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Home > News Room > Press Releases > 2001 > 07/23/2001
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  OPENWAVE REPORTS RESULTS FOR FOURTH QUARTER AND FISCAL YEAR 2001
  

  Fiscal Year Revenues Increase 218 Percent to $465 Million; Management Reaffirms Profitability Outlook for Calendar Year 2001
 
Redwood City, Calif. - July 23, 2001 -- Openwave Systems Inc. (Nasdaq: OPWV), the worldwide leader of open, IP-based communications infrastructure software and applications, today announced results for the fourth fiscal quarter and fiscal year ended June 30, 2001.

Fourth fiscal quarter revenues increased approximately 11 percent to $144.7 million from $130.0 million in the third quarter of fiscal 2001, and 153 percent from $57.3 million in the comparable period a year earlier. Revenues for the twelve months ended June 30, 2001, increased 218 percent to $465.3 million from $146.4 million for the comparable period ended June 30, 2000.

Deferred revenue was $90.3 million as of June 30, 2001, an increase of $8.3 million from the third fiscal quarter.

Pro forma earnings for the fourth fiscal quarter were $19.2 million, or $0.11 per diluted share, and for the fiscal year were $45.4 million, or $0.25 per diluted share, excluding merger and acquisition-related charges and stock-based compensation. The pro forma earnings per share number is based on 177.1 million weighted average diluted shares outstanding for the fourth fiscal quarter and 182.2 million weighted average diluted shares outstanding for the fiscal year ended June 30, 2001.

The Company achieved $14.6 million of positive cash flows from operations for the fiscal quarter. As of June 30, 2001, the Company had cash, cash equivalents, short-term and long-term investments of $369.7 million, excluding $20.7 million set aside as restricted cash, total assets of $1.73 billion and stockholders? equity of $1.56 billion.

"I'm pleased we have achieved our objectives for the fiscal year. We have executed well within a difficult environment," said Don Listwin, Chairman, President and Chief Executive Officer. "We continue to lead in the adoption of the mobile Internet globally. "

Net loss for the fourth fiscal quarter including merger and acquisition-related charges and stock-based compensation was $142.2 million, or $0.84 per basic and diluted share, compared to a net loss of $151.2 million, or $0.91 per basic and diluted share for the quarter ended March 31, 2001, and a net loss of $177.4 million, or $1.13 per basic and diluted share for the fourth quarter in the prior fiscal year.

Net loss for the fiscal year ended June 30, 2001, including merger and acquisition-related charges and stock-based compensation was $690.0 million, or $4.17 per basic and diluted share, compared to a net loss of $288.3 million, or $2.06 per basic and diluted share, for the fiscal year ended June 30, 2000.

Total active mobile subscribers grew by 4.2 million to over 21.6 million at the end of June 2001, up from 17.4 million at the end of March 2001. Mobile subscriber growth was impacted by slower subscriber growth in the highly penetrated Japanese market and by the conversion of large carrier customers to contracts with higher subscriber activation and usage thresholds. Openwave's messaging business continued to grow, as licensed subscribers reached an industry leading 180.9 million seats, at the end of June, with activated seats at 118.5 million highlighted by the 37 carriers which have each licensed over 1 million seats.

Of particular significance during the fourth quarter, the Company announced its support of the GSM Association's Mobile Services Initiative (M-Services). This initiative was created to accelerate deployment and adoption of mobile Internet services within the GSM community this year. Openwave is contributing two key components: first, WML extensions enabling a highly intuitive graphical user interface (GUI), and second, an end-to-end architecture, called Download Fun, supporting the secure download of consumer-oriented content, such as ring tones, images and wallpapers.

Financial Outlook

The following statements are forward looking and actual results may differ materially due to factors noted below, among others.

Management's outlook since the beginning of calendar 2001 has been that quarterly revenues would grow 10 to 20 percent sequentially. For the quarter ending September 30, 2001, Openwave's outlook is that seasonal growth patterns in its served wireless markets will result in quarterly revenues increasing at the low end of this range. For the quarter ending December 31, 2001, the Company's outlook is that revenues will grow by 10 to 20 percent sequentially, with the higher rate of growth contingent upon anticipated seasonal growth patterns that impact wireless markets around the holiday season, as well as M-Services and other growth opportunities.

The Company's pro forma earnings per share outlook for calendar year 2001 remains unchanged at approximately $0.43, excluding merger and acquisition-related charges and stock-based compensation. The Company's outlook is that gross profit will range between 81 and 83 percent for the remainder of calendar year 2001.

The Company's pro forma operating profit excluding merger and acquisition-related charges and stock-based compensation was 13 percent for the fourth fiscal quarter of 2001. The Company's targeted pro forma operating profit is now approximately 14 percent by the fourth calendar quarter of 2001.



Openwave Systems Inc. has scheduled a conference call for 5:30 p.m. EST today to discuss the results for the fourth fiscal quarter. Interested parties may access the conference call over the Internet through the Company's web site at www.openwave.com or by telephone at 1-888-754-3420 (domestic U.S.), 1-212-346-6457 (International). A replay will be available for 48 hours following the conference call.

Openwave Fourth Quarter Statement of Operations Openwave Fourth Quarter Balance Sheets About Openwave
 
Openwave Systems Inc. (Nasdaq: OPWV) is the worldwide leader of open IP-based communication infrastructure software and applications. Openwave is a global company headquartered in Redwood City, California. For more information, please visit www.openwave.com.

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. 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 and the Middle East including 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 success of the GSM Association’s Mobile Service Initiative; (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 the Company’s Quarterly Report on Form 10-Q for the quarters ended December 31, 2000 and March 31, 2001, 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. 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. The Company assumes no obligation to update the forward-looking statements included in this document.


 
Openwave, the Openwave logo and Services OS are trademarks of Openwave Systems Inc. All other trademarks and registered trademarks are trademarks of their respective holders.

For further information:
 
Contact Openwave Worldwide Public Relations

Openwave Systems Inc.
Alan Black
Chief Financial Officer
(650) 480-4888
alan.black@openwave.com

Openwave Systems Inc.
Mike Musson
Investor Relations
(805) 884-5352
mike.musson@openwave.com

Openwave Systems Inc.
Alexandrea Todd
(650) 281-1127
alexandrea.todd@openwave.com

Thompson Financial
Bonnie McBride
(415) 617-2540
bonnie.mcbride@tfn.com

  



 
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