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UTStarcom Releases Financial Results for the Third Quarter of 2007

ALAMEDA, Calif., Nov. 9 /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 third quarter of 2007.

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

Third Quarter Revenues of $646 million, an Increase of 20% Sequentially and 8% Year-over-Year


Net sales for the third quarter 2007 were $646 million. This $108 million
increase over the second quarter of 2007 was driven by strong sales in PCD as
well as growth in our Broadband and Wireless business units. Gross margins
for the third quarter of 2007 were 10%. The gross margins percentage was
impacted by a much larger percentage of PCD sales, as well as approximately
$10 million of inventory reserves. The net loss for the third quarter was
$55 million, or a loss of ($0.46) per share. This compares to a loss of
$62 million in the second quarter of 2007 and $43 million in the third quarter
of 2006.

Our third quarter cash and short term investments totaled $644 million, an
increase of $116 million from the second quarter of 2007. For this quarter,
cash and short term investments include approximately $115 million of
investments that were previously accounted for as long term equity

'Our third quarter results do not yet reflect the benefits of changes we
are in the process of implementing in UTStarcom,' stated
Peter Blackmore,
Chief Operations Officer of UTStarcom, Inc.

'We have strong technology in IP communications and are building momentum
in IPTV, NGN and optical infrastructure and access devices. Management has a
high sense of urgency about improving the operational capabilities of the
company to ensure profitable growth. Our conference call will give details
about our progress on this.'

    Guidance for the fourth quarter of 2007
    -- Revenue flat to slightly up compared to third quarter 2007
    -- Gross margins up 2 to 4 points from third quarter 2007
    -- Operating expenses (excluding any special charges) down sequentially

Conference Call Details

The Company will host a conference call to discuss the third quarter 2007
results. The call will take place at 5:30 a.m. (PST)/ 8:30 a.m. (EST) on
Monday, November 12. The conference call dial-in numbers are as follows:
United States -- 888-398-3046; International -- 706-902-1962. The conference
ID number is 24062138.

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 24062138.

Investors will also have the opportunity to listen to the conference call
and the replay over the Internet through UTStarcom's Web site at:

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

Forward-Looking Statements

This release includes forward-looking statements, including the foregoing
statements regarding the Company's expectations with respect to anticipated
improvements in its operational expenses to provide profitable growth, as well
as anticipated fourth quarter revenues, gross margins and operating expenses.
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 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.

     Company Contact
     Chesha Kamieniecki
     Director of Investor Relations
     UTStarcom, Inc.
     (510) 749-1560

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

                                                 September 30,    December 31,
                                                     2007             2006
                   ASSETS                                        (As reported)
    Current assets:
      Cash, cash equivalents and short-term
       investments                                  $643,868        $671,169
      Accounts and notes receivable, net             335,864         406,080
      Inventories and deferred costs                 609,522         635,838
      Prepaids and other current assets              140,483         123,521
        Total current assets                       1,729,737       1,836,608
    Long-term assets:
      Property, plant and equipment, net             212,835         213,155
      Long-term deferred costs                       166,503         176,649
      Other long-term assets                          89,540         147,538
        Total assets                              $2,198,615      $2,373,950

    Current liabilities:
    Accounts payable                                $194,941        $304,869
      Short-term debt                                414,977         102,758
      Customer advances                              304,554         265,812
      Deferred revenue                                90,137          95,742
      Other current liabilities                      228,591         273,883
        Total current liabilities                  1,233,200       1,043,064
    Long-term liabilities:
      Long-term debt                                     404         275,161
      Long-term deferred revenue and other
       liabilities                                   259,728         274,872
        Total liabilities                          1,493,332       1,593,097

    Minority interest in consolidated
     subsidiaries                                      4,532           6,493
    Total stockholders' equity                       700,751         774,360
      Total liabilities, minority interest
       and stockholders' equity                   $2,198,615      $2,373,950

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

                                   Three months ended    Nine months ended
                                     September 30,         September 30,
                                     2007      2006       2007        2006
                                           (As reported)         (As reported)

    Net sales                      $646,494  $600,899  $1,660,640  $1,754,406
    Cost of net sales               582,061   526,098   1,441,193   1,446,864
    Gross profit                     64,433    74,801     219,447     307,542

    Operating expenses:
      Selling, general and
       administrative                74,297    80,076     242,999     246,908
      Research and development       41,881    46,305     127,700     139,310
      Amortization of intangible
       assets                         4,046     4,821      12,137      14,567
      Gain on sale of semi-conductor
       design assets                 (4,271)  (12,291)     (4,271)    (12,291)
    Total operating expenses        115,953   118,911     378,565     388,494

    Operating loss                  (51,520)  (44,110)   (159,118)    (80,952)

    Interest income (expense), net   (5,859)      594     (11,601)      1,406
    Other income, net                 4,347     1,835       8,476      12,289
    Loss before income taxes and
     minority interest              (53,032)  (41,681)   (162,243)    (67,257)
    Income tax expense               (3,095)   (1,459)    (10,735)     (8,966)
    Minority interest in losses of
     consolidated subsidiaries          799        92       1,961         907
    Net loss                       $(55,328) $(43,048)  $(171,017)   $(75,316)

    Loss per share - Basic and
     diluted                         $(0.46)   $(0.36)     $(1.41)     $(0.62)

    Weighted average shares used
     in per-share calculation:
      - Basic and diluted           121,011   120,676     120,965     120,628

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

                                          Nine months ended  Nine months ended
                                         September 30, 2007 September 30, 2006
                                                               (As reported)

    Net cash (used in) provided by
     operating activities                      $(189,720)          $18,122

    Cash flows from investing activities:
      Property, plant and equipment, net         (22,180)          (17,040)
      Proceeds from sale of semiconductor
       design asset                                4,271            19,965
      Proceeds from sale of long-term
       investments                                 3,334                  -
      Change in restricted cash and long-
       term investments                            7,273            26,536
      Short-term investments, net                 (8,962)            1,939
      Investment in affiliates, net of cash
       acquired                                        -              (302)
      Other                                         (465)            1,538
    Net cash (used in) provided by
     investing activities                        (16,729)           32,636
    Cash flows from financing activities:
      Borrowings, net                             33,045           (95,992)
      Other                                        6,028              (364)
    Net cash provided by (used in)
     financing activities                         39,073           (96,356)
    Effect of exchange rate changes on
     cash and cash equivalents                    15,303             4,437
    Net decrease in cash and cash
     equivalents                                (152,073)          (41,161)
    Cash and cash equivalents at
     beginning of period                         661,623           645,571
    Cash and cash equivalents at end of
     period                                     $509,550          $604,410

SOURCE UTStarcom, Inc.