Plans to cut about 30% of its worldwide workforce; expects revenues of $10M to $15M and a GAAP net loss of $0.23 to $0.29 per share

August 23, 2002

1 Min Read

SANTA CLARA, Calif. -- Riverstone Networks, Inc., (Nasdaq: RSTN), today announced that it expects revenues for the second quarter ending August 31, 2002 to be approximately $10 million to $15 million. Based on these revenues, the Company anticipates a pro forma loss of approximately $0.18 to $0.24 per share and a GAAP loss of approximately $0.23 to $0.29 per share. Pro forma results exclude second quarter charges of approximately $5 million for severance expenses and charges associated with excess facilities, as well as amortization of stock compensation expense. To align its organization to pursue new market opportunities and accelerate its return to profitability, the Company is implementing a worldwide workforce reduction of approximately 30 percent of the Company's employee base. As a result of this reduction in workforce, the Company expects to realize cost savings of approximately $7 million per quarter beginning in the third quarter of the current fiscal year. The Company also announced today that it is expanding its focus on adjacent markets that require Riverstone's advanced switching and routing technologies. These opportunities, which include federal and cable, are markets where Riverstone's products and services have an established growth profile. "While we remain committed long term to our service provider customers, we are seeing a more immediate opportunity for our products in markets beyond telecommunications services," said Romulus Pereira, president and CEO of Riverstone Networks. "We believe we remain well positioned for long term success with a strong cash balance, a broad set of market opportunities, and a compelling set of next generation products." Riverstone Networks Inc.

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