Revenue Increases Sequentially; Book-to-Bill at 1:1
REDWOOD CITY, Calif., Aug. 2 /PRNewswire-FirstCall/ -- Openwave Systems Inc. (NASDAQ:OPWV), the leading independent provider of software products and services for the communications industry, today announced final financial results for its fiscal 2007 fourth quarter ended June 30, 2007. The company reported the financial results with the Musiwave results categorized as discontinued operations as it considers Musiwave as an asset held for sale. Revenues for the fiscal fourth quarter were $68.1 million, compared with $62.7 million in the prior quarter ended March 31, 2007 and $83.5 million in the same quarter in the preceding year. The Company reported bookings of $68.0 million in the fiscal 2007 fourth quarter.
Including revenue from discontinued operations, revenues for the fiscal fourth quarter were $75.6 million, compared with $71.1 million in the prior quarter ended March 31, 2007 and $91.1 million in the same quarter in the preceding year.
"I am pleased with our sequential revenue growth and our one-to-one book- to-bill ratio which demonstrate our ability to execute," said Robert Vrij, president and CEO of Openwave. "With our new executive team in place, we are focused on establishing our market leadership as the provider of software solutions to the communications industry, leveraging our technology expertise in our traditional messaging, gateway, client and location businesses, and expanding our overall addressable market." On a GAAP basis, net loss for the fourth fiscal quarter ended June 30, 2007 was $91.8 million, or $1.11 per share, compared to $32.5 million, or $0.35 per share, in the prior quarter and $5.1 million, or $0.06 per share, for the June quarter in the preceding year.
Net loss on a non-GAAP basis, which excludes discontinued operations, amortization of intangibles, stock-based compensation, gains on sales of non- operating assets, impairment charges, acquisition-related costs, costs associated with the stock option review and proxy contest, retention bonuses related to exploring strategic alternatives and restructuring costs, for the fourth fiscal quarter ended June 30, 2007 was $10.5 million, or $0.13 per diluted share, compared with $18.6 million, or $0.20 per diluted share, in the prior quarter and a net income of $4.7 million, or $0.05 per diluted share, during the June quarter of the prior year. 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.
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 third quarter ended June 30, 2007. Interested parties may access the conference call over the Internet through the Company's web site at http://www.openwave.comor/ by telephone at (877) 502-9272 or (913) 981-5581 (international). A replay of the conference call will be available for one week beginning at approximately 8:30 p.m. eastern time today by calling 888-203-1112. The replay can be accessed internationally by calling 719-457-0820. Reservation number: 9373340.
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/ for at least 12 months.
About Openwave Systems Openwave Systems Inc. (NASDAQ:OPWV) is the leading independent provider of software solutions that ignite mobility for the communications and media industries. Openwave empowers its customers to rapidly transform their business by sparking new revenue streams and market opportunities, building loyal subscriber communities and reducing operational costs. Openwave's broad range of IP-based handset-to-network solutions enable the rapid launch of information, communication and entertainment services across networks and devices and include handset software, content delivery, adaptive messaging, location, music and video services. Openwave is a global company headquartered in Redwood City, California. For more information please visit http://www.openwave.com/.
Openwave and the Openwave logo are trademarks of Openwave Systems Inc. All other trademarks are the properties of their respective owners.
Cautionary Note Regarding Forward Looking Statements This release contains 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 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; (b) the ability to improve sales productivity; (c) the ability to continue to sell our existing products and enhancements; (d) the ability to develop and commercialize new products; (e) risks associated with the development and licensing of software generally, including potential delays in software development and technical difficulties that may be encountered in the development or use of our software; and (f) increased global competition and pricing pressure on our products.
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 Annual Report on Form 10-K for the fiscal year ended June 30, 2006, 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 website at http://www.openwave.com/.
For more information please contact:
Openwave Systems Inc. Openwave Systems Inc. Mike Bishop Vikki Herrera
Investor Relations Public Relations
Tel: 650-480-4461 Tel: 650-480-6753 OPENWAVE SYSTEMS INC. CONDENSED CONSOLIDATED BALANCE SHEETS-UNAUDITED
(In thousands) June 30, June 30,
2007 2006
Assets
Current Assets:
Cash, cash equivalents and
short-term investments $246,489 $428,966
Restricted cash 2,061 -
Accounts receivable, net 82,649 152,547
Prepaid and other current
assets 33,921 21,449
Total current assets 365,120 602,962 Property and equipment, net 21,667 20,784
Long-term investments and
restricted cash and investments 37,944 81,140
Deposits and other assets 7,324 9,169
Goodwill and intangible assets,
net 146,258 205,776
Total assets $578,313 $919,831 Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable $14,581 $14,951
Accrued liabilities 70,069 59,077
Accrued restructuring costs 26,118 18,542
Deferred revenue 47,161 58,964
Total current liabilities 157,929 151,534 Accrued restructuring costs, less
current portion 51,140 60,922
Deferred revenue, less current
portion 14,011 6,814
Deferred rent obligations 1,649 1,055
Deferred tax liabilities, net 6,309 11,417
Convertible subordinated notes,
net 149,017 148,494
Total liabilities 380,055 380,236 Stockholders' equity 198,258 539,595
Total liabilities and
stockholders' equity $578,313 $919,831 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,
2007 2007 2006 2007 2006
Revenues:
License $19,402 $14,946 $37,797 $88,707 $194,611
Maintenance and
support 22,443 22,917 22,821 91,006 93,821
Services 23,376 22,712 20,425 97,379 93,833
Projects/ Systems 2,873 2,129 2,466 13,209 13,967
Total revenues 68,094 62,704 83,509 290,301 396,232 Cost of revenues:
License 1,510 872 1,901 4,924 7,189
Maintenance and
support 9,099 9,142 7,046 34,102 30,320
Services 15,574 17,502 15,588 72,576 70,206
Projects/ Systems 2,528 817 630 7,021 7,128
Amortization of
intangible assets 2,056 2,002 1,519 7,543 6,151
Total cost of
revenues 30,767 30,335 26,684 126,166 120,994
Gross profit 37,327 32,369 56,825 164,135 275,238 Operating Expenses:
Research and
development 17,539 17,806 19,046 71,410 84,148
Sales and
marketing 24,910 25,216 29,007 99,648 119,653
General and
administrative 16,253 19,077 16,290 67,786 67,725
Stock option review
and associated costs - 540 341 6,782 341
Restructuring and
other related costs 17,548 576 (3,047) 30,648 4,623
Acquisition-related
costs and amortization 823 774 713 3,024 2,852
Gain on sale of
technology - - - (1,287) (11,349)
Total operating
expenses 77,073 63,989 62,350 278,011 267,993 Operating income (loss)
from continuing
operations (39,746) (31,620) (5,525) (113,876) 7,245
Interest and other
(expense), net 3,430 4,020 4,267 18,293 9,057
Gain on/(impairment) of
non-marketable equity
securities 1,065 (1,185) (428) (120) (532)
Pretax income (loss)
from continuing
operations (35,251) (28,785) (1,686) (95,703) 15,770 Income taxes 1,807 1,347 489 6,544 5,377
Net income (loss) from
continuing operations (37,058) (30,132) (2,175) (102,247) 10,393
Net loss from
discontinued operations,
net of tax (54,748) (2,378) (2,927) (62,382) (5,157)
Net income (loss) $(91,806) $(32,510) $(5,102)$(164,629) $5,236
Basic net income (loss)
per share from:
Continuing operations $(0.45) $(0.33) $(0.03) $(1.13) $0.12
Discontinued operations (0.66) (0.02) (0.03) (0.69) (0.06)
Net income $(1.11) $(0.35) $(0.06) $(1.82) $0.06
Diluted net income (loss)
per share from:
Continuing operations $(0.45) $(0.33) $(0.03) $(1.13) $0.12
Discontinued operations (0.66) (0.02) (0.03) (0.69) (0.06)
Net income $(1.11) $(0.35) $(0.06) $(1.82) $0.06 Shares used in basic net
income (loss) per share 82,449 92,114 91,709 90,246 82,231
Shares used in diluted
net income (loss) per
share 82,449 92,114 91,709 90,246 85,316
Stock-based compensation
by category:
Maintenance and
support $168 $180 $207 $953 1,418
Services 216 199 343 1,239 1,541
Research and
development 757 422 483 2,426 5,787
Sales and marketing 760 1,356 4,467 6,795 19,089
General and
administrative (459) 2,293 3,208 6,476 12,979
Restructuring and other
related costs 1,691 - - 4,489 -
Discontinued operations 152 232 147 638 214
$3,285 $4,682 $8,855 $23,016 $41,028
OPENWAVE SYSTEMS INC. RECONCILIATION OF GAAP NET INCOME (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,
2007 2007 2006 2007 2006 Reconciliation between
GAAP and Non-GAAP net
income (loss):
Net income (loss) $(91,806) $(32,510) $(5,102) $(164,629) $5,236
Exclude:
Restructuring and other
related costs 17,548 576 (3,047) 30,648 4,623
Acquisition-related
costs and
amortization* 2,879 2,776 2,232 10,567 9,675
Amortization of stock-
based compensation 1,442 4,450 8,708 17,889 40,814
Stock option review and
associated costs** - 540 341 6,782 341
Costs associated with
proxy contest and
strategic alternatives 3,314 2,380 - 3,314 -
Retention bonuses
related to strategic
alternatives 3,217 409 - 3,626 -
Gains/impairments on
non-operating assets (1,065) 1,185 428 (1,167) (10,817)
Discontinued
operations, net of tax 54,748 2,378 2,927 62,382 5,157
Tax impact of
reconciling items*** (826) (792) (1,770) (3,308) (2,729)
Non-GAAP net income
(loss) per share $(10,549) $(18,608) $4,717 $(33,896) $52,300 GAAP net income (loss)
per share - diluted $(1.11) $(0.35) $(0.05) $(1.82) $0.06
Exclude:
Restructuring and other
related costs $0.21 $0.01 $(0.03) $0.34 $0.05
Acquisition-related
costs and
amortization* $0.03 $0.03 $0.02 $0.11 $0.11
Amortization of stock-
based compensation $0.02 $0.05 $0.09 $0.20 $0.48
Stock option review and
associated costs** $- $0.01 $- $0.07 $-
Costs associated with
proxy contest and
strategic alternatives $0.04 $0.03 $- $0.04 $-
Retention bonuses
related to strategic
alternatives $0.04 $- $- $0.04 $-
Gains/impairments on
non-operating assets $(0.01) $0.01 $0.01 $(0.01) $(0.12)
Discontinued
operations, net of tax $0.66 $0.02 $0.03 $0.69 $0.06
Tax impact of
reconciling items*** $(0.01) $(0.01) $(0.02) $(0.04) $(0.03)
Non-GAAP net income
(loss) per share -
diluted $(0.13) $(0.20) $0.05 $(0.38) $0.61 Shares used in computing
diluted earnings per
share 82,449 92,114 93,679 90,246 85,316 *Acquisition-related costs relates to payments due under the terms of the
Widerweb acquisition. Also includes $672 thousand of acquisition-related
hedging costs in the year ended June 30, 2006. Amortization relates to
acquired intangible assets. **Relates to legal fees regarding the stock option review and resulting
lawsuits. ***The tax impact relates to amortization of acquisition-related
intangibles and tax benefits related to stock-based compensation. DATASOURCE: Openwave Systems Inc.
CONTACT: Mike Bishop, Investor Relations, , +1-650-480-4461, or Vikki Herrera, Public Relations, , +1-650-480-6753, both of Openwave Systems Inc.
Web site: http://www.openwave.com/
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