TMCnet News

Openwave Reports Fourth Quarter Financial Results
[August 04, 2005]

Openwave Reports Fourth Quarter Financial Results


REDWOOD 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.


"Our momentum continues to accelerate as we delivered our largest bookings quarter ever, bolstered our cash position, and added new customers across the world," said David Peterschmidt, president and CEO of Openwave. "In the next quarter, Openwave will power over a trillion messaging transactions as we capitalize on our unique product assets to take advantage of the major trends in the telecommunications industry."
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/

[ Back To TMCnet.com's Homepage ]