Netopia Reports Second Fiscal Quarter Results

Net income on a GAAP basis for the second fiscal quarter was $0.6million or $0.02 per basic and diluted share, compared to a net lossof ($1.8) million or ($0.07) per share for the same period in theprior fiscal year.

Non-GAAP income for the second fiscal quarter (which for thecurrent period excludes SFAS 123(R) stock compensation expense andamortization of acquisition-related intangible assets) was $2.2million or $0.09 per basic and diluted share, compared to a non-GAAPloss of ($1.4) million or ($0.06) per share for the same period in theprior fiscal year (which for such period excluded amortization ofacquisition-related intangible assets).

"We are pleased with the financial results we achieved in thesecond fiscal quarter," said Alan Lefkof, Netopia's president and CEO."We believe that these results reflect the major investments that wehave made in hardware as well as software research and development. Wewill continue to provide solutions for carrier service assurance, withparticular focus on carriers deploying new IPTV, VoIP and otheradvanced broadband services."

Note:

Netopia will host a conference call to discuss its results for thesecond fiscal quarter ended March 31, 2006. The conference call willtake place on Wednesday, April 26, 2006 at 5:00 p.m. Eastern time(2:00 p.m. Pacific time). The conference call will be broadcast liveon the Internet and can be accessed by visiting Netopia's Web site atwww.netopia.com. To join the telephone conference, dial (913) 312-1277and enter the pass code 5403775.

An archived recording of the conference call will be available onNetopia's Web site for one year, and by telephone from April 26 - May2, 2006. To listen to the archived recording, dial (719) 457-0820 andenter the pass code 5403775, or go to Netopia's Web site.

About Netopia

Netopia, Inc. is a market leader in high-performance broadbandcustomer-premises networking equipment and carrier-class software forthe remote management of broadband services and equipment. Netopia'sgateways feature advanced technology for triple play and IPTV servicesand remote manageability to ensure service delivery. Netopia alsooffers remote device management and broadband-enabled services andsoftware for carriers, service providers, and enterprises, enablingsupport and value-added services across the home or business network.Netopia has established strategic distribution relationships withleading carriers and broadband service providers, including AT&T(formerly SBC Communications), BellSouth, Covad Communications,eircom, Swisscom, and Verizon.

Headquartered in Emeryville, California, Netopia's common stock islisted for quotation on the OTC Bulletin Board (OTCBB) System underthe symbol "NTPA." Further information about Netopia can be obtainedvia phone at (510) 420-7400, fax at (510) 420-7601, or on the Web atwww.netopia.com.

Note regarding unaudited Non-GAAP Condensed ConsolidatedStatements of Operations:

To supplement our unaudited GAAP Condensed Consolidated Statementsof Operations, Netopia uses non-GAAP measures of net income (loss) andincome (loss) per share, which are adjusted from results based on GAAPto exclude non-cash recurring expenses for stock compensation andamortization of acquisition-related intangible assets. These non-GAAPadjustments are provided to enhance the user's overall understandingof our current financial performance and our prospects for the future.These adjustments to GAAP results are made with the intent ofproviding greater transparency to information used by management inits financial and operational decision-making. These non-GAAP resultsare among the primary indicators that management uses as a basis formaking operating decisions because they provide meaningful informationregarding our core operating performance, including our ability toprovide cash flows to invest in research and development and to fundcapital expenditures. The unaudited Non-GAAP Condensed ConsolidatedStatements of Operations should not be considered in isolation or as asubstitute for financial information presented in accordance withgenerally accepted accounting principles, and may be different fromnon-GAAP measures used by other companies. The unaudited Non-GAAPCondensed Consolidated Statements of Operations includes aquantitative reconciliation of the differences between such statementsand the financial information presented in accordance with generallyaccepted accounting principles.

Safe Harbor Statement under the Private Securities LitigationReform Act of 1995:

Portions of this release that are not statements of historicalfact may include forward-looking statements. Statements regardingNetopia, Inc.'s beliefs, plans, expectations or intentions regardingthe future are forward-looking statements, within the meaning ofSection 27A of the Securities Act of 1933, as amended, and Section 21Eof the Securities Exchange Act of 1934, as amended. All suchforward-looking statements are made pursuant to the safe harborprovisions of the Private Securities Litigation Reform Act of 1995.These forward-looking statements include statements concerning productdevelopment, anticipated new products and customers, growthopportunities, and future operating results. Netopia's actual resultscould differ materially. Factors that might cause a differenceinclude, but are not limited to: Netopia's continued ability to formkey relationships for our broadband gateways and service deliverysoftware; Netopia's ability to enter into new distributionpartnerships; Netopia's ability to develop new broadband gateways andservice delivery software in a timely manner; market acceptance ofNetopia's broadband gateways and service delivery software; Netopia'sability to list its common stock on a Nasdaq Stock Market; Netopia'sability to resolve pending private securities litigation arising outof the restatement of Netopia's consolidated financial statements in atimely and economic manner; the pace of development and marketacceptance of Netopia's products and the market for broadband productsand services generally; the highly competitive nature of Netopia'smarkets and competitive pricing pressures; the uncertaintiesassociated with international operations; intense competition fromthird parties offering competitive broadband products and services;and economic conditions generally. In addition, prior period-to-periodcomparisons of revenues are not necessarily indicative ofperiod-to-period comparative revenues in future periods. Prospectiveand current investors are cautioned not to place undue reliance on anyforward-looking statements. Further, Netopia expressly disclaims anyobligation to revise or update any of the forward-looking statementscontained herein to reflect future events or developments after thedate hereof. Netopia does not undertake to update any oral or writtenforward looking-statement that may be made by or on behalf of Netopia.For more information concerning Netopia and risk factors that mayaffect Netopia's future results and may cause actual results to varyfrom results anticipated in forward-looking statements, including riskfactors relating to securities litigation arising out of therestatements described in Netopia's Annual Report on Form 10-K for thefiscal year ended September 30, 2004, investors should reviewNetopia's public filings with the United States Securities andExchange Commission, which are available by calling Netopia at (510)420-7516 or online at www.sec.gov.

All company names, brand names and product names are trademarks oftheir respective holder(s).

NETOPIA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)

Three Months Six Months
Ended March 31, Ended March 31,
---------------- -----------------
2006 2005 2006 2005
REVENUES:
Broadband equipment $22,715 $ 22,247 $ 43,758 $ 48,444
Broadband software and services 5,161 2,976 8,017 6,097
------- -------- -------- --------
Total revenues 27,876 25,223 51,775 54,541
------- -------- -------- --------

COST OF REVENUES:
Broadband equipment 15,386 16,307 29,865 36,252
Broadband software and services 581 384 1,141 650
Amortization of acquired
technology 300 300 600 600
------- -------- -------- --------
Total cost of revenues 16,267 16,991 31,606 37,502
------- -------- -------- --------

GROSS PROFIT 11,609 8,232 20,169 17,039

OPERATING EXPENSES:
Research and development 4,182 3,403 8,111 6,609
Sales and marketing 4,899 4,582 9,751 9,667
General and administrative 2,118 2,029 4,538 4,224
Amortization of acquired
intangible asset - 87 - 173
Restructuring costs - 98 - 98
------- -------- -------- --------
Total operating expenses 11,199 10,199 22,400 20,771
------- -------- -------- --------

OPERATING INCOME (LOSS) 410 (1,967) (2,231) (3,732)

Other income, net 195 155 358 303
------- -------- -------- --------

INCOME (LOSS) BEFORE INCOME TAXES 605 (1,812) (1,873) (3,429)

Provision for income taxes 11 20 24 44
------- -------- -------- --------

NET INCOME (LOSS) $ 594 $ (1,832)$ (1,897)$ (3,473)
------- -------- -------- --------


Net income (loss) per common share:
Basic $ 0.02 $ (0.07)$ (0.07)$ (0.14)
------- -------- -------- --------

Diluted $ 0.02 $ (0.07)$ (0.07)$ (0.14)
------- -------- -------- --------

Shares used in per-share
calculation:
Basic 25,643 25,038 25,545 24,892
------- -------- -------- --------

Diluted 25,944 25,038 25,545 24,892
------- -------- -------- --------


NETOPIA, INC.
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)


Three Months Ended Three Months Ended
March 31, 2006 March 31, 2005
--------------------------- ---------------------------
Non- Non-
GAAP GAAP
GAAP Adjust- Non- GAAP Adjust- Non-
Reported ments GAAP Reported ments GAAP
--------------------------- ----------------------------

REVENUES:
Broadband
equipment $22,715 $ - $22,706 $ 22,247 $ - $22,247
Broadband
software
and
services 5,161 - 5,170 2,976 - 2,976
-------- ------- ------- -------- ------- -------
Total
revenues 27,876 - 27,876 25,223 - 25,223
-------- ------- ------- -------- ------- -------

COST OF
REVENUES:
Broadband
equipment 15,386 (43)(a) 15,343 16,307 - 16,307
Broadband
software
and
services 581 - 581 384 - 384
Amortization
of acquired
technology 300 (300)(b) - 300 (300)(b) -
-------- ------- ------- -------- ------- -------
Total
cost of
revenues 16,267 (343) 15,924 16,991 (300) 16,691
-------- ------- ------- -------- ------- -------

GROSS PROFIT 11,609 343 11,952 8,232 300 8,532

OPERATING
EXPENSES:
Research and
development 4,182 (412)(a) 3,770 3,403 - 3,403
Sales and
marketing 4,899 (255)(a) 4,644 4,582 - 4,582
General and
adminis-
trative 2,118 (623)(a) 1,495 2,029 - 2,029
Amortization
of acquired
intangible
asset - - - 87 (87)(b) -
Restructuring
costs - - - 98 98
-------- ------- ------- -------- ------- -------
Total
operating
expenses 11,199 (1,290) 9,909 10,199 (87) 10,112
-------- ------- ------- -------- ------- -------

OPERATING
INCOME (LOSS) 410 1,633 2,043 (1,967) 387 (1,580)

Other
income, net 195 - 195 155 - 155
-------- ------- ------- -------- ------- -------

INCOME (LOSS)
BEFORE TAXES 605 1,633 2,238 (1,812) 387 (1,425)

Provision
for income
taxes 11 - 11 20 - 20
-------- ------- ------- -------- ------- -------

NET
INCOME
(LOSS) $ 594 $ 1,633 $ 2,227 $ (1,832)$ 387 $(1,445)
-------- ------- ------- -------- ------- -------

Net income
(loss) per
common share:
Basic $ 0.02 $ 0.09 $ (0.07) $ (0.06)
-------- ------- -------- -------

Diluted $ 0.02 $ 0.09 $ (0.07) $ (0.06)
-------- ------- -------- -------

Shares used in
per-share
calculation:
Basic 25,643 25,643 25,038 25,038
-------- ------- -------- -------

Diluted 25,944 25,944 25,038 25,038
-------- ------- -------- -------


Non-GAAP adjustments consist of:
(a) Non-cash stock compensation expense pursuant to SFAS 123(R);
(b) Amortization of acquisition related intangible assets

Note regarding unaudited Non-GAAP Condensed Consolidated Statements of
Operations:
To supplement our unaudited GAAP Condensed Consolidated Statements of
Operations, Netopia uses non-GAAP measures of net income (loss) and
income (loss) per share, which are adjusted from results based on GAAP
to exclude non-cash recurring expenses for stock compensation and
amortization of acquisition-related intangible assets. These non-GAAP
adjustments are provided to enhance the user's overall understanding
of our current financial performance and our prospects for the future.
These adjustments to GAAP results are made with the intent of
providing greater transparency to information used by management in
its financial and operational decision-making. These non-GAAP results
are among the primary indicators that management uses as a basis for
making operating decisions because they provide meaningful information
regarding our core operating performance, including our ability to
provide cash flows to invest in research and development and to fund
capital expenditures. The unaudited Non-GAAP Condensed Consolidated
Statements of Operations should not be considered in isolation or as a
substitute for financial information presented in accordance with
generally accepted accounting principles, and may be different from
non-GAAP measures used by other companies. The unaudited Non-GAAP
Condensed Consolidated Statements of Operations includes a
quantitative reconciliation of the differences between such statements
and the financial information presented in accordance with generally
accepted accounting principles.

NETOPIA, INC.
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)

Six Months Ended Six Months Ended
March 31, 2006 March 31, 2005
---------------------------- ---------------------------
Non- Non-
GAAP GAAP
GAAP Adjust- Non- GAAP Adjust- Non-
Reported ments GAAP Reported ments GAAP
---------------------------- ---------------------------

REVENUES:
Broadband
equipment $ 43,758 $ - $43,758 $ 48,444 $ - $48,444
Broadband
software
and
services 8,017 - 8,017 6,097 - 6,097
-------- ------- ------- -------- ------- -------
Total
revenues 51,775 - 51,775 54,541 - 54,541
-------- ------- ------- -------- ------- -------

COST OF
REVENUES:
Broadband
equipment 29,865 (72)(a) 29,793 36,252 - 36,252
Broadband
software
and
services 1,141 - 1,141 650 - 650
Amortization
of acquired
technology 600 (600)(b) - 600 (600)(b) -
-------- ------- ------- -------- ------- -------
Total
cost of
revenues 31,606 (672) 30,934 37,502 (600) 36,902
-------- ------- ------- -------- ------- -------

GROSS PROFIT 20,169 672 20,841 17,039 600 17,639

OPERATING
EXPENSES:
Research and
development 8,111 (960)(a) 7,151 6,609 - 6,609
Sales and
marketing 9,752 (481)(a) 9,271 9,667 - 9,667
General and
adminis-
trative 4,537 (1,034)(a) 3,503 4,224 - 4,224
Amortization
of acquired
intangible
asset - - - 173 (173)(b) -
Restructuring
costs - - - 98 - 98
-------- ------- ------- -------- ------- -------
Total
operating
expenses 22,400 (2,475) 19,925 20,771 (173) 20,598
-------- ------- ------- -------- ------- -------

OPERATING
INCOME (LOSS) (2,231) 3,147 916 (3,732) 773 (2,959)

Other
income, net 358 - 358 303 - 303
-------- ------- ------- -------- ------- -------

INCOME (LOSS)
BEFORE TAXES (1,873) 3,147 1,274 (3,429) 773 (2,656)

Provision
for income
taxes 24 - 24 44 - 44
-------- ------- ------- -------- ------- -------

NET
INCOME
(LOSS) $ (1,897)$ 3,147 $ 1,250 $ (3,473)$ 773 $(2,700)
-------- ------- ------- -------- ------- -------

Net income
(loss) per
common share:
Basic $ (0.07) $ 0.05 $ (0.14) $ (0.11)
-------- ------- -------- -------

Diluted $ (0.07) $ 0.05 $ (0.14) $ (0.11)
-------- ------- -------- -------

Shares used in
per-share
calculation:
Basic 25,545 25,545 24,892 24,892
-------- ------- -------- -------

Diluted 25,802 25,802 24,892 24,892
-------- ------- -------- -------


Non-GAAP adjustments consist of:
(a) Non-cash stock compensation expense pursuant to SFAS 123(R);
(b) Amortization of acquisition related intangible assets

Note regarding unaudited Non-GAAP Condensed Consolidated Statements of
Operations:
To supplement our unaudited GAAP Condensed Consolidated Statements of
Operations, Netopia uses non-GAAP measures of net income (loss) and
income (loss) per share, which are adjusted from results based on GAAP
to exclude non-cash recurring expenses for stock compensation and
amortization of acquisition-related intangible assets. These non-GAAP
adjustments are provided to enhance the user's overall understanding
of our current financial performance and our prospects for the future.
These adjustments to GAAP results are made with the intent of
providing greater transparency to information used by management in
its financial and operational decision-making. These non-GAAP results
are among the primary indicators that management uses as a basis for
making operating decisions because they provide meaningful information
regarding our core operating performance, including our ability to
provide cash flows to invest in research and development and to fund
capital expenditures. The unaudited Non-GAAP Condensed Consolidated
Statements of Operations should not be considered in isolation or as a
substitute for financial information presented in accordance with
generally accepted accounting principles, and may be different from
non-GAAP measures used by other companies. The unaudited Non-GAAP
Condensed Consolidated Statements of Operations includes a
quantitative reconciliation of the differences between such statements
and the financial information presented in accordance with generally
accepted accounting principles.


NETOPIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)


March September
31, 30,
2006 2005(a)
----------- ---------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $22,407 $22,234
Trade receivables, net 18,786 16,208
Inventories 6,395 8,718
Prepaid expenses and other current assets 2,250 1,102
----------- ---------
Total current assets 49,838 48,262
----------- ---------

Property and equipment, net 2,503 2,623
Intangible assets, net 3,377 4,037
Equity investment 1,032 1,032
Deposits and other assets 372 481
----------- ---------
TOTAL ASSETS $57,122 $56,435
=========== =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $10,847 $12,525
Deferred revenue 3,998 2,946
Other current liabilities 4,580 4,737
----------- ---------
Total current liabilities 19,425 20,208
----------- ---------

Long-term liabilities:
Deferred revenue, long-term 179 109
Other long-term liabilities 192 246
----------- ---------
TOTAL LIABILITIES 19,796 20,563
----------- ---------

Stockholders' equity 37,326 35,872
----------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $57,122 $56,435
=========== =========

(a) Derived from the audited consolidated balance sheets dated
September 30, 2005 included in Netopia, Inc.'s Annual Report on
Form 10-K for the fiscal year ended September 30, 2005.