||Contact: Michael D. Bornak, Chief Financial Officer/ Office: 412-820-1406 firstname.lastname@example.org
TOLLGRADE REPORTS THIRD CONSECUTIVE QUARTERLY PROFIT
POSTS FIRST ANNUAL NET INCOME SINCE 2005
February 23, 2011 Tollgrade Communications, Inc. (NASDAQ: TLGD), a leading
supplier of network service assurance test products and solutions, today reported revenue of $11.9
million and net income of $2.4 million or $0.17 per share on a fully diluted basis for the fourth
quarter ended December 31, 2010. The Companys net income of $2.4 million for the fourth quarter
2010 was almost equal to its third quarter 2010 net income of $2.5 million, which was the highest
quarterly net income since the second quarter of 2001. Although fourth quarter 2010 revenue was
down by approximately $0.8 million compared to fourth quarter 2009 revenue of $12.7 million, the
Companys profit from operations was approximately $1.9 million in the fourth quarter of 2010
compared to an operating loss of $(27.5) million in the fourth quarter of 2009, which included
intangible asset impairments of approximately $27.0 million.
For the year ended December 31, 2010, the Company posted revenue of approximately $45.6 million and
net income of $4.4 million or $0.34 per share on a fully diluted basis compared to revenue of $44.9
million and a net loss of $(36.2) million or a loss per share on a fully diluted basis of $(2.85)
for the prior year. With net income for the year of $4.4 million, 2010 was the Companys first
profitable year since 2005. Included in the Companys 2009 net loss, were approximately $30.5
million of non-cash expenses primarily related to intangible asset impairments and inventory
The Company again performed well during the quarter, posting positive net income for the
third consecutive quarter and for the full year, representing our first annual profit since 2005.
Our number one goal coming into 2010 was to ensure profitability, and we accomplished that goal.
We became profitable in part through our cost saving initiatives, which included moving to a
totally outsourced variable cost manufacturing model, along with workforce and other non-headcount
related cost savings. These cost reductions were strategically made to ensure that our customers
would still receive the highest levels of service. Additionally, during the year, we generated
approximately $5.5 million in cash from operations, said Edward Kennedy, President and Chief
First Quarter 2011 Revenue Outlook
We expect revenue to be in the range of $10 million to $12 million for the first quarter of 2011
as the first quarter of the year is traditionally one of our lighter quarters due to timing and
seasonality of orders, said Mr. Kennedy.