Ezenia! Inc. Announces 2009 Second Quarter Financial Results

Nashua, N.H., August 10, 2009 – Ezenia! Inc. (OTCBB: EZEN.OB), a leading market provider of real-time collaboration solutions for corporate and government networks, today reported its financial results for the second quarter ended June 30, 2009.

Revenue was approximately $907,000 for the second quarter of 2009 and $1.9 million for the six months ended June 30, 2009, a decrease of 47.8% and 46.6% from the same periods ended June 30, 2008, respectively. Loss of intelligence community (IC) and Department of Defense (DOD) revenue, due primarily to redirections in legacy collaborative solution selections, continues to impact our annual subscription revenue.

Operating results yielded losses of approximately $1.0 million for the second quarter and $1.9 million for the six months ended June 30, 2009, compared to losses of $920,000 and $1.5 million for the same periods in 2008, respectively. Operating costs declined to approximately $1.5 million for the second quarter and $3.0 million for the first half of the year ended June 30, 2009, compared to $2.0 million and $3.7 million for the same periods ended June 30, 2008, respectively. The decline in spending, virtually across the board, was attributed to reductions in employee related compensation costs, consulting expenses, supplies, occupancy and depreciation.

Net losses were approximately $964,000, or ($0.07) per share, for the second quarter and $1.9 million, or ($0.13) per share, for the first half of the year ended June 30, 2009, as compared to net losses of approximately $883,000, or ($0.06) per share, and $1.4 million, or ($0.10) per share, for the same periods in 2008, respectively.

“The disappointing shortfall in revenue this quarter and for the first half of the year is directly attributed to the booking shortfalls from key accounts and procurement difficulties that we continue to face, due to the previously established DISA sponsored selection programs,” noted Mr. Khoa Nguyen, Chairman and Chief Executive Officer of Ezenia. “Even with this decline in revenue and lack of income, we were able to preserve cash to approximately $6.4 million for the six months ended June 30, 2009 from $6.7 million for the year ended December 31, 2008, a drop of less than 5%”. Mr. Nguyen further noted, “The preservation of cash was mostly due to the collection of receivable balances and continued efforts to reduce expenses. The Company continues to focus on containing operating expense control, seek new sales opportunities both in traditional markets and adjacent markets, and foster new relationships with strategic resellers and system integrators. More recently, we have set up a Board of Advisors with distinguished members to help the Company in this endeavor. We are striving to preserve cash and return to profitability as expeditiously as possible, while balancing prudent investments against tight expense control.”

About Ezenia! Inc.

Ezenia! Inc. (OTC Bulletin Board: EZEN.OB), founded in 1991, is a leading provider of real-time collaboration solutions, bringing new and valuable levels of interaction and collaboration to corporate networks and the Internet. By integrating voice, video and data collaboration, the Company’s award-winning products enable groups to interact through a natural meeting experience regardless of geographic distance. Ezenia! products allow dispersed groups to work together in real-time using powerful capabilities such as instant messaging, white boarding, screen sharing and text chat. The ability to discuss projects, share information and modify documents allows users to significantly improve team communication and accelerate the decision-making process. More information about Ezenia! Inc. and its product offerings can be found at the company’s Web site,www.Ezenia.com.

Note to Investors Regarding Forward-Looking Statements
Statements included herein that are not historical facts may be considered forward-looking statements. You can identify these forward-looking statements by use of the words “expects,” “anticipates,” “estimates,” “believes,” “projects,” “intends,” “plans,” “will,” “may,” and similar words. Such forward-looking statements, including statements regarding our business and financial outlook, long-term strategy, improvements in our infrastructure, and proposed earnings per share growth targets, involve risks and uncertainties that could cause actual operating results to differ materially from those indicated by such forward-looking statements. These risks and uncertainties include the considerations that are discussed in the Company’s 2007 Annual Report on Form 10-K as amended for the year ended December 31, 2007, such as its dependence on the United States government as its largest customer, adverse changes in available funding and discretionary spending within the Department of Defense, its dependence on other major customers, the evolution of Ezenia!’s market, rapid technological change and competition within the collaborative software market, its reliance on third-party technology, protection of its propriety technology, acceptance of IWS in the commercial market, retention of key employees, stock price volatility, customer acceptance of Version 3.0 of InfoWorkSpace, its history of liquidity concerns and operating losses, and other considerations that are discussed further in such report. You should not place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company disclaims any obligation to update forward-looking statements after the date of such statements.

Note:

Ezenia! is a registered trademark of Ezenia! Inc., and the Ezenia! Logo and InfoWorkSpace are trademarks of Ezenia! Inc. Additional information on Ezenia! and its products is available at our website http://www.ezenia.com.

 

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