Revenues for the third quarter of 1999 were $32.0 million, an increase of $26.4 million over revenues of $5.6 million for the third quarter of 1998. The third quarter revenues represented an increase of $9.1 million, or 40 percent, over the $22.9 million in revenues reported for the second quarter of 1999. For the nine months ended September 30, 1999, Copper Mountain reported revenues of $68.1 million, a $61.0 million increase over revenue of $7.2 million reported for the same period of the prior year.

Net income was $4.6 million or $0.16 per pro forma diluted share for the third quarter of 1999, compared to a net loss of $3.3 million or a loss of $0.19 per pro forma diluted share for the same quarter of the prior year. Excluding the stock based compensation charge, net income was $5.8 million or $0.21 per pro forma diluted share for the third quarter of 1999, compared to a net loss of $2.0 million or a loss of $0.12 per pro forma diluted share for the same quarter of the prior year.

Net income for the nine months ended September 30, 1999 was $6.0 million or $0.23 per pro forma diluted share, compared to a net loss of $10.1 million or a loss of $0.61 per pro forma diluted share for the same period of the prior year. Excluding the stock based compensation charge, net income was $10.4 million or $0.41 per pro forma diluted share for the current nine month period, compared to a net loss of $7.8 million or a loss of $0.47 per pro forma diluted share for the same period of the prior year.

"We are pleased with Copper Mountain's results in the third quarter and our current market position, particularly in the rapidly expanding market for business DSL," said Copper Mountain Networks, Inc. President and Chief Executive Officer, Rick Gilbert. "We also remain cautiously optimistic as we head into the fourth quarter despite concern over possible short-term effects of Y2K on the economy and the market for networking and telecommunications equipment," Gilbert added.

"Our third quarter financial results reflect a strong market for broadband access equipment and continued demand for Copper Mountain's pragmatic DSL solutions," added Gilbert. "1999 has been a year of rapid deployment of DSL on the part of telecommunications service providers, with top-tier CLECs leading the way. We are optimistic about the number of emerging telecommunications service providers that are being funded and Copper Mountain is aggressively pursuing these and other service providers as an opportunity to broaden our customer base and reduce our customer concentration. In third quarter 1999, the revenue contribution from NorthPoint Communications and Rhythms NetConnections declined to 73 percent from approximately 85 percent in each of the two preceding quarters. This decline in concentration was primarily the result of new customer wins in 1999, including a number of customers announced in connection with our OEM agreement with Lucent Technologies," Gilbert stated.

Copper Mountain reported that in the third quarter of 1999, Lucent Technologies announced their own DSL access multiplexer which should compete, in some markets, with Copper Mountain's CopperEdge DSL concentrator product family. While the three-year OEM relationship with Lucent remains in effect, the Company also reported that it expects to face substantial competition from Lucent products in some prospective accounts and that the Company expects Lucent to prioritize the sale of its own DSL products over the Copper Mountain products it resells. Thus, the Company expects that the revenue contribution from the OEM relationship with Lucent will decline, both in terms of revenue and as a percentage of revenue, over time.

Highlights from the third quarter of 1999 include:

-- The shipment in the third quarter of over 900 CopperEdge DSL concentrators bringing the cumulative figure to over 3,000 DSL concentrators shipped since the Company's inception, with a potential capacity in excess of 575,000 DSL ports.

-- Three joint customer announcements with Lucent, including Network Telephone, Axessa, and Wiznet Inc.

-- Two additional Copper Mountain customer announcements including netINS, an independent telephone company consortium of more than 600 central offices in the Midwestern U.S.; and MGC Communications, a facilities-based provider targeting 13 markets in 1999 plus an additional 20 markets in 2000.

-- The results of a survey by Infonetics that Copper Mountain ranked first with CLEC service providers with respect to their anticipated purchases of DSL equipment through May 2000.

-- The recent confirmation by the Gartner Group's Dataquest that Copper Mountain ranked first worldwide in 1998 for shipments of business DSL and SDSL.

-- The announcement of a 24-port, G.lite line card for the CopperEdge family of DSL concentrators that complies with the G.lite standard G.992.2 recently ratified by the International Telecommunication Union (ITU). This line card will allow service providers to support high-speed data and POTS voice, integrated over one line, to the residential DSL market.