San Jose, Calif. — Oct. 27, 2004 — Symmetricom, Inc. (NASDAQ:SYMM), a leading worldwide supplier of network synchronization and timing solutions, today reported results for its fiscal first quarter, ended September 30, 2004.

Fiscal first quarter revenue was $52.0 million, an increase of $2.3 million, or 4.6 percent, over prior quarter revenue of $49.7 million, and an increase of $13.5 million, or 35.0 percent, over the same period last year.   Net earnings for the fiscal first quarter were $4.5 million or $0.10 per share on a fully diluted basis, more than double the net earnings from the prior quarter. In the same period of the prior year, the company reported a loss of $2.3 million or $(0.05) per share.

Non-GAAP net earnings for the fiscal first quarter, which excludes certain items related to non-cash compensation, amortization of acquired intangibles, integration and restructuring charges and unusual and non-recurring charges, were $5.6 million, or $0.12 per share on a fully diluted basis, compared to a non-GAAP net loss of $0.8 million, or $(0.02) per share in the first quarter of fiscal year 2004.

“Our first quarter benefited from strong sales of our newer products for sync network upgrades in telecom central offices,” said Tom Steipp, president and CEO of Symmetricom. “Additionally, a number of factors came together in the quarter, which yielded a significant improvement in gross margins.  Gross margins were 44.9 percent in the quarter, an improvement from 40.5 percent reported last quarter and 35.9 percent for the first quarter of fiscal 2004.”

Telecom Solution Division revenue for the quarter was $38.2 million, an increase of $1.9 million, or 5.4 percent over the prior quarter and an increase of $10.6 million, or 38.6 percent over the same period last fiscal year.  As compared to the prior quarter, strong sales of wireline products were partially offset by weaker OEM revenue.  Timing, Test & Measurement Division revenue was $13.8 million, an increase of $0.3 million, or 2.5 percent, over the prior quarter and up $2.9 million, or 26.1 percent, over the same period last fiscal year.

Outlook for Q2 FY05

Symmetricom expects second quarter FY05 revenue to be within a range of $46 million and $51 million.  The company expects earnings to be between $0.05 and $0.09 per share.

Investor Conference Call

As previously announced, management will hold a conference call to discuss these results today, October 27, 2004 at 1:30 p.m. Pacific Time.  Those wishing to join should dial 517-308-9002, 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 for one week.  To access the replay, please dial 888-568-0715.

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 charges. 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, 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 maintain gross margins, timing of orders, cancellation or delay of customer orders, difficulties in manufacturing products to specification or customer volume requirements, customer acceptance of new products, customer delays in qualification and field trials 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 but not limited to, the report on Form 10-K for the year ended June 30, 2004 and subsequent Form 10-Q and Form 8-K filings.

Note: Financial schedules attached.

Notes to Consolidated Statements of Operations (000’s)

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

• For the three months ended September 30, 2004 and September 30, 2003, the amortization of purchased technology related to the acquisitions of Datum, TrueTime, Telmax and the HP Communications Synchronization Business amounted to $991 and $987 respectively from cost of goods;
• For the three month period ended September 30, 2003, integration and restructuring charges related to the Datum, TrueTime, Net Monitor and the HP Communications and Synchronization Business acquisitions of $770, of which $442 was excluded from cost of goods and $328 from operating expenses;
• For the three months ended September 30, 2004 and September 30, 2003 the amortization of stock based compensation of $318 and $56 respectively; and
• For the three months ended September 30, 2004 and September 30, 2003 amortization of other intangibles related to the Datum and TrueTime acquisitions of $89 and $127 respectively from operating expenses.

(b) The above non-GAAP Statements of Operations assume a quarterly effective income tax rate of 23.4% and 25.0% for three-month periods ended September 30, 2004 and 2003 respectively.