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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

For the Fiscal Year Ended June 27, 2003

For the transition period from                     to                     

Commission File Number: 0-10726

C-COR.net Corp.

(Exact name of Registrant as specified in its charter)

60 Decibel Road

State College, Pennsylvania 16801

(Address of principal executive offices and Zip Code)

Registrant’s telephone number, including area code: (814) 238-2461

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.05 par value

Series A Junior Participating Preferred Stock Purchase Rights

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes x    No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K ((S)229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ¨

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12-b2 of the Act).    Yes x    No ¨

As of December 27, 2002, the aggregate market value of the voting stock held by non-affiliates of the Registrant was $115,701,834.

As of August 27, 2003, the Registrant had 36,571,189 shares of Common Stock outstanding.

Documents Incorporated by Reference:

Proxy Statement expected to be dated on or about September 15, 2003

PART I

Item 1.    Business

Some of the information presented in this report contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent C-COR’s judgment regarding future events and are based on currently available information. Although C-COR believes it has a reasonable basis for these forward-looking statements, we cannot guarantee their accuracy and actual results may differ materially from those we anticipated due to a number of uncertainties, many of which we are not aware.

Factors which could cause actual results to differ from expectations include:

This listing of factors is NOT intended to include ALL potential risk factors. The Company makes no commitment to update these factors or to revise any forward-looking statements for events or circumstances occurring after the statement is issued, except as required by law.

Introduction

C-COR, headquartered in State College, Pennsylvania, provides communications equipment, software solutions, and technical services to the global market for the full network life cycle of two-way hybrid fiber coax broadband networks. C-COR was organized as a corporation under the laws of the Commonwealth of Pennsylvania on June 30, 1953. Our core strategy is to leverage our reputation for quality and service, our strong customer relationships, and our extensive installed base of transmission equipment to provide a broad line of flexible, reliable, and cost-effective network products and service solutions worldwide.

C-COR operates through three divisions, each focused on a business segment: Broadband Communications Products, Broadband Network Services, and Broadband Management Solutions.

Broadband Communications Products (BCP), headquartered in Meriden, Connecticut, with an engineering facility in State College, Pennsylvania, supporting production facilities in Mexico and Austria, and sales offices around the world, is responsible for development, management, production, support, and sale of our advanced fiber optic, digital video transport, and radio frequency equipment.

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Broadband Network Services (BNS), headquartered in Lakewood, Colorado, with satellite offices throughout the U.S., provides broadband network engineering and design services, network integration services, outside plant and construction services, outsourced operational services, and consulting services. BNS is one of the nation’s largest non-cable operator-affiliated technical forces serving the cable industry.

Broadband Management Solutions (BMS), headquartered in Pleasanton, California, with an engineering facility in State College, Pennsylvania, is responsible for development, integration, management, implementation, support, and sale of our operations support system software solutions to operate and manage reliable, high-quality multi-service networks.

Our principal customers include many of the largest cable operators in the United States, such as Adelphia Communications, Cablevision Systems, Charter Communications, Comcast, Cox Communications, Insight Communications, Mediacom Communications, and Time Warner Cable; a number of smaller domestic cable operators; and numerous international cable operators. These customers primarily operate hybrid fiber coax networks for delivering video, voice, and data services to homes and businesses. Our customer base also includes telephone companies and broadcasters who purchase digital video transport equipment.

See Note T to the consolidated financial statements for financial information relating to each of the business segments for fiscal years 2003, 2002 and 2001.

On September 16, 2002, we completed the acquisition of Philips Broadband Networks (PBN), a global provider of broadband products and services with a strong customer base in Europe and Asia. Following the completion of the purchase, PBN became part of our BCP division. As part of the integration of PBN into the BCP division,  C-COR conducted a product rationalization process to eliminate redundant offerings and consolidate production facilities (including the closing of PBN’s Manlius, New York, facility) to streamline operations. With the PBN acquisition, we have increased our customer and installed equipment base in international markets and have expanded our optical product capabilities.

See Note B to the consolidated financial statements for further information relating to business combinations.

Industry Overview

A local hybrid fiber coax network (also known as the metro-access tier of the network) consists of (i) a headend where information is received from a third-party operation (such as satellite, Internet gateway, or telephony network) or from another of the cable operator’s facilities; (ii) a transmission infrastructure that distributes the signal throughout the local network; and (iii) connections from the local transmission network to the end-users or subscribers. Historically, these systems offered one-way only video service.

During the past decade, the cable industry, like other segments of the communications industry, has undergone substantial change as a result of:

For the cable operator, these factors have resulted in:

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While these evolving changes have provided many opportunities for cable equipment suppliers, current market conditions are volatile due to a number of factors, including:

These market challenges in fiscal 2003 caused a decline in demand for our products and services. We responded by controlling our costs, reducing our workforce as appropriate, consolidating facilities to operate more efficiently, and acquiring Philips Broadband Networks to expand our international and domestic customer base.

Strategy Overview

Our strategic goal is to balance our business base across three distinct market segments: advanced telecommunications products; operations management software solutions; and technical field services. We seek to implement this strategy through both internal development of new products and services as well as acquisitions. Specific aspects of our strategy include:

Providing a Comprehensive Hybrid Fiber Coax Network Product Line.    We offer a full range of radio frequency and fiber optic transmission products to transmit signals in both directions over hybrid fiber coax networks between “the headend and the curb.” In addition, we offer digital video transport products, which are used primarily by telephone and broadcast companies to optically transport a wide variety of uncompressed video, audio, and data signals over wide and/or metropolitan areas.

Providing Broadband Management Software Solutions to Enhance Network Integrity.    Network integrity and reliability have become critical needs as hybrid fiber coax network traffic and complexity have grown and as these networks are increasingly used by multiple service providers. Traditional approaches to managing hybrid fiber coax networks focus on monitoring limited, individual elements of the network, such as cable modems or power supplies. In contrast, C-COR’s Integrated Service Management (ISM^™) suite of software application modules allows cable operators to automate and proactively manage their network integrity and service delivery processes across multi-technology, multi-service, multi-vendor, and multi-ISP networks.

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Delivering Total Network Solutions to Meet the Emerging Broadband Needs of Hybrid Fiber Coax Network Operators.    We are able to offer a broad network solution to cable operators by delivering a comprehensive line of equipment, management software solutions, and network services that they require across the hybrid fiber coax network. We design the network to enhance reliability, deliver the infrastructure equipment and management software, furnish installation and activation services, and provide ongoing network management and support services.

Increasing International Sales.    We are currently supplying products and services to a number of international customers, including cable operators in Europe, Asia, Canada, and Latin America. The PBN acquisition expanded our customer base, particularly in Europe and Asia. With our broad product and services offerings, we are supplying comprehensive network solutions to network operators in various international markets who generally prefer to purchase products and services from suppliers offering a more complete product line.

Products, Software, and Services

We provide broadband communications products, technical services, and management software solutions to support primarily cable operators as they plan, design, build, maintain, and manage complex broadband communications networks. These major market areas of equipment, software, and services are formally represented within the C-COR organization by the following three business divisions:

Broadband Communications Products (BCP) provides our advanced fiber optic, digital video transport, and radio frequency telecommunications equipment.

Broadband Network Services (BNS) provides technical field services, covering broadband network engineering and design services, outside plant and construction services, outsourced operational services, and consulting services.

Broadband Management Solutions (BMS) provides our array of operations management software solutions to operate and manage reliable, high-quality, multi-service networks.

Broadband Communications Products

C-COR segments the cable network into two technology tiers: metro-access and metro-core. The metro-access tier covers the local hybrid fiber coax network infrastructure delivering signals from the operator’s local headend to the subscriber’s home or to the small and medium enterprise and back. The metro-access tier generally encompasses analog video, quadrature amplitude modulation, and fiber to the premise technologies. The metro-core tier interconnects the service provider’s local headend or point-of-presence with other inter-city operator facilities or with third party operations. An example of metro-core connections would be between a cable operator’s headend and a broadcaster’s facility in transporting quality video over long distances. With our radio frequency and fiber optic equipment as well as our digital video transport product family, C-COR’s Broadband Communications Products division has a market position in both the metro-access and metro-core tiers.

Metro-Access Product Families

A local hybrid fiber coax network connects a local central content source, typically referred to as the headend, to individual residential or business users through a physical plant of fiber optic and coaxial cables and a variety of electrical and optical devices that modulate, transmit, receive, and amplify the signals as they move through the network. A typical local hybrid fiber coax network consists of three major segments: the headend and hubs, nodes, and the radio frequency plant. C-COR offers a comprehensive range of metro-access technology products for each of these segments. The primary objective of the C-COR metro-access product suite is to efficiently

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utilize bandwidth capacity to accelerate deployment of advanced services. This is accomplished through innovative technology creating converged, high-density smart platforms with universal element management systems.

Headend and Hubs

The headend receives information from a satellite transmission, Internet gateway, telephony network, or other source and converts this information to laser modulated optical signals for transmission across the local network. Larger networks feature both primary headends and a series of secondary headends or hubs. C-COR offers a broad range of headend and hub equipment under our CHP Max5000^™ Converged Headend Platform that combines headend, hub, and compressed digital video transport onto one fully managed, scalable platform. The CHP Max5000 includes several transmission and access options, including analog and digital transmitters and receivers. The CHP Max5000 2RU platform supports ten application modules providing the smallest footprint and highest density headend platform on the market. A standard 6-foot rack holds up to 200 CHP Max5000 transmitters, providing exceptional space efficiency in the headend area, while reducing power consumption and equipment cooling costs. The innovative design of the CHP Max5000 lowers the capital costs of delivering more bandwidth per subscriber while enabling network operators to increase their bandwidth capacity for provisioning of advanced services, such as video-on-demand, high-speed Internet access, and voice-over-IP.

Nodes

The general function of the node in the local hybrid fiber coax network is to convert information from optical signals to radio frequency signals for distribution to the home or business. C-COR’s Opti Max^™ Optimum Node Series ranges from advanced fully-segmentable to fiber deep platforms offering superior performance and cost efficiency required to meet the demands of the most advanced network architectures. The Opti Max4000 Advanced Fully Segmentable Node Platform provides field scalability that incorporates one-to-four node operations on the same platform, thereby preserving the network operator’s investment while offering growth to meet service-increasing demands. The Opti Max1000 Fiber Deep Node Platform combines cost-efficient design and superior performance. The Opti Max Optimum Node Series also offers a wide selection of optical transmission options and platforms, ranging from one-to-four coaxial outputs that provide solutions to optimize network operator flexibility. For fiber-challenged applications seeking maximum geographical reach, DWDM (Dense Wavelength Division Multiplexing), CWDM (Coarse Wavelength Division Multiplexing), and digital multiplexing technologies are incorporated to increase the volume of information transmitted over a single fiber. Opti Max nodes utilize space and cost-saving scalable technology that allows network operators to have a “pay-as-they-grow” approach in deploying their infrastructure, minimizing capital expenditures, while maximizing network service availability and performance.

Radio Frequency Plant Equipment

The radio frequency plant comprises products that transmit information between the optical nodes and subscribers. These products are essentially radio frequency amplifiers that come in various configurations such as trunks, bridgers, and line extenders. A trunk amplifier handles a large amount of information in a network when the node size is greater than 500 homes. A bridger splits the signal to send it to a greater number of destinations. Line extenders move the information to the home or business. C-COR’s Flex Max^™ Series of Flexible Amplifiers offers a wide variety of aerial and cabinet-mount amplifiers. Our robust and reliable aerial trunk, bridger, and line extender amplifiers provide excellent forward and return path performance for architectures delivering both analog and digital channels. Our highly flexible cabinet-mount amplifiers include high-performance trunk and bridger amplifiers, high-output line extenders, and multi-dwelling unit (MDU) amplifiers. Representing one of the largest installed bases in the industry, the Flex Max Series of Flexible Amplifiers uses drop-in replacement modules to provide cost-savings upgrade applications.

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Metro-Core Product Family

C-COR’s DV6000/DV6400 family of transport products are capable of digitally transporting over optical cables a wide variety of video, audio, and data signals to the service provider’s local headend or point-of-presence. Since the establishment of the original DV6000 system in 1993, the DV product family has evolved and continues to be enhanced into one of the most widely used and cost-effective fiber optic transport systems available in the industry. C-COR’s DV platforms are used by major telecommunications providers around the world to carry prominent video programming.

Summary of C-COR’s Metro-Access and Metro-Core Products

The following table summarizes our major products and their primary functions and features:

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New Products and/or Developments

During fiscal year 2003, C-COR completed an intensive product rationalization process covering C-COR legacy metro-access product lines and the product lines from our acquisition of certain operations of ADC Telecommunications, Inc. (ADC) and of PBN to eliminate redundant offerings and consolidate capabilities into complementary lines of equipment. Following completion of the product rationalization, C-COR announced its newly branded line of metro-access equipment—CHP Max Converged Headend Platform, Opti Max Optimum Node Series, and Flex Max Series of Flexible Amplifiers—at a major industry show in May 2003. Of these, the Opti Max1000 Fiber Deep Platform is a new product development targeted to service providers who are launching advanced services in fiber-poor networks. The Opti Max1000 increases bandwidth and thus revenue potential of network operators with minimum capital expenditures.

In addition, during fiscal year 2003, C-COR continued to develop and deploy several enhancements to its metro-core DV video transport product line. These on-going efforts include:

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Broadband Network Services

With offices located throughout the U.S., C-COR’s Broadband Network Services division offers technical services for engineering, design, and deployment of advanced subscriber services over broadband networks. The technical services provided by the Broadband Network Services division include:

Broadband Management Solutions

C-COR’s Broadband Management Solutions division develops operations support system solutions that enable our customers to automate and proactively manage their networks and service delivery processes. C-COR’s Integrated Services Management (ISM) suite of operations support system software applications delivers a unified view of customers, quality of service, and network performance. During fiscal year 2003, BMS added a new module under the ISM umbrella: the Network Configuration Manager (NCM^™), a software application that documents network topology.

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The ISM currently incorporates the following specific application modules:

Significant Customers

During the past fiscal year, our customers have included almost all of the largest cable system operators in the United States, as well as a number of smaller domestic cable operators, numerous international cable operators, and telephone companies and broadcasters interested in digital video transport products. Our largest customers during fiscal year 2003 were Comcast and Time Warner Cable, accounting for 19% and 17%, respectively, of net sales. Our largest customers during fiscal year 2002 were Adelphia Communications, Charter Communications, and Time Warner Cable, accounting for 30%, 11%, and 10%, respectively, of net sales. Our largest customers during fiscal year 2001 were Adelphia Communications, Cox Communications, Time Warner Cable, and Charter Communications, which accounted for 17%, 15%, 15%, and 12%, respectively, of net sales. All of these principal customers purchase both products and services.

See Note P to the consolidated financial statements for further information relating to concentration of credit risk.

Sales and Distribution

Our sales and distribution are corporate functions focused on maximizing the synergies of C-COR’s three market offerings—equipment, services, and software—as a comprehensive network solution. Sales and distribution are organized into two major global regions: the first covering the Americas, and the second covering the EuroPacific area.

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Sales efforts are conducted from our headquarters in Pennsylvania; from offices in Europe, Canada, Asia, and Australia; from regional sales offices located throughout the United States; and through numerous sales and distribution channel partners around the world.

We sell our products and services in the United States through our direct sales force, national account representatives, and sales and distribution channel partners. Our direct sales force is organized by geographic regions and approaches the customer at the system level, and our national account representatives approach the customer at the corporate level. A highly qualified technical staff supports our sales force. They work closely with customers to design systems, develop technical proposals, and assist with installation and post-sale support.

International sales in Europe, Asia, and Canada are made both through our direct sales force and channel partners, while sales in Latin America are made through channel partners. Sales management for Europe is located in our Netherlands office, for Asia in our offices in Australia and Mainland China, and for Canada and Latin America from our headquarters in State College, Pennsylvania. For fiscal year 2003, our international sales represented 28% of consolidated net sales. In fiscal years 2002 and 2001, international sales were 13% and 13%, respectively, of net sales. The increase in fiscal year 2003 is a result of expansion of our customer base and installed equipment base, resulting from the acquisition of PBN.

Additionally, we provide 24x7 technical support, both directly and through channel partners, as well as training for customers and channel partners, as required, both in our facilities and at our customers’ sites.

Our marketing function develops strategies for product lines and, in conjunction with the sales force, identifies evolving technical and application needs of customers. The marketing function is also responsible for demand forecasting and general support of the sales force.

C-COR utilizes a corporate-wide ERP (Enterprise Resource Planning) system, accessible by C-COR personnel worldwide. The ERP system automates and standardizes key corporate functions in finance, manufacturing, purchasing, and customer service management.

Backlog

We schedule production of our Broadband Communications Products division’s equipment based on our backlog, informal commitments from customers, and sales projections. Our backlog consists of firm orders by customers for delivery within the next 12 months. The majority of equipment backlog typically is shipped within one-to-two quarters. In contrast, backlog in the Broadband Management Solutions and Broadband Network Services divisions typically reflects longer-term systems development and field service projects that convert into revenue over a 12-month period.

At June 27, 2003, our backlog of orders was $54.3 million, including $25.8 million for Broadband Communications Products, $20.8 million for Broadband Network Services, and $7.7 million for Broadband Management Solutions.

Anticipated orders from customers may fail to materialize and delivery schedules may be deferred or canceled for a number of reasons, including reductions in capital spending by network operators, customer financial difficulties, annual capital spending budget cycles, and construction delays.

Research and Product Development

We operate in an industry that is subject to rapid changes in technology. Our ability to compete successfully depends in large part upon anticipating such changes. Accordingly, we engage in ongoing research and

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development activities that are intended to advance existing product lines and develop or evaluate new products. Our current research and product development focus is on optical equipment, operations support system software solutions, and emerging packet-based technologies, architectures, and standards that impact critical areas, such as bandwidth management for multiple cable subscriber services.

Product managers in both the Broadband Communications Products and Broadband Management Solutions divisions have responsibility for the product life cycle of specific hardware or software products from concept through development, expansion, and end-of-life. In this role, the product managers coordinate with a variety of C-COR professionals from sales, marketing, engineering, and technical support to develop and implement product plans. The Broadband Communications Products division, specifically, utilizes a concurrent product development program to enhance the division’s capability to produce new products within an optimal time frame. The program addresses a number of key business activities, including portfolio management, innovation, product selection, product definition, electronic design and testing, selection of new product components, prototyping and piloting, and the ability to rapidly commercialize a new product.

During the past fiscal year, research and product development expenditures were primarily directed at expanding our fiber optic technology, developing new platforms for next-generation broadband applications, and expanding our deployments of operations support system software applications. We also continued with product development process improvements to reduce cycle time to design, reduce manufacturing costs, and improve design quality.

During fiscal years 2003, 2002, and 2001, we spent $27.0 million, $27.1 million, and $17.4 million, respectively, on research and product development. Research and product development expenses in the Broadband Communications Products division were $21.2 million, $17.9 million and $10.1 million, respectively, for fiscal years 2003, 2002, and 2001. Research and product development expenses in the Broadband Management Solutions division were $5.3 million, $8.3 million, and $6.7 million, respectively, for fiscal years 2003, 2002, and 2001. Other research and product development expenses, not allocated to segments, were $544,000, $900,000 and $600,000, respectively, for fiscal years 2003, 2002, and 2001. All research and product development expenditures have been expensed. Anticipated product development initiatives are expected to result in increased research and product development expense in future years.

Competition

The broadband communications markets are dynamic and highly competitive, requiring substantial resources of those companies that compete in these markets, skilled and experienced personnel, and a capability to anticipate and capitalize on change. Our Broadband Communications Products division competes with other companies, including Motorola’s Broadband Communications Sector (formerly General Instrument Corporation), Scientific Atlanta, Inc., and Harmonic, Inc., some of which are large publicly traded companies that may have greater financial, technical, and marketing resources than we do.

Equipment from our Broadband Communications Products division is marketed with emphasis on quality, differentiating features, and business case, and is generally priced competitively with other manufacturers’ product lines. Product reliability and performance, technological innovation, responsive customer service, breadth of product offering, and pricing are several of the key criteria for competition.

With regard to our Broadband Management Solutions and Broadband Network Services divisions, there are several competing vendors offering network management, mobile workforce management, and network configuration management systems as well as technical services in the United States, some of which may currently have greater sales in these areas than we do. However, we believe that we offer a more integrated solution that is tailored to the requirements of hybrid fiber coax network operators.

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Employees

We had approximately 1,170 employees as of August 28, 2003.

Suppliers

We closely monitor supplier delivery performance and quality. We employ a strategy of limiting the total number of global suppliers to those who are quality leaders in their respective specialties and who will work with us as partners in the supply chain. Typical items purchased are die cast aluminum housings, radio frequency hybrids, printed circuit boards, fiber optic lasers, and standard electronic components. Although a few of the components we use are single-sourced, we have experienced no significant difficulties during the past fiscal year in obtaining adequate quantities of raw materials and component parts.

We outsource the manufacture and repair of certain assemblies and modules where it is cost-effective to do so or where there are advantages with respect to delivery times. Current outsourcing arrangements include certain power supplies, accessories, optical modules, digital return modules, circuit boards, repair services, and small-lot manufacturing.

Intellectual Property

We hold eighteen (18) U. S. patents and have fourteen (14) patents pending in the U. S. Patent and Trademark Office. In addition, we hold an exclusive license, for use in our field, for thirty-one (31) ADC U. S. patents and patent applications and a non-exclusive license for forty-six (46) Philips U. S. patents, relating to fiber optic and radio frequency transmission equipment and technology, and network management techniques and services. We attempt to protect our intellectual property through patents, trademarks, copyrights, and a program of maintaining certain technology as trade secrets.

Item 2.    Properties

We operate the following principal facilities:

Segment:

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We are approved for ISO 9001:2000 registration at our State College, Meriden, Klagenfurt, and Tijuana facilities. C-COR’s quality management system includes quality assurance in design, development, production, installation, and servicing. Criteria for registration are set by the International Organization for Standardization, whose function is to develop global standards in an effort to improve the exchange of goods and services internationally. This designation builds on our reputation as a high-quality, global provider of transmission electronics.

Item 3.    Legal Proceedings

Certain former security holders and employees of Convergence.com Corporation, a company that we acquired in fiscal year 2000, filed claims against C-COR in March 2001 alleging violations of state securities laws and certain other state law claims under a stock option plan. The complaint alleges that the damages suffered by the individuals approximate $2.1 million, which is based on the amount of stock options multiplied by the highest price of C-COR’s common stock since the acquisition, and does not take into account the exercise price which the plaintiffs would have had to pay to the Company if the options were exercised. The plaintiffs also petitioned for treble damages, an undetermined amount of punitive damages and reimbursement of attorneys’ fees. We believe that we have defenses to these claims and are contesting them vigorously; however, we cannot be sure that we will be successful in defending these claims.

Item 4.    Submission of Matters to a Vote of Securities Holders

There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal year ended June 27, 2003.

Executive Officers of the Registrant

All executive officers of C-COR are elected annually by the Board of Directors to serve in their offices for the next succeeding year and until their successors are duly elected and qualified. The listing immediately following this paragraph gives certain information about our executive officers, including the age, present position and business experience during the past five years.

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PART II

Item 5.    Market for the Registrant’s Common Stock

The Company’s common stock is traded on The Nasdaq National Market under the symbol of CCBL. The range of high and low price information as reported by Nasdaq follows: