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UTStarcom Releases Financial Results for the Second Quarter of 2007

ALAMEDA, Calif., Oct. 18 /PRNewswire-FirstCall/ -- UTStarcom, Inc.
(Nasdaq: UTSI), a global leader in IP-based, end-to-end networking solutions
and services, today reported financial results for the second quarter of 2007.

UTStarcom Releases Financial Results for the Second Quarter of 2007
UTStarcom Releases Financial Results for the Second Quarter of 2007

(Logo: https://www.newscom.com/cgi-bin/prnh/20051013/SFTH063LOGO)

Net sales for the second quarter 2007 were $538.2 million. Gross margins
for the second quarter 2007 were 14.8% and net loss for the quarter was $61.7
million
, or a loss of ($0.51) per share.

'Clearly the first half of 2007 was challenging for UTStarcom,' stated

Fran Barton, Chief Financial Officer of UTStarcom, Inc. 'However we are
pleased to report that we expect to file our Q2 2007 Form 10-Q within the next
few days, and as such, we will have completed all of our outstanding filings,
which will bring us current with both the NASDAQ listing qualifications panel
and our bondholders. Now, we look forward to executing on our new corporate
strategy and focusing on the opportunities and internal improvements that we
believe will drive the Company toward profitability.'

Conference Call Details

The Company will host a conference call to discuss both the first and
second quarter 2007 results. The call will take place at 2:00 p.m. (PDT)/
5:00 p.m. (EDT) on Thursday, October 18. The conference call dial-in numbers
are as follows: United States -- 888-398-3046; International -- 706-902-1962.
The conference ID number is 19776282.

A replay of the call will be available for 30 days. The conference call
replay numbers are as follows: United States -- 800-642-1687; International --
706-645-9291. The Access Code is 19776282.

Investors will also have the opportunity to listen to the conference call
and the replay over the Internet through UTStarcom's Web site at:
https://www.utstar.com.

To listen to the live call, please go to the Web site at least 15 minutes
early to register, and to download and install any necessary audio software.
For those who cannot listen to the live broadcast, a replay will also be
available on this site.

About UTStarcom, Inc.

UTStarcom is a global leader in IP-based, end-to-end networking solutions
and international service and support. The company sells its broadband,
wireless, and handset solutions to operators in both emerging and established
telecommunications markets around the world. UTStarcom enables its customers
to rapidly deploy revenue-generating access services using their existing
infrastructure, while providing a migration path to cost-efficient, end-to-end
IP networks. Founded in 1991 and headquartered in Alameda, California, the
company has research and design operations in the United States, China, Korea
and India. UTStarcom is a FORTUNE 1000 company.

For more information about UTStarcom, visit the company's Web site at
https://www.utstar.com.

Forward-Looking Statements

This release includes forward-looking statements, including the foregoing
statements regarding the Company's expectations with respect to the completion
of any outstanding filing required to be made with the Securities and Exchange
Commission, the anticipated execution on new corporate strategy and the
anticipated focus on opportunities and internal improvements that will drive
the Company to profitability. These statements are forward-looking in nature
and subject to risks and uncertainties that may cause actual results to differ
materially. These risks include the ability of the Company to complete its
preparation of its Form 10-Q for the quarter ended June 30, 2007 and the
ability of the Company to develop and implement a successful new corporate
strategy and to identify and execute on opportunities and internal
improvements that will improve its competitiveness and profitability. The
Company also refers readers to the risk factors identified in its latest
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K, as filed with the Securities and Exchange Commission.



                               UTStarcom, Inc.
                    Condensed Consolidated Balance Sheets
                                (in thousands)

                                                 June 30,        December 31,
                   ASSETS                          2007              2006
    Current assets:                             (Unaudited)      (As reported)
      Cash, cash equivalents and short-term
       investments                                $527,579          $671,169
      Accounts receivable, net                     322,892           406,080
      Notes receivable                               4,083             5,060
      Inventories                                  652,956           635,838
      Prepaids and other current assets            132,882           101,795
      Short-term restricted cash and
       investments                                   9,797            16,666
                                              -------------     -------------
        Total current assets                     1,650,189         1,836,608
    Property, plant and equipment, net             212,873           213,155
    Long-term investments                           96,407            47,809
    Goodwill                                         3,063             3,063
    Intangible assets                               48,351            56,443
    Long-term deferred costs                       169,745           176,649
    Other long-term assets                          38,445            40,223
                                              -------------     -------------
        Total assets                            $2,219,073        $2,373,950
                                              =============     =============

     LIABILITIES, MINORITY INTEREST AND
      STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable                            $219,736          $304,869
      Short-term debt                              379,935           102,758
      Income taxes payable                               -             2,483
      Customer advances                            298,104           265,812
      Deferred revenue                              96,422            95,742
      Other current liabilities                    231,341           271,400
                                              -------------     -------------
        Total current liabilities                1,225,538         1,043,064

    Long-term deferred revenue                     243,999           261,014
    Long-term debt                                     460           275,161
    Other long-term liabilities                     21,307            13,858
                                              -------------     -------------
        Total liabilities                        1,491,304         1,593,097
                                              -------------     -------------

    Minority interest in consolidated
     subsidiaries                                    5,331             6,493
    Stockholders' equity:
      Common stock: $0.00125 par value;
       750,000,000 authorized shares;
       121,299,113 issued and 121,294,645
       outstanding at June 30, 2007 and
       December 31, 2006                               152               152
    Additional paid-in capital                   1,210,531         1,205,592
    Accumulated deficit                           (611,284)         (494,244)
    Accumulated other comprehensive
     income                                        123,078            62,899
    Treasury stock: 4,468 shares held in
     treasury at June 30, 2007 and
     December 31, 2006                                 (39)              (39)
                                              -------------     -------------
      Total stockholders' equity                   722,438           774,360
                                              -------------     -------------
      Total liabilities, minority interest
       and stockholders' equity                 $2,219,073        $2,373,950
                                              =============     =============



                               UTStarcom, Inc.
                     Consolidated Statement of Operations
                   (in thousands, except per share amounts)

                                   Three months ended     Six months ended
                                        June 30,              June 30,
                                       ---------             ---------
                                     2007      2006       2007        2006
                                  ---------  ---------  ---------    ---------
                                              (As                    (As
                                 (Unaudited) restated) (Unaudited)  restated)
    Net sales                      $538,245  $551,525  $1,014,146  $1,153,506
    Cost of net sales               458,515   442,575     859,132     920,765
                                  ---------  ---------  ---------    ---------
    Gross profit                     79,730   108,950     155,014     232,741
                                  ---------  ---------  ---------    ---------

    Operating expenses:
      Selling, general and
       administrative                88,865    83,108     168,701     166,833
      Research and development       42,158    46,603      85,819      93,005
      Amortization of intangible
       assets                         4,046     4,821       8,092       9,746
                                  ---------  ---------  ---------    ---------
    Total operating expenses        135,069   134,532     262,612     269,584
                                  ---------  ---------  ---------    ---------

    Operating loss                  (55,339)  (25,582)   (107,598)    (36,843)
                                  ---------  ---------  ---------    ---------

    Interest income (expense), net   (3,926)      781      (5,742)        812
    Other income, net                   158     6,887       4,129      10,454
                                  ---------  ---------  ---------    ---------
    Loss before income taxes,
     minority interest and equity
     in loss of affiliated
     companies                      (59,107)  (17,914)   (109,211)    (25,577)
    Income tax expense               (3,298)   (4,669)     (7,640)     (7,508)
    Minority interest in losses of
     consolidated subsidiaries          698       259       1,161         815
                                  ---------  ---------  ---------    ---------
    Net loss                       $(61,707) $(22,324)  $(115,690)   $(32,270)
                                  =========  =========  =========    =========


    Loss per share - Basic and
     diluted                         $(0.51)   $(0.19)     $(0.96)     $(0.27)

    Weighted average shares used
     in per-share calculation:
      - Basic and diluted           120,982   120,608     120,941     120,604
                                  =========  =========  =========    =========



                               UTStarcom, Inc.
                Condensed Consolidated Statement of Cash Flows
                                (in thousands)


                                            Six months ended  Six months ended
                                              June 30, 2007     June 30, 2006
                                                (Unaudited)      (As restated)
                                           ----------------   ----------------

    CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                      $(115,690)         $(32,270)
    Adjustments to reconcile net loss to
     net cash (used in) provided by
     operating activities:
      Depreciation and amortization                  29,737            34,653
      Net (gain) loss on sale and disposal
       of assets                                     (2,629)            2,169
      Net gain on long-term investment                 (366)              -
      Stock-based compensation expense                4,939             7,542
      (Recovery of) provision for doubtful
       accounts                                       2,370             3,133
      (Recovery of ) provision for deferred
       costs reserves                                (8,136)            5,978
      Deferred income taxes                           1,267               -
      Other                                            (366)             (537)
      Changes in operating assets and liabilities:
        Accounts receivable                          84,696            97,596
        Inventories                                 (19,369)          (36,916)
        Deferred costs                               31,563            (6,853)
        Other assets                                (28,637)           (7,784)
        Accounts payable                            (89,502)           39,693
        Income taxes payable                          6,801             3,438
        Customer advances                            27,141            69,280
        Deferred revenue                            (23,982)          (10,512)
        Other current liabilities                   (49,135)          (89,454)
                                           ----------------   ----------------
    Net cash (used in) provided by
     operating activities                          (149,298)           79,156
                                           ----------------   ----------------
    CASH FLOWS FROM INVESTING ACTIVITIES:
    Additions to property, plant and
     equipment                                      (15,425)          (12,288)
    Proceeds from the disposition of a
     long-term investment                             1,800               -
    Investment in affiliates, net of cash
     acquired                                           -                (302)
    Proceeds from sale of semiconductor
     design operations                                  -              19,965
    Change in restricted cash and long- term
     investments                                      6,615           (19,994)
    Purchase of short-term investments              (21,735)          (28,032)
    Proceeds from sale of short-term
     investments                                     13,484            25,588
    Other                                              (230)            1,672
                                           ----------------   ----------------
    Net cash used in investing activities           (15,491)          (13,391)
                                           ----------------   ----------------
    CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from borrowing                          64,621            62,545
    Payments on borrowings                          (64,732)         (140,053)
    Other                                             4,728             1,967
                                           ----------------   ----------------
    Net cash provided by (used in)
     financing activities                             4,617           (75,541)
    Effect of exchange rate changes on
     cash and cash equivalents                        7,972             5,225
    Net decrease in cash and cash
     equivalents                                   (152,200)           (4,551)
    CASH AND CASH EQUIVALENTS AT
     BEGINNING OF PERIOD                            661,623           645,571
                                           ----------------   ----------------
    CASH AND CASH EQUIVALENTS AT END OF PERIOD     $509,423          $641,020
                                           ================   ================
      Supplemental disclosure of cash flow
       information:
        Interest                                     $7,054            $4,596
        Income taxes                                 $3,687            $3,529
      Non-cash operating activity
        Accounts receivable transferred to
         notes receivable                           $11,462           $15,376
        Property, plant and equipment
         exchanged for long-term investment              $-            $5,500

SOURCE UTStarcom, Inc.