Comdial Accelerates Its Restructuring Program; Comdial Strengthens Core Competencies In High Growth Sectors While Offsetting Effects Of A Worsening Economy.

Business Editors/High-Tech Writers

SARASOTA, Fla.--(BUSINESS WIRE)--Nov. 2, 2001

Comdial Corporation (Nasdaq:CMDL) announced today that it is accelerating its restructuring program. The company is concentrating its R&D efforts in Internet protocol (IP) telephony and shifting the company's structure to support its streamlined product portfolio. Additionally, Comdial continues implementing its cost cutting program to adapt to the industry-wide economic slowdown

Comdial's core business strategy is to provide small and mid-market businesses with advanced communications solutions to bridge today's communications with tomorrow's IP telephony. Comdial continues to deliver products for its large installed base, to migrate its existing customers to IP telephony, and to deploy new customers with complete IP telephony systems. The company will keep its R&D resources focused on engineering new products that capitalize upon the high growth IP telephony sector.

Comdial has made significant progress with its outsourcing capabilities and is now benefiting from savings in direct and indirect production costs. Steve Swartz, Comdial's Vice President of product marketing, said, "Outsourcing and product line consolidation are key strategies in transforming the company. For example, we recently released two very robust and versatile systems. Because we designed with scalability in mind, we can meet a broader range of customer needs with these two systems, and do so more efficiently, than in the past when we had five platforms. These systems are produced by contract manufacturers, so Comdial has accelerated the outsourcing of its remaining product still manufactured in our Charlottesville, Virginia office."

Due to both Comdial's successful outsourcing and the current economic downturn, Comdial announced a workforce reduction of approximately 200 positions. About 100 employees are affected immediately and 100 cuts will phase in during the fourth quarter and first quarter next year. Most of the cuts are in manufacturing and engineering. The company began its restructuring plan late last year, that called for the consolidation of product lines and the introduction of new, more efficient products. The success of those product introductions and manufacturing outsourcing has resulted in the company realizing additional cost reductions.

The company expects to see improvements to SG&A expenses as well as a reduction in overhead as a result of the restructuring. Preliminary estimates on the long-term savings the company expects to realize as a result of the restructuring are approximately $5 million annually. When combined with previous reductions, the company estimates it will save approximately $15 million annually.

About Comdial

Comdial Corporation, headquartered in Sarasota, Florida, develops and markets sophisticated communications solutions for small to mid-sized businesses, government, and other organizations. Comdial offers a broad range of solutions to enhance the productivity of businesses, including voice switching systems, voice over IP (VoIP), voice processing and computer telephony integration solutions. For more information about Comdial and its communications solutions, please visit our web site at http://www.comdial.com.

Special Note Regarding Forward-Looking Statements 

This press release contains statements that may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, including the Company's ability to maintain its listing with Nasdaq, and the various factors set forth from time to time in the Company's previous filings with the SEC, including the Company's Form 10-Q for the quarter ended June 30, 2001. The Company undertakes no obligation to publicly update or revise the forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.