Applied Digital Access Announces Workforce Reduction.

SAN DIEGO--(BUSINESS WIRE)--March 31, 1999--Applied Digital Access Inc. (ADA)(Nasdaq:ADAX) announced today that as part of its ongoing efforts to improve profitability and focus on its core business, the company is reducing its workforce by approximately 65 people, which is 22 percent of its current workforce.

Of the reduction in workforce, 23 were temporary positions. The company determined the reduction was necessary in order to align current operations with the company's objectives of focusing on market opportunities in its core business, reducing expenses, including expenses related to its recently terminated joint development agreement with Northern Telecom Inc., and improving operating results.

As a result of the reduction in workforce, the company expects to incur a significant one-time charge in the first quarter ending March 31, 1999. Management's restructuring plan includes the identification of the affected personnel, a facility closure, asset write-downs, and the termination of certain leases. The company has not completed its analysis of the total dollar amount associated with the restructuring charge, but will complete this process prior to issuing its first quarter operating results.

The reduction in workforce includes approximately 46 people located at corporate headquarters in San Diego and 19 people from its office in Richardson, Texas. The majority of the reduced workforce was engineers focused on development conducted under the joint development agreement. As a result of the reduction in workforce, the company will close its Richardson office.

Don Strohmeyer, president and chief executive officer of ADA stated, "This action is one of several planned to align ADA with its core strengths and to focus on long-term financial improvement. We are confident that with our plans in place to reduce operating expenses and to enhance market growth, ADA will gain flexibility and will move toward its goal of achieving profitability."

Applied Digital Access is a leading provider of Network Performance Management products that include systems, software and services used to manage the quality, performance, availability and reliability of telecommunications service providers' networks. These products enable telecommunications service providers to improve quality of service, increase productivity, and lower operating expenses.

The company is headquartered in San Diego and has product development and support facilities in Vancouver, British Columbia; Terre Haute, Ind.; and Richardson, Texas. Press releases and other information about Applied Digital Access and its products and services are available at http://www.ada.com on the Internet.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: Except for historical information contained in this release, the preceding may contain forward-looking statements. These forward-looking statements include statements regarding the company's (i) intent to improve operating results, reduce expenses and focus its efforts, and (ii) plans to enhance market growth and move toward profitability. These statements involve potential risks and uncertainties as detailed in the company's Annual Report on Form 10-K for the year ended 12/31/97 and the most recent Form 10-Qs which include competition in the company's markets, fluctuations in quarterly operating results; history of losses, the concentration of major customers; telephone company qualification requirements, high dependence on two product lines, management of changing business, customer mergers, rapid technological change and dependence on new products, dependence on suppliers and subcontractors, high inventory levels and the need to make advance purchase commitments, Year 2000 compliance, product recall, government regulation, potential competition from RBOCs, proprietary technology, dependence on key personnel and volatility of stock price. The company's actual results could differ materially from those discussed in this release. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The company undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after the date of this release.