SAN JOSE, CA -- Cisco Systems, Inc., the worldwide leader in networking for the Internet, today reported its fourth quarter and fiscal year results for the period ended July 27, 2002. Net sales for the fourth quarter of fiscal 2002 were $4.8 billion, compared to $4.3 billion for the fourth quarter of fiscal 2001, an increase of 12%, and compared to $4.8 billion for the third quarter of fiscal 2002. Net income for the fourth quarter of fiscal 2002 on a generally accepted accounting principle (GAAP) basis, was $772 million or $0.10 per share, compared with net income of $7 million or $0.00 per share for the fourth quarter of fiscal 2001, and $729 million or $0.10 per share for the third quarter of fiscal 2002. Pro forma net income for the fourth quarter of fiscal 2002, which excludes the effects of acquisition charges, payroll tax on employee stock option exercises, and certain nonrecurring items, was $1.0 billion or $0.14 per share, compared with pro forma net income of $163 million or $0.02 per share for the fourth quarter of fiscal 2001, and $838 million or $0.11 per share for the third quarter of fiscal 2002. During the quarter, Cisco completed the acquisitions of Hammerhead Networks, Inc. and Navarro Networks, Inc. The total combined purchase price recorded during the quarter, including assumed liabilities, was approximately $260 million. In addition, Cisco took a one-time charge of $28 million, or less than $0.01 per share on an after-tax basis, as a write-off of in-process research and development. Net sales for fiscal 2002 were $18.9 billion, compared to $22.3 billion for fiscal 2001, a decrease of 15%. GAAP net income for fiscal 2002 was $1.9 billion or $0.25 per share, compared with a net loss of $1.0 billion or $0.14 per share for fiscal 2001. Pro forma net income for fiscal 2002 was $2.9 billion or $0.39 per share, compared with pro forma net income of $3.1 billion or $0.41 per share for fiscal 2001. Cash and cash equivalents and total investments were $21.5 billion at fiscal year-end 2002. Cash flow from operations was $1.6 billion for the fourth quarter and $6.6 billion for the full fiscal year 2002. "This was another solid quarter for Cisco, despite the ongoing challenges in the economy," said Cisco President and CEO John Chambers. "We continued to focus on what we can control, and the results speak for themselves. Our operational performance is on par with peak historical results, especially in the areas of gross margins and income as a percentage of revenue." Further commenting on Cisco's performance, Chambers noted, "Throughout this challenging time, we have focused on four key areas: profits, cash generation, productivity, and profitable market-share gains. We have consistently improved quarter by quarter in each of these categories, with our fourth quarter bringing in more than $1 billion in pro forma net income, $1.6 billion in cash from operations, a 22 percent productivity increase over last year's fourth quarter and 12 percent year-over-year revenue growth compared to a 44 percent decline by our top ten competitors." "We continue to see global leaders capturing the productivity benefits that result from Internet business solutions based on Cisco networks," said Chambers. "Cisco continues to innovate in core routing and switching technologies that serve as the foundation of our customers' productivity gains, as well as in emerging technology markets that we believe will drive the next wave of productivity, such as IP telephony, storage, security and mobility."