Openwave Reports Pro Forma Profit in the Second Fiscal QuarterCompany Earns $0.09 per share on a Pro Forma basis Quarterly Revenues Increase 36 Percent Sequentially; Outlook for Calendar Year 2001 Revenue Increased to $640 Million
PR NEWSWIRE - January 22, 2001 16:01
REDWOOD CITY, Calif., Jan 22, 2001 /PRNewswire via COMTEX/ -- Openwave Systems Inc. (Nasdaq: OPWV), the combination of Phone.com and Software.com, today announced record results for the second fiscal quarter ended December 31, 2000.
(Photo: newscom.com )
Second fiscal quarter revenues increased approximately 36 percent to $109.7 million from $80.8 million in the first quarter of fiscal 2001, and 278 percent from $29.1 million in the same period a year earlier. Revenues for the six months ended December 31, 2000 increased 279 percent to $190.6 million from $50.3 million for the same period ending December 31, 1999.
Pro forma earnings for the second fiscal quarter were $15.8 million, or $0.09 per diluted share, excluding merger and acquisition costs and stock- based compensation. The diluted earnings per share number is based on 180.6 million weighted average shares outstanding. During the second fiscal quarter, backlog increased by $43 million to over $325 million.
As of December 31, 2000, the company had cash, cash equivalents and short- term investments of $435.2 million, excluding $20.7 million set aside as restricted cash, total assets of $2.0 billion and stockholders' equity of $1.8 billion.
"We are very pleased to have achieved strong pro forma operating profitability ahead of schedule and to have reported solid sequential revenue growth in Openwave's first quarter as a merged entity," said Don Listwin, President and Chief Executive Officer. "The wireless Internet continues to come of age and its worldwide adoption is fueling Openwave's growth."
Net loss for the second fiscal quarter including merger and acquisition costs and stock-based compensation was $228.6 million, or $1.38 loss per basic and diluted share, compared to a net loss of $168.0 million, or $1.04 loss per basic and diluted share, for the first quarter of fiscal 2001, and a net loss of $25.4 million, or $0.19 loss per basic and diluted share, for the second quarter in the prior fiscal year.
The Company benefited from strong wireless subscriber additions throughout the second quarter, as consumers around the world signed up for mobile Internet services. Total active mobile subscribers using Openwave products grew by 5.2 million to over 12.1 million at the end of December 2000 from 6.9 million at the end of September 2000. This growth was evident in Japan as well as in the U.S., Korean and European markets.
In the messaging business, licensed subscribers reached an industry leading 145.6 million seats, at the end of December, with activated seats at 95.9 million. Of significance, with its high availability and scalability, the Openwave messaging platform has been recognized as a critical technology for next generation carrier services. Of Openwave's communication service provider customers, 31 have each licensed over 1 million seats.
Financial Outlook
The following statements are forward looking and actual results may differ materially due to factors noted below, among others.
For calendar year 2001, Openwave's outlook is that quarterly revenues will grow at 10 to 20 percent sequentially, resulting in calendar year 2001 revenues of approximately $640 million and earnings per share of approximately $0.46, excluding merger and acquisition costs and stock-based compensation. This represents an increase of $60 million from our previously stated outlook for the calendar year, and 123 percent growth over the calendar year ended December 31, 2000. The Company's outlook is that gross profit will range between 76 to 78 percent for calendar year 2001.
The Company's pro forma operating profit excluding merger and acquisition costs and stock-based compensation was 9 percent for the second fiscal quarter of 2001. This pro forma operating profit was significantly ahead of the Company's previous outlook, provided on November 20, 2000, that it would achieve breakeven by the end of the third fiscal quarter of 2001. The Company intends to improve its pro forma operating profit by approximately one percent per quarter through calendar year 2001, with a targeted pro forma operating profit of approximately 13 percent by the fourth calendar quarter of 2001.
Editors Note: Openwave Systems Inc. has scheduled a conference call for 5:00 p.m. EST today to discuss the results for the second fiscal quarter. Interested parties may access the conference call over Internet through the Company's website at www.openwave.com or by telephone at 1-888-849-9214. A replay will be available for 48 hours following the conference call.
About Openwave Systems Inc.
Openwave Systems, Inc., the combination of Phone.com and Software.com, is the worldwide leader of open Internet-based communication infrastructure software and applications. Openwave is a global company headquartered in Redwood City, California. For more information, please visit www.openwave.com.
NOTE REGARDING FORWARD LOOKING STATEMENTS
This release contains forward-looking statements relating to expectations, plans or prospects for Openwave that are based upon the current expectations and beliefs of Openwave's management as of today only and are subject to certain risks and uncertainties, including economic and market variables. Based upon such factors among others, actual results could be above or below those described in the forward-looking statements. 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 including Japan; (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 specifically associated with the integration of the businesses of Phone.com and Software.com and the ability to achieve the expected benefits of the merger (including but not limited to those risks associated with the ability to (i) integrate effectively the two companies' product lines, technology, operations and personnel, (ii) take advantage of cross-selling opportunities and product and market synergies, (iii) retain key officers and employees, and (iv) effectively manage a larger more geographically dispersed organization); (d) 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 the Company's software; (e) the ability to manage the company's growth; (f) the ability to continue to obtain qualified, experienced employees; (g) the ability to successfully partner with other companies; (h) the ability to acquire additional companies and integrate such acquisitions; (i) competition and technological changes and developments; and (j) general risks of the Internet and wireless and wireline telecommunications sectors.
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 Phone.com's and Software.com's respective Quarterly Reports on Form 10-Q for the quarter ended September 30, 2000, Phone.com's and Software.com's most recently filed Annual Reports on Form 10-K, and Phone.com's registration statement on Form S-4 as filed on October 10, 2000, and any subsequently filed reports. All documents also are available through the SEC's Electronic Data Gathering Analysis and Retrieval system (EDGAR) at www.sec.gov or from Openwave's Web site at www.openwave.com.
Openwave makes the forward looking statements set forth in this release as of today and undertakes no obligation to update these statements. It is currently expected that the business outlook statements set forth above will not be updated until the release of Openwave's next quarterly earnings announcement. The Company reserves the right to update the outlook for any reason during the quarter, including the occurrence of material events.
OPENWAVE SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(In thousands, except per share data)
Three Months Ended Six Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2000 1999 2000 1999
Revenues:
License $79,960 $17,347 $137,061 $29,480
Maintenance and support
services 13,303 5,773 23,843 10,318
Professional services 16,475 5,941 29,646 10,522
Total revenues 109,738 29,061 190,550 50,320
Cost of revenues:
License 6,214 966 11,851 2,054
Maintenance and support
services 7,070 3,624 13,377 5,861
Professional services 9,023 3,349 17,024 6,116
Total cost of revenues 22,307 7,939 42,252 14,031
Gross profit 87,431 21,122 148,298 36,289
Operating expenses:
Research and development 31,440 13,051 58,599 22,781
Sales and marketing 33,413 12,820 66,993 23,792
General and administrative 12,277 5,441 23,029 9,645
Stock-based compensation -
acquisition related 1,143 1,633 3,581 2,111
Stock-based compensation -
other 419 230 2,655 152
Amortization of goodwill and
other intangibles 159,731 17,291 318,145 17,291
Merger costs 83,094 -- 83,094 --
Total operating expenses 321,517 50,466 556,096 75,772
Operating loss (234,086) (29,344) (407,798) (39,483)
Interest and other income, net 7,175 4,838 15,491 7,107
Loss before income taxes (226,911) (24,506) (392,307) (32,376)
Income taxes 1,714 892 4,339 990
Net loss $(228,625) $(25,398) $(396,646) $(33,366)
Basic and diluted net loss
per share $(1.38) $(0.19) $(2.42) $(0.26)
Shares used in computing basic
and diluted net loss per share 165,088 132,251 163,614 130,644
Pro forma net income (loss)
per share excluding merger
and acquisition costs and
stock-based compensation $0.09 $(0.05) $0.06 $(0.11)
Shares used in computing pro
forma basic and diluted net
income (loss) per share 180,641 132,251 180,959 130,644
OPENWAVE SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In thousands)
Dec. 31, June 30,
Assets 2000 2000
Current assets:
Cash, cash equivalents and short-term
investments $435,229 $523,007
Accounts receivable, net 114,449 77,385
Prepaid expenses and other current assets 13,574 11,499
Total current assets 563,252 611,891
Property and equipment, net 68,425 34,824
Restricted cash 20,700 20,700
Deposits and other assets 7,157 5,880
Goodwill and other intangible assets 1,371,445 1,684,589
Total Assets $2,030,979 $2,357,884
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of equipment loans and
capital lease obligations $2,929 $3,367
Accounts payable 10,614 14,176
Accrued liabilities - acquisition related 39,400 20,788
Accrued liabilities - other 45,473 29,336
Deferred revenue 109,177 97,863
Total current liabilities 207,593 165,530
Equipment loans and capital lease obligations,
less current portion 1,971 3,319
Total liabilities 209,564 168,849
Total stockholders' equity 1,821,415 2,189,035
Total Liabilities and Stockholders' Equity $2,030,979 $2,357,884
Openwave and the Openwave logo are trademarks of Openwave Systems Inc. All other trademarks are the properties of their respective owners.
CONTACT: Alan Black, Chief Financial Officer, 650-817-1447, or Mike Musson, Investor Relations, 805-882-2470, ext. 289, or mike.musson@openwave.com, both of Openwave Systems Inc.
SOURCE Openwave Systems Inc.
CONTACT: Alan Black, Chief Financial Officer, 650-817-1447, or Mike Musson, Investor Relations, 805-882-2470, ext. 289, or mike.musson@openwave.com, both of Openwave Systems Inc. /Photo: NewsCom: newscom.com AP Archive: photoarchive.ap.org PRN Photo Desk, 888-776-6555 or 201-369-3467
URL: openwave.com
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