Enterasys Networks Reaches SEC Settlement

Enterasys Networks reached a settlement with the U.S. Securities and Exchange Commission (SEC). The settlement does not require any further adjustment to the Company's historical financial statements and does not impose any civil penalties or fines. Pursuant to the settlement, Enterasys, without admitting or denying any allegations, agreed to a cease and desist order requiring future compliance with the federal securities laws and regulations, and to appoint an internal auditor reporting directly to the Audit Committee of Enterasys' Board of Directors. Also, Enterasys Networks announced that it expects revenue for the fourth quarter ended December 28, 2002 to show continued stability in a range approximating $120 million, and that it has achieved its goal of break-even operating cash flow in the fourth quarter, ending the fiscal year with approximately $305 million of cash and marketable securities.
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