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NETSCOUT Announces Preliminary Fourth-Quarter Fiscal 2001 Earnings

March 27, 2001

WESTFORD, Mass., March 27 /PRNewswire/ -- NetScout Systems, Inc. (Nasdaq: NTCT) announced today that based on preliminary information, the company is revising its earnings guidance for its fiscal fourth quarter ending March 31, 2001, and for the coming fiscal year 2002. NetScout expects that the economic conditions being widely reported will affect most sectors of the Company's client base. These conditions are resulting in sudden, broadening constraints being applied to IT purchasing, which have delayed orders and lengthened sales cycles.

The Company expects that these conditions will continue in the near future. Accordingly, NetScout now expects that revenues for the fourth quarter of fiscal 2001 will be down to a range of $20 million to $22 million, and that pro forma earnings per share will be in the range of $0.01 to $0.03.

"Even though we continue to see a strong flow of very good opportunities and interest in the value provided by our products, it has become extremely difficult to reliably forecast in this tough economic environment," said Anil Singhal, President and CEO of NetScout. "Our business fundamentals remain strong. These fundamentals include our solid cash position, a number of new product introductions during the next 12 months, an expanded sales force and improving competitiveness, all of which will allow us to emerge from these difficult times stronger than ever."

NetScout's expectations looking forward are based on widely reported economic forecasts that foresee the current difficult economic conditions continuing through the end of calendar 2001. Further, NetScout anticipates that the current, abrupt delay in IT spending by many large enterprises will begin to ease in the second calendar quarter, NetScout's first fiscal quarter, as they turn their focus to high priority issues such as ensuring strong oversight and optimal performance of their very large infrastructures. Based on these assumptions, NetScout expects quarterly sequential revenue growth in the range of 10% to 12% off the lower revenue base of the current quarter for the next four quarters. Because of the lowered base, NetScout is taking significant actions to lower discretionary spending and to limit hiring. As a result, through fiscal 2002, operating margins are expected to grow from the low single digits to high teens by the fourth fiscal quarter.

More information on NetScout's fiscal fourth-quarter and full-year 2001 results will be available on April 26th, 2001 when the company intends to report its final results.

The Company invites shareholders to listen into a conference call today at 5:00 pm EST, which will be Webcast live through the Company's Website at http://www.netscout.com. A replay of the call will be available after 8:00 pm EST this evening through April 3, 2001. The number for the replay is (800) 642-1687 for U.S./Canada, and (706) 645-9291 for International callers. The access code is 103822.

About NetScout Systems

NetScout Systems, Inc. is a leading provider of infrastructure performance management solutions for leading companies and service providers worldwide. NetScout serves approximately half of the Fortune 500 and counts among its customers 3M Corporation, Amazon.com, AT&T Wireless, Bristol-Myers Squibb, Cable & Wireless, Cisco Systems, Computer Sciences Corporation, Exenet Technologies, Fidelity Investments, Intel Online, MCI, Reed Elsevier, Sprint, Sun Microsystems and Webhire. NetScout is headquartered in Westford, Massachusetts and has approximately 370 employees, with offices in North America, Europe and Asia. Further information on the company is available on the World Wide Web at www.netscout.com

Forward-looking statements in this release are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that statements in this press release which are not strictly historical statements, including the plans, objectives and future financial prospects of NetScout, constitute forward-looking statements which involve risks and uncertainties and are not guaranteed. Actual results could differ materially from the forward-looking statements in this press release. Risks and uncertainties which could cause actual results to differ materially from the forward-looking statements in this press release include, without limitation, risks and uncertainties associated with the company's strategic relationships with Cisco Systems and other partners, dependence upon broad- based acceptance of the company's infrastructure performance management solutions, the company's ability to achieve and maintain a high rate of growth, introduction and market acceptance of new products and product enhancements such as the delivery of nGenius product platform probes and software solutions, the ability of NetScout to take advantage of service provider opportunities, competitive pricing pressures, reliance on sole source suppliers, successful expansion and management of indirect distribution channels, the integration of NextPoint Networks and dependence on proprietary technology, as well as risks of slowdowns or downturns in economic conditions generally and in the market for infrastructure performance management solutions specifically. For a more detailed description of the risk factors associated with the company, please refer to the company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000, and Quarterly Report on 10-Q for the quarter ended December 31, 2000, on file with the Securities and Exchange Commission.

NetScout is a registered trademark and the NetScout logo is a trademark of NetScout Systems, Inc.
SOURCE NetScout Systems, Inc.
Web site: http: //www.netscout.com
CONTACT: Peggy Flynn, Director, Investor Relations of NetScout Systems, 978-614-4162, or flynnp@netscout.com; or Bill Zima, Associate Director Technology Consulting of Thomson Financial/Carson Group, 212-510-9261, or bill.zima@tfn.com

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