Veraz Networks Reports First Quarter 2010 Financial Results

Veraz Networks, Inc. (NASDAQ:VRAZ), a leading provider of Multimedia Generation Network (NGN) application, control, and bandwidth optimization products, today announced financial results for the first quarter ended March 31, 2010.

“Despite the global economic environment, we see our customers planning for network expansions, largely driven by increased demand for mobile voice and data services,” said Doug Sabella, Chief Executive Officer of Veraz Networks. “Although this quarter was challenging, we believe that we have the right set of products and services to address this growing market, and are confident that our announced plans to merge with Dialogic give us the size and scale needed to become a true mission critical supplier to our customers,” said Sabella.

Financial Highlights

• Revenues were $16.1 million, a 14% decrease over the preceding quarter and a 23% decrease over the first quarter of 2009.
• Gross Margin was 56%, as compared to 57% for the preceding quarter and 58% for the first quarter of 2009.
• Operating expenses were $14.0 million, a 1% decrease over the preceding quarter and a 4% decrease over the first quarter of 2009.
• On a GAAP basis, net loss was $(5.2 million) or $(0.12) loss per share, as compared to a $(4.1 million) or $(0.09) loss per share in the preceding quarter and a $(3.0 million) or $(0.07) loss per share reported in the first quarter of 2009.
• On a non-GAAP basis, net loss was $(4.3 million) or $(0.09) loss per share, as compared to $(2.6 million) or $(0.06) for the preceding quarter and a $(1.9 million) or $(0.04) reported in the first quarter of 2009.
• At the end of the first quarter 2010, the company had cash, cash equivalents, restricted cash and short-term investments of $31.2 million and no debt.

The conference call and live webcast to discuss Q1 2010 results on May 12, 2010 at 4:30 p.m. Eastern Time has been cancelled. In its place, Veraz Networks and Dialogic will host a conference call for investors on May 13, 2010 at 8:30 a.m. Eastern Time which will also include forward-looking information. The webcast and a presentation regarding the merger will be available from the “Investor Relations” section of the Veraz website ( www.veraznetworks.com). For parties in the United States and Canada, call 1-800-860-2442 to access the conference call. International parties can access the call at [phone].

About Veraz Networks

Veraz Networks, Inc. (NASDAQ: VRAZ - News), is the leading provider of application, control, and bandwidth optimization products that enable the evolution to the Multimedia Generation Network (MGN). Service providers worldwide use the Veraz MGN portfolio to extend their current application suite and rapidly add customized multimedia services that drive revenue and ensure customer retention. The Veraz MGN separates the control, media, and application layers while unifying management of the network, thereby increasing service provider operating efficiency. Wireline and wireless service providers in over 60 countries have deployed products from the Veraz MGN portfolio, which includes the ControlSwitch ^(TM), Network-adaptive Border Controller, I-Gate 4000 Media Gateways, the VerazView Management System, and a set of prepackaged applications. For more information regarding the Company, please visit www.veraznetworks.com.

Use of Non-GAAP Financial Measures

Some of the measures in this press release are non-GAAP financial measures within the meaning of the SEC Regulation G. Veraz believes that presenting non-GAAP net loss and non-GAAP net loss allocable to common stockholders is useful to investors, because it describes the operating performance of Veraz. Veraz management uses these non-GAAP measures as important indicators of the company's past performance and in planning and forecasting performance in future periods. The non-GAAP financial information Veraz presents may not be comparable to similarly-titled financial measures used by other companies, and investors should not consider non-GAAP financial measures in isolation from, or in substitution for, financial information presented in compliance with GAAP. You are encouraged to review the reconciliation of non-GAAP financial measures to GAAP financial measures included elsewhere in this press release.