OPWV Unwired Planet, Inc. (MM)

Openwave Systems Inc. (Nasdaq:OPWV), a global software innovator delivering all-Internet Protocol (all-IP) mediation and messaging solutions, today announced that revenues for the second fiscal quarter ended December 31, 2011 were $35.9 million, compared with $52.4 million in the prior quarter ended September 30, 2011 and $39.9 million in the December quarter in the preceding fiscal year. Bookings for the quarter were $20.4 million. The company ended the quarter with $69.7 million in cash and investments.

“As previewed a quarter ago, we undertook a strategic review of our products business and subsequently executed a set of activities, including establishing three business units and improving bookings execution. As a result, we believe our mediation and messaging business units are now optimized for a potential sale,” said Mike Mulica, CEO, Openwave. “We continue to believe in the large opportunity represented by our Intellectual Property initiative, and we are well underway in implementing a strategic plan to unlock the significant inherent value in our patent portfolio.”

On a GAAP basis, net loss for the second fiscal quarter ended December 31, 2011 was $10.4 million or $0.12 per share, compared with a net income of $2.6 million or $0.03 per share, in the prior quarter and net loss of $4.5 million or $0.05 per share, in the December quarter in the preceding year.

On a non-GAAP basis, net loss for the second fiscal quarter ended December 31, 2011 was $5.0 million or $0.06 per share, compared with a net income $9.3 million or $0.11 per share, in the prior quarter and a net loss of $2.7 million, or $0.03 per share, in the December quarter in the preceding year. Non-GAAP net income (loss) excludes restructuring, impairments and certain losses on investments, costs associated with strategic alternatives, amortization of intangibles and stock-based compensation, amounts associated with certain unusual events, discontinued operations, impairment of deferred tax assets and the tax impact of these items.

A reconciliation between net income (loss) and net income (loss) per share 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 income (loss) and non-GAAP net income (loss) per share. These non-GAAP measures exclude certain items that generally are non-recurring events or are non-cash items that many other companies exclude, in order to compare Openwave with other companies, such as stock-based compensation and amortization of intangibles. These non-GAAP measures also exclude items which management does not consider in evaluating Openwave’s on-going business, such as restructuring costs, impairments on investments, and discontinued operations. Openwave considers non-GAAP net income (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 daylight time today to discuss its financial results for its second quarter ended December 31, 2011. Interested parties may access the conference call over the Internet through Openwave’s website at www.openwave.com or by telephone at (877) 941-2068 or (480) 629-9712 (international). A replay of the conference call will be available for two weeks beginning at approximately 8:00 p.m. eastern daylight time today by calling 800-406-7325. The replay can be accessed internationally by calling 303-590-3030. Reservation number: 4505424#.

A live webcast of the call, together with supplemental financial information, will also be available on the Earnings & Metrics section of Openwave’s website at http://investor.Openwave.com. A replay will be available on the website for at least three months.

About Openwave Systems

Openwave Systems Inc. (Nasdaq:OPWV) is a global software innovator delivering all-Internet Protocol (all-IP) mediation and messaging solutions that enable communication service providers to create and deliver smarter services.

Building on its mobile data heritage, Openwave mobilizes the Internet with data-driven solutions that comprehensively enhance IP traffic and increase the value of the mobile network. Openwave arms its customers with a 360-degree view of network activity plus the tools to help them proactively optimize network resources (Congestion Control), react to user behavior with smarter data plans and services (Price Plan Innovation), and deliver a contextually relevant messaging experience (Converged Messaging).

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.

Openwave and the Openwave logo are trademarks of Openwave Systems Inc.

Cautionary Note Regarding Forward Looking Statements

The statements in this press release in Mr. Mulica’s quote with respect to future events or expectations 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, which could impede customer trials and the ability of Openwave to monetize its intellectual property portfolio; (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; and (c) Openwave’s cost cutting measures may not result in the cost reductions Openwave expects, or may have an unexpected negative effect on Openwave’s ability to service its customers, either of which would have an adverse effect on Openwave’s operating results.

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 Openwave’s filings with the U.S. Securities and Exchange Commission ("SEC"), including the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2011. 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)         December 31, June 30, 2011 2011 Assets Current Assets: Cash, cash equivalents and short-term investments $ 62,575 $ 81,213 Accounts receivable, net 26,313 22,293 Prepaid and other current assets   9,062   15,808 Total current assets 97,950 119,314   Property and equipment, net 4,837 6,680 Long-term investments 7,110 15,630 Deposits and other assets 2,285 5,373 Goodwill 267 267 Intangible assets, net   -   553 Total assets $ 112,449 $ 147,817   Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $ 5,474 $ 7,014 Accrued liabilities 18,692 19,810 Accrued settlement related to discontinued operations - 12,000 Accrued restructuring costs 15,736 13,660 Deferred revenue   23,513   29,088 Total current liabilities 63,415 81,572   Accrued restructuring costs, less current portion 6,209 12,515 Deferred revenue, less current portion 5,365 9,370 Deferred rent obligations and long-term taxes payable   925   1,415 Total liabilities 75,914 104,872   Stockholders' equity   36,535   42,945 Total liabilities and stockholders' equity $ 112,449 $ 147,817 OPENWAVE SYSTEMS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS-UNAUDITED (In thousands, except per share data)                 Three Months Ended Six Months Ended December 31, September 30, December 31, December 31, December 31, 2011   2011 2010   2011   2010   Revenues: License $ 9,578 $ 9,914 $ 10,072 $ 19,492 $ 22,404 Maintenance and support 10,201 10,671 13,913 20,872 27,906 Services 16,084 16,790 15,925 32,874 27,128 Patents   5     15,021   1     15,026     4,001   Total revenues   35,868     52,396   39,911     88,264     81,439     Cost of revenues: License 245 486 78 731 108 Maintenance and support 3,132 3,722 3,975 6,854 8,116 Services 14,803 13,797 11,594 28,600 20,481 Amortization of intangible assets   144     409   409     553     829   Total cost of revenues   18,324     18,414   16,056     36,738     29,534   Gross profit   17,544     33,982   23,855     51,526     51,905     Operating Expenses: Research and development 7,772 9,348 10,439 17,120 21,869 Sales and marketing 7,026 8,737 11,357 15,763 22,178 General and administrative 5,060 6,063 4,833 11,122 11,342 Patent initiative expenses 3,272 1,723 624 4,996 727 Restructuring and other related costs   1,674     5,072   856     6,746     1,564   Total operating expenses   24,804     30,943   28,109     55,747     57,680     Operating income (loss) from continuing operations (7,260 ) 3,039 (4,254 ) (4,221 ) (5,775 ) Interest and other income (expense), net   (309 )   61   210     (248 )   247   Pre-tax income (loss) from continuing operations (7,569 ) 3,100 (4,044 ) (4,469 ) (5,528 )   Income taxes   2,822     458   491     3,280     1,172   Net income (loss) from continuing operations (10,391 ) 2,642 (4,535 ) (7,749 ) (6,700 ) Discontinued operations, net   -     -   -     -     2,236   Net income (loss) $ (10,391 ) $ 2,642 $ (4,535 ) $ (7,749 ) $ (4,464 )     Basic net income (loss) per share from: Continuing operations $ (0.12 ) $ 0.03 $ (0.05 ) $ (0.09 ) $ (0.08 ) Discontinued operations   -     -   -     -     0.03   Net income (loss) per share $ (0.12 ) $ 0.03 $ (0.05 ) $ (0.09 ) $ (0.05 )   Diluted net income (loss) per share from: Continuing operations $ (0.12 ) $ 0.03 $ (0.05 ) $ (0.09 ) $ (0.08 ) Discontinued operations   -     -   -     -     0.03   Net income (loss) per share $ (0.12 ) $ 0.03 $ (0.05 ) $ (0.09 ) $ (0.05 )   Shares used in basic net income (loss) per share 85,594 85,482 84,324 85,538 84,170   Shares used in diluted net income (loss) per share 85,594 86,432 84,324 85,538 84,170   Stock-based compensation by category: Maintenance and support $ 41 $ 42 $ 40 $ 83 $ 85 Services 49 54 46 103 105 Research and development 107 94 115 201 246 Sales and marketing 139 116 161 255 317 General and administrative 271 173 256 444 526 Restructuring   27     106   -     133     -   $ 634   $ 585 $ 618   $ 1,219   $ 1,279   OPENWAVE SYSTEMS INC. RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS) (In thousands, except per share data)           Three Months Ended Six Months Ended December 31, September 30, December 31, December 31, December 31,   2011     2011     2010     2011     2010     Reconciliation between GAAP and Non-GAAP net income (loss): Net income (loss) $ (10,391 ) $ 2,642 $ (4,535 ) $ (7,749 ) $ (4,464 ) Exclude: Restructuring costs 1,674 5,072 856 6,746 1,564 Amortization of intangibles 144 409 409 553 829 Stock-based compensation 607 479 618 1,086 1,279 Amounts associated with unusual events(a) - 780 - 780 - Discontinued operations, net - - - - (2,236 ) Impairment of deferred tax assets 2,501 - - 2,501 - Tax impact of reconciling items(b) (49 ) (48 ) (47 ) (97 ) (90 ) Costs associated with strategic alternatives   467     -     -     467     -   Non-GAAP net income (loss) $ (5,047 ) $ 9,334   $ (2,699 ) $ 4,287   $ (3,118 )   Diluted GAAP net income (loss) per share $ (0.12 ) $ 0.03 $ (0.05 ) $ (0.09 ) $ (0.05 ) Exclude: Restructuring costs $ 0.02 $ 0.06 $ 0.01 $ 0.08 $ 0.02 Amortization of intangibles $ - $ - $ - $ - $ 0.01 Stock-based compensation $ - $ 0.01 $ 0.01 $ 0.01 $ 0.02 Amounts associated with unusual events(a) $ - $ 0.01 $ - $ 0.01 $ - Discontinued operations, net $ - $ - $ - $ - $ (0.03 ) Impairment of deferred tax assets $ 0.03 $ - $ - $ 0.03 $ - Tax impact of reconciling items(b) $ - $ - $ - $ - $ (0.01 ) Costs associated with strategic alternatives $ 0.01   $ -   $ -   $ 0.01   $ -   Diluted non-GAAP net income (loss) per share $ (0.06 ) $ 0.11   $ (0.03 ) $ 0.05   $ (0.04 )   Shares used in computing diluted earnings per share 85,594 86,432 84,324 86,379 84,170   (a)Relates to legal fees regarding lawsuits and other unusual events. (b)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 Six Months Ended December 31, September 30, December 31, December 31, December 31, 2011   2011   2010   2011   2010   Operating activities: Net income (loss) $ (10,391 ) $ 2,642 $ (4,535 ) $ (7,749 ) $ (4,464 ) Gain on sale of discontinued operation - - - - (2,236 ) Reconciling items: Depreciation, amortization of intangibles and stock-based compensation 1,810 2,157 2,335 3,967 4,662 Non-cash restructuring charges 187 212 290 399 605 Provision for (recovery of) doubtful accounts 270 197 (28 ) 467 (213 ) Other non-cash items, net 264 307 339 571 684 Changes in operating assets and liabilities   11,136     (22,969 )   (1,422 )   (11,833 )   (4,924 )   Net cash provided by (used for) operating activities   3,276     (17,454 )   (3,021 )   (14,178 )   (5,886 )   Investing activities: Purchases of property and equipment, net (141 ) (389 ) (1,569 ) (530 ) (2,635 ) Payment of settlement related to discontinued operations - (12,000 ) - (12,000 ) - Sale of discontinued operation, net - - - - 2,236 Proceeds of investments, net 6,760 6,440 (1,123 ) 13,200 (147 ) Release of restricted cash and investments   -     -     216     -     216     Net cash provided by (used for) investing activities   6,619     (5,949 )   (2,476 )   670     (330 )   Financing activities: Net proceeds from issuance of common stock   175     119     752     294     822     Cash provided by financing activities   175     119     752     294     822   Net increase/(decrease) in cash and cash equivalents 10,070 (23,284 ) (4,745 ) (13,214 ) (5,394 ) Cash and cash equivalents at beginning of period   23,982     47,266     60,286     47,266     60,935   Cash and cash equivalents at end of period, including discontinued operations $ 34,052   $ 23,982   $ 55,541   $ 34,052   $ 55,541