SMRA Somera Communications (MM)

DALLAS, Jan. 19 /PRNewswire-FirstCall/ -- Somera Communications (NASDAQ:SMRA), a global provider of telecommunications asset management and recovery services, today announced preliminary financial results for the quarter ended December 31, 2005. Somera currently expects to report total revenues of approximately $16 million, resulting in a net loss per share for the fourth quarter currently estimated in the range of ($0.09) to ($0.11). David Heard, CEO of Somera, commented on the preliminary results, "After realizing solid progress in revenue growth in the third quarter, we did not experience the telecom market's typical fourth quarter strength. We believe the operating environment in the fourth quarter was negatively affected by M&A activity among large carriers that effectively distracted these important customers from conducting their typical volume in our brokerage business. Although fourth quarter performance was softer than previously anticipated, we continue to retain a good sales funnel and have improved strategic inventory positions to stimulate future sales. "The progress of our programs and services business continues as we welcomed yet another RecoveryPLUS(TM) agreement in the fourth quarter bringing the total number of Top (10) U.S. carrier clients in the program to four. Additionally, we believe we are building momentum with many other key prospects as they move into more advanced stages of our RecoveryPLUS sales cycle. We currently expect that existing carrier customers will ramp their programs and additional carriers will subscribe to RecoveryPLUS, and as a result we expect to see the program and services business grow in its contribution to the overall business," said Mr. Heard. Organizational Restructuring Kent Coker, CFO of Somera added, "RecoveryPLUS is demonstrating a solid adoption rate and excellent long-term potential. However, the growth challenges in the traditional lines of business require that we further optimize our operating leverage to ensure we are able to reap the financial benefit of these RecoveryPLUS programs, and thus position us to achieve our strategic goal of being the leading asset management company in the industry. As a result, we are undertaking a series of operational rebalancing actions to allow for more patient growth with respect to our strategic initiatives. In taking these actions, we are more closely aligning our brokerage operations with revenues that we expect will position Somera for a return to profitability. "These actions include a reduction in workforce, further consolidation of facilities, and the reduction of other overhead costs which should reduce our total operating expenses. Somera expects to incur specific costs related to these actions in the first quarter of 2006. Our goal is to create a business model requiring a quarterly breakeven revenue level of $16-18 million. We are currently executing this operating model to allow the natural adoption of our RecoveryPLUS programs while creating a clearer path to profitability," said Mr. Coker. Somera expects to report its fourth quarter financial results after the market closes on February 16, 2006. A conference call will be held on the same day at 5:00 p.m. Eastern time / 2:00 p.m. Pacific time. About Somera Somera Communications is a telecom asset management firm that assists service providers generate greater value from their network assets in the form of lower operating costs, longer product life, higher productivity, and real measurable savings. Somera provides immediate availability of quality, warranted new and refurbished equipment at savings of 25% to 60%. Extending these benefits is Somera RecoveryPLUS(TM), which deploys knowledgeable personnel, proven processes and proprietary software to each client location to provide professional discovery, valuation and asset cataloging, thereby enhancing ongoing network efficiency while improving the accuracy and quality of reports required of today's regulatory environment. In addition, Somera offers outsourced network operations, logistics, and technical service, as well as comprehensive repair services for wireless, wireline, and data products -- all at significant savings and reduced cycle times. Founded in 1995, Somera has developed an impressive base of over 1,100 customers worldwide, including the industry leaders from each segment of the telecommunications market. Visit Somera on the web at http://www.somera.com/. This news release contains forward-looking statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, the following statements: * our expected revenue and net loss per share levels for the fourth quarter of 2005 * our sales funnel and have improved strategic inventory * the progress of our programs and services business * our expectation that existing carrier customers will ramp their programs and additional carriers will subscribe to RecoveryPLUS(TM), and that the program and services business grow in its contribution to the overall business * the benefits to be obtained as a result of the organization restructuring discussed above * our ability to achieve the break even model and, if obtained, whether we can be profitable with this operating model Actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements contained in this release, including, but not limited to, general economic conditions particularly affecting the telecommunications industry; capital equipment spending levels in the telecommunications industry, including the risk of continued customer spending delays associated with carrier consolidation; the impact of competition in the market for supplying equipment and equipment lifecycle management services to telecommunications operators; the risk of potential shortage of product supply; and Somera's ability to build its lifecycle management services capabilities; and other factors fully described in the company's reports to the Securities and Exchange Commission (SEC), including but not limited to, the Annual Report on Form 10-K for the fiscal year ended December, 31, 2004, and Quarterly Reports on Form 10-Q. The company does not undertake to update any forward-looking statements that may be made by or on behalf of the company. Copies of Somera's Securities & Exchange Commission filings may be obtained by contacting Financial Relations Board at 310-854-8319 or by visiting the Investor section of Somera's web site at http://www.somera.com/. This press release contains statements regarding estimated total revenues and net loss per share for the fourth quarter. Investors should note that the Company has only recently completed its fiscal year and the financial results have not been audited by our independent accounting firm. The preparation of final financial results requires a substantial amount of subjective judgment which must be reviewed and approved by our Audit Committee and our independent accounting firm. Accordingly, once the audit of our financial statements is completed the actual audited results may vary from the preliminary results provided in this press release. Contact: Jim Gardner Vice President, Marketing Somera Communications 972-304-5660, ext. 317 DATASOURCE: Somera Communications CONTACT: Jim Gardner, Vice President, Marketing of Somera Communications, +1-972-304-5660, ext. 317, Web site: http://www.somera.com/

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