Cabletron Outsources Manufacturing Operations to Celestica.

ROCHESTER, N.H.--(BUSINESS WIRE)--March 22, 1999--

Streamlines Business For Improved Expense Structure/Renewed Focus On

Core Competencies 

Cabletron Systems (NYSE:CS) today announced it has signed a letter of intent with Celestica, Inc. (NYSE:TSE)(ME:CLS) to outsource its worldwide manufacturing operations. As part of this transaction, Cabletron and Celestica will be entering into a strategic long-term supply agreement, under which Celestica will acquire certain Cabletron manufacturing assets. Additional terms of the agreement are expected to be released upon closure of the transaction.

This announcement launches the first phase of an aggressive program called Project Ignition, designed to focus Cabletron and its resources on key opportunities in the enterprise, service provider, software and professional services markets.

In addition, the transaction will:

-- Deliver more than $50 million in savings in the first full year alone;

-- Increase Cabletron's competitive position. The Celestica relationship will allow Cabletron to continue to improve its time-to-market, quality, competitive pricing flexibility, and ultimately, lower its cost of goods.

-- Celestica offers economies of scale on component sourcing and manufacturing operation.

"As we enter our new fiscal year, we are taking decisive action to continue to make Cabletron more strategically focused," said John d'Auguste, Cabletron's president of operations. "The strategic relationship with Celestica allows us to focus on our strengths and hit the ground running on fiscal year 2000 priorities: new product development, growth, profitability and increasing shareholder value." Cabletron currently operates manufacturing facilities in Rochester, NH, Ironton, Ohio and Limerick and Shannon, Ireland.

As part of the outsourcing action, Cabletron will consolidate its North American manufacturing operations to its Rochester, NH facility, which will result in the closure of its Ironton, Ohio operations within the next five months. Approximately 300 Ohio-based employees will be provided with compensation packages, as well as career outplacement and training services by Cabletron. Employees will be given preferential consideration for employment opportunities that are or may become available within the Celestica worldwide organization.

Celestica's New Hampshire operations are currently located in Exeter, and the company has announced plans to relocate its operations to a new facility in Portsmouth, NH within the next 18 months. It is anticipated the Rochester operations will transfer to Portsmouth at that time.

Celestica will retain substantially all Rochester manufacturing employees. The remaining employees will either be retained by Cabletron or will be engaged in a contract capacity on behalf of Celestica.

In Ireland, Cabletron will retain ownership of its manufacturing operations, leveraging Celestica's expertise in materials procurement and manufacturing efficiencies.

"Cabletron looks forward to working with Celestica, maximizing its global leadership in technology, quality and supply chain management," said d'Auguste. "Celestica has a full range of advanced manufacturing offerings that we will leverage to our competitive advantage."

About Cabletron

Cabletron Systems, a premier provider of enterprise-class networking solutions, delivers dependable network access and communications to millions of people worldwide. With scaleable products designed for Fortune 1000 enterprise networks, service providers and small businesses, Cabletron is the business communications specialist for the information age. Cabletron's web site can be reached on the Internet at: http://www.cabletron.com.

For further information on Celestica, visit its website at http://www.celestica.com.

Certain statements in this press release constitute forward looking information and actual results could differ materially from those discussed above. Specifically, statements in this press release regarding the expected benefits of outsourcing its manufacturing operations including projected annual savings of $(50) million; more flexible pricing; and lower cost of goods sold, are subject to numerous risks that could impair the Company's ability to realize the expected benefits of as soon as expected or ever. These risks include the possibility that the Company may encounter delays in consolidating certain facilities and in implementing planned workforce reductions; there may be additional unforeseen costs associated with relocations and employee severance and the need to maintain certain essential but underutilized facilities; and that there may be delays in consummating the transaction with Celestica, including the possibility that the transaction may not be consummated at all. Finally, if the Company encounters delays or difficulties in managing the relationship with Celestica or Celestica does not produce the expected manufacturing cost savings, then the projections set forth in this press release may not occur.