SAN JOSE, Calif. — Jan. 26, 2006 — Symmetricom, Inc. (NASDAQ:SYMM), a leading worldwide supplier of network synchronization and timing solutions, today reported results for its fiscal second quarter ended Dec. 31, 2005.

Fiscal second quarter revenue was $47.9 million, an increase of $3.6 million, or 8.2 percent, from prior quarter revenue of $44.3 million, and a decrease of $0.1 million, or 0.1 percent, from the year ago quarter revenue of $48.0 million.  For the six month period ended Dec. 31, 2005, revenue was $92.2 million, a decrease of $7.7 million, or 7.8%, from the prior year period.

Net earnings for the fiscal second quarter were $2.7 million, or $0.06 per share on a fully diluted basis, compared with $1.4 million, or $0.03 per share on a fully diluted basis, in the prior quarter, and $4.7 million, or $0.10 per share on a fully diluted basis, in the prior year period.  For the six month period ended Dec. 31, 2005, net earnings were $4.0 million, or $0.09 per share on a fully diluted basis, compared with net earnings of $9.2 million, or $0.20 per share on a fully diluted basis, in the prior year period.  The current quarter and six month period include expenses of $0.02 and $0.04 per share respectively, on a fully diluted basis, for expenses incurred for stock based compensation following the adoption of FAS123R.

Non-GAAP net earnings for the fiscal second quarter, which excludes certain items related to non-cash compensation, amortization of acquired intangibles, integration and restructuring charges and unusual and non-recurring items, were $4.4 million, or $0.09 per share on a fully diluted basis.  This compares with non-GAAP net earnings in the prior quarter of $3.4 million, or $0.07 per share on a fully diluted basis, and non-GAAP net earnings of $5.0 million, or $0.11 per share on a fully diluted basis, in the prior year period.  For the six month period ended Dec. 31, 2005, non-GAAP net earnings were $7.7 million, or $0.16 per share on a fully diluted basis, compared with $10.6 million, or $0.23 per share on a fully diluted basis for the prior year.

Telecom Solutions Division revenue for the quarter was $30.6 million, an increase of $0.7 million, or 2.5 percent, from the prior quarter revenue of $29.8 million, and a decrease of $1.9 million, or 5.8 percent, from the year ago quarter revenue of $32.4 million.  Telecom Solutions Division revenue for the six month period ended December 31, 2005 was $60.4 million, a decrease of $10.2 million, or 14.5 percent from the prior year period.

Timing, Test & Measurement Division revenue for the quarter was $17.4 million, an increase of $2.9 million, or 20.2 percent from the prior quarter revenue of $14.4 million, and an increase of $1.8 million, or 11.7 percent, from the year ago quarter revenue of $15.5 million.  Timing, Test & Measurement Division revenue for the six month period ended Dec. 31, 2005 was $31.8 million, an increase of $2.5 million, or 8.4 percent from the prior year period.

“The support for the upgrade cycle continues to build,” said Thomas Steipp president and CEO of Symmetricom.  “We received an initial order from AT&T to replace legacy equipment at 12 central offices and signed an agreement to replace virtually all of its legacy cesium primary reference sources over the next two years,” continued Mr. Steipp.  “We also made progress with our other customers, helping them develop and execute their modernization plans.  At this point, we have seen some level of activity, although modest, from most of the service providers in the United States and we believe that the overall level of upgrade activity will steadily rise.”
 
Additional Second Quarter Highlights

• Received several contract awards in our Timing, Test & Measurement Division for work on military communication satellites and secure mobile communications
• Introduced new precision timing products for military applications, including the Symmetricom 8130A, a low phase noise rubidium oscillator, and the 9633 accelerometer compensated OCXO, a low g sensitivity military crystal oscillator used in navigation, radar and secure communications
• Announced successful interoperability testing with modular CMTS products from Big Band Networks
• Continued to expand international market presence with competitive wins in the C.I.S. and other parts of Asia.

Outlook for Q3 FY06
Symmetricom expects third quarter FY06 revenue to be between $48 million and $53 million.  The company expects GAAP earnings to be between $0.04 and $0.08 per share, on a fully diluted basis, and non-GAAP earnings to be between $0.07 and $0.12 per share, on a fully diluted basis.

Investor Conference Call
As previously announced, management will hold a conference call to discuss these results today, January 26 at 1:30 p.m. Pacific Time.  Those wishing to join should dial 210-234-0002, passcode “Symmetricom.”  Please reference the conference leader: Thomas Steipp.  A live webcast of the conference call will also be available via the company’s website at www.symmetricom.com or www.vcall.com.  A replay of the call will be available through Feb. 10, 2006.  To access the replay, please dial 203-369-0170.

Non-GAAP Information
Certain non-GAAP financial information is included in this press release. In the non-GAAP Statements of Operations, Symmetricom excludes certain items related to non-cash compensation, amortization of acquired intangibles, integration and restructuring charges and unusual and non-recurring items. Symmetricom believes that excluding such items provides investors and management with a representation of the company’s core operating performance and with information useful in assessing our prospects for the future and underlying trends in Symmetricom’s operating performance.  Management uses such non-GAAP information to evaluate financial results and to establish operational goals. Non-GAAP information is not determined using GAAP and should not be considered superior to or as a substitute for data prepared in accordance with GAAP.  A reconciliation of the non-GAAP results to the GAAP results is provided in the “Consolidated Statements of Operations (non-GAAP)” schedule provided in the press release.

Safe Harbor 
This press release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created by those sections. These forward-looking statements include statements concerning estimates of future revenue and earnings, changes in anticipated customer demand to replace legacy products, as well as the information regarding the usefulness of the non-GAAP financial information.  Symmetricom's actual results could differ materially from those projected or suggested in these forward-looking statements. Factors that could cause future actual results to differ materially from the results projected in or suggested by such forward-looking statements include: reduced rates of demand for telecommunication products or test and measurement products, our customers’ ability and need to upgrade existing equipment, our ability to negotiate contracts with our customers, our ability to maintain gross margins, timing of orders, cancellation or delay of customer orders, loss of customers, difficulties in manufacturing products to specification or customer volume requirements, challenges in integrating businesses,  customer acceptance of new products,  geopolitical risks such as terrorist acts and the risk factors listed from time to time in Symmetricom's reports filed with the Securities and Exchange Commission, including the report on Form 10-K for the year ended June 30, 2005, subsequent Form 10-Q and Form 8K’s.

Note: Financial schedules attached.

Notes to Consolidated Statements of Operations (000’s) Three Months ended December 31

(a)      The above non-GAAP Statements of Operations exclude the effects of the following:

• For the three months ended December 31, 2005, the amortization of purchased technology related to the acquisitions of Datum, TrueTime, Telmax, HP Communications Synchronization Business and Agilent Technologies’ Frequency and Timing Standards product line, which amounted to $960;
• For the three months ended December 31, 2004, the amortization of purchased technology related to the acquisitions of Datum, TrueTime, Telmax, and HP Communications Synchronization Business, which amounted to $970;
• For the three months ended December 31, 2005, stock based compensation expense of $1,055 after adopting FAS123R;
• For the three months ended December 31, 2004, stock based compensation expense of $309 prior to adopting FAS123R;
• For the three months ended December 31, 2005, integration and restructuring charges related to the acquisition of Agilent Technologies’ Frequency and Timing Standards product line of  $217;
• For the three months ended December 31, 2005, amortization of other intangibles related to the Datum, TrueTime and Agilent Technologies’ Frequency and Timing Standards product line acquisitions of $102 (from operating expenses); and
• For the three months ended December 31, 2004, amortization of other intangibles related to the Datum, and TrueTime acquisitions of $89 (from operating expenses). 

(b)      The above non-GAAP Statements of Operations assume a quarterly effective income tax rate of 27.0% and 29.1% for the three months ended December 31, 2005, and 2004, respectively.    

Notes to Consolidated Statements of Operations (000’s) Six Months ended December 31

(c)      The above non-GAAP Statements of Operations exclude the effects of the following:

• For the six months ended December 31, 2005, the amortization of purchased technology related to the acquisitions of Datum, TrueTime, Telmax, HP Communications Synchronization Business and Agilent Technologies’ Frequency and Timing Standards product line, which amounted to $2,075;
• For the six months ended December 31, 2004, the amortization of purchased technology related to the acquisitions of Datum, TrueTime, Telmax, and HP Communications Synchronization Business, which amounted to $1,961;
• For the six months ended December 31, 2005, stock based compensation expense of $2,348 after adopting FAS123R;
• For the six months ended December 31, 2004, stock based compensation expense of $628 prior to adopting FAS123R;
• For the six months ended December 31, 2005, integration and restructuring charges related to the acquisition of Agilent Technologies’ Frequency and Timing Standards product line of  $343;
• For the six months ended December 31, 2005, amortization of other intangibles related to the Datum, TrueTime and Agilent Technologies’ Frequency and Timing Standards product line acquisitions of $200 (from operating expenses); and
• For the six months ended December 31, 2004, amortization of other intangibles related to the Datum, and TrueTime acquisitions of $178 (from operating expenses). 

(d)      The above non-GAAP Statements of Operations assume a quarterly effective income tax rate of 26.0% and 26.4% for the six months ended December 31, 2005, and 2004, respectively.