TeleCommunication Systems Reports Record Second Quarter 2007 Revenue

TeleCommunication Systems, Inc. (TCS) (NASDAQ: TSYS), a global leader in mission-critical wireless communications technology, reported results for the second quarter ended June 30, 2007.

--  Revenue was a record $35.3 million, a 4% increase from $34.1 million
    in the previous quarter and up 11% from $31.9 million in the second quarter
    of 2006.

--  GAAP loss from continuing operations was $6.0 million or $(0.15) per
    share, compared to income of $0.8 million or $0.02 per share in both the
    previous quarter and last year's second quarter. The second quarter of 2007
    included a $2.4 million nonrecurring non-cash charge associated with
    refinancing $10 million of debt with lower cost funds that is projected to
    produce approximately $1 million in cash savings over the next seven
    quarters.  Also included in the second quarter was about $1 million of
    unusual patent attorney costs.

--  GAAP net loss was $6.1 million or $(0.15) per basic and diluted share,
    versus income of $0.6 million or $0.02 per share in the previous quarter,
    and a net loss of $1.6 million or $(0.04) per share in last year's second
    quarter.  The loss for the quarter includes $5.9 million of noncash
    charges.

--  EBITDA (Earnings Before Interest Taxes Depreciation and Amortization)
    from continuing operations was $0.3 million or $0.01 per basic and diluted
    share, down from $4.7 million or $0.11 per share in the previous quarter
    and $4.7 million or $0.12 per share a year ago. (See important discussion
    about the presentation of EBITDA, below.)

--  Funded contract backlog increased to a record $123 million, up from
    $69 million at the end of the first quarter, of which the company expects
    to recognize $71 million in the next twelve months.
    

"The quarter's top line growth was fueled by a doubling of our government system sales," said Maurice B. Tosé, TCS chairman, president and CEO. "As previously reported during our Q1 earnings call, the absence of a large commercial license sale during the quarter has resulted in lower gross profit, breaking the five quarter trend of GAAP profitable results from continuing operations. However, the visibility into new messaging license revenue is improving, and we expect strong profit contributions from license sales in the second half of 2007 and throughout 2008. There are also several large contract award proposals pending under the $5 billion Worldwide Satellite Systems vehicle and other government procurement programs."

Continued Tosé, "Other highlights for the quarter included winning a $12 million patent infringement case against Sybase 365; completing the divestiture of our third and last Enterprise Division; the refinancing of $10 million of our term debt with lower cost funds; and obtaining a number of contract wins. I believe that these events strengthen the company's business platform and set the stage for future growth and profitability."

Second Quarter 2007 Commercial Segment Highlights

--  Wireless location platform and applications:

    o    TCS received a 5-Year contract extension for Hosted E9-1-1 services
    from Verizon Wireless. TCS maintains the world's only TL 9000 certified
    facility providing wireless or VoIP E9-1-1 location services.

    o    TCS and Qualcomm entered into an agreement enabling Qualcomm's BREW®
    Locate Signature Solution customers to deploy and manage revenue-
    generating, location-based services. QUALCOMM, a leading developer and
    innovator of advanced wireless technologies and mobile data solutions, can
    now offer WCDMA (UMTS) operators a location service solution based on TCS'
    hosted Xypoint® Secure User Plane for Location (SUPL) Server.

    o    Communications Solutions ( www.tmcnet.com/comsol ) named TCS's
    LivewirE911(TM) and LivewireLBS(TM) solutions recipients of its 2006
    Product of the Year Awards, recognizing TCS's innovation, leadership, and
    attention to detail.

--  Patents:

    o    The United States District Court for the Eastern District of Virginia
    found for TCS in its patent  claims against Sybase 365 (formerly Mobile 365
    and now a subsidiary of Sybase, Inc.). The jury found Sybase 365 infringed
    on TCS patent claims and awarded TCS a one-time monetary payment of $12.1
    million for past damages, which represents a 12% royalty. The jury also
    found Sybase 365's infringement to have been willful, and upheld the
    validity of the patent. The jury's findings are subject to post-trial
    motions and appeal. No revenue has been recorded pending the outcome of
    appeals and possible settlement discussions. The patent describes
    technology that enables wireless subscribers to send messages to
    subscribers in other wireless carrier networks by simply entering the
    recipient's phone number.

    o    TCS added two new patents to its portfolio during the quarter. One of
    the new patents covers technology which enables a location fix for a mobile
    device to be generated using the best possible location technology
    available within a defined time period. The second patent is for a gateway
    that bridges the gap between a carrier's internal network elements and
    external Internet destinations, and discloses enabling technology for a
    variety of Internet applications, including a gateway that allows e-mail
    and instant messages to be delivered between wireless devices and the
    Internet. The company is continuing its efforts to monetize its patents as
    well as use them to position the company for competitive advantages.