Cascade reports third quarter results; Earnings per share increase 120 percent on revenue increase of 140 percent.

Communications Corp. (NASDAQ: CSCC), a worldwide supplier of high-performance, multiservice wide area network (WAN) switches, today reported results for the third quarter ended September 30, 1995.

Revenue for the quarter increased 140 percent, to $36.0 million, from $15.0 million for the same period in 1994. Net income for the quarter totaled $6.8 million, or $0.22 per share, compared with net income of $2.9 million, or $0.10 per share, for the same period in 1994.

For the nine months ended September 30, 1995, revenue increased 197 percent, to $88.6 million, from $29.8 million for the first nine months of 1994. Net income for the nine-month period was $16.3 million, or $0.54 per share, compared with $5.0 million, or $0.19 per share, for the corresponding period of 1994.

"Cascade continues to capitalize on substantial growth opportunities in the market for broadband services based on Frame Relay, SMDS (Switched Multimegabit Data Service) and ATM (Asynchronous Transfer Mode) technology," said Daniel E. Smith, president and chief executive officer of Cascade. "We are pleased with our third-quarter earnings results, but we are even more pleased with some of the other important accomplishments we achieved this quarter. We have taken significant steps toward our goals of delivering the highest levels of technical service and maintaining our leadership position in the global network systems and service marketplace." Smith concluded, "Going forward, we see further significant growth opportunities in the carrier and Internet access provider segments of our markets."

During the quarter, Cascade announced that it had formed an alliance with IBM Corporation, designed to assure Cascade's users of comprehensive, on-site hardware service through IBM's worldwide service organization. The combination of Cascade's high performance, standards-based wide area networking systems and services and IBM's highly trained service resources will provide Cascade's users with the technology and service required for growing global networks.

Also this quarter, Cascade announced that LDDS WorldCom would test Cascade's B-STDX switches for Frame Relay-to-ATM service and network interworking functionality. Frame Relay-to-ATM interworking enables customers to gradually upgrade portions of their networks to ATM, thus avoiding the high costs of a complete changeover to ATM. Cascade was the first WAN switch vendor to comply with both the Frame Relay-to-ATM service and network interworking standards, incorporating the necessary capabilities in its B-STDX multiservice switch family. LDDS WorldCom's vendor certification program is recognized as one of the most extensive customer premises equipment testing processes in the telecommunications industry, and certification by LDDS WorldCom ensures WorldCom customers and CPE vendors worldwide that a vendor's equipment can successfully interoperate with the LDDS WorldCom Data Concourse.

Cascade continued to expand its position in the carrier market during the quarter and announced that it had been selected by MCI to provide a high performance SMDS switching solution for MCI's nationwide SMDS service offering, HyperStream. MCI will use Cascade switches to provide the scalability necessary for easy and fast access to HyperStream, the only SMDS service offered by an Interexchange Carrier (IXC). Cascade's B-STDX switches will provide MCI direct connect service to HyperStream via DXI (Data Exchange Interface) connections.

Finally, during the quarter Cascade announced the appointment of Dr. Hassan Ahmed to the position of vice president and chief technology officer. Dr. Ahmed, who holds several significant ATM technology patents, is responsible for investigating new developments in technology to help Cascade maintain its leadership in the broadband packet equipment market.

One of the world's fastest growing data communications companies and the price/performance leader in Frame Relay, Cascade Communications of Westford, Mass. is a global provider of wide area networking products for the enterprise and public carrier network markets. The pioneer of multiservice WAN switches, Cascade delivers enterprise-ready switches and network management solutions that enable Cascade's customers to seamlessly integrate existing technologies with ATM for cost-effective network expansion and investment protection. Cascade's STDX and B-STDX multiservice switches and the recently introduced Cascade 500 ATM switch offer the highest scalability and network capacity in the industry. Worldwide, private and public networks, such as BellSouth, Bridge Information Systems, GTE, Pacific Bell, US West, WilTel, and British Telecom, rely on Cascade products for unparalleled quality of service and high-performance WAN services.

                                   CASCADE COMMUNICATIONS CORP.
                               Consolidated Statements of Operations
                                (in thousands, except per share data)

                                     Three Months Ended    Nine Months
                            Sept. 30,   Oct. 1,   Sept. 30,   Oct. 1,
                                1995       1994       1995       1994

Revenue                      $36,015    $15,028    $88,630    $29,817
Cost of revenue               12,966      5,671     32,157     11,729
     Gross profit             23,049      9,357     56,473     18,088

Operating expenses:
     Research and development  5,419      2,141     13,145      4,936
     Sales and marketing       5,581      3,040     14,383      6,026
     General and
      administrative           1,977        762      4,765      1,518
Total operating expenses      12,977      5,943     32,293     12,480

Income from operations        10,072      3,414     24,180      5,608

Interest income, net             964        279      2,290        302

Income before income taxes    11,036      3,693     26,470      5,910

Provision for income taxes     4,249           813   10,191       916

Net income                    $6,787     $2,880    $16,279     $4,994

Net income
    per common share           $0.22      $0.10      $0.54      $0.19

Weighted average number
   of common and common
   equivalent
   shares outstanding         30,443     28,514     30,272     26,017

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                                   CASCADE COMMUNICATIONS CORP.
                                   Consolidated Balance Sheets
                                         (in thousands)

                              Sept. 30,             Dec. 31,
                                1995                  1994
ASSETS

Current assets:
     Cash and investments    $52,248               $41,581
     Accounts receivable, net 18,315                 8,227
     Notes receivable          1,252                   113
     Inventories               5,152                 7,937
     Other current assets      3,976                 1,734
     Total current assets     80,943                59,592

Property and equipment, net   11,399                 5,954
Other assets                   2,902                   218

Total assets                 $95,244               $65,764

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities          $20,846               $13,284

Stockholders' equity          74,398                52,480

Total liabilities and
 stockholders' equity        $95,244               $65,764

CONTACT: Paul E. Blondin

Cascade Communications Corp.

508-952-1001

or

Sharon Merrill Associates Inc.

Suzanne DuLong

617-262-1800