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Terayon Restructures to Pure-Play Digital Video Company

Santa Clara, California - January 26 2006 -- Terayon Communication Systems, Inc. (NASDAQ: TERNE), a leading provider of video localization-on-demand solutions, today announced a restructuring to focus the companys strategy solely on its digital video applications and reduce its overall cost structure as a pure-play video business.
Our decision to concentrate solely on digital video applications enables us to laser-focus the company on a growing market for real-time network digital video processing and expand our applications and services, said Jerry Chase, Terayon, CEO. Network operators worldwide in cable, satellite, telco and mobile, understand that they must customize digital video programming services and advertising to become more relevant to their individual customers. The move to customizing content delivered the instant before viewing creates substantial opportunity for Terayon, particularly in the area of digital video advertising, as it builds on our existing core competencies and market leadership. Localizing services and advertising plays strongly to the core strength exhibited in our award winning CherryPicker product line.

Microprocessor Design As part of the companys move to a pure-play video business, Terayon is reviewing strategic alternatives for its Home Access Solutions product line including the opportunity to monetize its current investment in working capital. As part of the restructuring, Terayon expects to record charges of approximately $0.6 million for employee related costs in addition to other restructuring costs, the majority of which are expected to occur in the first quarter of 2006.

based Avon is undergoing a restructuring plan that is expected to cost up to $500 million. The company didn't say where the layoffs would occur. Avon shares rose 4 cents to end at $31.64 on the New York Stock Exchange. Point Inc., based manufacturer of video surveillance systems, announced Wednesday $8.2 million in financing to assist in the acquisition of Ponoma, Calif.-based Tops Digital Security Inc.

Intel Motherboard Chase continued, We are now structured to take advantage of what we do best. By focusing on digital video, we expect to drive our strategic goals of increased market penetration and improved financial performance. With the savings we obtain from the restructuring, we intend to allocate additional resources for digital video software application development to pursue new revenue-generating video opportunities. Through our focus and partnerships with key industry players and existing customer relationships in the cable, satellite and telco markets, Terayon is well positioned for success.

It cannot be emphasized too much that every company must have a backup policy in place. Whilst physical premises can be rebuilt or refurbished, digital data cannot be so easily restructured, of more than one company over the years.

Gigabyte Mainboard About Terayon
Terayon Communication Systems, Inc. (NASDAQ: TERNE) provides real-time digital video networking applications to cable, satellite and telecommunication service providers worldwide, which have deployed more than 6,000 of Terayons digital video systems to localize services and advertising on-demand and brand their programming, insert millions of digital ads, offer HDTV and other digital video services. Terayon maintains its headquarters in Santa Clara, California; has sales and support offices worldwide and is on the web at www.terayon.com.

As a result of these changes, Corel will be closing its existing Digital Imaging facility in Minneapolis. In addition, time restructuring charge of approximately $2.2 million in the fourth quarter. The Company further expects that the full benefits of this restructuring will be realized beginning in the second half of 2008.

History Of Microprocessor Source: Terayon

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