SAN JOSE, Calif. -- Sunrise Telecom Incorporated (Nasdaq: SRTI - News), a leading provider of service verification equipment for the telecommunications and cable broadband industries, today announced that revenue for the second quarter of 2004 was $15.0 million, up 46% from a year-ago second quarter revenue of $10.3 million and up 9% from the prior quarter revenue of $13.8 million.

GAAP net income was $0.8 million, or $0.02 per diluted share, for the second quarter of 2004, compared with a GAAP net loss of $(2.5) million, or $(0.05) per diluted share, for the second quarter of 2003 and a GAAP net loss of $(7.3) million, or $(0.15) per diluted share, for the first quarter of 2004. GAAP net income includes amortization of acquisition-related intangible assets, stock-based compensation expense, and, for the first quarter of 2004, a charge for establishing a valuation allowance on deferred tax assets. Excluding these non-cash expenses, non-GAAP net income was $1.2 million, or $0.02 per diluted share, compared with a non-GAAP net loss of $(1.7) million, or $(0.03) per diluted share, in the second quarter of 2003 and non-GAAP net income of $0.7 million, or $0.01 per diluted share, in the first quarter of 2004. Refer to the "Reconciliation of Non-GAAP Adjustments" in the financial tables section of this release for a detailed presentation of the differences between the GAAP and non-GAAP financial measures.

Sunrise Telecom Acting CFO, Paul Marshall, said, "We are really pleased with our financial performance this quarter. We posted enviable gross margins again, and achieved profitability on both a non-GAAP and GAAP basis. Quarters like this one, as well as the fourth quarter of 2003, show the positive operating leverage our business model has when we can keep our sales at or above $15 million per quarter."

Sunrise Telecom Inc.