Hifn Reports Q1

LOS GATOS, Calif. -- Hifn(tm) (NASDAQ: HIFN) today reported financial results for the first quarter ended December 31, 2003. Revenues for the first quarter of fiscal 2004 were $7.1 million, an increase of 14% from the $6.2 million in revenues reported in the previous quarter and up 62% from the $4.4 million in revenue reported in the first quarter of fiscal 2003. Net loss for the first quarter ended December 31, 2003 was $3.5 million, or $0.31 per share, as compared to net loss of $5.1 million, or $0.48 per share, for the first quarter ended December 31, 2002. The results for the first quarter ended December 31, 2003 includes an in-process research and development charge of $1.8 million related to the asset and intellectual property acquisition of IBM's Picoprocessor PowerNP completed on December 31, 2003. "The first fiscal quarter results show a continuing recovery in Hifn's business, with a strong performance in software driving higher gross margins. We expect this recovery to continue through the 2004 fiscal and calendar year," said Chris Kenber, Hifn's Chairman and CEO. "The acquisition of the IBM Picoprocessor PowerNP products takes Hifn into a highly complementary and profitable business, selling to the same customers who select our security processors. The intellectual property in these products will also drive our next generation of security processors, thereby expanding the functionality and value we deliver to our customers," Kenber continued. "Finally, during the December quarter, Hifn successfully taped out its 4000 and 8000 series of flow-through security processors resulting from the September 2002 NetOctave asset acquisition. Early testing at full speed has shown excellent performance and they should sample to customers this quarter," said Kenber. Hifn Inc.