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Occam Networks Reports Fourth Quarter and Fiscal Year End Results
Closes Year by Surpassing One Millionth Port Milestone

SANTA BARBARA, Calif. – February 1, 2007 – Occam Networks, Inc. (NASDAQ: OCNW), a leading supplier of innovative Ethernet and IP-based loop carrier equipment to telecommunications companies, today announced its financial results for the quarter and year ended December 31, 2006. 

Revenues totaled $20.1 million for the fourth quarter, which ended December 31, 2006, a tenth straight quarter of increased revenues. Fourth quarter 2006 revenues represented an increase of 56% over the fourth quarter of 2005 and 11% sequentially over the third quarter of 2006. Annual revenue for 2006 was $68.6 million, representing a 75% increase over annual revenue for 2005. Net income for the fourth quarter of 2006, calculated in accordance with generally accepted accounting principles ("GAAP"), was $0.9 million or $0.04 per diluted share compared with net income of $0.4 million or $0.03 per diluted share for the fourth quarter of 2005 and net income of $0.2 million or $0.01 per diluted share for the third quarter of 2006. Annual net losses for 2006 and 2005 were $1.9 million and $9.3 million, respectively. The results for 2006 and 2005 included beneficial conversion feature charges related to the issuance of preferred stock and warrants. These non-cash charges were calculated in accordance with GAAP and are expected to be non-recurring. The results for 2006 and 2005 also include non-cash, employee stock-based compensation expenses. Pro forma net income before stock-based compensation was $1.5 million for the fourth quarter of 2006, compared to pro forma net income of $0.6 million for the fourth quarter of 2005 and $0.7 million for the third quarter of 2006. Pro forma net income before beneficial conversion feature charges and stock-based compensation for 2006 was $3.4 million. Pro forma net loss before beneficial conversion feature charges and stock-based compensation for 2005 was $6.8 million. A reconciliation of Occam's GAAP and pro forma financial results, together with a statement of how management uses the non-GAAP financial information, is set forth below.

The company also finished the fiscal year by surpassing one million ports shipped.  The company believes its fiscal year end results reflect increasing interest among telecommunications service providers in upgrading their networks to offer IPTV, Triple Play and other new, innovative services.

"Occam's focus on offering IP- and Ethernet-based technologies allowing telco service providers to bring exciting services to residential and business subscribers bore outstanding returns for Occam in 2006,” said Bob Howard-Anderson, Occam's president and chief executive officer.  “Achieving our millionth port shipped was among the year's highlights.”

In addition to surpassing the millionth port shipped mark, Occam's important 2006 milestones included:

  1. Occam surpassed the 200 customer mark, demonstrating the continued strong interest among telecommunications carriers in Occam's IP- and Ethernet-based approach to offering new, innovative services.
  2. Occam completed a relisting onto NASDAQ from the OTC bulletin board, and a secondary equity offering that raised $48.7 million, net of issuance costs.
  3. Occam added Session Initiation Protocol (SIP) to its OccamOS, enabling telcos to choose from SIP, MGCP, GR303 or TR08 for voice service control.
  4. Technology Marketing Corporation's TMC Labs recognized Occam Networks' BLC 6314 10GigE Transport and Optical Line Termination (OLT) Blade with a 2006 Innovation Award, citing these products as “groundbreaking.”

Earnings Call Information

Occam will hold its quarterly financial results conference call on Thursday, February 1, 2007, at 4:30 p.m. EST/1:30 p.m. PST to report the results for its quarter and fiscal year ended December 31, 2006.  Interested parties may call 1-866-901-2585 (for U.S. callers) and 1-404-835-7099 (for international callers) and tell the operator they are participating in the Occam Networks conference call.  A recording of the call will also be made available at Occam's website, www.occamnetworks.com, for 72 hours after the call is completed.

About Occam Networks, Inc.

Occam Networks' broadband loop carrier (BLC) solutions enable telecommunications and other service providers to offer the voice, video, and data, or Triple Play, services over both copper and fiber optic networks. Occam solutions give telco service providers flexibility and scalability to continuously expand their offerings, with a simplicity of service deployment. Occam's BLC products and services are currently deployed at over 200 service providers in North America. For more information, please visit www.occamnetworks.com



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Contact:

Kirsten McGregor
Occam Networks
1.805.692.2917
kmcgregor@occamnetworks.com

Tim Johnson
Stearns Johnson Communications
+1 415.397.7600
tjohnson@stearnsjohnson.com

Occam Networks is a registered trademark of Occam Networks Inc. in the United States and/or other countries.  All other trademarks mentioned are the property of their respective owners.