LynuxWorks Announces Consecutive Year-over-year Growth and Profitability Company's fourth-quarter success fueled by growth in the military/aerospace market

Embedded software leader continues to demonstrate success with new design wins and plans 35% growth in workforce

SAN JOSÉ, Calif., May 17, 2004 — LynuxWorks™ today announced the close of fiscal year 2004 and continued growth for the year. In FY04, the company achieved 21% year-over-year growth in revenue and announced increased profitability and cash flow. In addition, the company has seen 165% growth in new design wins—particularly in the military/aerospace market. The company's continued increase of customer wins in the military demonstrates LynuxWorks' commitment to open standards and OS security.

The company is actively hiring in both Marketing / Sales and Engineering to respond to the growth opportunity, and plans to grow its workforce by 35% over the next few months.

Linux® and other open standards continue to gain significant momentum in the government and military because they enable ease of application portability, software reuse and interoperability between systems. By ensuring that all software is open standards-based, future hardware and software upgrades can be made seamlessly to reduce cost and development time and support future enhancements to new and unique war-fighting capabilities on ships, aircrafts, submarines and other platforms.

Support of the POSIX® open standard in embedded systems assures code portability and is increasingly being mandated for government and commercial contracts. As part of LynuxWorks' long-standing commitment to open standards support, its entire product line is POSIX compliant and capable of running Linux applications, including its flagship LynxOS® real-time operating system (RTOS), LynxOS-178, and BlueCat® Linux 5.0, the company's enhancement of the Linux 2.6 kernel.

LynuxWorks' saw a substantial increase in design wins over the last six months in the military and aerospace markets in addition to solid performance in the consumer electronics market, where the company's BlueCat® Linux® 5.0, the industry's first embedded Linux product built on the 2.6 kernel, continues to be the platform of choice for developers of consumer electronics products.

BlueCat Linux 5.0 represents the industry's first commercially available embedded Linux technology based on the recently introduced Linux 2.6 kernel. BlueCat Linux 5.0 is a single source of stable embedded technology that provides the flexibility and cost benefits of open-source software and allows programmers to take advantage of important feature enhancements in the Linux 2.6 kernel. These new features include improved real-time performance, easier porting to new computers, support for large memory models, support for microcontrollers and an improved I/O system. These enhancements make it an ideal operating system for embedded computing projects, ranging from small consumer electronic devices to large-scale systems.

The company also recently announced significant enhancements to its Java™ and Eclipse platforms that enable developers to build systems that exhibit real-time behavior and allows them to have complete control over their embedded and real-time applications. Real Time Specification for Java (RTSJ) version 1.0 is an industry standard set of extensions that allows developers of LynuxWorks' RTOS, LynxOS, to bring real-time functionality to their Java Basic systems. RTSJ brings the advantages of the existing Java platform including binary portability, dynamic code loading, tool support, safety, security and simplicity to the (RTOS) market.

The new LynuxWorks Eclipse-based IDE is a Linux- and Solaris™-based development environment, powered by the Eclipse platform that provides developers of LynuxWorks' BlueCat Linux with complete control over creating, editing, compiling, managing and debugging C/C++ and Java embedded and real-time applications. The Eclipse IDE offers developers a choice in their preferred development environment by extending support to LynuxWorks' premium tools, TotalView, a multi-process embedded debugger for LynxOS, and SpyKer™, an embedded system trace tool. The Eclipse IDE also enables development on the Linux 2.6 kernel.

"We are very pleased with the company's performance this past year. It is a strong market validation of our strategy of providing our customers with the best and widest choices of operating systems based on Linux and open standards," said Dr. Inder Singh, CEO of LynuxWorks. "LynuxWorks will continue to offer extended value to developers with open-standard based tools as well as continued development of a secure RTOS to meet the stringent requirements of the military and aerospace markets."

About LynuxWorks

LynuxWorks is a world leader in the embedded software market, providing operating systems, software development products and consulting services for the world's most successful communications, aerospace/defense, and consumer products companies. Established in 1988, the company is a technology leader in the real-time operating systems (RTOS) industry, and a founding member of the Embedded Linux Consortium (ELC). LynuxWorks headquarters are located in San José, California.

LynuxWorks is a trademark and LynxOS and BlueCat are registered trademarks of LynuxWorks, Inc. Other brand or product names are registered trademarks or trademarks of the respective holders. Linux is a registered trademark of Linus Torvalds. Other company and product names may be trademarks of their respective owners.

LynuxWorks press contacts

Kirsten Long Director, Marketing Communications LynuxWorks, Inc. USA +1 408-979-4404	Barbara Stewart Patterson & Associates USA 480-488-6909
Hamid Mirab Managing Director EMEA LynuxWorks Ltd. United Kingdom +44 208-906-9506	Peter van der Sluijs Neesham Public Relations Europe +44 1442-879222