<PAGE>  1
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                           UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549
                         Amendment No. 1 to
                             FORM 10-K

          (Mark One)
      [X] Annual Report Pursuant to Section 13 or 15(d)
          of the Securities Exchange Act of 1934

          For the fiscal year ended January 1, 2000

          OR

      [ ] Transition Report pursuant to Section 13 or 15(d)
          of the Securities Exchange Act of 1934

          For the transition period from _________ to ___________
                      Commission File No. 0-18033

                          EXABYTE CORPORATION
         (Exact name of registrant as specified in its charter)

             Delaware                        84-0988566
     (State of Incorporation)     (IRS Employer Identification No.)

                          1685 38th Street
                      Boulder, Colorado  80301
     (Address of principal executive offices, including zip code)

                      Area Code(303) 442-4333
         (Registrant's Telephone Number, including area code)

     Securities registered pursuant to Section 12(b) of the Act:
       N/A                                    N/A
(Title of each class)      (Name of each exchange on which registered)

     Securities registered pursuant to Section 12(g) of the Act:
                  Common Stock, $.001 Par Value
                        (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past ninety days.
      Yes          /X/                      No          /  /

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.                                                       (x)

The approximate aggregate market value of the voting stock held by non-
affiliates of the registrant as of March 1, 2000 was $150,667,958 based on
the closing sale price on such date(a).  The aggregate number of shares of
common stock outstanding on March 1, 2000 was 22,935,732.
<PAGE>  2

Document incorporated by reference: Proxy Statement for the 2000 Annual
Meeting of Stockholders scheduled to be held April 28, 2000: Part III, Items
10, 11, 12, and 13.

(a) Excludes 3,953,942 shares of common stock held by directors, executive
officers and stockholders whose ownership exceeds ten percent of the common
stock outstanding at March 1, 2000.  Exclusion of shares held by any person
should not be construed to indicate that such person possesses the power,
direct or indirect, to direct or cause the direction of the management or
policies of registrant, or that such person is controlled by or under common
control with the registrant.














Exabyte Corporation is filing this Amendment No. 1 to its Annual Report on
Form 10-K for the fiscal year ended January 1, 2000 (which is its 1999 fiscal
year) for the sole purpose of amending portions of the following sections of
the Report: Part I: Item 1 (Business), Part II: Item 6 (Selected Financial
Data), Part II: Item 7 (Management's Discussion and Analysis of Financial
Condition and Results of Operations) and Part II: Item 8 (Financial Statements
and Supplementary Data). This Amendment sets forth a revised definition of
service offerings and "resellers" in Part I , restating 1999 consolidated
financial statements to reflect the recording of a full valuation allowance
on deferred tax assets, as well as other revisions to address comments received
by the SEC Staff in a review of the Company's financial statements. Unless the
context expressly indicates otherwise, all parts of the Report, including the
portions being amended here, are current as of April 6, 2000, the initial
filing date of the Report. Readers are directed to read Exabyte's publicly
available reports filed with the Securities and Exchange Commission for periods
subsequent to the period covered by this Report for more current information
concerning Exabyte.
















<PAGE> 3
PART I

Item 1.
BUSINESS.

THE COMPANY
===========

Exabyte Corporation ("Exabyte" or the "Company") was incorporated in June 1985
under the laws of the State of Delaware.  Exabyte designs, manufactures and
markets a full range of 8mm and MammothTape(TM) tape drives and robotic tape
libraries as well as DLTtape(TM) robotic tape libraries.  Exabyte also provides
its own brand of recording media, software utilities and worldwide service and
customer support.

The Company's strategic focus is the information storage and retrieval tape
drive and library market for workstations, midrange computer systems and
networks, primarily for data backup and archival applications.  Computer
manufacturers and resellers require a variety of storage products which vary
in price, performance, capacity and form-factor characteristics as their needs
for data backup and archival storage increase.  Additionally, end users require
reliable data backup and archival applications.  Exabyte's current strategy is
to offer a number of products to address a broad range of these requirements.

In 1999, the Company restructured its operations and consolidated its
automation, drives and service divisions to reduce the redundancy in the
management structure.  The Company also established a wholly-owned subsidiary,
CreekPath Systems, Inc., to provide high data availability solutions to
Internet companies through Internet service providers and application service
providers.

In addition to the historical information contained in this document, the
following discussion contains forward-looking statements that involve future
risks and uncertainties.  The actual results that the Company achieves may
differ materially from any forward-looking statements due to such risks and
uncertainties.  Words such as "believes," "anticipates," "expects," "intends,"
"plans" and similar expressions are intended to identify forward-looking
statements, but are not the exclusive means of identifying such statements.
The Company undertakes no obligation to revise any forward-looking statements
in order to reflect events or circumstances that may arise after the date of
this report.  Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in the section below entitled
"RISK FACTORS."

PRODUCTS AND SERVICES
=====================

Exabyte's products, marketed exclusively through resellers and original
equipment manufacturer ("OEM") partners around the world, address the need
for reliable, high-performance data storage in the fastest growing segments
of the computer industry - NT, UNIX and Linux application and database servers.

Exabyte concentrates on the midrange application and database server market,
manufacturing tape backup and network storage solutions for small, medium and
large businesses. Exabyte provides cost-effective solutions in a range of
technologies, including MammothTape(TM), 8mm and DLTtape(TM).

Throughout the past decade, Exabyte's products have found widespread use in
attended and unattended network backup, automated storage management, near-
<PAGE> 4
online storage, archiving, data collection, software distribution and
interchange.

In 1994, Exabyte announced a new technology, known today as MammothTape(TM)
technology.  MammothTape(TM) technology is an integrated system encompassing
both tape drive design and advanced metal evaporated ("AME") media. All aspects
of the technology are designed to work together to optimize recording
performance and to help ensure the integrity of vital data.

Although based on 8mm helical-scan recording technology, the first-generation
MammothTape(TM) drives incorporated several significant improvements: faster
transfer rates, higher capacity, more immediate SCSI response, gentle tape
handling, extensive error recovery, automated storage solutions and high-
performance AME media.

There are currently three MammothTape(TM) technology tape drives, each scalable
and suitable for specific business needs. Exabyte's Mammoth-2 ("M2(TM)") tape
drives are made for the midrange market. Appropriate for NT, UNIX and Linux
environments, they automatically scale their performance to match the host
system, without impacting server performance. The original Mammoth tape
drives provide consistent performance and reliability at a modest price.
Mammoth-LT drives offer economical entry into MammothTape(TM) technology.

Combining MammothTape(TM) drives with Exabyte libraries creates automated
data backup for businesses of all kinds. Exabyte's MammothTape(TM) technology
libraries incorporate the elements needed to protect data and provide a solid
growth path to the future.

Exabyte's Eliant(TM)820 tape drive is the Company's only 8mm "non-
MammothTape(TM)" product offering.  However, data recorded on Eliant(TM)820
tape drives are backward readable by Mammoth and Mammoth-LT tape drives,
giving the Eliant(TM)820 end-users an easy migration path into Exabyte's
MammothTape(TM) technology.

There can be no assurance that any of the current or announced products or
services listed below will be successfully developed, made commercially
available on a timely basis or achieve market acceptance.  Exabyte encounters
a number of risks in producing and selling its products and services.  For a
description of such risks see "RISK FACTORS--Mammoth-2," "RISK FACTORS--Product
Development," "RISK FACTORS--Media Dependence," "RISK FACTORS--Product
Quality and Performance," "RISK FACTORS--Management of Business and Product
Transitions" and "RISK FACTORS--Customer Dependence" below.

Tape Drive Products
===================

The primary factors distinguishing the Company's tape drive products from one
another are data capacity and transfer rate. Data capacity refers to the total
amount of data that can be stored on a single media cartridge.  Transfer rate
refers to the speed at which data may be transferred to or from the tape drive.

All data capacities and transfer rates indicated for the products listed
below are compressed and assume a compression ratio of two-to-one unless
stated otherwise.  Actual compression will vary depending on the nature of
the data and the drive and media quality.

Exabyte's tape drives offer data capacities* ranging from 14GB to 150GB and
transfer rates* ranging from 2MB per second to 30MB per second. In 1999,

<PAGE> 5
sales of Exabyte's current tape drive products represented 45% of revenue,
while in 1998 and 1997, sales represented 43% and 23% of total revenue,
respectively.

The following table sets forth specific information about each of the Company's
tape drives:

MammothTape(TM)Technology:
--------------------------
     Drive                Capacity*          Transfer Rate*
     -----                --------           -------------
     Mammoth-2             150GB                30MB/sec
     Mammoth                40GB                 6MB/sec
     Mammoth-LT             28GB                 4MB/sec

8mm Technology:
---------------
     Eliant(TM)820          14GB                 2MB/sec

*Data capacities and transfer rates for the Mammoth, Mammoth-LT and
Eliant(TM)820 tape drives assume a compression ratio of two-to-one,
while M2(TM) assumes a compression ratio of two-and-a-half-to-one.

Future Tape Drive Products
--------------------------

Mammoth-3

The Company is currently developing its Mammoth-3 ("M3(TM)") tape drive.  The
Company anticipates that this drive will feature a compressed data capacity
of approximately 300GB and a compressed transfer rate of 50MB per second
(assuming a compression ratio of two-and-a-half-to-one, although actual
compression may vary depending on the nature of the data and the drive and
media quality). M3(TM) is designed to be backward compatible with the Mammoth-
Tape(TM) product line and will exclusively use AME media.  See "RISK FACTORS--
Product Development," "RISK FACTORS--Media Dependence" and "RISK FACTORS--
Supplier Dependence" below.  Worldwide shipment of M3(TM) to customers is
expected to begin in 2001.

There can be no assurance that this or any other announced product or
unannounced product in development will be successfully developed, made
commercially available on a timely basis or achieve market acceptance.
See "RISK FACTORS--Product Development" section below.

Robotic Tape Libraries
======================

Exabyte libraries are engineered to work with multiple tape drive technologies.
This flexibility is designed to allow Exabyte to quickly address changing
market conditions and respond to requests from our customers for automation
solutions involving different tape technologies. The current Exabyte library
family includes MammothTape(TM), DLTtape(TM) and, in the near future, LTO(RTM)
technologies.

Exabyte libraries are designed to be scalable, allowing Exabyte to develop
different sized libraries based on the same model, with room inside each box
for expansion. This capability is intended to enable Exabyte designs to
accommodate increases in customers' data storage needs, allowing customers to
protect their library investment.
<PAGE> 6
Exabyte engineered its library products to satisfy the reliability, service-
ability and management requirements of storage networking. They combine the
reliability of Exabyte robotics with features such as optional Ethernet ports,
hot-pluggable tape drive carriers designed to be serviced during library
operation, standard bar code scanners and removable magazines.

In 1999, revenues from current library sales were 13% of total revenue, while
in 1998 and 1997, sales represented 14% and 15% of revenues, respectively.

All data capacities and transfer rates indicated for the products listed below
are compressed and assume a compression ratio of two-to-one unless stated
otherwise.  Actual compression will vary depending on the nature of the data
and the drive and media quality.

The following table sets forth specific information about Exabyte's robotic
tape library products.  Capacity and transfer rates reported assume each
library is running at full capacity, as indicated in the column heading,
"Full Capacity."

<TABLE>
<CAPTION>
MammothTape(TM) Libraries:
--------------------------
     Library         Full Capacity            Capacity*     Transfer Rate*
     -------         -------------            --------      -------------
     <S>             <C>                       <C>           <C>
     X200            10 M2(TM) drives and       30TB            1TB/hour
                     200 media cartridges

     X80             8 M2(TM) drives and        12TB          864GB/hour
                     80 media cartridges

     220             2 M2(TM) drives and         3TB          216GB/hour
                     20 media cartridges

     EZ17            1 M2(TM) drive and          1TB          108GB/hour
                     7 media cartridges

     440/480         4 Mammoth drives and        3TB           86GB/hour
                     80 media cartridges

DLTtape(TM) Libraries:
----------------------
     Library         Full Capacity            Capacity*     Transfer Rate*
     -------         -------------            --------      -------------
     690D            6 DLT7000 drives and        6TB          216GB/hour
                     90 media cartridges

     230D            2 DLT7000 drives and        2TB           72GB/hour
                     30 media cartridges

     17D             1 DLT7000 drive and       490GB           36GB/hour
                     7 media cartridges
</TABLE>

*Data capacities and transfer rates for the M2(TM) drive assume a compression
ratio of two-and-a-half-to-one.  All other data capacities and transfer rates
assume a compression ratio of two-to-one,

<PAGE> 7
Future Library Product Offerings
--------------------------------

The Company is currently developing a number of new library product offerings.
Some of the products listed in the tables below represent library offerings
which are designed to incorporate drives that are not yet available from the
respective manufacturers.  The Company intends to make the libraries available
to its customers once the drives are available for the Company to incorporate
into its libraries.  The expected availability dates listed are estimated dates
which the Company currently expects such drives to become available, but are
subject to delays from the manufacturer which are beyond the control of the
Company.

There can be no assurance that these or any other announced product or
unannounced product in development will be successfully developed, made
commercially available on a timely basis or achieve market acceptance.
See "RISK FACTORS--Product Development" section below.

<TABLE>
<CAPTION>
Future Announced MammothTape(TM) Libraries:
-------------------------------------------
     Library         Full Capacity            Capacity*     Transfer Rate*     Availability
     -------         -------------            --------      -------------      ------------
     <S>             <C>                      <C>            <C>               <C>
     430             4 M2(TM) drives and         4TB         432GB/hour        2nd Half 2000
                     30 media cartridges

     215             2 M2(TM) drives and         2TB         216GB/hour        2nd Half 2000
                     15 media cartridges

Future Announced LTO Ultrium(TM) Libraries:
-------------------------------------------
     Library         Full Capacity            Capacity*     Transfer Rate*     Availability
     -------         -------------            --------      -------------      ------------
     110L            1 drive and               2.5TB         144GB/hour        2nd Half 2000
                     10 media cartridges

     221L            2 drives and                5TB         288GB/hour        2nd Half 2000
                     20 media cartridges

     6108L           6 drives and               22TB         648GB/hour        2nd Half 2000
                     108 media cartridges
</TABLE>

*Data capacities and transfer rates for M2(TM) assume a compression ratio
of two-and-a-half-to-one, while data capacity and transfer rate compression
for the other technologies assume compression ratios consistent with those
technologies.  All data capacities and transfer rates are subject to change.

Media
=====

Exabyte provides various types of media cartridges, as well as cleaning
cartridges and data cartridge holders, for its tape drive products.  The high-
quality media, produced by multiple third parties, is available in different
lengths to handle various data storage requirements. Sales of media and media
related products represented approximately 30%, 23% and 15% of sales in 1999,
1998 and 1997, respectively.
<PAGE> 8
The growth of Exabyte's current and future MammothTape(TM) drives is dependent
upon the continuous supply of AME media. There are several risks associated
with dependence on this type of media, including possible delays or
cancellations of product shipments by the Company if the media is not received
on a timely basis or at an acceptable quality level. See "RISK FACTORS--Media
Dependence" below.

AME with SmartClean(TM)
-----------------------
AME media with SmartClean(TM) technology is used exclusively by M2(TM) and
includes a section of cleaning tape at the beginning of each data cartridge.
This cleaning tape is specifically designed to remove chemical films that can
build up on heads. These films are caused by organic compounds and cannot be
removed by other cleaning methods. The M2(TM) drive keeps statistics on its
own operation and activates the SmartClean(TM) technology only when the drive
needs cleaning.  With normal use, extra cleaning cartridges are not needed.

AME Media
---------
Formulated specifically for Exabyte MammothTape(TM) tape drives, Exabyte AME
tape offers expanded recording capacity and low abrasivity, which reduces
mechanical wear. AME magnetic material is vertically aligned. This unique
orientation and the absence of binder components on the media gives AME higher
capacity and superior signal strength. AME's specially formulated backcoating
dramatically reduces the buildup of static electricity and debris, greatly
reducing the chance of read/write errors.

MP Media
--------
Exatape 8mm data-grade metal particle ("MP") media is designed to optimize
drive performance and increases data integrity. The only media recommended for
use in Exabyte Eliant(TM)820 tape drives and libraries, Exatape is laboratory
certified. A special cartridge design resists contamination for prolonged shelf
life.

The following table shows the compatibility of Exabyte's media with Exabyte's
MammothTape(TM) and 8mm technology drives:

<TABLE>
<CAPTION>
Exabyte Media Compatibility
---------------------------
Media                        M2(TM)           Mammoth           Mammoth-LT       Eliant(TM)820
=====                        ======           =======           ==========       =============
<S>                          <C>              <C>               <C>              <C>
Metal Particle               NS*              Read Only         Read Only        Read/Write
AME                          Read             Read/Write        Read/Write       NS*
AME with SmartClean(TM)      Read/Write       NS*               NS*              NS*
</TABLE>
*NS = Not Supported

NetStorM(TM)
============

NetStorm(TM), Exabyte's network storage management initiative, is designed
to optimize the performance and management capabilities of Exabyte's drives,
and libraries, each being certified with other vendors' products. From network
backup through complex storage networks (SANs), NetStorM(TM) is designed to
provide reliable, high-performance data solutions.
<PAGE> 9
A SAN is a secondary network dedicated to backup and storage functions. The
main purpose of a SAN is to centralize the storage function and relieve the
primary network of massive data transfers that can slow it down. A SAN provides
all the benefits of network backup with the ability to transport data over long
distances. It also provides increased manageability and high performance.

Exabyte's library monitor provides Fibre Channel connectivity and Internet-
enabled, Java-based out-of-band device management. The library monitor offers
certified interoperability and end-to-end storage management capabilities,
relying on compatibility with leading Internet service providers including
CreekPath, Computer Associates, Veritas, and Hewlett-Packard to deliver
management functions.

Service and Support
===================

Exabyte provides a full range of warranty and post-warranty support services
for Exabyte's library, tape drive, and media products.  These services, which
are delivered through a worldwide network of service centers and authorized
service providers, support Exabyte's OEM and reseller customers, as well as end
users, in the deployment, operation and maintenance of Exabyte products.

In addition to Exabyte's standard service and support offerings, the Company
offers a support package, SupportSuite(TM), which consists of award-winning,
international service and support offerings to help customers integrate the
Company's products while protecting the customer's investment in Exabyte
technology. Exabyte's SupportSuite(TM) spans entire product life cycles,
providing a full range of data storage, migration, recovery, and storage
automation services to ensure ongoing data protection.

In 1999, revenue from service and support programs accounted for 7% of total
revenue, while in 1998 and 1997 these programs accounted for 7% and 6% of
revenues, respectively.

CreekPath Systems
=================

The Company's wholly-owned subsidiary, CreekPath Systems, Inc. ("CreekPath"),
was created in December 1999 to leverage Exabyte's investments and
expertise in Storage Area Networks (SANs), Fibre Channel and Java-based
software for storage resource management.  CreekPath delivers high performance
and high availability data solutions behind web servers by integrating SAN
solutions, including switches, routers, tape libraries and RAID, together with
Java-based management software and leading SAN data management solutions.
CreekPath will use these technologies to deliver a storage service to Internet
companies.  As with any new venture, risks include the ability to hire
appropriate personnel, capitalization of the plan, acceptance of products and
services in a new market, and the availability of competitive products and
services in the target market.

MARKETING AND CUSTOMERS
=======================

The Company markets its products worldwide to OEMs and resellers, and provides
services directly to OEMs and to the consumers of Exabyte's reseller customers.
Initial sales of new products are often made to resellers who are usually
quicker to evaluate, integrate, and adopt new technology. OEM sales generally
increase (relative to reseller sales) as the new product successfully completes
the necessary qualification process. In particular, Exabyte's M2(TM) tape
<Page 10>

drive is dependent upon OEM adoption for its success.  For a description of
the risks associated with Exabyte's customers and customer dependence, see
"RISK FACTORS--Mammoth-2," "RISK FACTORS--Customer Dependence," "RISK FACTORS--
Market Demand" and "RISK FACTORS--Year 2000 Compliance" below.

OEMs
====
OEM customers incorporate Exabyte products as part of their own systems.
Exabyte works closely with its OEM customers during early product development
stages to help ensure Exabyte's products will readily integrate into the OEM's
systems.

The sales cycle for an OEM typically covers many months.  During this time,
the OEM evaluates the technology, qualifies the product specifications and
verifies Exabyte's compliance with product specifications.  The OEM then
integrates the product into its system and publicly announces the integration
toward the end of the sales cycle before volume shipments of Exabyte's products
are made to the OEM.  Product sales to OEMs represented 38% of total sales in
1999. In 1998 and 1997, these sales were 46% and 49%, respectively, of total
sales.

Resellers
=========
Our reseller channel customers purchase products for resale and they may
provide services to their customers, such as:

- distribution;
- financial terms and conditions;
- pre-sales, sales and/or post-sales system upgrades; or
- other value-added products and/or services.

Even though we have no obligation, we support some reseller channel customers
by providing marketing and technical support directly to them or their
consumers.  As a result, we may incur certain additional costs for these sales.
Other costs and risks associated with our reseller channel customers may
include:

- inventory price protections;
- stock rotation obligations;
- short term marketing promotions; and
- customer and consumer rebates.

The reseller business is also characterized by relatively short order lead
times which limit our ability to forecast sales to these customers. See
"RISK FACTORS--Market Demand" below.

Sales to resellers represented approximately 58%, 50% and 46% of sales in
1999, 1998 and 1997, respectively.

International
=============
Exabyte also markets its products overseas directly to international OEMs and
resellers.  In addition, the Company also serves OEMs and end users through
its international resellers.  Each of the Company's international markets
is served by resellers with rights to sell the Company's products in a country
or group of countries. In addition, many of Exabyte's domestic customers ship
a significant portion of Exabyte's products to their overseas customers. Direct

<PAGE> 11

international sales accounted for approximately 34%, 30%, and 32% of sales in
1999, 1998, and 1997, respectively. (See Note 9 of Notes to Consolidated
Financial Statements.)

Currently, a very small percentage of the Company's international sales are
denominated in foreign currencies and are affected by foreign exchange rate
fluctuations, as well as the European conversion to the euro.  In addition,
changes in the foreign exchange rates or the euro conversion may adversely
affect the volume of sales denominated in U.S. dollars to overseas customers.
Exabyte's sales are also subject to risks common to export activities,
including government regulation or seizure of property, tariffs, and import
restrictions.  For a description of these and other risks associated with
international sales, See "RISK FACTORS--Foreign Sales" below.

Principal Customers
===================

A partial list of Exabyte's OEM and reseller customers includes Bull S.A.,
Fujitsu Siemens Computers, IBM, Ingram Micro, Merisel, NCR, Sun Microsystems
and Tech Data.

IBM, Sun Microsystems and Ingram Micro were the only three customers accounting
for 10% or more of Exabyte's sales during fiscal 1999 and 1998, while IBM and
Sun Microsystems were the only two customers who accounted for 10% or more of
sales during fiscal year 1997.  IBM accounted for 15% of sales in 1999 and 15%
and 17% of sales in 1998 and 1997, respectively. Sun Microsystems accounted for
11% of sales in 1999 and 11% and 13% of sales in 1998 and 1997 respectively.
Ingram Micro accounted for 14% of sales in 1999 and 13% of sales in 1998.
These three customers accounted for an aggregate of 40% of sales in 1999.

Loss of, or a significant reduction in sales to, any of Exabyte's key customers
would have a material adverse effect on the Company's results of operations.
For a description of these and other risks associated with Exabyte's customers
and customer dependence, see "RISK FACTORS--Customer Dependence" and "RISK
FACTORS--Market Demand" below.

COMPETITION
===========

The data storage market is extremely competitive and subject to rapid
technological change.  The Company believes that competition in the data
storage market will continue to increase, particularly because manufacturers
of all types of storage technologies compete for a limited number of customers.
The Company believes that the main competitive factors considered by these
customers are storage capacity, data transfer rate, price/performance,
innovation, product quality and reliability, timing of new product
introductions, volume availability, customer support and the company's
financial strength.

Numerous companies are engaged in the research, development and commercial-
ization of data storage products, including computer manufacturers such as IBM
and Hewlett-Packard, that incorporate their own storage products into their
systems.  Some of the Company's current and potential competitors have
significantly greater financial, technical, and marketing resources than
Exabyte.  There can be no assurance that they will not devote those resources
to the aggressive marketing of helical scan, mini cartridge, half-inch
cartridge, optical or other storage product technologies.  Future developments
of tape and optical technologies, as well as new forms of storage technologies,
<Page 12>

could create additional, significant competition to Exabyte. Other risks
include loss of market share, timing to market, price erosion and pricing
pressure. For a description of these and other risks associated with Exabyte's
competition, see "RISK FACTORS--Mammoth-2" and "RISK FACTORS--Competition"
below.

Exabyte's M2(TM) tape drive faces significant competition from current and
announced tape drive products manufactured by Quantum, Sony and the LTO(RTM)
Consortium.  Some of these future products assert greater data capacities and
transfer rates than M2(TM).  The following table sets forth a comparison of
Exabyte's M2(TM) and its competitors.  The Company believes all data and
expected availability dates shown below are accurate as of the date of filing.
However, there can be no assurance that any of the below information will not
change in the future.

<TABLE>
<CAPTION>
                                         CAPACITY        TRANSFER RATE
DRIVE           MANUFACTURER             (Native)          (Native)           AVAILABILITY
-----           ------------             --------        -------------        ------------
<S>             <C>                      <C>              <C>                 <C>
M2(TM)          Exabyte                    60GB            12GB/sec           Now Shipping
DLT8000         Quantum                    40GB             6GB/sec           Now Shipping
AIT-2           Sony                       50GB             6GB/sec           Now Shipping
LTO(RTM)        LTO(RTM) Consortium       100GB            15GB/sec           2nd Half of 2000
SuperDLT        Quantum                   100GB            10GB/sec           2nd Half of 2000
M3(TM)          Exabyte                   120GB            20GB/sec           2001
AIT-3           Sony                      100GB            12GB/sec           2001
</TABLE>

Further, the Company faces competition for its tape drives (excluding M2(TM))
and robotic tape library products from companies offering 8mm, half-inch, 4mm
and mini-cartridge products.

There are several companies which offer competitive media products.  Exabyte's
service programs compete with those offered by independent service providers.

MANUFACTURING
=============

Exabyte manufactures parts or complete units of its tape drive and library
products.  Exabyte's Scotland facility customizes generic tape drives to meet
customer-specific requirements for Exabyte's European customers.  The Company
currently employs just-in-time manufacturing techniques emphasizing flexibility
and continuous product flow.  These techniques depend on uninterrupted access
to high-quality, competitively priced components in required volumes. The
Company has a large number of sole-source dependencies for such components.
Exabyte has executed master purchase agreements with some of its sole-source
suppliers and conducts business with the rest of its suppliers on a purchase
order basis.  Reliance on sole-source suppliers can result in possible
<PAGE> 13
shortages of key components, reduced control over delivery schedules,
manufacturing yields, quality and costs.  See "RISK FACTORS--Supplier
Dependence" below.  Further, many such components are sourced from suppliers
located outside the U.S.  See "RISK FACTORS--Foreign Sourcing" below.

Exabyte obtains key materials and components necessary for manufacturing its
products from its German subsidiary, Exabyte Magnetics GmbH ("EMG"), as well
<PAGE> 13

as from a number of third-party suppliers.  Many of these key components are
made to the Company's specifications and are acquired from sole sources.
See "RISK FACTORS--Supplier Dependence" and "RISK FACTORS--Mammoth-2" below.

The Company manufactures a mechanical deck mechanism for its MammothTape(TM)
tape drive products.  Production of these deck assemblies requires a more
complex manufacturing process than the Company had previously undertaken.
Difficulties in manufacturing this deck assembly caused production constraints
for Exabyte's Mammoth tape drive in the past.  There can be no assurance that
such problems will not occur again in the future, particularly with M2(TM) or
future MammothTape(TM) products.  For a description of the risks associated
with the production of the Company's MammothTape(TM) product line, see "RISK
FACTORS--Mammoth-2," "RISK FACTORS--Product Development" and "RISK FACTORS--
Media Dependence" below.

Among the many key components for Exabyte's products and the supplier(s)
supplying the components are:

     Component                          Supplier(s)
     ---------                          ---------
     8mm tape decks.....................Hitachi
     Circuit boards.....................Solectron
                                        SCI Systems
     Recording heads....................Alps
                                        EMG
     Reel Motor.........................Kumagaya
     Cartridge Loader...................Yano
     Misc. Deck Components..............Kenseisha
     AME Media..........................Sony
                                        MEI
                                        TDK

Exabyte also contracts with third parties to manufacture certain product
components.  For a description of the risks associated with manufacturing,
see "RISK FACTORS--Third Party Contract Manufacturing" and "RISK FACTORS--
Patent Infringement and Proprietary Rights" below.

For a description of these and other risks associated with Exabyte's suppliers,
see "RISK FACTORS--Year 2000 Compliance", "RISK FACTORS--Supplier Dependence"
and "RISK FACTORS--Foreign Sourcing" below.

Hitachi
=======
On April 22, 1999, Exabyte entered into a joint development agreement with
Hitachi, Ltd. ("Hitachi") for the development of Exabyte's future Mammoth-3
tape drive. The development and introduction of M3(TM) depends heavily upon
the success of this joint development relationship.

In addition, on December 20, 1999, the Company entered into a second joint
development agreement with Hitachi for the development of a scanner for
Exabyte's M2(TM) tape drive. Although scanners for Exabyte's MammothTape(TM)
drives are currently supplied by EMG, the procurement of a second source for
the supply of scanners for M2(TM) is intended to reduce the risk of the
development of this tape drive.

Both agreements provide that Exabyte shall retain ownership rights to any
jointly developed product under the agreements.  However, the agreements

<PAGE> 14

further provide that Hitachi has the right to license the technology, royalty-
free, from Exabyte for any non-data storage purpose.

There can be no assurance that the joint development agreements will be
successful or that any component developed under such agreements will meet
the Company's specifications or be developed at an acceptable cost to the
Company, which may cause a significant delay or even termination of the
production of the tape drives, and would have a material adverse effect on
the Company's competitive position and its results of operations.  See "RISK
FACTORS--Mammoth-2," "RISK FACTORS--Supplier Dependence" "RISK FACTORS--Third
Party Contract Manufacturing" and "RISK FACTORS--Foreign Sourcing" below.

In addition, Hitachi also supplies the tape deck components for Exabyte's
Eliant(TM)820 tape drives pursuant to an agreement dated December 11, 1996.
The agreement has a term of three years, subject to two automatic 12-month
extensions. While the purchase agreement contains certain restrictions
regarding the sale of Hitachi's tape decks or customized parts to third
parties, such limitations do not prevent Hitachi from individually developing
similar components and selling such components to third parties or
incorporating such components into its own competitive products.

There can be no assurance that the decks or other components supplied or
developed by Hitachi will be successful or continue to be available at current
supply levels or prices.  The Company's inability to obtain decks or components
at a commercially reasonable cost would cause a significant delay or even
termination of the production of certain of the Company's tape drive products,
and would have a material adverse effect on the Company's competitive position
and its results of operations.

For a description of these and other risks associated with Hitachi or
Exabyte's other suppliers, see "RISK FACTORS--Mammoth-2," "RISK FACTORS--
Supplier Dependence" and "RISK FACTORS--Foreign Sourcing" below.

RESEARCH AND DEVELOPMENT
========================

Exabyte participates in an industry that is subject to rapid technological
changes and believes its future success depends on its ability to extend its
technology and further the development of highly reliable tape drive products
with competitive price performance characteristics.  The Company focuses its
research and development efforts primarily on developing new products with
improved price performance and enhancing its current products.  There are
numerous risks associated with Exabyte's research and development efforts.
For a description of these risks, see "RISK FACTORS--Product Development"
below.

The Company's research and development expenses were approximately $35.7
million, $29.9 million and $40.9 million in 1999, 1998 and 1997, respectively.
Except for certain software development costs, the Company's research and
development costs are expensed as incurred.








<PAGE> 15
PATENTS AND PROPRIETARY INFORMATION
===================================

Exabyte relies on a combination of patents, copyright and trade secret
protections, non-disclosure agreements, and licensing arrangements to establish
and protect its proprietary rights.  During 1999, 18 patents were issued for
Exabyte in the United States, of which four have been allowed but have not yet
issued, all relating to technologies and other aspects of Exabyte tape drive
and robotic tape library products.  However, the Company believes that, because
of the rapid pace of technological change in the tape storage industry, factors
such as knowledge, ability and experience of Exabyte's employees, new product
introductions and frequent product enhancements are often more significant
than patent and trade secret protection.

Exabyte licenses its technology to third party manufacturers to allow them
to manufacture Exabyte's products.  Additionally, Exabyte has granted
manufacturing licenses to certain customers which allow them to manufacture
and sell the Company's products should specific events occur, such as the
Company's inability to perform its supply obligations.  Exabyte also enters
into joint development agreements with third parties for the development of
product components.  Under these agreements, the third parties generally have
joint ownership of certain technologies related to the component being
developed. The dissolution of these agreements could result in significant
costs and other risks to the Company.  See "RISK FACTORS--Patent Infringement
and Proprietary Rights" below.

There are a number of risks associated with Exabyte's proprietary rights.
For a description of these risks, see "RISK FACTORS--Patent Infringement and
Proprietary Rights" and "RISK FACTORS--Third Party Contract Manufacturing"
below.

BACKLOG
=======

Backlog consists of purchase orders for which a delivery schedule within six
months has been specified by the customer.  The Company's total backlog as of
January 1, 2000 and January 2, 1999 totaled approximately $15.5 million and
$19.8 million, respectively. Exabyte's customers typically are not obligated
to purchase minimum quantities of the Company's products.  Lead times for the
release of purchase orders depend upon the scheduling practices of each
customer. Exabyte believes that the rate of new orders will vary significantly
from month to month.  Customers may cancel or reschedule orders without
significant penalty.  In addition, the Company's actual shipments depend upon
its production capacity and component availability. For these reasons, the
Company's backlog as of any particular date may not be indicative of its
actual sales for any succeeding fiscal period.

For a description of these and other risks associated with Exabyte's backlog
management, see "RISK FACTORS--Inventory Write-downs and Special Charges" and
"RISK FACTORS--Customer Dependence" below.

FOREIGN EXCHANGE AND IMPORT RESTRICTIONS
========================================

Many of the Company's key components and products are currently or may be
manufactured overseas in countries such as Japan, Germany, China, Singapore,
Indonesia and Malaysia.  Additionally, a substantial portion of Exabyte's
products incorporate subassemblies and components purchased from Japanese or
other overseas suppliers in yen or another foreign currency.  The Company's
<PAGE> 16
results of operations, therefore, may be materially affected by fluctuations
in currency exchange rates.  The Company, from time to time, enters into
foreign currency forward contracts to hedge the purchase of certain inventory
components from Japanese suppliers.  (See Note 1 of Notes to the Consolidated
Financial Statements.)  See "RISK FACTORS-Market Risk" below.

Exabyte's international involvement is also subject to other risks common to
foreign operations, including government regulations, foreign exchange or
import restrictions or tariffs imposed by the U.S. Government on products or
components shipped from another country.  Additionally, the sale of Exabyte's
products to domestic federal or state agencies may be limited by the Buy
America Act or the Trade Agreement Act to the extent the Company incorporates
components produced overseas into its products.

The Company's subsidiaries located in The Netherlands, Germany, Japan, Canada
and Singapore operate under their respective local currencies.  (See Note 1 of
Notes to Consolidated Financial Statements.)  As a result, any amounts payable
to a subsidiary or owed by a subsidiary are subject to the foreign exchange
rate applicable between the U.S. dollar and the local currency and could have
a material adverse effect on the Company's results of operations.  In addition,
the Company's foreign operations are subject to the risks generally applicable
to the conduct of business in such countries.  For a description of these and
other risks associated with Exabyte's foreign involvement, see "RISK FACTORS--
Foreign Operations," "RISK FACTORS--Foreign Sourcing" and "RISK FACTORS--
Foreign Sales" below.

EMPLOYEES
=========

As of January 29, 2000, the Company had 1,021 full-time and part-time
employees worldwide, including 132 in engineering, 139 in manufacturing, 35
in marketing, 65 in quality control, 64 in general and administrative, 40 in
information systems, 53 in services, 63 in logistics, 69 in technical support,
121 in sales, 225 in its German, Japan and Scotland subsidiaries and 15 in
CreekPath Systems, Inc. None of the Company's employees is represented by a
labor union although Exabyte's German subsidiary is subject to an organized
Works Council.

The Company reduced its workforce in October 1997 and again in January 1998,
partially as a result of its decision to close its Eagle(RTM) division.
These reductions resulted in the involuntary termination of approximately 200
employees.  In August 1999, the Company reduced its workforce again, as a
result of the re-consolidation of its segments and the outsourcing of certain
service functions to third parties, resulting in the involuntary termination
of approximately 200 employees at the end of 1999.

The Company faces extreme competition for key employees. Success depends to a
significant extent upon the ability to attract, retain and motivate key
engineering, marketing, sales, manufacturing, support and executive personnel.
For a description of the risks associated with retaining key employees, see
"RISK FACTORS--Key Employees" below.








<PAGE> 17
RISK FACTORS
============

Mammoth-2
=========

The Company believes that its future success depends largely on the success
of its Mammoth-2 tape drive.  There are several risks related to the success
of M2(TM), including supply, product transition, OEM qualification and
adoption, and media availability.

Manufacturing
-------------
Should the Company be unable to manufacture M2(TM) in sufficient enough
quantities to fulfill current or potential backlog orders, it could have a
material adverse effect on the Company's results of operations. Exabyte's
German subsidiary, EMG, develops, manufactures and supplies scanners and
recording heads, key components of M2(TM), to the Company.  These components
require a high degree of manufacturing and technical expertise.  The Company
is highly dependent upon the continuous supply of these components for the
success of its M2(TM) tape drive.  Any inability of EMG to supply a sufficient
number of high-quality components could have a material adverse effect on the
Company's results of operations.

Product Transition
------------------
The Company is experiencing a period of business and product transition
related to its M2(TM) product.  Due to the recent release of M2(TM), customers
may delay or cancel orders of Mammoth tape drives, which would have a material
adverse effect on the Company's results of operations.

OEM Qualification and Adoption
------------------------------
The success of M2(TM) is heavily dependent upon the qualification and adoption
of the drive by existing and potential OEM customers.  Should M2(TM) not pass
the qualification process of key OEM's, or should any key OEM fail to adopt
M2(TM), it could have a material adverse impact on the Company's results of
operations and may adversely affect Exabyte's competitive position.

One factor in the adoption of M2(TM) by potential OEM customers is the
availability of a feature in the M2(TM) product to enable it to read data
written by the earlier generation Mammoth tape drives.  The Company expects
that this backward-read feature will be available in the second quarter
of 2000.  Failure to achieve this backward-read feature on a timely basis
could adversely affect OEM adoption of the M2(TM) product, the Company's
competitive position and its results of operations.

Product Development
===================

Exabyte participates in an industry that is subject to rapid technological
change.  The Company believes that its future success will depend on its
ability to apply and extend its technology and further develop reliable tape
subsystems and robotic tape libraries with competitive price performance and
quality characteristics.  Accordingly, Exabyte's ability to compete
successfully depends on continued enhancements to its existing products and the
timely development of new products that meet the changing needs of users.  The


<PAGE> 18
Company has experienced delays from time to time meeting internal product
development schedules.  In the future, the Company may encounter difficulties
that could delay or prevent future product development.

Exabyte continually assesses its product cycles in terms of product
introduction and withdrawal.  Any failure by the Company to accurately
estimate the timing of new product introductions may result in the premature
or delayed withdrawal of its existing product lines.  The premature withdrawal
of an existing product line could result in the loss of revenue and earnings
contribution from that product line.  The delayed withdrawal of an existing
product line could result in the Company's assumption of excess product
inventory.  Additionally, the premature or delayed introduction of a product
could adversely affect the sales or withdrawal timing of an existing product.

Failure to accurately time product introductions and withdrawals could have a
material adverse effect on the Company's results of operations. Additionally,
the Company's inability to successfully introduce announced products would
have a material adverse effect on the Company's results of operations.

Exabyte's Mammoth and M2(TM) tape drives incorporate a deck assembly mechanism
manufactured by the Company.  Prior to the introduction of Mammoth, the
Company's manufacturing experience was largely limited to assembling and
testing components purchased from third parties.  Production of this deck
assembly requires a complex manufacturing process that is partially derived
from its previous experience in manufacturing the deck assembly for its Mammoth
tape drive.  There can be no assurance that any such manufacturing efforts will
be successful.  Should the Company experience any difficulties in the
manufacture of the M2(TM) deck assembly, it could cause the Company to delay
or cancel shipments of the M2(TM) drive, which would have a material adverse
effect on the Company's results of operations, and would have a material impact
on the Company's competitive position.

Supplier Dependence
===================

The Company relies on sole-source suppliers for certain critical components.
A reliance on sole-source suppliers involves several risks, including possible
shortages of certain key components and reduced control over delivery
schedules, manufacturing yields, quality and costs.  The Company has
experienced problems with the quality of and interruptions in the supply of
sole-source components in the past.  Any future yield, quality, delivery or
supply problems with any of these suppliers could force Exabyte to delay or
cancel shipments of its products, which could have a material adverse effect on
the Company's competitive position and its results of operations.

These relationships subject Exabyte to supply or technology dependencies. See
"RISK FACTORS--Patent Infringement and Proprietary Rights."

Hitachi
-------
Should Hitachi be unable to develop or produce the necessary components
pursuant to the joint development agreements entered into by the Company
and Hitachi to the Company's specifications or at an acceptable cost to the
Company, it could adversely affect Exabyte's ability to successfully develop
and/or introduce its Mammoth-3 tape drive or manufacture its M2(TM) tape drive.
Additionally, even if Hitachi does successfully develop and produce the
necessary components, there can be no assurance that the Company will be able
to incorporate such components into its drives, or that any such incorporation
will be at an acceptable cost to the Company.  Any inability to incorporate
<PAGE> 19
the components developed by Hitachi, for any of the above reasons or otherwise,
could have a material adverse effect on the Company's results of operations and
could adversely impact its competitive position.

Additionally, Hitachi supplies mechanical tape decks for Exabyte's
Eliant(TM)820 tape drive products.  The Company may encounter delays in or
termination of the production of these tape drives should supply problems
arise with Hitachi.  While Exabyte has a supply contract with Hitachi, there
can be no assurance that the supply of tape decks will continue at required
levels, or that prices will remain at the current levels.

ASIC Chips
----------
The Company obtains its ASIC chips for its MammothTape(TM) product line from
several different sources.  However, because of the substantial lead-time
necessary for Exabyte to qualify other suppliers, Exabyte's inability to
obtain an adequate supply of chips at a competitive price and high quality
from any of its ASIC chip suppliers could cause the Company to delay or cancel
shipments of its MammothTape(TM) products, which could have a material adverse
effect on the Company's competitive position and its results of operations.

EMG
---
Exabyte's German subsidiary, EMG, develops, manufactures and supplies scanners
and recording heads, key components of Exabyte's Mammoth and M2(TM) products.
These components require a high degree of manufacturing and technical
expertise. There can be no assurance that the Company will not experience
production constraints in connection with its M2(TM) product, which would
have a material adverse effect on the Company's results of operations.

Liquidity
=========

The Company believes its existing sources of liquidity and funds expected to
be generated from operations will provide adequate cash to fund anticipated
working capital and other cash requirements through fiscal 2000 and on a long
term basis. On April 4, 2000, the Company obtained a commitment on a new $20.0
million line of credit with Congress Financial Corporation, a subsidiary of
First Union National Bank.  Under the terms of the commitment, Exabyte may
borrow up to 80% of eligible accounts receivable.  The line will be secured
by accounts receivable and inventory.  Borrowings under the line will bear
interest at the lower of prime plus .5% or LIBOR plus 2.5%.  The formal
agreement is expected to close during April 2000. If actual operating results
differ from projected results, the Company may be required to secure additional
sources of financing. There can be no assurance that the Company will be able
to procure any necessary additional financing or that such financing will be
on terms acceptable or beneficial to the Company. (See MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, "LIQUIDITY AND
CAPITAL RESOURCES")

Inventory/Logistics
===================

Some of Exabyte's customers may require as a part of the supplier relationship
that Exabyte maintain inventory on behalf of the customer at one or more third
party warehouse locations.  Exabyte would be further required to retain title
and ownership of any such inventory until it is physically pulled by the
customer from the warehouse inventory stock.

<PAGE> 20
Operating under this business model would cause the Company to incur additional
costs associated with the shipment, maintenance and carrying costs of its
inventory.  Although the Company may attempt to pass these increased costs
to the customer through increased product pricing, there can be no assurance
that any such attempt would be successful.  Should the Company be forced to
internally absorb these additional costs, it could have a material adverse
effect on the Company's results of operations.

In addition, the Company may be required to increase its inventory
levels to assure compliance with the customer's new inventory requirements.
Should the Company be unable to adequately manage such an increase in its
inventory, it may result in the Company incurring special charges or inventory
write-downs, or establishing additional inventory reserves, which would have a
material adverse effect on the Company's results of operations.

Competition
===========

The tape storage market is highly competitive and subject to rapid technology
change, and the Company expects competition to increase.  Competition has
resulted in price erosion of Exabyte's products in the past and is expected to
occur in the future.  The Company may also face more significant competitive
challenges in the future in the form of loss of market share, pricing pressure
and otherwise, particularly in the library market.  Numerous companies are
engaged in researching, developing, and commercializing data storage products.
Additionally, some of the Company's current and prospective competitors have
significantly greater financial, technical, manufacturing and marketing
resources than Exabyte.  There can be no assurance that these competitors will
not devote their resources to the aggressive marketing of storage product
technologies.  There can be no assurance that these technologies will
not be equivalent or superior to the Company's technology or render the
Company's products obsolete or non-competitive.  The Company's ability to
successfully compete in the tape storage market depends, in part, on accessing
and adapting to any such technological changes. In addition, the industry has
experienced a number of consolidations which have increased and may continue to
increase the competitive pressures on Exabyte.

Exabyte's M2(TM) tape drive faces significant competition from current and
announced tape drive products manufactured by Quantum, Sony and the LTO(RTM)
Consortium.  Some of these future products assert greater data capacities and
transfer rates than M2(TM). Further, the Company faces competition for its tape
drives (excluding M2(TM)) and robotic tape library products from companies
offering 8mm, half-inch, 4mm and mini-cartridge products.  Significant
competition may also develop from companies offering erasable and non-erasable
optical disks.  In addition, other companies may introduce in the future
competitive storage tape drives based on new technologies that may render
the Company's products obsolete or non-competitive.

Key Employees
=============

The development, introduction and success of Exabyte's products depend largely
on the continued employment of certain key employees.  The loss of or inability
to recruit key employees could delay internal product development schedules,
interrupt team continuity and subject Exabyte to the risk of losing proprietary
information to competitors or other third parties.
Exabyte has in the past lost key employees to competitors, including start-up
companies in direct competition with Exabyte, and other companies and may
likely lose key employees in the future.  Although Exabyte has incentive
<PAGE> 21
programs in place that are designed to encourage the continuous employment
and recruitment of certain key employees, there can be no assurance that such
programs will be successful.  Any such loss of key employees could have a
material adverse effect on the Company's results of operations.

Media Dependence
================

Exabyte's MammothTape(TM) family is exclusively dependent upon the continuous
supply of high-quality AME media. Exabyte's ability to sustain growth in the
MammothTape(TM) product family depends on the availability of this media, which
is produced to the Company's specifications.  Currently, AME media is sourced
from Matsushita Electric Industrial Co. Ltd. ("MEI"), TDK Corporation ("TDK")
and Sony.  In the event such media is not available in sufficient volume, at
an acceptable quality level and at a competitive price, the Company could be
forced to delay or cancel shipments of current Mammoth tape drive products and
associated libraries, or delay the introduction of future MammothTape(TM) tape
drive products, which could have a material adverse effect on the Company's
competitive position and its results of operations.

Additionally, M2(TM) is heavily dependent upon the supply of AME media with
SmartClean(TM) technology.  This media is currently supplied solely from MEI.
Exabyte is currently working with TDK in the early stages of its qualification
process for this media. There can be no assurance that any media supplied by
TDK will pass the Company's qualification processes or that the supplier's
production of the media will be in the volume or of the quality required by
Exabyte. Should Exabyte be unable to procure AME media with SmartClean(TM) in
sufficient quantities and at acceptable quality levels, the Company may be
forced to delay or cancel shipments of M2, which would have an adverse affect
on the Company's competitive position and would have a material adverse impact
on the Company's results of operations.

Patent Infringement and Propriety Rights
========================================

The Company relies on a combination of patents, copyright and trade secret
protection, non-disclosure agreements and licensing arrangements to establish
and protect its proprietary rights. Although Exabyte continues to file patent
applications for its products, there can be no assurance that patents will
issue from any pending applications or, if patents do issue, that any claims
allowed will be broad enough to protect the Company's technology.  In addition,
there can be no assurance that any patents issued to the Company will not be
challenged, invalidated, or circumvented, or that any rights granted thereunder
would provide proprietary protection to the Company.

The Company has received in the past, and may receive in the future,
communications from third parties asserting that the Company's products
infringe their proprietary rights.  The Company has also received letters from
third parties seeking indemnification from infringement against other third
parties.  There can be no assurance that any of these claims will not result in
prolonged and costly litigation. While it may be necessary or desirable in the
future to obtain licenses relating to one or more of Exabyte's products or
current or future technologies, there can be no assurance that Exabyte will
be able to do so on commercially reasonable terms. The inability to obtain any
required license or to obtain such license on commercially reasonable terms
could have a material adverse effect on the Company's results of operations.
Although the Company continues to implement protective measures and intends
to defend its proprietary rights, policing unauthorized use of Exabyte's

<PAGE> 22
technology or products is difficult and there can be no assurance that
these measures will be successful.  In addition, the laws of certain foreign
countries may not protect the Company's proprietary rights to the same extent
as do the laws of the United States.

Additionally, the mechanized deck assembly incorporated in the MammothTape(TM)
product line is produced by Exabyte rather than supplied from a third party.
As such, the Company does not benefit from supplier indemnification regarding
patent or other intellectual property infringement.  There can be no assurance
that the manufacture and/or sale of these tape drives will not infringe the
proprietary rights of third parties.

Third Party Contract Manufacturing
==================================

The Company has contracts with third parties to manufacture certain products.
Third party manufacturing of the Company's products may impair the Company's
ability to establish, maintain or achieve adequate product manufacturing design
standards or product quality levels. Risks associated with the transfer of
product manufacturing to third parties are particularly pronounced in the early
stages of the manufacturing of the product.  A number of the Company's third
party manufacturing programs involve such early-stage manufacturing.

Third party manufacturing of the Company's products is based in part on
technology that the Company believes to be proprietary.  Exabyte may license
this technology to third party manufacturers to enable them to manufacture
products for the Company.  There can be no assurance that such manufacturers
will abide by any use limitations or confidentiality restrictions in such
licenses.  In addition, these manufacturers may develop processes related to
manufacturing the Company's products which they would then own independently or
jointly with the Company.  Any such action would increase Exabyte's reliance on
such manufacturers or would require the Company to obtain a license from such
manufacturers in order to manufacture its products.  There can be no assurance
that any necessary licenses would be available on terms acceptable to the
Company, if available at all.

The Company may enter into contracts with third parties outside the United
States to manufacture certain products or components for Exabyte, which may
impair the Company's ability to establish, maintain or achieve adequate
manufacturing design standards or quality levels.  In addition to normal market
risks for utilizing third party manufacturers, contracting with foreign third
party manufacturers subjects the Company to certain additional exposures,
including political instability, currency controls and fluctuations, and
tariff, import and other restrictions and regulations.  Additionally, the sale
of such products manufactured overseas to domestic federal or state agencies
may be restricted by limitations imposed by the Buy American Act or the Trade
Agreement Act.

Customer Dependence
===================

IBM, Sun Microsystems and Ingram Micro accounted for 15%, 14%, and 11%
respectively, of Exabyte's sales in 1999, accounting for an aggregate of 40%
of sales. None of Exabyte's customers is required to purchase a minimum
quantity of the Company's products, and any customer may cancel or reschedule
orders without significant penalty.  The loss of one or more of these key
customers or substantial cancellations by Exabyte's customers would have a
material adverseeffect on the Company's results of operations.  The Company
has experienced delays in receipt of purchase orders and, on occasion,
<PAGE> 23
anticipated purchase orders have been rescheduled or have not materialized
due to changes in customer requirements.  In addition, significant rescheduling
or deferrals of orders by any of these customers could cause substantial
fluctuations in the Company's quarterly results. Additionally, Exabyte's
library products represent higher-margin business to the Company.  Any
shortfall in the sale of these products would have a greater adverse impact
on the Company's results of operations.

Market Demand
=============

The Company believes that the demand for its products is substantially
dependent upon the demand for workstations, mid-range computer systems and
networks.  These markets tend to be volatile and subject to market shifts,
which may or may not be discernible in advance by Exabyte.  A slowdown in the
demand for such products could have a material adverse effect on the demand
for the Company's products in any given period.  Any demand weakness,
particularly in the reseller channel, which generally represents higher-
margin sales, could have a greater impact on profitability and a material
adverse effect on the Company's results of operations.  Additionally,
inaccuracies in market demand forecasts can quickly result in either
insufficient or excessive inventories and disproportionate overhead expenses.
In particular, the short order lead time characteristic of stales to resellers
limits the Company's ability to forecast these sales.  In 1999, 58% of the
Company's sales were to resellers.

Volatility Of Stock Price
=========================

The market price of the Company's common stock has historically been, and
is expected to continue to be, extremely volatile.  The Company's operating
results have been below the expectations of investors and market analysts in
the past, and are likely to be below expectations again in some future period.
Exabyte's operating results have in the past and may again in the future fall
short of analyst or investor expectations.  Any such shortfall could have an
immediate and significant impact on the market price of the Company's common
stock. Other factors could also have an immediate and significant impact on the
market price of the Company's common stock, including without limitation,
the Company's disclosure of its assessment of its business prospects, new
product announcements by the Company's competitors and general conditions in
the computer market.

In addition, the stock market in recent years has experienced extreme price
and volume fluctuations that have affected the market price of many high
technology companies and that have often been unrelated or disproportionate
to the operating performances of these companies.

Fluctuations In Quarterly Results
=================================

The Company's quarterly results can fluctuate substantially from quarter to
quarter for various reasons.  The markets served by Exabyte are volatile and
subject to market shifts, which may or may not be discernible in advance by
the Company.  The Company's operations and revenues have in the past and will
in the future reflect substantial fluctuations from period to period as a
consequence of delays in product introduction, industry shifts, price erosion,
general economic conditions affecting the timing of orders from customers, as
well as other factors discussed herein.

<PAGE> 24
Management of Business and Product Transitions
==============================================

The Company is currently experiencing a period of rapid business and product
transition.  The Company is also in the process of addressing the complexities
of developing, manufacturing and servicing multiple products which incorporate
several different technologies and which are sold through multiple marketing
channels.  This transition has placed a significant strain on the Company's
management, operational and financial resources, and may continue to do so in
the future. Effective management of this business transition will require
Exabyte to continually implement and improve its operational, financial and
information systems and to expand, train and manage its employee base.

Inventory Write-downs and Special Charges
=========================================

The Company may be unable to manage inventory levels to meet changing patterns
of product demand, product transitions and new product introductions.  Such
inability may result in the Company's incurring a special charge or inventory
write-down, or establishing a reserve, any of which would have a material
adverse effect on its results of operations.  The Company has incurred special
charges and/or inventory write-downs in the past which have had a material
adverse effect on the Company's results of operations.  There can be no
assurance that additional reserves, write-downs or write-offs will not be
taken in the future and that such actions will not have a material adverse
effect on the Company's results of operations.

Product Quality and Performance
===============================

Any failure of the Company's products, including media, to perform in
accordance with specifications could result in the loss of critical user data.
Such a loss may result in claims against the Company for damages arising from
such data loss.  In addition, the Company may incur costs associated with a
product recall or other corrective action to address product defects, including
latent or epidemic defects.  The Company's results of operations could be
materially adversely affected by the costs related to such corrective action or
the defense of claims and the payment of any judgment or settlement in excess
of any insurance coverage.  While the Company has in the past incurred certain
costs related to product defects, no such costs to date have resulted in a
material adverse effect to the Company's results of operations.

Foreign Sourcing
================

Because many of Exabyte's key components and products are currently or may be
manufactured in Japan, Germany, The Netherlands, China, Singapore, Indonesia
or Malaysia, the Company's results of operations may be materially affected
by fluctuations in currency exchange rates or Europe's conversion to the euro.
A substantial portion of the Company's products incorporate subassemblies and
components purchased from Japanese or other overseas suppliers in yen or other
foreign currencies.  The Company enters into foreign currency forward contracts
to hedge the purchase of certain inventory components from Japanese suppliers.
Additional contractual arrangements may be made, subjecting Exabyte to
additional foreign exchange rate risks. The Company's international involvement
is also subject to certain other risks common to foreign operations, including
government regulation, import restrictions or economic instability.  In
particular, an adverse foreign exchange movement of the U.S. dollar versus

<PAGE> 25
Japanese yen or other currency, or the imposition of import restrictions or
tariffs by the United States government on products or components shipped from
Japan or another country could have a material adverse effect on the Company's
results of operations.

Foreign Sales
=============

Direct international sales accounted for approximately 34% of sales in 1999,
and Exabyte currently expects that direct international sales will continue
to represent a significant portion of the Company's revenue. In addition, many
of the Company's domestic customers ship a significant portion of Exabyte's
products to their customers overseas.  Currently, a very small percentage of
sales are denominated in foreign currencies and may be directly affected by
foreign exchange rate fluctuations.  Changes in the foreign exchange rates
may also affect the volume of sales denominated in U.S. dollars to overseas
customers.  The Company's sales are also subject to risks common to export
activities, including government regulation, tariffs, and import and
environmental restrictions.  Exabyte's international sales may also be
subject to export licensing requirements.

Foreign Operations
==================

The Company's subsidiaries in The Netherlands, Germany, Japan, Canada and
Singapore operate under their respective local currencies. As a result, any
amounts payable to a subsidiary or owed by a subsidiary are subject to the
foreign exchange rate between the U.S. dollar and the applicable local
currency, and could have a material impact on the Company's results of
operations.  In addition, the Company's foreign operations are subject to
the risks generally applicable to the conduct of business in such countries.

Anti-Takeover Provisions
========================

The Company has taken a number of actions which could have the effect of
deterring a hostile takeover or delaying or preventing a change in control
that could result in a premium payment to the Company's stockholders for their
shares or that might otherwise be beneficial to the stockholders.  The Company
has adopted a stockholder rights plan which could cause substantial dilution of
stock to a person who attempts to acquire the Company on terms not approved by
the Board of Directors.  In addition, the Company's Restated Certificate of
Incorporation and By-laws contain provisions which may delay or prevent a
change in control.  These provisions include:(i) the classification of the
Board; (ii) the authority of the Board to issue preferred stock without further
action by the stockholders, with such voting rights and other provisions as
the Board may determine; (iii) the requirement that actions by stockholders
be taken at a meeting of stockholders and not by written consent; (iv) the
requirement for advance notice of stockholder proposals and director
nominations;(v) the provision that only the Board may increase the authorized
number of directors; and (vi) the requirement that special meetings of
stockholders may be called only by the Chairman of the Board, President or
majority of directors.

Effective January 26, 1996, the Compensation Committee approved, and the Board
adopted, a severance compensation program ("Severance Program") under which
officers and other key employees of the Company would receive certain severance
payments if they are dismissed from Exabyte within one year after certain
changes in control of the Company occurred.  The Severance Program provides
<PAGE> 26
for a severance payment in varying amounts, not to exceed 12 months of
compensation, depending upon: (i) the time of any such change in control; and
(ii) the position level of the terminated officer or employee.  The Severance
Program further allows, in certain circumstances, accelerating the vesting of
outstanding and unexercised stock options held by the affected officer or
employee.

Securities Suits
================

A large number of companies, directors and officers in the high technology
industry have been subjected to class action and derivative action suits filed
in federal and state courts.  These suits generally allege that the defendants
failed to adequately disclose certain risks.  The Company's results of
operations could be materially affected by the legal costs of defending such
actions, the diversion of management's attention from the Company's business,
and the payment of any judgment or settlement arising out of any such actions
against the Company in the future.  In 1993, the Company successfully defended
a series of such class actions at an immaterial cost to the Company and it is
the Company's belief there are no current or pending securities related actions
against the Company at this time.

Market Risk
===========

In the ordinary course of its operations, the Company is exposed to certain
market risks, primarily changes in foreign currency exchange rates and interest
rates.  Uncertainties that are either nonfinancial or nonquantifiable, such as
political, economic, tax, other regulatory or credit risks are not included in
the following assessment of the Company's market risks.

Foreign Currency Exchange Rates:
The Company has foreign subsidiaries whose operations expose the Company to
foreign currency exchange rate changes  (See Note 1 of Notes to Consolidated
Financial Statements).  Foreign currency exchange rate changes could impact
translations of foreign denominated assets and liabilities into U.S. dollars
and future earnings and cash flows from transactions denominated in different
currencies.  At January 1, 2000, 8.4% of the Company's total assets were
denominated in foreign currencies.  During 1999, 1% of revenue and 13% of
operating expenses were denominated in foreign currencies.  The Company's
exposure to currency exchange rate changes is diversified due to the number
of different countries in which it conducts business.  The Company has
subsidiaries in Germany, the Netherlands, Japan, Singapore and Canada whose
books of record are maintained in their local currency.  Foreign currency
gains and losses will continue to result from fluctuations in the exchange
rates of these subsidiaries' operations compared to the U.S. dollar thereby
impacting future operating results.

The Company purchases certain inventory components and services, denominated
in yen, from Japanese manufacturers.  Generally, such payments are settled at
the prevailing spot rate.  However, from time to time,  the Company enters
into foreign currency forward contracts in anticipation of movements in the
dollar/yen exchange rate to hedge these purchases.  Such contracts are
established with a maturity date within six months of the purchase date.  To
be considered a hedge, contracts must be established for future purchases
denominated in yen.  In circumstances where the timing of hedged purchases is
deferred, the contract maturity dates are extended to cover the deferred
payment.  At January 1, 2000, there were no contracts outstanding.

<PAGE> 27
The Company prepared sensitivity analyses of its exposures from foreign assets
as of January 1, 2000, and of exposure from anticipated foreign revenue,
and operating expenses in 2000 using historical data and anticipated future
activity to assess the impact of hypothetical changes in foreign currency
exchange rates.  Based upon the results of these analyses, the Company
estimates that a 10% change in foreign currency exchange rates from the 1999
year end rates could have a $1.1 million impact on net assets, a $161,000
impact on net sales and a $1.2 million impact on operating expenses.  These
risks are materially similar to the risks presented in the prior year, and
could have a material effect on the Company's results of operations, cash
flows or financial condition for the next year.

The Company also prepared sensitivity analyses of its exposure related to yen
denominated purchases.  Using a hypothetical 10% change in the dollar/yen
exchange rate from the year end rate, and projected 2000 purchases
denominated in yen, the Company estimates a potential $6.3 million impact.
The impact could affect a combination of net income and inventory, and could
have a material effect on the Company's results of operations, cash
flows or financial condition for the next year.

Interest Rates:
At January 1, 2000, investments, including cash equivalents, consist of
held-to-maturity debt securities with maturity dates of nine months or less
(see Note 1 of Notes to Consolidated Financial Statements).  Changes in
interest rates could impact the Company's anticipated interest income.

The Company prepared sensitivity analyses of its interest rate exposures to
assess the impact of hypothetical changes in interest rates.  Based on the
results of these analyses, the Company estimates that a 10% change in
interest rates from the 1999 year end rates could have a $265,000 impact on
results of operations.  This risk is materially similar to the risk presented
in the prior year, and could have a material effect on the Company's results
of operations, cash flows or financial condition for the next year.

Year 2000 Compliance
====================

The phenomenon, known generally as the Year 2000 problem, involves the
potential inability of information or other data-dependent systems to
properly distinguish year references as of the turn of the century.
The Company believes the Year 2000 problem represents a material risk
to the Company.

The Company experienced no disruption of operations during the rollover from
December 31, 1999 to January 1, 2000.  There can be no assurance, however,
that critical system failures will not occur at other critical dates during
the Year 2000.  Should such system failure occur, the Company may be unable
to conduct business or manufacture its products, which could cause a material
adverse effect on the Company's results of operations.

For a full disclosure of the risks associated with the Company's Year 2000
Compliance, see "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS--Year 2000 Compliance" below.






<PAGE> 28
EXECUTIVE OFFICERS OF THE COMPANY
=================================

The executive officers of the Company and their ages as of March 31, 2000,
are as follows:

William L. Marriner    47     Chairman of the Board
                              President and Chief Executive Officer
Stephen F. Smith       50     Vice President, Chief Financial Officer,
                              Corporate Secretary and General Counsel
Farouk Al-Nasser       60     Vice President, General Manager, Data Storage
                              Products
Manfred Benecken       55     Vice President, General Manager, Quality and
                              Support Services
Michael P. Koclanes    43     President, CEO, CreekPath Systems, Inc.


Mr. William L. Marriner, age 47, joined Exabyte in March 1987 as Vice President
of finance and administration and Chief Financial Officer.  He was subsequently
promoted to Senior Vice President in July 1991 and Executive Vice President in
December 1994 and continued to serve as Chief Financial Officer until December
1997. Mr. Marriner was elected acting President and Chief Executive Officer in
January 1997, President, Chief Executive Officer and director in July 1997 and
Chairman of the Board in January 1998.  Prior to joining the Company,
Mr. Marriner held various positions at Storage Technology Corporation from 1978
to 1987, including Vice President of Pacific and Latin American operations,
manager of business planning and administration for international operations
and Assistant to the President.

Mr. Stephen F. Smith, age 50, joined the Company in June 1989 as Exabyte's
General Counsel, and currently holds this position.  Mr. Smith was appointed
Vice President and Chief Financial Officer in December 1997.  Mr. Smith has
also served as Secretary since February 1995.  Prior to joining Exabyte,
Mr. Smith held various positions at Storage Technology Corporation from 1977 to
1989, including General Counsel, Senior Counsel and Director of International
Financial Operations.

Dr. Farouk Al-Nasser, age 60, joined Exabyte in May 1997 as the Vice President
and General Manager of the Drives and Storage Media division with over 30 years
of experience in the high technology industry, and was subsequently appointed
Vice President and General Manager of the Data Storage Products division after
the Company's August 1999 restructuring. Previously, he served as founder,
owner, chairman, president & CEO of 4MATT, Inc., a privately held company
specializing in formatting data storage tape cartridges, from January 1994 to
May 1997.  From January 1990 to January 1994, he served as founder and
president of IOTAPE (Iomega Tape Business Unit), a leading supplier of mini-
cartridge tape drives for the desktop market.  Prior to IOTAPE, Dr. Al-Nasser
held various senior engineering, management, and executive positions at Cipher
Data Products, SyQuest Technology, and Storage Technology Corporation.
Dr.Al-Nasser holds a Ph.D. in Electrical Engineering.

Mr. Manfred Benecken, age 55, joined Exabyte in August 1995 as the Director
for European Services. In November 1996 he relocated to the Company's Boulder
facility. Mr. Benecken was promoted to Vice President and General Manager of
Exabyte's Worldwide Customer and Support Services division in April 1997 and
was subsequently appointed as Vice President and General Manager of the Quality
and Support Services division after the Company's August 1999 restructuring.


<PAGE> 29
Prior to joining Exabyte as a full-time employee, Mr. Benecken worked for
Exabyte as a consultant in Europe from 1994 to 1995.  Previously, Mr. Benecken
spent 26 years with IBM in a variety of management positions in various areas
within the company, including disk drive engineering and manufacturing,
firmware development and management consulting.

Mr. Michael P. Koclanes, age 43 joined Exabyte in October 1994 as Vice
President of Information Systems.  In October 1996, Mr. Koclanes was appointed
to the position of Vice President of Marketing and in May 1997 he was promoted
to Vice President and General Manager of Exabyte's Storage Automation and
Solutions division.  In January 2000, Mr. Koclanes was appointed President and
Chief Executive Officer of CreekPath Systems, Inc., a wholly-owned subsidiary
of Exabyte, formed in December 1999. Prior to joining Exabyte, Mr. Koclanes
worked for Sun Microsystems Computer Corp. in a variety of management
positions, including director of new product introductions for graphics and
desktop products and director of Sun European information systems.  Prior to
Sun Microsystems, Mr. Koclanes held a variety of management positions with
Schlumberger, GM and McDonnell Douglas.

Executive officers serve at the discretion of the Board.  There are no family
relationships among any of the directors and officers.

Item 2.
PROPERTIES

The Company's corporate offices as well as the Company's research and
development, and manufacturing facilities are located in Boulder, Colorado,
in leased buildings aggregating approximately 358,898 square feet.  The lease
terms on these facilities expire on various dates ranging from December 31,
1999 to September 30, 2004.  The Company believes that additional space will
be available if needed for further expansion.  The following chart identifies
the location and type of each Exabyte property:

                                    LOCATION
                        -------------------------------------
   OFFICE TYPE          DOMESTIC                INTERNATIONAL
   -----------          --------                -------------
   R&D & Mfg.           Boulder, CO             Nuremberg, Germany
                        San Diego, CA           Falkirk, Scotland

   Procurement          Boulder, CO             Tokyo, Japan

   Service              Boulder, CO             Falkirk, Scotland
                                                Mississauga, Ontario, Canada
                                                Artarmon, Australia
                                                Singapore

   Sales & Support      Boulder, CO             Utrecht, The Netherlands
                        Campbell, CA            Mississauga, Ontario, Canada
                        Mission Viejo, CA       Paris, France
                        Atlanta, GA             Gwynedd, United Kingdom
                        Oakbrook, IL            Frankfurt, Germany
                        Annapolis, MD           Shanghai, China
                        Walpole, MA             Beijing, China
                        St. Louis, MO           Hong Kong, China
                        Houston, TX             Singapore
                        Dallas, TX


<PAGE> 30
Item 3.
LEGAL PROCEEDINGS

On June 18, 1999, Ecrix Corporation filed a Complaint in the United States
District Court for the District of Colorado seeking judgment declaring seven
patents owned by Exabyte to be invalid or not infringed by certain tape drive
products manufactured by Ecrix.  Although Exabyte engaged in settlement
discussions both before and after June 18, 1999, Ecrix rejected Exabyte's
settlement offers.  Therefore, on October 7, 1999, Exabyte filed an Answer and
Counterclaim asserting infringement by Ecrix of eight patents.  In response,
Ecrix filed an Amended Complaint, which was effectively filed October 21, 1999,
asserting additional antitrust claims under the Sherman Act and Colorado
Antitrust Act, as well as claims of patent misuse, estoppel, unfair competition
under Section 43(a) of the Lanham Act and common law, violation of Colorado
Consumer Protection Act, and tortious interference.  Exabyte has responded to
Ecrix's Amended Complaint.  Discovery is proceeding.  It is not possible to
predict the outcome of this action.  However, the Company believes that Ecrix's
claims will not have a material adverse effect on the Company's results of
operations.

Item 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Inapplicable.



































<PAGE> 31
PART II
Item 5.
MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

The Company's common stock has been traded in the over-the-counter market and
has been quoted in the National Market System of the Nasdaq Stock Market
("Nasdaq") under the symbol EXBT since the Company's initial public offering on
October 19, 1989. For the calendar quarters indicated, the following table
shows the high and low trading prices of the Company's common stock as reported
on Nasdaq.

<TABLE>
<CAPTION>
Calendar Year                                          High          Low
-------------                                        --------      --------
<S>                                                  <C>           <C>
1998
First Quarter................................        $ 9-5/8       $ 6-7/16
Second Quarter...............................         12-3/4         6-3/4
Third Quarter................................          8-3/8         5
Fourth Quarter...............................          9-1/16        4-1/2

1999
First Quarter................................        $ 6-5/8       $ 4-7/16
Second Quarter...............................          6-3/32        3-11/16
Third Quarter................................          5-3/32        3-3/8
Fourth Quarter...............................          9-1/8         4-1/4

2000
First Quarter (through February 1, 2000).....        $ 8-3/4       $ 7
</TABLE>

On February 1, 2000, the Company had 593 holders of record of its common
stock.  The reported closing price of the common stock was $7-7/8.  The Company
has never paid cash dividends on its common stock.  The Company presently
intends to retain any earnings for use in its business and does not anticipate
paying any cash dividends on its common stock in the foreseeable future.

Item 6.
SELECTED FINANCIAL DATA

The selected financial data set forth below with respect to the Company's
consolidated statements of operations for the fiscal years ended January 1,
2000, January 2, 1999, January 3, 1998, December 28, 1996 and December 30,
1995 and with respect to the consolidated balance sheets as of January 1, 2000,
January 2, 1999, January 3, 1998, December 28, 1996 and December 30, 1995 are
derived from audited consolidated financial statements.  The consolidated
financial statements for the years ended January 1, 2000, January 2, 1999 and
January 3, 1998 are included elsewhere in this report on Form 10-K and the
selected financial data shown below are qualified by reference to such
financial statements.  There were 52 weeks in 1999, 1998, 1996 and 1995.
There were 53 weeks in 1997.







<PAGE> 32
<TABLE>
<CAPTION>
(In thousands, except per share data)                                  Fiscal Years Ended
                                                      Jan. 1,     Jan. 2,     Jan. 3,     Dec. 28,    Dec. 30,
Consolidated Statement of Operations Data:              2000        1999        1998        1996        1995
------------------------------------------            --------    --------    --------    --------    --------
<S>                                                   <C>         <C>         <C>         <C>         <C>
Net sales....................................         $222,827    $286,505    $335,684    $362,891    $374,147
Cost of goods sold...........................          182,875     207,604     288,053     265,002     311,891
                                                      --------    --------    --------    --------    --------
Gross profit.................................           39,952      78,901      47,631      97,889      62,256
Operating expenses:
     Selling, general and administrative.....           56,650      56,978      59,211      47,929      49,896
     Research and development................           35,725      29,888      40,909      38,391      36,956
                                                      --------    --------    --------    --------    --------
Income (loss) from operations................          (52,423)     (7,965)    (52,489)     11,569     (24,596)
Other income (expense), net..................            1,235       1,816        (634)      1,114       1,568
                                                      --------    --------    --------    --------    --------
Income (loss) before income taxes(1).........          (51,188)     (6,149)    (53,123)     12,683     (23,028)
(Provision) benefit for income taxes (2).....          (37,219)      3,382      22,312      (4,058)     10,593
                                                      --------    --------    --------    --------    --------
Net income (loss)............................         $(88,407)   $ (2,767)   $(30,811)   $  8,625    $(12,435)
                                                      ========    ========    ========    ========    ========
Basic net income (loss) per share............         $  (3.97)   $  (0.12)   $  (1.38)   $   0.39    $  (0.57)
                                                      ========    ========    ========    ========    ========
Common shares used in the calculation of
     basic net income (loss) per share(3)....           22,256      22,285      22,326      22,003      21,711
                                                      ========    ========    ========    ========    ========
Diluted net income (loss) per share..........         $  (3.97)   $  (0.12)   $  (1.38)   $   0.39    $  (0.57)
Common and potential common shares used               ========    ========    ========    ========    ========
     in the calculation of diluted net
     income (loss) per share(3)..............           22,256      22,285      22,326      22,307      21,711
                                                      ========    ========    ========    ========    ========
Consolidated Balance Sheet Data:
--------------------------------
Working capital..............................         $ 59,594    $116,953    $134,357    $150,713    $143,071
Total assets.................................          127,276     207,836     221,346     256,126     250,336
Long-term obligations, excluding current
     portion.................................            6,570       7,461       9,049      10,441      10,109
Stockholders' equity.........................           78,756     166,272     170,796     200,013     186,366
</TABLE>

(1) The Company recorded restructuring charges in 1999 and 1997 totaling
     $2,446,000 and $34,947,000, respectively.  See Note 11 of Notes to
     Consolidated Financial Statements.
(2) The Company recorded a full valuation allowance on all existing deferred
     tax assets in 1999.  See Notes 6 and 13 of Notes to Consolidated Financial
     Statements.
(3) See Note 1 of Notes to Consolidated Financial Statements for an
     explanation of the determination of shares used in computing net income
     (loss) per share.









<PAGE> 33
Quarterly Results of Operations (Unaudited)
-------------------------------------------
The following table sets forth unaudited operating results for each quarter of
fiscal 1999 and 1998.  This information has been prepared on the same basis as
the audited financial statements and, in the opinion of management, contains
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation thereof.  These unaudited quarterly results should be read
in conjunction with the consolidated financial statements and notes thereto
appearing elsewhere in this annual report on Form 10-K.  The operating results
for any quarter are not necessarily indicative of results for any future
period.
<TABLE>
<CAPTION>
(In thousands, except per share data)                                Quarters Ended
                                                      Jan. 1,    Oct. 2,     Jul. 3,     Apr. 3,
                                                        2000       1999        1999        1999
                                                     --------    --------    --------    --------
<S>                                                  <C>         <C>         <C>         <C>
Net sales..............................              $ 58,617    $ 53,041    $ 48,519    $ 62,650
Cost of goods sold.....................                47,809      45,755      42,200      47,111
                                                     --------    --------    --------    --------
Gross profit...........................                10,808       7,286       6,319      15,539
Selling, general and administrative....                12,949      15,973      14,478      13,250
Research and development...............                 9,593       9,658       8,690       7,784
                                                     --------    --------    --------    --------
Loss from operations(1)................               (11,734)    (18,345)    (16,849)     (5,495)
Other income (expense), net............                   (29)        900         172         192
                                                     --------    --------    --------    --------
Loss before income taxes...............               (11,763)    (17,445)    (16,677)     (5,303)
(Provision) benefit for income taxes(2)                  (150)        (58)    (38,814)      1,803
                                                     --------    --------    --------    --------
Net loss...............................              $(11,913)   $(17,503)   $(55,491)   $ (3,500)
                                                     ========    ========    ========    ========
Basic net loss per share...............              $  (0.53)   $  (0.78)   $  (2.50)   $  (0.16)
                                                     ========    ========    ========    ========
Diluted net loss per share.............              $  (0.53)   $  (0.78)   $  (2.50)   $  (0.16)
                                                     ========    ========    ========    ========

                                                             As a Percentage of Net Sales

Net sales..............................                 100.0%      100.0%      100.0%      100.0%
Cost of goods sold.....................                  81.6        86.3        87.0        75.2
                                                        -----       -----       -----       -----
Gross margin...........................                  18.4        13.7        13.0        24.8
Selling, general and administrative....                  22.1        30.1        29.8        21.2
Research and development...............                  16.3        18.2        17.9        12.4
                                                        -----       -----       -----       -----
Loss from operations(1)................                 (20.0)      (34.6)      (34.7)       (8.8)
Other income (expense), net............                  (0.1)        1.7         0.3         0.3
                                                        -----       -----       -----       -----
Loss before income taxes...............                 (20.1)      (32.9)      (34.4)       (8.5)
(Provision) benefit for income taxes...                  (0.2)       (0.1)      (80.0)        2.9
                                                        -----       -----       -----       -----
Net loss...............................                 (20.3)%     (33.0)%    (114.4)%      (5.6)%
                                                        =====       =====       =====       =====
</TABLE>


<PAGE> 34

(1) In the quarter ended October 2, 1999, the Company recorded
restructuring charges of $2,446,000 related to the consolidation of its
operating structure. See Note 10 of Notes to Consolidated Financial Statements.
(2) In the quarter ended July 3, 1999, the Company recorded a full valuation
allowance on all existing deferred tax assets.  See Notes 6 and 13 of Notes to
Consolidated Financial Statements.

<TABLE>
<CAPTION>
 (In thousands, except per share data)                               Quarters Ended
                                                     Jan. 2,     Oct. 3,     Jul. 4,     Apr. 4,
                                                       1999        1998        1998        1998
                                                     --------    --------    --------    --------
<S>                                                  <C>         <C>         <C>         <C>
Net sales..............................              $ 63,196    $ 72,805    $ 69,754    $ 80,750
Cost of goods sold.....................                49,657      51,639      49,404      56,904
                                                     --------    --------    --------    --------
Gross profit...........................                13,539      21,166      20,350      23,846

Selling, general and administrative....                15,335      13,723      14,476      13,444
Research and development...............                 8,801       7,880       6,076       7,131
                                                     --------    --------    --------    --------
Income (loss) from operations..........               (10,597)       (437)       (202)      3,271
Other income (expense), net............                   633         949         430        (196)
                                                     --------    --------    --------    --------
Income (loss) before income taxes......                (9,964)        512         228       3,075
(Provision) benefit for income taxes...                 4,679        (174)        (77)     (1,046)
                                                     --------    --------    --------    --------
Net income (loss)......................              $ (5,285)   $    338    $    151    $  2,029
                                                     ========    ========    ========    ========
Basic net income (loss) per share......              $  (0.24)   $   0.02    $   0.01    $   0.09
                                                     ========    ========    ========    ========
Diluted net income (loss) per share....              $  (0.24)   $   0.02    $   0.01    $   0.09
                                                     ========    ========    ========    ========
</TABLE>
<TABLE>
<CAPTION>
                                                             As a Percentage of Net Sales
<S>                                                    <C>          <C>         <C>         <C>
Net sales..............................                100.0%       100.0%      100.0%      100.0%
Cost of goods sold.....................                 78.6         70.9        70.8        70.5
                                                       -----        -----       -----       -----
Gross margin...........................                 21.4         29.1        29.2        29.5

Selling, general and administrative....                 24.3         18.9        20.8        16.7
Research and development...............                 13.9         10.8         8.7         8.8
                                                       -----        -----       -----       -----
Income (loss) from operations..........                (16.8)        (0.6)       (0.3)        4.0
Other income (expense), net............                  1.0          1.3         0.6        (0.2)
                                                       -----        -----       -----       -----
Income (loss) before income taxes......                (15.8)         0.7         0.3         3.8
(Provision) benefit for income taxes...                  7.4         (0.2)       (0.1)       (1.3)
                                                       -----        -----       -----       -----
Net income (loss)......................                 (8.4)%        0.5%        0.2%        2.5%
                                                       =====        =====       =====       =====
</TABLE>


<PAGE> 35
Item 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following tables set forth items in the Exabyte Corporation and
Subsidiaries (the "Company") Consolidated Statements of Operations for the
three years ended January 1, 2000, January 2, 1999 and January 3, 1998 as a
percentage of net sales.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                      1999              1998              1997
                                                     -----             -----             -----
<S>                                                  <C>               <C>               <C>
Net sales...................................         100.0%            100.0%            100.0%
Cost of goods sold..........................          82.1              72.5              85.8
                                                     -----             -----             -----
Gross margin................................          17.9              27.5              14.2

Operating expenses:
  Selling, general and administrative.......          25.4              19.9              17.6
  Research and development..................          16.0              10.4              12.2
                                                     -----             -----             -----
Loss from operations........................         (23.5)             (2.8)            (15.6)
Other income (expense), net.................           0.5               0.6              (0.2)
                                                     -----             -----             -----
Loss before income taxes....................         (23.0)             (2.2)            (15.8)
(Provision) benefit for income taxes........         (16.7)              1.2               6.6
                                                     -----             -----             -----
Net loss....................................         (39.7)%            (1.0)%            (9.2)%
                                                     =====             =====             =====
</TABLE>

PRODUCT MIX TABLES
(Amounts in Thousands)
<TABLE>
<CAPTION>

                                                      1999              1998              1997
                                                      -----             -----             -----
<S>                                                   <C>               <C>               <C>
8mm drives:
  Eliant(TM)820, Mammoth-LT, Mammoth
    and M2(tm)...............................         $99,939           $122,048          $ 77,400
8mm Libraries:
  EZ17(TM), 210, 220, 440, 480, X80
  and X200..................................         29,388             39,959            51,457
DLTtape(TM) Libraries:
  17D, 230D and 690D........................         12,733              6,067               --
Media.......................................         67,667             67,113            49,132
Service, spares and other...................         15,441             19,338            21,679
End-of-life drives and libraries(x).........          5,239             43,490           153,114
Sales allowances............................         (7,580)           (11,510)          (17,098)
                                                    --------           --------          --------
                                                    $222,827           $286,505          $335,684
                                                    ========           ========          ========


<PAGE> 36

                                                       1999              1998              1997
                                                      -----             -----             -----
<S>                                                   <C>               <C>               <C>
8mm drives:
  Eliant(TM)820, Mammoth-LT, Mammoth
    and Mammoth-2...........................          44.9%             42.6%             23.1%
8mm Libraries:
  EZ17(TM), 210, 220, 440, 480, X80
  and X200..................................          13.2              13.9              15.3
DLTtape(TM) Libraries:
  17D, 230D and 690D........................           5.7               2.1                --
Media.......................................          30.4              23.4              14.6
Service, spares and other...................           6.9               6.7               6.6
End-of-life drives and libraries(x).........           2.3              15.3              45.5
Sales allowances............................          (3.4)             (4.0)             (5.1)
                                                     -----             -----             -----
                                                     100.0%            100.0%            100.0%
                                                     =====             =====             =====
(x)Prior year percentages reflect current year
   classifications of end-of-life products.
</TABLE>
CUSTOMER MIX TABLE
<TABLE>
<CAPTION>

                                                     1999               1998               1997
                                                    -----              -----              -----
<S>                                                 <C>                <C>                <C>
OEM.........................................         38.1%              46.3%              48.7%
Reseller....................................         57.7               49.5               46.1
End user and other..........................          4.2                4.2                5.2
                                                    -----              -----              -----
                                                    100.0%             100.0%             100.0%
                                                    =====              =====              =====
</TABLE>
In addition to the historical information contained herein, the following
discussion contains forward-looking statements that include risks and
uncertainties.  The Company has identified by *bold-face* various sentences
within this discussion which contain such forward-looking statements.  The
actual results that the Company achieves may differ materially from any
forward-looking statements due to such risks and uncertainties.  Words such as
"believes," "anticipates," "expects," "intends," "plans," and similar
expressions are intended to identify forward-looking statements, but are not
the exclusive means of identifying such statements.  The Company undertakes no
obligation to revise any forward-looking statements in order to reflect events
or circumstances that my arise after the date of this report.  Factors that
could cause actual results to differ include but are not limited to, those
identified herein, as well as, those discussed in the Company's filings on Form
10-K and Forms 10-Q.

FISCAL YEAR 1999 COMPARED TO 1998

Our net sales decreased by 22.2% to $222.8 million in 1999 from $286.5
million in 1998.  In comparing net sales from 1999 to 1998, there were several
significant differences:
  -  Sales of end-of-life products (primarily the 8505XL, 8700, 10h and 18D)
decreased to $5.2 million in 1999 from $43.5 million in 1998 as we concluded
the build-out and sale of these products late in 1998 and early 1999.
<PAGE> 37
  -  Sales of current 8mm drive products decreased to $99.9 million in
1999 from $122.0 million in 1998 as sales to our two largest OEM customers
decreased by $17 million from 1998 to 1999.
  -  Sales of current 8mm library products decreased to $29.4 million in
1999 from $40.0 million in 1998.  This decrease was in proportion to our
overall sales decrease.
  -  Sales of services, spare parts and other decreased to $15.4 million
in 1999 from $19.3 million in 1998  as we lost a major service customer in 1999.
  -  Sales of current DLTtape(tm) libraries increased to $12.7 million in 1999
from $6.1 million in 1998.  We  introduced our first DLTtape(tm) library in 1997
and increased our DLTtape(tm) offerings during 1998 and 1999.
  -  Sales allowances decreased to $7.6 million in 1999 from $11.5 million in
1998, having a positive impact on net sales.  The decrease resulted from a
lower emphasis placed on the use of sales rebates, as well as the final
sell-off of desktop products in early 1998, which required a high level of
sales incentives.

During 1999, our sales shifted to reseller customers from OEM customers.  Our
sales to reseller customers in 1999 decreased by 9.5% in absolute dollars over
1998. Our sales to OEM customers decreased by 36% in 1999 over 1998.  We
undertook a number of initiatives in 1999 to position ourselves in the reseller
channel in anticipation of the introduction of the M2(tm) drive late in the
year. Sales to domestic customers decreased to 66.0% of net sales in 1999 from
70.5% in 1998. Sales to international customers increased to 34.0% of net sales
in 1999 from 29.5% in 1998.  Sales decreased to all geographic regions; however
domestic sales decreased at a higher rate.

Our cost of sales includes the actual cost of all materials, labor and
overhead incurred in the manufacturing and service processes, as well as
certain other related costs.  Other related costs include primarily provisions
for warranty repairs and inventory obsolescence.  Our costs of sales for 1999
decreased to $182.9 million from $207.6 million in 1998 and our gross margin
percentage decreased to 17.9% in 1999 from 27.5% in 1998.  Excluding
restructuring charges for 1999 (see "Restructuring" discussion later in this
section), our cost of goods sold decreased to $182.2 million in 1999 and our
gross margin percentage decreased to 18.2%.

Our gross margin percentage decreased to 17.9% in 1999 compared to 27.5% in
1998.  Excluding restructuring charges, the 1999 gross margin was 18.2%.
Gross margins were negatively impacted by lower net sales, which were tied to a
relatively fixed manufacturing cost structure.  During 1999, we had more plant
capacity than we were using to support current manufacturing volumes.
Additionally, lower pricing on products approaching end-of-life status
negatively impacted product margins.  In addition, we estimate that 1999
margins were negatively impacted by $2.3 million due to strengthening in the
dollar/yen exchange rate.  In 1998, we estimated that margins were positively
impacted by $2.5 million due to a weakening dollar/yen exchange rate.

Selling, general and administrative expenses decreased to $56.7 million
and 25.4% of sales in 1999 from $57.0 million and 19.9% of sales in 1998.
Without restructuring charges, these expenses for 1999 were $55.2 million and
24.8% of net sales.  The decrease was due to higher advertising spending in
1998 to reintroduce our Mammoth tape drive as well as introduce several new
library products.   In 1999, there were fewer and smaller-scale product
introductions.

Research and development expenses increased to $35.7 million and 16.0% of sales
in 1999 from $29.9 million and 10.4% of sales in 1998.  Without restructuring
charges, 1999 expenses were $35.4 million and 15.9% of net sales.  Spending
<PAGE> 38

increased in 1999 to support the development and release of the M2(tm) tape
drive, which we first sold in the fourth quarter.  In addition, we contracted
with Hitachi for the development of technology related to future generations of
MammothTape(tm) drives and manufacturing of the M2(tm) drive.  During 1999, we
incurred $2.2 million of engineering expenses under these contracts.

Other income (expense), net consists primarily of interest income and expenses,
foreign currency re-measurement and transaction gains and losses, state
franchise taxes and other miscellaneous items.  Other income was $1.2 million
in 1999 compared to $1.8 million in 1998.  This decrease was the result of
unfavorable changes in foreign currency transaction gains and losses in 1999,
offset by increased interest income.  Net foreign exchange (gains)/losses
related to foreign currency transactions were $686,000 and $(36,000) in 1999
and 1998, respectively.

The income tax provision for 1999 of $37.2 million compared to a $3.4 million
tax benefit in 1998.  As of the second quarter of 1999, the Company recorded
a deferred tax valuation allowance equal to 100% of total deferred tax assets.
Management considered a number of factors, including the Company's cumulative
operating losses over the prior three years, short-term projected losses due to
the impact of delays in the release of the M2(tm) product, as well as certain
offsetting positive factors.  Management concluded that a valuation allowance
was required for 100% of the total deferred tax assets as it is more likely
than not that the deferred tax assets will not be realized. (See Notes 6 and 13
of Notes to Consolidated Financial Statements).  The minimum amount of future
taxable income required to fully realize these assets is estimated to be $146.6
million.

At January 1, 2000, domestic net operating loss carryforwards of $75.5
million, which expire between 2018 and 2019, are available to offset future
taxable income.  Utilization of $6.1 million of the carryforwards is subject
to an annual limitation of $670,000 through 2005.  Foreign net operating loss
carryforwards may be carried forward indefinitely. In addition, the Company
has unused research and development credits of $3,405,000 which expire between
2012 and 2019 and alternative minimum tax credits of $1,113,000 which may be
carried forward indefinitely.

FISCAL YEAR 1998 COMPARED TO 1997
---------------------------------

The Company's net sales of $286.5 million during 1998 represent a decrease of
14.7% from net sales of $335.7 million during 1997.  In comparing net sales
from 1997 to 1998, there were several significant differences:

-   Sales of current 8mm drive products increased to $122.0 million in 1998 from
$77.4 million in 1997.  Sales of both the Eliant 820(tm) and Mammoth products
increased by more that 50%, primarily on the strength of OEM business.

-   Sales of 8mm library products decreased $11.5 million across all products.

- Sales of media increased $18.0 million as the Company placed a greater
emphasis on selling these products.

- Sales of end-of-life products decreased from $153.1 million in 1997 to
$43.5 million in 1998.  Almost all of this decrease resulted from sales of
8205/8505 tape drives which were discontinued at the end of 1997.

- Sales allowances decreased $5.6 million due to the discontinuance of our
<PAGE> 39

Eagle(RTM)products at the end of 1997.  Eagle products required higher levels
of sales incentives than the 8mm counterparts.

The relative customer mix during 1998 shifted slightly to resellers from
OEMs and end users/others. Domestic sales represented 70.5% of net sales during
1998 compared to 68.3% in 1997. International sales represented 29.5% of net
sales in 1998 compared to 31.7% in 1997.

The Company's gross margin percentage for 1998 increased to 27.5% compared to
14.2% for 1997.  Gross margin in 1997 excluding restructuring charges was 22.8%
(see Note 11 of Notes to Consolidated Financial Statements).  Gross margins
were favorably impacted in 1998 by lower manufacturing expenses resulting from
headcount and cost reduction efforts during the latter part of 1997.
Additionally, product margins improved due to decreased sales of lower-margin
Eagle(RTM) products.  Margins were also favorably impacted by approximately
$2.5 million due to a stronger dollar/yen relationship in 1998 than in 1997.

Selling, general and administrative expenses decreased to $57.0 million in 1998
from $59.2 million in 1997.  Excluding restructuring charges, 1997 expenses
were $57.7 million (see Note 11 of Notes to Consolidated Financial Statements).
These expenses represent 19.9% of revenue in 1998 compared to 17.6% of revenue
in 1997 and 17.2% of revenue in 1997 without restructuring charges.  The
absolute dollar decrease is the result of headcount and cost reduction efforts
during the latter part of 1997 which are offset by increased advertising
expenditures during 1998.  The increased 1998 advertising resulted from a
reintroduction of the Mammoth product as well as the introduction of several
new library products.

Research and development expenditures decreased to $29.9 million and 10.4% of
revenue for 1998 from $40.9 million and 12.2% of revenue in 1997.  Excluding
restructuring charges (see Note 11 of Notes to Consolidated Financial
Statements) these expenses in 1997 were $37.4 million and 11.1% of revenue.
The decrease in both absolute dollars and as a percentage of revenue is mainly
due to the decision to exit the desktop and low-end server market including
closure of the Eagle(RTM) division late in 1997.

Other income, net, consists primarily of interest income and expense, state
franchise taxes, foreign currency gains and losses, the translation impact of
the Company's foreign subsidiaries' balance sheets and other miscellaneous
items.  Other income in 1998 was $1.8 million compared to expense of $634,000
in 1997.  The change relates mainly to foreign translation gains and losses.

The income tax benefit for 1998 was 55.0% compared to a benefit of
42.0% in the prior year.  See Note 6 of Notes to Consolidated Financial
Statements for a description of the factors which resulted in the effective
tax rates being different from the statutory tax rate of 35%.

RESTRUCTURING CHARGES
---------------------

During the third quarter of 1999, management determined that the division of
our business into three operating segments was no longer appropriate due to the
amount of overhead required to maintain this structure.  We incurred $2,466,000
in pretax restructuring charges to combine our three operating segments under
common management.  These costs included severance, outplacement and benefits
for the resulting workforce reduction of approximately 143 employees.  All
areas of the Company were impacted by the workforce reduction.  We believe this
restructuring resulted in annual savings of $11.0 million.  These savings
<PAGE> 40
included decreased payroll and fringe benefits, as well as, savings on building
rent, utilities and taxes.  Expected payroll savings were a result of
reductions in workforce and open positions that were not filled as a result of
this restructuring.

Approximately $664,000 of these costs were included in cost of sales, $1.5
million were included in selling, general and administrative costs and $328,000
were included in research and development costs.  At January 1, 2000, $292,000
of severance and related accruals remain *and are expected to be paid during
the first half of 2000.*

The following table summarizes the activity related to the 1999 restructuring
reserve:

(In thousands)
                                                     Severance and Related
                                                     ---------------------
Restructuring charges                                       $2,446
Cash payments                                               (2,154)
                                                            -------
Balance, January 1, 2000                                    $  292
                                                            =======

Additional information concerning the restructuring is incorporated by
reference from Item 1, "Notes to Consolidated Financial Statements," under the
caption, "Note 11 - Restructuring".


MARKET RISK
-----------

In the ordinary course of its operations, the Company is exposed to certain
market risks, primarily changes in foreign currency exchange rates and interest
rates.  Uncertainties that are either nonfinancial or nonquantifiable, such as
political, economic, tax, other regulatory or credit risks are not included in
the following assessment of the Company's market risks.

Foreign Currency Exchange Rates:
The Company has foreign subsidiaries whose operations expose the Company to
foreign currency exchange rate changes  (See Note 1 of Notes to Consolidated
Financial Statements).  *Foreign currency exchange rate changes could impact
translations of foreign denominated assets and liabilities into U.S. dollars
and future earnings and cash flows from transactions denominated in different
currencies.*  At January 1, 2000, 8.4% of the Company's total assets were
denominated in foreign currencies.  During 1999, 0.7% of revenue and 13.4% of
operating expenses were denominated in foreign currencies.  The Company's
exposure to currency exchange rate changes is diversified due to the number
of different countries in which it conducts business.  The Company has
subsidiaries in Germany, the Netherlands, Japan, Singapore and Canada whose
books of record are maintained in their local currency.  *Foreign currency
gains and losses will continue to result from fluctuations in the exchange
rates of these subsidiaries' operations compared to the U.S. dollar thereby
impacting future operating results.*

The Company purchases certain inventory components and services, denominated
in yen, from Japanese manufacturers.  Generally, such payments are settled at
the prevailing spot rate.  However, from time to time,  the Company enters
into foreign currency forward contracts in anticipation of movements in the
dollar/yen exchange rate to hedge these purchases.  Such contracts are
<PAGE> 41
established with a maturity date within six months of the purchase date.  To
be considered a hedge, contracts must be established for future purchases
denominated in yen.  In circumstances where the timing of hedged purchases is
deferred, the contract maturity dates are extended to cover the deferred
payment.  At January 1, 2000, there were no contracts outstanding.

The Company prepared sensitivity analyses of its exposures from foreign assets
as of January 1, 2000, and of exposure from anticipated foreign revenue,
and operating expenses in 2000 using historical data and anticipated future
activity to assess the impact of hypothetical changes in foreign currency
exchange rates.  *Based upon the results of these analyses, the Company
estimates that a 10% change in foreign currency exchange rates from the 1999
year end rates could have a $1.1 million impact on net assets, a $161,000
impact on net sales and a $1.2 million impact on operating expenses.  These
risks are materially similar to the risks presented in the prior year, and
could have a material effect on the Company's results of operations, cash
flows or financial condition for the next year.*

The Company also prepared sensitivity analyses of its exposure related to yen
denominated purchases.  *Using a hypothetical 10% change in the dollar/yen
exchange rate from the year end rate, and projected 2000 purchases denominated
in yen, the Company estimates a potential $6.3 million impact.  The impact
could affect a combination of net income and inventory, and could have a
material effect on the Company's results of operations, cash flows or financial
condition for the next year.*

Interest Rates:

At January 1, 2000, investments, including cash equivalents, consist of
held-to-maturity debt securities with maturity dates of nine months or less
(see Note 1 of Notes to Consolidated Financial Statements).  *Changes in
interest rates could impact the Company's anticipated interest income.*

The Company prepared sensitivity analyses of its interest rate exposures to
assess the impact of hypothetical changes in interest rates.  *Based on the
results of these analyses, the Company estimates that a 10% change in
interest rates from the 1999 year end rates could have a $265,000 impact on
results of operations.  This risk is materially similar to the risk presented in
the prior year, and could have a material effect on the Company's results of
operations, cash flows or financial condition for the next year.*

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

During 1999, the Company expended $23.8 million of cash for operating
activities, received $891,000 from the issuance of common stock to Company
employees, expended $11.0 million for capital equipment and paid $4.2
million on long-term liabilities.  Together, these activities resulted in a
decrease in the combined balance of cash and short-term investments of $38.1
million to a year-ending balance of $32.6 million.  The Company's working
capital decreased to $59.6 million on January 1, 2000 from $117.0 million on
January 2, 1999.

The Company maintains a $7.5 million bank line of credit which expires
August 1, 2000.  This line of credit is secured by $7.5 million in marketable
securities held by an affiliate of the lender.  The line of credit has no
financial covenants.  Use of the invested funds is not legally restricted.
On January 1, 2000, the amount available under the line was $7.5 million and
no borrowings were outstanding.  Borrowings made under the agreement bear
<PAGE> 42

interest at the lower of the bank's prime rate or LIBOR + 2%.

Offsetting the amount available under the line of credit is a letter of
credit which secures certain leasehold improvements made by the Company's
subsidiary in Germany.  This letter is currently for DM 1.1 million and
decreases by DM 100,000 in August of each year until it is fully depleted.

On April 4, 2000, the Company obtained a commitment on a new $20.0 million
line of credit with Congress Financial Corporation, a subsidiary of First
Union National Bank.  Under the terms of the commitment, Exabyte may borrow
up to 80% of eligible accounts receivable.  The line will be secured by
accounts receivable and inventory.  Borrowings under the line will bear
interest at the lower of prime plus .5% or LIBOR plus 2.5%.  *The formal
agreement is expected to close during April 2000.*

*The Company currently expects to make capital expenditures of approximately
$14.0 to $18.0 million during 2000.  The Company believes its existing sources
of liquidity and funds expected to be generated from operations will provide
adequate cash to fund anticipated working capital and other cash requirements
through fiscal 2000 and on a long term basis.*

NEW ACCOUNTING PRONOUNCEMENTS
-----------------------------

Information concerning new accounting pronouncements is incorporated by
reference from Item 1, "Notes to Consolidated Financial Statements," under the
caption, "Note 1 - Operations and Summary of Significant Accounting Policies",
"New Accounting Pronouncement."

YEAR 2000 COMPLIANCE
--------------------

The phenomenon, known generally as the Year 2000 problem, involves the
potential inability of information or other data-dependent systems to
properly distinguish year references as of the turn of the century.
*The Company believes the Year 2000 problem represents a material risk
to the Company.*

The Company itself is heavily dependent upon the proper functioning of its own
computer- or data-dependent systems, including, but not limited to, its systems
in areas such as information, business, financial, operations, manufacturing
and service.  *Any failure or malfunctioning on the part of these or other
systems could adversely affect the Company in ways that are not currently
known, discernable, quantifiable or otherwise anticipated by the Company.*

In mid-1997, Exabyte formed an internal task force to evaluate those areas of
the Company that might be affected by the Year 2000 problem and devised a plan
for the Company to become Year 2000 compliant in a timely manner (the "Plan").
An inventory of all critical systems was completed during 1999. Year 2000
compliant system upgrades were completed prior to December 31, 1999. Testing
of these systems was completed during the fourth quarter of 1999.  The
Company's subsidiaries were also incorporated into the Company's Plan to
become Year 2000 compliant.

The Company experienced no disruption of operations during the rollover from
December 31, 1999 to January 1, 2000.  *There can be no assurance, however,
that critical system failures will not occur at other critical dates during the
year 2000.  Should such system failure occur, the Company may be unable to
<PAGE> 43

conduct business or manufacture its products, which could cause a material
adverse effect on the Company's results of operations.*

The Company's suppliers (particularly sole-source and long lead-time suppliers)
and key customers have, to date, not been adversely affected by any Year 2000
problem. *There can be no assurance, however, that any of the Company's
suppliers will not experience a Year 2000 related problem during the balance
of the year 2000. Should any of the Company's suppliers encounter Year 2000
problems that cause them to delay manufacturing or shipments of key components
to Exabyte, the Company may be forced to delay or cancel shipments of its
products, which would have a material adverse effect on the Company's results
of operations.  Additionally, Exabyte's key customers may experience Year 2000
problems at critical dates during the year which would cause them to delay or
cancel substantial purchase orders or delivery of Exabyte's products which
would also have a material adverse effect on the Company's results of
operations.*

Exabyte incurred costs of approximately $200,000 in upgrading its systems to
become Year 2000 compliant. The Company has developed a contingency plan should
the Company experience a Year 2000 problem.  No material costs were incurred
during the development of the contingency plan.

*The Company believes that the tape drives and tape libraries manufactured or
produced by the Company do not use and have not used date data in order to
meet stated functional performance characteristics.  The Company further
believes such products accurately process date data (including, but not
limited to, calculating, comparing and sequencing) from, into and between the
twentieth and twenty-first centuries, including leap year calculations,
provided such products operate in accordance with the Company's published
specifications, and further provided that all hardware, third-party software
and firmware used in combination with the Company's products properly exchange
date data with such products.  However, there can be no assurance that the
Company's products will function in this manner.  Any failure of the Company's
products to perform in accordance with specifications could result in the loss
of critical user data, resulting in claims against the Company for damages
arising from such data loss, which could have a material adverse effect on the
Company's results of operations.*  We have not been notified of any date data
failure to date as the result of any Year 2000 problem.

*In addition, Exabyte believes that many companies in the high technology
industry will face significant litigation in the future should problems
caused by Year 2000 noncompliance arise.  Because Exabyte operates in the high
technology industry, the Company believes that it may be the subject of such
litigation, which could have a material adverse effect on the Company's
results of operations.*













<PAGE> 44
Item 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information concerning the Company's market risk is incorporated by reference
from Item 7, "Management's Discussion and Analysis of Financial Condition and
Results of Operation," under the caption, "Market Risk."

Item 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                                                         Page

Report of Independent Accountants...................................      45

Consolidated Balance Sheets -
  January 1, 2000 and January 2, 1999...............................      46

Consolidated Statements of Operations - for the years ended
  January 1, 2000, January 2, 1999 and January 3, 1998..............      47

Consolidated Statements of Changes in Stockholders' Equity -
  for the years ended January 1, 2000, January 2, 1999 and
  January 3, 1998...................................................      48

Consolidated Statements of Cash Flows -
  for the years ended January 1, 2000, January 2, 1999 and
  January 3, 1998...................................................      49-50

Notes to Consolidated Financial Statements..........................      51-67






























<PAGE> 45

REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of Exabyte Corporation

In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)1 on page 69, present fairly in all material
respects, the financial position of Exabyte Corporation and its subsidiaries at
January 1, 2000 and January 2, 1999, and the results of their operations and
their cash flows for each of the three years in the period ended
January 1, 2000, in conformity with accounting principles generally accepted in
the United States. In addition, in our opinion, the financial statement
schedule listed in the index also appearing under Item 14(a)2 on page 69
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
These financial statements and the financial statement schedule are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements and the financial statement schedule
based on our audits.  We conducted our audits of these statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for the opinion expressed above.

Due to substantial operating losses incurred in 2000 and the resulting
liquidity constraints, the Company has recently engaged in an evaluation of
strategic alternatives available to it. The Company will continue to incur net
operating cash outflows in the near term to accomplish its long term business
objectives.  Management's progress to date and future plans regarding these
matters are discussed more fully in Note 13 to the consolidated financial
statements.

Also as discussed in Note 13, the Company restated its 1999 financial
statements to record a full valuation allowance on its deferred tax assets.


/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP



Denver, Colorado
January 20, 2000, except for Note 13 which is as of April 16, 2001.












<PAGE> 46
EXABYTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                 January 1,      January 2,
                                                   2000            1999
                                                 --------        --------
<S>                                              <C>             <C>
ASSETS
Current assets:
  Cash and cash equivalents...............       $ 25,610        $ 56,571
  Short-term investments..................          7,039          14,145
  Accounts receivable, net................         37,163          38,014
  Inventories, net........................         26,805          26,997
  Income tax receivable...................          1,431           2,563
  Deferred income taxes...................             -            9,637
  Other current assets....................          3,496           3,129
                                                 --------        --------
Total current assets......................        101,544         151,056
                                                 --------        --------
Property and equipment, net...............         24,708          28,396
Deferred income taxes.....................              -          27,308
Other assets..............................          1,024           1,076
                                                 --------        --------
Total long-term assets....................         25,732          56,780
                                                 --------        --------
                                                 $127,276        $207,836
                                                 ========        ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable........................       $ 23,327        $ 16,032
  Accrued liabilities.....................         13,815          14,002
  Accrued income taxes....................          1,877           2,370
  Current portion of long-term
    obligations ..........................          2,931           1,699
                                                 --------        --------
Total current liabilities.................         41,950          34,103
Long-term obligations.....................          6,570           7,461
Commitments and contingencies
    (Notes 7 and 12)......................
Stockholders' equity:
  Preferred stock, $.001 par value;
    14,000 shares authorized; no
    shares issued and outstanding.........             --              --
  Common stock, $.001 par value;
    50,000 shares authorized; 22,886
    and 22,647 shares issued..............             23              23
  Capital in excess of par value..........         67,584          66,693
  Treasury stock, at cost, 455 and
    455 shares............................         (2,742)         (2,742)
  Retained earnings.......................         13,891         102,298
                                                 --------        --------
Total stockholders' equity................         78,756         166,272
                                                 --------        --------
                                                 $127,276        $207,836
                                                 ========        ========
</TABLE>


<PAGE> 47

The accompanying notes are an integral part of the consolidated financial
statements.


EXABYTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
                                                             Fiscal Years Ended
                                                  January 1,      January 2,      January 3,
                                                    2000            1999            1998
                                                  --------        --------        --------
<S>                                               <C>             <C>             <C>
Net sales............................             $222,827        $286,505        $335,684
Cost of goods sold...................              182,875         207,604         288,053
                                                  --------        --------        --------
Gross profit.........................               39,952          78,901          47,631

Operating expenses:
Selling, general and administrative..               56,650          56,978          59,211
Research and development.............               35,725          29,888          40,909
                                                  --------        --------        --------
Loss from operations.................              (52,423)         (7,965)        (52,489)

Other income (expense), net..........                1,235           1,816            (634)
                                                  --------        --------        --------
Loss before income taxes.............              (51,188)         (6,149)        (53,123)

(Provision)benefit for income taxes..              (37,219)          3,382          22,312
                                                  --------        --------        --------
Net loss.............................             $(88,407)       $ (2,767)       $(30,811)
                                                  ========        ========        ========
Basic net loss per share.............             $  (3.97)       $  (0.12)       $  (1.38)
                                                  ========        ========        ========
Common shares used in the
      calculation of basic net loss
      per share......................               22,256          22,285          22,326
                                                  ========        ========        ========

Diluted net loss per share...........             $  (3.97)       $  (0.12)       $  (1.38)
                                                  ========        ========        ========
Common and potential common shares
     used in the calculation of
     diluted net loss per share......               22,256          22,285          22,326
                                                  ========        ========        ========

</TABLE>

     The accompanying notes are an integral part of the consolidated financial
     statements.







<PAGE> 48
EXABYTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands, except per share data)
<TABLE>
<CAPTION>
                                                                                             Capital
                                                Common Stock        Treasury Stock          in Excess         Retained
                                              Shares    Amount    Shares      Amount       of Par Value       Earnings
                                              ------    ------    ------      --------     ------------       --------
<S>                                           <C>          <C>       <C>      <C>               <C>           <C>
Balance, December 28, 1996.............       22,184       $22       (15)     $    (9)          $64,124       $135,876

Common stock options exercised ($.10
  to $15.13 per share).................          143                                                236
Common stock issued pursuant to the
  Employee Stock Purchase Plan
   ($5.47 and $10.89 per share).........         139                                              1,075
Tax effect of disqualifying
  dispositions of common stock.........                                                             164
Stock compensation expense.............                                                             119
Net loss for the year..................                                                                        (30,811)
                                              ------       ---       ---      -------           -------       --------
Balance, January 3, 1998...............       22,466        22       (15)          (9)           65,718        105,065

Common stock options exercised ($.50              19                                                 94
  to $9.00 per share)..................
Common stock issued pursuant to the
  Employee Stock Purchase Plan
  ($4.68 and $5.95 per share)..........          162         1                                      853
Tax effect of disqualifying
  dispositions of common stock.........                                                              28
Purchases of treasury stock............                             (440)      (2,733)
Net loss for the year..................                                                                         (2,767)
                                              ------       ---       ---      -------           -------       --------
Balance, January 2, 1999...............       22,647        23      (455)      (2,742)           66,693        102,298

Common stock options exercised ($1.00
  to $6.81 per share)..................           33                                                202
Common stock issued pursuant to the
  Employee Stock Purchase Plan
  ($3.30 and $3.40 per share)..........          206                                                689
Net loss for the year..................                                                                        (88,407)
                                              ------       ---       ---      -------           -------       --------
Balance, January 1, 2000...............       22,886       $23      (455)     $(2,742)          $67,584       $ 13,891
                                              ======       ===       ===      =======           =======       ========



</TABLE>

     The accompanying notes are an integral part of the consolidated financial
     statements.







<PAGE> 49
EXABYTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
                                                                Fiscal Years Ended
                                                    -----------------------------------------
                                                    January 1,      January 2,    January 3,
                                                      2000            1999          1998
                                                    -----------    -----------    -----------
<S>                                                  <C>            <C>            <C>
Cash flows from operating activities:
     Cash received from customers............        $223,624       $291,422       $350,833
     Cash paid to suppliers and employees....        (249,910)      (269,301)      (359,975)
     Interest received.......................           2,628          2,314          2,216
     Interest paid...........................            (477)          (607)          (637)
     Income taxes paid.......................            (297)        (1,093)        (1,732)
     Income tax refund received..............             663         11,771          3,020
          Net cash (used) provided by                --------       --------       --------
            operating activities.............         (23,769)        34,506         (6,275)
                                                     --------       --------       --------

Cash flows from investing activities:
     Purchase of short-term investments......         (41,000)       (69,275)       (58,470)
     Proceeds from the sale of short-term
        investments....................                48,106         56,600         77,600
     Capital expenditures....................         (11,002)        (9,414)       (11,810)
     Cash (used) provided by investing               --------       --------       --------
       activities............................          (3,896)       (22,089)         7,320
                                                     --------       --------       --------
Cash flows from financing activities:
     Proceeds from issuance of
       common stock .........................             891            948          1,311
     Purchase of treasury stock..............              --         (2,733)            --
     Principal payments on long-term
       obligations...........................          (4,187)        (1,075)        (1,565)
          Net cash used by financing                 --------       --------       --------
            activities.......................          (3,296)        (2,860)          (254)
                                                     --------       --------       --------

Net (decrease) increase in cash and cash
     equivalents.............................         (30,961)         9,557            791
Cash and cash equivalents at beginning
     of year.................................          56,571         47,014         46,223
                                                     --------       --------       --------
Cash and cash equivalents at end
     of year.................................        $ 25,610       $ 56,571       $ 47,014
                                                     ========       ========       ========
</TABLE>

     The accompanying notes are an integral part of the consolidated financial
     statements.







<PAGE> 50
EXABYTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
                                                                   Fiscal Years Ended
                                                       -------------------------------------------
                                                         January 1,      January 2,     January 3,
                                                           2000            1999           1998
                                                        -----------     -----------    -----------
<S>                                                     <C>             <C>            <C>
Reconciliation of net loss to net cash
  (used) provided by operating activities:
     Net loss.....................................      $(88,407)       $ (2,767)      $(30,811)
     Adjustments to reconcile net loss
       to net cash (used) provided by operating
       activities:
          Depreciation, amortization
            and other.............................        15,648          16,619         19,742
          Write-down of assets....................           --            1,961          6,054
          Deferred income tax provision (benefit).        36,945          (7,367)        (5,351)
          Provision for losses and reserves
            on accounts receivable................         6,666           8,521         14,486
          Provision for inventory write-downs.....            --              --         15,236
          Stock compensation expense..............            --              --            119

     Change in assets and liabilities:
          Accounts receivable.....................        (5,815)         (4,958)           351
          Inventories, net........................           192          17,554         (4,022)
          Income tax receivable...................         1,132          13,310        (15,873)
          Other current assets....................           804           1,566         (1,484)
          Other assets............................            15             (43)          (171)
          Accounts payable........................         7,295           2,040         (4,923)
          Accrued liabilities.....................          (187)        (11,944)         1,028
          Accrued income taxes....................          (493)          1,353            201
          Other long-term obligations.............         2,436          (1,339)          (857)
                                                        --------        --------       --------
          Net cash (used) provided by
            operating activities..................      $(23,769)       $ 34,506       $ (6,275)
                                                        ========        ========       ========

Supplemental schedule of non-cash
  investing and financing activities:
     Notes payable issued to purchase property
       and equipment and services.................      $  2,092        $  1,102       $    626
     Income tax benefit of disqualifying
       dispositions of common stock...............            --              28            164
     Capital lease obligations....................            --             904            137

</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.






<PAGE> 51
EXABYTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Exabyte Corporation (the "Company") was incorporated on June 5, 1985 under the
laws of the state of Delaware.  Exabyte designs, manufactures and markets a
full range of 8mm tape drives as well as 8mm and DLTtape(TM) robotic tape
libraries.  Exabyte also provides its own brand of recording media, software
utilities and worldwide service and customer support.  The Company reports
its results of operations on the basis of a fiscal year of 52 or 53 weeks
ending on the Saturday closest to December 31.  There were 52 weeks in 1999 and
1998.  There were 53 weeks in 1997.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries. All intercompany accounts and transactions have
been eliminated.

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement
exists, delivery has occurred, the sales price is fixed or determinable, and
collectibility is probable.  Generally, these criteria are met upon shipment of
products and transfer of title to customers.  Revenue from sales to certain
resellers is subject to agreements allowing certain rights of return and price
protection on unsold merchandise held by those resellers. Accordingly, reserves
for estimated future returns and for price protection are provided in the
period of the sale.  Revenue for out-of-warranty service repairs is recorded
when the service has been performed and the product has been shipped back to
the customer.  Revenue for on-site warranty contracts is deferred and amortized
on a straight-line basis over the contract period.  Certain original equipment
manufacturers ("OEM's") require that we maintain inventory at third party
warehouses.  Revenue for these sales are recorded when title passes, upon the
OEM taking possession of the inventory from the warehouse.

Foreign Currency Transactions and Remeasurement

The U.S. dollar is the functional currency of the consolidated corporation
including its subsidiaries.  For the Company's foreign subsidiaries, monetary
assets and liabilities are remeasured into U.S. dollars using the exchange
rates in effect at the balance sheet date and non-monetary assets are
remeasured at historical rates.  Results of operations are remeasured using the
average exchange rates during the period.  The Company recorded net foreign
exchange (gains) losses related to these remeasurements of $207,000, $230,000
and $(989,000) in 1999, 1998 and 1997, respectively.  From time to time, the
Company enters into transactions that are denominated in foreign currencies.
These transactions are translated at the prevailing spot rate upon payment and
recorded in the operating account to which the payment relates.  Accounts
receivable and payable from subsidiaries denominated in foreign currencies are
translated at each period end using period end rates and transaction gains and
losses are recorded.  The Company recorded net foreign exchange (gains)losses
related to these transactions of $686,000, $(36,000) and $1,698,000 in 1999,
1998 and 1997, respectively.




<PAGE> 52
Foreign Currency Forward Contracts

Through 1998, the Company entered into foreign currency forward contracts in
anticipation of movements in the dollar/yen exchange rate, which it used to
hedge the purchase of certain inventory components from Japanese manufacturers.
The Company did not enter into these contracts for trading purposes.  Contracts
were generally established with a maturity date within six months of the
purchase date.  Hedged inventory transactions were included in the Statement
of Cash Flows as operating activities. Transaction gains or losses due to
exchange rate movements were recorded upon settlement of the transaction,
deferred into inventory, and recognized in income as the underlying inventory
was sold.  At January 1, 2000 and January 2, 1999, there were no contracts
outstanding.

Comprehensive Income

The Company has no items of comprehensive income.

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, short-term investments,
account receivable, accounts payable, accrued liabilities and the current
portion of long-term obligations in the consolidated financial statements
approximate fair value because of the short-term maturity of these instruments.
The fair value of long-term obligations for notes payable and capital leases
was estimated by discounting the future cash flows using market interest rates
and does not differ significantly from that reflected in the consolidated
financial statements.

Concentration of Credit Risk

The Company's customers include original equipment manufacturers ("OEMs"),
resellers and end users.  Financial instruments which potentially subject the
Company to concentrations of credit risk are primarily accounts receivable,
cash equivalents and short-term investments.  The Company performs ongoing
credit evaluations of its customers' financial condition and, generally,
requires no collateral from its customers.  At January 1, 2000 and January 2,
1999, one customer accounted for approximately 21% and 16%, respectively, of
net accounts receivable.  Another customer accounted for 15% and 16%,
respectively, of net accounts receivable at January 1, 2000 and January 2,
For these same periods, a third customer accounted for 10% and 17%,
respectively, of net accounts receivable.  No other customers accounted for
10% or more of net accounts receivable at year end for the two years presented.

Accounts receivable are summarized as follows:
<TABLE>
<CAPTION>
                                                      January 1,      January 2,
                                                        2000            1999
                                                      ---------       ---------
                                                          (In thousands)
<S>                                                   <C>             <C>
Accounts receivable..........................         $45,018         $45,844
Less: reserves and allowance for
  non-collection.............................          (7,855)         (7,830)
                                                      -------         -------
                                                      $37,163         $38,014
                                                      =======         =======
</TABLE>
<PAGE> 53

Cash Equivalents and Short-Term Investments

The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.  Such cash equivalents
aggregated $18,797,000 and $45,136,000 at January 1, 2000, January 2, 1999
and January 2, 1999, respectively.

The Company invests in held-to-maturity debt securities which are recorded at
amortized cost.  These include corporate bonds, government bonds and
certificates of deposit.  At January 1, 2000 these investments had maturity
dates of eleven months or less.  There were no unrealized gains or losses on
such investments for the three years then ended.

Inventories

Inventories are stated at the lower of cost or market, cost being determined by
the first-in, first-out method, and include material, labor and manufacturing
overhead.  Inventories are presented net of reserves for excess quantities and
obsolescense of $9,569,000 and $8,426,000 at January 1, 2000 and January 2,
1999, respectively, and consist of the following:

<TABLE>
<CAPTION>
                                                      January 1,      January 2,
                                                        2000            1999
                                                      ---------       ---------
                                                           (In thousands)
<S>                                                    <C>             <C>
Raw materials and component parts............          $15,694         $16,851
Work-in-process..............................            1,874           1,931
Finished goods...............................            9,237           8,215
                                                       -------         -------
                                                       $26,805         $26,997
                                                       =======         =======
</TABLE>

Depreciation and Amortization

Property and equipment are recorded at cost.  Depreciation is computed using
the straight-line method over the estimated useful lives of the respective
depreciable assets.  Software, computers, furniture and machinery/equipment
are depreciated over three years.  Leasehold improvements are amortized on
a straight-line basis over the shorter of the useful life of the asset or the
lease term (three to twelve years).  Maintenance and repairs are expensed as
incurred and improvements are capitalized.

The Company continually evaluates long-lived assets, based on the net future
cash flow expected to be generated from the asset on an undiscounted cash flow
basis, whenever significant events or changes in circumstances occur which
indicate the carrying amount may not be recoverable.  If that analysis
indicates that an impairment has occurred, we measure the impairment based on a
comparison of discounted cash flows or fair values, whichever is more readily
determinable, to the carrying value of the related asset.

Warranty Costs

A provision for estimated future costs which may be incurred under the
Company's various product warranties is recorded when products are shipped.
<PAGE> 54

Advertising Costs

Advertising costs are expensed as incurred.  Advertising expense was
$4,243,000, $7,626,000 and $4,008,000 in 1999, 1998 and 1997, respectively.

Research and Development Costs

Software development costs are capitalized from the time technological
feasibility is established to the time the resulting software product is first
shipped.  Capitalized software costs are stated at the lower of cost or net
realizable value.  There were no capitalized software costs at January 1, 2000.
At January 2, 1999 there were $37,000 in capitalized software costs.  These
items are recorded as other noncurrent assets.  During 1999 and 1998, certain
capitalized software development efforts were determined to be impaired, and
$37,000 and $403,000 in costs, respectively, were written off.  All other
research and development costs are expensed as incurred.

Net Income (Loss) Per Share

Basic net income (loss) per common share is based on the weighted-average
number of shares of common stock outstanding during each respective period.
Diluted net income (loss) per common share adds to basic weighted shares the
weighted-average number of shares of potential common shares (dilutive stock
options) outstanding during each respective period. Proceeds from the exercise
of the potential common shares are assumed to be used to repurchase outstanding
shares of the Company's common stock at the average fair market value during
the period.  In a period in which a loss is incurred, only the weighted-average
number of common shares is used to compute the diluted loss per share as the
inclusion of potential common shares would be antidilutive.  The calculation of
basic and diluted earnings per share (EPS) is as follows:
<TABLE>
<CAPTION>
(In thousands, except per share data)

                                         1999          1998          1997
                                       --------      --------      --------
<S>                                    <C>           <C>           <C>
Basic and diluted EPS computation:
    Net loss.....................      $(88,407)     $ (2,767)     $(30,811)
                                       ========      ========      ========
    Common shares outstanding....        22,256        22,285        22,326
                                       ========      ========      ========
    Basic and diluted EPS........      $  (3.97)     $  (0.12)     $  (1.38)
                                       ========      ========      ========
</TABLE>

In all years presented, basic shares equal diluted shares because inclusion of
potential common shares would be antidilutive.

Options to purchase 2,941,000, 2,742,000 and 3,204,000 shares of common stock
were excluded from dilutive stock option calculations for 1999, 1998 and 1997,
respectively, because their exercise prices were greater than the average fair
market value of the Company's stock for the period, and as such they would be
antidilutive.

In addition, for 1999, 1998 and 1997, options to purchase 1,099,000, 1,102,000
and 494,000 shares of common stock, respectively, were excluded from the
diluted computation above because of their antidilutive effect on net loss per
<PAGE> 55

share.  Inclusion of these shares would have resulted in additional dilutive
stock options outstanding of 45,000, 117,000 and 97,000, respectively.

Use of Estimates

The Company has prepared these financial statements in conformity with
generally accepted accounting principles which require the use of management's
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities, as well as the reported
amounts of revenue and expenses.  Accordingly, actual results could differ from
the estimates used.

Reclassifications

Certain reclassifications have been made to historical information to
correspond to the 1999 financial statement presentation.

New Accounting Pronouncement

In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133").  SFAS 133 prescribes
accounting for changes in the fair value of derivatives.  In July 1999, the
FASB delayed the implementation date of this standard to all fiscal quarters of
all fiscal years beginning after June 15, 2000.  This delay was published as
Statement of Financial Accounting Standards No. 137 ("SFAS 137").  The Company
is in the process of assessing the effects of application of this statement,
and believes it will not have a material impact on the Company's consolidated
results of operations.  Application may result in the recognition of components
of comprehensive income which are discussed in Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income."

NOTE 2 - PROPERTY AND EQUIPMENT

Property and equipment consist of the following:
<TABLE>
<CAPTION>
                                                      January 1,       January 2,
                                                        2000             1999
                                                      ---------        ---------
                                                           (In thousands)
<S>                                                    <C>             <C>
Equipment and furniture......................         $108,056         $100,432
Equipment under capital leases...............            1,826            2,384
Leasehold improvements.......................           17,572           16,507
Less: accumulated depreciation and
  amortization...............................         (102,746)         (90,927)
                                                      --------         --------
                                                      $ 24,708         $ 28,396
                                                      ========         ========
</TABLE>

Depreciation expense was $15,583,000, $16,619,000 and $19,503,000 in
1999, 1998 and 1997, respectively.  Accumulated amortization of equipment
under capital leases was $1,446,000 and $1,657,000 at January 1, 2000 and
January 2, 1999, respectively.  Amortization of equipment under capital
leases is included in depreciation expense.  In 1997, the Company incurred
restructuring charges which included fixed asset write-downs (see Note 11).
<PAGE> 56
NOTE 3 - ACCRUED LIABILITIES

Accrued liabilities consist of the following:
<TABLE>
<CAPTION>
                                                      January 1,      January 2,
                                                        2000            1999
                                                      ---------       ---------
                                                           (In thousands)
<S>                                                    <C>             <C>
Wages and employee benefits..................          $ 6,083         $ 6,047
Warranty and related costs, current portion..            3,536           4,650
Other........................................            4,196           3,305
                                                       -------         -------
                                                       $13,815         $14,002
                                                       =======         =======
</TABLE>

NOTE 4 - DEBT

Line of Credit

The Company maintains a $7,500,000 bank line of credit which expires
August 1, 2000.  This line of credit is secured by $7,500,000 in
marketable securities held by an affiliate of the lender.  The line of credit
has no financial covenants.  Use of the invested funds is not legally
restricted.  On January 1, 2000, the amount available under the line was
$7,500,000 and no borrowings were outstanding.  Borrowings made under the
agreement bear interest at the lower of the bank's prime rate or LIBOR + 2%.

Offsetting the amount available under the line of credit is a letter of
credit which secures certain leasehold improvements made by the Company's
subsidiary in Germany.  This letter is currently for DM 1,100,000 and
decreases by DM 100,000 in August of each year until it is fully depleted.

Long-Term Obligations

In 1999 and 1998, the Company entered into notes payable for $2,092,000 and
$1,102,000, respectively to finance the purchase of certain equipment,
computer software and services.  The 1999 note payable requires quarterly
installments of interest (7.2%) and principal through April 2001.  The 1998
note payable requires monthly installments of interest (7.7%) and principal
through January 2001 and is collateralized by the respective equipment.

The Company has also entered into capital lease obligations related to the
acquisition of certain equipment.

Other long-term obligations include the long-term portion of estimated
warranty obligations and deferred revenue on on-site warranty contracts.
The following represents future payments pursuant to these obligations as
of January 1, 2000:








<PAGE> 57
<TABLE>
<CAPTION>

                                                  Capital
                                       Notes       Lease
                                      Payable   Obligations    Other       Total
                                      --------    --------    --------    --------
                                                     (In thousands)
<S>                                  <C>           <C>        <C>         <C>
2000.......................          $1,565        $383       $1,113      $3,061
2001.......................             331         148        2,633       3,112
2002.......................              --           4        3,441       3,445
2003.......................              --          --           35          35
2004.......................              --          --           --          --
Thereafter.................              --          --           --          --
                                     ------        ----       ------      ------
                                      1,896         535        7,222       9,653
Less: amount representing
  interest.................             (92)        (60)          --        (152)
                                     ------        ----       ------      ------
Present value of payments..           1,804         475        7,222       9,501
Less: current portion......          (1,478)       (340)      (1,113)     (2,931)
                                     ------        ----       ------      ------
                                     $  326        $135       $6,109      $6,570
                                     ======        ====       ======      ======
</TABLE>

Interest expense aggregated $477,000, $607,000 and $637,000 in 1999, 1998
and 1997, respectively.

NOTE 5 - CAPITAL STOCK AND STOCK COMPENSATION PLANS

At January 1, 2000, the Company had three stock-based compensation plans.  The
Company applies APB Opinion 25 and related interpretations in accounting for
its plans.  Accordingly, no compensation cost has been recognized for options
granted at fair market value under its fixed stock option plans and its stock
purchase plan.  Had compensation cost for the Company's three stock-based
compensation plans been determined based on the fair value at the grant dates
for awards under those plans consistent with the method of FASB Statement 123,
the Company's pro forma results of operations and pro forma net loss per share
would have been as follows:
<TABLE>
<CAPTION>
(In thousands, except per share data)               1999         1998         1997
                                                    ----         ----         ----
<S>                                                 <C>          <C>          <C>
Net loss:
    As reported......................               $(88,407)    $(2,767)    $(30,811)
    Pro forma........................               $(90,558)    $(5,929)    $(34,953)
Basic and diluted net loss per share:
    As reported......................               $(3.97)      $(0.12)     $(1.38)
    Pro forma........................               $(4.07)      $(0.27)     $(1.57)

</TABLE>

In all years presented, basic loss per share equals diluted loss per share
because inclusion of potential common shares would be antidilutive.


<PAGE> 58
Fixed Stock Option Plans

Under the Incentive Stock Plan, the Company may grant options to its
employees and directors for up to 9,500,000 shares of common stock.  Under
the 1997 Non-Officer Stock Option Plan, the Company may grant options to its
employees (who are not officers or directors) for up to 2,750,000 shares of
common stock.   Under both plans, options are granted at an exercise price not
less than the fair market value of the stock on the date of grant.  The options
vest over periods up to 50 months and expire 10 years after the date of grant,
except in the event of the termination or death of the employee, whereupon
vested shares must be exercised within 90 days or six months, respectively, or
they are canceled.

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions:
<TABLE>
<CAPTION>
                                                  1999               1998               1997
                                                  ----               ----               ----
<S>                                               <C>                <C>                <C>
Estimated dividends...................            none               none               none
Expected volatility...................            57%                57%                55%
Risk-free interest rate...............            4.7%-6.6%          4.4%-5.9%          5.6%-6.9%
Expected life from vest date (years)..            0.28               0.29               0.29

</TABLE>

A summary of the status of the Company's fixed stock option plans as of
January 1, 2000, January 2, 1999 and January 3, 1998, and changes during the
years then ended is presented as follows:

<TABLE>
<CAPTION>
                                         1999                       1998                       1997
                               -----------------------    -----------------------    -----------------------
                               Shares   Weighted-Avg.     Shares   Weighted-Avg.     Shares   Weighted-Avg.
                               (000s)   Exercise Price    (000s)   Exercise Price     (000s)   Exercise Price
                               -------  --------------    -------  --------------    -------  --------------
<S>                            <C>         <C>            <C>         <C>            <C>         <C>
Outstanding at beginning
   of year..................   3,844       $13.32         3,698       $15.98         3,618       $16.71
Granted.....................   1,462         5.30         1,326         7.09         1,190        12.51
Exercised...................     (33)        6.16           (19)        5.07          (143)        1.65
Forfeited...................  (1,233)       10.76        (1,161)       14.82          (967)       16.58
                               -----       ------         -----       ------         -----       ------
Outstanding at end of year..   4,040       $11.26         3,844       $13.32         3,698       $15.98
                               =====       ======         =====       ======         =====       ======
Options exercisable
  at year-end...............   2,394       $14.29         2,215       $15.97         2,103       $17.63
Weighted-average fair value
  of options granted during
  the year..................               $ 2.12                     $ 2.86                     $ 4.91
</TABLE>





<PAGE> 59
The following table summarizes information about fixed stock options
outstanding at January 1, 2000:
<TABLE>
<CAPTION>
                            Options Outstanding                           Options Exercisable
                     Number      Weighted-Avg.   Weighted-Avg.        Number       Weighted-Avg.
  Range of        Outstanding      Remaining       Exercise        Exercisable       Exercise
Exercise Prices     (000's)    Contractual Life     Price            (000's)          Price
---------------   -----------  ----------------  -------------     -----------     -------------
<S>                  <C>          <C>                <C>              <C>              <C>
$ 3.97- 5.50         1,033        9.2 years          $ 5.19             173            $ 5.50
  6.88-12.38         1,115        7.5 years            7.33             554              7.78
 12.63-15.88         1,099        5.9 years           13.61             892             13.75
 16.13-35.63           793        3.2 years           21.44             775             21.52
                     -----        ---------          ------           -----            ------
                     4,040        6.7 years          $11.26           2,394            $14.29
                     =====        =========          ======           =====            ======
</TABLE>

Employee Stock Purchase Plan

Under the Employee Stock Purchase Plan, the Company is authorized to issue up
to 1,000,000 shares of common stock to its full-time employees, nearly all of
whom are eligible to participate.  The Company currently has 9,000 shares
available for issue under this plan.  As a result, more shares must be
authorized in order to fulfill any future issuances, including those for the
purchase period from January 1, 2000 to June 30, 2000.  Under the terms of the
plan, employees may elect to have up to 15% of their gross salaries withheld
by payroll deduction to purchase the Company's common stock.  The purchase
price of the stock is 85% of the lower of market price at the beginning or
end of each six-month participation period.  Under the plan, employees
purchased 206,000, 162,000 and 139,000 shares in 1999, 1998 and 1997,
respectively.  The fair value of each stock purchase plan grant is estimated
on the date of grant using the Black-Scholes model with the following
assumptions:
<TABLE>
<CAPTION>                                         1999            1998            1997
                                                  ----            ----            ----
<S>                                               <C>             <C>             <C>
Estimated dividends..................             none            none            none
Expected volatility..................             57%             57%             55%
Risk-free interest rate..............             4.7%-4.9%       4.7%-5.4%       5.3%-5.6%
Expected life (years)................             0.5             0.5             0.5
Weighted-average fair value of
  purchase rights granted............             $1.49           $2.34           $4.14

</TABLE>

Stockholder Rights Plan

The Board of Directors adopted on January 24, 1991 and amended on August 23,
1995 a Stockholder Rights Plan ("Rights Plan") in which preferred stock
purchase rights were distributed as a dividend at the rate of one right for
each share of Exabyte common stock held as of February 15, 1991.  The Rights
Plan is designed to deter coercive or unfair takeover tactics and to prevent an
acquiring entity from gaining control of the Company without offering a fair
price to all of the Company's stockholders.


<PAGE> 60
Each right will entitle the holders of the Company's common stock to purchase
one one-hundredth of a share of preferred stock at an exercise price of $75,
subject to adjustment in certain cases to prevent dilution.  The rights are
evidenced by the common stock certificates and are not exercisable or
transferable apart from the common stock until the earlier of ten days after
the date on which a person or group has acquired beneficial ownership of 15% or
more of the common stock (an "Acquiring Entity") or ten business days after the
public announcement of the commencement of a tender or exchange offer that
would result in the Acquiring Entity owning 15% or more of the common stock.
Further, the rights generally entitle each right holder (except the Acquiring
Entity) to purchase that number of shares of the Company's common stock which
equals the exercise price of the right divided by one-half of the current
market price of the common stock if any person becomes the beneficial owner of
15% or more of the common stock.  If an Acquiring Entity purchases at least 15%
of the Company's common stock, but has not acquired 50%, the Board of Directors
may exchange the rights (except those of the Acquiring Entity) for one share of
common stock per right.  In addition, under certain circumstances, if the
Company is involved in a merger or other business combination in which the
Company is not the surviving corporation, the rights entitle the holder to buy
common stock of the Acquiring Entity with a market value of twice the exercise
price of each right.

The Company is generally entitled to redeem the rights for $.01 per right at
any time until ten days following a public announcement that a 15% stock
position has been acquired and in certain other circumstances.  The rights,
which do not have voting rights, will expire on February 15, 2001, unless
redeemed or exchanged earlier by the Company pursuant to the Rights Plan.

NOTE 6 - INCOME TAXES

Pretax loss is subject to tax in the following jurisdictions:
<TABLE>
<CAPTION>
                        1999          1998         1997
                      --------      --------     --------
                                 (In thousands)
<S>                   <C>          <C>          <C>
Domestic..........    $(48,681)    $ (5,374)    $(50,899)
Foreign...........      (2,507)        (775)      (2,224)
                      --------     --------     --------
                      $(51,188)    $ (6,149)    $(53,123)
                      ========     ========     ========
</TABLE>
















<PAGE> 61
The provision for (benefit from) income taxes consists of the following:
<TABLE>
<CAPTION>
                         1999        1998         1997
                        -------     -------     --------
                                 (In thousands)
<S>                     <C>         <C>         <C>
Current:
  Federal.........      $     --     $ 2,443     $(15,607)
  State...........            --       1,428       (1,535)
  Foreign.........           274         114          182
Deferred:
  Federal.........        31,588      (6,180)      (4,988)
  State...........         3,182      (1,187)        (364)
  Foreign.........         2,175          --           --
                        --------     --------    ---------
                        $ 37,219     $(3,382)    $(22,312)
                        ========     ========    =========
</TABLE>

Total income tax benefit differs from the amount computed by
applying the U.S. federal income tax rate of 35% to loss before
income taxes for the following reasons:
<TABLE>
<CAPTION>
                                  1999           1998         1997
                                ---------      --------     --------
                                           (In thousands)
<S>                             <C>            <C>          <C>
U.S. federal income tax
  at statutory rate..........   $(17,916)      $ (2,152)    $(18,593)
State income taxes, net
  of federal benefit.........     (1,084)           (63)      (1,362)
Valuation allowance..........     56,149              --           --
Research and development
  credits....................     (1,000)        (1,500)      (1,500)
Tax exempt interest..........         (9)          (397)        (465)
Prior year filing effects....         --            364       (1,210)
Foreign taxes in excess
  of 35%.....................      1,396            376          904
Other........................       (317)           (10)         (86)
                                --------       --------     --------
                                $ 37,219       $ (3,382)    $(22,312)
                                ========       ========     ========
</TABLE>














<PAGE> 62
Deferred tax assets are attributable to the following:
<TABLE>
<CAPTION>
                                                 January 1,      January 2,
                                                   2000            1999
                                                -----------     -----------
                                                      (In thousands)
<S>                                              <C>             <C>
Current assets:
  Warranty reserve..........................     $ 2,681         $ 2,507
  Bad debt and revenue reserves.............       2,772           2,634
  Inventory reserves........................       4,009           2,931
  Other.....................................       2,367           1,565
                                                 -------         -------
                                                  11,829           9,637
  Less valuation allowance..................     (11,829)             --
                                                 -------         -------
                                                 $  --           $ 9,637
                                                 =======         =======
Noncurrent assets:
  Property and equipment....................     $ 4,375         $ 4,939
  Net operating loss carryforwards:
    Domestic................................      31,672          13,925
    Foreign.................................       2,000           2,175
  Credit carryforwards......................       4,517           5,152
  Goodwill..................................         928           1,017
  Other.....................................         828             100
                                                 -------         -------
                                                  44,320          27,308
  Less valuation allowance..................     (44,320)             --
                                                 -------         -------
                                                 $    --         $27,308
                                                 =======         =======
</TABLE>

As of the end of the second quarter of 1999, the Company recorded a deferred
tax valuation allowance equal to 100% of total deferred tax assets.  Management
considered a number of factors, including the Company's cumulative operating
losses over the prior three years, short-term projected losses due to the
impact of delays in the release of the M2(tm) product, as well as certain
offsetting positive factors.  Management concluded that a valuation allowance
was required for 100% of the total deferred tax asset as it is more likely
than not that the deferred tax assets will not be realized (See Note 13).

At January 1, 2000, domestic net operating loss carryforwards of $75,539,000,
which expire between 2018 and 2019, are available to offset future taxable
income.  Utilization of $6,025,000 of the carryforwards is subject to an annual
limitation of $670,000 through 2005. Foreign net operating loss carryforwards
may be carried forward indefinitely. In addition, the Company has unused
research and development credits of $3,405,000 which expire between 2012 and
2019 and alternative minimum tax credits of $1,113,000 which may be carried
forward indefinitely.







<PAGE> 63

NOTE 7 - LEASE COMMITMENTS

The Company leases its office, production and sales facilities under various
operating lease arrangements.  Most of the leases contain various provisions
for rental adjustments including, in certain cases, a provision based on
increases in the Consumer Price Index.  In addition, most of the leases
require the Company to pay property taxes, insurance and normal maintenance
costs.  The Company has sublet certain of these leased spaces to third
parties. The Company also leases certain equipment under operating leases.

Future minimum lease payments under non-cancelable operating lease arrangements
are as follows:
<TABLE>
<CAPTION>
                                                         Gross Amount       Sublease       Net Amount
                                                         ------------       --------       ----------
                                                                         (In thousands)
     <S>                                                 <C>                 <C>           <C>
     2000...................................             $ 5,601             $382          $ 5,219
     2001...................................               4,947               94            4,853
     2002...................................               4,577               10            4,567
     2003...................................               3,683               --            3,683
     2004...................................               2,163               --            2,163
     Thereafter.............................                 258               --              258
                                                         -------             ----          -------
                                                         $21,229             $486          $20,743
                                                         =======             ====          =======
</TABLE>

Rent expense aggregated $5,917,000, $5,971,000 and $5,906,000 in 1999,
1998 and 1997, respectively.

NOTE 8 - EMPLOYEE BENEFIT PLAN

The Company maintains a qualified Section 401(k) Savings Plan which allows
eligible employees to contribute up to 15% of their salaries on a pre-tax
basis.  Company contributions to the plan are discretionary.  The Company
recorded as expense matching contributions totaling $761,000, $917,000 and
$920,000 in 1999, 1998 and 1997, respectively.  Company contributions are
fully vested after six years of employment.

NOTE 9 - SEGMENT, GEOGRAPHIC AND SALES INFORMATION

In 1998, the Company adopted Statement of Financial Accounting Standards No.
131 "Disclosures About Segments of an Enterprise and Related Information"
("SFAS 131").  At the time, the Company was organized on a divisional basis by
product lines.  Each product line was engineered, manufactured and marketed in
one of three different operating segments.  Certain other costs including
administrative, sales, technical support and corporate marketing were not
allocated to the segments and were considered corporate costs.  During the
third quarter of 1999, the Company underwent a restructuring (see Note 11)
and as a result collapsed the three separate operating segments into one.

Currently, all operations of the Company are considered one operating segment.
Therefore, no segment disclosures have been presented.  The Company will
continue to review the internal reporting structure for future changes that
could result in disclosure of segments under SFAS 131.

<PAGE> 64

The following table details revenues from external customers by geographic
area:
<TABLE>
<CAPTION>
                             Revenues form External Customers
                             --------------------------------
                                 1999      1998      1997
                               --------  --------  --------
                                      (In thousands)
<S>                            <C>       <C>       <C>
United States...............   $147,149  $201,973  $229,200
Europe/Middle East..........     56,435    63,797    74,695
Pacific Rim.................     14,715    17,020    25,085
Other.......................      4,528     3,715     6,704
                               --------  --------  --------
                               $222,827  $286,505  $335,684
                               ========  ========  ========
</TABLE>
Foreign revenue is based on the country in which the customer is located.

The following table details long-lived asset information by geographic
area:
<TABLE>
<CAPTION>
                                        Long-lived Assets
                                ---------------------------------
                                January 1,  January 2,  January 3,
                                  2000        1999        1998
                                ---------   ---------   ---------
                                         (In thousands)
<S>                             <C>         <C>         <C>
United States...............    $18,281     $22,021     $26,308
Scotland....................      3,703       3,429       5,278
Germany.....................      3,132       3,313       4,035
Pacific Rim.................        331         430         522
Other.......................        285         279         445
                                -------     -------     -------
                                $25,732     $29,472     $36,588
                                =======     =======     =======
</TABLE>

<TABLE>
The following table details revenue by product line:

                                   1999         1998       1997
                                  ------       ------     ------
<S>                             <C>          <C>         <C>
                                           (In thousands)

Drives                          $100,714      $155,325   $220,330
Libraries                         46,575        56,486     61,641
Media                             67,668        67,113     49,132
Service, spares and other         15,450        19,091     21,679
Sales allowances                  (7,580)      (11,510)   (17,098)
                                 --------     ---------   --------
                                $222,827      $286,505   $335,684
                                ========      ========   ========
</TABLE>
<PAGE> 65

The following table summarizes sales to major customers:
<TABLE>
<CAPTION>
                                       Net Sales                    % of Total Net Sales
                               ----------------------------      -------------------------
                                 1999      1998      1997         1999     1998     1997
                               --------  --------  --------      ------  ------   ------
                                      (In thousands)
<S>                            <C>       <C>        <C>          <C>      <C>      <C>

IBM  .......................   $33,790   $43,405    $56,015      15.2%    15.2%    16.7%
Ingram Micro ...............    29,967    36,138     33,292      13.5     12.6      9.9
Sun Microsystems............    24,400    31,505     44,581      11.0     11.0     13.3

</TABLE>


No other customers accounted for 10% or more of sales in any of these periods.

NOTE 10 - QUARTERLY INFOMRATION (UNAUDITED)

<TABLE>

(In thousands except per share data)              1999
<S>                           <C>         <C>             <C>         <C>

                                 Q4          Q3             Q2          Q1
                              -------     -------         -------     -------
Net sales .................   $58,617     $53,041        $48,519     $62,650
Gross profit ..............    10,808       7,286          6,319      15,539
Net loss ..................   (11,913)    (17,503)       (55,491)     (3,500)
Basic and diluted
   net loss per share .....     (0.53)      (0.78)         (2.50)      (0.16)


(In thousands except per share data)              1998

                                 Q4          Q3             Q2          Q1
                              -------     -------         -------     -------
Net sales                     $63,196     $72,805        $69,754     $80,750
Gross profit                   13,539      21,166         20,350      23,846
Net income (loss)              (5,285)        338            151       2,029
Basic and diluted
 net income (loss) per share    (0.24)        .02            .01         .09

</TABLE>

NOTE 11 - RESTRUCTURINGS

During the third quarter of 1999, management determined that the division of
the Company into three operating segments was no longer appropriate due to the
amount of overhead required to maintain this structure.  The Company incurred
$2,446,000 in pretax restructuring charges to combine its three operating
segments under common management.  These costs included severance, outplacement
and benefits for the resulting workforce reduction of approximately 143
employees.  All areas of the Company were impacted by the workforce reduction.
Approximately $664,000 of these costs were included in cost of sales,
$1,453,000 were included in selling, general and administrative costs and
<PAGE> 66
$328,000 were included in research and development costs.  Severance and
related costs of $2,154,000 were paid in cash during 1999.  The remaining
severance and related cost accruals are expected to be paid during the first
half of 2000.

The following table summarizes the activity related to the 1999 restructuring
reserve:

                                                        Severance and Related
                                                        ---------------------
(In thousands)

Restructuring charges ................................         $2,446
Cash payments ........................................         (2,154)
                                                               -------
Balance, January 1, 2000 .............................         $  292
                                                               =======

During 1997, the Company incurred $34,947,000 in pre-tax restructuring
charges related to formal decisions by the Company's Board of Directors to
exit the desktop and low-end server markets and establish a more competitive
cost structure in those markets.  These charges include workforce reduction
costs of $3,123,000, inventory write-downs of $16,890,000, non-cancelable
supplier/customer commitments of $7,794,000 and asset write-downs of $7,140,000.
At January 1, 2000 all costs of this restructuring have been settled
or paid except for certain future lease commitments totaling $61,000.

NOTE 12 - CONTINGENCIES

The Company is, from time to time, subjected to certain claims, assertions or
litigation by outside parties as part of its ongoing business operations.  The
outcomes of any such contingencies are not expected to have a material adverse
impact on the financial condition or results of the operations of the Company.

The Company has entered into development agreements with Hitachi Corporation
for the development of certain M2 and M3 components and manufacture of
engineering prototypes.  Under these agreements, which are cancelable by either
party by giving notice and without cost or penalty, the Company will retain all
technology rights for data storage applications.  Neither party is obligated to
pay royalties.  Amounts are expensed based upon the performance of services by
Hitachi or receipt of engineering prototypes.

Under these two agreements, the Company had a maximum obligation with regard to
development activities of approximately $5,000,000.  In addition, the Company
purchased prototype parts, as needed.  During 1999 and 2000, Exabyte expensed
$2,100,000 and $2,900,000, respectively, for development charges and $100,000
and $600,000 for prototype parts under these agreements.

NOTE 13 - SUBSEQUENT EVENTS

LIQUIDITY

Since January 1, 2000, the Company has continued to incur operating losses and
for the year ended December 30, 2000 incurred a net loss of $41.3 million.
These losses were attributed to continued revenue shortfalls from plan,
primarily in drives and media, resulting in a build-up of inventories and
creating liquidity constraints on the Company. Further, as of December 30,
2000, the Company had only $7.2 million of remaining borrowing capacity under
the $20 million secured line of credit, which expires on May 16, 2003.
<PAGE> 67
As a result of the above, the Company's is currently reassessing it business
and investigating various strategic alternatives that would result in increased
liquidity.  These alternatives may include one or more of the following:

   -  sale of all or part of the Company's operating assets, off-balance sheet
assets and/or intangibles;

   -  restructuring of current operations;

   -  additional equity infusions;

   -  modification of the existing bank line of credit; or

   -  strategic alliance, acquisition or merger.

The Company has engaged an investment banker to assist in this process and will
continue to explore these and other options that would provide additional
capital for longer term objectives and operating needs.

The Company cannot assure that it will accomplish such strategic actions or
financing actions and if it is unable to do so, it may not be able to achieve
its currently contemplated business objectives, or the timing in reaching those
objectives may be delayed.

RESTATEMENT

The 1999 consolidated financial statements presented herein have been restated
to reflect the recording of a full valuation allowance on deferred tax assets
as of January 1, 2000.  The Company originally recorded a partial valuation
allowance on its deferred tax assets as of July 3, 1999 due to the significant
deterioration in operating results incurred in the quarter then ended.  Based
on a re-evaluation of the situation subsequent to the issuance of the 1999
financial statements, the Company has increased that partial valuation
allowance to a full valuation allowance resulting in an increase to income
tax expense in the second quarter of 1999 and for the year 1999 of $38,620,000.
This restatement had no effect on the Company's net cash flows from operating,
investing or financing activities.  The 1999 financial statements have been
restated as follows:

<TABLE>
                                                        1999
                                                        ----
                                         As Originally          Restated
                                             Reported
                                     --------------------   -------------
<S>                                         <C>                  <C>
                                     (In thousands, except per  share data)
Statement of Operations Data:
(Provision) benefit for income taxes .....  $  1,401              $(37,219)
 Net Loss ................................   (49,787)              (88,407)
 Basic and diluted net loss per share ....     (2.24)                (3.97)

Balance Sheet Data:
 Deferred income taxes (current) .........  $  8,136              $     --
 Total current assets ....................   109,680               101,544
 Deferred income taxes (noncurrent) ......    30,484                    --
 Retained earnings .......................    52,511                13,891
 Total stockholders' equity ..............   117,376                78,756
</TABLE>
<PAGE> 68
Item 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

     None reported.

PART III

Item 10.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information concerning the Company's directors is incorporated by reference
from the information contained in the Section entitled "Election of Directors"
in the Company's definitive Proxy Statement for the Company's 2000 Annual
Meeting of Stockholders to be filed within 120 days after January 1, 2000, the
close of its fiscal year ("Proxy Statement").  Information concerning
compliance with Section 16(a) of the Securities Exchange Act of 1934 is
incorporated by reference from the Section entitled "Compliance with Section
16(a) of the Securities Exchange Act of 1934" in the Proxy Statement.
Information concerning the executive officers of the Company is set forth
in Part I of this Form 10-K.

Item 11.
EXECUTIVE COMPENSATION

Information required by this Item is incorporated by reference from the Section
entitled "Summary of Compensation," contained in the Proxy Statement.

Item 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information required by this Item is incorporated by reference from the Section
entitled "Security Ownership of Certain Beneficial Owners and Management"
contained in the Proxy Statement.

Item 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Not applicable.




















<PAGE> 69
PART IV

Item 14.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)1.   Financial Statements

The following consolidated financial statements of Exabyte Corporation and
Subsidiaries are included in Part II, Item 8.

Consolidated Financial Statements as of January 1, 2000, January 2, 1999
and for each of the three fiscal years in the period ended January 1, 2000.


                                                                     Page
                                                                     -----
Report of Independent Accountants...............................      45

Consolidated Balance Sheets.....................................      46

Consolidated Statements of Operations...........................      47

Consolidated Statements of Changes in Stockholders' Equity......      48

Consolidated Statements of Cash Flows...........................      49-50

Notes to Consolidated Financial Statements......................      51-67

(a)2.   Financial Statement Schedules

Schedules-Years ended January 1, 2000, January 2, 1999
  and January 3, 1998.

  II      Valuation and Qualifying Accounts and Reserves........      72

All other schedules are omitted because they are inapplicable, not required
under the instructions, or the information is included in the financial
statements or notes thereto.





















<PAGE> 70
(a)3.   Exhibit Index

     Exhibit
      Number       Description
------------------------------

         3.1       Restated Certificate of Incorporation. (1)
         3.2       Certificate of Determination of Preference of Series A
                   Junior Participating Preferred Stock. (2)
         3.3       By-laws of the Company, as amended. (12)
      **10.1       Incentive Stock Plan, as amended and restated on
                   January 16, 1997. (8)
      **10.2       Stock Option Agreement used in connection with the
                   Incentive Stock Plan. (11)
      **10.3       1990 Employee Stock Purchase Plan. (7)
      **10.4       Employee Stock Purchase Plan Offering used in connection
                   with the 1990 Employee Stock Purchase Plan. (7)
      **10.5       Form of participation agreement used in connection with the
                   1990 Employee Stock Purchase Plan. (3)
      **10.6       1997 Non-officer Stock Option Plan, as adopted by the Board
                   of Directors on December 23, 1997. (10)
      **10.7       Stock Option Agreement used in connection with the 1997 Non-
                   Officer Stock Option Plan. (10)
        10.8       Agreement for the sale and transfer of all shares in Grundig
                   Data Scanner GmbH dated September 13, 1994. (4)
        10.9       Form of Indemnity Agreement entered into by the Company
                   with each director and executive officer of the Company. (6)
      **10.10      2000 Officer Bonus Plan.
        10.11      Rights Agreement, dated January 24, 1991, between the
                   Company and The First National Bank of Boston, as Rights
                   Agent. (2)
        10.12      Amendment to the Rights Agreement, dated August 4, 1995,
                   between the Company and The First National Bank of Boston
                   as Rights Agent. (5)
        10.13      Development Agreement, dated April 22, 1999, among
                   Hitachi Digital Media Products Division of Hitachi, Ltd.
                   and Exabyte Corporation.
        10.14      Development Agreement, dated December 20, 1999, among
                   Hitachi Digital Media Products Division of Hitachi, Ltd.
                   and Exabyte Corporation.
        10.15      8mm Mechanical Components Purchase Agreement, dated
                   December 11, 1996, among Hitachi Ltd. Electronic Sales
                   Office, Exabyte Corporation and Nihon Exabyte
                   Corporation. (9)
        10.16      Commitment Letter regarding Line of Credit, between the
                   Company and Congress Financial Corporation, a subsidiary
                   of First Union National Bank, accepted April 4, 2000.
        21.1       List of Subsidiaries.
        23.1       Consent of PricewaterhouseCoopers LLP.
        24.1       Power of Attorney.  Reference is made to the signature page.


**         Indicates management contracts or compensation plans or
           arrangements filed pursuant to Item 601(b)(10) of Regulation S-K.





<PAGE> 71
 (1)    Filed as an Exhibit to the Company's Registration Statement on Form
        S-1 (Registration No. 33-30941) filed with the Securities and Exchange
        Commission (the "SEC") on September 8, 1989 or Amendments Nos. 1 and 2
        thereto (filed on October 12, 1989 and October 16, 1989 respectively),
        and incorporated herein by reference.

 (2)    Filed as an Exhibit to the Company's Report on Form 8-K, as filed with
        the SEC on January 26, 1991 and incorporated herein by reference.

 (3)    Filed as an Exhibit to the Company's Registration Statement on Form
        S-8 (Registration No. 33-33414), as filed with the SEC on February 9,
        1990 and incorporated herein by reference.

 (4)    Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q,
        filed with the SEC on November 14, 1994 and incorporated herein by
        reference.

 (5)    Filed as an Exhibit to the Company's Report on Form 8-K, as filed
        with the SEC on August 23, 1995 and incorporated herein by reference.

 (6)    Filed as an Exhibit to the Company's 1994 Annual Report on Form 10-K,
        filed with the SEC on March 17, 1995 and revised and filed on
        March 24, 1995, incorporated herein by reference.

 (7)    Filed as an Exhibit to the Company's Report on Form S-8 (Registration
        No. 333-09279), as filed with the SEC on July 31, 1996 and
        incorporated herein by reference.

 (8)    Filed as an Exhibit to the Company's Quarterly Report on Form 10-Q,
        filed with the SEC on November 12, 1997 and incorporated herein by
        reference.

 (9)    Filed as an Exhibit to the Company's Annual Report on Form 10-K,
        filed with the SEC on March 19, 1997, and incorporated herein by
        reference.

(10)    Filed as an Exhibit to the Company's Report on Form S-8 (Registration
        No. 333-73011), as filed with the SEC on March 1, 2000 and
        incorporated herein by reference.

(11)    Filed as an Exhibit to the Company's Annual Report on Form 10-K,
        filed with the SEC on March 25, 1998, and incorporated herein by
        reference.

(12)    Filed as an Exhibit to the Company's Annual Report on 10-K, filed
        with the SEC on April 1, 1999, and incorporated herein by
        reference.

Reports on Form 8-K

No report on Form 8-K was filed during the fiscal quarter ended January 1,
2000.







<PAGE> 72
EXABYTE CORPORATION AND SUBSIDIARIES
Schedule II - Valuation and Qualifying Accounts and Reserves
(In thousands)
<TABLE>
<CAPTION>

   Col. A                                   Col. B        Col. C        Col. D         Col. E         Col. F
 ----------                               ----------    ----------    ----------     ----------     ----------
                                           Balance       Charged
                                           at            to            Charged                        Balance
                                           Beginning     Costs         to                             at End
                                           of            and           Other                          of
Description                                Period        Expenses      Accounts       Deduction       Period
------------                              ----------    ----------    ----------     -----------     ----------
<S>                                        <C>            <C>           <C>            <C>             <C>
Year Ended January 3, 1998:
  Allowance for doubtful accounts.....     $ 1,519        $   310       $    --        $   (813) (1)   $ 1,016

  Reserves for sales programs.........       5,796             --        14,176         (13,242) (2)     6,730

  Inventory valuation reserves........       7,950         21,038            --         (10,120) (3)    18,868
                                           -------        -------       -------        --------        -------
                                           $15,265        $21,348       $14,176        $(24,175)       $26,614
                                           =======        =======       =======        ========        =======
Year Ended January 2, 1999:
  Allowance for doubtful accounts.....     $ 1,016           (713)           --             330  (1)       633

  Reserves for sales programs.........       6,730             --        11,510         (11,043) (2)     7,197

  Inventory valuation reserves........      18,868         (1,752)           --          (8,690) (3)     8,426
                                           -------       --------       -------        --------        -------
                                           $26,614        $(2,465)      $11,510        $(19,403)       $16,256
                                           =======        =======       =======        ========        =======
Year Ended December 1, 2000:
  Allowance for doubtful accounts.....     $   633        $  (430)      $    --        $    442  (1)   $   645

  Reserves for sales programs.........       7,197             --         7,580          (7,567) (2)     7,210

  Inventory valuation reserves........       8,426          3,612            --          (2,469) (3)     9,569

  Deferred tax valuation reserve               --          56,149            --             --          56,149
                                            ------        -------       -------        --------        -------
                                           $16,256        $59,331       $ 7,580        $ (9,415)       $73,573
                                           =======        =======       =======        ========        =======
</TABLE>
(1) Accounts written off, net of recoveries.
(2) Net credits issued to customers for sales programs.
(3) Use of inventory reserves against inventory.











<PAGE> 73
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this amendment to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Boulder, State of Colorado, on April 26, 2001.

EXABYTE CORPORATION



                     By:       /s/ Stephen F. Smith
                              -----------------------
                              Stephen F. Smith
                     Title:   Chief Financial Officer, Vice President,
                              General Counsel and Secretary
                              (Principal Financial and Accounting Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints William L. Marriner and Stephen F. Smith, and
each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place, and
stead, in any and all capacities, to sign any and all amendments to this
report, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this amendment has been signed by the following persons in the
capacities and on the dates indicated.




/s/ William L. Marriner       Chairman of the Board,           April 26, 2001
-----------------------       President and Chief             -----------------
William L. Marriner           Executive Officer
                              (Principal Executive
                              Officer)



/s/ Stephen F. Smith          Vice President, Chief            April 26, 2001
-----------------------       Financial Officer, General      -----------------
Stephen F. Smith              Counsel and Secretary
                              (Principal Financial
                              and Accounting Officer)




<PAGE> 74


/s/ Peter D. Behrendt         Director                         April 26, 2001
-----------------------                                       -----------------
Peter D. Behrendt



/s/ Stephen C. Johnson        Director                         April 26, 2001
-----------------------                                       -----------------
Stephen C. Johnson



/s/ A. Laurence Jones         Director                         April 26, 2001
-----------------------                                       -----------------
A. Laurence Jones


/s/ Thomas E. Pardun          Director                         April 26, 2001
-----------------------                                       -----------------
Thomas E. Pardun



/s/ Ralph Z. Sorenson         Director                         April 26, 2001
-----------------------                                       -----------------
Ralph Z. Sorenson