Ottawa, Canada, October 9, 2013 — DragonWave Inc. (TSX: DWI; NASDAQ: DRWI) a leading global supplier of packet microwave radio systems for mobile and access networks, today announced financial results for its second quarter ended August 31, 2013. All figures are in U.S. dollars and were prepared in accordance with U.S. generally accepted accounting principles.

Revenue for the second quarter of fiscal year 2014 was $25.5 million, compared with $24.5 million in the first quarter of fiscal year 2014 and $44.2 million in the second quarter of fiscal year 2013. Revenue from the Nokia Solutions and Networks ("NSN") channel represented 61% of revenue in the fiscal quarter.

Gross margin for the second quarter of fiscal year 2014 was 11.0%, compared with 11.5% in the first quarter of fiscal year 2014 and 15% in the second quarter of fiscal year 2013.

"I am pleased that we are making progress on multiple fronts" said DragonWave President and CEO, Peter Allen.

Net loss applicable to shareholders in the second quarter of fiscal year 2014 was $10.5 million or ($0.28) per basic and diluted share. This compares to a net loss applicable to shareholders of $6.6 million or ($0.17) per basic and diluted share in the first quarter of fiscal year 2014 and net loss of $1.1 million or ($0.03) per basic and diluted share in the second quarter of fiscal year 2013.

Cash, cash equivalents, and restricted cash totaled $9.8 million at the end of the second quarter of fiscal year 2014, compared to $23.4 million at the end of the first quarter of fiscal year 2014. Cash, cash equivalents and restricted cash reported at August 31, 2013 do not include the proceeds of the Company's public offering of units which closed on September 23, 2013.

The DragonWave management team will discuss the results on a webcast and conference call beginning at 8:30 a.m. Eastern Time on October 10, 2013.

The live webcast and presentation slides will be available at the Investor Relations section of the DragonWave website at: http://investor.dragonwaveinc.com/events.cfm

DragonWave® is a leading provider of high-capacity packet microwave solutions that drive next-generation IP networks. DragonWave's carrier-grade point-to-point packet microwave systems transmit broadband voice, video and data, enabling service providers, government agencies, enterprises and other organizations to meet their increasing bandwidth requirements rapidly and affordably. The principal application of DragonWave's products is wireless network backhaul. Additional solutions include leased line replacement, last mile fiber extension and enterprise networks. DragonWave's corporate headquarters is located in Ottawa, Ontario, with sales locations in Europe, Asia, the Middle East and North America. For more information, visit http://www.dragonwaveinc.com.

Certain statements in this release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements as to DragonWave's growth opportunities and the potential benefits of, and demand for, DragonWave's products. These statements are subject to certain assumptions, risks and uncertainties, including our view of the relative position of DragonWave's products compared to competitive offerings in the industry. Readers are cautioned not to place undue reliance on such statements. DragonWave's actual results, performance, achievements and developments may differ materially from the results, performance, achievements or developments expressed or implied by such statements. Risk factors that may cause the actual results, performance, achievements or developments of DragonWave to differ materially from the results, performance, achievements or developments expressed or implied by such statements can be found in the public documents filed by DragonWave with U.S. and Canadian securities regulatory authorities. DragonWave assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.

Forward-looking statements are provided to assist external stakeholders in understanding DragonWave's expectations as of the date of this release and may not be appropriate for other purposes. Material risks and uncertainties relating to our business are described under the heading "Risks and Uncertainties" in the MD&A dated October 9, 2013 and in the Company's Annual Information Form dated May 17, 2013 and other public documents filed by DragonWave with Canadian and United States securities regulatory authorities, which are available at www.sedar.com and www.sec.gov, respectively.

CONSOLIDATED STATEMENTS OF OPERATIONS

Expressed in US $000's except share and per share amounts

	Three months ended						Six months ended

	August 31, 2013			August 31, 2012			August 31, 2013			August 31, 2012
REVENUE		25,453			44,157			49,985			57,131
Cost of sales		22,659			37,414			44,371			46,255

Gross profit		2,794			6,743			5,614			10,876

EXPENSES
Research and development		4,783			12,139			10,085			16,538
Selling and marketing		3,175			4,357			6,557			8,015
General and administrative		4,433			8,513			9,181			13,783

		12,391			25,009			25,823			38,336

Income (loss) before amortization of intangible assets and other items		(9,597	)		(18,266	)		(20,209	)		(27,460	)
Amortization of intangible assets		(437	)		(1,199	)		(996	)		(1,741	)
Accretion expense		(56	)		(30	)		(121	)		(52	)
Restructuring expense		—			—			—			(798	)
Interest income (expense)		(380	)		(740	)		(918	)		(711	)
Impairment of intangible assets		—			(1,148	)		—			(4,017	)
Gain on change in estimate		342			352			342			1,542
Gain on contract amendment		—			—			5,285			—
Gain on purchase of business		—			19,397			—			19,397
Foreign exchange gain (loss)		(397	)		462			(495	)		(541	)

Income (loss) before income taxes		(10,525	)		(1,172	)		(17,112	)		(14,381	)
Income tax expense (recovery)		76			—			168			(572	)

Net Income (loss)		(10,601	)		(1,172	)		(17,280	)		(13,809	)
Net Loss Attributable to Non-Controlling Interest		92			50			146			108

Net Income (loss) applicable to shareholders		(10,509	)		(1,122	)		(17,134	)		(13,701	)
Income (loss) per share
Basic		(0.28	)		(0.03	)		(0.45	)		(0.37	)
Diluted		(0.28	)		(0.03	)		(0.45	)		(0.37	)
Weighted Average Shares Outstanding
Basic		38,112,887			37,992,859			38,086,403			36,962,103
Diluted		38,112,887			37,992,859			38,086,403			36,962,103



ASSETS
Current Assets
Cash and cash equivalents	8,858		22,959
Restricted cash	968		—
Trade receivables	20,832		35,452
Inventory	32,917		32,722
Other current assets	5,618		6,077
Contingent receivable	—		13,843
Deferred tax asset	54		69

	69,247		111,122
Long Term Assets
Property and equipment	4,504		7,444
Deferred tax asset	1,568		1,581
Deferred financing cost	—		149
Intangible assets	1,975		2,771
Goodwill	11,927		11,927

	19,974		23,872
Total Assets	89,221		134,994

LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities	30,964		56,962
Debt facility	15,000		15,000
Deferred revenue	848		1,163
Capital lease obligation	2,551		3,251
Contingent liabilities	200		255

	49,563		76,631
Long Term Liabilities
Capital lease obligation	—		1,451
Other long term liabilities	693		783
Contingent liabilities	—		519

	693		2,753
Commitments
Shareholders' equity
Capital stock	179,589		179,429
Contributed surplus	6,638		6,047
Deficit	(137,331	)	(120,197	)
Accumulated other comprehensive loss	(9,743	)	(9,685	)

Total Shareholder's equity	39,153		55,594
Non-controlling interests	(188	)	16

Total Equity	38,965		55,610
Total Liabilities and Equity	89,221		134,994

Shares issued & outstanding	38,123,880		38,048,297


Nadine Kittle Marketing Communications DragonWave Inc. nkittle@dragonwaveinc.com Tel: 613-599-9991 ext. 2262		Russell Frederick CFO DragonWave Inc. rfrederick@dragonwaveinc.com Tel: 613-599-9991 ext. 2253		Becky Obbema Interprose Public Relations (for DragonWave) Becky.Obbema@interprosepr.com Tel: (408) 778-2024