From: Maribel Lopez <jlewis@schwartz-pr.com> To: <lwn@lwn.net> Subject: Red Hat Reports Fiscal Third Quarter Results Date: Wed, 19 Dec 2001 11:44:26 -0500 RED HAT REPORTS FISCAL THIRD QUARTER RESULTS -Profitability and positive cash flows from operations, adjusted for non-cash items, highlight the quarter - RESEARCH TRIANGLE PARK, North Carolina, -- December 18, 2001 -- Red Hat, Inc. (Nasdaq:RHAT), the global leader in Linux and open source solutions, today reported an adjusted net income of $1,300,000, or $0.01 per share, excluding amortization of goodwill and stock based compensation and restructuring charges, for the third quarter of fiscal 2002, compared to an adjusted net loss of $100,000, or break even per share, for the second quarter of fiscal 2002. The company reported revenue of $21.5 million for the third quarter ended November 30, 2001, an increase of 2% over the second quarter of fiscal 2002. On a GAAP basis, the company reported a net loss of $15 million, or $0.09 per share, compared with a net loss of $55.3 million, or $0.33 per share in the second quarter fiscal 2002. For the last nine months ended on November 30, 2001, the company reported revenues of $68.2 million, a decrease of 10% over the same period in year 2000. In terms of earnings, for the last nine months ended on November 30, 2001, the company reported an adjusted net income of $1,800,000, or $0.01 per share, compared to an adjusted net loss of $10,000,000, or $0.06 per share, for the last nine months of last year. On a GAAP basis, the company reported a net loss of $97.9 million - or $0.58 per share - for the last nine months ended on November 30, 2001, compared to a net loss of $62.5 million - or $0.38 per share - for the last nine months of last year. "Significant growth of Enterprise Subscription and Open Source Services revenues are validating the acceptance of Red Hat Linux as an Enterprise Computing Platform and Red Hat's ability to monetize the adoption of Red Hat Linux by the Large Enterprise", stated Kevin Thompson, Executive Vice President and Chief Financial Officer. About Red Hat, Inc. Red Hat is the global leader in Linux and open source solutions. Red Hat is headquartered in Research Triangle Park, N.C. and has offices worldwide. For investor inquiries, contact Gabriel Szulik at Red Hat, (919) 547-0012, x439. More information about Red Hat is available at www.redhat.com. FORWARD-LOOKING STATEMENTS Forward-looking statements in this press release are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that statements in this press release that are not strictly historical statements, including, without limitation, management's plans and objectives for future operations and management's assessment of market factors, constitute forward-looking statements which involve risks and uncertainties. These risks and uncertainties include, without limitation, reliance upon strategic relationships, management of growth, the possibility of undetected software errors, the risks of economic downturns generally, and in Red Hat's industry specifically, the risks associated with competition and competitive pricing pressures, the viability of the Internet, and other risks detailed in Red Hat's filings with the Securities and Exchange Commission, copies of which may be accessed through the SEC's Web site at http://www.sec.gov.