Exhibit 99.1

NETWORK EQUIPMENT TECHNOLOGIES ANNOUNCES
FINANCIAL RESULTS FOR SECOND QUARTER OF FISCAL 2011

Fremont, CA, October 27, 2010 – Telecommunications equipment maker Network Equipment Technologies, Inc. (“NET”, NASDAQ:NWK) today reported its results for its second fiscal quarter, ended September 24, 2010.

Total revenue in the second quarter was $20.2 million, up from $13.5 million in the prior quarter and up from $19.8 million in the second quarter of the prior fiscal year. Results for the quarter reflect increased revenue from sales to global enterprise customers for unified communications solutions and from the Federal government’s roll-out of secure voice solutions.

Net loss in the second quarter was $3.4 million or $0.11 per share, compared to a net loss of $8.2 million, or $0.28 per share, in the prior quarter and a net loss of $4.2 million, or $0.14 per share, in the second quarter of the prior fiscal year.

On a non-GAAP basis, net loss in the second quarter was $1.9 million or $0.06 per share, compared to net loss of $6.7 million or $0.23 per share in the prior quarter, and a net loss of $3.1 million, or $0.11 per share in the second quarter of fiscal 2010. Non-GAAP income adjusts for stock-based compensation, restructure charges, gains from the early extinguishment of debt, and other significant non-recurring items, including separation charges related to changes in senior management.

Cash, restricted cash and investment balances at the end of the second quarter were $72.2 million, down from $75.6 million at the end of the prior quarter, primarily as a result of cash used for operations.

“Increasing opportunities and global roll-outs of unified communications within the enterprise, along with deployments of secure communications for the government, have resulted in increased sales of our VX Series platform,” said President and CEO C. Nicholas Keating, Jr. “Within the past quarter, we made substantial progress in securing agreements and beginning the on-boarding process with several of the largest and most widely recognized value added distribution partners in the world. These relationships will enable us to more effectively drive our products into the global reseller channels that we are targeting.”

Conference Call Information:

NET will be hosting a conference call today to discuss these results at 5:00 p.m. ET. Please dial (866) 783-2144 or (857) 350-1603 and provide conference ID# 37724392 to access the call. The conference call will also be broadcast from the company’s website.

A recording of the conference call will be provided by telephone and the Internet beginning two hours after completion of the call. The replay may be accessed by telephone through midnight on November 3, 2010; please dial (888) 286-8010 or (617) 801-6888 and enter conference ID# 72813432.  A digital recording will be available on the company's website for one year.

About Network Equipment Technologies

Network Equipment Technologies, Inc. (NET) delivers high performance networking equipment optimized for real-time communications. For more than a quarter of a century, NET has delivered solutions for multi-service networks requiring high degrees of versatility, security and performance. Today, the company is focused on providing secure real-time communications for unified communications (UC), SIP trunking, enterprise mobility, and IP-based multi-service networking. NET is headquartered in Fremont, CA and has 14 offices worldwide including the U.S., the U.K., France, the Middle East, China, Japan, Australia, and Latin America. The company sells its solutions to enterprise and government customers through a direct sales force and an international network of resellers and distributors.  

Use of Non-GAAP Financial Information

Use of non-GAAP information.  In evaluating NET’s performance, management uses certain non-GAAP financial measures to supplement consolidated financial statements prepared under GAAP. Management believes that non-GAAP net loss and other non-GAAP measures help indicate a base level of NET’s performance before gains, losses, or charges that are considered by management to be outside of the recurring operations of our business. We believe that the non-GAAP information regarding recurring operations allows for a better understanding of NET’s operating performance compared to prior periods and a clearer analysis of operating trends. Management uses this non-GAAP information for planning and forecasting of future periods, making decisions regarding spending levels and the allocation of resources, and determining management and employee compensation. We believe that disclosing these non-GAAP financial measures to the readers of our financial statements provides such readers with useful supplemental data that, while not a substitute for financial measures prepared in accordance with GAAP, allows for greater transparency in the review of our ongoing financial and operational performance. Specifically, we believe these non-GAAP financial measures, when read in conjunction with NET’s GAAP financials, provide useful information to investors by offering:

·

the ability to make more meaningful period-to-period comparisons of our ongoing operating results;

·

the ability to better identify trends in our underlying business and perform related trend analysis;

·

a better understanding of how management plans and measures our underlying business; and

·

an easier way to compare our most recent results of operations against investor and analyst financial models.

In determining non-GAAP net loss, we exclude certain gains or losses that are the result of infrequent events. Such items include (i) gains from the early extinguishment of our debt, and (ii) gains or losses from significant restructuring or other infrequent charges such as termination and severance charges related to changes in senior management. Management believes that these exclusions are appropriate because these items are not indicative of ongoing operating results or limit comparability.

We also exclude certain non-cash charges that may vary between periods and between companies based on the valuation methodology chosen and the input of required data that may not be directly related to current business operations, such as a company’s stock price. Such items include stock-based compensation. Management believes that excluding these items allows for more meaningful comparisons of our operating results across periods and to our competitors.

Limitations.  These non-GAAP financial measures are not presented in accordance with, nor are they a substitute for, U.S. GAAP. The non-GAAP financial measures used should not be considered in isolation from measures of financial performance prepared in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In addition, these measures may be different from non-GAAP measures used by other companies, limiting their usefulness for comparison purposes.

Forward Looking Statements

This press release contains forward-looking statements, relating to possible future revenue and other operating results, within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that such statements are based on current expectations, forecasts and assumptions that involve risks and uncertainty that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that could affect such results include our ability to commercialize new products and product enhancements, success in building new sales channels, achieving broad market acceptance for our products, the status of relations with and performance by third-party technology providers, challenges of managing inventory and production of products, certifications and regulatory compliance for new and existing products, federal government budget matters and procurement decisions, and the timing of orders and revenue, as well as the factors identified in Network Equipment Technologies' most recent Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. Network Equipment Technologies disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

NETWORK EQUIPMENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

(unaudited)

NETWORK EQUIPMENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

(1) Derived from audited consolidated financial statements as of March 26, 2010.

NETWORK EQUIPMENT TECHNOLOGIES, INC.
GAAP TO NON-GAAP NET LOSS RECONCILIATION
(Unaudited – in thousands, except per share amounts)