8-K

UNITED STATES

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):  January 26, 2005

TUT SYSTEMS, INC.

(Exact name of Registrant as specified in its charter)

Delaware	000-25291	94-2958543
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)
6000 SW Meadows Drive, Suite 200 Lake Oswego, Oregon 97035
(Address of principal executive offices) (Zip Code)
(971) 217-0400
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (18 CFR 230.425)

o Solicitation material pursuant to Rule 14a-12 under the Exchange Act (18 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (18 CFR 240.13e-4(c))

Item 2.02.  Results of Operations and Financial Condition

On January 25, 2005, Tut Systems, Inc. issued a press release announcing its earnings for the fourth quarter and year ended December 31, 2004. The press release, attached hereto as Exhibit 99.1, is being furnished on this Form 8-K.

SIGNATURES

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

January 26, 2005	By:	/s/    Randall K. Gausman
		Randall K. Gausman,
		Vice-President, Finance and Administration, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer and Duly Authorized Officer)

2

Index to Exhibits

Exhibit	Description
99.1	Press release of Tut Systems, Inc. issued on January 25, 2005.

3

EX-99.1

EXHIBIT 99.1

Press Release

TUT SYSTEMS, INC. REPORTS FOURTH QUARTER AND YEAR END 2004 RESULTS

Lake Oswego, Oregon, January 25, 2005 — Tut Systems, Inc. (Nasdaq: TUTS), today announced its fourth quarter and year-end results for 2004. Revenue for the quarter ended December 31, 2004 was $7.0 million compared with revenue of $9.2 million for the quarter ended December 31, 2003.  This represents a decrease in revenue of 24% when compared with the fourth quarter of 2003 and a 5% increase when compared with third quarter 2004 revenue of $6.7 million.  Revenue for the year ended December 31, 2004 was $25.0 million compared with revenue of $32.2 million for the year ended December 31, 2003.  This represents a year-over-year decrease in revenue of 22%.

Revenue relating to the broadband transport and service management products was $2.1 million and $1.1 million for the quarters ended December 31, 2003 and 2004, respectively and $8.3 million and $6.9 million for the years ended December 31, 2003 and 2004 respectively.  Revenue related to video processing systems was $7.1 million and $5.9 million for the quarters ended December 31, 2003 and 2004, respectively and $23.9 million and $18.1 million for the years ended December 31, 2003 and 2004 respectively.  International sales represented 19.4% and 28.2% of total sales for the quarters ended December 31, 2003 and 2004, respectively.  For the years ended December 31, 2003 and 2004, international sales represented 18.4% and 23.3% of total sales.

Net loss for the three months ended December 31, 2004 was $(2.6) million or $(0.11) per basic and diluted share.  This compares with the net loss for the three months ended December 31, 2003 of $(0.5) million or $(0.03) per basic and diluted share.  Net loss for the year ended December 31, 2004 was $(13.5) million or $(0.63) per basic and diluted share compared with a net loss of $(5.5) million or $(0.28) per basic and diluted share for the year ended December 31, 2003.

“As we enter 2005, we are very excited about the level of customer activity in which we are engaged in the Telco TV market in North America and the rest of the world,” said Sal D’Auria, Chairman, President and CEO of Tut Systems, Inc.  “Over the course of the next several quarters we anticipate that many of the tier one and other large carriers will begin deploying IPTV.  We believe that our industry leadership position and leading edge technology, uniquely positions us to benefit from these opportunities.”

Fourth Quarter Conference Call Information

Tut Systems will host a conference call to discuss fourth quarter results on January 26, 2005 beginning at 5:30 am Pacific time. For callers within the United States, please dial 877-356-8058, at least 5 minutes before start time or visit http://www.tutsystems.com.  International participants may dial 706-634-2465 or visit http://www.tutsystems.com.  Enter conference identification number 3554053.

For callers within the United States accessing the conference call replay, please dial 800-642-1687 or 706-645-9291, conference ID # 3554053.  The replay will be available two hours after the call ends for one week, and will be available at http://www.tutsystems.com.

Recent Announcements:

Significant announcements from Tut Systems since the third quarter earnings release include:

10/25/04	Broadband Municipal Consortium Welcomes Tut Systems, Inc.
11/8/04	Tut Systems Achieves Telco TV Industry Milestone With 100th Operator Delivering Digital TV
11/11/04	Consolidated Communications Announces ‘Telco TV’ Service Using Tut Systems Astria(R) Digital Headend Solution
11/16/04	Tut Systems to Demonstrate Integrated IPTV Content Security System With Widevine(R) Technologies and Thomson at Telco TV 2004
11/18/04	Alcatel and Tut Systems Announce Their 10th Joint IPTV Customer in the US IOC Market
1/7/05	Tut Systems, Inc. to Acquire Cosine Communications and Provides Preliminary 2004 Revenue Results

Forward Looking Statements

Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Specifically, without limitation, statements relating to (1) our anticipation that many tier one and other large carriers will begin deploying IPTV over the next several quarters and (2) our leading edge technology and industry leadership position uniquely positions us to benefit from IPTV deployments.  Forward looking statements are based on management’s current expectations and beliefs, and are subject to risks and uncertainties.  As a result, actual results may differ materially from the forward-looking statements contained herein.

Risks that relate to these forward looking statements include the risks inherent in new and developing technologies and markets, the risk that competitors will introduce rival technologies and products, and the risk that the expected financial benefits of the IPTV deployment will not be achieved as a result of unforeseen costs or events.  Further detailed information about risk factors that may impact our business is set forth in our periodic filings with the Securities and Exchange Commission.  We expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

About Tut Systems, Inc.

Tut Systems, Inc. (NASDAQ: TUTS) delivers content processing and distribution products for deploying next-generation data and video services over broadband networks. Service providers, content providers and government agencies in the United States and internationally use Tut Systems solutions to deliver broadcast-quality video over broadband networks.

Tut Systems is headquartered in Lake Oswego, OR with regional offices across North America, Europe and Asia.  For more information visit www.tutsys.com or call 971-217-0400.

- FINANCIAL TABLES FOLLOW -

Contact:

Randy Gausman	Jeff Schline
Chief Financial  Officer	Manager, Corporate Communications
Tut Systems	Tut Systems
(971) 217-0400	(971) 217-0364
RandallG@TutSys.com	jschline@TutSys.com

TUT SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

	Three months ended December 31,								Year ended December 31,
	2003				2004				2003			2004
Revenue:
Product	$	9,090			$		7,010		$	31,474		$	24,942
License and royalty	114				10				718			50
Total revenue	9,204				7,020				32,192			24,992
Cost of goods sold	4,621				4,302				15,646			16,980
Gross profit	4,583				2,718				16,546			8,012
Operating expenses:
Sales and marketing	1,777				2,258				7,479			8,096
Research and development	1,688				1,752				7,909			7,278
General and administrative	1,151				1,076				4,476			4,336
Restructuring costs	¾				¾				292			¾
Impairment of intangible assets	¾				¾				128			202
Amortization of intangible assets	449				376				1,809			1,524
Total operating expenses	5,065				5,462				22,093			21,436
Loss from operations	(482			)	(2,744			)	(5,547		)	(13,424		)
Gain on sale of investments	¾				125				¾			125
Interest and other (expense) income, net	(37			)	(11			)	30			(161		)
Net loss	$	(519		)	$	(2,630		)	$	(5,517	)	$	(13,460	)
Net loss per share, basic and diluted	$		(0.03	)	$	(0.11		)	$	(0.28	)	$	(0.63	)
Shares used in computing net loss, basic and diluted	20,202				24,499				19,996			21,392

TUT SYSTEMS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands)
(unaudited)

	December 31, 2003		December 31, 2004
ASSETS
Current assets:
Cash and cash equivalents	$	14,370	$	12,440
Accounts receivable, net	7,062		6,585
Inventories, net	4,181		3,994
Prepaid expenses and other	1,026		1,137
Insurance receivable	10,725		¾
Total current assets	37,364		24,156
Property and equipment, net	1,722		1,874
Intangibles and other assets	3,685		1,935
Total assets	$	42,771	$	27,965
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	4,571	$	4,545
Deferred revenue	253		226
Legal settlement liability	10,725		¾
Total current liabilities	15,549		4,771
Note payable and other liabilities	3,567		3,816
Total liabilities	19,116		8,587
Stockholders’ equity	23,655		19,378
Total liabilities and stockholders’ equity	$	42,771	$	27,965