Class Action Suit Filed Against AFCI Communications, Inc. and Certain of its Officers and Directors for Violations of the Federal Securities Laws.

SEATTLE--(BUSINESS WIRE)--July 20, 1998--A class action has been commenced in the United States District Court for the Northern District of California on behalf of all purchases of Advanced Fibre Communications, Inc. ("AFCI") common stock during the period from June 3, 1997 through June 30, 1998 (the "Class Period").

The complaint charges AFCI and certain of its officers and directors with violations of the federal securities laws. Specifically, plaintiffs have brought claims under sections 10(b) and 20 of the Securities Exchange Act of 1934. AFCI is a major seller of telecommunications equipment.

The complaint alleges that AFCI and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants' false and misleading statements about strong sales of AFCI's telecommunications products, continuing strong sales to one of its largest customers (GTE), its strong and growing sales in China and its success in penetrating Bell Atlantic, Bell South, U.S. West, Ameritech, and SBC (the "Baby Bells") and the strong continuing growth in demand for its products over the next several years which would result in 35%-50% earnings per share ("EPS") growth for AFCI during '98-'99, artificially inflated AFCI stock to a Class period high of $44-3/4 in April 1998.

AFCI's insiders sold 3.6+ million shares of their AFCI stock at as high as $44 for $128 million in proceeds. On June 30, 1998, just weeks after AFCI's stock hit its all-time high, AFCI revealed that, due to weak sales in China, delays in delivering a new product to Chinese customers, a lack of Asian distributors, virtually non-existent sales to GTE and slower-than-anticipated sales to the Baby Bells, its second quarter 1998 results were going to be much worse than earlier forecast and that its 1998 EPS would likely decline from 1997 levels. AFCI's stock fell from $40-1/4 to $16-3/4 on July 1, 1998, a 58% one day decline on volume of 31 million shares, by far the largest one-day price decline and the largest one-day volume in AFCI's history.

The plaintiff is represented by Hagens Berman, P.S., a firm that has significant expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud. Hagens Berman, P.S. has concentrated its practice in the field of class action and multi-plaintiff litigation, representing plaintiffs in numerous securities and investment fraud actions throughout the country. For more information, visit the firms's web site at Hagens-Berman.com.

Hagens Berman, P.S. has been appointed lead or co-lead counsel on behalf of defrauded investors in numerous complex financial cases, and has been responsible for many large recoveries which, in the aggregate, total more that $1 billion.

If you are a member of the Class described above, you may, no later than 60 days from July 2, 1998, move the Court to serve as lead plaintiff of the Class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiffs' counsel, Carl H. Hagens, Steve W. Berman or Karl P. Barth at Hagens Berman, P.S. at 206/623-7292 or toll free at 888/381-2889 or via e-mail at [e-mail].

    CONTACT: Hagens Berman, P.S.
              Carl H. Hagens, Steve W. Berman or Karl P. Barth
              206/623-7292 or 888/381-2889
              [e-mail]