Radyne Reports Second Quarter EPS of 17 Cents

PHOENIX, July 24  /PRNewswire-FirstCall/ -- Radyne Corporation (NASDAQ:RADN), today reported net sales for the second quarter of 2006 were $34.6 million compared to second quarter 2005 net sales of $20.6 million.  The increase resulted from continued growth in both the amplifier and the satellite electronics and broadcast segments.  During the second quarter of 2005, the Company completed its merger with Xicom Technology.  Consolidated sales for that quarter included only five weeks of Xicom sales.

Net sales for the satellite electronics and broadcast segment increased by 18% to $18.5 million during the second quarter of 2006 compared to the same period one year ago.  The second quarter of 2006 was the fourth consecutive quarter of sequential sales growth for the Company's Xicom subsidiary.  Xicom sales for the quarter were $16.1 million compared to $14.9 million for the first quarter of 2006.

Net earnings, after taxes and interest, for the second quarter of 2006 were $3.2 million, or $0.17 per diluted share compared to earnings of $2.1 million, or $0.12 per diluted share for the same quarter of 2005. Earnings from operations increased 54% to $4.8 million during the second quarter of 2006 from $3.1 million for the second quarter of 2005.  Reported second quarter 2006 earnings included equity compensation expense which had the effect of reducing earnings per diluted share by $0.02 compared to the year earlier period due to the adoption of new accounting standards.

Bookings during the quarter were $34.1 million, a 53% increase over bookings of $22.3 million in the second quarter of 2005.  At the end of the second quarter of 2006, Radyne's consolidated backlog was $33.2 million compared to $29.8 million at the end of the second quarter of 2005.

For the first six months of 2006, sales rose 92% to $65.8 million compared to $34.3 million for the first six months of 2005.  Earnings per diluted share for the first six months of 2006 grew to $0.30 from $0.20 for the same period in 2005.  Consolidated sales for the six months of 2005 included only five weeks of Xicom sales.

"So far, 2006 has been a very good year for Radyne," commented Bob Fitting, CEO.  "With Xicom's growth and the current sales outlook for our satellite and broadcast businesses, we expect to show significant year over year increases in sales and profits."

For the first six months of 2006, Radyne's cash balance increased 47% to $24.9 million compared to $16.9 million at the beginning of 2006. Consolidated Accounts Receivable increased to $22.3 million compared to $20.3 million at the beginning of 2006.  Consolidated Inventory was $21.7 million compared to $18.1 million at the beginning of 2006.

Radyne will be holding a conference call on Monday, July 24, 2006 at 4:30 p.m. EDT to discuss its second quarter 2006 financial results and operational highlights.  The call is open to the public.  The domestic dial in number is 1-866-578-5747 and the international dial in number is 617-213-8054. The conference will also be accessible via the Internet at http://www.radn.com/ and http://www.earnings.com/.

About Radyne Corporation

Radyne Corporation designs, manufactures, sells, integrates and installs products, systems and software used for the transmission and reception of data and video over satellite, troposcatter, microwave and cable communication networks.  The Company, through its Tiernan subsidiary, is a supplier of HDTV and SDTV encoding and transmission equipment.  The Xicom Technology subsidiary is a producer of high power amplifiers for communications applications. Radyne is headquartered in Phoenix, Arizona, has manufacturing facilities in Phoenix, San Diego, and Santa Clara, and sales offices in Singapore, Beijing, Jakarta and the United Kingdom.  The Company also has sales and/or service centers in Sao Paulo, Bangalore, Shanghai and Moscow.  For more information, visit our web site at http://www.radn.com/.  Additional information on Xicom is available at http://www.xicomtech.com/.

  Contact: Malcolm Persen, Chief Financial Officer, 602.437.9620

  Safe Harbor Paragraph for Forward-Looking Statements


This press release includes statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act") and Radyne Corporation claims the protection of the safe-harbor for forward-looking statements contained in the Reform Act. Forward-looking statements involve risks, uncertainties and other factors that may cause actual results, performance or achievements of Radyne Corporation and its subsidiaries to be materially different from those expressed or implied by such forward-looking statements.  These forward-looking statements are often characterized by the terms "may," "believes," "projects," "expects," "intends" or "anticipates," and do not reflect historical facts.  Specific forward-looking statements contained in this press release include expectations for future revenues, orders and backlog, cash flow and earnings per share and indications that the Company will benefit from strong market demand for its new products.  There is no assurance that the Radyne sales will continue to grow or that the Xicom acquisition will continue to provide desirable financial or strategic results for the Company.  We cannot guarantee that the Company will continue to generate cash and asset fluctuations may be seasonal in nature and not an indication of future results.  There can be no assurance that the indicators that the Company relies on to gauge future business prospects, such as backlog and bookings, will accurately forecast future results.

Factors that may affect forward-looking statements and the Company's business generally include but are not limited to the following: changes in demand for the Company's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, constraints on supplies of critical raw materials, excess or shortage of production capacity, and other risks discussed from time to time in the Company's SEC filings and reports.  In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions.

Forward-looking statements speak only as of the date the statement was made.  Radyne Corporation does not undertake and specifically declines any obligation to update any forward-looking statements.  In addition, the Company does not endorse any projections regarding future performance that may be made by third parties.

  Financial Statements follow.



                            Radyne Corporation
                  Condensed Consolidated Balance Sheets
                    (in thousands, except share data)
                                Unaudited

                                                    June 30,   December 31,
                                                      2006        2005
                      Assets
  Current assets:
    Cash and cash equivalents                       $24,886        $16,928
    Accounts receivable - trade, net of
     allowance for doubtful accounts of $467
     and $804, respectively                          22,321         20,337
    Cost in excess of billings                          218             --
    Inventories                                      21,655         18,057
    Deferred tax assets                               3,017          3,010
    Income tax receivable                             1,021             --
    Prepaid expenses and other assets                   702            864
      Total current assets                           73,820         59,196

  Goodwill                                           29,950         30,333
  Intangibles                                         6,137          6,706
  Property and equipment, net                         3,734          4,098
  Other assets                                          254            295
      Total Assets                                 $113,895       $100,628

        Liabilities and Stockholders' Equity
  Current liabilities:
    Accounts payable                                 $5,194         $5,054
    Accrued expenses                                  9,045          9,045
    Customer advance payments                         1,615          2,319
    Current portion of long-term debt                 1,000          1,000
    Income taxes payable                                 --            609
      Total current liabilities                      16,854         18,027

  Long-term debt, less current portion                3,250          3,750
  Deferred tax liability                                382            752
  Deferred rent                                         226            413
  Accrued stock option compensation                       6             46
      Total liabilities                              20,718         22,988

  Stockholders' equity:
    Common stock; $.001 par value - authorized,
     50,000,000 shares; issued and outstanding,
     18,217,024 shares and 17,334,467 shares,
     respectively                                        18             17
    Additional paid-in capital                       73,155         63,171
    Retained earnings                                19,999         14,450
    Other comprehensive income                            5              2
      Total stockholders' equity                     93,177         77,640
      Total Liabilities and Stockholders' Equity   $113,895       $100,628



                            Radyne Corporation
             Condensed Consolidated Statements of Operations
                    (in thousands, except share data)
                                Unaudited

                                 Three Months Ended       Six Months Ended
                                      June 30,                June 30,
                                  2006        2005        2006        2005

  Net sales                    $34,633     $20,613     $65,826     $34,321
  Cost of sales                 20,203      10,973      38,506      17,556
    Gross profit                14,430       9,640      27,320      16,765

  Operating expenses:
    Selling, general and
     administrative              7,044       4,715      13,573       8,392
    Research and development     2,617       1,832       5,340       3,330
      Total operating expenses   9,661       6,547      18,913      11,722

  Earnings from operations       4,769       3,093       8,407       5,043

  Other (income) expense:
    Interest expense                68          54         146          80
    Interest and other income     (235)       (238)       (452)       (488)

  Earnings before income taxes   4,936       3,277       8,713       5,451
    Income tax expense           1,781       1,202       3,162       1,935
  Net earnings                  $3,155      $2,075      $5,551      $3,516

  Earnings per share:
    Basic                        $0.18       $0.12       $0.31       $0.21
    Diluted                      $0.17       $0.12       $0.30       $0.20

  Weighted average number of
   common shares outstanding:
    Basic                       18,012      16,727      17,786      16,601
    Diluted                     18,800      17,410      18,674      17,337



                            Radyne Corporation
                            Segment Reporting
                              (in thousands)
                                Unaudited

                      Three months ended June 30, 2006
                               (in thousands)
                      Satellite electronics
                     and broadcast equipment  Amplifiers  Corporate   Total
  Net sales                  $18,487           $16,146        $--    $34,633
  Operating income             6,989             1,700     (3,920)     4,769
  Depreciation and
   amortization                 $260              $604        $--       $864


                        Six months ended June 30, 2006
                               (in thousands)
                      Satellite electronics
                     and broadcast equipment  Amplifiers  Corporate   Total
  Net sales                  $34,792           $31,034        $--    $65,826
  Operating income            13,169             3,112     (7,874)     8,407
  Depreciation and
   amortization                 $525            $1,233        $--     $1,758

  Total assets               $52,849           $61,046        $--   $113,895


DATASOURCE: Radyne Corporation



CONTACT:  Malcolm Persen, Chief Financial Officer of Radyne Corporation,

[phone]



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

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

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