Paradyne Reports Second Quarter 2004 Results; Revenues Increase 24% Year-over-Year as Paradyne...

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The corrected release reads:

PARADYNE REPORTS SECOND QUARTER 2004 RESULTS; REVENUES INCREASE 24% YEAR-OVER-YEAR AS PARADYNE RETURNS TO PROFITABILITY

Paradyne (Nasdaq:PDYN), a leading provider of broadband voice, data and video network access solutions, today reported its second quarter financial results for the period ended June 30, 2004.

Net revenues for the second quarter of fiscal 2004 were $24.2 million, an increase of 24.2 percent compared to the same period in 2003 and an 8.7 percent improvement from the first quarter. Sales of broadband access products accounted for $20.6 million in revenue; sales of narrowband products were $2.2 million; and service revenue accounted for $1.5 million.

Paradyne's second quarter financial results mark the company's return to profitability: On a pro forma basis, second quarter earnings per share (EPS) were 2-cents per diluted share, Paradyne's fifth consecutive quarter of earnings improvement and a 10-cent per share increase over the second quarter of 2003. On a generally accepted accounting principles (GAAP) basis, Paradyne earned 1-cent per diluted share, compared to a loss of 11-cents per diluted share for the second quarter of 2003. Reconciliation between GAAP and pro forma results is provided in a table immediately following the Consolidated Statements of Operations.

"Steady growth in our target markets and consistent demand for broadband access equipment supporting the migration to packet-based networking is fueling our growth," said Sean Belanger, president and CEO of Paradyne. "Our new products launched over the last six months are gaining excellent market adoption, both in the U.S. and abroad."

Paradyne's cash position remains healthy at $46.1 million, and the company is debt free.

Business highlights for the second quarter include:

--Shipments of standards-based ADSL ports approximately doubled from last quarter with over 91,000 ports shipped in the second quarter of 2004.

--Standards-based ADSL endpoint shipments increased 57 percent over the prior quarter for a total of 25,900 modems shipped in the second quarter.