RBAK Redback Networks

Redback Networks Inc. (NASDAQ:RBAK) today announced that it preliminarily expects lower than anticipated revenue of approximately $64 million for the fiscal quarter ended December 31, 2006. �The fourth quarter was our largest quarter ever for the SmartEdge products as we experienced substantial quarter over quarter revenue growth and the acquisition of several new large SmartEdge customers,� said Kevin DeNuccio, president and chief executive officer, Redback Networks. �Unfortunately we failed to meet our revenue targets due to, among other reasons, distribution channel disruptions caused by the timing of our proposed acquisition by Ericsson, and lower than expected revenue from our older SMS product line as we transitioned our largest SMS customers in the fourth quarter to our SmartEdge products. We expect that substantially all of the delayed purchases will become revenue in 2007.� Mr. DeNuccio continued, �We are excited about the progress we made last quarter with our SmartEdge product line, and the positive reactions of our customers to the Ericsson proposed acquisition. I want to assure our shareholders, customers and employees that Ericsson�s plans for the pending transaction remain�unchanged.� The full financial details of the quarter�s results will be presented at Redback�s regularly scheduled fiscal fourth quarter 2006 results conference call on January 30, 2007 at 1:45 p.m. Pacific Time. The details of the call and webcast are as follows: Date: Tuesday, January 30, 2007 Time: 1:45 p.m. PT/2:45 MT/3:45 CT/4:45 ET Domestic Dial-in phone number: 1-800-559-2403 International Dial-in phone number: 1-847-619-6534 Passcode: 16677677 Webcast: You can also participate in the conference call via your computer by registering your name on Redback's Investor Center at: http://ir.redback.com. The conference call will be archived on Redback�s Investor Center website. A replay will be accessible by telephone one hour after conclusion of the call until February 26, 2007. To ensure that the conference begins in a timely manner, please dial in 10 minutes prior to the scheduled start time. About Redback Networks Redback Networks Inc. manages 50 million broadband connections for 15 of the top 20 telephone carriers worldwide. Redback�s multi-service routing platform delivers next generation broadband services such as VoIP, IPTV and On-Demand Video. Redback Networks has more than 500 carrier customers worldwide and is based in San Jose, CA. In 2006, Redback marks its 10 year anniversary, celebrating ten years of broadband innovation. For more information, visit Redback Networks at www.redback.com. REDBACK and SmartEdge are trademarks registered at the U.S. Patent and Trademark Office and in other countries. NetOp is a trademark of Redback Networks Inc. All other products or services mentioned are the trademark, service marks, registered trademarks or registered service marks of their respective owners. Note Regarding Forward Looking Statements The statements contained in this press release that are not purely historical are forward-looking statements which are subject to the safe harbor provisions of the Private Litigation reform Act of 1995. These statements include but are not limited to statements regarding our expected financial results for the fiscal quarter ended December 31, 2006 and expectations regarding the timing of customer purchases and related revenue in 2007. These statements are only predictions and involve a number of risks and uncertainties, the outcome of which could materially and/or adversely affect Redback�s actual future results. These risks include without limitation, final review of quarterly results by the Company and the Company�s independent auditors; variations in customer demand for products and services; the impact of industry consolidation on customer buying patterns; timing of orders and manufacturing lead times; changes in customer order trends or customer or product mix; and growth trends in the networking industry and in various geographic regions. Other risks relating to Redback�s business include the outcome of the pending tender offer by Ericsson for Redback shares and the risks set forth in the Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 and Redback�s other most recent reports on Form 10-Q and Form 8-K, and amendments thereto, on file with the Securities and Exchange Commission (SEC), and other reports filed with the SEC from time to time. All forward-looking statements included in this document are based upon information available as of the date hereof, and Redback assumes no obligation to update these statements. Additional Information: This announcement is neither an offer to purchase nor a solicitation of an offer to sell securities. The tender offer is being made pursuant to a Tender Offer Statement on Schedule TO (including the Offer to Purchase, the related Letter of Transmittal and other tender offer materials) filed by Telefonaktiebolaget LM Ericsson (publ) and Maxwell Acquisition Corporation with the SEC on December�22, 2006. In addition, on December�22, 2006, Redback filed a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC related to the tender offer. The Tender Offer Statement (and related materials) and the Solicitation/Recommendation Statement contain important information that should be read carefully before any decision is made with respect to the tender offer. Those materials may be obtained at no charge upon request to MacKenzie Partners, Inc., the information agent for the tender offer, at 105 Madison Avenue, New York, New York 10016, or by calling toll free at (800)�322-2885. In addition, all of those materials (and all other offer documents filed with the SEC) are available at no charge on the SEC�s website at www.sec.gov.