BOULDER, CO -- Exabyte Corporation (Nasdaq: EXBT), a performance leader in network backup systems, today reported revenue for the second quarter of 2001 of $39,412,000 compared to $51,314,000 for the second quarter of 2000 and $49,052,000 for the first quarter of 2001. The net loss for the second quarter of 2001 was $5,259,000 or $0.23 per share compared to a net loss of $9,637,000 or $0.43 per share for the second quarter of 2000 and a net loss of $17,550,000 or $0.77 per share for the first quarter of 2001. Included in the results for the second quarter of 2001 was a gain from the sale of Sun Microsystems stock of $1,719,000 or $0.08 per share. "The second quarter was a very difficult period for the information industry as the economic weakness already evident in the U.S. spread to Europe and Asia. Our revenue performance was impacted by this very challenging environment. We did, however, manage to significantly improve our bottom line through improvements in our production yields, reductions in our cost structure and excellent asset management. I am very pleased with the results orientation of the new management team at Exabyte and their accomplishments this past quarter," stated Bill Marriner, Exabyte's Chairman, President and Chief Executive Officer. "Contributing to the sequential revenue decline were slower media sales after we fulfilled a substantial backlog in March of 2001. We also had lower sales of our older Eliant(TM) 820 and Mammoth drives and DLTtape(TM) libraries. Sales of our flagship M2(TM) drives and libraries were up for the quarter." "The quarterly gross margin improved sequentially by 13.8 points to 20.9% as a result of improved production yields, lower labor and overhead costs and reduced warranty costs. Operating expenses for the quarter were down by $8.4 million (36%) as compared to the second quarter of 2000 and by $5.4 million (27%) from the first quarter of 2001. Despite these reductions, we continued with timely execution of new product developments during the quarter. We launched our second LTO(TM) library (221L), three AIT libraries (EZ17-A, 215A and 430A), and the native fibre channel interface for our M2 drives and libraries," continued Marriner. "We also placed a great deal of emphasis and attention on asset management during the second quarter. We reduced inventories by $7.8 million (20%) to $31.8 million and have further opportunity for improvement in the third quarter. Our capital equipment spending was also tightly controlled, with a net reduction in PP&E of $1.9 million," said Marriner. "Since the timing and extent of the turnaround in the general economy remains difficult to predict, we will continue to focus our energies in the third quarter on balance sheet improvement, tight expense control and further strengthening of the product portfolio. With the recent addition of LTO and AIT library products, SDLT libraries in development and the launch of serverless backup capability in our M2 drives and libraries, we believe we are well positioned as the economic environment improves. Our fibre M2 drive, which is now available in volume, has three times the storage capacity, equal throughput, and is 20% of the price of the leading product in the market today. This should have great appeal to information organizations with growing storage requirements but limited budgets," stated Marriner. For additional information visit www.exabyte.com