euch in den letzten Tagen umfangreiche NEUE fundamentale Informationen reingestellt, so daß man sich hier ein objektives Bild machen kann, zumal die Auftragslage bei EXTR aufgrund neuer Deals und Abkommen, resp. der Entscheidung von tragenden Firmen die Produkte von Extr zu verwenden, sehr gut ist.
GANZ KLAR: Extr momentan auch vom Bärenmarkt des Fallens mitbetroffen, ist bei diesem Kurzniveau mit/unter 3,50 $ VOLLKOMMEN UNTEBEWERTET und fundamental ist dieser Kurs mit nichts begründet. Ein angemessene Bewertung -unter Berücksichtigung des mom. Börsenumfeldes- liegt unter Berücksichtigung der neuen Zahlen und Aussichten zwischen 4,80 bis 6,00 $ mit Aussichten/Ziel konservativ auf mindestens 7,00 §.

Dies ergeben auch die Einschätzungen der NEUESTEN RATINGS (Einstufung der Analystenhäuser), die ich hier Euch wiedergebe = HÖHERSTUFUNG auf "Buy bis STRONG BUY":
---->

NEEDHAM & CO

Extreme Networks "strong buy" Datum: 02.10.2002


Rating-Update: Die Analysten von Needham & Co. stufen die Aktien von Extreme Networks mit "strong buy" ein. Das Kursziel sehe man bei 14 USD. (WKN 920402)




Quelle: AKTIENCHECK.DE AG


WEDBUSH MORGAN

Extreme Networks "buy" Datum: 01.10.2002


Rating-Update: Die Analysten von Wedbush Morgan stufen die Aktien von Extreme Networks mit "buy" ein. Das Kursziel sehe man bei 7 USD. (WKN 920402)




Quelle: AKTIENCHECK.DE AG



HINWEIS: Merrill Lynch hatte noch vor paar Tagen (30.09.02) EXTR von buy auf neutral herabgestuft und mit dieses Kursdiaster ausgelöst und zwar OHNE eine vernünftig fundamentale Begründung mitzuliefern, ANDERE -s. oben- sehen dies zwischenzeitlich anders. Es ist daher dringend anzuraten sich hier breit zu informieren. Hier nochmals sein Rating vom 01.10.02 (beruhend auf 30.09.02 =ALT):

MERRILL LYNCH

Extreme Networks neutral Datum: 01.10.2002


Rating-Update: Die Analysten von Merrill Lynch reduzieren das Rating für die Aktien von Extreme Networks von "buy" auf "neutral". (WKN 920402)




Quelle: AKTIENCHECK.DE AG



FAZIT (rechtsunverbindlich):
Es ist anzuraten hier jetzt durchzuhalten und keinesweges bei dies `Ausverkaufskursen` zu verkaufen. Eher könnte man, wenn tatsächlich die 2,00$-Marke nach unten durchstoßen wir massiv nachkaufen. Ich/wir sind hier der unverbindlichen Meinung, daß bei Extr bei den nächsten nachhaltigen Anstieg im Börsenumfeld dann mit einem MASSIVEN Ansteigen des Kurses zu rechnen sein wird (auf o.g. Wert gem. Angaben) - Viele die raus sind, werden dann massiv wieder rein gehen, um vermeintliche Verluste wieder reinzufahren. Dies dürfte aber, wenn der Zug angefahren ist, nicht ganz ohne Risiko sein - zumal hier dann mit Übertreibungen nach oben zu rechnen ist. - Fest steht, daß Extr momentan vollkommen unterbewertet ist und hier ein enormes `Aufholpotential` schlummert (aber wie gesagt, man sollte o.g. Einschätzungen und Rating sich hier gut vor Augen halten und entspr. mit stopp-buy/-loss arbeiten - und lieber den Spatz in der Hand pflegen, zumind. solange das Börsenumfeld noch so ist!). ANMERKUNG: die Erwartungen werden mit Auslaufen der `Ergebniszeitmeldungen` nach unserer unverbindlichen Einschätzung eintreffen, d.h. die Börse wird bekanntermaßen spätestens mit/nach dem 19.10.02 "DREHEN" (wenn der `verrückt-gewordene` Bush mit seiner schon "krankhaften" Kriegstreiberrei keinen Strich durch Rechnung macht....) .... Ansonsten


herzlichst Euer `help`