TranSwitch Reports Q2, Lays Off

SHELTON, Conn. -- TranSwitch Corporation (Nasdaq:TXCC) announced today that it posted second quarter 2002 net revenues of $4.5 million, a net loss on a GAAP (Generally Accepted Accounting Principles) basis of ($11.5) million, or ($0.13) per basic and diluted share and a pro forma net loss of ($10.2) million, or ($0.10) per diluted share, as adjusted. The Company also announced that it has reduced its workforce by approximately 16 percent of the 420 people that it employs worldwide. "We are anticipating that third quarter, 2002 product revenue will be approximately flat to our second quarter, 2002 results. We are estimating that our third quarter, 2002 pro forma diluted loss per share as adjusted will be in the range of ($0.11-$0.12) per share," stated Dr. Das. "When we look back on 2002, we will see that it will have been the toughest year in our industry's history." "In order to reduce our operating expense run-rate, TranSwitch Corporation reduced its workforce earlier this week by approximately 16%, closing its Milpitas, CA and Raleigh, NC design centers and reducing its staff in Boston, MA and Shelton, CT. This is the third workforce reduction the Company has completed in the last year," stated Dr. Das. "This restructuring will result in an estimated $4.0 to $5.0 million charge to earnings in the third quarter of 2002. TranSwitch will also review its remaining fixed asset base as part of this third quarter restructuring effort; however, at this time it has not completed its analysis of this portion of the restructuring estimate," continued Dr. Das. TranSwitch Corp.