Highwave Reports Annual EarningsHighwave Reports Annual Earnings

LANNION, France -- Highwave Optical Technologies (Nouveau Marché, HGWO), a leading technology supplier of active fiber based components and subsystems for the telecommunication Dense Wavelength Division Multiplexing (DWDM) systems, fiber laser industry, fiber optic sensors and defense markets, announced today its revenues for its fiscal year 2003-2004, ended on March 31, 2003.

Revenues for the fourth quarter of the fiscal year 2004 was € 0.8 million, representing a sequential increase of 10% versus the third quarter 2004 revenues, and a 33% increase versus the fourth quarter of the fiscal year 2002-2003.

“The revenues of fiscal year 2003-2004 illustrate a significant market improvement versus the last three quarterly revenues of the previous year.The revenues 2002-2003 were mainly generated during the first quarter of that year (€ 2.0 million) thanks to orders booked during the previous years.Compared with the previous fiscal year, Highwave Optical Technologies doubled the number of orders received by its clients during the fiscal year ended 31 March 2004. In addition, on a similar average EUR/USD exchange rate basis compared to 2003, the 2004 revenues would have been superior by 10% the the Compan’y actual 2004 revenues.

At the same time, the Company significantly reduced its cost base in2003-2004 through both a redundancy plan (40% cost savings) and a drastic decrease with regards to its General and Administrative expenses. The leases have been significantly re-negotiated to the Company’s benefit (50% cost savings as of May 2004) and the transfer of the main manufacturing capabilities to Thailand is now complete. The Company is now fully restructured” commented Sylvain Boj, COO.

“With an even greater product range which includes fiber lasers for military and industrial applications (a market estimated to be € 300 million) in addition to optical amplifiers and optical components, the Company has put in place a global development strategy based on its cutting-edge technology and even larger addressable markets. A first official presentation of the Company’s new products range will take place during CLEO (Conference on Lasers and Electro Optics) in San Fransisco during May 18-20.Going forward, the growth of addressable non-telecom markets coupled with the increasing need to provide a global service offering to our clients strengthens our conviction about the necessary consolidation in our sector”, commented François Leraillez, CEO.

Highwave Optical Technologies