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Openwave Reports Fourth Quarter Financial ResultsREDWOOD CITY, Calif., Aug. 4 /PRNewswire-FirstCall/ -- Openwave Systems Inc. , the leading provider of open software products and services for the communications industry, today announced that revenues for its fourth fiscal quarter ended June 30, 2005 were $100.3 million, an increase of $23.5 million, or 31%, from $76.8 million during the June quarter in the preceding year. Openwave posted bookings of $130.4 million, the highest level in the company's history. Including $64.6 million in restructuring charges, net loss for the fourth fiscal quarter ended June 30, 2005 on a GAAP basis was $62.3 million, or $0.91 per share, compared to a net loss of $0.7 million, or $0.01 per share, for the June quarter in the preceding year. Net income on a non-GAAP basis, which excludes amortization of intangibles and acquisition-related stock-based compensation, and restructuring and related costs, for the fourth fiscal quarter ended June 30, 2005 was $4.8 million, or $0.07 per diluted share. A reconciliation between net income (loss) on a GAAP basis and a non-GAAP basis is provided below in a table immediately following the Condensed Consolidated Statements of Operations. At June 30, 2005, the Company had cash, cash equivalents, short-term and long-term investments totaling $286.8 million, of which $24.3 million is set aside as restricted cash. Net cash generated from operating activities during the three months ended June 30, 2005 was $9.1 million, which included $3.0 million of cash used for restructuring liabilities. Conference Call Information Openwave has scheduled a conference call for 5:00 p.m. eastern time today to discuss its financial results for its fiscal fourth quarter ended June 30, 2005. Interested parties may access the conference call over the Internet through the Company's web site at http://www.openwave.com/ or by telephone at (800) 230-1092 or (612) 288-0318 (international). A replay of the conference call will be available for one week beginning at 8:30 p.m. eastern time on August 4 by calling (800) 475-6701. The replay can be accessed internationally by calling (320) 365-3844. Reservation number: 790128. A live webcast of the call, together with supplemental financial information, will also be available on the Quarterly Earnings section of Openwave's website at http://investor.openwave.com/medialist.cfm for at least 12 months. Non-GAAP Measure The company's stated results include a non-GAAP measure, non-GAAP net income (loss), which excludes amortization of intangibles and acquisition- related stock-based compensation, and restructuring and related costs. The company considers this to be an important measure because it provides a useful measure of the operational performance of the company and is used by the company's management for that purpose. In addition, investors often use a measure such as this to evaluate the financial performance of a company. Non- GAAP net income (loss) results are presented for supplemental informational purposes only for understanding Openwave's operating results. These non-GAAP results should not be considered 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. About Openwave Openwave Systems Inc. is the leading independent provider of open software products and services for the communications industry. Openwave's breadth of products, including mobile phone software, multimedia messaging software (MMS), email, location and mobile gateways, along with its worldwide expertise enable its customers to deliver innovative and differentiated data services. Openwave is a global company headquartered in Redwood City, California. For more information please visit http://www.openwave.com/. Cautionary Note Regarding Forward Looking Statements This release and the scheduled conference call may contain forward-looking statements relating to expectations, plans or prospects for Openwave Systems Inc. that are based upon the current expectations and beliefs of Openwave's management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward- looking statements. Notwithstanding changes that may occur with respect to matters relating to any forward looking statements, Openwave does not expect to, and disclaims any obligation to, update such statements. Openwave, however, reserves the right to update such statements or any portion thereof at any time for any reason. In particular, the following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: (a) the ability to realize our strategic objectives by taking advantage of market opportunities in the Americas, Europe, the Middle East, and Asia; (b) the ability to make changes in business strategy, development plans and product offerings to respond to the needs of our current, new and potential customers, suppliers and strategic partners; (c) risks associated with the development and licensing of software generally, including potential delays in software development, technical difficulties that may be encountered in the development or use of our software, and potential infringement claims by third parties; (d) the effects of our restructurings and the ability to successfully support our operations; (e) the ability to recruit and retain qualified, experienced employees; (f) the willingness of communication service providers to invest and improve their data networks; (g) the ability to successfully partner with other companies; (h) the ability to acquire additional companies and technologies and integrate such acquisitions; (i) increased global competition and pricing pressure on our products; (j) technological changes and developments; (k) general risks of the Internet and wireless and wireline telecommunications sectors; and (l) the uncertain economic and political climate in the United States and throughout the rest of the world and the potential that such climate may deteriorate. For a detailed discussion of these and other cautionary statements, please refer to the risk factors discussed in filings with the U.S. Securities and Exchange Commission ("SEC"), including but not limited to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2005, and any subsequently filed reports. All documents also are available through the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at http://www.sec.gov/ or from Openwave's Web site at http://www.openwave.com/. NOTE: (C) 2005 Openwave and the Openwave logo are trademarks and or registered trademarks of Openwave Systems Inc. All other trademarks are the properties of their respective owners. INVESTOR CONTACTS: MEDIA CONTACTS: Amy Staas Hannah Newton VP Finance and Investor Relations Openwave Systems Openwave Systems Inc. (650) 480 7119 (805) 884-5359 [email protected] Julie Keslik Supan Zeno Group for Openwave (415) 309-2954 [email protected] OPENWAVE SYSTEMS INC. CONDENSED CONSOLIDATED BALANCE SHEETS-UNAUDITED (In thousands) June 30, June 30, 2005 2004 Assets Current Assets: Cash, cash equivalents and short-term investments $236,555 $269,771 Accounts receivable, net 144,853 78,421 Other current assets 21,961 15,694 Total current assets 403,369 363,886 Property and equipment, net 16,765 30,552 Long-term investments 25,909 44,663 Restricted cash 24,293 27,384 Intangibles, net and other assets 34,884 9,300 Goodwill 44,073 723 $549,293 $476,508 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $10,861 $4,697 Accrued liabilities 54,429 36,679 Accrued restructuring costs 20,236 10,429 Deferred revenue 72,994 60,662 Total current liabilities 158,520 112,467 Accrued restructuring costs, less current portion 77,261 38,838 Deferred revenue, less current portion 4,025 1,321 Deferred rent obligations 691 4,308 Deferred tax liabilities, less current portion, net 5,025 -- Convertible subordinated notes, net 147,367 146,542 Total liabilities 392,889 303,476 Total stockholders' equity 156,404 173,032 $549,293 $476,508 OPENWAVE SYSTEMS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS-UNAUDITED (In thousands, except per share data) Three Months Ended Year Ended June 30, March 31, June 30, June 30, June 30, 2005 2005 2004 2005 2004 Revenues: License $43,172 $48,417 $36,848 $175,565 $145,668 Maintenance and support services 24,490 24,460 21,172 93,295 84,163 Professional services 22,997 20,657 13,427 75,422 47,015 Project/Systems 9,607 12,732 5,375 39,353 13,945 Total revenues 100,266 106,266 76,822 383,635 290,791 Cost of revenues: License 1,385 408 669 2,964 4,720 Maintenance and support services 9,173 9,064 6,111 31,822 24,588 Professional services 14,916 15,133 11,396 55,564 38,816 Project/Systems 6,075 8,281 4,996 23,588 9,879 Amortization of intangible assets 1,817 1,692 619 6,059 3,063 Total cost of revenues 33,366 34,578 23,791 119,997 81,066 Gross profit 66,900 71,688 53,031 263,638 209,725 Operating Expenses: Research and development 25,369 25,330 20,284 94,986 93,260 Sales and marketing 23,252 26,144 23,596 97,693 97,765 General and administrative 12,431 12,190 7,284 46,312 33,355 Restructuring and other related costs 64,600 4,468 (570) 70,560 2,426 Stock-based compensation 2,365 1,011 723 5,202 3,150 Amortization of other intangible assets 736 772 67 2,788 269 Total operating expenses 128,753 69,915 51,384 317,541 230,225 Operating income (loss) (61,853) 1,773 1,647 (53,903) (20,500) Interest and other expense, net 622 (1,397) (541) 582 (12) Income (loss) before provision for income taxes (61,231) 376 1,106 (53,321) (20,512) Income taxes 1,107 2,990 1,843 8,808 9,339 Net loss $(62,338) $(2,614) $(737) $(62,129) $(29,851) Basic net loss per share $(0.91) $(0.04) $(0.01) $(0.93) $(0.48) Diluted net loss per share $(0.91) $(0.04) $(0.01) $(0.93) $(0.48) Shares used in computing basic net loss per share 68,264 67,131 63,978 66,650 62,310 Shares used in computing diluted net loss per share 68,264 67,131 63,978 66,650 62,310 OPENWAVE SYSTEMS INC. RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME (LOSS) (In thousands, except per share data) Three Months Ended Year Ended June 30, March 31, June 30, June 30, June 30, 2005 2005 2004 2005 2004 Reconciliation between GAAP net income (loss) and Non-GAAP: GAAP net loss $(62,338) $(2,614) $(737) $(62,129) $(29,851) Add back: Restructuring and other related costs 64,600 4,468 (570) 70,560 2,426 Amortization of acquisition-related intangibles 2,553 2,464 686 8,847 3,332 Amortization of acquisition-related stock-based compensation -- 339 -- 339 -- Non-GAAP net income (loss) $4,815 $4,657 $(621) $17,617 $(24,093) Basic net loss per share $(0.91) $(0.04) $(0.01) $(0.93) $(0.48) Add back: Restructuring and other related costs 0.94 0.06 (0.01) 1.05 0.04 Amortization of acquisition-related intangibles 0.04 0.04 0.01 0.13 0.05 Amortization of acquisition-related stock-based compensation -- 0.01 -- 0.01 -- Non-GAAP net income (loss) $0.07 $0.07 $(0.01) $0.26 $(0.39) Shares used in computing basic earnings (net loss) per share 68,264 67,131 63,978 66,650 62,310 Diluted net loss per share* $(0.86) $(0.04) $(0.01) $(0.88) $(0.48) Add back: Restructuring and other related costs 0.89 0.06 (0.01) 1.00 0.04 Amortization of acquisition-related intangibles 0.04 0.04 0.01 0.13 0.05 Amortization of acquisition-related stock-based compensation -- 0.01 -- -- -- Non-GAAP net income (loss) per share $0.07 $0.07 $(0.01) $0.25 $(0.39) Shares used in computing diluted earnings (net loss) per share 72,855 71,245 63,978 70,318 62,310 * GAAP net loss divided by non-GAPP "shares used in computing diluted earnings (net loss) per share." OPENWAVE SYSTEMS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS-UNAUDITED (in thousands) Three Months Ended Fiscal Year Ended June 30, March 31, June 30, June 30, June 30, 2005 2005 2004 2005 2004 Cash flows from operating activities: Net loss $(62,338) $(2,614) $(737) $(62,129) $(29,851) Adjustments to reconcile net loss to net cash provided by (used for) operating activities: Depreciation and amortization of intangibles and stock-based compensation 7,522 6,328 5,012 24,938 26,310 Provision for (recovery of) doubtful accounts -- (40) (53) 2,130 (1,333) Noncash charges related to restructured property and equipment 63,755 4,468 -- 69,028 813 Other non-cash expenses, net 165 383 (1,506) 1,232 (612) Changes in operating assets and liabilities, net of effect of acquisitions (23) (9,408) (2,902) (42,811) (43,129) Net cash provided by (used for) operating activities 9,081 (883) (186) (7,612) (47,802) Cash flows from investing activities: Purchases of property and equipment, net (4,231) (3,046) (4,241) (12,298) (6,961) Purchases of intangible assets -- -- -- (450) -- Acquisitions, net of cash acquired (167) (5,190) -- (52,755) -- Proceeds from short-term investments, net 12,562 6,698 56,110 29,350 (8,095) Proceeds (purchases) of long-term investments, net (3,521) (312) 5,146 (4,110) (38,107) Restricted cash and investments, and non- marketable securities 1,501 1,938 181 2,282 (5,113) Net cash provided by (used for) investing activities 6,144 88 57,196 (37,981) (58,276) Cash flows from financing activities: Net proceeds from issuance of common stock 11,761 4,295 1,857 22,978 18,193 Net proceeds from issuance of convertible debt -- -- -- -- 144,975 Other, net (3,805) -- (699) (3,805) 50 Cash provided by financing activities 7,956 4,295 1,158 19,173 163,218 Effect of exchange rates on cash and cash equivalents (526) (676) -- (587) -- Net increase (decrease) in cash and cash equivalents 22,655 2,824 58,168 (27,007) 57,140 Cash and cash equivalents at beginning of period 103,807 100,983 95,301 153,469 96,329 Cash and cash equivalents at end of period $126,462 $103,807 $153,469 $126,462 $153,469 Openwave Systems Inc. CONTACT: investors, Amy Staas, VP Finance and Investor Relations,+1-805-884-5359, or media, Hannah Newton, +1-650-480-7119, [email protected], both of Openwave Systems Inc.; or Julie KeslikSupan of Zeno Group, +1-415-309-2954, or [email protected], forOpenwave Web site: http://www.openwave.com/ |