Ixia to Restate Earnings

CALABASAS, Calif. -- Ixia (NASDAQ:XXIA) announced today that it has filed a Current Report on Form 8-K (the "Form 8-K") with the Securities and Exchange Commission (the "Commission") disclosing that it will restate previously issued financial statements for (i) the year ended December 31, 2003, (ii) the year ended December 31, 2004 and each of the quarters and year-to-date periods therein, (iii) the year ended December 31, 2005 and each of the quarters and year-to-date periods therein, and (iv) the quarter ended March 31, 2006 and the quarter ended June 30, 2006 and the year-to-date period therein. As a result of the foregoing, the Company's financial statements for these periods and management's report on internal control filed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 should no longer be relied upon. The Company concluded that restatement is required because, as a result of a previously unidentified material weakness in internal control over financial reporting, the Company did not properly account for certain implied post contract customer support and maintenance (“PCS”) obligations.

The Company also announced that it has filed a Form 12b-25 Notification of Late Filing with the Commission stating that it was unable to timely file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 (the “Form 10-Q”), but that it is working expeditiously to file it as soon as possible. As discussed in the Form 8-K filed today, the Company anticipates that The Nasdaq Stock Market (“Nasdaq”) will notify the Company that because of its inability to timely file the Form 10-Q, Nasdaq intends to delist the Company’s Common Stock. Ixia intends to request that Nasdaq grant to the Company an extension in which to comply with the applicable listing requirement.

As previously announced, Ixia’s management, under the direction of the Audit Committee of the Board of Directors, has been conducting a review of the Company’s accounting for revenue recognition with respect to certain of its software upgrade and support practices and the potential impact on the Company's previously reported financial results. As reported in the Form 8-K, the Company has identified practices that have given rise to certain implied PCS obligations that extend beyond the Company's standard PCS period. In addition, in connection with the Company’s continuing review of its software upgrade and support practices and related implied PCS obligations, it is possible that the Company will identify issues which may require further adjustments to the Company’s financial statements for one or more prior fiscal years or periods.

Ixia (Nasdaq: XXIA)