Ciprico Cuts Headcount 30%

MINNEAPOLIS -- Ciprico Inc. (NASDAQ: CPCI) (the "Company") today announced that it has reduced its full-time headcount by approximately 30%. Steve Merrifield, president and CEO of Ciprico stated: "This action was necessitated by an insufficient volume of sales. Current business and economic conditions have caused a sharp decline in sales of our traditional video storage products, while our newer IT class products are taking longer than expected to be qualified at current and prospective customers."

As a result of the above, the Company believes its revenue ramp is delayed approximately six months causing the Company to take action to reduce expenses. As previously announced the Company is exploring strategic alternatives, and to assist with this the Company has retained Craig-Hallum Capital Group LLC, a Minneapolis-based investment banking firm.

"Revenue projections for fiscal year 2008 will not reach the levels anticipated," Merrifield said. "Over the past 18 months we have worked to transition Ciprico to become a more software centric company. We continue to be optimistic about the future of our new technology platform as confirmed by more than 200 companies now evaluating our new RAIDCore adapters and VST software solutions. There remains a strong commitment to our software virtualization strategy and we remain confident that the overall transition from hardware to virtualized software data protection will emerge as the dominant solution in the market over the next several years."

Ciprico Inc.