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RALEIGH, NC -- Red Hat, Inc. (Nasdaq:RHAT), the premier Linux and open source solutions provider, today reported results for the fourth quarter and fiscal year 2002. Red Hat's fiscal fourth quarter was characterized by continued strong performance in the Enterprise marketplace, as evidenced by the addition of ten enterprise customers who are making large scale deployments of Red Hat's Open Source technologies. These customers include AOL, UBS, Morgan Stanley, Amazon, Cisco, Nortel, Dell, GE Medical, Dreamworks, Oracle, Deutsche Bank, Siemens, and BP. Red Hat, Inc. reported an adjusted net income from continuing operations of $1.0 million, or $0.01 per share, excluding amortization of goodwill, stock based compensation, and restructuring charges, for the fourth quarter of fiscal 2002, compared to an adjusted net income of $1.9 million, or $0.01 per share, for the third quarter of fiscal 2002. This represents the fourth consecutive quarter in which the company has delivered profitable or breakeven results. The company reported revenue of $18.6 million for the fourth quarter ended February 28, 2002, as compared to $20.0 million in the third quarter of fiscal 2002. The company showed continued Enterprise performance with Enterprise revenues increasing to $16.1 million in the fourth quarter from $15.7 million in the third quarter. Gross margin improved to 66% during the fourth quarter, compared to 64% in the previous quarter. On a GAAP basis, the company reported a net loss from continuing operations of $28.9 million, or $0.16 per share, compared with a net loss from continuing operations of $12.0 million, or $0.07 per share in the third quarter of fiscal 2002. The primary differences between the company's pro forma net income from continuing operations and GAAP net income from continuing operations, in the fourth quarter of fiscal 2002, are non-cash charges related to amortization of stock based compensation, goodwill, and other intangible assets of $9.9 million, write-off of goodwill of $15.6 million and severance cost of $2.2 million related to the company's restructuring to focus on delivering Open Source solutions to the Global 2000. For the fiscal year ended on February 28, 2002, the company reported revenues of $78.9 million, a decrease of 2% over the same period in year 2001. In terms of earnings, for the fiscal year ended on February 28, 2002, the company reported an adjusted net income from continuing operations of $3.3 million, or $0.02 per share, compared to an adjusted net loss of $6.5 million, or $0.04 per share, for the fiscal year ended in February of 2001. On a GAAP basis, the company reported a net loss of $139.9 million or $0.83 per share - for the fiscal year ended on February 28, 2002, compared to a net loss of $86.7 million or $0.53 per share for the fiscal year ended in February of 2001. "In a challenging environment, Red Hat has consistently delivered positive adjusted earnings", stated Kevin Thompson, Executive Vice President and Chief Financial Officer. "Fiscal 2002 has been a successful year for Red Hat. It has been marked by the successful transition of the company from a retail software products company to a provider of Open Source Solutions to the Large Enterprise. This transition was accomplished while achieving and maintaining positive adjusted operating results". In the fourth quarter the company completed the re-allocation of its resources to increase its focus on Unix to Linux migration opportunities in the Global 2000. This resulted in the company discontinuing its non-strategic Network Consulting business and restructuring its Embedded business. For more information visit www.redhat.com