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Stratos Announces Second Quarter Financial Results

Xantic integration ahead of plan; revenue up 50 percent compared to second quarter of 2005

BETHESDA, MD (July 26, 2006) - Stratos Global Corp. (TSX: SGB), the leading global provider of advanced mobile and fixed-site remote communications solutions, today announced financial results for the second quarter ended June 30, 2006.

For the quarter, the Corporation reported revenue of US$139.3 million, a 50 percent increase compared with the US$92.7 million achieved in the same quarter of 2005. This growth primarily reflected the recently completed Xantic acquisition, which was consolidated with Stratos beginning February 14, 2006.

The Corporation also reported a net loss of US$4.1 million, or US$0.10 basic loss per share, for the second quarter of 2006, compared with net earnings of US$0.4 million, or US$0.01 basic earnings per share, reported for the same period last year. Results for the second quarter of 2006 were negatively impacted by US$0.4 million, or US$0.01 per share, associated with severance costs related to the integration of Xantic and by the non-cash, after-tax amortization of customer relationship intangibles of US$1.9 million, or US$0.05 per share, related to the Xantic and Plenexis acquisitions. Second quarter 2005 results were adversely impacted by US$1.6 million, or US$0.04 per share, resulting from an unfavorable lower court decision and by non-cash, after-tax amortization of customer relationship intangibles of US$0.4 million, or US$0.01 per share, related to the Plenexis acquisition.

Excluding these items, the Corporation reported an adjusted net loss (non-GAAP measure) for the quarter of US$1.8 million, or US$0.04 per share, compared with adjusted net earnings of US$2.4 million, or US$0.06 per share in the second quarter a year-ago. The lower results in the second quarter of 2006 reflect higher interest expense associated with the debt financing of the Xantic acquisition.

In the Mobile Satellite Services (MSS) business, revenue increased by 75 percent to US$108.3 million in the second quarter of 2006, as compared to the second quarter of 2005, reflecting increased revenue resulting from the Xantic acquisition. MSS segment earnings improved by 18 percent to US$12.6 million in the second quarter of 2006, as compared to the same period a year ago. This increase reflects the positive impact of the Xantic acquisition, which is partially offset by lower traffic volumes and margins from Stratos' Inmarsat land market sector, and a continued shift toward lower-margin products and services.

Revenue in the Broadband division was US$31.0 million in the second quarter of 2006, a one percent increase over the same quarter a year ago. Broadband segment earnings in the second quarter of 2006 totaled US$2.0 million, compared with US$4.5 million in the same quarter a year ago. This decline primarily reflects a reduction in higher margin microwave services following last year's hurricanes, which is partially offset by higher growth but lower margin VSAT services.

"While our second quarter financial results continue to be impacted by the challenging fundamentals affecting our sector as a whole, we are pleased with the progress made on a number of important fronts," said Jim Parm, Stratos president and chief executive officer. "The integration of Xantic into our MSS business is proceeding extremely well and has resulted in our identifying additional synergies. As a result, we have increased our synergy estimate to $25-30 million annually, from our original estimate of $20-25 million. We now expect to reach the full run rate by the second half of next year, a full six months ahead of our original timetable."

Parm added, "In the Broadband business, we continued to make progress in customer acquisition and are continuing to pursue an attractive array of new opportunities. The signing of a five-year, $19 million contract with Apache Corporation is one example of the progress we are making in positioning our Broadband business for the future."

He concluded, "On a broader front, we are taking steps to increase profitability through targeted price increases in both our Broadband and MSS businesses. We also are conducting a focused review of our operating costs. We expect these activities will lead to improved profitability beginning in the latter part of this year. Looking to the second half, we anticipate improvement in operational earnings as we drive increased growth in revenue, earn greater volume discounts from Inmarsat, and begin to realize other cost synergies from the Xantic integration and our cost structure review."

First Half Results
For the first six months of 2006, the Corporation achieved revenue of US$258.6 million, a 40 percent increase compared with US$185.2 million in the first half of 2005. This improvement reflected the acquisition of Xantic, which was completed on February 14, 2006. First half 2006 results were adversely impacted by non-cash, after-tax write-offs of approximately US$23.3 million and amortization of customer relationship intangibles of US$2.9 million, primarily related to the Xantic acquisition. As a result, the Corporation reported a net loss for the first half of 2006 of US$28.9 million, or US$0.69 per share, compared with net earnings of US$3.9 million, or US$0.09 per share for the same period a year ago.

The Corporation's financial statements for the three- and six-month period ended June 30, 2006, and related notes, 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. ET, Thursday, July 27, 2006. To access the conference call, please dial 1-866-249-1964. A replay of the conference call also will be available through Thursday, August 3. To access the replay, please call 1-877-289-8525 and use access code 21195999#.

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