Polycom (PLCM) 8-K Revenues at a Record $120 Million for Q4 2001; Operating Cash Flow of $25 Million in Q4

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Exhibit 99.1

Contact: Michael R. Kourey, CFO
Polycom, Inc.
408.474.2844
email:mkourey@polycom.com

POLYCOM REPORTS FOURTH QUARTER RESULTS

Revenues at a Record $120 Million for Q4 2001;
Operating Cash Flow of $25 Million in Q4

MILPITAS, Calif.—Jan. 23, 2002—Polycom®, Inc. (NASDAQ: PLCM), a worldwide leader in the convergence of interactive voice, video and data communications, today reported its operating results for the fourth quarter ended December 31, 2001.

Fourth quarter consolidated net revenues were $120.0 million, compared to $113.6 million recorded for the fourth quarter of 2000. Pro forma net income in the fourth quarter, which excludes acquisition-related costs of the PictureTel and other acquisitions, goodwill amortization and other nonrecurring items, was $14.6 million, or 16 cents per diluted share. This compares to pro forma net income of $18.9 million, or 22 cents per diluted share, for the fourth quarter of 2000. Included in these results are the operations of PictureTel during the period beginning October 19, 2001, the day following the closing of the acquisition, through the end of the fourth quarter.

For the year ended December 31, 2001, consolidated net revenues were $383.2 million, compared to $373.6 million for the same period last year. Pro forma net income for the year ended December 31, 2001 was $52.0 million, compared to $56.7 million for 2000. These results exclude acquisition-related costs of the PictureTel and other acquisitions, goodwill amortization and other nonrecurring items.

On a product line basis, consolidated net revenues for the fourth quarter of 2001 consisted of 61% video communications, or $72.5 million; 18% network systems, or $22.0 million; 14% voice communications, or $16.5 million; 6% iPower-related services, or $7.7 million; and 1% network access, or $1.3 million. This compares to the fourth quarter of 2000, in which consolidated net revenues consisted of 54% video communications, or $61.4 million; 12% network systems, or $13.6 million; 21% voice communications, or $23.5 million; and 13% network access, or $15.1 million.

Including the effect of the pro forma items, the net loss for the fourth quarter of fiscal 2001 was $50.4 million, or 56 cents per diluted share, compared to a net income of $4.9 million, or 6 cents per diluted share, for the same period last year. For the year ended December 31, 2001, including the effect of the pro forma items, the net loss was $27.7 million, or 33 cents per diluted share, compared to a net income of $37.5 million, or 45 cents per diluted share, for the year ago period.

The prior year figures include the results of Accord Networks, which was acquired by Polycom on February 28, 2001 and accounted for as a pooling of interests.

As has been noted on the Company's web site since January 15, 2002, Polycom will hold a conference call today at 5:00 p.m. ET/2:00 p.m. PT to discuss its fourth quarter earnings. Robert Hagerty, Chairman, President and CEO, and Michael Kourey, Chief Financial Officer, will host the conference. You may participate by viewing the webcast atwww.polycom.comor, for callers in the US and Canada, call 888.324.6991; and for callers outside of the US and Canada, call 212.547.0152, with the pass code being "Polycom." A replay of the call will also be available through January 30, 2002 atwww.polycom.comor, for callers in the US and Canada, at 800.513.1169; and for callers outside of the US and Canada, at 402.344.6838. The access number for the replay is 21101.

About Polycom

Polycom, Inc. develops, manufactures and markets a full range of high-quality, easy-to-use and affordable voice and video communication endpoints, video management software, multi-network gateways, and multi-point conferencing and network access solutions. Its fully integrated end-to-end solution, The Polycom Office™, is supported by the Polycom Accelerated Communications Architecture, and enables business users to realize the benefits of integrated video, voice and data over converged networks.

Polycom, PictureTel, and the Polycom logo are registered trademarks and iPower and The Polycom Office are trademarks of Polycom in the U.S. and various countries. ©2002, Polycom, Inc. All rights reserved.

POLYCOM, INC.
Pro Forma Condensed Consolidated Statements of Operations
Excluding Acquisition-related costs, Purchased in-process R&D, Amortization of goodwill, purchased
intangibles and unearned stock-based compensation, Grant repayment, Litigation settlement costs,
Litigation reserve release and Other investment adjustments
(In thousands, except per share data)
(Unaudited)

			Three Months Ended						Year Ended
			December 31, 2001			December 31, 2000			December 31, 2001			December 31, 2000
Net revenues			$	120,048		$	113,578		$	383,189		$	373,554
Cost of net revenues				54,142			51,514			166,747			164,099
	Gross profit			65,906			62,064			216,442			209,455
Operating expenses:
	Sales and marketing			21,829			19,937			74,645			70,745
	Research and development			17,757			12,940			59,276			43,570
	General and administrative			7,756			5,518			21,473			20,702
		Total operating expenses		47,342			38,395			155,394			135,017
Operating income				18,564			23,669			61,048			74,438
Interest income, net				2,158			3,775			12,755			8,419
Other income (expense)				(162	)		(22	)		(608	)		8
Income before provision for income taxes				20,560			27,422			73,195			82,865
Provision for income taxes				5,962			8,554			21,227			26,208
Pro forma net income			$	14,598		$	18,868		$	51,968		$	56,657
Basic net income per share			$	0.16		$	0.23		$	0.61		$	0.75
Diluted net income per share			$	0.16		$	0.22		$	0.59		$	0.68
Weighted average shares outstanding for basic EPS				90,194			81,564			85,123			75,264
Weighted average shares outstanding for diluted EPS				93,588			87,179			88,139			83,828

The above pro forma amounts have been adjusted to exclude the following items:

	Three Months Ended						Year Ended
	December 31, 2001			December 31, 2000			December 31, 2001			December 31, 2000
Net income (loss) including the effect of the pro forma adjustments	$	(50,355	)	$	4,939		$	(27,700	)	$	37,463
Acquisition-related costs		12,547			4,768			24,077			4,768
Purchased in-process research and development		50,192			—			52,642			—
Amortization of goodwill, purchased intangibles & unearned stock-based compensation		4,083			—			6,258			—
Grant repayment		—			5,876			—			5,876
Litigation settlement costs		—			—			—			6,500
Litigation reserve release		—			—			—			(1,843	)
Other investments adjustment		1,655			5,854			3,178			5,854
Combined income tax effect of pro forma adjustments		(3,524	)		(2,569	)		(6,487	)		(1,961	)
Pro forma net income	$	14,598		$	18,868		$	51,968		$	56,657

POLYCOM, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)

			Three Months Ended						Year Ended
			December 31, 2001			December 31, 2000			December 31, 2001			December 31, 2000
			(Unaudited)			(Unaudited)
Net revenues			$	120,048		$	113,578		$	383,189		$	373,554
Cost of net revenues				54,142			51,514			166,747			164,099
	Gross profit			65,906			62,064			216,442			209,455
Operating expenses:
	Sales and marketing			21,829			19,937			74,653			70,745
	Research and development			17,798			12,940			59,416			43,570
	General and administrative			7,797			5,518			21,564			20,702
	Acquisition-related costs			12,547			4,768			24,077			4,768
	Purchased in-process research and development			50,192			—			52,642			—
	Amortization of goodwill and purchased intangibles			4,001			—			6,019			—
	Grant repayment			—			5,876			—			5,876
	Litigation settlement costs			—			—			—			6,500
	Litigation reserve release			—			—			—			(1,843	)
		Total operating expenses		114,164			49,039			238,371			150,318
Operating income (loss)				(48,258	)		13,025			(21,929	)		59,137
Interest income, net				2,158			3,775			12,755			8,419
Other investments adjustment				(1,655	)		(5,854	)		(3,178	)		(5,854	)
Other income (expense)				(162	)		(22	)		(608	)		8
Income (loss) before provision for income taxes				(47,917	)		10,924			(12,960	)		61,710
Provision for income taxes				2,438			5,985			14,740			24,247
Net income (loss)			$	(50,355	)	$	4,939		$	(27,700	)	$	37,463
Basic net income (loss) per share			$	(0.56	)	$	0.06		$	(0.33	)	$	0.50
Diluted net income (loss) per share			$	(0.56	)	$	0.06		$	(0.33	)	$	0.45
Weighted average shares outstanding for basic EPS				90,194			81,564			85,123			75,264
Weighted average shares outstanding for diluted EPS				90,194			87,179			85,123			83,828

POLYCOM, INC.
Condensed Consolidated Balance Sheets
(In thousands)

			December 31, 2001		December 31, 2000
ASSETS
Current assets
	Cash and cash equivalents		$	126,832	$	189,399
	Short-term investments			23,348		52,399
	Trade receivables, net			89,309		75,653
	Inventories			48,173		49,971
	Deferred taxes			49,941		26,623
	Prepaid expenses and other current assets			14,646		11,283
		Total current assets		352,249		405,328
Fixed assets, net				28,945		22,046
Long-term investments				68,682		53,543
Goodwill and purchased intangible assets, net				347,063		—
Deferred taxes				15,184		2,811
Other long-term assets				9,042		19,980
		Total assets	$	821,165	$	503,708
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Accounts payable		$	31,418	$	33,614
	Accrued payroll and related liabilities			9,864		8,770
	Taxes payable			24,053		16,188
	Deferred revenue			20,878		4,564
	Other current liabilities			64,387		16,223
		Total current liabilities		150,600		79,359
Long-term liabilities				26,579		1,566
		Total liabilities		177,179		80,925
Stockholders' equity				643,986		422,783
		Total liabilities and stockholders' equity	$	821,165	$	503,708

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Exhibit 99.1

POLYCOM REPORTS FOURTH QUARTER RESULTS
POLYCOM, INC. Condensed Consolidated Statements of Operations (In thousands, except per share data)
POLYCOM, INC. Condensed Consolidated Balance Sheets (In thousands)