================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

   For the quarterly period ended December 26, 1997
                                  ----------------------------------------------

                                       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 number         0-25684
                        --------------------------------------------------------

                          PREMISYS COMMUNICATIONS, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its chapter)

           Delaware                                        94-3153847
----------------------------------     -----------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

                 48664 Milmont Drive, Fremont, California 94538
--------------------------------------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (510) 353-7600
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


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 90 days.

Yes  X     No
    ---       ---

The number of shares  outstanding of the issuer's common stock, par value $0.01,
as of January 23, 1998 was 25,609,950 shares.


================================================================================

                                       1

<PAGE>


<TABLE>
                                        PREMISYS COMMUNICATIONS, INC.

                                                    INDEX
                                                 -----------

<CAPTION>
PART I.        Financial Information                                                              Page No.
               --------------------------                                                        -----------

<S>            <C>                                                                                    <C>
               Item 1.     Financial Statements

                           Condensed Consolidated Balance Sheet - June 30, 1997 and December
                           31, 1997                                                                    3

                           Condensed Consolidated Statement of Operations - Three and Six Month
                           Periods ended December 31, 1996 and December 31, 1997                       4

                           Condensed Consolidated Statement of Cash Flows - Six Month Periods
                           ended December 31, 1996 and December 31, 1997                               5

                           Notes to Condensed Consolidated Financial Statements                        6

               Item 2.     Management's Discussion and Analysis of Financial Condition and
                           Results of Operations                                                       8

               Item 3.    Quantitative and Qualitative Disclosures About Market Risk                  18


PART II.       Other Information
               ----------------------

                Item 4.    Submission of Matter to a Vote of Security Holders                         19

                Item 5.    Other Information                                                          19

                Item 6.    Exhibits and Reports on Form 8-K                                           20

                Signatures                                                                            21
</TABLE>

                                                      2

<PAGE>


<TABLE>
I.       FINANCIAL  INFORMATION

ITEM 1.  Financial Statements


                                                    Premisys Communications, Inc.
                                         Condensed Consolidated Balance Sheet - (unaudited)
                                           (in thousands except share and per share data)

<CAPTION>
                                                                                                           June 30,     December 31,
                                                                                                             1997           1997
                                                                                                           --------       --------
                                                               ASSETS
<S>                                                                                                        <C>             <C>     
Current assets:
   Cash and cash equivalents                                                                               $ 28,923        $ 28,956
   Short-term investments                                                                                    44,301          65,247
   Accounts receivable, net                                                                                   7,658           5,307
   Inventories                                                                                                8,775           7,502
   Deferred tax assets                                                                                        7,207           7,207
   Prepaid expenses and other assets                                                                          3,793             759
                                                                                                           --------        --------
      Total current assets                                                                                  100,657         114,978
Property and equipment, net                                                                                   6,444           7,105
                                                                                                           --------        --------
                                                                                                           $107,101        $122,083
                                                                                                           ========        ========

                                                LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                                                        $  4,756        $  6,171
   Accrued liabilities                                                                                        5,528          10,275
   Income taxes payable                                                                                        --               627
                                                                                                           --------        --------
      Total current liabilities                                                                              10,284          17,073
                                                                                                           --------        --------


Stockholders' equity:
   Preferred Stock, $0.01 par value, 2,000,000 shares authorized; no shares issued                             --              --
      or outstanding
   Common Stock, $0.01 par value, 100,000,000 shares authorized;  25,190,751 and
      25,535,948 shares issued and outstanding                                                                  252             255
   Additional paid-in capital                                                                                74,994          76,495
   Retained earnings                                                                                         21,571          28,260
                                                                                                           --------        --------
      Total stockholders' equity                                                                             96,817         105,010
                                                                                                           --------        --------
                                                                                                           $107,101        $122,083
                                                                                                           ========        ========

<FN>
See notes to condensed consolidated financial statements
</FN>
</TABLE>

                                                                 3

<PAGE>


<TABLE>
                                                    Premisys Communications, Inc.
                                    Condensed Consolidated Statement of Operations - (unaudited)
                                                (in thousands, except per share data)

<CAPTION>
                                                                             Three Months Ended                Six Months Ended
                                                                                December 31,                      December 31,
                                                                          ------------------------          ------------------------
                                                                           1996             1997             1996             1997
                                                                          -------          -------          -------          -------
<S>                                                                       <C>              <C>              <C>              <C>    
Revenues                                                                  $26,356          $24,616          $50,650          $43,901
Cost of revenues                                                            8,768            8,278           17,299           15,496
                                                                          -------          -------          -------          -------
Gross profit                                                               17,588           16,338           33,351           28,405
                                                                          -------          -------          -------          -------
Operating expenses:
   Research and development                                                 2,510            4,184            4,838            7,208
   Selling, general and administrative                                      5,743            6,656           10,390           12,163
                                                                          -------          -------          -------          -------
      Total operating expenses                                              8,253           10,840           15,228           19,371
                                                                          -------          -------          -------          -------
Income from operations                                                      9,335            5,498           18,123            9,034
Interest and other income, net                                                661              870            1,255            1,583
                                                                          -------          -------          -------          -------
Income before income taxes                                                  9,996            6,368           19,378           10,617
Provision for income taxes                                                  3,898            2,356            7,557            3,928
                                                                          -------          -------          -------          -------
Net income                                                                $ 6,098          $ 4,012          $11,821          $ 6,689
                                                                          =======          =======          =======          =======
Net income per share:
   Basic                                                                  $  0.25          $  0.16          $  0.48          $  0.26
                                                                          =======          =======          =======          =======
   Diluted                                                                $  0.23          $  0.15          $  0.44          $  0.24
                                                                          =======          =======          =======          =======

Shares used in computing net income per share:
   Basic                                                                   24,550           25,462           24,491           25,385
                                                                          =======          =======          =======          =======
   Diluted                                                                 26,721           27,579           26,600           27,508
                                                                          =======          =======          =======          =======


<FN>
See notes to condensed consolidated financial statements
</FN>
</TABLE>

                                                                 4

<PAGE>


<TABLE>
                                                    Premisys Communications, Inc.
                                    Condensed Consolidated Statement Of Cash Flows - (unaudited)
                                                           (in thousands)

<CAPTION>
                                                                                                       Six Months Ended December 31,
                                                                                                       ----------------------------
                                                                                                           1996              1997
                                                                                                         --------          --------
<S>                                                                                                      <C>               <C>     
Cash flows from operating activities:
   Net income                                                                                            $ 11,821          $  6,689
   Adjustments  to  reconcile  net  income  to net cash  provided  by (used  in)
    operating activities:
      Depreciation                                                                                            564               992
      Changes in assets and liabilities:
        Accounts receivable                                                                                (5,651)            2,351
        Inventories                                                                                        (1,134)            1,273
        Prepaid expenses and other assets                                                                    (556)            3,034
        Accounts payable                                                                                    3,043             1,415
        Accrued liabilities                                                                                   292             4,791
        Income taxes payable                                                                                 (580)              627
                                                                                                         --------          --------
Net cash provided by operating activities                                                                   7,799            21,172
                                                                                                         --------          --------

Cash flows from investing activities:
   Purchase of property and equipment                                                                      (3,761)           (1,653)
   Purchase of short-term investments                                                                     (16,365)          (20,946)
                                                                                                         --------          --------
Net cash used in investing activities                                                                     (20,126)          (22,599)
                                                                                                         --------          --------

Cash flows from financing activities:
   Proceeds from issuance of Common Stock, net                                                              2,555             1,504
   Repayment of capital lease obligations                                                                     (72)              (44)
                                                                                                         --------          --------
Net cash provided by financing activities                                                                   2,483             1,460
                                                                                                         --------          --------
Net increase (decrease) in cash                                                                            (9,844)               33
Cash and cash equivalents at beginning of period                                                           22,058            28,923
                                                                                                         --------          --------

Cash and cash equivalents at end of period                                                               $ 12,214          $ 28,956
                                                                                                         ========          ========
Supplemental disclosures:
  Cash paid for income taxes                                                                             $  8,421          $      1


<FN>
See notes to condensed consolidated financial statements
</FN>
</TABLE>

                                                                 5

<PAGE>


                          Premisys Communications, Inc.
              Notes to Condensed Consolidated Financial Statements


NOTE 1 - Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim  financial  information and with the  instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not contain all of the information
and footnotes required by generally accepted accounting  principles for complete
financial statements.  In the opinion of management,  the accompanying unaudited
condensed consolidated financial statements have been prepared on the same basis
as the audited  consolidated  financial  statements and include all adjustments,
consisting  only  of  normal  recurring  adjustments,  necessary  for  the  fair
statement of the  Company's  financial  condition  as of December 31, 1997,  the
results of its operations for the three and six month periods ended December 31,
1996 and 1997,  and its cash flows for the six month periods ended  December 31,
1996 and 1997. These financial statements should be read in conjunction with the
Company's audited financial statements as of June 30, 1996 and 1997 and for each
of the three years in the period ended June 30, 1997,  including  notes thereto,
included in the Company's Annual Report on Form 10-K.  Operating results for the
six month period ended December 31, 1997 are not  necessarily  indicative of the
results that may be expected for the year ending June 30, 1998.

     The Company has a 52/53 week fiscal accounting year that ends on the Friday
closest to June 30.  Accordingly,  fiscal periods shown herein as ending on June
30, 1997 and December  31, 1996 and 1997 for  financial  statement  presentation
purposes actually reflect amounts for the fiscal periods ended on June 27, 1997,
December 27, 1996 and December 26, 1997.


NOTE 2 - Inventories (in thousands)
                                                   June 30,         December 31,
                                                     1997                1997
                                                   --------            --------
                                                                     (unaudited)
Inventories
   Raw materials                                   $  2,010            $  1,159
   Work-in-process                                    1,390               2,471
   Finished goods                                     7,893               7,150
                                                   --------            --------
                                                     11,293              10,780
   Less: Reserves                                    (2,518)             (3,278)
                                                   --------            --------
                                                   $  8,775            $  7,502
                                                   ========            ========


NOTE 3 - Earnings Per Share

     The Company adopted  Statement of Financial  Accounting  Standards No. 128,
"Earnings Per Share" ("SFAS 128") during the second quarter of fiscal 1998. SFAS
128 requires  presentation  of both Basic EPS and Diluted EPS on the face of the
income statement. Basic EPS, which replaces primary EPS, is computed by dividing
net income available to common stockholders  (numerator) by the weighted average
number of common shares outstanding  (denominator) during the period. Unlike the
computation  of primary EPS,  Basic EPS  excludes  the dilutive  effect of stock
options. Diluted EPS replaces fully diluted EPS and gives effect to all dilutive
potential common shares  outstanding  during a period. In

                                       6

<PAGE>


computing  Diluted  EPS,  the  average  stock  price  for the  period is used in
determining  the number of shares  assumed to be  purchased  under the  treasury
stock  method  from  exercise  of stock  options  rather  than the higher of the
average or ending stock price as used in the computation of fully diluted EPS.

<TABLE>
     Following is a presentation of the numerators and denominators of the Basic
and Diluted EPS computations for the periods presented below:

<CAPTION>
                                                         December 31, 1996                             December 31, 1997
                                             ----------------------------------------    ------------------------------------------
    Three Month Period                        Net Income       Shares         Per Share  Net Income         Shares         Per Share
          Ended                              (Numerator)    (Denominator)      Amount    (Numerator)     (Denominator)       Amount
          -----                              -----------    -------------      ------    -----------     -------------       ------
                                                                     (in thousands except per share data)
<S>                                           <C>              <C>            <C>           <C>              <C>            <C>     
Basic EPS
Net income available to common stockholders   $ 6,098          24,550         $   0.25      $ 4,012          25,462         $   0.16

Effect of Dilutive Securities
Common stock equivalents                         --             2,171                          --             2,117
                                              -------         -------                       -------         -------

Diluted EPS
Net income available to 
common stockholders and
assumed conversions                           $ 6,098          26,721         $   0.23      $ 4,012          27,579         $   0.15
                                              =======         =======         ========      =======         =======         ========


                                                         December 31, 1996                             December 31, 1997
                                             ----------------------------------------    ------------------------------------------
      Six Month Period                        Net Income       Shares         Per Share  Net Income         Shares         Per Share
          Ended                              (Numerator)    (Denominator)      Amount    (Numerator)     (Denominator)       Amount
          -----                              -----------    -------------      ------    -----------     -------------       ------
                                                                     (in thousands except per share data)
Basic EPS
Net income available to common stockholders   $11,821          24,491         $   0.48      $ 6,689          25,385         $   0.26

Effect of Dilutive Securities
Common stock equivalents                         --             2,109                          --             2,123
                                              -------         -------                       -------         -------

Diluted EPS
Net income available to
common stockholders and
assumed conversions                           $11,821          26,600         $   0.44      $ 6,689          27,508         $   0.24
                                              =======         =======         ========      =======         =======         ========
</TABLE>


Options to purchase 95,300, 615,161,  108,003 and 748,623 shares of Common stock
were outstanding at the three month periods ended December 31, 1996 and 1997 and
the six month periods ended December 31, 1996 and 1997,  respectively,  but were
not  included in the  computation  of Diluted  EPS because the options  exercise
price was greater  than the average  market  price of the common  shares in each
period.

                                       7

<PAGE>


ITEM 2. Management's Discussion and Analysis of Financial Condition and Result
           of Operations

Results of Operations

This Form 10-Q contains forward-looking statements within the meaning of Section
21E of the Securities  Exchange Act of 1934, as amended,  and Section 27A of the
Securities Act of 1933, as amended.  These forward-looking  statements involve a
number of risks and uncertainties which are described throughout this Form 10-Q,
including  demand from and its  relationships  with its  strategic  partners and
major  customers,   including  ADC  Telecommunications  ("ADC")  Motorola,  Inc.
("Motorola") and Paradyne  Corporation  ("Paradyne");  limited order backlog and
quarterly  fluctuations;  delays  and  cancellations  of  actual  and  projected
customer orders;  new product  development and  introductions by the Company and
its  competitors  including  products  based on the  technology  licensed by the
Company from Positron Fiber Systems Corporation  ("Positron");  deregulation of,
and  legislation  regarding  the domestic and  international  telecommunications
industry;  market  acceptance of the SlimLine and StreamLine  products;  rapidly
changing  technologies and the Company's ability to respond thereto;  the growth
of demand for  telecommunications  services  such as wireless,  cellular and the
Internet;  competition;  changes in the mix of products or  customers  or in the
level of operating  expenses;  and other factors described  throughout this Form
10-Q,  including  under  "Revenues"  and "Other  Factors That May Affect  Future
Operating Results," and in the Company's Annual Report on Form 10-K for the year
ended June 30, 1997.  The actual  results  that the Company  achieves may differ
materially   from  any   forward-looking   statements  due  to  such  risks  and
uncertainties.  The  Company has  identified  using an  asterisk  ("*")  various
sentences within this Form 10-Q which contain such  forward-looking  statements,
and words such as "believes",  "anticipates",  "expects",  "intends," "will" and
similar expressions are intended to identify forward-looking statements, but are
not the exclusive means of identifying such statements. In addition, the section
labeled "Other Factors That May Affect Future Operating Results", which does not
include   asterisks   for   improved   readability,    consists   primarily   of
forward-looking  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.  Readers are urged to carefully  review and
consider the various  disclosures  made by the Company in this report and in the
Company's  other  reports  filed with the  Securities  and Exchange  Commission,
including its Form 10-K, that attempt to advise interested  parties of the risks
and factors that may affect the Company's business.


Revenues
                                       Three Months Ended December 31,
                                ---------------------------------------------
                                1996                  % Change           1997
                                ----                  --------           ----
        Revenues             $26,356,000                 (7%)        $24,616,000

                                         Six Months Ended December 31,
                                ---------------------------------------------
                                1996                  % Change           1997
                                ----                  --------           ----
        Revenues             $50,650,000                (13%)        $43,901,000


     Revenues consist  primarily of gross sales of products,  less discounts and
sales returns and allowances.  A majority of the revenue decrease from the three
and six month  periods  ended  December  31, 1996 to the  comparable  periods in
fiscal 1998 was attributable to a reduction in unit volumes of

                                       8

<PAGE>


platforms and modules  sold.  The reduction in unit volumes in the quarter ended
December 31, 1997 versus the same period in fiscal 1997 was  primarily  due to a
reduction in shipments to Paradyne, partially offset by an increase in shipments
to ADC and Motorola,  Inc. The reduction in unit volumes in the six month period
ended  December 31, 1997 versus the same period in fiscal 1997 was primarily due
to a reduction  in shipments to Paradyne,  DSC  Communications  Corporation  and
Motorola, Inc. which was partially offset by an increase in shipments to ADC, in
particular one of its CLEC  customers.  See Other Factors That May Affect Future
Operating  Results - "Indirect  Channels  of  Distribution."  However,  revenues
increased  $5,331,000,  or 28%, from  $19,285,000 in the quarter ended September
30, 1997 to $24,616,000 in the quarter ended December 31, 1997. This increase in
revenues in the second quarter of fiscal 1998 versus the first quarter fiscal of
1998 was due to  increased  shipments  of the  Company's  products to all of the
Company's  major  strategic  distribution  partners.  *The Company  expects that
revenues  will  increase in the March 1998 quarter  over those  reported for the
quarter  ended  December  31,  1997,  but at a much lower rate than the increase
between the quarters  ended  September 30, 1997 and December 31, 1997.  However,
these  expectations are subject to a number of uncertainties,  in particular the
level of demand from ADC and its customers.

     The following  table sets forth,  for the periods  indicated,  the revenues
generated  from the Company's  customers  which  exceeded 10% of total  revenues
during the three and six month periods ended  December 31, 1997,  other domestic
customers as a group and international customers as a group, in absolute dollars
and as a percentage of total revenues.


                               Source of Revenues

                                        Three Months Ended December 31,
                           ----------------------------------------------------
                              1996            %            1997           %
                           -----------   ----------    -----------   ----------
ADC                        $ 3,001,000           11%   $ 8,447,000           34%
Paradyne                    11,317,000           43%     2,772,000           11%
Motorola, Inc.               2,397,000            9%     2,521,000           10%
Other Domestic Customers     7,490,000           28%     8,528,000           35%
International Customers      2,151,000            9%     2,348,000           10%
                           -----------   ----------    -----------   ----------
Total Revenues             $26,356,000          100%   $24,616,000          100%
                           ===========   ==========    ===========   ==========


                                         Six Months Ended December 31,
                           ----------------------------------------------------
                              1996            %            1997           %
                           -----------   ----------    -----------   ----------
ADC                        $ 5,559,000           11%   $15,455,000           35%
Paradyne                    18,491,000           37%     5,440,000           12%
Motorola, Inc.               5,612,000           11%     4,035,000            9%
Other Domestic Customers    17,829,000           35%    15,226,000           35%
International Customers      3,159,000            6%     3,745,000            9%
                           -----------   ----------    -----------   ----------
Total Revenues             $50,650,000          100%   $43,901,000          100%
                           ===========   ==========    ===========   ==========

     The  Company  sells a  substantial  majority  of its  products to a limited
number of customers  which  generally  resell the  Company's  products to public
carriers and end users.  For the three month periods ended December 31, 1996 and
1997, revenues from the Company's four major strategic partners  represented 65%
and 63% of the Company's total revenues, respectively. For the six month periods
ended  December  31,  1996 and 1997,  revenues  from the  Company's  four  major
strategic  partners  represented  68% and 63% of the Company's  total  revenues,
respectively. These major strategic

                                       9

<PAGE>


distribution  partners  generated 63% of the  Company's  revenues in the quarter
ended  September 30, 1997.  *The loss of any one or more of the Company's  major
customers  would have a material  adverse  effect on the Company's  business and
operating results. See "Other Factors That May Affect Future Operating Results -
Indirect Channels of Distribution",  "-Limited Order Backlog" and "-Relationship
with Paradyne."

     During the three and six month  periods  ended  December 31,  1997,  direct
international  revenues  accounted  for  10% and 9% of the  Company's  revenues,
respectively,  compared  to 9% and 6%,  respectively,  for the same  periods  in
fiscal 1997.  Certain of the  Company's  domestic  customers  also sell Premisys
products  into  international  markets.  *The  Company  intends  to  expand  its
operations  outside the United States and anticipates that  international  sales
will  increase  in the future both in absolute  dollars and as a  percentage  of
revenues. In order to sell its products  internationally,  the Company must meet
standards  established  by  international   telecommunications   committees  and
authorities in various  countries.  *Conducting  business  outside of the United
States is subject to certain risks, including longer payment cycles,  unexpected
changes  in  regulatory   requirements  and  tariffs,   more  volatile  economic
conditions,  risks associated with foreign currency exchange rates, difficulties
in staffing and managing  foreign  operations,  greater  difficulty  in accounts
receivable collection and potentially adverse tax consequences.



Gross Profit
                                          Three Months Ended December 31,
                                       -------------------------------------
                                       1996          % Change           1997
                                       ----          --------           ----
          Gross Profit              $17,588,000        (7%)          $16,338,000
    As a percentage of revenues         67%                              66%

                                            Six Months Ended December 31,
                                       -------------------------------------
                                       1996          % Change           1997
                                       ----          --------           ----
          Gross Profit              $33,351,000        (15%)         $28,405,000
    As a percentage of revenues         66%                              65%


     Cost of  revenues  consists  of  component  costs,  compensation  costs and
overhead  related  to  the  Company's  manufacturing   operations  and  warranty
expenses.  Gross profit  decreased  from the three and six month  periods  ended
December 31, 1996 to the comparable periods in fiscal 1998 primarily as a result
of lower unit shipment  volumes.  The gross margin  decreased  slightly from the
three and six month periods ended December 31, 1996 to the comparable periods in
fiscal  1998,  as  favorable  shifts in customer  and product mix were offset by
increases in manufacturing costs. *The Company expects its gross margins for the
remainder  of fiscal 1998 to decline by two to four  percentage  points from the
66% reported in the quarter ended  December 31, 1997 due primarily to changes in
product mix. *However, achievement of the Company's expectations is subject to a
number  of risks,  including  customer  mix,  the mix of  products  sold and the
Company's ability to realize expected revenue levels.

                                       10

<PAGE>



Research and Development Expenses
                                           Three Months Ended December 31,
                                         -------------------------------------
                                         1996          % Change           1997
                                         ----          --------           ----
    Research and development expenses $2,510,000          67%         $4,184,000
       As a percentage of revenues       10%                             17%


                                             Six Months Ended December 31,
                                         -------------------------------------
                                         1996          % Change           1997
                                         ----          --------           ----
    Research and development expenses $4,838,000          49%         $7,208,000
       As a percentage of revenues       10%                             16%


     Research and development  expenses consist of personnel costs,  consulting,
testing, supplies and depreciation expenses. All software development costs have
been  expensed  in  the  period  in  which  they  were  incurred.  Research  and
development expenses increased  $1,674,000,  or 67%, from the three months ended
December 31, 1996 to the comparable period in fiscal 1998 and by $2,370,000,  or
49%, from the six month period ended December 31, 1996 to the comparable  period
in fiscal 1998. This increase was due to the  combination of increased  expenses
for outside  services and  personnel for the purposes of expanding the Company's
product  line and for  materials  used in product  development.  The increase in
research and development  expenses as a percentage of the Company's revenues was
the combined  result of increased  spending and lower  revenues in the three and
six month  periods  ended  December 31, 1997 versus the  comparable  periods for
fiscal 1997.  *During the remaining quarters of fiscal 1998, the Company expects
that these expenses will increase in absolute dollars as compared to the quarter
ended December 31, 1997. *However,  the Company expects that the sequential rate
of growth  of these  expenses  will be less than the rate of growth in  revenues
during the remaining quarters of fiscal 1998. *These expectations are subject to
a number of risks,  including the Company's  ability to realize expected revenue
levels.


<TABLE>
Selling, General and Administrative Expenses

<CAPTION>
                                                   Three Months Ended December 31,
                                                   -------------------------------
                                                      1996       % Change     1997
                                                      ----       --------     ----
<S>                                                <C>             <C>    <C>        
     Selling, general and administrative expenses  $5,743,000      16%    $ 6,656,000
         As a percentage of revenues                  22%                    27%

                                                    Six Months Ended December 31,
                                                   -------------------------------
                                                      1996       % Change     1997
                                                      ----       --------     ----
     Selling, general and administrative expenses  $10,390,000     17%    $12,163,000
        As a percentage of revenues                    21%                   28%
</TABLE>


     Selling  expenses consist  principally of compensation  costs for sales and
marketing personnel (including sales commissions and bonuses),  travel expenses,
customer support expenses, trade show expenses and advertising expenses. General
and  administrative  expenses  consist  primarily of  compensation  expenses for
administration,  finance, and general management personnel, as well as legal and
audit fees. Selling,  general and administrative expenses increased $913,000, or
16%, from the three months ended December 31, 1996 to the  comparable  period in
fiscal 1998 and by $1,773,000,  or 17%, from the six month period ended December
31, 1996 to the comparable period in fiscal 1998. These increases were primarily
the result of  increased  staffing  and  associated  expenses,  and, to a lesser
extent,

                                       11

<PAGE>


travel and  customer  support  expenses.  The  increase in selling,  general and
administrative  expenses as a percentage of the Company's revenues for the three
and six month periods in fiscal 1998 as compared with the comparable  periods in
fiscal 1997 was the result of the increased  spending  combined with the revenue
decline in the three and six month periods in fiscal 1998 versus the  comparable
periods for fiscal 1997.  *The Company expects that these expenses will increase
in absolute dollars during the remaining  quarters of fiscal 1998 as compared to
the quarter  ended  December 31, 1997.  *However,  the Company  expects that the
sequential rate of growth of these expenses will be less than the rate of growth
in revenues during the remaining  quarters of fiscal 1998.  *These  expectations
are subject to a number of risks,  including  the  Company's  ability to realize
expected revenue levels.

Interest and Other Income, net

                                               Three Months Ended December 31,
                                              --------------------------------
                                              1996          % Change      1997
                                              ----          --------      ----
     Interest and other income, net         $661,000            32%     $870,000
       As a percentage of revenues              3%                          4%


                                               Six Months Ended December 31,
                                              --------------------------------
                                              1996        % Change      1997
                                              ----        --------      ----
     Interest and other income, net      $ 1,255,000         26%     $ 1,583,000
        As a percentage of revenues            3%                          3%


     Interest and other  income,  net consists of interest  income less interest
expense, and, to a much lesser extent,  foreign currency exchange rate gains and
losses.  The increase in interest and other  income,  net, for the three and six
month periods  ended  December 31, 1997 as compared to the same period in fiscal
1997 was due to higher cash balances.

<TABLE>
Provision for Income Taxes

<CAPTION>
                                                 Three Months Ended December 31,
                                                ----------------------------------
                                                1996        % Change          1997
                                                ----        --------          ----
<S>                                           <C>             <C>          <C>       
           Provision for income taxes         $3,898,000      (40%)        $2,356,000
     As a percentage of income before taxes      39%                          37%


                                                   Six Months Ended December 31,
                                                ----------------------------------
                                                1996        % Change          1997
                                                ----        --------          ----
           Provision for income taxes         $7,557,000      (48%)        $3,928,000
     As a percentage of income before taxes      39%                          37%
</TABLE>


     The Company's  provision for income taxes represents  estimated federal and
state income taxes. The Company's effective tax rate for the three and six month
periods ended December 31, 1997 was 37% which was less than the combined federal
and state  statutory  rate as a result of  tax-exempt  interest  income from the
Company's  municipal  securities  portfolio and the  utilization of research and
development tax credits  available in fiscal 1998. The decrease in the Company's
income  tax rate  from 39% in fiscal  1997 to 37% in  fiscal  1998 is due to the
extension of the federal research and development tax credit.

                                       12

<PAGE>


<TABLE>
Net Income per Share

<CAPTION>
                                                                 Three Months Ended December 31,
                                                       -----------------------------------------------------
                                                            1996            % Change                 1997
                                                            ----            --------                 ----
<S>                                                     <C>                   <C>                <C>        
                     Net income                         $ 6,098,000           (34%)              $ 4,012,000
           Net income per share (diluted)                    $ 0.23           (35%)                   $ 0.15
Shares used in computing diluted net income per share    26,721,000             3%                27,579,000

                                                                  Six Months Ended December 31,
                                                       -----------------------------------------------------
                                                            1996            % Change                 1997
                                                            ----            --------                 ----
                     Net income                         $11,821,000           (43%)              $ 6,689,000
           Net income per share (diluted)                    $ 0.44           (45%)                   $ 0.24
Shares used in computing diluted net income per share    26,600,000             3%                27,508,000
</TABLE>


     Net income per share  (diluted)  decreased by $0.08, or 35%, in the quarter
ended  December  31, 1997 and by $0.20,  or 45%, in the six month  period  ended
December 31, 1997 as compared to the same  periods in fiscal 1997.  The decrease
in both  comparative  periods was due primarily to a decrease in net income and,
to a lesser  extent,  an increase in shares used in  calculating  net income per
share between the three and six month periods ended December 31, 1996 and 1997.

<TABLE>
Liquidity and Capital Resources

<CAPTION>
                                                          December 31,                      December 31,
                                                              1996            % Change          1997
                                                              ----            --------          ----
<S>                                                       <C>                   <C>          <C>        
Net cash provided by operating activities                 $ 7,799,000           171%         $21,172,000
Period  end cash,  cash  equivalents  and  
short-term investments                                    $67,477,000            40%         $94,203,000
Period end working capital                                $86,084,000            14%         $97,905,000
</TABLE>


     At December 31, 1997, the Company had approximately  $94.2 million of cash,
cash equivalents and short-term investments. Net cash totaling $21.2 million was
provided by operating  activities during the six months ended December 31, 1997,
due primarily to net income of $6.7 million and increases in accrued liabilities
and  accounts  payable,  and  decreases in prepaid  expenses  and other  assets,
accounts receivable and inventories, aggregating $12.9 million.

     Cash used in investing  activities during the six months ended December 31,
1997 consisted  principally of purchases of short-term securities totaling $20.9
million.  Cash  flows from  financing  activities  during  the six months  ended
December  31, 1997  consisted  primarily  of $1.5  million  from the exercise of
employee  stock  options  and the  issuance of stock  under the  Company's  1995
employee stock purchase plan,  which was offset  somewhat by payments on capital
lease obligations.

     As of December 31, 1997, the Company's  working  capital was  approximately
$97.9  million.  Except for the  commitment  under the  Positron  Agreement,  as
discussed in the  Company's  Annual  Report on Form 10-K for the year ended June
30,  1997,  the  Company  has  no  significant   capital  spending  or  purchase
commitments  other  than  normal  purchase  commitments  and  commitments  under
facilities and capital  leases.  *The Company  believes that its available funds
and anticipated cash flows from operations will satisfy the Company's  projected
working  capital  and  capital  expenditure  requirements  for at least the next
twelve months.

                                       13

<PAGE>


Other Factors That May Affect Future Operating Results

     As referenced in the first paragraph of this Item 2, this section  consists
primarily of forward looking statements but, for improved readability,  does not
include asterisks.

     INDIRECT  CHANNELS OF DISTRIBUTION.  Substantially  all of the sales of the
Company's  products are through  indirect  channels of  distribution.  Thus, the
Company's  ability to affect and judge the  timing and size of  individual  user
orders is more limited than for manufacturers  selling directly to the end users
of their products. Any of the telecommunications equipment suppliers that market
and sell the Company's  products could elect to cease  marketing and selling the
Company's products, and there can be no assurance that these  telecommunications
equipment  suppliers  will continue to place orders with the Company or that the
Company  will be able to obtain  orders  from new  telecommunications  equipment
suppliers   or   end   users.   See   "-Relationship   with   Paradyne".   These
telecommunications equipment suppliers could develop products that could be sold
for  selected  applications  for  which the  Company's  products  are  currently
provided,  which could reduce the level of demand from these  telecommunications
equipment suppliers for the Company's products. See "-Competition". In addition,
the Company's  revenues for a given  quarter may depend to a significant  degree
upon planned  product  shipments  for a single  carrier's  equipment  deployment
project.  For example, in the quarters ended September 30 and December 31, 1997,
shipments  of the  Company's  products to one CLEC  customer of ADC,  one of the
Company's  strategic  distribution  partners,  represented  more than 10% of the
Company's  total  revenues for each quarter.  Revenues  derived from  particular
carrier  projects are often difficult to forecast due to a relatively long sales
cycle and delays in the timing of such  projects.  Such  delays  occurred in the
quarter ended March 31, 1997,  and materially  adversely  affected the Company's
business  and  operating  results for the  quarter  ended  March 31,  1997.  The
projects that were delayed in the quarter ended March 31, 1997 for the most part
have not  recommenced,  and the Company is not forecasting that they will do so.
Such delays may occur in the future and would have a similar  impact if they did
occur.  Delays can be caused by late  deliveries  by other  vendors,  changes in
implementation  priorities,  slower  than  anticipated  growth in demand for the
services  that  the  equipment  supports  and  delays  in  obtaining  regulatory
approvals  for new  tariffs.  Revenues can also be affected by delays in initial
shipments of new products  and new software  releases  developed by the Company.
See "-Rapidly Evolving  Technology".  In fiscal 1997, a delay of the development
and release of a new feature resulted in a loss of a large, forecasted shipment.
In developing countries,  delays and reductions in the planned deployment of the
Company's products can also be caused by sudden declines in the local economy or
capital  availability  and by new import  controls.  Suppliers of the  Company's
products have in the past and may in the future build  significant  inventory in
order to facilitate more rapid  deployment of anticipated  major projects or for
other reasons.  Decisions by such suppliers to sell from their  inventory  could
lead to reductions in purchases  from the Company.  These  reductions,  in turn,
could cause fluctuations in the Company's  operating results and have an adverse
effect on the Company's  business and operating  results in the periods in which
the inventory is utilized. In addition,  the Company has in the past experienced
delays as a result of the need to modify  its  products  to comply  with  unique
customer  specifications.  While  such  delays  have not to date had a  material
adverse effect on the Company's business or operating  results,  there can be no
assurance that any future delays would not have such an adverse effect.

     LIMITED ORDER BACKLOG.  The Company  typically  operates with limited order
backlog,  and a majority  of its  revenues  in each  quarter  result from orders
booked in that quarter.  Also, the Company has from time-to-time,  including the
four quarters of fiscal 1997,  recognized a substantial  portion of its revenues
from  sales  booked  and  shipped  in the last  month of a  quarter.  Due to the
delivery  requirements  of its  customers,  the  Company  expects to continue to
experience  limited order backlog.  The Company's  agreements with its customers
typically  allow  customers to cancel orders without  penalty

                                       14

<PAGE>


until a  relatively  short  period of time  before  shipment.  The  Company  has
experienced  cancellation  of orders  from time to time,  and expects to receive
order  cancellations  from time to time in the  future,  which  could  adversely
affect the Company's revenue for a quarter or series of quarters.

     QUARTERLY FLUCTUATIONS.  The Company's operating results may fluctuate on a
quarterly  and  annual  basis due to factors  such as the timing of new  product
announcements  and  introductions  by the Company,  its major  customers and its
competitors,  delays  in  equipment  deployment,  market  acceptance  of  new or
enhanced versions of the Company's products,  changes in the product or customer
mix of revenues, changes in the level of operating expenses, competitive pricing
pressures,  the gain or loss of significant  customers,  increased  research and
development  expense  associated  with  new  product  introductions,   component
shortages  (see  "-Dependence  on  Certain  Suppliers"),  and  general  economic
conditions.  The Company's  planned  product  shipments  for a single  carrier's
equipment  deployment  project  can  be a  significant  portion  of a  quarter's
revenues, and delays in the timing of such a project (which have occurred in the
past  including  the quarter ended March 31, 1997) could and have had a material
adverse effect on the Company's business and operating results. All of the above
factors are  difficult  for the Company to forecast,  and these or other factors
can materially adversely affect the Company's business and operating results for
one quarter or a series of quarters.  The Company's  expense levels are based in
part on its  expectations  regarding  future  revenues and in the short term are
fixed to a large extent. Therefore, the Company may be unable to adjust spending
in a timely manner to compensate for any unexpected future revenue shortfall. In
the quarter ended March 31, 1997, the Company  experienced  such an unforecasted
revenue  shortfall  and  was not  able  to  compensate  for it  through  expense
reduction,  which  resulted  in a net loss.  Any  significant  decline in demand
relative to the Company's  expectations or any material delay of customer orders
would have a material  adverse  effect on the  Company's  business and operating
results.  The  Company's  operating  results  may also be  affected  by seasonal
trends.  Such trends may include lower  revenues in the summer months during the
Company's first fiscal quarter when many businesses  experience lower sales, and
in the Company's third fiscal quarter, as compared to its second fiscal quarter,
as a result of strong calendar year end purchasing  patterns from certain of the
Company's strategic customers.

     RAPIDLY EVOLVING  TECHNOLOGY.  The  telecommunications  equipment market is
characterized  by  rapidly  changing   technologies  and  frequent  new  product
introductions,  which include ATM and new digital  subscriber line  technologies
("xDSL").  The Company's  success will depend to a  substantial  degree upon its
ability to respond to changes in technology and customer requirements. This will
require the timely  selection,  development  and  marketing  of new products and
enhancements on a cost-effective  basis.  For example,  the Company has licensed
certain  technology  from  Positron for  inclusion in the  Company's  Q-155 XTRA
products,  which were  announced in June 1997 and are expected to begin shipping
in the quarter  ending  September 30, 1998.  However,  there can be no assurance
that the Company will be able to  successfully  integrate such technology into a
new product within such time frame,  or at all. In addition,  failure to achieve
market acceptance of the SlimLine and StreamLine  products could have a material
adverse effect on the Company's  operating results.  The introduction of new and
enhanced  products also requires that the Company manage  transitions from older
products  in order to minimize  disruptions  in customer  orders,  avoid  excess
inventory of old products and ensure that adequate  supplies of new products can
be delivered to meet  customer  orders.  In the past,  certain of the  Company's
newly introduced products have contained undetected errors and incompatibilities
with  installed  products,  which has  resulted  in losses  and delays in market
acceptance  of  such  products.  As  the  functionality  and  complexity  of the
Company's  products continue to grow, the Company has experienced and may in the
future  experience an increased  incidence of such errors or failures as well as
delays in introducing its products.

                                       15

<PAGE>


     RELATIONSHIP WITH PARADYNE.  The Company has a strategic  relationship with
Paradyne,  formerly a wholly-owned subsidiary of AT&T Corporation ("AT&T"), that
involves  the joint  development,  marketing  and sale of most of the  Company's
products by Paradyne.  The Company's  agreement with Paradyne  provides Paradyne
exclusive  distribution  rights  with  respect  to the  products  covered by the
agreement to AT&T entities, as defined under the agreement.

     At the time that the Company  entered into its OEM agreement with Paradyne,
Paradyne was a 100%-owned subsidiary of AT&T. In 1996, AT&T separated into three
publicly-held  stand-alone businesses,  one of which Lucent - would focus on the
communications equipment market. In June 1996, Lucent concluded a stock purchase
agreement for the sale of Paradyne to the Texas Pacific Group.  In January 1997,
Paradyne  implemented an organizational  change that moved all sales and support
activities for products  purchased from Premisys (the Paradyne AAC product line)
from its sales and support  organization  to a group  dedicated to marketing and
servicing  these  products to Lucent and AT&T.  In the  quarter  ended March 31,
1997,  Paradyne announced new products which are extensions of its existing line
of  CSU/DSU  products.  Premisys  expects  that the  higher  capacity  models of
Paradyne's  916x  series  may offer  features  that are  similar to those of the
Company's  IMACS and  Streamline  products.  See  "-Competition"  and  "-Rapidly
Evolving Technology".

     Although  sales to Paradyne  declined  from the three and six month periods
ended  December  31, 1996 to the  comparable  periods  ended  December 31, 1997,
shipments to Paradyne continued to represent a substantial portion (11% and 12%)
of the Company's  revenues in the three and six month periods ended December 31,
1997.  Paradyne is not subject to any minimum purchase  requirements,  and there
can be no  assurance  that  Paradyne  will  continue  to place  orders  with the
Company.  Premisys  expects that sales to Paradyne  will decline again in fiscal
1998  as  Paradyne  focuses  its  resources  on its  own  products.  Significant
reductions in shipments to Paradyne would have a material  adverse effect on the
Company's business and operating results.

     COMPETITION.   The  market  for   telecommunications   products  is  highly
competitive and subject to rapid  technological  change. The Company's principal
competition to date has been from major telecommunications  equipment suppliers,
such as Newbridge Networks Corporation and Tellabs,  which offer a broad line of
products including access devices for business applications. The Company expects
substantial  additional  competition  from existing  competitors as they develop
products to compete with the  functionality  and  flexibility  of the  Company's
products.  As Premisys begins shipping its new products  announced in June 1997,
it expects to face  additional  competition  from both  start-ups  and  existing
telecommunications equipment manufacturers. The SlimLine and StreamLine products
are likely to compete  with those sold by channel  bank and  CSU/DSU  vendors as
well  as  with  new  startups  focusing  on the  access  equipment  market.  See
"-Relationship  With  Paradyne."  The Q-155  product  will likely  compete  with
broadband access products  offered or announced by a number of vendors.  Certain
of the  telecommunications  equipment  suppliers  that market and distribute the
Company's  products may in the future  develop  products  that could be sold for
selected  applications for which the Company's products are currently  provided.
Successful, timely development of such products could reduce the level of demand
from these telecommunications equipment suppliers for the Company's products.

     DEPENDENCE  ON KEY  PERSONNEL.  The  Company's  success  to date  has  been
significantly  dependent on the  contributions  of its senior officers and other
key  employees.  The loss of the  services  of any one of the  Company's  senior
officers or key employees could have a material  adverse effect on the Company's
business  and  operating  results.  The  Company's  success  also  depends  to a
significant   extent  on  its   ability   to  attract   and  retain   additional
highly-skilled  technical,   managerial,  sales  and  marketing  personnel,  the
competition for whom is intense.

                                       16

<PAGE>


     INDUSTRY  STANDARDS AND  REGULATORY  MATTERS.  The market for the Company's
products is also characterized by the need to meet a significant number of voice
and data  communications  regulations and standards,  including those defined by
the  Federal  Communications   Commission,   Underwriters   Laboratories,   Bell
Communications Research ("Bellcore") and, internationally, various countries and
international   standards   committees.   Regulations  can  be  changed  by  new
legislation, as occurred with the enactment of the Telecommunications Reform Act
of 1996; these changes can impact service offerings and  competitiveness  in the
communications marketplace, and thus could have an effect on the timing and size
of the industry's investment in access equipment.  New standards are evolving as
new  technologies,  such as ATM and xDSL,  are  deployed.  As  existing  and new
standards evolve, the Company will be required to modify its products or develop
and  support  new  versions  of its  products.  It is also  important  that  the
Company's  products  be easily  integrated  with  carriers'  network  management
systems.  The  failure  of the  Company's  products  to  comply,  or  delays  in
compliance,  with the various  existing and evolving  industry  standards  could
delay  introduction  of the  Company's  products,  which  could  have a material
adverse  effect on the Company's  business and operating  results.  In addition,
government  regulatory policies are likely to continue to have a major impact on
the pricing of existing as well as new public network services and therefore are
expected to affect demand for such services and the telecommunications  products
that support such services.

     LIMITED  PROTECTION OF  INTELLECTUAL  PROPERTY.  The Company  relies upon a
combination  of  patent,   trade  secret,   copyright  and  trademark  laws  and
contractual  restrictions  to establish  and protect  proprietary  rights in its
products.  There  can be no  assurance  that  these  statutory  and  contractual
arrangements  will prove sufficient to deter  misappropriation  of the Company's
technologies or independent third-party development of similar technologies. The
telecommunications  industry is characterized by the existence of a large number
of patents and frequent litigation based on allegations of patent  infringement.
In the event of litigation to determine the validity of any  third-party  claims
asserting that the Company's  products  infringe or may infringe the proprietary
rights of such third  parties,  such  litigation,  whether or not  determined in
favor of the  Company,  could result in  significant  expense to the Company and
divert the efforts of the Company's  technical  and  management  personnel  from
productive  tasks.  In the event of an adverse  ruling in such  litigation,  the
Company  might  be  required  to  discontinue  the  use and  sale of  infringing
products,  expend significant resources to develop non-infringing  technology or
obtain licenses from third parties.

     DEPENDENCE ON CERTAIN  SUPPLIERS.  Certain components used in the Company's
products are  currently  available  from only one  supplier.  In  addition,  the
Company relies on contract  manufacturers  to produce its printed  circuit board
assemblies.  Use  of  contract  manufacturers  can  expose  Premisys  to  supply
interruptions  due  to  production,   quality  or  financial   problems  of  its
contractors.  Shortages or delays in the delivery of the components  used in the
Company's  products  (which have  occurred  in the past) or  extended  delays in
deliveries  of printed  circuit board  assemblies  could result in delays in the
shipment of the Company's products and/or increase  component costs.  Failure of
the Company to order sufficient  quantities of any required component in advance
could prevent the Company from increasing  production of products in response to
customer  orders in excess of amounts  projected  by the  Company.  Although the
Company  typically  maintains  some reserve  inventory of components and printed
circuit board assemblies,  this inventory would not cover a significant delay in
the delivery of such items.  The Company also utilizes  independent  contractors
for some new product  developments.  Delays in completing  assigned  development
projects or design  errors could cause  delays in new product  releases and poor
market acceptance.

                                       17

<PAGE>


     STOCK PRICE  FLUCTUATIONS.  All of the above  factors are difficult for the
Company to  forecast,  and these or other  factors,  such as changes in earnings
estimates by securities  analysts,  can  materially  affect the Company's  stock
price for one quarter or a series of  quarters.  Further,  the stock  market has
experienced  extreme  price  and  volume  fluctuations  that  have  particularly
affected the market  prices of  securities  of many high  technology  companies.
These  fluctuations,   as  well  as  general  economic,   political  and  market
conditions,  may materially  adversely  affect the market price of the Company's
Common Stock.  There can be no assurance that the trading price of the Company's
Common Stock will remain at or near its current level.

ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk.

     Not applicable.

                                       18

<PAGE>


II.      OTHER INFORMATION

ITEM 4.   Submission of Matter to a Vote of Security Holders

At the Company's  Annual Meeting of Stockholders  held on December 10, 1997 (the
"Annual Meeting"), the following individuals were elected to the Company's Board
of Directors by the votes indicated:

                                                     FOR                WITHHELD
                                                     ---                --------
Boris J. Auerbuch                                 23,717,733            25,328
Robert C. Hawk                                    23,713,933            29,128
Edward A. Keible, Jr                              23,718,973            24,088
Raymond C. Lin                                    23,718,823            24,238
Gary J. Morgenthaler                              23,713,973            24,088
Marino R. Polestra                                23,713,073            29,988
Lip-Bu Tan                                        23,719,623            23,438

In addition,  the  Company's  1994 Stock Option Plan was amended to increase the
number of shares of Common Stock reserved for issuance thereunder from 4,000,000
to 5,200,000. The following votes were cast in connection with such amendment:

                                                                   BROKER
FOR                      AGAINST               ABSTAIN            NON-VOTES
---                      -------               -------            ---------
16,607,286              6,939,246              23,934             172,595

Finally, the appointment of Price Waterhouse LLP as auditors for the fiscal year
ended June 30, 1998 was ratified by the following vote:

                                                                   BROKER
FOR                      AGAINST               ABSTAIN            NON-VOTES
---                      -------               -------            ---------
23,675,123                 50,330              17,608                -0-


ITEM 5.  Other Information

In December,  1997,  Joseph L. Lias  resigned as the Company's  Vice  President,
Marketing.

In January 1998, Peter Hauser became the Company's Vice President, International
Sales. He is responsible for Premisys'  sales  activities in Europe,  the Middle
East,  Africa,  Central and South America and Asia. Mr. Hauser was formerly with
General DataComm as the Company's Vice President,  International Sales - Europe,
Middle East and Africa.

                                       19

<PAGE>


ITEM   6.         Exhibits and Reports on Form 8-K

A.     Exhibits

      Exhibit No. Description of Exhibit
      ----------  ----------------------------

         10.42    Employment  Agreement by and between Premisys  Communications,
                  Inc. and Peter Hauser dated as of January 5, 1998.

         27.01    Financial Data Schedule

B.     Reports on Form 8-K

         None

                                       20

<PAGE>



                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                              PREMISYS COMMUNICATIONS, INC.


         February 2, 1998                            /S/ Robert W. Dilfer
--------------------------------------         ---------------------------------
              Date                                       Robert W. Dilfer
                                                   Vice President and Controller
                                              (Duly Authorized Officer and Chief
                                                        Accounting Officer)

                                       21

<PAGE>


                                Index to Exhibits
                              --------------------


Exhibit No.    Description of Exhibit
-----------    ---------------------------

10.42          Employment Agreement by and between Premisys Communications, Inc.
               and Peter Hauser dated as of January 5, 1998.

27.01          Financial Data Schedule

                                       22