C-COR Reports Financial Results for Third Quarter of Fiscal Year 2005

    Business Editors

    STATE COLLEGE, Pa.--(BUSINESS WIRE)--April 21, 2005--C-COR Incorporated (Nasdaq:CCBL), a global provider of interoperable network solutions that simplify the transition to on demand networks, today reported its financial results for the third quarter of fiscal year 2005, ended March 25, 2005. Net sales for the third quarter were $48.2 million compared to $58.4 million for the same period last year. Bookings in the quarter were $93.6 million for a book-to-bill ratio of 1.94.
    The net loss for the third quarter of fiscal year 2005 was $17.3 million, compared to a net income of $5.0 million for the same period last year. The loss per share for the third quarter of fiscal year 2005 was $(.37) compared to earnings per diluted share of $.12 for the same period last year.
    C-COR's results for the third quarter of fiscal year 2005 included $1.7 million of amortization related to intangible assets and a $4.0 million charge for in-process research and development related to the acquisition of nCUBE Corporation. These items, which equate to $.12 on a per share basis, are included in results reported under generally accepted accounting principles (GAAP), but are typically excluded from the analyst estimates comprising the First Call consensus number. C-COR is breaking out these numbers to improve comparability of the projected GAAP results and the non-GAAP First Call number.
    C-COR anticipates that net sales for the fourth quarter of fiscal year 2005, ending June 24, 2005, will be between $65 and $72 million with a loss per share of between $(.08) and $(.17). These projections include $1.7 million related to amortization of intangible assets, or $.04 per share. Amortization of intangible assets is typically excluded from the First Call analyst projections. C-COR is breaking out this number to improve comparability of the projected GAAP results and the non-GAAP First Call number.
    Corporate management will discuss C-COR's financial results on a conference call today at 9:45 AM (ET). For information on how to access the conference call, refer to C-COR's news release dated April 11, 2005 (posted on the C-COR web site at www.c-cor.com), or contact Investor Relations at 814-231-4402 or 814-231-4438.

    About C-COR

    C-COR offers world-class, market-focused business solutions for cable operators, telephone companies, broadcasters, and other private and public sector entities. The Company's solutions simplify the transition to Internet Protocol (IP) demand-oriented networks by delivering interoperable, modular products in sync with IP network upgrade cycles. C-COR's products and services include a suite of software applications that automate the management of content, network, subscribers, and workforce, with more than 200 deployments worldwide; next-generation optical transport products; on-demand video systems with implementations in more than 20 countries; and a range of network assurance and technical services that allows operators to design and keep their networks operating at peak performance. Leading network operators through the transition to the on demand IP era, C-COR leverages its dedicated global workforce to deliver solutions for lowering risk, improving profit margins, and effectively managing change. C-COR was recently named in CED Magazine's "Broadband 50 Companies to Watch." C-COR's common stock is listed on the Nasdaq National Market (Symbol: CCBL) and is a component of the Russell 2000 Stock Index. For additional information regarding C-COR, visit www.c-cor.com.

C-COR Incorporated Condensed Consolidated Statements of Operations (unaudited, in thousands except per share amounts)

Thirteen Weeks Ended -------------------- March 25, March 26, 2005 2004 ---------- --------- Net sales $48,157 $58,427 Cost of sales 32,246 34,922 ---------- --------- Gross margin 15,911 23,505

Operating expenses: Selling and administrative 17,137 12,158 Research and product development 10,666 5,539 Amortization of intangibles 1,684 550 Acquired in-process research and development charge 4,000 0 Restructuring costs (recovery) 57 (109) ---------- --------- Total operating expenses 33,544 18,138

Income (loss) from operations (17,633) 5,367

Interest expense (309) (27) Investment income 242 394 Foreign exchange gain (loss) 132 (255) Other income (loss), net (183) 125 ---------- ---------

Income (loss) before income taxes (17,751) 5,604

Income tax (benefit) expense (402) 613 ---------- --------- Net income (loss) $(17,349) $4,991 ========== =========

Net income (loss) per share: Basic $(0.37) $0.13 Diluted $(0.37) $0.12

Weighted average common shares and common share equivalents Basic 47,402 39,012 Diluted 47,402 41,201

C-COR Incorporated Condensed Consolidated Statements of Operations (unaudited, in thousands except per share amounts)

Thirty-nine Weeks Ended ----------------------- March 25, March 26, 2005 2004 ----------- ----------- Net sales $168,743 $176,724 Cost of sales 108,257 109,959 ----------- ----------- Gross margin 60,486 66,765

Operating expenses: Selling and administrative 43,287 30,777 Research and product development 26,596 16,008 Amortization of intangibles 4,030 1,650 Acquired in-process research and development charge 5,850 0 Restructuring costs (recovery) 676 (215) ----------- ----------- Total operating expenses 80,439 48,220

Income (loss) from operations (19,953) 18,545

Interest expense (353) (68) Investment income 1,029 704 Foreign exchange gain 140 478 Gain on sale of bankruptcy trade claims 0 21,075 Other income, net 95 197 ----------- -----------

Income (loss) before income taxes (19,042) 40,931

Income tax expense 908 1,391 ----------- ----------- Net income (loss) $(19,950) $39,540 =========== ===========

Net income (loss) per share: Basic $(0.45) $1.06 Diluted $(0.45) $1.02

Weighted average common shares and common share equivalents Basic 44,521 37,439 Diluted 44,521 38,835

C-COR Incorporated Consolidated Balance Sheets (in thousands of dollars)

March 25, June 25, 2005 2004 ----------- --------- (unaudited) ASSETS Current assets Cash and cash equivalents $23,217 $63,791 Restricted cash 3,080 1,637 Marketable securities 31,464 52,934 Accounts receivable, net 51,785 43,785 Unbilled receivables 3,306 3,494 Inventories 31,205 25,680 Deferred taxes 737 0 Other 11,516 4,849 ----------- --------- Total current assets 156,310 196,170 ----------- ---------

Property, plant and equipment, net 20,605 17,697 Goodwill 132,205 38,312 Other intangible assets, net 16,382 10,752 Deferred taxes 51 754 Other long-term assets 4,014 3,200 ----------- --------- Total $329,567 $266,885 =========== =========

LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $24,074 $23,571 Accrued liabilities 39,362 31,274 Deferred taxes 0 467 Current portion of long-term debt 152 158 ----------- --------- Total current liabilities 63,588 55,470

Long-term debt, less current portion 35,649 772 Other long-term liabilities 5,906 2,381 Shareholders' equity 224,424 208,262 ----------- --------- Total $329,567 $266,885 =========== =========

    Some of the information presented in this announcement constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent the Company's judgment regarding future events, and are based on currently available information. Although the Company believes it has a reasonable basis for these forward-looking statements, the Company cannot guarantee their accuracy and actual results may differ materially from those the Company anticipated due to a number of known and unknown uncertainties, many of which the Company is not aware. Factors which could cause actual results to differ from expectations include, among others, capital spending patterns of the communications industry, changes in regard to significant customers, the demand for network integrity, the trend toward more fiber in the network, the Company's ability to develop new and enhanced products, the Company's ability to provide complete network solutions, continued industry consolidation, the development of competing technology, the global demand for the Company's products and services, the Company's ability to translate bookings into revenues, and the Company's ability to complete and integrate acquisitions and achieve its strategic objectives. For additional information concerning these and other important factors that may cause the Company's actual results to differ materially from expectations and underlying assumptions, please refer to the reports filed by the Company with the Securities and Exchange Commission, particularly the Company's most recently filed Annual Report on Form 10-K.

--30--DJL/cl*

CONTACT: C-COR Investor Relations Sally O. Thiel, 814-231-4402 email: sthiel@c-cor.com OR C-COR Media Relations Jo Ann Lehtihet, 814-231-4438 email: jlehtihet@c-cor.com

KEYWORD: PENNSYLVANIA INDUSTRY KEYWORD: TELECOMMUNICATIONS SOFTWARE NETWORKING INTERNET E-COMMERCE EARNINGS SOURCE: C-COR Incorporated

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