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  OPENWAVE SYSTEMS INC. CONFIRMS FOURTH QUARTER 2005 AND CALENDAR YEAR 2006 BUSINESS OUTLOOK
  

  REDWOOD CITY, Calif. - December 1, 2005 -- Openwave Systems Inc. (Nasdaq: OPWV) today confirmed the business outlook previously provided at its regular quarterly webcast conference call held on October 26, 2005. The following information is provided on a calendar-year basis.

Fourth Quarter 2005
  • Openwave estimated that the revenue target for the fourth quarter was $103 - $105 million.
  • Non-GAAP operating profit was estimated to be 15%, or 2% on a GAAP basis.
  • Non-GAAP earnings per share were estimated to be in the range of $0.18 to $0.20 per share, or $.01 to $.03 per share on a GAAP basis.
  • Non-GAAP per share amounts are based on an assumed 89 million shares outstanding and GAAP per share amounts are based on an assumed 81 million shares outstanding. As of November 30, 2005, there were approximately 73 million shares outstanding.
Calendar 2006
  • Openwave estimated that the revenue growth target for calendar 2006 would be between 15% to 20% over the projected revenue for 2005, excluding approximately $40 to $45 million in revenue estimated to be generated from the operations of Musiwave following the closing of that acquisition. In addition, the Company estimated that revenue for the first quarter of 2006 would increase slightly from the projected revenue for the fourth quarter of 2005.
  • Non-GAAP earnings per share were estimated to be in the range of $0.80 to $1.00 per share, or $.30 to $.50 per share on a GAAP basis.
  • Per share amounts are based on an assumed 106 million shares outstanding, which includes an estimated 8.2 million shares issuable upon conversion of outstanding convertible notes.
Non-GAAP Information. Non-GAAP operating profit projected for the fourth quarter of 2005 excludes estimated amortization of intangibles (2)%, stock based compensation (10)%, and restructuring and related costs (1)%. Non-GAAP earnings per share for the same period exclude estimated amortization of intangibles $(.03), stock-based compensation $(.13) and restructuring and related costs $(.01). Non-GAAP projected earnings per share for calendar 2006 exclude estimated amortization of intangibles $(.09) and stock-based compensation $(.41).

Management believes the presentation of this non-GAAP information may be useful to investors because the Company has historically provided this or similar information and understands that some investors find it helpful in analyzing the Company's expenses and comparing them to the expenses of the Company's competitors or others. Management uses this non-GAAP information, along with GAAP information, in evaluating the Company's historical and projected operating results, primarily with a view to assessing ongoing expenses exclusive of specific, non-recurring transactions, as may be the case with our amortization of acquisition-related intangibles and restructuring and related costs. Management uses the operating results exclusive of our equity-based compensation expense to compare our performance with the Company's competitors or others. Management does so, in part, because of the divergence of opinion as to the best accounting method of equity compensation, notwithstanding the recent adoption of FAS 123R.

The non-GAAP information is not prepared in accordance with generally accepted accounting principles and may differ from the non-GAAP information used by other companies. Non-GAAP information should not be considered in isolation from, or as a substitute for, information prepared in accordance with GAAP. Moreover, there are material limitations associated with the use of non-GAAP information. In this regard, while the some transactions causing the non-GAAP expenses are non-recurring, the Company in the future may effect other transactions, such as acquisitions or restructurings that will trigger similar expenses. Moreover, the Company expects in the future to incur additional equity-based compensation pursuant to FAS 123R as outstanding stock options continue to vest and as a result of the granting of additional equity compensation. For these reasons, our non-GAAP information may not be as useful to investors as the GAAP information also provided.

About Openwave
 
Openwave Systems Inc. (Nasdaq: OPWV) 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 www.openwave.com.

Cautionary Note Regarding Forward Looking Statements
 
This release contains forward-looking statements relating to the revenue, growth rates, earnings per share, outstanding shares, our pending acquisition of Musiwave, and other business outlook information for Openwave Systems Inc. that are based upon the current expectations and beliefs of Openwave's management. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

A number of factors could cause actual results to differ materially from those described in the forward-looking statements. In this regard, visibility into the operating results for both the fourth quarter and the subsequent calendar year has not fundamentally changed since the initial release of this information in late October because of, among other things, the significant number of transactions that customarily are not executed until the last week of a given quarter or period. Moreover, information with respect to the financial results for calendar 2006 remains preliminary and subject to change upon completion of the fourth quarter of 2005 and finalization of the Company's budget for 2006. In addition, we may not be able to close the Musiwave transaction as contemplated or at all.

Other factors that could cause our actual results to differ include: (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 possibility that our previously announced proposed acquisition of Musiwave will not close or that the closing may be delayed; (i) the ability to successfully manage and integrate Musiwave's operations and employees and to acquire additional companies and technologies and successfully integrate such acquisitions; (j) increased global competition and pricing pressure on our products; (k) technological changes and developments; (l) general risks of the Internet and wireless and wireline telecommunications sectors; and (m) 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 Annual Report on Form 10-K for the fiscal year ended June 30, 2005, our Quarterly Report on Form 10-Q for the three months ended September 30, 2005, and any subsequently filed reports. These and other reports 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 disclaims any obligation to update such statements for subsequent events or information.

 
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.

For further information:
 
Contact Openwave Worldwide Public Relations

  



 
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