Somera Announces First Quarter 2005 Financial Results

Somera Announces First Quarter 2005 Financial Results
Q1 2005 Highlights






DALLAS, April 28  /PRNewswire-FirstCall/ -- Somera Communications
(NASDAQ:SMRA), a global provider of telecommunications asset management
services, today announced financial results for the first quarter ended March
31, 2005.

Total revenue for the first quarter of 2005 was $20.5 million, compared with
$23.2 million for the fourth quarter of 2004.  The sequential decline in sales
was primarily due to traditional first quarter seasonality and purchasing
decision delays resulting from the recent wave of industry mergers and
acquisitions.

Gross profit for the first quarter of 2005 grew to $7.7 million, an increase of
24% over the gross profit of $6.2 million reported for the fourth quarter of
2004.  Blended gross profit margin for the first quarter was 37%, compared with
27% for the fourth quarter of 2004.  The gross margin increase was primarily
associated with higher margins on our international business, new lifecycle
services programs and improved product supply chain management.

Operating expenses for the first quarter of 2005 were $10.8 million, compared
with $12.9 million for the fourth quarter of 2004.  The sequential decrease
from the fourth quarter directly reflects the impact associated with
organizational changes and expense controls implemented during the third and
fourth quarters of 2004 to effectively rebalance the Company's cost structure.

Somera's net loss was $3.3 million, or $0.07 per share for the first quarter of
2005, an improvement of 47% over the net loss of $6.2 million, or $0.12 per
share, for the fourth quarter of 2004.

Somera's balance sheet at March 31, 2005 included $35.2 million of cash and
cash equivalents and short-term investments, $38.9 million in working capital
and no long-term debt.

"Our first quarter results demonstrate that we are making progress toward
reaching our target breakeven model and delivering on our four point plan to
profitability," commented David W. Heard, Somera's President and Chief
Executive Officer.  "I am very pleased to see our gains in gross profit dollars
and gross margin, and our quarterly operating expenses decreased according to
plan.  Going forward, we will seek to manage quarterly expenses while
continuing to invest in key areas that will support our growing market
penetration.  These include further development of our intellectual property in
our operating systems and expansion of our global channel for sales, service
and supply."

Continued Heard, "While total revenue was lower than the fourth quarter of
2004, we signed a large Lifecycle Services contract for spares management with
XO Communications, initiated a limited market trial for a similar service with
one of our Regional Bell Operating Company (RBOC) customers, and began
implementation of our Somera RecoveryPLUS(TM) program with a top 10 national
North America service provider.  The positive market response to our service
offering gives us confidence in our ability to gain new customers and expand
our programs with existing customers.  Our pipeline looks promising and our
balance sheet provides resources to support our strategic business
initiatives."

"In addition, Somera made several key executive appointments during the first
quarter and I believe the Company is solidly positioned with the knowledge,
leadership, and sales and service resources to successfully execute our asset
management strategy," concluded Heard.

Teleconference and Webcast

Management will hold a teleconference with simultaneous webcast today at 4:30
p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss first quarter results. 
Please dial 800-510-9691 for domestic calls, or 617-614-3453 for international
calls, at least five minutes before start time and use passcode 11010929.  The
call will be webcast on the Investor Relations page of the Somera web site at
http://www.somera.com/.  Listeners will need to have Microsoft Media Player
installed on their computers.  A telephonic replay will be available from one
hour after the call ends through May 26, 2005, at 888-286-8010 for domestic
calls, or 617-801-6888 for international calls, passcode 60318183.

The webcast is also being distributed through the Thomson StreetEvents Network.
 Individual investors can listen to the call at http://www.earnings.com/,
Thomson's individual investor portal, powered by StreetEvents.  Institutional
investors can access the call via Thomson StreetEvents
(http://www.streetevents.com/), a password-protected event management site.

About Somera

Somera launched its family of Lifecycle Management Services in 2004 in response
to an industry-wide need for telecom asset management to optimize return on
assets.  Somera's product offerings enable service providers to generate
greater value from legacy assets in the form of lower operating costs, longer
product life, higher productivity, and real measurable capital savings.  With
Somera LifecyclePLUS, customers can outsource elements of network operations,
logistics, and technical service.  Somera RecoveryPLUS(TM) is a program
approach to deliver documented savings and expense relief by recovering hidden
value in current under-utilized assets and inventories.  Somera RepairPLUS
provides comprehensive support for wireless, wireline, and data products at
significant savings and reduced cycle times. These services are in addition to
Somera's traditional Brokerage business that provides immediate availability of
quality, warranted new and refurbished equipment at savings of 25 to 60%. 
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 statements about
Somera's projected return to quarterly profitability in the fourth quarter of
2005, Somera's ability to manage quarterly expense levels, continue to invest
in key areas, increase market penetration, develop its operating system and
make improvements within its global channel for sales, service and supply,
Somera's ability to gain new customers and expand its programs with existing
customers in future periods, the nature of the future market environment, and
Somera's customer pipeline. Forward-looking statements involve a number of
risks and uncertainties 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. 
Actual results may differ materially from the statements contained in this new
release.  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
SEC filings may be obtained by contacting Investor Relations, Somera
Communications, at 1-805-681-3322.

                       SOMERA COMMUNICATIONS, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                  (In thousands, except per share data)
                               (unaudited)

                                                    March 31,  December 31,
                                                       2005       2004
                                   ASSETS
   Current assets:
     Cash and cash equivalents                        $6,303      $7,654
     Short-term investments                           28,909      32,757
     Accounts receivable, net of allowance for
      doubtful accounts of $557 and $574 at
      March 31, 2005 and December 31, 2004,
      respectively                                    16,710      16,217
     Inventories, net                                 11,472      10,027
     Other current assets                              2,473       1,876
          Total current assets                        65,867      68,531
   Property and equipment, net                         4,593       4,600
   Other assets                                          142         148
   Goodwill                                            1,760       1,760
   Intangible assets, net                                 33          50
          Total assets                               $72,395     $75,089
             LIABILITIES AND STOCKHOLDERS' EQUITY
   Current liabilities:
     Accounts payable                                $13,854     $12,396
     Accrued compensation                              2,750       2,503
     Other accrued liabilities                         9,925      11,139
     Deferred revenue                                    464         723
          Total current liabilities                   26,993      26,761
   Stockholders' equity:
     Preferred stock ($0.001 par value per share;
      authorized 20,000 shares, no shares issued)
     Common stock ($0.001 par value per share;
      authorized 200,000 shares, shares issued and
      outstanding: 50,233 and 49,872 at March 31,
      2005 and December 31, 2004, respectively            50          49
     Additional paid-in capital                       75,131      74,652
     Unearned stock-based compensation                  (289)        (72)
     Accumulated other comprehensive loss               (104)       (191)
     Accumulated deficit                             (29,386)    (26,110)
          Total stockholders' equity                  45,402      48,328
          Total liabilities and stockholders'
           equity                                    $72,395     $75,089



                       SOMERA COMMUNICATIONS, INC.
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In thousands, except per share data)
                               (unaudited)

                                               Three Months Ended March 31,
                                                    2005            2004
   Revenues:
     Equipment revenue                             $18,804        $23,012
     Service revenue                                 1,730          5,376
       Total revenues                               20,534         28,388
   Cost of revenues:
     Equipment cost of revenue                      11,966         17,756
     Service cost of revenue                           880          4,152
       Total cost of revenues                       12,846         21,908
         Gross profit                                7,688          6,480
   Operating expenses:
     Sales and marketing                             5,830          5,639
     General and administrative                      4,990          4,648
     Amortization of intangible assets                  17             17
       Total operating expenses                     10,837         10,304
  Loss from operations                              (3,149)        (3,824)
  Other expense, net                                   114            206
  Loss before income taxes                          (3,263)        (4,030)
  Income tax provision                                  13             26
  Net loss                                         $(3,276)       $(4,056)
  Net loss per share: basic and diluted             $(0.07)        $(0.08)
  Weighted average shares: basic and diluted        49,935         49,519


DATASOURCE: Somera Communications



CONTACT:  Kelly Delany, Director, Communications of Somera

Communications, [phone], 



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

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