Burlington, Mass., March 7, 2005 - Ezenia! Inc. (OTCBB: EZEN.OB), a leading market provider of secure real-time collaboration solutions for government networks and eGovernment, today reported its financial results for the fourth quarter of 2004 and fiscal year ended December 31, 2004.

The Company generated revenues of approximately $2.8 million for the fourth quarter of 2004, a 29% increase from approximately $2.2 million for the fourth quarter of 2003. Net income for the fourth quarter of 2004 was approximately $1.2 million ($0.09 per share), as compared to net income of approximately $557,000 ($0.04) for the fourth quarter of 2003. In the fourth quarter of 2004, net income included an income tax benefit of approximately $608,000 ($0.04 per share), related to the carryback of net operating losses incurred in 2001 as a result of the Federal Job Creation and Worker Assistance Act of 2002. Net income for the prior year's fourth quarter included an income tax benefit of approximately $267,000 ($0.02 per share), relating to a change in the estimate for potential liabilities related to federal and state income taxes paid in prior years.

For the year ended December 31, 2004, reported revenues were approximately $10.4 million, a 26% increase from approximately $8.2 million for the year ended December 31, 2003. Net income for the year ended December 31, 2004 was approximately $3.2 million ($0.23 per share), compared to a reported net loss for the year ended December 31, 2003 of approximately $828,000 ($0.06 per share). An additional income tax benefit of approximately $819,000 ($0.06 per share), recognized in the Company's second quarter relating to the Company's settlement with the Israeli Tax commission, is included in the net income for the current year.

"We continue to be encouraged by the strong performance of our InfoWorkSpace product and we are pleased to report our fifth consecutive quarter of profitability", noted Khoa Nguyen, Ezenia Chairman and Chief Executive Officer. "Our results in 2004 continue to affirm the acceptance of our InfoWorkSpace product line. Excluding revenue relating to our legacy video conferencing products and services, revenue related to our InfoWorkSpace product line increased 64% in 2004 as compared to 2003. Gross margin grew to 72% in the fourth quarter of 2004 compared to 66% in the same period of the prior year, and increased to 65% for the year ended December 31, 2004 as compared with 54% for the year ended December 31, 2003. Income from operations grew to 21.4% in the fourth quarter of 2004 compared to 12.7% in the same period of the prior year and was 17.4% for the year ended December 31, 2004. These increases in margin are especially encouraging with the decline in our legacy video conferencing product and service revenue and the higher margins associated with that revenue. With the recent signing of a three year extension to our existing product agreement with Microsoft effective January 1, 2005, we expect to see continued strengthening in our margin and profit for 2005".

"We saw an increase in operating expenses for the fourth quarter of 2004 as compared to the fourth quarter of 2003, due primarily to an increase in general and administrative expenses. For the year ended December 31, 2004, operating expenses declined to approximately $5.0 million from $5.6 million for the year ended December 31, 2003. We will continue to maintain a disciplined and responsible approach to cost control throughout 2005 as we strive to improve the growth of the InfoWorkSpace product line. For the year ended December 31, 2004, we achieved earnings per share of $0.23, $0.13 per share on an operational basis and $0.10 per share realized from tax benefits, and would like to match that earnings per share level in 2005 purely on an operational basis".

"We ended 2004 with a total cash and net collectible accounts receivable balance of approximately $8.9 million, which is approximately $3.9 million, or 77%, higher than where we ended 2003, a very significant increase. Given the improvements in our margin, and the reductions we have realized in our operating expense run rate, we are very encouraged to begin 2005 in such a comparatively more favorable position in terms of financial strength," remarked Mr. Nguyen. "We are further encouraged by the bookings received to date in the first quarter of 2005, which are on track to be the highest quarterly total in the Company's InfoWorkSpace history. We continue to remain on track in the execution of our long term strategy but understand the challenges that lie ahead in the burgeoning collaboration market."