Vitesse Gains in Q2

CAMARILLO, Calif. -- Vitesse Semiconductor Corporation (Nasdaq:VTSS) ("Vitesse" or the "Company") today reported results for the second quarter of fiscal 2004 ended March 31, 2004. Revenues in the second quarter of fiscal 2004 were $56.0 million, compared to $38.1 million in the second quarter of fiscal 2003, and $50.3 million in the first quarter of fiscal 2004. Revenues for the six months ended March 31, 2004 were $106.3 million, compared to $73.8 million in the six months ended March 31, 2003.

On a generally accepted accounting principles (GAAP) basis, net loss for the second quarter of fiscal 2004 was $17.4 million or $0.08 loss per share compared to net loss of $25.1 million or $0.12 loss per share in the second quarter of fiscal 2003 and net loss of $8.0 million or $0.04 loss per share in the first quarter of fiscal 2004. Net loss for the six months ended March 31, 2004 was $25.4 million or $0.12 loss per share compared to net loss of $36.2 million or $0.18 loss per share for the six months ended March 31, 2003.

Pro-forma net income for the second quarter of fiscal 2004 was $1.4 million or $0.01 income per share, compared to pro-forma net loss of $7.9 million or $0.04 loss per share in the second quarter of fiscal 2003, and pro-forma net income of $0.2 million or $0.00 income per share in the prior quarter. Pro-forma net income for the six months ended March 31, 2004 was $1.6 million or $0.01 income per share, compared to pro-forma net loss of $17.5 million or $0.09 loss per share in the six months ended March 31, 2003. Pro-forma net income for the three and six months ended March 31, 2004 excludes the following continuing charges: amortization of intangible assets, acquisition related deferred stock-based compensation, employee stock purchase plan compensation and restructuring charges, and includes an adjustment to income taxes.

Vitesse's President and CEO, Lou Tomasetta, said, "I'm pleased to report another quarter of continuing revenue growth and improving pro-forma profitability. Revenues increased sequentially, once again driven by strength in our Metro and Enterprise product lines. We expect that in the third quarter of fiscal 2004, revenues will increase approximately 8% over the second quarter. We are also forecasting our GAAP loss to be between $0.06 to $0.10 loss per share and our pro-forma net income to increase to $0.02 income per share in the third quarter of fiscal 2004."