AWR Announces Record Performance for Fiscal Year 2005; High-Frequency EDA Supplier Achieves Product Bookings Growth of 38%.

EL SEGUNDO, Calif. -- Applied Wave Research, Inc. (AWR(R)), a leading provider of high-frequency electronic design automation (EDA) tools, today announced record sales and revenue with the closure of fiscal year 2005, ending March 31. Key achievements included: major product upgrades and shipments, strategic new customer accounts, expansion of existing accounts, the addition of key EDA partners, and continued expansion of AWR's research and development efforts and sales and support networks.

Dramatic Bookings and Revenue Growth

AWR achieved the company's sixth consecutive year of double-digit growth in bookings, while also returning to profitability after several years of significant investments to expand into new markets. Sales increased on a global basis, with record product revenues in Europe, North America, and Japan. March 2005, and the fiscal quarter ending March 31, were also the company's all-time record month and record quarter in both bookings and revenue.

"Fiscal year 2005 was the most successful in AWR's history, with a resounding 38% increase in product bookings over FY2004," said James Spoto, president and CEO of AWR. "Our steady and impressive growth in an uncertain economy over the past six years bears out our conviction that the EDA market is demanding a completely new solution to meet the increasingly complex requirements for the design of next-generation communications products. We are very pleased with our results and look forward to another successful year."

Strengthened Product Line with More Powerful Simulation Capability and Tighter Integration to Third-Party Tools

AWR shipped three major product upgrades, Microwave Office(R) 2004, Analog Office(TM) 2004, and Visual System Simulator(TM) (VSS) 2004 design suites. All three products are based on the revolutionary AWR Design Environment(TM), which the company continues to improve and augment. AWR's core technology is an industry-unique single design environment and unified data model that provides ease-of-use and improves design flows.

The latest version of the Microwave Office industry-leading design system offers significant improvements in performance and capacity to increase design accuracy and shorten design cycle time. The 2004 Analog Office solution has been enhanced to provide the industry's most open, unified design environment, offering full interaction with a comprehensive and powerful set of industry-leading third-party tools. The VSS 2004 product provides significant core enhancements, as well as expanded application-specific libraries to address emerging requirements for ultra wide band (UWB), wireless local area networks (WLAN), and 3G and 4G cellular standards.

Expanded Customer Base, New Partnerships, and Expanded Sales Presence

AWR added several major new companies to its rapidly growing worldwide customer base, including: Astra Microwave Products, BOE Hydis, Eagle Test Systems, Inc., and Silicon Laboratories, among others. In addition, existing customers significantly expanded their use of AWR software in order to increasingly standardize on AWR solutions as they phase out legacy design systems.

AWR also strengthened its market presence by partnering with key EDA vendors in order to provide integrated solutions for design flows. Technology partnership agreements were signed with Analog Devices, Auriga Measurement Systems, Rohde & Schwarz, MEM Research, OEA International, Optimal Corporation, and Taiwan Semiconductor Manufacturing Company Ltd. (TSMC).

About Applied Wave Research, Inc.

Applied Wave Research is a leading supplier of high-frequency electronic design automation (EDA) products for the design of wireless telecommunications equipment, semiconductors, high-speed computers, networking systems, automotive mobility systems, and a variety of other electronics-based products. AWR is a privately held company and has development offices, sales offices, training centers, and global distribution. AWR launched its first product in 1998 and today has over 500 customer companies worldwide, including virtually every major high-frequency electronic component and system supplier. The company is headquartered at 1960 East Grand Avenue, Suite 430, El Segundo, California 90245. For more information about AWR and its products, please visit www.appwave.com or call 310-726-3000.

AWR, the AWR logo, and Microwave Office are registered trademarks, and Analog Office, Visual System Simulator, and AWR Design Environment are trademarks of Applied Wave Research, Inc. All other registered marks are the property of their respective holders.