Path 1 Reports Q2

SAN DIEGO -- Path 1 Network Technologies , a leading provider of video networking products that enable the transmission of broadcast-quality video over IP networks, today announced its preliminary financial results for the second quarter ended June 30, 2006.

Second Quarter Results

For the second quarter of 2006, the Company reported revenue of $826,000, an increase of 35% compared to the first quarter of 2006. This growth follows increases in revenues of 18% and 29% for the prior two sequential quarters, respectively. Revenues for the same period last year were $1,142,000.

Gross profit for the second quarter of 2006 totaled $507,000, or 61% of total revenues, compared to gross profit of $261,000, or 43% in the first quarter of 2006. Gross Profits for 2005 second quarter were $635,000, or 56% of total revenues.

Net loss for the second quarter of 2006 was $1.9 million, or $0.25 per share, compared to a net loss of $2.0 million, or $0.27 per share, in the first quarter of 2006 and $2.6 million or $0.38 per share for the second quarter of 2005.

As of June 30, 2006, the Company had cash and cash equivalents of $594,000 and a debt balance of $2,336,000.

Commenting on the preliminary results, Tom Tullie, Chief Executive Officer of Path 1, said, "I am very pleased with our Fiscal Q2 financial results in which we recorded the third sequential quarter of double digit revenue growth and significant gross margin improvement. We grew revenue by 35% over the prior sequential quarter largely due to increased sales to Level 3 as they continue to roll out their High Definition (HD) video service offerings to additional markets and by new sales to Time Warner Cable for additional deployments of their Video on Demand (VOD) services. Additionally, we continued to execute on our cost management strategies and our operating expenses were down by $1.2 million versus the same quarter of the previous year."

Path 1 Network Technologies Inc. (Amex: PNO)