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Entropic Communications Reports Third Quarter Results
Conference Call to be Webcast Today at 2:00 p.m. Pacific Time

SAN DIEGO, Oct 26, 2009 (GlobeNewswire via COMTEX News Network) -- Entropic Communications, Inc. (Nasdaq:ENTR), a leading provider of silicon and software solutions to enable connected home entertainment, today reported its third quarter results for the period ended September 30, 2009. Entropic reported third quarter net revenues of $31.0 million, an increase of 19 percent compared with $26.1 million in the second quarter of 2009 and two percent lower than in the third quarter of 2008.

In accordance with U.S. generally accepted accounting principles (GAAP), the company's third quarter net loss was $1.2 million, or ($0.02) per share (basic and diluted). This compares with GAAP net loss of $4.3 million, or ($0.06) per share (basic and diluted) in the second quarter of 2009. Non-GAAP net income in the third quarter was $1.4 million, or $0.02 per share (basic and diluted), compared to non-GAAP net loss of $0.7 million, or ($0.01) per share (basic and diluted) in the second quarter of 2009.

"We were pleased to once again see strong quarter-over-quarter revenue growth and a return to non-GAAP profitability," said Patrick Henry, president and CEO of Entropic Communications. "Our MoCA home networking products are now shipping into new Pay-TV service provider deployments, demand for our satellite products is strong and we are gaining traction with our silicon tuner products. Entropic's customer base is diversifying and we are well positioned to achieve continued revenue and earnings growth. We are very excited about the opportunities in front of us and believe we have a solid product portfolio and roadmap that substantiate a compelling long-term growth strategy."

                                               Three months ended
                                          ----------------------------
                                          Sept 30,  June 30,  Sept 30,
 (In millions, except per share data)       2009      2009      2008

 Net revenues                               $31.0     $26.1     $31.7
 GAAP net loss                              ($1.2)    ($4.3)    ($7.1)
 GAAP net loss per share (basic and
  diluted)                                 ($0.02)   ($0.06)   ($0.11)

 Non-GAAP net income (loss) (1)              $1.4     ($0.7)    ($1.2)
 Non-GAAP net income (loss) per share (1)   $0.02    ($0.01)   ($0.02)

 1.  Please refer to "Non-GAAP Financial Measures" below and the
 financial statements portion of this press release for an explanation
 of the non-GAAP financial measures contained in the table above and a
 reconciliation of such measures to the comparable GAAP financial
 measures.

Recent Highlights

 * Announced a collaborative relationship with Intellon Corporation to
   accelerate the availability of home networking solutions combining
   coaxial cable and powerline communications.  Aligning the
   capabilities of Entropic's MoCA and Intellon's HPAV solutions will
   ensure continued compatibility with tens of millions of devices
   already deployed by service providers and consumers throughout the
   world and offer customers a solid pathway to the highly anticipated
   MoCA 2.0 and HPAV2 standards.

 * Partnered with Intel Digital Home Group to demonstrate the world's
   first UPnP QoS 3.0 over MoCA on a set-top box platform during the
   CableLabs Summer Conference in Denver.  Entropic and Intel's shared
   vision for ubiquitous connected home entertainment networking
   showcased how MSOs can enable and deliver on the future convergence
   of high-bandwidth, personal content applications without
   compromising the delivery of premium service offerings.

 * Demonstrated a MoCA enabled, high-performance, set-top box
   reference design in collaboration with NXP Semiconductors for the
   satellite, cable and IP STB markets at the International
   Broadcasters Convention (IBC) 2009 in Amsterdam.  NXP and Entropic
   are enabling STB OEMs and service providers to bring complete home
   networked STB solutions to market faster, with lower development
   costs and ultra-low power consumption.

 * Combined Entropic's proven MoCA solution with ViXS Systems'
   advanced video processing technology to deliver a cutting-edge,
   high-performance MoCA-enabled network attached storage (NAS)
   reference design that enables premium content capture, storage and
   sharing over a MoCA home network.  The MoCA enabled NAS reference
   design, which was demonstrated at IBC, will serve as a blueprint
   for top-tier consumer electronic and service provider OEMs to
   design a high-performance, feature-rich and cost-effective NAS for
   a high-quality entertainment experience.

 * Announced inclusion of Entropic's RF4400 ATSC Tuner in EchoStar's
   high-definition over-the-air (OTA) module for select HD set-top
   boxes. The RF4400 is an advanced silicon tuner that provides high
   performance in a small form factor that will enhance the customer
   viewing experience for over the air HD reception.

 * Collaborated with Sigma Designs to develop high definition,
   MoCA-compliant Cable TV and IPTV set-top box reference designs,
   powered by Entropic's EN2510 and Sigma Designs' SMP8654. These
   reference designs will bring highly competitive, full-featured STB
   solutions to OEMs and service providers globally.

 * Announced that Inverto's newest family of Black Unicable
   Multiswitches will utilize Entropic's channel stacking switch
   (CSS) silicon technology for the free to air market. Entropic's
   CSS chips are the industry-leading and de facto standard for
   single-cable solutions that fundamentally change and dramatically
   simplify direct broadcast satellite (DBS) delivery to the home.

 * Expanded Entropic's relationship with Cavium Networks and announced
   support for the ECONA family of processors.  Pairing Entropic's 65
   nanometer, third-generation MoCA 1.1 compliant EN2510 single-chip
   solution with Cavium's ECONA dual-core ARM-based processor family
   will enable the development and fast delivery of best-in-class home
   networking solutions ideally suited for fiber-to-the-home and IPTV
   service provider deployments.

 * Announced collaboration with PMC Sierra for the high-speed access
   market.  By combining PMC's high-speed 10G EPON and Entropic's
   broadband access silicon solution, MSOs will have a cost effective
   solution to extend the reach of fiber.

 * Expanded the executive team with the addition of William R.
   Bradford as senior vice president of worldwide sales. Mr. Bradford
   has more than 20 years of direct sales, sales management,
   marketing, business development and general management experience
   in the semiconductor industry. Throughout his career, Mr. Bradford
   has excelled at building sales organizations and developing
   channels, alliances and OEM partnerships on a global basis.

 * Recognized as the fastest growing technology company in San Diego
   and the 5th fastest growing in North America by the Deloitte
   Technology Fast 500, an annual list of the 500 fastest growing
   technology, media, telecommunications, life sciences and clean
   technology companies in the U.S. and Canada, based on percentage
   fiscal year revenue growth over five years.

For More Information

Entropic management will be holding a conference call today, October 26, 2009, at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time to discuss the company's results for the third quarter and to provide guidance for the fourth quarter. You may access the conference call via any of the following:

 Teleconference: 719-325-2384

 Conference ID: 9005064

 Web Broadcast: http://ir.entropic.com/events.cfm

 Replay: 719-457-0820

About Entropic Communications

Entropic Communications, Inc. (Nasdaq:ENTR) is a leading fabless semiconductor company that is engineering the future of connected home networking and entertainment by providing next-generation silicon and software technologies to the world's leading cable, telecommunications and satellite service providers, OEMs and consumer electronic manufacturers. As a co-founder of MoCA (Multimedia over Coax Alliance), Entropic pioneered and continues to evolve the way high-definition television-quality video and other multimedia & digital content such as movies, music, games and photos are brought into and delivered throughout the home. For more information, visit Entropic at www.entropic.com.

The Entropic Communications logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4255

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: net income (loss) and net income (loss) per share. These non-GAAP financial measures exclude the effects on the Statement of Operations of, among others, all forms of stock-based compensation, non-cash acquired intangibles amortization and impairment charges, and restructuring charges (benefits), and their related affects on the number of diluted shares used in calculating non-GAAP earnings (loss) per share.

Management uses these non-GAAP financial measures to manage the company's business, including setting operating budgets and executive compensation plans. These non-GAAP measures are also used to (i) supplement the financial results and forecasts reported to the company's board of directors, (ii) evaluate the company's operating performance, (iii) compare the company's performance to internal forecasts, and (iv) manage the company's business and benchmarking performance internally. The non-GAAP measures have been made available to stockholders consistently in the past to provide transparency on how management manages the company's operating performance. Management believes that these non-GAAP operating measures are useful to investors, when used as a supplement to GAAP measures, in evaluating the company's ongoing operational performance.

The non-GAAP financial measures disclosed by the company should not be considered in isolation or a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Forward-Looking Statements

Statements in this press release that are not strictly historical in nature constitute "forward-looking statements." Such statements include, but are not limited to, statements regarding our expectations for future revenue and earnings growth, our belief that our product portfolio and roadmap substantiates a compelling long-term growth strategy, and the anticipated benefits from various businesses, collaborations and partnerships, and new executive hires that we have announced. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Entropic's actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to, our dependence on a limited number of customers for a substantial portion of our revenues; risks associated with adverse U.S. and international economic conditions; risks that the market for HD video and other multi-media content delivery and networking solutions will not develop as we expect; risks associated with competing against larger and more established companies and our ability to compete successfully in the market for MoCA-compliant chipsets; risks associated with timely development and introduction of new or enhanced products; risks that our collaborations and partnerships, and our new executive hires, will not yield their anticipated benefits; and other factors discussed in the "Risk Factors" section of Entropic's Quarterly Report on Form 10-Q for the quarter ended June 30, 2009. All forward-looking statements are qualified in their entirety by this cautionary statement. Entropic is providing this information as of the date of this release and does not undertake any obligation to update any forward-looking statements contained in this release as a result of new information, future events or otherwise.

Entropic Communications(R) and the stylized Entropic "curve" logo are either trademarks or registered trademarks of Entropic Communications, Inc. in the United States and/or other countries.

                     ENTROPIC COMMUNICATIONS, INC.
         GAAP Condensed Consolidated Statements of Operations
 (In thousands, except for share information and footnote disclosures)

                         Three Months Ended       Nine Months Ended

                   Sept. 30,  June 30, Sept. 30, Sept. 30,  Sept. 30,
                     2009      2009      2008      2009       2008
                   --------  --------  --------  ---------  ---------

                (unaudited)(unaudited)(unaudited)(unaudited)(unaudited)

 Net revenues      $30,958   $26,146   $31,678   $ 81,227   $116,502
 Cost of net
  revenues          15,332    13,201    17,308     40,437     64,014
                   --------  --------  --------  ---------  ---------
 Gross profit       15,626    12,945    14,370     40,790     52,488
 Operating
  expenses:
   Research and
    development     10,824    10,102    13,902     34,249     42,892
   Sales and
    marketing        3,345     3,395     3,991     10,377     12,590
   General and
    administrative   2,642     2,712     2,798      8,043      9,862
   Write off of
    in-process
    research
    and
    development         --        --        --         --      1,300
   Amortization
    of purchased
    intangibles         --        --       713         16      2,022
   Restructuring
    charges (1)         70       979       209      2,173      1,278
   Impairment of
    goodwill and
    intangible
    assets (2)          --        --        --        208         --
                   --------  --------  --------  ---------  ---------
     Total
      operating
      expenses      16,881    17,188    21,613     55,066     69,944
                   --------  --------  --------  ---------  ---------
 Loss from
  operations        (1,255)   (4,243)   (7,243)   (14,276)   (17,456)
 Other income,
  net                   26        30       156        115        149
                   --------  --------  --------  ---------  ---------
 Loss before
  income taxes      (1,229)   (4,213)   (7,087)   (14,161)   (17,307)
                   --------  --------  --------  ---------  ---------
 Income tax
  provision              9        74        37        100        119
                   --------  --------  --------  ---------  ---------
 Net loss
  attributable
  to common
  stockholders     $(1,238)  $(4,287)  $(7,124)  $(14,261)  $(17,426)
                   ========  ========  ========  =========  =========
 Net loss per
  share
  attributable
  to common
  stockholders
  -- basic
  and diluted      $ (0.02)  $ (0.06)  $ (0.11)  $  (0.21)  $  (0.26)
                   ========  ========  ========  =========  =========
 Weighted average
  number of
  shares used
  to compute
  loss per
  attributable
  to common
  stockholders      70,146    69,424    67,669     69,473     67,378
                   ========  ========  ========  =========  =========

 (1) During the three months ended September 30, 2009 and June 30,
 2009, the Company recorded restructuring charges of $70,000 and
 $979,000, respectively, related to a restructuring plan implemented
 in March 2009 to improve its operating cost structure which included
 a reduction-in-force and the closing of its France location and one
 of its Israel locations.  During the nine months ended September 30,
 2009, the total restructuring charges related to the restructuring
 plan were $2,173,000.

 During the three months ended September 30, 2008, the Company
 recorded restructuring charges of $209,000 related to the
 implementation of a restructuring plan to improve its operating cost
 structure which included a reduction-in-force.

 During the six months ended June 30 2008, the Company recorded
 restructuring charges of $1,069,000 related to exiting the lease
 agreement for the Company's former headquarters in San Diego,
 California, as well as related charges for the impairment of
 property and equipment and other long term assets.

 (2) During the three months ended March 31, 2009, the Company
 recorded an impairment charge on intangible assets of $208,000.
 The Company determined that the intangible assets associated with its
 2007 acquisition of Arabella Software, Ltd. were fully impaired as
 the developed technology acquired would no longer be used in the
 ongoing business operations.





                    ENTROPIC COMMUNICATIONS, INC.
              GAAP Condensed Consolidated Balance Sheets
                            (In thousands)

                           Sept. 30,   June 30,  March 31,   Dec. 31,
                             2009       2009       2009       2008
                           ---------  ---------  ---------  ---------
                          (unaudited)(unaudited) (unaudited)
 ASSETS
 Current assets:
   Cash and cash
    equivalents            $  34,329  $  31,403  $  30,602  $  30,071
   Marketable securities          --        850        849      4,339
   Accounts receivable, net   15,648     14,930     17,181     13,915
   Inventory                  14,067     13,462     14,979     18,693
   Prepaid expenses and
    other current assets       2,625      3,153      3,345      2,785
                           ---------  ---------  ---------  ---------
     Total current assets     66,669     63,798     66,956     69,803
 Property and equipment,
  net                         11,757     12,154     12,802     13,046
 Intangible assets, net        2,028      2,434      2,839      3,469
 Other long-term assets          258        278        262        284
                           ---------  ---------  ---------  ---------
     Total assets          $  80,712  $  78,664  $  82,859  $  86,602
                           =========  =========  =========  =========

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:
   Accounts payable        $   5,882  $   5,350  $   6,818  $   5,166
   Accrued payroll and
    benefits                   3,373      3,088      3,559      3,498
   Accrued expenses and
    other current
    liabilities                2,652      2,961      3,622      2,707
   Deferred revenues             165        184        185        467
                           ---------  ---------  ---------  ---------
     Total current
      liabilities             12,072     11,583     14,184     11,838
 Stock repurchase
  liability                      431        512        677        784
 Other long-term
  liabilities                  3,052      3,059      3,088      3,231
 Stockholders' equity         65,157     63,510     64,910     70,749
                           ---------  ---------  ---------  ---------
     Total liabilities
      and stockholders'
      equity               $  80,712  $  78,664  $  82,859  $  86,602
                           =========  =========  =========  =========





                    ENTROPIC COMMUNICATIONS, INC.
           Unaudited Reconciliation of Non-GAAP Adjustments
 (In thousands, except for share information and footnote disclosures)

 This press release contains the following non-GAAP financial measures:
 net income (loss) and net income (loss) per share.  The presentation
 of such measures is not intended to be considered in isolation or as
 a substitute for, or superior to, the financial information prepared
 and presented in accordance with GAAP.  Our non-GAAP net income
 (loss) and net income (loss) per share exclude the items listed below.

 The following table sets forth such non-GAAP measures for the
 applicable periods as well as the reconciliation of such measures to
 the directly comparable GAAP measures for the periods shown.


                           Three Months Ended       Nine Months Ended
                      ----------------------------  ------------------
                      Sept. 30, June 30,  Sept. 30, Sept. 30, Sept. 30,
                        2009      2009      2008      2009      2008
                      --------  --------  --------  --------  --------
 GAAP net loss
  attributable to
  common stockholders $ (1,238) $ (4,287) $ (7,124) $(14,261) $(17,426)
 Non-GAAP adjustments:
   Stock-based
    compensation:
     Cost of net
      revenues              41        45        63       102       173
     Research and
      development        1,006       996     1,834     3,524     5,421
     Sales and
      marketing            354       326       647     1,048     1,881
     General and
      administrative       797       853       914     2,552     2,979
                      --------  --------  --------  --------  --------
       Total
        stock-based
        compensation     2,198     2,220     3,458     7,226    10,454
   Acquisition-related
    items:
     Amortization of
      purchased
      intangible
      assets:
       Cost of net
        revenues           406       405     1,590     1,217     4,420
       Operating
        expenses            --        --       713        16     2,022
     Impairment of
      goodwill and
      intangible assets     --        --        --       208        --
    Restructuring
     charges                70       979       209     2,173     1,278
   Write off of debt
    issuance costs          --        --        --        --       476
   Retention bonuses        --        --        --        --       698
   Write off of
    in-process research
    and development         --        --        --        --     1,300
                      --------  --------  --------  --------  --------
   Total of non-GAAP
    adjustments          2,674     3,604     5,970    10,840    20,648
                      --------  --------  --------  --------  --------
 Non-GAAP net income
  (loss)                $1,436     $(683)  $(1,154)  $(3,421)   $3,222
                      ========  ========  ========  ========  ========

 GAAP weighted average
  shares (basic)        70,146    69,424    67,669    69,473    67,378
   Non-GAAP adjustment
    for dilutive
    shares (a)           4,313        --        --        --     5,834
                      --------  --------  --------  --------  --------
 Non-GAAP weighted
  average shares
  (basic and diluted)   74,459    69,424    67,669    69,473    73,212
                      ========  ========  ========  ========  ========

 GAAP net loss per
  share (basic and
  diluted)              $(0.02)   $(0.06)   $(0.11)   $(0.21)   $(0.26)
   Non-GAAP adjustments
    detailed above (a)    0.04      0.05      0.09      0.16      0.30
                      --------  --------  --------  --------  --------
 Non-GAAP net income
  (loss) per share
  (basic and diluted)    $0.02    $(0.01)   $(0.02)   $(0.05)    $0.04
                      ========  ========  ========  ========  ========

 (a)  Shares included for calculating diluted earnings per share for
  periods with non-GAAP net income. For the periods shown with a net
  loss, no shares were included for the diluted earnings per share
  calculation, as including such shares would be antidilutive.

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Entropic Communications

CONTACT:  Entropic Communications, Inc.
Investor Contact:
Debra Hart, Director, Investor Relations
858.768.3852
debra.hart@entropic.com
The Ardell Group
Media Contacts:
Angela Edgerton
858.792.2941
angela@ardellgroup.com

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