Openwave Systems' CEO Discusses F3Q12 Results - Earnings Call Transcript

Openwave Systems Inc. (OPWV)

F3Q12 Earnings Call

May 8, 2012 05:30 pm ET

Executives

Mike Bishop - IR

Mike Mulica - CEO

Tim Robbins - CFO

Anne Brennan - General Manager, Intellectual Property

Analysts

Jonathan Skeels - Davenport & Company

Scott Sutherland - Wedbush Securities

Presentation

Operator

Good afternoon ladies and gentlemen. Thank you for standing by. Welcome to the Unwired Planet's third quarter 2012 earnings conference call. During today’s presentation, all parties will be in a listen-only mode and following the presentation, the conference will be opened for questions. (Operator Instructions) This conference is being recorded today, May 8, 2012.

I would now like to turn the call over to Mike Bishop of Investor Relations.

Mike Bishop

Thank you, good afternoon and thank you for joining us today to discuss the results of Unwired Planet's third quarter fiscal year 2012. Joining me today from Redwood City are Mike Mulica, Chief Executive Officer; Anne Brennan, Chief Financial Officer and Tim Robbins, General Manager, Intellectual Property. Before we discuss the results of the quarter, I want to remind everybody that we are operating under the rules of Regulation FD. The third quarter financial results’ press release was distributed at the close of market today, which includes the non-GAAP to GAAP reconciliation. And if you’ve not yet seen a copy, you can find one at our website at openwave.com. For your convenience, this call is being recorded and will be available for playback from our website for three months.

Further, any remarks that maybe made on this call or in our earnings press release of our future expectations, plans or prospects for the company may constitute forward-looking statements for the purpose of the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. The actual results may differ materially from those indicated by the forward-looking statements as a result of various important factors. These factors include the specific risk factors discussed in the company’s press release that was distributed today, and in the company’s filings with the SEC, including, but not limited to the fiscal [2000] yearend results on Form 10-K, and any other reports subsequently filed with the SEC.

We intend to make forward-looking statements based on management’s outlook as of today. We do not intend to update these statements until the release of Unwired Planet's next quarterly report and disclaim any obligation to do so prior to that time. We reserve the right to update the outlook for any reasons during the quarter.

I would like to note that the discussion of the financial results, unless otherwise indicated, earnings-related items are discussed on a non-GAAP basis, which excludes stock-based compensation, restructuring expense and discontinued operations.

Please access our press release to review a reconciliation of the non-GAAP measures we report to the corresponding GAAP measures. And with that I would like to turn the call to Mike.

Mike Mulica

Thanks Mike and good afternoon, everyone. Thanks for joining the call today. Clearly our company is going through quite a transformation and we are very glad to report our progress. We have recently announced some fundamental changes to the business and I would like to address these as well as the new structure of the company going forward. Shortly Anne will detail the results of the past quarter. These will focus on the ongoing business as we forward with the new streamlined company we have created to pursue the IP monetization opportunity. Just a few short quarters ago, we moved to first identify a new strategic direction for Openwave and then rapidly executed on it. Our plan was to first unencumber each business unit, then determine how to maximize the shareholder value with these units. Following our detailed strategic review in December, we announced the product line divesture process in January. We conducted a very thorough process for the asset divestures and investigated a broad base of potential buyers.

The sale of the location business to Persistent Systems a quarter ago was the first step in implementing our strategic initiative to the divesture of our products businesses. Two weeks ago we successfully executed an agreement to sell the remaining businesses, Mediation and Messaging to Marlin Equity Partners for $55 million.

This is [last], a working capital adjustment of $5.4 million and also subject to purchase price adjustments once determined. We believe this is a great result for shareholders, employees and customers. Marlin has the strategy to make Openwave's products and services more comparative through increased focus in investment and R&D and they absorb and will employee the majority of Openwave's employees.

In addition those assets and liabilities primarily associated with the product businesses were transferred with the sale. With the close of the transaction we’ve totally changed the company's profile. First we launched the Unwired Planet name harkening back to the company's roots. As of May 9, we’re changing the ticker symbol to UTIP. Unwired Planet will now be focused on multi-pronged intellectual property strategy that includes licensing and enforcement if necessary to protect its patent portfolio of approximately 200 issued US and foreign patents and approximately 75 pending applications, many of which are considered foundational to the mobile communications market place.

As we said last quarter, Daniel Mendez and Tim Robbins are serving are General Managers of Unwired Planet's IP portfolio business. We believe the sale of the product groups builds on our capacity to execute our multi-pronged strategy to realize the value of our patent portfolio with much greater efficiency. Now we would like to provide you with a view of the valuable Unwired Planet intellectual property. There is probably no better person to do that than Tim Robbins who has been responsible for developing our go-forward strategy and this initiative. Tim?

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