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Foundry Reports Fourth Quarter Results

San Jose, CA - January 29, 2002 - Foundry Networks™, Inc. (Nasdaq: FDRY), today reported financial results for its fourth quarter ended December 31, 2001.

Net revenue for the fourth quarter of 2001 was $65.4 million, which compares to $74.7 million for the third quarter of 2001, a decrease of 12%. Pro forma net income, which excludes certain one-time charges noted below, for the fourth quarter of 2001 was $1.0 million or $0.01 per diluted share, compared to pro forma net income of $2.5 million or $0.02 per diluted share for the third quarter of 2001.

Actual net loss for the fourth quarter of 2001, which includes expenses for the amortization of deferred stock compensation and one-time charges for items such as asset impairments, facilities consolidation, as well as inventory provisions associated with a major product transition and bad debt expense attributed to one specific account, was ($10.7) million or ($0.09) per diluted share, compared to net income of $1.9 million or $0.02 per diluted share for the third quarter of 2001. (See attached financial tables for reconciliation of GAAP and pro forma results.)

Revenues for the year ended December 31, 2001, were $311.2 million, which compares to revenues of $377.2 million for the year ended December 31, 2000. Pro forma net income for 2001 was $16.2 million or $0.13 per diluted share, compared to pro forma net income of $93.6 million or $0.74 per diluted share for 2000. Actual net income for 2001 was $2.9 million or $0.02 per diluted share as compared to $88.1 million or $0.69 per diluted share for 2000.

"We successfully achieved several notable milestones during 2001 in spite of the deteriorating economic environment," stated Bobby Johnson, President and CEO of Foundry Networks. "Specifically, we strategically balanced our customer base between enterprise and service providers, we launched our next-generation technology - Foundry's JetCore ASIC chipset, we shipped and recognized revenue on the first industry standards compliant 10 Gigabit Ethernet products, and we finished 2001 with positive earnings for the third consecutive year. We also strengthened our balance sheet by generating approximately $30 million of cash from operations during 2001. With the introduction of our next-generation products and $275 million of cash on a debt-free balance sheet, Foundry is well positioned for the future industry recovery," concluded Johnson. During the quarter, the Company paid approximately $15.0 million to repurchase 1.5 million shares of its common stock through open market transactions to conclude its stock repurchase program.

Conference Call
Foundry Networks will host a conference call today to further discuss these results at 2:00 p.m. PDT. The call can be accessed via a webcast at www.foundrynet.com. A Web replay will also be available after the call at this same Web address.

Safe Harbor Statement
This press release contains forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and is subject to the safe harbor created by that section. The forward looking statements relate to statements made by the Company's chief executive officer regarding the Company's positioning for the anticipated future industry recovery. These forward looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those stated or implied by our forward looking statements. These risks and uncertainties include the risk that the Company's next generation products may not be successful or that the anticipated industry recovery may not occur. As to other risks and uncertainties which pertain to the Company's business, investors are cautioned to review the risks and uncertainties that are discussed in detail in the Company's most recent Quarterly Report on Form 10-Q and most recent Annual Report on Form 10-K available from Foundry Networks or from the SEC at www.sec.gov.

About Foundry Networks

Foundry Networks, Inc. (NASDAQ: FDRY) is a leading provider of high-performance enterprise and service provider switching, routing, security and Web traffic management solutions, including Layer 2/3 LAN switches, Layer 3 Backbone switches, Layer 4-7 application switches, wireless LAN and access points, metro routers and core routers. Foundry's customers include the world's premier ISPs, metro service providers, and enterprises, including e-commerce sites, universities, entertainment, health and wellness, government, financial and manufacturing companies. For more information about the company and its products, call 1.888.TURBOLAN or visit www.foundrynet.com.

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