8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): July 21, 2004

SOMERA COMMUNICATIONS, INC.

(Exact name of registrant as specified in charter)

Delaware	000-27843	77-0521878
(State or other jurisdiction of incorporation)	(Commission file number)	(IRS Employer Identification No.)

5383 Hollister Avenue, Santa Barbara, CA	93111
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (805) 681-3322

Item 7. Financial Statements and Exhibits

(c) Exhibits.

99.1 Press Release, dated July 21, 2004, announcing second quarter 2004 financial results.

Item 12. Results of Operation and Financial Condition.

On July 21, 2004, the Registrant issued a press release announcing its second quarter 2004 financial results. The press release is attached as Exhibit 99.1 to this Form 8-K and is furnished to the Commission pursuant to Item 12 of Form 8-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SOMERA COMMUNICATIONS, INC.
By:	/s/    C. Stephen Cordial
	C. Stephen Cordial Chief Financial Officer

Dated: July 21, 2004

INDEX TO EXHIBITS

Exhibit Number	Description
99.1	Press Release, dated July 21, 2004, announcing second quarter 2004 financial results.

EX-99.1

Somera Reports Results for Second Quarter of 2004

SANTA BARBARA, Calif., July 21, 2004—Somera Communications, Inc. (NASDAQ: SMRA), a global provider of equipment lifecycle management services, today announced financial results for the second quarter ended June 30, 2004.

Total revenue for the second quarter of 2004 was $25.8 million, compared with $28.4 million for the first quarter of 2004. Net loss under generally accepted accounting principles (GAAP) was $3.9 million, or $0.08 per share, compared with $4.1 million, or $0.08 per share, for the first quarter of 2004.

“During the quarter, we experienced a marked improvement in operational execution, with gross margins increasing four percentage points over Q1 levels, as we focused on restoring business fundamentals and preliminary execution of our growth strategies,” said David Heard, Somera’s President and Chief Executive Officer. “Our revenue shortfall during the second quarter was due primarily to the weak contribution from large national wireless operators in North America and our decision to de-emphasize certain low margin services . This decision improved our services gross margins to 36% without compromising our ability to provide more profitable, value-added services to better match our customers’ needs and support our strategic direction. Moving forward, we will continue to identify other areas where we can drive operating efficiencies and bottom line contribution.”

Somera’s operating expenses for the second quarter of 2004 were $10.9 million, compared with $10.3 million for the first quarter of 2004. The sequential increase in expenses related to recruitment, settlement of certain litigation, outside services for sales development, and Sarbanes-Oxley compliance.

At June 30, 2004, the company had $41 million in cash and short-term investments, $55 million in working capital and no long-term debt. Added Heard, “We were relentless in managing cash as we balanced our quarterly performance with our need to make prudent and appropriate investments for future growth. As a result, cash burn was down significantly from first quarter levels and we will continue to maintain a tight and aggressive cash management policy.”

Page 1 of 5

5383 Hollister Ave., Suite 100 Ÿ Santa Barbara, CA 93111

Phone (805) 681-3322 Ÿ Fax (805) 681-3325

E-mail: scinfo@somera.com Ÿ Web: www.somera.com

Strategy, Direction, and Outlook

“We believe there is significant demand for solutions that enable carriers and OEMs to manage their equipment lifecycles more profitably in the face of unprecedented changes in the telecommunications industry,” said Heard. “Consolidation and the rapid pace of new technology and service introductions has accelerated equipment displacement, transition, and digestion. Our successful management of these equipment lifecycles could enable carriers and OEMs to concentrate on the introduction of these new technologies and services, while we support their aging networks through the buying, selling, and servicing of equipment to optimize our customers’ ROI. “

Continued Heard, “I believe we understand the core operational issues required to provide the right portfolio of services and executional precision to address this opportunity. We are focused on making the right investment for the shareholders for the longer term and getting the company back to growth and profitability. However, I am not prepared to provide guidance until we have implemented some of the necessary refinements and improved our competencies in a few key areas.”

Teleconference and Webcast

Management’s teleconference and webcast are scheduled for 4:30 p.m. Eastern Time/1:30 p.m. Pacific Time today and are open to everyone. Please dial 800.599.9795 for domestic calls, or 617.786.2905 for international calls, at least five minutes before start time and use passcode 85982364. The call will be simultaneously webcast on the Investor Relations page of the Somera web site at www.somera.com. Listeners will need to have Microsoft Media Player installed on their computers. A replay will be available from one hour after the call ends through August 21, 2004, 11:59 p.m. Eastern Time/8:59 p.m. Pacific Time, at 888.286.8010 for domestic calls, or 617.801.6888 for international calls, passcode: 96719422.

About Somera Communications

Somera provides equipment lifecycle solutions to support operators need to extend the life of legacy networks at the lowest cost and greatest return. The company buys, sells, and services new and refurbished equipment and provides strategic support to maximize equipment lifecycles and ROI. Founded in 1995, Somera has developed an impressive base of over 1,100 customers worldwide, including the industry leaders from each segment of the telecommunications market. Visit Somera on the Web at www.somera.com.

Page 2 of 5

5383 Hollister Ave., Suite 100 Ÿ Santa Barbara, CA 93111

Phone (805) 681-3322 Ÿ Fax (805) 681-3325

E-mail: scinfo@somera.com Ÿ Web: www.somera.com

This news release contains forward-looking statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including those regarding the company’s expectation for a return to growth and profitability, the company’s implementation of restructuring and improving competencies in certain key areas, expected changes in market dynamics for the company’s customer base,; the company’s expectation of improved industry fundamentals; the company’s ability to execute on its lifecycle management services offering; and the company’s ability to capitalize on future network equipment deployment opportunities. Forward-looking statements involve a number of risks and uncertainties including, but not limited to, general economic conditions particularly affecting the telecommunications industry; capital equipment spending levels in the telecommunications industry; the impact of competition in the market for supplying equipment to telecommunications operators; the risk of potential shortage of product supply; risks regarding the company’s ability to expand international operations and build services capabilities; and other factors fully described in the company’s reports to the Securities and Exchange Commission (SEC), including, but not limited to, the Annual Report on Form 10-K for the fiscal year ended December 31, 2003, and Quarterly Reports on Form 10-Q. Actual results may differ materially from the statements contained in this news release. The company does not undertake to update any forward-looking statements that may be made by or on behalf of the company. Copies of Somera’s SEC filings may be obtained by contacting Investor Relations, Somera Communications, at 1-805-681-3322.

Contacts:	MEDIA	INVESTOR RELATIONS
	Kelly Delany	Steve Cordial
	Director of Communications	Vice President and Chief Financial Officer
	kdelany@somera.com	scordial@somera.com
	805.699.3384	805-699-3354

—Financial Statements Attached—

Page 3 of 5

5383 Hollister Ave., Suite 100 Ÿ Santa Barbara, CA 93111

Phone (805) 681-3322 Ÿ Fax (805) 681-3325

E-mail: scinfo@somera.com Ÿ Web: www.somera.com

SOMERA COMMUNICATIONS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

(Unaudited)

	June, 30 2004		December 31, 2003
ASSETS
Current Assets:
Cash and cash equivalents	$	40,827	$	41,842
Short-term investments		500		5,000
Accounts receivable, net		13,404		19,906
Inventories, net		16,015		13,804
Other current assets		11,346		10,487
Total current assets		82,092		91,039
Property and equipment, net		5,770		5,809
Other assets		94		117
Intangible assets		1,844		1,877
Total assets	$	89,800	$	98,842
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	13,929	$	14,520
Accrued compensation		2,485		3,478
Other accrued liabilities		9,230		9,338
Deferred revenue		1,082		1,369
Total current liabilities		26,726		28,705
Stockholders’ Equity		63,074		70,137
Total liabilities and stockholders’ equity		89,800	$	98,842

Page 4 of 5

5383 Hollister Ave., Suite 100 Ÿ Santa Barbara, CA 93111

Phone (805) 681-3322 Ÿ Fax (805) 681-3325

E-mail: scinfo@somera.com Ÿ Web: www.somera.com

SOMERA COMMUNICATIONS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
Equipment revenue	$	22,748		$	31,099			45,760			63,357
Service revenue		3,019			4,855			8,395			8,434
Total revenue		25,767			35,954			54,155			71,791
Equipment cost of revenue		16,833			22,478			34,589			45,781
Service cost of revenue		1,947			4,424			6,099			7,022
Total cost of revenue		18,780			26,902			40,688			52,803
Gross profit		6,987			9,052			13,467			18,988
Operating expenses:
Selling, general and administrative		10,894			12,695			21,181			25,937
Amortization of intangible assets		17			326			34			652
Impairment of goodwill and intangible assets		—			25,329			—			25,329
Total operating expenses		10,911			38,350			21,215			51,918
Loss from operations		(3,924	)		(29,298	)		(7,748	)		(32,930	)
Interest and other income (expense), net		56			281			(150	)		421
Loss before income taxes		(3,868	)		(29,017	)		(7,898	)		(32,509	)
Income tax (benefit) provision		8			(6,258	)		34			(7,672	)
Net loss		(3,876	)		(22,759	)		(7,932	)		(24,837	)
Net loss per share - basic and diluted	$	(0.08	)	$	(0.46	)	$	(0.16	)	$	(0.51	)
Weighted average number of shares outstanding:
Basic and diluted		49,759			49,097			49,639			49,048

Page 5 of 5

5383 Hollister Ave., Suite 100 Ÿ Santa Barbara, CA 93111

Phone (805) 681-3322 Ÿ Fax (805) 681-3325

E-mail: scinfo@somera.com Ÿ Web: www.somera.com