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Stratos Announces 2005 Fourth Quarter and Annual Financial Results

BETHESDA, MD (February 16, 2006) - Stratos Global Corp. (TSX: SGB), a leading global provider of advanced mobile and fixed-site remote telecommunications solutions, today announced financial results for the fourth quarter and year ended December 31, 2005. The Corporation reported net earnings in 2005 of US$5.4 million, or US$0.13 basic earnings per share, compared with US$25.1 million, or US$0.51 basic earnings per share, reported in 2004. Revenue for 2005 was US$381.0 million, a 4 percent improvement compared with the US$367.8 million achieved in 2004. Segment earnings (representing earnings before interest expense, depreciation and amortization, other costs (income), non-controlling interest, equity in earnings of investee, and income taxes) for 2005 were US$58.2 million, compared with US$78.1 million reported for the prior year.

Links Fourth Quarter and Annual 2005 Financial Results Fourth Quarter 2005 Analyst Presentation Fourth Quarter 2005 Conference Call Live Webcast NOTE: Click on the Windows Media icon in the top left corner to begin audio

In the Mobile Satellite Services (MSS) business, both revenue and segment earnings for the full year were adversely impacted by intensified price competition, resulting in lower volumes, prices and reduced margins, as well as a shift toward lower-margin products and services. MSS revenue for 2005 declined by 2 percent to US$259.9 million, and segment earnings declined by 20 percent to US$44.7 million, as compared to 2004. Revenue and segment earnings for 2004 were US$265.8 million and US$56.1 million, respectively.

Revenue in the Corporation's Broadband division was US$121.1 million in 2005, a 19 percent increase over the prior year results, primarily reflecting the acquisition of Plenexis Holding GmbH, which was completed on January 31, 2005. Segment earnings declined to US$13.4 million for 2005, as compared with US$22.0 million achieved in 2004. Broadband results were impacted by a continued gradual decline in the core Gulf of Mexico market, hurricanes Katrina and Rita which disrupted offshore microwave services in the second half of 2005 and the expiration of certain legacy contracts in our North Sea VSAT business.

"2005 was both eventful and challenging for Stratos. We achieved a number of important strategic milestones, while also managing the business through a period of intensified price competition in a consolidating mobile satellite sector, as well as hurricane-related disruption in our Broadband business," said Jim Parm, Stratos' president and chief executive officer. "For 2006, we are focused on execution - particularly with the integration of our recently completed acquisition of Xantic B.V. of the Netherlands - as well as the launch of our next-generation Inmarsat BGAN (Broadband Global Area Network) service and the refocus of our Broadband business, to better serve our customers."

Fourth Quarter 2005 Results
For the fourth quarter ended December 31, 2005, consolidated revenue totaled US$100.6 million, an improvement of 13 percent compared to the same quarter a year ago, and a 6 percent improvement on a sequential basis compared with the third quarter of 2005. Compared to the fourth quarter of 2004, MSS revenue increased by 5 percent to US$66.9 million and Broadband revenue grew by 33 percent to US$33.7 million.

Segment earnings for the fourth quarter of 2005 totaled US$15.6 million, a 31 percent sequential improvement compared with the third quarter of 2005. This significant improvement reflected the restoration of service on the microwave network in the Gulf of Mexico, coupled with the provision of VSAT and other temporary solutions for customers impacted by the hurricanes. The third quarter of 2005 was adversely impacted by the write-off of certain previously deferred acquisition-related costs. Segment earnings in the fourth quarter of 2004 were US$19.7 million.

Net earnings of US$2.0 million, or US$0.05 per share, for the fourth quarter of 2005 compared favorably to the third quarter of 2005 when the Corporation reported a modest net loss of US$0.5 million, or US$(0.01) per share. Results for the fourth quarter of 2004 reflected net earnings of US$3.9 million, or US$0.08 per share.

"We're encouraged by the revenue and segment earnings growth achieved in the fourth quarter on a sequential basis," commented Mr. Parm. "We were able to improve MSS revenue modestly, compared to the third quarter of this year. We believe this bodes well following the significant expansion of our business with the acquisition of Xantic. On the Broadband front, I'm very proud of the work our staff has done to restore microwave service in the Gulf of Mexico and to provide much needed emergency communications solutions to our customers, who were also impacted by the hurricanes. I look forward to continued growth in our Broadband business as we complete this restoration and renew our focus on winning new international business."

2006 Financial Guidance
As previously announced, the Corporation completed the acquisition of Xantic B.V. on February 14, 2006. As a result, financial results for 2006 will include the results of Xantic from the date of completion of the acquisition. The Corporation expects revenue growth in 2006 to be in the mid-to-high 40 percent range, including revenue related to the acquisition of Xantic. Adjusting for the revenue acquired from Xantic, organic revenue growth in the low-to-mid single digit range is expected for 2006.

The Corporation expects to report a net loss for 2006, primarily as a result of the previously announced non-cash, after-tax write-offs of approximately US$24 million related to the acquisition of Xantic. On an adjusted earnings basis (reflecting net earnings before the after-tax effects of the non-cash write-offs and amortization of customer intangibles related to both the Xantic and Plenexis acquisitions), the Corporation expects adjusted earnings per share for 2006 to be generally comparable to 2005.

Capital expenditures for 2006, including network and IT capital relating to the Xantic integration as well as capital associated with the microwave network restoration, are expected to be approximately 7 percent of revenue.

The Corporation's financial statements for the year ended December 31, 2005, along with related notes, and together with management's discussion and analysis of such results, are attached.

A conference call with analysts to discuss these results will be held at 8:30 a.m. EST on Friday, February 17, 2006. To access the conference call, please dial 1-800-814-4853. A replay of the conference call will also be available through Friday, February 24. To access the replay, please call 1-877-289-8525 and use access code 21172844#.

About Stratos
Stratos Global Corporation (www.stratosglobal.com) is a publicly traded company (TSX: SGB) and the leading global provider of a wide range of advanced mobile and fixed-site remote communications solutions for users operating beyond the reach of traditional networks. With its owned-and-operated infrastructure and extensive portfolio of industry-leading satellite and microwave technologies (including Inmarsat, Iridium, Globalstar, MSAT, VSAT, and others), Stratos serves the voice and high-speed data connectivity requirements of a diverse array of markets, including government, military, energy, industrial, maritime, aeronautical, enterprise, media and recreational users throughout the world.

Caution Concerning Forward-Looking Statements
Documents related to this release contain statements and information about potential future circumstances and developments. Such statements and information are qualified by the inherent risks and uncertainties surrounding future expectations generally and may differ materially from Stratos Global Corporation's actual future results. For additional information with respect to these risks and uncertainties, reference should be made to the Corporation's continuous disclosure materials filed with the Canadian Securities Administrators. Stratos Global Corporation disclaims any intention or obligation to update or revise any forward-looking statements or information, whether as a result of new information, future events, or otherwise.

For additional information :
Paula McDonald, FCA
Executive Vice President and Chief Financial Officer
709.724.5227
paula.mcdonald@stratosglobal.com