Sunrise Telecom® Reports Profitable 2009 Fourth Quarter, EBITDA $0.9 million

Sunrise Telecom^® Incorporated (Pink Sheets: SRTI), a leader in test and measurement solutions for telecom, wireless and cable networks, today announced unaudited results for the three months ended December 31, 2009. EBITDA of $0.9 million reflects the effect of the company’s 2009 restructuring, strong sales from new products, and sales seasonality.

Net sales for the fourth quarter of 2009 were $13.7 million, a 43% increase from $9.6 million for the third quarter of 2009. Net sales for the fourth quarter of 2008 were $21.5 million, including sales from the Protocol Products Group which was sold in December 2008.

Fourth quarter GAAP operating income was $0.4 million, compared with a GAAP operating loss of $6.1 million in the prior quarter, and a non-GAAP operating loss of $2.8 million in the fourth quarter of 2008 (excluding the gain from the sale of the Protocol Products Group). This was the first profitable quarter in three years. GAAP net income per share in the fourth quarter of 2009 was $0.01 compared with a GAAP net loss per share of $(0.12) in the third quarter of 2009 and a non-GAAP net loss per share of $(0.06) in the fourth quarter of 2008 (excluding the gain from the sale of the Protocol Products Group).

EBITDA for the quarter was $0.9 million compared with negative EBITDA of $5.1 million in the third quarter of 2009 and negative EBITDA of $1.2 million in the fourth quarter of 2008.

"These quarterly results reflect the revitalized energy and outlook for Sunrise Telecom. We are pleased that our customers are placing renewed trust and confidence in our innovative solutions,” said Bahaa Moukadam, Sunrise Telecom’s chief executive officer.

New Product Milestones

Sunrise Telecom continued strengthening its product portfolio during the quarter. The new CM2800, targeted at DOCSIS plant maintenance, made significant impact in sales during the quarter following its October introduction.

"We are excited that many major cable operators throughout the world have come to embrace this new product. This best-in-class product helps cable operators lower their cost and improve their customers’ experience,” said Mr. Moukadam.

Sunrise Telecom also made significant product enhancements to its realGATE solution for asset and workforce management, improving technician productivity. Improvements to further minimize risk of service disruption were also made to the 24/7 cable TV infrastructure monitoring system, realWORX WEB.

The well-established STT Metro product saw the addition of fibre channel testing, offering new versatility to the flagship STT platform and broadening the Ethernet product portfolio.

Cost Reduction Program

In the fourth quarter of 2009, Sunrise Telecom began realizing benefits from the cost reduction programs implemented in September 2009. The new management team’s focus on discipline in discretionary spending, combined with the transition of manufacturing to Sunrise Telecom’s Taiwan facility, has significantly reduced expenses.

Operating costs for the quarter were $6.9 million, a reduction of $1.8 million, or 21%, from the prior quarter and a reduction of $5.7 million, or 45%, from the fourth quarter of 2008.

First Quarter 2010 Business Outlook

"We continue our relentless focus on improving every customer touch point including improvement in quality, lead time and technical support. We have a strong pipeline of innovative products to drive productivity for Telecom and Cable TV customers. On the cost side, we will further reduce operating expenses by fully realizing the benefits of the manufacturing transition. We expect first quarter 2010 revenue to be in the range of $10 million to $12 million,” stated Mr. Moukadam.

About Sunrise Telecom Incorporated

Sunrise Telecom develops and delivers high-quality communications test and measurement solutions for telecom, cable and wireless networks. The Company's robust portfolio of feature-rich, easy-to-use products enables service providers to deliver premium voice, video, data and next-generation digital multimedia services quickly, reliably, and cost-effectively. Based in San Jose, California, Sunrise Telecom distributes its products through a direct sales force and a global network of sales representatives and distributors. For more information, visit http://www.sunrisetelecom.com or email info@sunrisetelecom.com.

Use of Non-GAAP Financial Measures

Sunrise Telecom reports financial information in accordance with generally accepted accounting principles (GAAP), but it believes that evaluating its ongoing operating results may be difficult to understand if limited to reviewing only GAAP financial measures. Management also utilizes EBITDA as a performance measure because it believes that EBITDA, while it is a non-GAAP financial measure, is a useful supplemental measure of the company's performance because it excludes non-cash and other special charges that may obscure the company's operating results. Management uses EBITDA to manage and assess the profitability of the company’s business.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933, including, but not limited to, material contained in quotations, sales expectations for the first quarter of 2010, expectations related to the effects of cost reductions previously taken and expectations for the release of new products in 2010. These forward-looking statements are subject to many risks and uncertainties that could cause actual results to differ materially from those projected. Specific factors that may cause results to differ include the following: a lack of acceptance or slower than anticipated acceptance for Sunrise Telecom's new or enhanced products and modules; slower than anticipated product development or introduction into the marketplace; unanticipated delays in product delivery schedules; lower than anticipated end-user demand for telecommunications services and a corresponding cutback in spending by customers; increased competitive pressures, including from former employees; rapid technological change within the telecommunications industry; Sunrise Telecom's dependence on a limited number of major customers; Sunrise Telecom's dependence on limited source suppliers; deferred or lost sales resulting from order cancellations or order changes; deferred or lost sales resulting from Sunrise Telecom's lengthy sales cycle; unanticipated difficulties associated with international operations; Sunrise Telecom's ability to manage growth and slowdowns; the loss of key employees; ineffective internal controls requiring remediation; the long-term impact of cost controls; the Company's general lack of liquidity; the unknown effects of management changes; and protracted litigation, which could disrupt Sunrise Telecom's normal business operations. Some of these risks and uncertainties are described in more detail in Sunrise Telecom's reports including, but not limited to, its Annual Report on Form 10-K for the period ended December 31, 2008, its Quarterly Report on Form 10-Q for the period ended March 31, 2009 filed with the SEC, and its quarterly reports for the periods ended June 30 and September 30, 2009 filed with Pink Sheets. Sunrise Telecom assumes no obligation to update the forward-looking statements included in this press release.