/FIRST AND FINAL ADD -- CLM059 -- Glenayre Reports Pro Forma Results Related to Acquisition/

  Glenayre Technologies, Inc and Subsidiaries
  Unaudited Pro Forma Combined Statement of Operations
  For the six months ended June 30, 2005
  (In thousands, except per share amounts)

                                          Universal    Pro
                                Glenayre   Manufac-   Forma
                             Technologies, turing &  Adjust-       Consoli-
                                  Inc.    Logistics   ments  Notes  dated

  Revenues                        $60,676  $163,450  $(47,403)(a) $176,723

  Cost of Revenues                 34,146    97,925    (2,548)(b)  129,522

  GROSS MARGIN                     26,530    65,525   (44,855)      47,200

  OPERATING EXPENSES:
  Selling, general and
   administrative expense          19,085    17,420     2,083 (c)   38,588
  Research and development
   expense                          6,982       -         -          6,982
  Advertising expense                 -         -         -            -
  Amortization of intangible
   assets                             566       -       2,903 (d)    3,469
  Other operating expenses             15       -         -             15

  Total Operating Expenses         26,648    17,420     4,986       49,054

  OPERATING INCOME (LOSS)            (118)   48,105   (49,841)      (1,853)

  OTHER INCOME (EXPENSE):
  Interest income                   1,101       259       -          1,360
  Interest expense                   (512)     (143)   (1,758)(e)   (2,413)
  Gains (losses) on disposal of
   assets, net                         (1)      (39)      -            (40)
  Other income                     (1,005)    1,399       -            394

  Total Other Income (expense)       (417)    1,476    (1,758)        (699)

  INCOME (LOSS) FROM CONTINUING
   OPERATIONS BEFORE INCOME TAXES    (535)   49,581   (51,599)      (2,553)
  Provision (benefit) for income
   taxes                              163    12,207   (12,207)(g)      163

  INCOME (LOSS) FROM CONTINUING
   OPERATIONS                       $(698)  $37,374  $(39,392)     $(2,716)


  INCOME (LOSS) PER WEIGHTED
   AVERAGE COMMON SHARE:
   Income (loss) from continuing
    operations                     $(0.01)    $0.56    $(0.59)      $(0.04)

  INCOME (LOSS) PER COMMON SHARE
   - ASSUMING DILUTION:
   Income (loss) from continuing
    operations                     $(0.01)    $0.56    $(0.59)      $(0.04)

  Depreciation expense included
   in Income (Loss) from
   continuing operations:          $2,022    $5,546      $-         $7,568

      See notes to unaudited pro forma condensed combined statement of
                                 operations



  Glenayre Technologies, Inc and Subsidiaries
  Unaudited Pro Forma Combined Statement of Operations
  For the year ended December 31, 2004
  (In thousands, except per share amounts)

                                          Universal    Pro
                                Glenayre   Manufac-   Forma
                             Technologies, turing &  Adjust-       Consoli-
                                  Inc.    Logistics   ments  Notes  dated

  Revenues                       $50,575  $403,103  $(122,728)(a)  $330,950

  Cost of Revenues                25,857   250,164    (20,643)(b)   255,377

  GROSS MARGIN                    24,718   152,939   (102,085)       75,572

  OPERATING EXPENSES:
  Selling, general and
   administrative expense         19,886    32,756      5,888 (c)    58,530
  Research and development
   expense                        13,374       -          -          13,374
  Advertising expense                556       -          -             556
  Amortization of intangible
   assets                            -         -        6,805 (d)     6,805
  Other operating expenses           172       -          -             172

  Total Operating Expenses        33,987    32,756     12,692        79,436

  OPERATING INCOME (LOSS)         (9,269)  120,183   (114,777)       (3,864)

  OTHER INCOME (EXPENSE):
  Interest income                  1,203       714        -           1,917
  Interest expense                  (228)     (953)    (4,966)(e)    (6,147)
  Gains (losses) on disposal of
   assets, net                        84       -          -              84
  Other income                        15    (2,800)     2,880 (f)        95

  Total Other Income (expense)     1,074    (3,039)    (2,086)       (4,051)

  INCOME (LOSS) FROM CONTINUING
   OPERATIONS BEFORE INCOME
   TAXES                          (8,195)  117,144   (116,863)       (7,915)
  Provision (benefit) for income
   taxes                             (55)   50,832    (49,157)(g)     1,620

  INCOME (LOSS) FROM CONTINUING
   OPERATIONS                    $(8,140)  $66,312   $(67,706)      $(9,535)

  INCOME (LOSS) PER WEIGHTED
   AVERAGE COMMON SHARE:
   Income (loss) from continuing
    operations                    $(0.12)    $1.00     $(1.02)       $(0.14)

  INCOME (LOSS) PER COMMON SHARE
   - ASSUMING DILUTION:
   Income (loss) from continuing
    operations                    $(0.12)    $1.00     $(1.02)       $(0.14)

  Depreciation expense included
   in Income (Loss) from
   continuing operations:         $1,783   $20,165    $(3,354)      $18,594

       See notes to unaudited pro forma condensed combined statement of
                                  operations



                         Glenayre Technologies, Inc.
                 Summary Schedule of Non-GAAP Financial Data
                          (In thousands) Unaudited

  The following summary of financial data shows the reconciliation of pro
  forma income (loss) from continuing operations, as determined in
  accordance with accounting principles generally accepted in the United
  States (GAAP), to pro forma income (loss) from continuing operations
  before one-time gains and charges and earnings before interest, taxes,
  depreciation and amortization from continuing operations before one-time
  gains and charges.

  EBITDA is income (loss) from continuing operations, excluding one-time
  gains and charges, before net interest income, income taxes and
  depreciation and amortization and is presented because the Company
  believes that such information is commonly used in both the
  telecommunications industry and the entertainment industry as one measure
  of a company's operating performance. EBITDA from continuing operations
  is not determined in accordance with generally accepted accounting
  principles, it is not indicative of cash provided by operating
  activities, should not be used as a measure of operating income and cash
  flows from operations as determined under GAAP, and should not be
  considered in isolation or as an alternative to, or to be more meaningful
  than, measures of performance determined in accordance with GAAP.
  EBITDA, as calculated by the Company, may not be comparable to similarly
  titled measures reported by other companies and could be misleading
  unless all companies and analysts calculated EBITDA in the same manner.


                                           Six Months Ended     Year ended
                                               June 30,         December 31
                                                 2005               2004

  Pro forma income (loss) from
   continuing operations                         $(2,716)          $(9,535)
  Indirect acquisition and employment
   costs (1)                                       1,618
  Patent litigation settlement costs (2)                             2,700
  Pro Forma Income (loss) from
   continuing operations before
   one-time gains and charges                     (1,098)           (6,835)

  Provision for income taxes                         163             1,620
  Loss on currency translation (3)                 1,300
  Gain on currency swaps                            (262)
  Interest income, net                             1,053             4,230
  Depreciation and amortization                   11,037            25,399

  EBITDA from continuing operations
   before one-time gains and charges             $12,193           $24,414

  EBITDA from continuing operations
   before one-time gains and charges
   by segment
  Messaging business                               3,383            (4,687)
  EDC                                              8,810            29,101
                                                 $12,193           $24,414

  (1) In connection with the acquisition of the CD/DVD manufacturing and
      distribution operations of Universal Music Group, the company incurred
      certain indirect acquisition costs and one-time employment related
      costs.
  (2) Represents damages awarded to Phillip Jackson for a patent
      infringement lawsuit.
  (3) As a result of a decline in the Euro exchange rate.



  NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

  The following pro forma adjustments are included in the unaudited pro
  forma condensed combined statements of operations:

  (a) To adjust revenues as follows:
  - Reduce revenue by approximately $102 million for 2004 and $39 million
    for the six months ended June 30, 2005 to reflect the pricing terms in
    the supply agreements in effect immediately after the acquisition
    transaction between Entertainment Distribution Company, LLC ("EDC"), a
    majority owned subsidiary of Glenayre, and Universal Music Group; and
  - Eliminate freight revenue of approximately $20 million for 2004 and $8
    million for the six months ended June 30, 2005 to reflect net revenue
    based on the terms of the new supply agreements.

  (b) To adjust cost of revenues as follows:
  - Eliminate freight of approximately $20 million for 2004 and $8 million
    for the six months ended June 30, 2005 based on the terms of the new
    supply agreements; and
  - Increase royalty expenses by approximately $5 million for the six months
    ended June 30, 2005 to reflect the royalty rates to be paid by EDC.

  (c) To adjust general and administrative costs as follows:
  - Add certain corporate overhead and compensation costs of $5 million for
    2004 and $2.1 million for the six months ended June 30, 2005 for
    incremental costs related to new contracts to support the acquired
    business;
  - Eliminate pension costs of approximately $1.6 million related to pension
    liabilities not acquired, and certain other general and administrative
    costs of $0.3 million incurred by businesses not acquired for 2004; and
  - To eliminate certain non-recurring income of $2.9 million for 2004
    generated by former business of UM&L that were not acquired

  (d) To reflect additional amortization expenses related to intangible
      assets acquired.  The actual amortization amount is subject to change
      based on the final valuation results.

  (e) To reflect additional interest charges related to the new term loan of
      $46.5 million, the amortization of related deferred financing costs,
      and accretion of deferred rebates to be paid to Universal Music Group,
      pursuant to the asset and share purchase agreements.

  (f) To eliminate loss of $2.9 million for 2004 related to sale of
      buildings to other affiliates of Universal Music.

  (g) To adjust the combined tax provision to reflect the tax effect of the
      pro forma adjustments and the application of Glenayre's tax attributes
      to the acquired business.  The pro forma combined provision for income
      taxes does not reflect the amounts that would have resulted had
      Glenayre and UM&L filed consolidated income tax returns during the
      periods presented.


PRNewswire-FirstCall -- Aug. 15 

DATASOURCE: Glenayre Technologies, Inc.



Web site:  http://www.glenayre.com/



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