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EXHIBIT 99.1 CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS AND RISK FACTORS In passing the Private Securities Litigation Reform Act of 1995 (the Reform Act), Congress
encouraged public companies to make forward-looking statements by creating a safe harbor to
protect companies from securities law liability in connection with forward-looking statements.
Radyne ComStream Inc. (the Company) intends to qualify both its written and oral forward-looking
statements for protection under the Reform Act and any other similar safe harbor provisions. Forward-looking statements are defined by the Reform Act. Generally, forward-looking
statements include expressed expectations of future events and the assumptions on which the
expressed expectations are based. The words may, believes, projects, expects or
anticipates and similar expressions identify forward-looking statements. This Annual Report on
Form 10-K for the year ended December 31, 2004 contains forward-looking statements that involve
risks and uncertainties. Such forward-looking statements are within the meaning of that term in
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based
on various expectations and assumptions concerning future events and they are subject to numerous
known and unknown risks and uncertainties that could cause actual events or result to differ
materially from those projected. Due to those and other uncertainties and risks, the investment
community is urged not to place undue reliance on written or oral forward-looking statements of the
Company. We undertake no obligation to update or revise this Cautionary Statement Regarding
Forward-Looking Statements to reflect future developments. In addition, we undertake no obligation
to update or revise forward-looking statements to reflect changed assumptions, the occurrence of
unanticipated events, or changes to future operating results over time. The Company provided the following risk factor disclosure in connection with its continuing
effort to qualify its written and oral forward-looking statements under the safe harbor protection
of the Reform Act and any other similar safe harbor provisions. Important factors currently known
to management that could cause actual results to differ materially from those in forward-looking
statements include the disclosures contained in the Companys Annual Report on Form 10-K to which
this statement is appended as an exhibit and also include the following: RISK FACTORS You should carefully consider the following risks before you decide to buy our securities. If
any of the following risks actually occur, our business, financial condition or results of
operations would likely suffer. As a result, the trading price of our securities could decline,
and you may lose all or part of the money you paid to buy our securities. We Have A History Of Inconsistent Operating Results, And Could Suffer Losses In The Future. As a result of operating losses from time to time in prior years, we had an accumulated
deficit of $9.5 million at December 31, 2003. While the Company regained profitability during 2003
and continued to be profitable in 2004, we accomplished it through aggressive cost cutting more
than through increased sales. There are no assurances that the cost cutting measures instituted
during the 2002 and 2003 fiscal years will be effective in the years to come and the Companys
forecasts rely heavily on increased revenues (of which there are no assurances) to predict future
profitability. A failure to achieve either lower costs or higher sales would affect our
profitability and could result in losses. Our Quarterly Operating Results Have Fluctuated Significantly In The Past, And We Anticipate That
They Could Do So In The Future, Which Could Adversely Affect Our Stock Price. We may continue to experience significant quarter to quarter fluctuations in our operating
results, which may result in volatility in the price of our common stock. These fluctuating
operating results derive from a variety of factors, including the following:  
    timing of the initiation and completion of our purchase orders;




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
    demand for our products;  
    introduction of new or enhanced products by us or our competitors;  
    growth of demand for Internet-based products and services in developing countries;  
    timing of significant marketing programs we may implement;  
    extent and timing of hiring additional personnel;  
    competitive conditions in our industry; and  
    general economic conditions in the United States and abroad. The factors described above are difficult to forecast and could harm our business, financial
condition and results of operations. Furthermore, the last three years have been challenging for
the telecommunication and Internet industries, thereby resulting in longer sales cycles and delays
in the purchase decision-making process of existing and potential customers of our products and
services. Accordingly, we may have difficulty in accurately forecasting our revenues for any
future quarter. We Depend On International Sales, Which Could Cause Our Sales Levels To Be Volatile. We are dependent on sales to customers outside the United States. We expect that
international sales will continue to account for a significant portion of our revenues for the
foreseeable future. For example, sales to our foreign customers were approximately 47% for the
year ended December 31, 2004, 48% for the year ended December 31, 2003 and 47% for the year ended
December 31, 2002. Additionally, we estimate that approximately 60% of our domestic sales are
eventually exported. Moreover, the growth in the use of satellites for Internet traffic in recent
years has been centered on connecting Internet service providers, or ISPs, with Internet servers.
U.S. based ISPs rarely use satellites to provide point-to-point infrastructure for the Internet.
Accordingly, we expect that our sales to the Internet Service Provider market will be primarily to
customers located outside the United States. As a result of our dependence on foreign markets,
the occurrence of any negative international political, economic or geographic events could result
in significant revenue shortfalls. These shortfalls could cause our business, financial condition
and results of operations to be harmed. Some of the risks of doing business internationally
include:  
    changing regulatory requirements;  
    fluctuations in the exchange rate for the United States dollar;  
    the availability of export licenses;  
    political and economic instability;  
    difficulties in staffing and managing foreign operations, tariffs and other trade barriers;  
    changes in diplomatic and trade relationships;  
    complex foreign laws and treaties;  
    acts of terrorism; and  
    difficulty of collecting foreign account receivables. In addition, we are subject to the Foreign Corrupt Practices Act, which prohibits us from
making payments to government officials and others in order to influence the granting of contracts
we may be seeking. Our non-U.S. competitors are not subject to this law and this may give them a
competitive advantage over us. Fluctuations in the Valuations of Foreign Currencies Could Decrease the Purchasing Power of our
Foreign Customers, Reduce Sales and Decrease our Earnings. Our foreign sales are denominated in United States dollars. As a result, any decrease in the
value of foreign currencies relative to the United States dollar may materially adversely affect
the demand for our products by increasing their costs in the currency of those countries. For
example, the value of the Mexican Peso, Venezuelan Bolivar and the Brazilian Real have deteriorated
against the Dollar over the last three years and these markets have experienced decreased bookings
and adversely affected our results of operations in 2004 and 2003. We Depend On Developing Markets And Their Uncertain Growth Potential Could Result In A Reduction In
Revenues And Even Losses. We believe a substantial portion of the growth in demand for our products will depend upon
customers in developing countries. We cannot provide assurance that such increases in demand will
occur or that prospective customers will accept our products. The degree to which we are able to
penetrate potential markets in developing countries will be affected to a large extent by the speed
with which other competing elements of the communications




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infrastructure, such as other satellite-delivered solutions, telephone lines, television
cable, and land-based solutions, are installed in these developing countries. The Sales And Implementation Cycles for our Products are Long And Have Recently Increased, and We
May Incur Substantial, Non-Recoverable Expenses or Devote Significant Resources To Sales That May
Not Occur When Anticipated, If At All. A customers decision to purchase our products involves a significant commitment of its
resources and a lengthy evaluation and product qualification process. After a customer decides to
purchase our products, the timing of their deployment and implementation depends on a variety of
factors specific to each customer. Further, prospective customers may delay purchasing our products
in order to evaluate new technologies and develop and implement new wireless systems. Throughout
the sales cycle, we spend considerable resources educating and providing information to prospective
customers regarding the use and benefits of our products. Our sales cycle for new customers is
lengthy, typically from four to five months, which is an increase from the two to three months we
experienced in the past. The Continuing Downturn In The Rapidly Evolving Telecommunications And Internet Industries Could
Harm Our Business. Our success depends upon the continued growth of the telecommunications industry, particularly
with regard to the Internet. The rapid growth and evolution in the global telecommunications and
Internet industries and the need for high-speed or enhanced telecommunications products has been
slowed by recent economic conditions in the United States and elsewhere. The potential growth in
these areas is unpredictable. We cannot provide assurance that the deregulation, privatization and
economic globalization of the worldwide telecommunications market that has resulted in historical
demand for technologies and services will resume in a manner favorable to us or our business
strategies. Competition In Our Industry Is Intense And Can Lead To Reduced Sales And Market Share. The markets for ground segment systems are highly competitive. We have a number of major
competitors in the satellite communications equipment field. These include large companies, such
as Hughes Network Systems, Inc., NEC, and Comtech EFData Corp., which have significantly larger and
more diversified operations and greater financial, marketing, personnel and other resources than we
possess. As a result, these competitors may develop and expand their products more quickly, adapt
more quickly to new or emerging technologies and changes in customer requirements, take advantage
of acquisition and other opportunities more readily, and devote greater resources to the marketing
and sale of their products than we can. Competition from current competitors or future entrants in the markets in which we compete
could cause us to lose orders or customers or could force us to lower the prices we charge for our
products, all of which would have a material adverse impact on our business, financial condition,
and results of operations. Our Products May Become Obsolete Due To Rapid Technological Change. The telecommunications industry, including the ground-based satellite communications systems
business, is characterized by rapid and continuous technological change. Future technological
advances in the telecommunications industry may result in the introduction of new products or
services that compete with our products or render them obsolete. Our success depends in part on
our ability to respond quickly to technological changes through the improvement of our current
products and the development of new products. Accordingly, we believe that we will need to
allocate a substantial amount of capital to research and development activities in the future. We
may not generate cash flow from operations or have access to outside financing in amounts that are
sufficient to adequately fund the development of new products. Even if we are able to obtain the
required funding to develop new products, we cannot assure you that we will be able to develop
products that we will be able to sell successfully. Our inability to improve our existing products
and develop new products could have a material adverse effect on our business, financial condition,
and results of operations. Our Research And Development Efforts Are Costly And The Results Are Uncertain, Which May Reduce Our
Profitability And Could Result In Losses.




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Our continued growth depends on penetrating new markets, adapting existing satellite
communications products to new applications, and introducing new communications products that
achieve market acceptance and benefit from our established international distribution channels.
Accordingly, we are actively applying our communications expertise to design and develop new
hardware and software products and enhance existing products. These efforts are costly. We
expended $5.3 million, or 9% of our net sales, in fiscal 2004 on research and development
activities. This was a decrease from the prior year in which we spent $6.3 million, or 11% of our
net sales for the year. Additionally, our research and development program may not produce
successful results, which would have a material adverse effect on our business, financial
condition, and results of operations. The Xicom Acquisition May Not Be Completed. Under the terms of the definitive agreement, closing is subject to completion of a
satisfactory pre-closing audit, receipt and approval of complete disclosure schedules, and
customary closing conditions. If the pre-closing audit results in differences of certain net
working capital values in excess of $500 thousand relative to those values as included in Xicoms
most recent annual financial statements as previously provided to the Company, either party
potentially has the right to walk away from the transaction. Further, there is no assurance that
either party will complete the transaction or that expected financing will be available to the
Company. The definitive agreement is filed herewith as Exhibit 10.12. Continued Growth Through Acquisition Could Prove Unsuccessful And Strain Our Personnel And Systems
And Divert Our Resources. We have pursued, and will continue to pursue, growth opportunities through internal
development and acquisition of complementary businesses, products and technologies. Our operations
have expanded significantly as a result of our acquisitions of ComStream, Armer, and Tiernan. We
anticipate that they will expand again if the Xicom acquisition is completed. We are unable to
predict whether or when any other prospective acquisition will be completed. However, in order to
pursue successfully the opportunities presented by the ground segment and emerging
satellite-delivered communications and broadcast equipment markets, we will be required to continue
to expand our operations. This expansion could entail various risks, including the following:  
    difficulty of assimilating the operations and personnel of acquired businesses or
products due to unforeseen circumstances;
    the necessity to attract, train, motivate, and manage a significantly larger number of employees;
    the use of a disproportionate amount of our managements attention or our resources;
    substantial cash expenditures, potentially dilutive issuances of equity securities, the
incurrence of additional debt and contingent liabilities, and amortization expenses related
to intangible assets;
    potential disruption of our ongoing business;
    our inability, once integrated, to achieve comparable levels of revenues, profitability
or productivity as our existing business or otherwise perform as expected; and
    our potential inability to obtain the desired financial and strategic benefits from the
acquisition or investment. Moreover, we cannot assure you that we will be able to successfully identify suitable
acquisition candidates, complete acquisitions, or expand into new markets. The occurrence of any
of the risks described above or any failure to manage further growth in an efficient manner and at
a pace consistent with our business could have a material adverse effect on our growth and our
business, financial condition, and results of operations. Our Ability To Use Our Net Operating Loss Carryforwards May Be Limited By The Ownership Change
Caused By The Sale Of All Of The Shares Of Our Common Stock Held By Our Majority Stockholders. We have net operating loss carryforwards that expire between the years 2018 and 2022. As a
result of the recent sale by Stetsys Pte Ltd. and Stetsys US, Inc. of all of the shares of our
common stock held by each company, we will experience an ownership change as defined by Section 382
of the U.S. Internal Revenue Code of 1986, as amended. Because of the ownership change, we will be
limited in our ability to use the net operating losses from before the date of the ownership change
to offset items of taxable income realized after that date. The annual limitation may also result
in the expiration of net operating losses before utilization. In addition, any




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future ownership change could further limit the availability of our net operating loss
carryforwards to offset tax liabilities and may be viewed negatively by a prospective buyer of the
stock. Our Competitive Position Relies Heavily On Our Proprietary Technology And Intellectual Property. We rely on our proprietary technology and intellectual property to maintain our competitive
position. Unauthorized parties could attempt to copy aspects of our technologies or to obtain
information that we regard as proprietary. We may not be able to police unauthorized use of our
intellectual property. Our failure to protect our proprietary technology and intellectual property
could adversely affect our competitive position. We generally rely on confidentiality agreements with our employees and some of our suppliers
to protect our proprietary technology. We also control access to and distribution of confidential
information concerning our proprietary technology. We cannot guarantee that the other parties to
these agreements will not disclose or misappropriate the confidential information concerning our
proprietary technology, which could have a material adverse effect on our business. We rely on patents to protect certain of our proprietary technology. Patents, however, often
provide only narrow protection that may not prevent competitors from developing products that
function in a manner similar to those covered by our patents. In addition, some foreign countries
in which we sell our products do not provide the same level of protection to intellectual property
as the laws of the United States provide. We cannot assure you that any patents we currently own
or control, or that we may acquire in the future, will prevent our competitors from independently
developing products that are substantially similar or superior to ours. We may find it necessary to take legal action in the future to enforce or protect our
intellectual property rights. Litigation can be very expensive and can distract our managements
time and attention, which could adversely affect our business. In addition, we may not be able to
obtain a favorable outcome in any intellectual property litigation. Our Products Could Infringe On The Intellectual Property Of Others. Third parties may in the future assert that our technology violates their intellectual
property rights. As a result of such claims, we could be required to enter into licensing
arrangements or develop non-infringing products, which could be prohibitively expensive or could
divert a significant amount of resources from other aspects of our business. We may find it necessary to take legal action in the future to defend against claims that our
products or technologies infringe the rights of third parties. Litigation can be very expensive
and can distract our managements time and attention, which could adversely affect our business. In
addition, we may not be able to obtain a favorable outcome in any intellectual property litigation. We Depend Upon Certain Suppliers And Subcontractors, The Loss Of Which Could Cause An Interruption
In The Production Of Our Products. We rely on subcontractors to assemble and test some of our products. Additionally, our
products use a number of specialized chips and customized components or subassemblies produced by a
limited number of suppliers. We maintain limited inventories of these products and do not have
long-term supply contracts with our vendors. In the event our subcontractors or suppliers are
unable or unwilling to fulfill our requirements, we could experience an interruption in product
availability until we are able to secure alternative sources of supplies. We are also subject to
price increases by suppliers that could increase the cost of our products or require us to develop
alternative suppliers, which could interrupt our business. It may not be possible to obtain
alternative sources at a reasonable cost. Supply interruptions could cause us to lose orders or
customers, which would result in a material adverse impact on our business, financial condition,
and results of operations. Stock Prices Of Technology Companies Are Volatile, Which Could Result In Substantial Losses To
Investors. The trading price of our common stock has been volatile over the past couple of years and
could continue to be volatile in response to factors including the following, some of which are
beyond our control:




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
    decreased demand in the Internet-services sector;  
    variations in our operating results;  
    announcements of technological innovations or new services by us or our competitors;  
    changes in expectations of our future financial performance, including financial estimates by securities analysts and
investors;  
    changes in operating and stock price performance of other technology companies similar to us;  
    conditions or trends in the technology industry;  
    additions or departures of key personnel; and  
    future sales of our common stock. Domestic and international stock markets often experience significant price and volume
fluctuations. These fluctuations, as well as general economic and political conditions unrelated
to our performance, may adversely affect the price of our common stock. The Large Number Of Shares Eligible For Future Sale May Adversely Affect The Market Price Of Our
Common Stock. A large number of our issued and outstanding shares of common stock are eligible for future
sale. The sale, or availability for sale, of a substantial number of shares of common stock in the
public market could materially adversely affect the market price of our common stock and could
impair our ability to raise additional capital through the sale of our equity securities. Nasdaq Could Delist Our Common Stock Which Could Make It More Difficult For You To Sell Or Obtain
Quotations As To The Price Of Our Common Stocks. We are currently in compliance with Nasdaqs continued listing requirements. However, if we
cannot satisfy Nasdaqs continued listing criteria in the future, Nasdaq could delist our common
stock. In the event of delisting, trading, if any, would be conducted only in the over-the-counter
market in the so-called pink sheets or the NASDs Electronic Bulletin Board. As a result, an
investor would likely find it more difficult to sell or obtain quotations as to the price of our
common stock. We Have Provisions In Our Certificate Of Incorporation That Substantially Eliminate The Personal
Liability Of Members Of Our Board Of Directors For Violations Of Their Fiduciary Duty Of Care As A
Director And That Allow Us To Indemnify Our Officers And Directors. This Could Make It Very
Difficult For You To Bring Any Legal Actions Against Our Directors For Such Violations Or Could
Require Us To Pay Any Amounts Incurred By Our Directors In Any Such Actions. Pursuant to our certificate of incorporation, members of our Board of Directors will have no
liability for violations of their fiduciary duty of care as a director, except in limited
circumstances. This means that you may be unable to prevail in a legal action against our
directors even if you believe they have breached their fiduciary duty of care. In addition, our
certificate of incorporation allows us to indemnify our directors from and against any and all
expenses or liabilities arising from or in connection with their serving in such capacities with
us. This means that if you were able to enforce an action against our directors or officers, in all
likelihood we would be required to pay any expenses they incurred in defending the lawsuit and any
judgment or settlement they otherwise would be required to pay. The Loss Of The Services Of Certain Members Of Our Senior Management Or The Inability To Attract Or
Retain Additional Technical Personnel Could Impair Our Ability To Conduct And Expand Our Business. Our future performance depends significantly on Robert C. Fitting, our Chief Executive
Officer, and Steve Eymann, our Executive Vice President and Chief Technical Officer. The loss of
either of these key employees would adversely affect our operations.
Mr. Fitting is 70 years old
and we may eventually need to effect an appropriate transition to a new Chief Executive Officer.
Any such transition may disrupt our business, customers and employees. Our continued ability to attract and retain highly skilled personnel also is critical to the
operation and expansion of our business. The market for skilled engineers and other technical
personnel is extremely competitive, and recruitment and retention costs are high. Although we have
been able to attract and retain the personnel




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necessary to operate our business, we may not be able to do so in the future, particularly as
we continue to expand our business into Internet-related products and other markets. The failure
to attract and retain personnel with the necessary skills when needed could materially and
adversely affect our business and expansion plans. Anti-Takeover Effect Of Delaware Law And Our Charter. Under the Delaware general Corporation Law, which we are subject to, it will be more difficult
for a third party to take control of the Company and may limit the price some investors are willing
to pay for shares of our common stock. Furthermore, our certificate of incorporation authorizes
the issuance of up to 10,000,000 shares of preferred stock without a vote or other stockholder
approval. Terrorist Attacks and War May Negatively Impact All Aspects of Our Operations, Revenues, Costs and
Stock Price. Recent terrorist attacks in the United States, as well as future events occurring in response
or connection to them, including, without limitation, future terrorist attacks against United
States targets, actual conflicts involving the United States or its allies or military or trade
disruptions impacting our domestic or foreign suppliers of merchandise, may impact our operations,
including, among other things, causing delays or losses in the delivery of wafer supplies to us and
decreased sales of our products. More generally, any of these events could cause consumer
confidence and spending to decrease or result in increased volatility in the United States and
worldwide financial markets and economy. They also could result in economic recession in the United
States or abroad. Any of these occurrences could have a significant impact on our operating
results, revenues and costs.