ULCM Ulticom (MM)

Ulticom, Inc. (the "Company") (NASDAQ: ULCM News) today announced its financial results for its second quarter of fiscal 2010 (three months ended July 31, 2010).

Revenues for the second quarter of fiscal 2010 were $8.9 million, down $0.7 million from the previously announced preliminary revenues of $9.6 million, due to the treatment of revenues from maintenance services previously provided that have been deferred due to a possible contract amendment referring to such services. This revenue is now expected to be recognized during the second half of fiscal year 2010. The Company continues to expect fiscal year 2010 revenues to be approximately $36.5 to $39.0 million.

Revenues for the second quarter of fiscal 2010 were down 25% as compared to $11.9 million for the second quarter of fiscal 2009, but were up 6% as compared to $8.4 million for the first quarter of fiscal 2010. The Company reported a net loss of $1.2 million, or ($0.11) per diluted share, for the second quarter of fiscal 2010, as compared to a net loss of $0.5 million, or ($0.05) per diluted share, for the second quarter of fiscal 2009 and compared to a net loss of $1.2 million, or ($0.11) per diluted share, for the first quarter of fiscal 2010. Results for the second quarter of fiscal 2010 included $0.3 million of pre-tax costs associated with restatement-related matters, corporate development initiatives, workforce reductions, employee retention and non-cash share-based payment expense compared with $2.1 million for the second quarter of fiscal 2009 and $1.2 million for the first quarter of fiscal 2010. Results for the second quarter of fiscal 2010 were also adversely impacted by the Company’s revision of its projected effective tax rate for fiscal year 2010, resulting in the recognition of income tax expense of approximately $1.1 million.

At July 31, 2010, the Company had $76.8 million in cash, cash equivalents and short-term investments, $84.9 million of working capital, and $89.5 million of shareholders’ equity.

Shawn Osborne, President and Chief Executive Officer, said, “Despite the ongoing weakness in the deployment of our signaling component products, Ulticom continues to make progress with our Tier 1 telecom equipment customer base by integrating our next generation wireless signaling system solutions that enable them to efficiently manage increasing traffic, enhance their product portfolio and generate new revenue opportunities.”

Conference Call

The Company will host a conference today at 4:30 PM local time to discuss these results and its outlook for 2010 and to hold a question and answer session. Please use the following dial in number to register your name and company affiliation for the conference call: 888-500-6974. The conference ID# is 6900164. The call will also be carried live on the Investor Relations page of the Company web site at www.ulticom.com and will be available for 90 days.

About Ulticom, Inc.

Ulticom provides service essential signaling component and system solutions for wireless, wireline, and Internet communications. Ulticom's products are used by leading telecommunication equipment and service providers worldwide to deploy broadband mobile access, multimedia transport control, subscriber data management and enhanced communication services. Ulticom is headquartered in Mount Laurel, NJ with additional offices in the United States, Europe, and Asia.

Note: This Press Release contains “forward-looking statements” for purposes of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, including statements relating to the Company’s future business performance. Important factors that could cause actual results to differ materially include those risks described in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 20, 2010. The Company makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made, except as otherwise required by the federal securities laws.

Financial Highlights

Financial highlights at and for the three and six months ended July 31, 2009 and 2010 appear below. Readers are encouraged to review the Quarterly Report on Form 10-Q for the second quarter of fiscal 2010 , which the Company expects to file on or before September 14, 2010, in particular the Condensed Consolidated Financial Statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations.

    ULTICOM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

  January 31, July 31, 2010 2010 ASSETS Current Assets: Cash and cash equivalents $ 13,190 $ 66,821 Short-term investments 65,087 10,013 Accounts receivable, net 10,657 8,732 Inventories 1,019 1,056 Prepaid expenses and other current assets   7,444   7,111 Total current assets 97,397 93,733 Property and equipment, net 1,872 1,466 Other assets 1,411 373 Deferred income taxes   6,377   6,785 Total assets $ 107,057 $ 102,357   LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities: Accounts payable and accrued expenses $ 6,598 $ 4,351 Deferred revenue   2,945   4,480 Total current liabilities 9,543 8,831 Long-term Liabilities: Deferred revenue 3,682 3,495 Unrecognized income tax benefits 1,640 541 Other long-term liabilities   35   - Total long-term liabilities   5,357   4,036 Total shareholders’ equity   92,157   89,490 Total liabilities and shareholders’ equity $ 107,057 $ 102,357       ULTICOM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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(In thousands, except per share data)

  Three months ended Six months ended July 31,   July 31, July 31,   July 31, 2009 2010 2009 2010 Revenues $ 11,864 $ 8,896 $ 23,420 $ 17,282 Cost of revenues   2,890     2,441     5,908     5,024   Gross profit   8,974     6,455     17,512     12,258     Operating expenses: Research and development 3,367 2,904 6,857 5,950 Selling, general and administrative   6,732     4,036     14,077     9,936     Loss from operations (1,125 ) (485 ) (3,422 ) (3,628 ) Interest and other income, net   373     314     1,226     686     Loss before income taxes (752 ) (171 ) (2,196 ) (2,942 ) Income tax expense (benefit)   (237 )   1,055     (770 )   (476 ) Net loss $ (515 ) $ (1,226 ) $ (1,426 ) $ (2,466 )   Loss per share: Basic $ (0.05 ) $ (0.11 ) $ (0.13 ) $ (0.22 ) Diluted $ (0.05 ) $ (0.11 ) $ (0.13 ) $ (0.22 )