Acterna Returns to Profitability in Third Quarter; Net Income and Cash-Flow Positive for the Quarter.

Business Editors/High-Tech Writers

GERMANTOWN, Md.--(BUSINESS WIRE)--Feb. 10, 2004

Acterna Inc., the largest provider of test and network management solutions to telecommunications and cable network operators, today announced that it returned to profitability in its fiscal third quarter ended December 31, 2003.

Following the completion of its debt restructuring on October 14, 2003, Acterna was net income positive for the post-emergence period from October 15 to December 31, 2003, and generated positive cash flow during that period.

"Acterna's strategy is to deliver test innovations that help our customers speed the deployment of new network technologies and communications services while offering systems, software and solutions that drive capital and operating expense reductions and improve service quality," said John Peeler, Acterna's president and chief executive officer. "Customer response and our third-quarter performance are strong indications that we are successfully executing our strategy."

"Acterna exceeded expectations and turned in an exceptional third quarter, seasonally the strongest period of the year for us," said Grant Barber, Acterna's chief financial officer. "Strong sequential bookings and revenue growth, combined with the steps we have taken to strengthen our balance sheet and cost structure and streamline operations, have created strong momentum for Acterna as we enter 2004. Market conditions remain challenging, but we are focused on the communications test solutions and technologies that continue to attract investment. Acterna is operating with greater financial flexibility, and we remain confident in our ability to capitalize on the industry's best growth opportunities."

    Third-quarter highlights include:

    --  The introduction of more than 10 new products and major
        enhancements, including:

        --  dual port gigabit Ethernet and fibre channel enhancements
            to the Acterna FST-2802;

        --  release of version 5.0 hardware for the ANT-5 SDH Access
            Tester;

        --  the extension of the HST-3000 platform to include
            all-in-one testing capabilities to support worldwide DSL
            growth as well as new applications for the deployment of
            VoIP and other services technologies around the globe;

        --  roll-out of the latest generation of the MTS optical
            tester line, the MTS-8000, for field use in both outside
            plant and central office applications, offering the most
            compact and cost-effective solution for optical network
            testing;

        --  the PathTrak Version 2.3 Return Path Monitoring System,
            the latest version of the company's return path solution,
            a critical monitoring component for the deployment of
            trouble-free high speed services such as VoIP for cable
            network operators;

        --  the Remote Service Analyzer Module (RSAM) 5600, the
            industry's first forward-path analyzer with an integrated
            web server that provides interoperability with field
            meters such as Acterna's DSAM via a web browser;

        --  the Quadrature Amplitude Modulation (QAM) RF interface for
            the DTS MPEG-2 Transport Stream Analyzer enables cable
            network technicians to troubleshoot network signals with
            more efficiency by analyzing and monitoring any MPEG-2
            transport stream being carried within a QAM RF signal;

        --  the ONT-512, a new scalable instrument with parallel
            testing at the Virtual Tributary/Tributary Unit (VT/TU)
            level for customers challenged by single-channel testing
            of next generation SONET/SDH; and

        --  new Optical Fiber Mapping (OFM) software for fiber network
            operators that makes it easy to retrieve, cross-reference,
            and share information among multiple users.

    --  The execution of a new agreement with Verizon, expanding its
        deployment of Acterna's NetOptimize(TM) OSS to support traffic
        engineering, operations, and capacity management across
        Verizon's National Voice Network.

    --  New investments to capitalize on the best growth opportunities
        in China, including the appointment of former Nortel
        executive, Kevin Ng, as managing director for greater China
        and the establishment of Acterna's Asia-Pacific headquarters
        in Hong Kong.

    --  Significant customer wins, such as renewal of a $5.5 million
        software contract for an incumbent local exchange carrier in
        the U.S., nearly $2 million in orders from two of the largest
        wireless service providers in the U.S., a new $1 million order
        for DSL test heads from one of Europe's largest service
        providers, and acceptance by a U.S. incumbent local exchange
        carrier of Acterna's FST 2310 TestPad for telecom network
        testing at SONET rates up to OC-48.

About Acterna

Acterna, a privately held company, is the world's largest provider of communications test solutions for telecommunications and cable network operators. A trusted communications test partner for more than eight decades, Acterna offers an unmatched portfolio of award-winning instruments, systems, software and services that help its customers reduce network costs while improving performance and reliability. Headquartered in Germantown, Maryland, USA - with European and Asia-Pacific operations based in Eningen, Germany and Hong Kong - Acterna serves nearly every major communications service provider and equipment manufacturer around the world through a skilled sales and support organization in 31 countries.

Certain statements in this press release are forward-looking statements. The Company has based these forward-looking statements on its current expectations and projections about future events. Although the Company believes that its assumptions made in connection with the forward-looking statements are reasonable, there can be no assurance that the Company's assumptions and expectations will prove to have been correct. These forward-looking statements are subject to various risks, uncertainties and assumptions. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.