Record 2002 Product Sales Signals End of Embedded Recession

1/23/2003 - Green Hills Software, Inc., the industry leader in real-time operating systems and embedded development tools, announced record product sales for Q4 and full-year 2002, signaling an end to the embedded industry recession. Financial results will be audited by Ernst & Young and announced as soon as they are available. Preliminary results are reported here.

Green Hills Software's Q4, 2002 product sales increased by approximately 35% over Q4, 2001, and by approximately 20% over Q3, 2002. "The market for embedded software has rebounded strongly from its year-long slumber from Q3, 2001 through Q2, 2002," commented Green Hills president Dan O'Dowd. "We're back to sales and earnings growth at or above the 30% per year level that has been typical for us for during the last twenty years. This leaves no doubt that the recession is over. Our results mirror the recent expansion in business capital expenditures reported earlier this month in the Institute for Supply Management (ISM) index. Many of our customers and partners share this observation based on their own improved business prospects and full-year 2002 results. We believe the turn actually occurred during the third quarter, but we weren't sure until record Q4 results confirmed the recession was over."

David Chandler, vice president of sales for Green Hills says, "Customer demand and interest in INTEGRITY® is at an all-time high. We need more salespeople and field application engineers (FAEs) to handle additional opportunities. It's amazing how much activity we're seeing now as opposed to a year ago, so we're looking for good people to help us capitalize on the economic recovery."

Driving sales for 2002 were significant design wins for Green Hills Software's INTEGRITY® RTOS. Major corporations including Rockwell Collins, Boeing, Lockheed Martin, Goodrich and many others selected INTEGRITY® during 2002. Boeing will use INTEGRITY® to run the flight, navigation, and weapons systems aboard the B-1B bomber. Lockheed will run INTEGRITY® in the world's most popular modern fighter, the F-16.

INTEGRITY® is the most advanced memory-protected RTOS, targeting embedded applications that demand the highest reliability and real-time performance, including communications switches and routers, aircraft avionics, medical devices and more. "INTEGRITY's superior technology and royalty-free pricing," remarked David Chandler, "provide an unbeatable combination and are the key to the design wins booked in 2002."

"During the downturn, our products helped our customers to be more productive - able to do more with their reduced resources," commented John Carbone, vice president of marketing for Green Hills Software. "In 2001, we emerged as #1 in RTOS market share growth and we continued to grow market share in 2002, especially through particularly strong INTEGRITY® sales in Q4. This further solidified our market position as the second largest RTOS company worldwide."

Green Hills continued its tradition of leadership in optimizing compiler technology with the introduction in 2002 of the industry's fastest compiler for the PowerPC processor, certified by EEMBC, the leading embedded microprocessor consortium for benchmark development and verification.

Also in 2002, Green Hills announced the world's best compilers for ARM, producing the smallest code footprint for memory-constrained applications. Carbone adds, "These compiler products complemented our INTEGRITY® RTOS, and led to design wins in 2002. These industry-leading products are the reason for the outstanding sales results we've seen in Q4 and 2002 as a whole."

Green Hills Software remains the world's most profitable RTOS company, having achieved 20 consecutive profitable years and record earnings per share in 2002, tops among embedded software companies. Strong earnings are enabling Green Hills to expand its workforce without sacrificing profitability, and capitalize on the economic recovery in 2003 and beyond. Green Hills president O'Dowd comments, "We're hiring because the business is out there and we can afford to invest to capture it. In fact, we can't afford to let this opportunity slip by. This is how we've grown in the past. With the recession behind us, now is the time to increase our sales force and capture the market for emerging new projects."

About Green Hills Software, Inc.
Founded in 1982, Green Hills Software Inc. is the technology leader for real-time operating systems and software development tools for 32- and 64-bit embedded systems. Our royalty-free INTEGRITY® RTOS, compilers, MULTI® and AdaMULTI Integrated Development Environments and Green Hills ProbeTM, offer a complete development solution that addresses both deeply embedded and maximum reliability applications.

Green Hills Software is headquartered in Santa Barbara, CA, with European headquarters in the United Kingdom. For more information on Green Hills Software products, call 805-965-6044, email

Green Hills Software, the Green Hills logo, MULTI and INTEGRITY® are registered trademarks. The Green Hills Probe, Slingshot, AdaMULTI, EventAnalyzer, ResourceAnalyzer, ISIM, QuickStart, Integrate, G-Cover, GMART, GSTART and Safety Critical Products are trademarks of Green Hills Software Inc.

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