Tollgrade Reports Q1

PITTSBURGH -- Tollgrade Communications, Inc. (Nasdaq: TLGD), today reported revenue of $14,543,423 and earnings of 3 cents per share for the first quarter ended March 29, 2003. Revenue and earnings per share for the first quarter of 2002 were $17,522,274 and 11 cents per share, respectively. The first quarter 2003 results include the results of the company's Cheetah(TM) status and performance monitoring operations (Cheetah) acquired February 13, 2003. The first quarter 2003 results were in line with previous guidance from Tollgrade. The company's guidance, including expectations related to the Cheetah acquisition, were for first quarter 2003 revenues and EPS results to range from $11.7 million to $15.0 million, and an approximate loss of two cents on the low end to as much as earnings of five cents at the higher sales level, respectively. "Despite the fact that spending is still extremely tight among our RBOC customers, particularly as it relates to Digital Loop Carrier (DLC) deployments, our customers are committed to maintaining high levels of customer service. Because proper centralized consumer testing is paramount to such endeavors, both LoopCare(TM) and DigiTest(R) provide many features that make such activities more effective," said Chris Allison, Tollgrade's chairman and chief executive officer. "Our core MCU(R) product sales continue to be challenging, but we're seeing positive DigiTest LTS replacement and independent carrier DigiTest and LoopCare deployments for POTS and DSL testing. In terms of CATV, our LIGHTHOUSE(R) and Cheetah products performed beyond expectations." Regarding the company's second quarter outlook, Chris Allison reported that, "Our results will be affected by a number of factors. Our overall company is bigger now as a result of our Cheetah acquisition and our cable business seems a little more stable in comparison to our telco business. However, spending in the telco industry remains tight, but there continues to be an interest in reducing operational costs through effective automated POTS testing. Also, our customers are still deploying DLC systems, just not at the levels that we saw in 2000 and 2001. Additionally, we are seeing continued interest in treating DSL as a consumer service, which fits strategically with our product portfolio emphasis. Finally, further impact to the company of recent Federal Communications Commission rulings is still in question. As a result of all of these factors, we expect second quarter revenue to range from $13.0 million to $16.0 million with earnings per share ranging from breakeven to six cents. The lower end of the range is a function of the unpredictability of spending patterns due to the tight budgetary constraints of our RBOC customers." Tollgrade Communications Inc.