[October 29, 2009] Openwave Reports First Quarter Fiscal 2010 Financial Results Tweet REDWOOD CITY, Calif. --(Business Wire)-- Openwave Systems Inc (News - Alert). (Nasdaq:OPWV), one of the world's leading software innovators enabling revenue-generating personalized services which converge the mobile and broadband experience, today announced that revenues for the first fiscal quarter ended September 30, 2009 were $49.8 million, compared with $47.9 million in the prior quarter ended June 30, 2009 and $51.0 million in the September quarter in the preceding fiscal year. Bookings for the first quarter of fiscal 2010 were $47.3 million. The company ended the quarter with $121.6 million in cash and investments. "The data tsunamis we have long talked about are rolling in and carriers are looking to Openwave for leadership and as a result we are seeing increasing demand for our mobile Internet products," said Ken Denman, CEO of Openwave. "In what is traditionally a seasonally weaker quarter for sales activity, we saw a strong bookings level. We believe Openwave entered the second quarter of fiscal 2010 as a stable, efficient company and that our healthy pipeline will lead to future bookings and ultimately return Openwave to growth." On a GAAP basis, net income for the first fiscal quarter ended September 30, 2009 was $990,000, or $0.01 per share, compared with a net loss of $3.4 million, or $0.04 per share, in the prior quarter and a net loss of $10.5 million, or $0.13 per share, in the September quarter in the preceding year. On a non-GAAP basis, net loss for the first fiscal quarter ended September 30, 2009 was $380,000, or $0.00 per share, compared with net loss of $278,000 or $0.00 per share, in the prior quarter and net loss of $1.0 million, or $0.01 per share, during the September quarter of the prior year. Non-GAAP net loss excludes discontinued operations, amortization of intangibles and other acquisition-related costs, stock-based compensation, professional fees associated with certain unusual events, impairments, restructuring and other costs. 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. Non-GAAP Measure The company's stated results include the non-GAAP measures, non-GAAP net loss and non-GAAP net loss per share. These non-GAAP measures exclude certain items that generally are non-recurring events, such as costs associated with the stock option lawsuit. Additionally, these non-GAAP measures exclude other items that are non-cash items that many other companies exclude, in order to compare Openwave with other companies, such as stock-based compensation, amortization of intangibles and acquisition-related costs, and other expenses. These non-GAAP measures also exclude items which management does not consider to evaluate Openwave's on-going business, such as restructuring costs and discontinued operations. Openwave considers non-GAAP net loss to be an important measure because it provides a useful measure of the operational performance of Openwave and is used by Openwave's management for that purpose. In addition, investors often use measures such as these to evaluate the financial performance of a company. These non-GAAP measures 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. Conference Call Information Openwave has scheduled a conference call for 5:00 p.m. eastern time today to discuss its financial results for its first quarter ended September 30, 2009. Interested parties may access the conference call over the Internet through Openwave's Web site at www.openwave.com or by telephone at (877) 941-8416 or (480) 629-9808 (international). A replay of the conference call will be available for two weeks beginning at approximately 8:00 p.m. eastern time today by calling 800-406-7325. The replay can be accessed internationally by calling 303-590-3030. Reservation number: 4171901. A live webcast of the call, together with supplemental financial information, will also be available on the Earnings & Metrics section of Openwave's Web site at http://investor.Openwave.com. A replay will be available on the Web site for at least three months. About Openwave Openwave Systems Inc. (Nasdaq:OPWV) is one of the world's leading software innovators, offering a proactive mediation platform and tools to mobilize the Internet. As the communications industry intersects with the Internet, Openwave software enables service providers to converge services, increasing the value of their networks by accelerating time to market and reducing the cost and complexity associated with new service deployment. Openwave's unique product portfolio provides a complete range of mobile internet service management, messaging, and location based solutions. Openwave is a global company with a blue chip customer base spanning North America, Latin America, Australia and New Zealand, Asia, Africa, Europe, and the Middle East. Openwave is headquartered in Redwood City, California. For more information please visit www.openwave.com. Openwave is the trademark of Openwave Systems Inc. All other trademarks are the properties of their respective owners. Cautionary Note Regarding Forward Looking Statements The statements in this press release in Mr. Denman's quote with respect to future events or expectations, including the belief that the company's pipeline will lead to future bookings and ultimately return Openwave to growth, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1943 and Section 27A of the Securities Act of 1933. These forward-looking statements are subject to many risks and uncertainties that could cause actual results to differ materially from those projected. Notwithstanding changes that may occur with respect to matters relating to any forward looking statements, Openwave assumes no obligation to update the forward-looking statements included in this press release. In particular, the following factors, among others, could cause actual results to differ materially from those projected: (a) the current economic climate may impede the growth of wireless data demand; and (b) Openwave may not be able to make changes in business strategy, development plans and product offerings to respond to any changes in wireless demand needs of its customers. For a detailed discussion of these and other factors that may cause these forward looking statements not to come true, please refer to the risk factors discussed in the Openwave's filings with the U.S. Securities and Exchange Commission ("SEC (News - Alert)"), including the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2009. These documents are available through the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at www.sec.gov or from Openwave's website at www.openwave.com. OPENWAVE SYSTEMS INC. CONDENSED CONSOLIDATED BALANCE SHEETS-UNAUDITED (In thousands)         September 30, June 30, 2009 2009 Assets Current Assets: Cash, cash equivalents and short-term investments $ 104,834 $ 109,082 Accounts receivable, net 36,397 31,107 Prepaid and other current assets   19,119   26,801 Total current assets 160,350 166,990   Property and equipment, net 10,487 11,566 Long-term investments and restricted cash and investments 16,798 17,618 Deposits and other assets 8,459 8,313 Goodwill 267 - Intangible assets, net   3,461   3,880 Total assets $ 199,822 $ 208,367   Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $ 3,427 $ 5,348 Accrued liabilities 19,325 23,079 Accrued restructuring costs 13,929 15,327 Deferred revenue   39,968   38,349 Total current liabilities 76,649 82,103   Accrued restructuring costs, less current portion 32,093 34,843 Deferred revenue, less current portion 9,881 11,901 Deferred rent obligations and long-term taxes payable   5,625   6,824 Total liabilities 124,248 135,671   Stockholders' equity   75,574   72,696 Total liabilities and stockholders' equity $ 199,822 $ 208,367     OPENWAVE SYSTEMS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS-UNAUDITED (In thousands, except per share data)             Three Months Ended September 30, June 30, September 30, 2009 2009 2008 Revenues: License $ 10,425 $ 13,091 $ 14,327 Maintenance and support 15,798 16,224 16,378 Services   23,619     18,622     20,340   Total revenues   49,842     47,937     51,045     Cost of revenues: License 230 323 1,154 Maintenance and support 4,316 4,075 4,241 Services 17,773 13,878 14,447 Amortization of intangible assets   420     420     1,129   Total cost of revenues   22,739     18,696     20,971   Gross profit   27,103     29,241     30,074     Operating Expenses: Research and development 9,864 11,025 12,160 Sales and marketing 10,711 11,768 10,744 General and administrative 7,925 6,539 10,620 Restructuring and other related costs 422 2,274 1,903 Acquisition-related costs and amortization   -     -     152   Total operating expenses   28,922     31,606     35,579     Operating loss from continuing operations (1,819 ) (2,365 ) (5,505 ) Interest and other income (expense), net   (1,209 )   (172 )   (6,496 ) Pre-tax loss from continuing operations (3,028 ) (2,537 ) (12,001 )   Income taxes   498     907     503   Net loss from continuing operations (3,526 ) (3,444 ) (12,504 ) Gain on sale of discontinued operations   4,516     -     2,000   Net income (loss) $ 990   $ (3,444 ) $ (10,504 )     Basic and diluted net income (loss) per share from: Continuing operations $ (0.04 ) $ (0.04 ) $ (0.15 ) Discontinued operations   0.05     -     0.02   Net income (loss) per share $ 0.01   $ (0.04 ) $ (0.13 )   Shares used in basic and diluted net income (loss) per share 83,295 83,177 82,773   Stock-based compensation by category: Maintenance and support $ 38 $ 32 $ 72 Services 76 60 166 Research and development 98 154 250 Sales and marketing 146 125 132 General and administrative   189     179     351   $ 547   $ 550   $ 971     OPENWAVE SYSTEMS INC. RECONCILIATION OF GAAP NET (News - Alert) INCOME (LOSS) TO NON-GAAP NET LOSS (In thousands, except per share data)         Three Months Ended September 30, June 30, September 30, 2009 2009 2008 Reconciliation between GAAP and Non-GAAP net income (loss): Net income (loss) $ 990 $ (3,444 ) $ (10,504 ) Exclude: Restructuring and other related costs 422 2,274 1,903 Acquisition-related costs and amortization(a) 420 420 1,281 Amortization of stock-based compensation 547 550 971 Professional fees associated with unusual events(b) 344 (44 ) 2,004 Discontinued operations, net of tax(c) (4,516 ) - (2,000 ) Other-than-temporary impairments of investments 1,464 - 5,632 Tax impact of reconciling items(d)   (51 )   (34 )   (293 ) Non-GAAP net loss $ (380 ) $ (278 ) $ (1,006 )   GAAP net income (loss) per share $ 0.01 $ (0.04 ) $ (0.13 ) Exclude: Restructuring and other related costs $ - $ 0.02 $ 0.02 Acquisition-related costs and amortization(a) $ 0.01 $ 0.01 $ 0.02 Amortization of stock-based compensation $ 0.01 $ 0.01 $ 0.01 Professional fees associated with unusual events(b) $ - $ - $ 0.02 Discontinued operations, net of tax(c) $ (0.05 ) $ - $ (0.02 ) Other-than-temporary impairments of investments $ 0.02 $ - $ 0.07 Tax impact of reconciling items(d) $ -   $ -   $ -   Non-GAAP net loss per share $ -   $ -   $ (0.01 )   Shares used in computing diluted earnings per share 83,295 83,177 82,773   (a) Acquisition-related costs relates to retention-based consideration under the terms of the Widerweb and Solomio acquisitions. Amortization relates to acquired intangible assets. (b) Relates to legal fees regarding the stock option lawsuits and other unusual events, net of insurance reimbursements. (c) Relates to the release of escrowed funds associated with the previous sale of Musiwave. (d) The tax impact relates to tax benefits related to amortization of intangibles and stock-based compensation.   OPENWAVE SYSTEMS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS-UNAUDITED (in thousands)               Three Months Ended September 30, June 30, September 30, 2009 2009 2008 Operating activities: Net income (loss) $ 990 $ (3,444 ) $ (10,504 ) Gain on sale of discontinued operation (4,516 ) - (2,000 ) Reconciling items: Depreciation, amortization of intangibles and stock-based compensation 2,449 2,519 3,770 Non-cash restructuring charges 391 390 447 Accelerated depreciation on restructured property and equipment - 128 235 Provision for (recovery of) doubtful accounts 31 (595 ) 37 Other non-cash items, net 64 (8 ) 147 Other-than-temporary impairments of investments 1,464 - 5,632 Changes in operating assets and liabilities   (9,662 )   5,487     (687 )   Net cash provided by (used for) operating activities   (8,789 )   4,477     (2,923 )   Investing activities: Purchases of property and equipment, net (607 ) (1,161 ) (477 ) Sale of discontinued operation, net 4,516 - 9,718 Proceeds of investments, net (700 ) (70 ) 8,969 Maturities of restricted cash and investments, net   419     213     -     Net cash provided by (used for) investing activities   3,628     (1,018 )   18,210     Financing activities: Payment on notes payable - - (150,000 ) Net proceeds from issuance of common stock 81 20 - Employee stock purchase plan   -     66     -     Cash provided by (used for) financing activities   81     86     (150,000 ) Net increase (decrease) in cash and cash equivalents (5,080 ) 3,545 (134,713 ) Cash and cash equivalents at beginning of period   91,545     88,000     196,150   Cash and cash equivalents at end of period, including discontinued operations $ 86,465   $ 91,545   $ 61,437 [ Back To TMCnet.com's Homepage ]