PETAH TIKVA, Israel -- ECI Telecom Ltd. (Nasdaq: ECIL) today announced consolidated results of operations for the second quarter ended June 30, 2001. Revenues for the second quarter of 2001 were $266.4 million compared to $252.5 million in the first quarter of 2001 and $290.8 million recorded in the second quarter of 2000. On a pro forma basis gross profit was $84.5 million compared to gross profit of $68.5 million in the first quarter of 2001 and gross profit of $130 million in the second quarter of 2000. Excluding one-time items, the operating loss for the second quarter of 2001 was ($24.8 million) compared to an operating loss of ($48.5 million) in the first quarter of 2001 and operating income of $17.3 million for the second quarter of 2000. Including one-time items, such as impairment of assets, restructuring expenses, and purchase of in-process R&D, operating loss for the second quarter of 2001 was ($34.7 million), compared to an operating loss of ($242.6 million) in the first quarter of 2001, and an operating loss of ($11.4) million for the second quarter of 2000. On a pro-forma basis, the net loss from continuing operations for the second quarter of 2001 was ($26.1 million) or ($0.28) per diluted share compared to ($42 million) or ($0.45) per diluted share for the first quarter of 2001 and net income of $20.6 million or $0.22 per diluted share in the second quarter of 2000. Including one time items, the net loss was ($36 million), or ($0.39) per diluted share in the second quarter of 2001, compared to a net loss of ($256.4 million) or ($2.77) per share in the first quarter of 2001 and ($8.2 million), or ($0.09) per diluted share for the same period last year. Commenting on the results, Doron Inbar, President and CEO said, "We are pleased to report sequential improvement across almost all parameters. The improvement derives mainly from our focus on specific opportunities and the significant and painful cost cutting measures we have taken over the last 6 months. At the same time, due to continuing lack of visibility, ECI remains cautious as to the near term outlook. We continue to operate in a very challenging business environment as the slowdown in the worldwide telecom market persists with most equipment and service suppliers reporting contraction in their business." ECI Telecom Ltd.