UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-02287

SYMMETRICOM, INC.

(Exact name of registrant as specified in our charter)

Delaware		No. 95-1906306
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

2300 Orchard Parkway, San Jose, California 95131-1017

(Address of principal executive offices)

Registrant’s telephone number: (408) 433-0910

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer x

Non-accelerated filer o

Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x

Indicate number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date:

		Outstanding
Class		as of October 31, 2007
Common Stock		45,980,380

Explanatory Note

Symmetricom, Inc. (the “Company”, “we”, “us” or “our”) is filing this Amendment No. 1 (the “Amended Report”) to its Quarterly Report on Form 10-Q/A for its fiscal quarterly period ended September 30, 2007, originally filed with the U.S. Securities and Exchange Commission, (“SEC”), on November 9, 2007 (the “Original Filing”), to amend and restate its condensed consolidated balance sheet as of September 30, 2007 and October 1, 2006 and the condensed consolidated statements of operations and cash flows for the three-month period ended October 1, 2006. In connection with the restatement, we reevaluated the effectiveness of our controls and procedures and, accordingly, include revised disclosure in this Amended Report under Part I, Item 4, “Controls and Procedures.”

Subsequent to the original filing, on April 17, 2008, the Audit Committee of the Board of Directors, following a review initiated by the Audit Committee with the assistance of independent legal counsel and a forensic accounting firm, concluded that, due to errors in accounting for accrued liabilities related to inventory receipts, our financial statements for the fiscal years and interim periods from the fiscal year ended June 30, 2002 through fiscal year ended July 1, 2007 and for the first quarter of fiscal 2008 ended September 30, 2007 should no longer be relied upon. The restatement corrects accounts payable balances, cost of sales, income tax provision (benefit) and related non-current deferred tax assets and retained earnings for the periods affected. The cumulative impact to retained earnings for fiscal years 2002 through 2007 was an increase of approximately $0.2 million, with no impact on net income in the first quarter of fiscal 2008.

Except as discussed above, we have not modified or updated disclosures presented in the Original Filing, except as required to reflect the effects of the restatement, in this Amended Report. Accordingly, this Amended Report does not reflect events occurring after our Original Filing or modify or update those disclosures affected by subsequent events, except as specifically referenced herein. Information not affected by the restatement is unchanged and reflects the disclosures made at the time of the Original Filing. The following items have been amended as a result of the restatement:

PART I.	Item 1.	Financial Statements (Unaudited):
		Condensed Consolidated Balance Sheets—September 30, 2007 (As restated) and July 1, 2007
		Condensed Consolidated Statements of Operations—Three months ended September 30, 2007 and October 1, 2006 (As restated)
		Condensed Consolidated Statements of Cash Flows—Three months ended September 30, 2007 and October 1, 2006 (As restated)
		Notes to Condensed Consolidated Financial Statements
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 4.	Controls and Procedures

PART II.	Item 1A	Risk Factors
	Item 6	Exhibits

This Quarterly Report on Form 10-Q/A should be read in conjunction with our filings made with the SEC subsequent to the date of the Original Filing, including our Form 10-K/A for fiscal year ended July 1, 2007, which we are filing concurrently with this Amended Report, as well as our Current Reports on Form 8-K filed subsequent to the date of the Original Filing.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SYMMETRICOM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)
(Unaudited)

	September 30,		July 1,
	2007		2007
	(As Restated, See Note 15)

ASSETS

Current assets:
Cash and cash equivalents	$	52,074	$	37,587
Short-term investments	120,581		138,559
Accounts receivable, net of allowance for doubtful accounts of $1,000 and $1,107	31,126		37,368
Inventories, net	41,851		38,957
Note receivable from employee	500		500
Prepaids and other current assets	14,538		11,094
Total current assets	260,670		264,065
Property, plant and equipment, net	26,319		26,626
Goodwill	54,657		54,706
Other intangible assets, net	16,771		17,730
Deferred taxes and other assets	40,435		46,060
Total assets	$	398,852	$	409,187

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	10,348	$	12,949
Accrued compensation	13,408		13,936
Accrued warranty	3,679		3,374
Other accrued liabilities	11,026		15,161
Current maturities of long-term obligations	1,599		1,547
Total current liabilities	40,060		46,967
Long-term obligations	125,940		125,550
Deferred income taxes	784		334
Total liabilities	166,784		172,851
Commitments and contingencies (Notes 6 and 11)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 500 shares authorized, none issued	—		—
Common stock, $0.0001 par value; 70,000 shares authorized, 49,429 shares issued and 46,024 shares outstanding at September 30, 2007; 48,959 shares issued and 46,528 outstanding at July 1, 2007	183,678		187,070
Accumulated other comprehensive income	167		403
Retained earnings	48,223		48,863
Total stockholders’ equity	232,068		236,336
Total liabilities and stockholders’ equity	$	398,852	$	409,187

See notes to the unaudited condensed consolidated financial statements.

SYMMETRICOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended
	September 30,			October 1,
	2007			2006
				(As Restated, See Note 15)

Net revenue	$	50,735		$	47,260
Cost of products and services	28,027			24,372
Amortization of purchased technology	805			740
Integration and restructuring charges	3			—
Gross profit	21,900			22,148
Operating expenses:
Research and development	7,286			4,774
Selling, general and administrative	15,516			13,351
Amortization of intangibles	260			117
Integration and restructuring charges	293			—
Operating income (loss)	(1,455		)	3,906
Interest income	2,210			2,367
Interest expense	(1,195		)	(1,220		)
Income (loss) before income taxes and discontinued operations	(440		)	5,053
Income tax provision (benefit)	(129		)	1,675
Income (loss) from continuing operations	(311		)	3,378
Gain from discontinued operations, net of tax	68			474
Net income (loss)	$	(243	)	$	3,852

Earnings (loss) per share—basic:
Income (loss) from continuing operations	$	(0.01	)	$	0.07
Gain from discontinued operations	—			0.01
Net income (loss)	$	(0.01	)	$	0.08
Weighted average shares outstanding—basic	45,474			45,540

Earnings (loss) per share—diluted:
Income (loss) from continuing operations	$	(0.01	)	$	0.07
Gain from discontinued operations	—			0.01
Net income (loss)	$	(0.01	)	$	0.08
Weighted average shares outstanding—diluted	45,474			46,163

See notes to the unaudited condensed consolidated financial statements.

SYMMETRICOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
(Unaudited)

	Three Months Ended
	September 30,			October 1,
	2007			2006
				(As Restated, See Note 15)
Cash flows from operating activities:
Net income (loss)	$	(243	)	$	3,852
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	2,537			2,117
Deferred income taxes	(551		)	1,150
Stock-based compensation	1,587			1,136
Stock option excess income tax benefit	(1		)	—
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	6,242			917
Inventories	(2,894		)	(1,847		)
Prepaids and other assets	(1,392		)	(1,862		)
Accounts payable	(2,741		)	(167		)
Accrued compensation	(528		)	1,031
Other accrued liabilities	1,079			1,185
Net cash provided by operating activities	3,095			7,512
Cash flows from investing activities:
Purchases of short-term investments	(24,364		)	(44,749		)
Maturities of short-term investments	42,229			49,718
Purchases of plant and equipment	(1,025		)	(1,054		)
Purchased technology related costs	(36		)	—
Net cash provided by investing activities	16,804			3,915
Cash flows from financing activities:
Repayment of long-term obligations	(338		)	(291		)
Proceeds from issuance of common stock	47			520
Stock option excess income tax benefit	1			99
Repurchase of common stock	(4,944		)	(2,013		)
Net cash used for financing activities	(5,234		)	(1,685		)
Effect of exchange rate changes in cash	(178		)	(17		)
Net increase in cash and cash equivalents	14,487			9,725
Cash and cash equivalents at beginning of period	37,587			82,193
Cash and cash equivalents at end of period	$	52,074		$	91,918
Non-cash investing and financing activities:
Unrealized gain (loss) on securities, net	$	(58	)	$	63
Plant and equipment purchases included in accounts payable	516			470
Cash payments for:
Interest	75			245
Income taxes	734			442

See notes to the unaudited condensed consolidated financial statements.

SYMMETRICOM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation and Recently Issued Accounting Pronouncements

The condensed consolidated financial statements of the Company included herein are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of the management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Symmetricom’s Annual Report on Form 10-K/A for the year ended July 1, 2007. The results of operations for the three months ended September 30, 2007 are not necessarily indicative of the results to be anticipated for the entire fiscal year ending June 29, 2008.

The condensed consolidated balance sheet as of July 1, 2007 has been derived from the audited and restated financial statements as of that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

Fiscal Quarter

Our fiscal quarter is 13 weeks ending on the Sunday closest to the end of the calendar quarter.

Recently Issued Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits companies to choose to measure certain financial instruments and other items at fair value. The standard requires that unrealized gains and losses are reported in earnings for items measured using the fair value option. SFAS No. 159 will be effective for our fiscal year beginning June 30, 2008. We are currently assessing the potential impact that the adoption of SFAS No. 159 will have on our consolidated financial statements.

In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 106, and 132(R). SFAS No. 158 requires employers to recognize a net liability or asset and an offsetting adjustment to accumulated other comprehensive income to report the funded status of defined benefit pension and other post-retirement benefit plans. Previous standards required employers to disclose the complete funded status of its plans only in the notes to the financial statements. Additionally, SFAS No. 158 requires employers to measure plan assets and obligations at their year-end balance sheet date. Guidance relating to the recognition of the over or under funded status of the plan and additional disclosure requirements is effective for periods ending after December 15, 2006. Guidance relating to the measurement date of the plans is effective for the years ending after December 15, 2008. We do not believe that SFAS No. 158 will have a material impact on our consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which provides guidance for using fair value to measure assets and liabilities. The standard also responds to investors’ requests for more information about (1) the extent to which companies measure assets and liabilities at fair value, (2) the information used to measure fair value, and (3) the effect that fair-value measurements have on earnings. SFAS No. 157 will apply whenever another standard requires (or permits) assets or liabilities to be measured at fair value. The standard does not expand the use of fair value to any new circumstances. SFAS No. 157 will be effective for our fiscal year beginning June 30, 2008. We are currently assessing the potential impact that the adoption of SFAS No. 157 will have on our consolidated financial statements.

Note 2. Discontinued Operations

During the third quarter of fiscal 2007, we discontinued the operation of our Specialty Manufacturing/Other business segment. Specialty Manufacturing/Other was part of our Telecommunications Solutions Division. This has been accounted for as a discontinued operation and, accordingly, the results of operations have been excluded from continuing operations in the consolidated statements of operations. During fiscal 2007, we recognized a $0.2 million gain, net of taxes, all of which was attributable to income from discontinued operations.

During the first quarter of fiscal 2008, we recognized a gain of approximately $0.1 million, net of taxes, attributable to discontinued operations, that was primarily due to the collection of a fully reserved receivable.

Note 3. Income Taxes

On July 2, 2007, we adopted the provisions of the Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109 , which provides a financial statement recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. Under FIN 48, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon

ultimate settlement. FIN 48 also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures.

The adoption of FIN 48 had the following impact on our financial statements:

• increased goodwill by $0.1 million;

• decreased long-term assets (non-current deferred tax assets) by $4.1 million;

• increased long-term obligations by $0.7 million;

• increased long-term deferred tax liabilities by $0.4 million;

• decreased retained earnings by $0.4 million; and

• decreased our income taxes payable by $4.7 million.

As of July 2, 2007, we had $14.6 million of unrecognized tax benefits of which $8.4 million, if recognized, would impact our effective tax rate. We also had $4.1 million of unrecognized tax benefits that, if recognized, would result in a decrease to goodwill recorded in purchase business combinations. The impact on net income reflects the liabilities for unrecognized tax benefits net of certain deferred tax assets and the federal tax benefit of state income tax items.

Our policy is to include interest and penalties, when material, related to unrecognized tax benefits in income tax expense. As of July 2, 2007 we had no accrued interest related to uncertain tax positions on our balance sheet.

We file income tax returns in the United States (“U.S.”) and a number of U.S. state and foreign jurisdictions. The tax years ended June 2002 forward remain open to examination by the major taxing jurisdictions in which we operate which include the U.S., California, Puerto Rico, and Germany. We are not currently under examination by any income tax authority.

As of September 30, 2007, we had $14.6 million of liabilities from unrecognized tax benefits that are included in deferred and other tax liabilities, net. The total liabilities for unrecognized tax benefits relate primarily to the allocations of revenue and costs among our global operations and credits that may be available to reduce taxes. There were no material changes related to activities during the first quarter of fiscal 2008. At September 30, 2007, we had no accrued interest related to uncertain tax positions on our balance sheet.

Note 4. Inventories

Components of inventories were as follows:

	September 30,		July 1,
	2007		2007
	(In thousands)
Raw materials	$	17,710	$	16,699
Work-in-process	11,349		12,250
Finished goods	12,792		10,008
	$	41,851	$	38,957

Note 5. Goodwill and Other Intangible Assets

Goodwill

Goodwill has not changed significantly from the amounts disclosed in the Company’s Form 10-K/A for the fiscal year ended July 1, 2007.

Other Intangible Assets

Other intangible assets as of September 30, 2007 and July 1, 2007 consist of:

	Gross				Net
	Carrying		Accumulated		Intangible
	Amount		Amortization		Assets
	(in thousands)
Purchased technology	$	30,514	$	18,192	$	12,322
Customer lists, trademarks, other	9,801		4,393		5,408
Balances as of July 1, 2007	$	40,315	$	22,585	$	17,730
Purchased technology	$	30,520	$	18,829	$	11,691
Customer lists, trademarks, other	9,917		4,837		5,080
Balances as of September 30, 2007	$	40,437	$	23,666	$	16,771

The estimated future amortization expenses by fiscal year are as follows:

Fiscal year:	(in thousands)

2008 (remaining nine months)	$	2,919
2009	3,799
2010	3,489
2011	2,820
2012	2,041
Thereafter	1,703
Total amortization	$	16,771

During the first quarter of fiscal 2008, we determined that the weighted-average amortization period for $2.0 million of developed technology purchased in the fourth quarter of 2007 is three years.

Intangible asset amortization expense for the first quarter of fiscal 2008 and 2007 was approximately $1.1 million and $0.9 million, respectively.

Note 6. Long-term Obligations

Long-term obligations consist of:

	September 30,			July 1,
	2007			2007
	(In thousands)
Long-term obligations:
Convertible subordinated notes (1)	$	120,000		$	120,000
Capital lease	2,359			2,697
Bond payable	2,405			2,405
Deferred revenue	1,127			1,089
Lease accrual	492			422
Post-retirement benefits, net	257			262
Conditional grant	136			136
Lease loss accrual, net	73			86
Income tax (See Note 3)	690			—
Less—current maturities	(1,599		)	(1,547		)
Total	$	125,940		$	125,550

(1) See Note 14 – Subsequent Events.

Note 7. Stockholders’ Equity

Stock Award Activity

For the three months ended September 30, 2007, we granted non performance-based options to purchase 489,000 shares of Symmetricom’s common stock, and awarded 480,000 shares of restricted stock. Our right to repurchase restricted stock generally lapses over the same three-year term as the vesting period applicable to the stock options.

			Non Performance-based Options Outstanding				Performance-based Options Outstanding				Restricted Stock Outstanding
													Weighted
	Shares				Weighted				Weighted				Average
	Available		Number of		Average		Number of		Average		Number of		Grant-Date
	For Grant		Shares		Exercise Price		Shares		Exercise Price		Shares		Fair Value
	(In thousands, except per share amounts)
Balances at July 1, 2007	2,940		4,897		$	7.66	295		$	8.53	844		$	7.98
Granted - options	(489	)	489		5.23		—		—		—		—
Granted - restricted shares	(480	)	—		—		—		—		480		5.17
Exercised	—		(10	)	4.40		—		—		—		—
Vested	—		—		—		—		—		(121	)	7.51
Canceled	201		(101	)	8.76		(100	)	8.53		(20	)	7.74
Expired	—		—		—		—		—		—		—
Balances at September 30, 2007	2,172		5,275		$	7.42	195		$	8.53	1,183		$	6.89

The total number of in-the-money options outstanding and exercisable as of September 30, 2007 was as follows:

		Weighted
		Average
		Remaining	Weighted		9/30/2007		Intrinsic		Aggregate
	Number of	Contractual	Average		Closing		Value		Intrinsic
Option	Shares	Life	Exercise Price		Price		Per Share		Value
	(In thousands)	(In years)							(In thousands)

Outstanding at September 30, 2007	618	3.79	$	4.07	$	4.70	$	0.63	$	391

Exercisable at September 30, 2007	614	3.78	$	4.07	$	4.70	$	0.63	$	390

The aggregate intrinsic value in the preceding table represents the total pre-tax value of stock options outstanding as of September 30, 2007, based on our common stock closing price of $4.70 on September 30, 2007, which would have been received by the option holders had all option holders exercised their options as of that date.

The weighted average estimated fair value of options granted was $2.05 per share in the first quarter of fiscal 2008 and $2.82 per share in the corresponding quarter of fiscal 2007. Our calculations were made using the Black-Scholes option-pricing model. The fair value of Symmetricom’s stock-based awards to employees was estimated assuming no expected dividend and the following weighted-average assumptions for the first three months of fiscal 2008 and 2007, as follows:

	Three months ended
	September 30, 2007		October 1, 2006
Expected life (in years)	3.8		3.5
Risk-free interest rate	4.5	%	4.8	%
Volatility	45.6	%	50.9	%

We recorded stock-based compensation expense of $1.6 million in the first quarter of fiscal 2008, which includes the net cumulative impact of 3.0% estimated future annual forfeitures in the determination of the expense in the period, rather than recording forfeitures when they occur. At September 30, 2007, the total compensation cost related to unvested stock-based awards granted to employees, directors and consultants under the Company’s stock option plans but not yet recognized was approximately $8.8 million, net of estimated forfeitures of $0.7 million. This cost will be amortized on an accelerated method basis over a period of approximately 1.8 years and will be adjusted for subsequent changes in estimated forfeitures.

Stock Repurchase Program

On August 8, 2007, the Board of Directors authorized management to repurchase up to approximately 2.9 million shares of Symmetricom common stock, adding 2.0 million shares to a previously authorized program with no termination date. During the first three months of fiscal 2008, we repurchased 940,656 shares of common stock pursuant to the repurchase program for an aggregate price of approximately $4.8 million.

As of September 30, 2007, the total number of shares available for repurchase under the repurchase program authorized by the Board of Directors was approximately 1.9 million.

Note 8. Integration and Restructuring Charges

The following tables show the details of the restructuring cost accruals, which consist of facilities and severance costs, for the year ended July 1, 2007 and the three-month period ended September 30, 2007:

	Balance at							Balance at
	July 1,		Expense					September 30,
	2007		Additions		Payments			2007
	(in thousands)
Lease loss accrual (fiscal 2004)	$	145	$	—	$	(11	)	$	134
All other integration and restructuring changes (fiscal 2004)	482		—		(3		)	479
All other integration and restructuring changes (fiscal 2008)	—		296		(296		)	—
Total	$	627	$	296	$	(310	)	$	613

The accrued balance of the $0.1 million lease loss accrual for facilities as of September 30, 2007 will be paid over the next five years. We expect to incur additional integration and restructuring charges amounting to $0.7 million for the QoSmetrics acquisition.

Note 9. Comprehensive Income

Comprehensive income is comprised of two components: net income and other comprehensive income. Other comprehensive income refers to revenue, expenses, gains and losses that under generally accepted accounting principles are recorded as an element of stockholders’ equity but are excluded from net income. Other comprehensive income is comprised of unrealized gains and losses, net of taxes, on marketable securities categorized as available-for-sale and foreign currency translation adjustments. The components of comprehensive income, net of tax, are as follows:

	Three Months Ended
	September 30,			October 1,
	2007			2006
	(in thousands)

Net income (loss)	$	(243	)	$	3,852
Other comprehensive income, net of taxes:
Foreign currency translation adjustments	(178		)	(17		)
Unrealized gain (loss) on investments	(58		)	63
Other comprehensive income (loss)	(236		)	46
Total comprehensive income (loss)	$	(479	)	$	3,898

Note 10. Net Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income by the weighted average number of common shares outstanding during the period less unvested shares of restricted common stock. Diluted earnings (loss) per share is calculated by dividing net income by the weighted average number of common shares outstanding and common equivalent shares from stock options, warrants and unvested restricted stock using the treasury method, except when anti-dilutive.

The following table reconciles the number of shares utilized in the earnings (loss) per share calculations:

	Three Months Ended,
	September 30,			October 1,
	2007			2006
	(In thousands, except per share amounts)
Numerator:
Income (loss) from continuing operations	$	(311	)	$	3,378
Gain from discontinued operations	68			474
Net income (loss)	$	(243	)	$	3,852

Shares (Denominator):
Weighted average common shares outstanding	46,498			45,902
Weighted average common shares outstanding subject to repurchase	(1,024		)	(362		)
Weighted average shares outstanding - basic	45,474			45,540
Weighted average dilutive share equivalents from stock options and warrants	—			548
Weighted average common shares dilutive subject to repurchase	—			75
Weighted average shares outstanding - diluted	45,474			46,163
Net earnings per share - basic:
Earnings (loss) from continuing operations	$	(0.01	)	$	0.07
Earnings from discontinued operations	—			0.01
Net earnings (loss)	$	(0.01	)	$	0.08
Net earnings per share - diluted:
Earnings (loss) from continuing operations	$	(0.01	)	$	0.07
Earnings from discontinued operations	—			0.01
Net earnings	$	(0.01	)	$	0.08

The following common stock equivalents were excluded from the net earnings per share calculation as their effect would have been anti-dilutive:

	Three Months Ended,
	September 30, 2007	October 1, 2006
	(In thousands, except per share amounts)

Stock options and warrants	6,182	3,939
Common shares subject to repurchase	21	—
Total shares of common stock excluded from diluted net earnings per share calculation	6,203	3,939

Note 11. Contingencies

We formerly leased a tract of land in Texas for our operations. Those operations involved the use of solvents and, at the end of the lease, we remediated an area where the solvents had been deposited on the ground and obtained regulatory approval for that remedial activity. In 1996, an environmental investigation of the property detected those same contaminants in groundwater in excess of then current regulatory standards. The groundwater contamination has migrated to some adjacent properties. We have entered into the Texas Natural Resource Conservation Commission’s Voluntary Cleanup Program (the “Voluntary Cleanup Program”) to obtain regulatory approval for closure of this site and a release from liability to the State of Texas for subsequent landowners and lenders. We have notified adjacent property owners affected by the contamination of participation in the Voluntary Cleanup Program. On May 20, 2004, we received a demand from the owner of several adjacent lots for damages in the amount of $1.3 million, as well as seeking an indemnity for the contamination and a promise to remediate the contamination. On March 14, 2006, the adjacent property owner filed suit in Probate Court No. 1, Travis County, Texas (Anna B. Miller, Individually and as Executrix of the Estate of Robert L. Miller, et al. vs. Austron, Inc., et al.), seeking damages. Symmetricom has not yet been served in this matter. We are continuing to work on the remediation of the formerly leased site as well as the adjacent properties and intend to defend this lawsuit vigorously. As of September 30, 2007, we had an accrual of $0.5 million for remediation costs, appraisal fees and other ongoing monitoring costs.

Under the indemnification provisions of our standard sales contracts, we agree to defend the customer against third party claims asserting infringement of certain intellectual property rights, which may include patents, copyrights, trademarks or trade secrets, and to pay any judgments entered on such claims against the reseller/customer. The exposure to us under these indemnification provisions is generally limited to the total amount paid by the customer under the agreement. However, certain agreements include indemnification provisions that could potentially expose us to losses in excess of the amount received under the agreement. To date, there have been no claims under such indemnification provisions. As such, we believe the estimated fair value of these indemnification agreements is not material.

	Three Months Ended
	September 30,			October 1,
	2007			2006
	(in thousands, except percentages)
Net revenue:
Telecom Solutions Division:
Wireline Products	$	20,515		$	20,839
Wireless/OEM Products	5,538			8,429
Global Services	4,284			2,836
Timing, Test and Measurement Division	20,243			15,156
Quality of Experience Assurance Division	155			—
Total net revenue	50,735			47,260
Cost of sales:
Telecom Solutions Division:
Wireline Products	9,754			8,727
Wireless/OEM Products	3,686			6,125
Global Services	3,233			1,546
Timing, Test and Measurement Division	11,317			7,974
Quality of Experience Assurance Division	37			—
Other cost of sales*	808			740
Total cost of sales	28,835			25,112
Gross profit:
Telecom Solutions Division:
Wireline Products	10,761			12,112
Wireless/OEM Products	1,852			2,304
Global Services	1,051			1,290
Timing, Test and Measurement Division	8,926			7,182
Quality of Experience Assurance Division	118			—
Other cost of sales*	(808		)	(740		)
Total gross profit	$	21,900		$	22,148

Gross margin:
Telecom Solutions Division:
Wireline Products	52.5		%	58.1		%
Wireless/OEM Products	33.4		%	27.3		%
Global Services	24.5		%	45.5		%
Timing, Test and Measurement Division	44.1		%	47.4		%
Quality of Experience Assurance Division	76.1		%	—		%
Other cost of sales*	(1.6		)%	(1.6		)%
Total gross margin	43.2		%	46.9		%

* Includes amortization and impairment of purchased technology and applicable integration and restructuring charges.

Note 13. Warranty

Changes in our accrued warranty liability during the first three-month period of fiscal 2008 was as follows:

	(In thousands)
Product warranty at July 1, 2007	$	3,374
Provision for warranty	1,036
Accruals related to change in estimate	(80		)
Less: Actual warranty costs	(651		)
Product warranty at September 30, 2007	$	3,679

The impact of the restatements on the consolidated balance sheet as of September 30, 2007 and the consolidated statements of operations and cash flows for the three-month period ended October 1, 2006 (the prior fiscal year quarter) are detailed in the tables below:

	As of September 30, 2007
	As Previously					As
	Reported		Adjustments #2			Restated
	(in thousands)
Consolidated Balance Sheet Data:
Deferred taxes and other assets	$	40,527	$	(92	)	$	40,435
Total assets	398,944		(92		)	398,852
Accounts payable	10,596		(248		)	10,348
Current liabilities	40,308		(248		)	40,060
Total liabilities	167,032		(248		)	166,784
Retained earnings	48,067		156			48,223
Stockholders’ equity	231,912		156			232,068
Total liabilities and stockholders’ equity	398,944		(92		)	398,852

	Three Months Ended October 1, 2006
	As Previously					As
	Reported		Adjustments #2			Restated
	(In thousands)
Consolidated Statement of Operations Data:
Net revenue	$	47,260	$	—		$	47,260
Cost of products and services	24,461		(89		)	24,372
Gross profit	22,059		89			22,148
Operating income	3,817		89			3,906
Income tax provision	1,642		33			1,675
Income (loss) from continuing operations	3,322		56			3,378
Net income	3,796		56			3,852

	Three Months Ended October 1, 2007
	As Previously			Adjustment						Adjustment			As
	Reported			#1 *			Total			#2			Restated
	(In thousands)
Consolidated Statement of Cash Flows Data:
Net income	$	3,796		$	—		$	3,796		$	56		$	3,852
Deferred income taxes	1,117			—			1,117			33			1,150
Accounts payable	(78		)	—			(78		)	(89		)	(167		)
Net cash provided by operating activities	7,512			—			7,512			—			7,512

Purchases of short-term investments	(12,917		)	(31,832		)	(44,749		)	—			(44,749		)
Maturities of short-term investments	17,886			31,832			49,718			—			49,718
Net cash used for investing activities	3,915			—			3,915			—			3,915

* This correction was made in the original filing of the financial statements on Form 10-Q.

This Quarterly Report on Form 10-Q/A should be read in conjunction with our filings made with the SEC subsequent to the date of the Original Filing, including our Form 10-K/A for our fiscal year ended July 1, 2007, which we are filing concurrently with this Amended Report, as well as any Current Reports on Form 8-K filed subsequent to the date of the Original Filing.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations gives effect to the restatement of the condensed consolidated financial statements discussed in Note 15, “Restatement of Previously Issued Financial Statements,” of the Notes to Condensed Consolidated Financial Statements, and should be read together with the condensed consolidated financial statements and related notes included elsewhere in this report. The restatement corrects account payable balances, cost of sales, income tax provision (benefit) and related non-current deferred tax assets and statement of cash flows for the periods affected.

When used in this discussion, the words “expects,” “anticipates,” “estimates,” “believes,” “plans,” “will,” “intend,” “can” and similar expressions are intended to identify forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

These risks and uncertainties include, but are not limited to, risks relating to general economic conditions in the markets we address and the telecommunications market in general, risks related to the development of our new products and services, the effects of competition and competitive pricing pressure, uncertainties associated with changing intellectual property laws, developments in and expenses related to litigation, increased competition in our markets, inability to obtain sufficient amounts of key components, the rescheduling or cancellations of key customer orders, the loss of a key customer, the effects of new and emerging technologies, the risk that excess inventory may result in write-offs, price erosion and decreased demand, fluctuations in the rate of exchange of foreign currency, changes in our effective tax rate, the impact on investor confidence due to material weaknesses in our controls over financial reporting, potential short-term investment losses and other risks due to credit market dislocation, changes in accounting for convertible debt, the tax treatment of the restructuring of our Puerto Rico subsidiary, market acceptance of our new products and services, technological advancements, undetected errors or defects in our products, the risks associated with our international sales, geopolitical risks and risk of terrorist activities, the risks associated with attempting to integrate other companies and businesses we acquire, expenses related to the restatement of our financial statements and the risks set forth below in Part II. Item 1A, “Risk Factors.”

These forward-looking statements speak only as of the date hereof. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances or on which any such statement is based.

All references to “Symmetricom,” “we,” “us,” and “our” mean Symmetricom, Inc. and its subsidiaries, except where it is made clear that the term means only the parent company.

Overview

Symmetricom is a leading supplier of synchronization and timing products to industry, government, research centers and aerospace markets. We supply solutions for customers who demand reliable products and engineering expertise in a variety of applications, including network synchronization, timing, testing, verification and/or the measurement of time and frequency-based signals. We design and/or manufacture rubidium clocks, crystal oscillators, cesium clocks and hydrogen maser clocks. Our products include synchronization network elements, timing elements and business broadband access devices for wireline and wireless networks as well as the provision of professional services. Our products play an essential role in network operations, quality of service of wireline, wireless and broadband communications networks, enabling our customers to increase performance and efficiency in their communications infrastructures. During fiscal 2007, we formed the Quality of Experience Assurance Division to pursue potential opportunities in the quality of experience (QoE) market for video services. We believe that the QoE market holds the promise of faster revenue growth in the future than our historic lines of businesses. The acquisition of QoSmetrics S.A. in fiscal 2007 formed the nucleus of this business.

Symmetricom’s customers include worldwide public network providers, incumbent local exchange carriers (ILECs), public telephone and telegraph companies (PTTs), competitive local exchange carriers (CLECs), other telephone companies, wireless service providers, cable television operators, distributors and systems integrators, communications original equipment manufacturers (OEMs), aerospace contractors, governments and research facilities.

Critical Accounting Estimates

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures at the date of our financial statements. On an ongoing basis, management evaluates its estimates and judgments. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably likely to occur could materially impact the financial statements. With the exception of the below paragraph that discusses the impact of the Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109, on our critical accounting policy and estimates for accounting for income taxes, we believe that there have been no significant changes during the three months ended September 30, 2007 to the items that we disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K/A for the fiscal year ended July 1, 2007.

On July 2, 2007, we adopted the provisions of the FIN 48, which provides a financial statement recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. Under FIN 48, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. FIN 48 also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. During our first quarter of fiscal 2008, we adjusted our policy in the accounting for and presentation of uncertain tax positions in order to comply with the interpretive guidance set forth in FIN 48.

Results of Operations

The following table presents selected items in our condensed consolidated statements of operations as a percentage of total revenues for the three months ended September 30, 2007 and October 1, 2006:

	Three Months Ended
	September 30,		October 1,
	2007		2006

Net revenue
Telecom Solutions Division:
Wireline Products	40.4	%	44.1	%
Wireless/OEM Products	10.9	%	17.8	%
Global Services	8.4	%	6.0	%
Timing, Test and Measurement Division	39.9	%	32.1	%
Quality of Experience Assurance Division	0.4	%	—	%
Total net revenue	100.0	%	100.0	%

Cost of products and services	55.2	%	51.5	%
Amortization of purchased technology	1.6	%	1.6	%
Integration and restructuring charges	—	%	—	%
Gross profit	43.2	%	46.9	%
Operating expenses:
Research and development	14.4	%	10.1	%
Selling, general and administrative	30.6	%	28.3	%
Amortization of intangibles	0.5	%	0.2	%
Integration and restructuring charges	0.6	%	—	%
Income (loss) from operations	(2.9	)%	8.3	%
Interest income	4.4	%	5.0	%
Interest expense	(2.4	)%	(2.6	)%
Income (loss) before income taxes	(0.9	)%	10.7	%
Income tax provision (benefit)	(0.3	)%	3.5	%
Income (loss) from continuing operations	(0.6	)%	7.1	%
Gain from discontinued operations, net of tax	0.1	%	1.0	%
Net income (loss)	(0.5	)%	8.2	%

Net Revenue:

	Three months ended
	September 30, 2007			October 1, 2006			$ Change			% Change

Net Revenue (in thousands):
Wireline Products	$	20,515		$	20,839		$	(324	)	(1.6	)%
Wireless/OEM Products	5,538			8,429			(2,891		)	(34.3	)
Global Services	4,284			2,836			1,448			51.1
Timing, Test and Measurement Division	20,243			15,156			5,087			33.6
Quality of Experience Assurance Division	155			—			155			100.0
Total Net Revenue	$	50,735		$	47,260		$	3,475		7.4	%
Percentage of Revenue	100.0		%	100.0		%

Net revenue consists of sales of products, software licenses and services. In the first quarter of fiscal 2008, net revenue increased by $3.5 million to $50.7 million from $47.3 million in the corresponding quarter of fiscal 2007. This increase was primarily attributable to a $5.1 million or 33.6% increase in revenue from Timing, Test and Measurement Division due to the Timing Solutions Corporation products acquired on October 2, 2006 and higher sales of products to the Government for communication programs in the intelligence community, the Air Force and the Coast Guard. In addition, revenues from the Global Services segment increased by $1.4 million or 51.1% primarily due to installation services at Verizon Communications Inc. Wireless/OEM Products revenue decreased by $2.9 million or 34.3% compared to the corresponding quarter in fiscal 2007 due to a reduction in purchases from major OEM customers. In the first quarter of fiscal 2008, Wireline revenue had a relatively slight decline of 1.6% compared to the same period in prior year. As stated in the Fiscal Year 2008 Outlook in our Form 10-K/A for the fiscal year ended July 1, 2007, we do not expect substantial orders from two large customers in the first half of fiscal 2008, which will cause our revenue to be below the level in the second half of fiscal 2007. We expect orders from these two large customers to increase in the second half of fiscal 2008, as the calendar 2008 capital expenditure budgets for these customers are approved. Revenue for the Quality of Experience Assurance Division, which was formed on January 2, 2007, was $0.2 million for the first quarter of fiscal 2008.

Gross Profit:

	Three months ended
	September 30, 2007			October 1, 2006			$ Change			% Change

Gross Profit (in thousands):
Wireline Products	$	10,761		$	12,112		$	(1,351	)	(11.2	)%
Wireless/OEM Products	1,852			2,304			(452		)	(19.6	)
Global Services	1,051			1,290			(239		)	(18.5	)
Timing, Test and Measurement Division	8,926			7,182			1,744			24.3
Quality of Experience Assurance Division	118			—			118			100.0
Other cost of sales	(808		)	(740		)	(68		)	9.2
Total Gross Profit	$	21,900		$	22,148		$	(248	)	(1.1	)%
Percentage of Revenue	43.2		%	46.9		%

Gross profit in the first quarter of fiscal 2008 decreased by $0.2 million or 1.1% compared to the corresponding quarter of fiscal 2007. Gross profit for Wireline Products decreased by $1.4 million or 11.2%, which is greater than the revenue decrease of 1.6%, primarily due to higher sales volume for major projects in Asia that are at lower margins. Gross profit for the Wireless/OEM Products decreased by $0.5 million or 19.6%, which was lower than the revenue decrease of 34.3% for the same period due primarily to increased prices and a more favorable product mix. Gross profit for Global Services decreased $0.2 million or 18.5%, as compared to the 51.1% revenue increase for the same period due to large volume increases in installation services that are at a lower margin. Gross profit for the Timing, Test and Measurement Division increased by $1.7 million or 24.3%, which was lower than the revenue increase of 33.6% for the same period due primarily to volume increases for Timing Solutions Corporation products that are at lower margins. Gross profit for the Quality of Experience Assurance Division, which was formed on January 2, 2007, was $0.1 million.

Other cost of sales increased $0.1 million or 9.2% due primarily to additional amortization of purchased technology related to the acquisitions of Timing Solutions Corporation on October 2, 2006 and QoSmetrics, which formed our Quality of Experience Assurance Division, on January 2, 2007.

Operating Expenses

Research and Development Expense:

	Three months ended
	September 30, 2007			October 1, 2006			$ Change		% Change

Research and development expense (in thousands)	$	7,286		$	4,774		$	2,512	52.6	%
Percentage of Revenue	14.4		%	10.1		%

Research and development expenses were $7.3 million for the first quarter of fiscal 2008 compared to $4.8 million for the corresponding period of fiscal 2007. The overall increase in the research and development expense was primarily attributable to the $2.3 million for additional expenses related to the acquisitions of Timing Solutions Corporation on October 2, 2006 and QoSmetrics, which formed our Quality of Experience Assurance Division, on January 2, 2007.

	Three months ended
	September 30, 2007			October 1, 2006			$ Change		% Change

Selling, general and administrative (in thousands)	$	15,516		$	13,351		$	2,165	16.2	%
Percentage of Revenue	30.6		%	28.3		%

Selling, General and Administrative:

Selling, general and administrative expenses consist primarily of salaries, benefits, sales commissions and travel-related expenses for our sales and services, finance, human resources, information technology and facilities departments. These expenses increased by 16.2% to $15.5 million for the first quarter of fiscal 2008 compared to $13.4 million for the corresponding quarter of fiscal 2007. This $2.2 million increase in selling, general and administrative expenses was primarily attributable to the increased expenses for the Quality of Experience Assurance Division formed on January 2, 2007, higher stock compensation expenses and higher commission expense for revenue increases.

Amortization of intangibles:

	Three months ended
	September 30, 2007			October 1, 2006			$ Change		% Change

Amortization of intangibles (in thousands)	$	260		$	117		$	143	122.2	%
Percentage of Revenue	0.5		%	0.2		%

Amortization of intangibles increased by 122.2% to $0.3 million during the first quarter of fiscal 2008 compared to $0.1 million during the corresponding quarter of fiscal 2007 due to the acquisitions of Timing Solutions Corporation and QoSmetrics that both occurred subsequent to the first quarter of fiscal 2007.

Integration and restructuring charges:

	Three months ended
	September 30, 2007			October 1, 2006			$ Change		% Change

Integration and restructuring charges (in thousands)	$	293		$	—		$	293	100.0	%
Percentage of Revenue	0.6		%	—		%

Administrative related integration and restructuring charges of $0.3 million were incurred in the first quarter of fiscal 2008, all related to the QoSmetrics acquisition.

Income Taxes:

	Three months ended
	September 30, 2007			October 1, 2006			$ Change			% Change

Income tax provision (benefit) (in thousands)	$	(129	)	$	1,675		$	(1,804	)	(107.7	)%
Percentage of Revenue	(0.3		)%	3.5		%

Our income tax benefit was $0.1 million in the first quarter of fiscal 2008, compared to an income provision of $1.7 million in the corresponding quarter of fiscal 2007. Our effective tax rate in the first quarter of fiscal 2008 was 29.3%, compared to an effective tax rate of 33.1% in the corresponding period of fiscal 2007.

Gain from discontinued operations, net of tax:

	Three months ended
	September 30, 2007			October 1, 2006			$ Change			% Change

Gain from discontinued operations, net of tax (in thousands)	$	68		$	474		$	(406	)	(85.7	)%
Percentage of Revenue	0.1		%	1.0		%

In the third quarter of fiscal 2007, we discontinued the operation of the Specialty Manufacturing/Other business segment. The gain of approximately $0.1 million, net of tax, for the first quarter of fiscal 2008, was primarily due to the collection of a fully reserved receivable.

Key Operating Metrics

Key operating metrics for measuring our performance include sales backlog and contract revenue. A comparison of these metrics for the first quarter of fiscal 2008 with the end of fiscal 2007 is listed below:

Sales Backlog:

Our backlog consists of firm orders that have yet to be shipped to the customer, or may not be shippable to a customer until a future period. Most orders included in backlog can be rescheduled or cancelled by customers without significant penalty. Historically, a substantial portion of net revenue in any fiscal period has been derived from orders received during that fiscal period.

Our backlog amounted to $50.4 million as of September 30, 2007, compared to $51.9 million as of July 1, 2007. Our backlog, which is shippable within the next six months, was $40.0 million as of September 30, 2007, compared to $43.4 million as of July 1, 2007. The decline in sales backlog is primarily due to the lower order volume from two major customers as discussed previously.

Contract Revenue:

As of September 30, 2007, we had approximately $9.3 million in contract revenue to be performed and recognized within the next 36 months, compared to approximately $6.3 million in contract revenue that was to be performed and recognized within 36 months following July 1, 2007. These amounts have been accounted for as part of our sales backlog discussed above.

Liquidity and Capital Resources

As of September 30, 2007, working capital was $220.6 million compared to $217.1 million as of July 1, 2007. Cash and cash equivalents as of September 30, 2007 increased to $52.1 million from $37.6 million as of July 1, 2007. This increase was primarily the result of a decrease in accounts receivable and an increase in maturities of short-term investments. Short-term investments decreased from $138.6 million as of July 1, 2007 to $120.6 million as of September 30, 2007. This decrease was attributable primarily to an increase in maturities of short-term investments during the first 3 months of fiscal 2008.

The $3.1 million net cash provided by operating activities for the three months ended September 30, 2007 was primarily attributable to non-cash expenses related to depreciation and amortization of $2.5 million, stock-based compensation expenses of $1.6 million and a $6.2 million decrease in accounts receivable. This was partially offset by an inventory increase of $2.9 million, an accounts payable decrease of $2.7 million, and an increase in prepaids and other assets of $1.4 million. The $16.8 million net cash provided by investing activities for the

three months ended September 30, 2007 was primarily attributable to $42.2 million in maturities of short-term investments, that was partially offset by $24.4 million in purchases of short-term investments and $1.0 million in purchases of plant and equipment. The $5.2 million net cash used for financing activities was primarily attributable to $4.9 million used to repurchase common stock under our stock buyback program.

Our day sales outstanding in accounts receivable was 56 days as of September 30, 2007, compared to 59 days at July 2, 2007.

In the fourth quarter of fiscal 2007, we purchased asset-backed commercial paper with a $7.8 million par value maturing on March 13, 2008. At the time of purchase, the investment’s portfolio consisted primarily of triple-A rated assets, with sub-prime loan assets making up approximately 23% of the portfolio. Since the date of purchase, the entity issuing the commercial paper was declared insolvent and entered receivership. The receiver then announced that it is in exclusive discussions with a major financial institution to purchase the entity’s assets and restructure its existing debt. The restructuring plan may include payout at par over time, but this has not been announced and may not necessarily materialize. During the second quarter of fiscal 2008, our investment manager advised us that although a temporary impairment will be recognized, full repayment is expected. Accordingly, no impairment loss was recorded at September 30, 2007.

We believe that our existing cash resources will be sufficient to meet our anticipated operating and working capital expenditure needs in the ordinary course of business for at least the next 12 months and the foreseeable future. We base our expense levels in part on our expectation of future revenue levels. If our revenue for a particular period is lower than we expect, we may take steps to reduce our operating expenses accordingly. If cash generated from operations is insufficient to satisfy our liquidity requirements or if we require additional capital resources to grow our business or to acquire complementary technologies and businesses in the future, we may seek to issue additional equity securities or obtain additional debt financing. Additional financing may not be available at all or on terms favorable to us. Additional financing may also be dilutive to our existing stockholders. As a result of our delayed filing of our Quarterly Report on Form 10-Q for the quarter ended December 30, 2007, we will be ineligible to register our securities on Form S-3 for sale by us or resale by others until we have timely filed all periodic reports under the Securities and Exchange Act of 1934 for a period of twelve calendar months and any portion of a month from the due date of the last untimely report. We may use Form S-1 to raise capital or complete acquisitions, but doing so could increase transaction costs and adversely impact our ability to raise capital or complete acquisitions of other companies in a timely manner. We do not have any arrangements or relationships with entities that are not consolidated into our financial statements that are reasonably likely to materially affect our liquidity or the availability of our capital resources.

On May 7, 2008, we received a notice of acceleration from the trustee under the indenture governing our $120.0 million principal amount of 3.25% Senior Contingent Convertible Subordinated Notes due 2025. The notice states that our failure to file our Quarterly Report on Form 10-Q for the quarter ended December 30, 2007 violates certain provisions of the indenture. The acceleration letter declares that the principal amount outstanding under the Notes, together with any accrued and unpaid interest, and fees and expenses, are immediately due and payable. This notice of acceleration relates to the trustee’s and certain bondholders’ previous notice received by the Company on or about March 3, 2008 stating that our failure to file our Quarterly Report on Form 10-Q for the quarter ended December 30, 2007 with the SEC violates provisions of the indenture. We believe we are not in default under the indenture. We also believe that no event of default entitling holders to accelerate has occurred with respect to the notes. We believe the indenture requires us to provide to the trustee, copies of the reports we are required to file with the SEC, such as our quarterly and annual reports, within 15 days of filing such reports with the SEC rather than the date such reports are due to be filed with the SEC.

Wells Fargo Line of Credit

On May 1, 2004, we entered into a credit agreement with Wells Fargo Bank, National Association to obtain a revolving line of credit up to $5.0 million to be used as working capital. On June 1, 2005 this agreement was amended to allow us to increase the line of credit up to $10.0 million. On November 1, 2006 the agreement was amended to lower the line of credit to $3.0 million. The line of credit contains certain financial covenants and restrictions. At the end of the first quarter of fiscal 2008, we were not in compliance with one of the covenants under the agreement, which requires us to reflect a net profit on a quarterly basis. Subsequently, the bank issued a waiver to us on October 29, 2007 concerning this covenant for the first quarter. No borrowings on this facility were outstanding as of September 30, 2007. On November 1, 2007 the line of credit expired and was not renewed since we determined it was no longer needed due to our current liquidity position.

Contingencies

See Item 1 of Part I, Financial Statements — Note 12 — Contingencies.

Recently Issued Accounting Pronouncements

items measured using the fair value option. SFAS No. 159 will be effective for our fiscal year beginning June 30, 2008. We are currently assessing the potential impact that the adoption of SFAS No. 159 will have on our consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Exposure

As of September 30, 2007, we had short-term investments of $120.6 million. Currently our short-term investment portfolio consists of corporate and government debt securities. Our exposure to market risk due to fluctuations in interest rates relates primarily to our corporate debt securities, which are subject to interest rate risk in as much as their fair value will fall if market interest rates increase. If market interest rates were to increase or decrease immediately and uniformly by 10% from the levels prevailing at September 30, 2007, the fair value of the portfolio would not change by a material amount. We do not use derivative financial instruments to mitigate the risks inherent in these securities. However, we do attempt to reduce these risks by typically limiting the maturity date of such securities to no more than nine months, placing our investments with high credit quality issuers and limiting the amount of credit exposure with any one issuer. In addition, we have the ability and currently intend to hold these investments to recovery, which may be maturity, and therefore we believe that reductions in the value of these securities attributable to short-term fluctuations in interest rates would not materially harm our business.

On June 8, 2005, we issued convertible subordinated notes with a fixed rate of interest of 3.25%, which would have no interest rate risk impact to our business.

Foreign Currency Exchange Rate Exposure

Our exposure to market risk due to fluctuations in currency exchange rates relates primarily to the intercompany balances with our subsidiaries in the United Kingdom and Germany. Although we transact business with various countries, settlement amounts are usually based on U.S. currency. Transaction gains or losses have not been significant in the past and we do not presently engage in hedging activity. Based on our foreign currency denominated assets at September 30, 2007, a hypothetical 10% adverse change in British Pounds and Euro against U.S. dollars would not result in a material foreign exchange loss. Consequently, we do not expect that reductions in the value of such assets or other accounts denominated in foreign currencies resulting from even a sudden and significant fluctuation in foreign exchange rates would have a direct material impact on our business.

Notwithstanding the foregoing analysis of the direct effects of interest rate and currency exchange rate fluctuations on the value of certain of our investments and accounts, the indirect effects of such fluctuations could have a materially harmful effect on our business. For example, international demand for our products is affected by foreign currency exchange rates. In addition, interest rate fluctuations may affect the buying patterns of our customers. Furthermore, interest rate and currency exchange rate fluctuations have broad influence on the general condition of the U.S., foreign and global economies, which could materially harm our business.

Item 4. Controls and Procedures

As disclosed in the Explanatory Note of this Amended Report and in Note 15 to our condensed consolidated financial statements included in this Amended Report, the Audit Committee of our Board of Directors, following a review initiated by the Audit Committee with the assistance of independent legal counsel and a forensic accounting firm, concluded that, due to errors in accounting for accrued liabilities related to inventory receipts, the Company’s financial statements for the first quarter of fiscal 2008 ended September 30, 2007should no longer be relied upon. This was due to a design deficiency in the reconciliation and review process. To correct this material weakness in the

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Item 1 of Part I, Financial Statements—Note 12—Contingencies.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K/A for our fiscal year ended July 1, 2007. The risks discussed in our Annual Report on Form 10-K/A could materially affect our business, financial condition and future results. The risks described in our Annual Report on Form 10-K/A are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

a) Not applicable.

b) Not applicable.

c) The following table provides monthly detail regarding our share repurchases and forfeitures during the three months ended September 30 , 2007:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Number of Shares That May Yet Be Purchased Under the Plans or Programs
July 2, 2007 through July 29, 2007	—	$	—	—	885,830
July 30, 2007 through August 26, 2007	240,000	$	5.13	240,000	2,645,830
August 27, 2007 through September 30, 2007	700,656	$	5.03	700,656	1,945,174
Total	940,656	$	5.06	940,656

As of September 30, 2007, the total number of shares available for repurchase under the repurchase program authorized by the Board of Directors was approximately 1.9 million.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 5. Other Information

Not applicable.

Exhibit Number		Description of Exhibits

10.1		Form of Amended and Restated Executive Severance Benefits Agreement between the Registrant and each of William Slater, Nancy J. Shemwell, Dale A. Pelletier, Bruce K. Bromage, William H. Minor, Jr. and David Cox (incorporated by reference from Exhibit 10.1 to the Registrant’s current report on Form 8-K filed October 15, 2007).

31		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

		SYMMETRICOM, INC.
		(Registrant)

DATE: June 17, 2008	By:	/s/ THOMAS W. STEIPP
		Thomas W. Steipp
		Chief Executive Officer (Principal Executive Officer) and Director

DATE: June 17, 2008	By:	/s/ WILLIAM SLATER
		William Slater
		Executive Vice President Finance and Administration, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)

				Page
	Explanatory Note			3

PART I.	FINANCIAL INFORMATION

		Item 1.	Financial Statements (Unaudited):

			Condensed Consolidated Balance Sheets—September 30, 2007 (As Restated) and July 1, 2007	4

			Condensed Consolidated Statements of Operations—Three months ended September 30, 2007 and October 1, 2006, (As restated)	5

			Condensed Consolidated Statements of Cash Flows—Three months ended September 30, 2007 and October 1, 2006, (As restated)	6

			Notes to Condensed Consolidated Financial Statements	7

		Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

		Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

		Item 4.	Controls and Procedures	23

PART II.	OTHER INFORMATION

		Item 1.	Legal Proceedings	25

		Item 1A.	Risk Factors	25

		Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25

		Item 3.	Defaults Upon Senior Securities	25

		Item 4.	Submission of Matters to a Vote of Security Holders	25

		Item 5.	Other Information	25

		Item 6.	Exhibits	26

		SIGNATURES		27