Features - Financial Plays Of The Week:

EXABYTE THIRD QUARTER RESULTS REFLECT BROAD IMPROVEMENT

Exabyte Corporation has reported financial results for the third quarter of 2002, reflecting broad improvement compared with the second quarter brought about by higher revenues and effective implementation of the Company's restructuring program.

Revenues grew modestly from $35.6 million in the previous quarter to $36.9 million in the third quarter aided in part by sales of new products. Gross margins increased significantly from 23.7 percent last quarter to 28.7 percent in the third quarter due to continued reduction of manufacturing overhead costs, improvements to product costs, lower warranty expense, and higher mix of media products. Operating expenses fell nearly 13 percent from $13.3 million in the second quarter to $11.7 million in the third quarter. Third quarter loss from operations was $1.1 million, representing a $3.8 million improvement compared to the second quarter loss from operations of $4.9 million. Third quarter net loss of $1.2 million includes charges of $427 thousand for severance pay, and $1.0 million for decreases in value of tooling assets, and income of $580 thousand from a VAT refund. Net loss available to common stockholders of $3.2 million in the third quarter included a deemed dividend related to the beneficial conversion feature of Series I preferred stock of $1.9 million.

"When Exabyte acquired Ecrix nearly 12 months ago, many of us saw an exciting future based on new products and new opportunity to grow our business. But first, we had to meet the challenge of returning Exabyte to profitability," commented Juan Rodriguez, Chairman of the Board for Exabyte. "Tom Ward joined us in June and immediately took up that challenge. In his first full quarter, Tom has demonstrated tenacious leadership by refining, expanding and executing the plans we formulated in January to accomplish that critical first step."

"For the last three quarters we have focused everyone's efforts on one common goal: to return Exabyte to profitability," stated Tom Ward, president and CEO. "The changes we have put in motion, combined with the acceptance of our new products and our ability to effectively capitalize on the market opportunity, are contributing measurable improvement to our business. The third quarter results validate that we targeted the right set of goals and that our plans for Exabyte are working."

Exabyte made revenue shipments of four new products during the third quarter including the VXA-2 tape drive and V23 media cartridge, a new version of the Exabyte 430 tape library which automates up to four VXA-2 tape drives and thirty cartridges, and Magnum20 which is an eight drive, 148 cartridge tape library compatible with LTO tape drives. The Company marked a major success in the growth of its OEM business by the recent announcement of OEM agreements with IBM for resale of Exabyte VXA-2 and Mammoth-2 (M2) tape drives and media products under IBM logo.

About Exabyte Corporation

Since 1987, when it introduced the world's first 8mm tape drive for data storage, Exabyte Corporation has been recognized as a leading innovator in tape storage and automation. Exabyte tape solutions offer value, performance and reliability for midrange servers, workstations and computer networks. Exabyte products include Mammoth-2 (M2), the first 8mm native Fibre Channel tape drive; VXA-1, the first packet format tape drive; and the 110L autoloader, one of the first tape automation units for LTO (Ultrium). Exabyte markets VXA, 8mm and MammothTape drives and automation for MammothTape, VXA, and LTO (Ultrium). Exabyte's worldwide network of distributors, resellers and OEMs includes IBM, Compaq, Fujitsu Siemens Computers, Bull, Apple Computer, Tech Data, Digital Storage Inc, Ingram Micro and Arrow Electronics.

For additional information, call 1-800-EXABYTE or visit their Web site at www.exabyte.com. For investor relations inquiries, e-mail investor@exabyte.com.