Avici Reports Q1 Results

NORTH BILLERICA, Mass. -- Avici Systems Inc. (NASDAQ: AVCI - News), today reported its first quarter results for the three months ended March 31, 2004.

Gross revenue for the first quarter ended March 31, 2004 was $7.0 million compared to $7.6 million for the comparable three month period ended March 31, 2003. Revenue, net of common stock warrant discount, for the March 2004 quarter was $6.4 million, compared to $6.8 million for the same period last year.

GAAP net loss for the first quarter ended March 31, 2004 was $9.1 million, or $0.73 per share, compared to a GAAP net loss of $12.7 million, or $1.03 per share, in the prior year's first quarter. GAAP net loss for the 2004 and 2003 first quarter periods includes $0.7 million and $1.3 million, respectively, for non-cash equity based charges, namely common stock warrant discount and stock based compensation and, in the 2004 first quarter, a credit of $0.2 million resulting from the further utilization of certain inventory previously considered excess.

Excluding these charges and credits, non-GAAP net loss and net loss per share for the three months ended March 31, 2004 was $8.6 million, or $0.69 per share, compared to a net loss of $11.4 million, or $0.93 per share, in the prior year quarter ended March 31, 2003.

Cash, marketable securities and long-term investments totaled $94 million at March 31, 2004.

"Despite the shortfall in first quarter revenue, we saw year-over-year improvement in our cash flow and net loss due to prudent expense management, " said Steve Kaufman, President and CEO. "Our channel strategy is starting to payoff globally with new customer wins. Avici's new business pipeline is also growing as carriers seek to upgrade their networks with more reliable, scalable and economical core routers."

Avici Systems Inc.