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Foundry Reports Third Quarter Financial Results

San Jose, CA - October 23, 2002 - Foundry Networks™, Inc. (Nasdaq: FDRY), today reported financial results for its third quarter ended September 30, 2002.

Net revenue for the third quarter increased to $76.6 million, compared to $75.0 million for the second quarter of 2002, and $74.7 million for the third quarter of 2001. Foundry Networks earned net income of $7.0 million, or $0.06 per diluted share in the third quarter of 2002, compared with net income of $4.0 million, or $0.03 per share in the second quarter of 2002, and net income of $1.9 million or $0.02 per share during the third quarter of 2001.

"The third quarter was a period of solid execution for Foundry," said Bobby Johnson, President & CEO of Foundry Networks. "Both gross margins and net margins reached their highest levels of 2002, and we improved our backlog and book-to-bill metrics."

Mr. Johnson added, "While we remain very optimistic about Foundry's longer-term prospects, navigating the current economic environment requires us to focus our day-to-day efforts on intelligently pursuing new customers, as well as creatively serving existing accounts. We continue to maintain a cost-efficient organization, all the while investing in product and corporate development designed to strengthen our market position."

Third Quarter Highlights

  • Verio deployed Foundry Networks' 10-Gigabit Ethernet solution to power the NTT/VERIO global IP network.
  • Foundry participated in the world's first VPLS multi-vendor interoperability test.
  • Foundry announced market share leadership in three market segments through significant market share gains.
  • Amsterdam Internet Exchange upgraded its backbone with Foundry Networks' 10-Gigabit Ethernet solution to better serve over 130 Internet Service Providers.
  • SP Telecommunications announced that they would utilize Foundry Networks' switches to provide broadband services in Asia.
  • Foundry's BigIron 10-Gigabit Ethernet solution was named "Best of Show" At Networld + Interop 2002 Tokyo.

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.foundrynetworks.com. A Web replay will also be available for approximately 90 days 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. These forward-looking statements include statements by Bobby Johnson regarding the Company's order backlog, book-to-bill metrics, optimism regarding longer-term prospects, and investments designed to improve market position. The forward-looking statements in this press release are subject to a number of risks and uncertainties, including the strength of the overall economy and the high-technology arena in particular, continued demand for Internet related equipment and acceptance of Foundry's current and future products, as well as potential order cancellations. Actual results could differ materially from those projected in our forward-looking statements. Investors should review the risk factors described in more detail in our most recent Annual Report on Form 10-K and most recent Quarterly Report on Form 10-Q available from Foundry or from the SEC at www.sec.gov. Foundry assumes no obligation to update the forward-looking statements contained in this press release.

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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