Ezenia! Inc. Announces 2005 Second Quarter Financial Results

Nashua, N.H., August 10, 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 its second quarter and six month period ended June 30, 2005.

The Company generated revenues of approximately $3.3 million for the second quarter of 2005, a 31.6% increase from $2.5 million for the second quarter of 2004. For the six months ended June 30, 2005, revenue was approximately $6.4 million, an increase of 25.5% when compared to the six months ended June 30, 2004.

Income from operations for the quarter ended June 30, 2005 was approximately $885 thousand as compared to $387 thousand for the same period in 2004. For the six-month period ended June 30, 2005, income from operations was approximately $1.5 million, compared to $793 thousand for the same period in 2004.

Net income for the quarter and six-month period ended June 30, 2005 was approximately $929 thousand ($0.06 per share) and $1.6 million ($0.11 per share), respectively. Net income for similar periods ended June 30, 2004 was approximately $1.1 million ($0.08 per share) and $1.5 million ($0.11 per share). Net income for the periods ended June 30, 2004 benefited from a one-time refund of income tax previously withheld by the Israeli Tax Commission of $819 thousand minus a settlement fee of $179 thousand.

“We are pleased to report our seventh consecutive profitable quarter”, noted Khoa Nguyen, Ezenia Chairman and Chief Executive Officer. “Income from operations rose 129% and 89%, respectively, for the quarter and six-month periods, year to year, and more than 32% from the first quarter of 2005. Income from operations grew to 27.0% and 24.2% of revenue, respectively, for the quarter and six-month periods of 2005, compared to 15.6% and 15.5% in the same periods of the prior year and 21.3% in the first quarter of the current year. These gratified results have been a combination of the overall improvement of our gross margin, which is expected to continue during the second half of 2005, and our continued focus on expense control.”

“For the quarter, total operating expenses remained flat at approximately $1.2 million but declined, as a percentage of revenue, to 38.4% from 49.0% the same period a year ago and from 43.8% for the first quarter of 2005,” further commented Mr. Nguyen. “For the six months ended June 30, 2005, operating expenses declined to 41.1% from 46.8% for the comparable period in 2004. Our focus on expense control continues to pay off and ensures that investments made in personnel hiring, capital spending, and facility management are consistent with the growth profile of the company and the performance of the InfoWorkSpace product line.”

“We ended the quarter with a total cash and net collectible accounts receivable balance of approximately $9.4 million, up 67.9% from the $5.6 million for the same period ending June 30, 2004,” remarked Mr. Nguyen. “With continuing improvements in margin and operating expense run rate as a percentage of revenue plus the recent additions to the management team, we are on track to meet or exceed total earning per share achieved last year and strengthen the execution of our long-term strategy.”

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
Statements included herein that are not historical facts include forward-looking statements. Such forward-looking statements involve risks and uncertainties that could cause actual operating results to differ from those indicated by such forward-looking statements. These risks and uncertainties include the considerations that are discussed in the Management’s Discussion and Analysis section of the Company’s 2006 Annual Report on Form 10-K for the year ended December 31, 2004, such as the evolution of Ezenia!’s market, its dependence on major customers, rapid technological change and competition within the collaborative software market, its reliance on third party technology, protection of its propriety technology, its history of liquidity concerns and operating losses, and other considerations that are discussed further in this report. Copies of the Company’s 2004 Annual Report on Form 10-K for the year ended December 31, 2004, or other publicly available financial information, may be received at no charge by contacting Investor Relations at Ezenia!.

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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