Mike Bishop - IR Charles Levine - Chairman Bruce Coleman - Interim CEO Anne Brennan - Interim CFO

Amir Rozwadowski - Lehman Brothers Tom Roderick - Thomas Weisel Scott Sutherland - Wedbush Morgan Securities Peter Jacobson - Brean Murray Jim Moran - Morgan Joseph Al Tobia - Sidus Investment Management Lauren Ye - JPMorgan

Good afternoon and welcome to the Openwave Third Quarter Conference Call. Today’s call is being recorded and will be available for replay starting at 5:00 p.m. Pacific Time today. For opening remarks and introductions, I would like to turn the call over to Mr. Michael Bishop with Investor Relations. Please go ahead sir.

Good afternoon everyone and thank you for joining us today to discuss the results of Openwave Systems third quarter of fiscal year 2008. Joining me today from Redwood City are, Charles Levine, the Chairman of the Board of Directors; Bruce Coleman, Interim CEO, and Anne Brennan, our Interim Chief Financial Officer. Before we discuss the results of the quarter, I want to remind everyone that we are operating under the rules of regulation FD. Our third quarter financial results press release was distributed at the close of the NASDAQ stock market and if you have not seen a copy, you can find one at our website at www.openwave.com. For your convenience, this call is being recorded and will be available for playback from our website for one year. Before we begin, I would like to remind you that any remarks that may be made on this call or in our earnings press release about future expectations, plans or prospects for the company may constitute forward-looking statements for the purposes of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The actual results may differ materially from those indicated by these 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 at the close of the market and in the company’s filings with the SEC, including but not limited to Openwave Systems Form 10-K and subsequent 10-Qs. We intend to make several forward-looking statements during this call that are based on management’s current outlook as of today. We do not intend to update these business outlook statements until the release of Openwave’s next quarterly earnings announcements and disclaim any obligation to do so prior to that time. However, we reserve the right to update the outlook for any reason during the quarter. And with that, I would like to turn the call to Charles.

Good afternoon and thank you for joining us. As you heard, I am Charles Levine, Openwave’s Chairman of the Board. As many of you have seen by our press release issued on Monday, we announced the appointment of Bruce Coleman as Interim CEO replacing former President and CEO, Robert Vrij, who resigned from Openwave and is no longer with the company. We’ve also engaged Spencer Stuart, a leading executive approving firm to assist us in the search for a new CEO. I am pleased that we were able to attract Bruce to Openwave. He is a seasoned executive with more than 15 interim and turnaround assignments under his belt and he is widely known as one of the true professionals in the business. He brings a unique set of skills based on his experience and we’re looking forward to him working with the Board and the management team to accelerate Openwave’s turnaround. Bruce is joining me today on the call along with CFO, Anne Brennan. Before I report the results of the quarter, I’d like to turn the call over to Bruce for his perspective. Bruce?

Thank you. Good afternoon. When I was looking at the Openwave opportunity, among other things, I examined the company’s strategy as well as the inherent potential for the company to be very successful. I believe that the strategy of focus on fewer product areas and more products in those areas makes a great deal of sense in these times. And in fact our ability to expand sales from a first to a second tier of our marketplace allows us to expand our customer base and to sell more product in the long-term. The kinds of things that the company needs now for the next four, five, six months I think fit very well with my experience and my skill sets as an Interim CEO and I believe this company has a great deal of strengths that we can capitalize upon. Just for your information, I just finished an assignment over a week and a half ago. Normally I only do one assignment in a year and take the rest of the year to recuperate and improve my handicap. However, I must tell you that when Openwave approached me I saw the opportunity is really too strong to resist. There is a great deal that can be accomplished here and I think I can help that. My task is to accelerate movements through Phase 2 of the turnaround as well as assist the Board in hiring a very strong permanent CEO with a proven track record of being able to grow companies. Over the next four to six months I believe I can position the company for long-term growth of revenue and profit.

Thank you Bruce, we’re happy to have on board. As Bruce mentioned the Phase 2 strategy is pivotal to Openwave’s turnaround. I had like to reiterate the commitment of the Board and the Management team to continue executing this corporate strategy. The Board and the Management team have spent the last several quarters carefully planning Phase 2 to architect the strategy for Openwave to attain long-term growth and profitability. And we are all 100% committed to successfully executing the company’s turnaround. We are convinced that the current plan to focus our product set while reducing our cost structure puts the company on the right track. We are implementing Phase 2 with a sense of urgency. The right product set combined with the right cost structure allows us to position ourselves for growth. Our plan is to expand our customer base while serving our current set of loyal customers leading the growth in revenue, growth in profits and we hope growth in shareholder value. I will further discuss the details of the strategy a bit later on the call. Anne and I plan to spend some time updating you in four key areas. First, an overview of our financial performance, second, an update on Phase 2, third, an update on new product wins and customer momentum over the past quarter and lastly Anne will cover our third quarter financial results in greater detail. The results for the third quarter of 2008 were revenue of $58 million, non-GAAP operating expense of $39 million and we had a non-GAAP EPS loss of $0.4. During the quarter, we signed $57.1 million in bookings. I am pleased that we were able to achieve an improved bottom line despite lower than anticipated revenue. The revenue was impacted by a number of key contracts for which purchase orders had not been received by the end of the quarter. Despite the number of moving parts, we believe we can show reasonable but incremental revenue and earnings improvement in FY ‘09 as we position the business for long-term growth. Our bookings of 57.1 million are below our expectations. However, it reflects substantial increase in licenses as a percentage of the total and with higher gross margin of 61% being placed into our backlog. I would now like to spend some time discussing an update on our corporate strategy. As you may have see on March 31st, we announced execution on Phase 2 of our strategy and I want to provide you with additional context around that decision. If Phase 1 could be best viewed as stabilization of Openwave, Phase 2 is a fundamental re-architecture of our business and in particular the product and sales organizations to position the company for long-term growth and accelerating profitability. Key elements of Phase 2 include the completion of our market -- of our product review and rationalization process, a restructure of our sales organization and broadening of our customer targets and lastly the long-term financial benefits we expect to realize as a result of the restructuring. In rationalizing the product portfolio, our aim is to increase focus in investment on those product lines that have the largest addressable market potential and maximize our relevancy to our customers, while decreasing or eliminating our investment in product areas that promise a lower return. As a part of that focused product strategy, we are placing greater emphasis in investment on our gateway and service management as well as our messaging products, accelerating new development and driving increased market momentum for Integra service delivery platform and key service enablers to optimize the open internet experience, as well as our Rich Mail and messaging infrastructure products. This will allow us to increase R&D in those areas and further solidify our market leadership position, while maintaining a competitive edge by a strong innovation. It also provides a great return on investment for R&D. Openwave is a company with a rich history of leadership in the wireless data space. As a result of that history, we brought a broad array of products to market. Some of those legacy products no longer justify substantial incremental investment compared to the potential return on investments in our gateway and messaging product lines. As a result, we have made the decision to discontinue investment in client and location beyond the current customer commitments. With regard to our location product line, we will continue to sell per releases or those releases resulting from customer obligations and we’ve already spoken to each of our current customers. We expect to realize revenue from this product line well into future quarters. In fact this quarter, we signed an agreement with a leading operator in Japan to deploy a new location solution. With regard to our client portfolio, although we do see this as an area of market that is increasing, the company didn’t see the traction that we had expected with MIDAS as a pull-through technology that operators could use to drive key OEM software decisions and enforce greater client service synergies. We will satisfy all contractual commitments for our client line and will continue to sell existing products. In fact, we have already closed one of three existing browser renewal contracts this past quarter. We’ll also continue to enable mobile internet browsing through the network side of our business, by key technologies like OpenWeb, but will not be investing in new client side development. In parallel, with narrowing our product set, we are looking to expand our customer base as a key growth strategy for the business. We are in the process of restructuring the sales team to more nimbly address a wider set of mobile and broadband customers, moving from an almost exclusive focus on the top 30 accounts, to a broader base of 400 accounts, including tier-2 and tier-3 operators. At the same time, we recognize the value of our largest customers and we plan to continue to meet and exceed their expectations. They provide not only a stable revenue base, but they also serve as a barometer, indicating trends and leading innovation in the carrier markets. The sales organization will include named account teams and new customer prospect teams that will cover specific territories and work independently as well as within region channel partners. By broadening our customer base, and continuing to introduce new service enablers and applications that optimize and enhance our next generation Integra gateway and Rich Mail messaging suite, we are confident that this will offset the decline in revenue associated with our product rationalization. As for the top line impact of Phase 2, we perceive fiscal year ‘09 revenue remaining in line with fiscal year ‘08. However we expect to realize profitability faster with a reduced break-even point as a result of our lowered operating costs. Now I would like to highlight some of our new product traction and customer momentum. We secured six new wins in Q3 fiscal year ‘08 bringing the total number of new product wins to 28, since we began tracking this metric four quarters ago. In our gateway line of business, we continue to win this increased customer momentum for OpenWeb, one of our key service enablers. Sprint publicly announced it was working with Openwave to launch an enhanced mobile web browsing experience on virtually all of the web capable Sprint phones and become the first U.S. carrier to deploy our OpenWeb solution. This quarter we also received two new OpenWeb orders in EMEA from leading operators in South Africa and Belgium in support of their upcoming launches of open internet browsing services. Bear in mind we’re signing these deals in a very tight telco spending environment. In our messaging line of business we continue to see momentum with our Rich Mail solution. This quarter, we signed a Rich Mail deal with Telecom Italia, one of the world’s largest mobile and fixed operators and part of a global international telecom group. At this year’s Mobile World Congress event in Barcelona, we also announced that Telekom Slovenije had selected a bundled set of our messaging offering, including Rich Mail, Email Mx, Infrastructure Solution and Edge Gx, our anti-abuse security solution. So as you can see we continue to witness tangible customer momentum for our gateway and messaging lines and we’re encouraged by the traction of the new products in these areas. And now for a discussion of the detailed financials, I’ll turn the call over to Anne, our Interim CFO.

Thank you, Charles, and good afternoon everyone. As we review the financial results for the third fiscal quarter of 2008, I would like to highlight the following key themes. Expense and margin management, seeing positive benefits to the bottom line and restructuring that will drive even greater efficiency in the company and improvement in financial results. Before I begin discussing the numbers, I would like to note but unless otherwise indicated, gross margins, expenses and earnings related items are reported on a non-GAAP basis, which excludes stock-based compensation, impairments on investments, retention bonuses related to when the company explores strategic alternatives, amortization of intangibles and other acquisition related costs, restructuring expenses and certain legal expenses. In addition all comparisons with last quarter’s numbers exclude Musiwave, which we sold to Microsoft on December 31, 2007. Please access our financial metric summary that is available at www.openwave.com to review Openwave’s historical financial performance excluding Musiwave. Overall, for the quarter ended March 31, 2008, Openwave posted a GAAP loss of $0.18 per share which includes 5.9 million related to the restructuring amount on March 31st, and a non-GAAP net loss of $0.04 per share. Our reconciliation from GAAP to non-GAAP loss can be found in our press release. I will now turn your attention to the detailed results for the March quarter. Revenue for the quarter was 58.0 million, a decrease of 5.1 million or 8.1% quarter-over-quarter. This decrease was attributable to support and services revenue. License revenue was $18.4 million, up $1.6 million or 9.3% sequentially which comprised 31.7% of total revenues. This increase was due to higher license fees in our Asian business. Maintenance and support revenue was $18.8 million, down $2.1 million or 10.1% sequentially, which comprised 32.3% of total revenue. This decrease is primarily attributable to POs for a large customer arising after our quarter-end cut-off. Professional services revenue was $17.4 million, down $1.7 million or 8.9% sequentially, which comprised 29.9% of total revenue. This decrease is primarily attributable to lower percent completions on several consulting engagements. Project revenue was 3.5 million, down $2.9 million or 45.2% sequentially, which comprised 6.1% of total revenue. The decrease in revenue is attributable to projects entering the final stages of the engagement. The retail breakdown of revenues in the March quarter shows an increasing change in mix of our international business. 43% of our revenue originated from customers based in the Americas, 19% from EMEA and 38% from Asia. This compares to last quarter’s breakdown of 49%, 17% and 34% for the Americas, EMEA and Asia respectively. The Americas decrease was primarily attributable to the support and project revenues as previously noted. For the third fiscal quarter of 2008, Sprint represented 18% of revenue and Telstra represented 12% of revenue. No other customer represented greater than 10% of our revenue for the quarter. Turning now to our gross margins. We achieved 61.5% blended gross margins for the quarter, an improvement of 5.5 points over last quarter. As I will discuss later in more detail, this gross margin improvement was primarily attributable to our professional services margins. Gross margin on license revenue increased slightly to 94.6% compared to 94.0% for the December quarter. The maintenance and support gross margins of 63.0% decreased 2.1 points from 65.1% last quarter. This decline was primarily attributable to several support contracts, whose purchase orders were received after the end of the quarter and the corresponding revenue was not recognized in this quarter. Professional services margin of 27.6% increased 13.2 points from 14.4% last quarter. The increase in margin was attributable to a reduction in labor costs and the cancellation of a lost contract. Project revenue margins decreased 2.9 points from 50.1% last quarter to 47.2% this quarter. As for operating expenses, fiscal quarter three, research and development of $15.2 million increased $1.2 million or 8.3% from 14.0 million in the prior quarter. This increase is primarily attributable to seasonally higher labor related costs as well as increased outsource development fees. Fiscal quarter three sales and marketing expenses of $16.0 million decreased $2.4 million or 12.9% from $18.4 million in the prior quarter. This decrease from the prior quarter was attributable to lower commissions and labor related costs, offset by higher marketing costs, related to the Mobile World Congress event. Fiscal quarter three general and administrative expenses of $7.7 million decreased $1.3 million or 14.7% from $9.0 million in the prior quarter. This decrease was primarily attributable to lower infrastructure costs in addition to lower labor related costs compared to the March quarter. Our head count decreased by 44 employees from 918 at the end of December to 874 at the end of March. Please see our metric sheet posted on the website for a breakdown of head count by function. Regarding stock based compensation, total expense for the third quarter of 2008 was $1.9 million compared to $3.4 million in the prior quarter. This $1.5 million increase -- decrease was due to the decline in expense for company wide option grants made three and four years ago, which became truly vested in fiscal quarter two. In the March quarter, interest and other income was a charge of $1.1 million, which compares to a gain of 2.5 million in the December quarter. The loss in fiscal quarter three was primarily driven by $2.4 million unrealized impairment charge on investments, primarily auction rate securities. Income taxes increased to $0.7 million in the March quarter compared to $0.5 million last quarter. The increase is primarily related to higher foreign withholding tax. Now I would like to discuss the financial details of the restructuring. As Charles discussed earlier on March 31st, 2008, we announced a restructuring related to Phase 2 of our corporate strategy. In the third fiscal quarter of 2008, we took a 5.9 million charge on the income statement related to severance cost for the employees, and expect to incur additional restructuring charges over the next few quarters of approximately 10 to $13 million. The majority of the restructuring will be completed by the end of September 2008. As we mentioned in the press release, this restructuring should reduce our total expenses by $50 million per year, with savings coming from labor related expenses and reductions in infrastructure costs. Although we will begin to see some impact from the restructuring in the fourth fiscal quarter of 2008, these savings will be offset by some seasonally higher expenses. The full impact of restructuring will be achieved as we exit the second fiscal quarter of 2009. In the March quarter, Openwave’s bookings were $57.1 million, down 23.3 million or 29% from the December quarter. As noted on last quarter’s earnings call, the December quarter of 80.4 million benefited from several large bookings delayed from the September quarter. Our book-to-bill for the quarter was 0.9821, and our year-to-date book-to-bill ratio is one to one. Our current backlog is $263.4 million compared to $262.2 million last quarter. Deferred revenue increased to $57.6 million as of March 31st, 2008 as compared to $53.4 million in the December quarter. This increase is primarily due to several support contract renewals that we signed during the quarter. Accounts receivables increased to $59.3 million in March from $51.0 million at the end of December. Our overall DSO increased by 19 days from 73 days at the end of December to 92 days at the end of March. The DSO increase was mostly attributable to unbilled receivables as a result of several large professional services contracts achieving revenue milestones and advance of billing milestones. Turning now to our cash and investment balances, we ended the quarter with $274.4 million in cash, cash equivalents and short-term and long-term investments, down 6.3% from $292.8 million last quarter. These amounts included approximately $17.6 million of restricted cash and investments. As previously disclosed as of March 31st, we have approximately $20 million currently in auction rate securities recorded in long-term investments due to their current illiquid status. In the third fiscal quarter of 2008, we took a 2.4 million unrealized impairment charge against our investments. As for the operating cash flow, we used $11.5 million of cash in the March quarter compared to $17.7 million in the December quarter. Depreciation and amortization including the amortization of goodwill and intangibles for the quarter totaled $4.8 million, of which $2.2 million was depreciation. As of March 31st, 2008, Openwave had approximately $160 million of convertible debt on its balance sheet. This convertible debt will come due in September 2008. Current cash flow projections indicate that we will generate sufficient funds from ongoing operations without a requirement to source funds externally. We will monitor our cash requirements on an ongoing basis. I would now like to turn the call back to Charles for his comments before we open the call for questions.

Thank you, Anne. I would like to close the call by summarizing some of the key changes we’ve made at Openwave to position this company for long-term success. The first is our focused product strategy. This was not an easy decision for the Board or the management team to make, but it was necessary to ensure that the company can concentrate on a focused set of key areas with the greatest potential for Openwave to lead the market. While also bringing in a continued high proportion of licensing based revenue with highly productized offerings. Second is a new view on our sales strategy. By effectively opening the door to additional tier-2 and tier-3 operators, we are dramatically expanding the number of customers we are able to serve, delivering both legacy and new product to those customers. At the same time, we will continue to serve our premier customers, the largest tier-1 operators. The last is continued operational discipline. With this latest restructuring, we expect to reduce cost by $50 million annually; coupled with our Phase 1 reduction of $70 million, that’s a combined $120 million reduction in our operating expenses over a 24-month period. With projected stability of our top line revenue for FY ‘09, this will effectively position Openwave for achievement of our profitability goals in the next several quarters. With Bruce Coleman in place to lead the turnaround, we are highly confident that we will be able to successfully execute against our turnaround strategy. And with that I will open the call for questions.

Thank you. The question-and-answer session will be conducted electronically. (Operator Instructions) And we will go first to Amir Rozwadowski with Lehman Brothers. Amir Rozwadowski - Lehman Brothers: Thank you very much, and thank you for taking the question. In terms of some of the shifting in -- recent shifting in management, could you folks give us a little bit of color as to your confidence in sort of the strategy that’s in place, and potential impact that shifting may have in terms of the recovery plan?

Sure. The strategy that we developed was not an individual strategy. It was a strategy of the entire senior management team combined with a pretty fair amount of Board input. When we approved that strategy, we were confident that we had selected the right strategy, and the job was a job of execution thereafter. We think, we have a team in place today that can and will effectively execute that strategy, and in fact, with Bruce Coleman in place, a man who has executed turnarounds I think 17 times before this one, we are confident that we will be able to do it more quickly and more effectively than we could have otherwise. Amir Rozwadowski - Lehman Brothers: Thanks for the color there. In terms of achieving breakeven or profitability, can you give us a sense at what revenue level or perhaps when you believe that that can be achieved?

Hi, Amir, this is Anne. Amir Rozwadowski - Lehman Brothers: Hey, Anne.

I can take that question, Charles. Amir, when we speak about our goals are to be profitable, and we have taken substantial steps in Phase 1 and Phase 2 as Charles highlighted. At this state, we haven’t provided a date for profitability. There are a number of moving parts but is our intention to move to profitability? Amir Rozwadowski - Lehman Brothers: Okay. Thank you. And then I believe, Anne lastly, you had mentioned some of the exposure on the auction rate security side, should we expect -- how much risk is associated with your cash balance with the auction rate securities?

We are relatively conservative in terms of our treatment of auction rate securities based on the research that we have done with companies out there, who hold investments of the same nature. So in answer to your question, is there risks to our cash balance, and practically there isn’t. We also review this on an ongoing basis, and take into account changing market conditions. Amir Rozwadowski - Lehman Brothers: All right. Thank you very much for taking my questions.

Thank you.

We will take our next question from Tom Roderick with Thomas Weisel. Tom Roderick - Thomas Weisel: Hi. Good afternoon. Thank you. And Bruce welcome aboard.

Thank you. Tom Roderick - Thomas Weisel: So Bruce, my question, my first question here is for you. It seems that you are -- you are no stranger to challenging situations, so I guess, the question is, as you get into the situations where there is a turnaround in place, what do you find to be the most effective steps towards engaging the company to turnaround? As I look at a declining maintenance stream, do you think of the top priority getting out, seeing your customers, maintaining personnel and retaining personnel in house, or do you prefer to take an approach to sit back and really think about a detailed strategic plan and focus on the products? How should we think about your role here?

You are correct. I have seen the movie before 17 times, and while things are different, they are the same. And to the extent that a person with a day and half of experience can speak with lots of knowledge, let me give you my insight so far. First, some of the mechanics of the turnaround have been done already, not necessarily the case of other times that I have come into a company. We have taken substantial costs out of the company, normally something I do. So, we have to finish Phase 2, but we are well on the way. So, point one, look at expenses. Yes, I think there are more expenses to be had by being smarter, but the bulk of the hard work so far has been done. Number two, you have to have a decent strategy. Fortunately we have a strategy that’s good. And we have products that are beginning to get traction. So I am going to focus more on the implementation of finishing up the products for delivery, one; two, making sure that our sales team is effectively executing; three, passing judgment on what things we do when to see that there is good common sense to those. And of course in addition, I absolutely am going to reach out for customers, particularly those large customers who have sustained us for a number of years, and I plan also to be visiting our employees worldwide as well. I think it’s important in terms of change for people to have a sense that there is a plan, that it’s common sense aboard, and the team is excited. And the way they measure that best is to see or hear from the top management. I have been on five different calls with our employees so far, and expect to see or talk with at least a dozen customers in the next week. Further questions on that? Tom Roderick - Thomas Weisel: No. That’s fantastic. Maybe just one follow-up question from me here. You recently engaged in the Phase 2 of the restructuring plan, and as part of that you are limiting any further investment on the client side of the business and also in location based services. And yet we have heard here on the call today that you have already renewed one of the three client renewals, and you landed a new deal on location based services. So how are you able to end of life a product effectively, yet still continue to win business? Do you have to offer stipulations for source code? Can you just walk us through the process of how you can run those investment costs down, while still winning new customers? Thanks.

The answer, it starts with, we have not announced end of life of these products. We continue to support the products. We are not investing in new features and new technology, but some of these products are leading edge products today, and products that customers want. So we will continue to provide those customers those products. We do have a roadmap in place and we do have customer commitments that we’ve made. We intend to honor every one of those customer commitments. Tom Roderick - Thomas Weisel: Okay. Thank you very much.

Thank you. We will take our next question from Scott Sutherland with Wedbush Morgan Securities. Scott Sutherland - Wedbush Morgan Securities: Great. Thank you. Good afternoon. Just wanted to follow on Tom -- wanted to follow on Tom’s last question here. You are maybe not ending the life of the products, but you are reducing the investment and focus on those product categories, client and location. What is the appetite to maybe look for potential suitors who will continue those products or potentially acquire those products with a comparison of cash flows where you can milk out of those product lines, versus what you can get for, sell those product lines?

That’s a question that I think you guys in the investment community could answer as well as I can. We have done NPVs on these product lines. We know what we think they will generate over time. If a suitor were to come and offer us something in excess of what we believe the internal NPV is, we would very seriously look at that. We are not out looking for people to unload them, however. Scott Sutherland - Wedbush Morgan Securities: Okay. Another question for you, Bruce. When you kind of look at Openwave and the opportunity, what kind of due diligence, what kind of customer discussions do you have, and what was their kind of attitude towards Openwave and the newer products?

Excuse me for smiling, because you can’t see it. Scott Sutherland - Wedbush Morgan Securities: No, I can’t.

But I am smiling. My assignments come about very promptly, that is to say, Robert resigned and there needed to be some leadership at the top. So I have done some very brief calls. I know a lot of people in the industry, and I called four or five of them, whom I consider to be smart people. My test was is it reasonable company from what I have read about the company, and you can do a lot online as I did over the last weekend. Does it make sense? Do I feel comfortable with the common sense and the skill set of the Board of Directors, because I have to work with them? And from 30,000 feet can I make a difference. So I wish I could tell you that I had lots of time to look at it, I didn’t, but fortunately having been in the industry for a while, I was able to do a reasonability check that made me comfortable. Scott Sutherland - Wedbush Morgan Securities: Okay. We will look for a more detailed update later.

You bet. Scott Sutherland - Wedbush Morgan Securities: Couple of quick questions. One, you guys talked about targeting new customers, especially tier-2 and tier-3, can you talk about these, what was it I think 28 wins you have. Are any of these like new logo, customer logos, or are these all your existing customers that you are just penetrating further?

There is to my knowledge one new logo. Scott Sutherland - Wedbush Morgan Securities: Okay. And lastly on your project side of the business, is this something that you are just going to drive down to zero these kind of things you are going to continue to do on a basis of when customers want more project related deals?

Well in general, services is a part of our business. We are shifting from large projects to projects, my way of describing it that facilitate the implementation of products that are more standard into a number of operations. So we help people get started and get the value rather than just customize. Some people would ask, well, it’s a pretty good business this customization and your larger customers are paying for it. But in fact, if you look at least from my experience in multiple industries, even the largest customers now want to have a more standard implementation, because the cost of implementation and the cost of change can be staggering. So, while we are moving to a more standard product even our larger customers are wanting to have us deliver more standard product, and in fact, we expect to have a very healthy professional services business making -- helping the customers get value out of the products rather than putting more non-standards features on them. Scott Sutherland - Wedbush Morgan Securities: Okay. Great. Thank you for answering my questions.

Thank you. We will go next to Peter Jacobson with Brean Murray. Peter Jacobson - Brean Murray: Thanks. You talked about FY ‘09 revenue in line with FY ‘08, have you given guidance on FY ‘08, and are you still saying that revenue has stabilized at this level?

Hi, Peter. This is Anne. Following on from Chuck’s comments -- sorry, Charles comments, the position is that we will see a moderate increase based on the numbers, which we have seen so far for fiscal ‘08. Peter Jacobson - Brean Murray: That means, it will be...

That will be... Peter Jacobson - Brean Murray: Are you talking about sequentially in the upcoming quarter?

In the upcoming quarter, again the increase will be of a moderate nature based on the current figures that you saw for fiscal quarter three. Peter Jacobson - Brean Murray: Okay. And you indicated there wasn’t a specific timeframe for profitability yet in the context of the revenue guidance, I believe you spoke about achieving a breakeven point, was that associated with FY ‘09 or was there no timeframe on that?

We haven’t announced a timeline with regards to profitability; however, as we implement Phase 2 of the rationalization, that obviously one of our prime goals. Peter Jacobson - Brean Murray: Okay. And you had indicated that the restructuring would be completed at the end of the September quarter, is that more weighted in the September quarter or more weighted in the June quarter?

As we spoke earlier, we announced on March 31st, we will see some improvements in cost in this current quarter, that’s countered by some of our seasonal increases in terms of the sales and marketing and the general administrative area, and in fiscal quarter one, we will have additional traction based on -- primarily around the head count number. As you are aware, we had a number of individuals impacting North America. They happen sooner than the international area. So it takes time for us to realize the full effect of those savings. And unlike the restructuring, which we announced last year, there is an element this time around of both facilities and IT infrastructure savings and those take slightly longer in terms of appreciating the savings, so that’s what -- that’s kind of the timeline that we are on for fiscal quarter four through one and two of ‘09. Peter Jacobson - Brean Murray: All right. So just a -- so it’s -- I would like to just clarify the distinction between completing the actions and getting the revenue benefit because you talked about completing everything at the end of September, yet the full realization would be the exiting the second quarter, it seemed to me it would be exiting the first quarter?

No. In fact, if you refer back to my discussions earlier, this will impact, this will be seen by the end of the second quarter. And that’s just a direct function of the ramp in terms of both the labor element and the infrastructure element of the cost. Peter Jacobson - Brean Murray: Okay. And then my final question is, can you just review the status of the restructuring actions that have been completed and what are the remaining key actions to do, if you could just summarize that please?

Sure. So let’s think about it with regards to key elements. We in the early part of April, following on from our March 31st announcement, we announced the restructuring and took immediate action in the Americas region. In the international region it take slightly longer just because of the labor laws. So that is the consultation process for labor related costs in the international area is in progress. We are also following on from that. We are also looking at firming up on the facilities and the IT infrastructure that we will reduce as a direct consequence of the reducing head count number. Peter Jacobson - Brean Murray: How many of the 200 people to have left the company?

I don’t have that figure at the hand right now. Peter Jacobson - Brean Murray: All right. Thank you very much.

Thank you.

(Operator Instructions). We’ll go next to Kevin Dede with Morgan Joseph. Jim Moran - Morgan Joseph: Hi, guys. This is Jim Moran for Kevin Dede. Just a couple of quick questions. First of all, with the maintenance revenues being down a bit, when should we expect to see that business come back up?

So, we expect with effect from next quarter that the maintenance and support revenues would tend towards the values that you saw prior to the fiscal quarter three. So with immediate effect from Q4. Jim Moran - Morgan Joseph: Okay. Are the new deals being structured according to the ratable revenue recognition?

So, yes, we are as we announced on the last call. And -- but I think that question is directly related to perhaps the client business, because we made a specific statement about that last time around, where we were taking revenue on an upfront basis when we did the original deals in 2006, we stated then the intention was to go to a more ratable model. And in terms of what happened since the last call, we have renewed and we have established a ratable model in the client area. The other areas of the business, obviously follow rev-rec model that are suitable to the contract terms that we negotiate on an individual contract basis. Jim Moran - Morgan Joseph: Okay, great. And just given the current economic situation, how’s the spending environment looking, and are you seeing any cautiousness from any of the tier-2 or tier-3 companies that you’ve approached so far?

I think that you’ve read the papers and you’ve probably seen that some of the large telco companies have cut back some of their capital spending. And yeah, we’ve seen some impact from that. And I think that’s one of the reasons that we did not see some of the bookings that we might have liked. There was a shift in our bookings away from some of our largest customers historically. That’s good news and bad news. Obviously, the bad news is we didn’t get as many as we had hoped to get. But the good news is we compensated for a lot of the shortfall with other customers. So, we are seeing some softness, but I don’t think it’s long-term. Jim Moran - Morgan Joseph: Okay. And then finally, would you be able to discuss the timing on the new CEO, if you guys have a timeline in mind? I might have missed that.

I can do that briefly. We’ve engaged Spencer Stuart. They are probably the best in the world. They certainly do more CEO searches than anyone in the world. Typically, a CEO search takes somewhere in the neighborhood of four to six months. Obviously, we are not far enough down the road to know, but what we do know is we’ve got a guy in place today who really knows how to do what needs to be done today. So, we have luxury of being able to search for the right guy, who can grow the company once we’ve executed all the steps we need in the turnaround. Jim Moran - Morgan Joseph: Okay, great. Sounds good and good luck going forward guys.

Thank you.

Thank you.

Thank you. We will go next to Al Tobia with Sidus Investment Management. Al Tobia - Sidus Investment Management: Yeah. Thank you. Just a question, I’d like a little more detail on the stability of the current executive ranks. It seemed to me that Robert brought in an awful lot of senior executives and with him sort of departing quickly and also the loss of the CFO few months ago, and I know -- and I see Bruce has got a background in the software industry and I remember him from Boole & Babbage. But I am not necessarily comfortable that Robert back stopped at all the telco customers, how is that being handled, because at least to us, he was sort of the sales face of the company with a lot of the big telco customers. I know Bruce has an extensive software background, but what are the risks there? And also on the personnel side, he did bring in a lot of senior managers, what’s being done to make sure that they are kept happier or kept on Board?

So, I will begin answering the question and then I will turn it over to Bruce for a bit more color. We are obviously -- we need to make sure that we’ve got a strong team that’s committed to this turnaround. And so far everything that the Board has heard supports the notion that those people will move forward with that turnaround and move forward with 100% commitment. Obviously slavery is gone by the wayside, so we can’t prevent people who want to leave from leaving, but we have no expectations there is going to be any kind of mass exodus. We think that a lot of people that we have facing customers are people that are very strong, and people that have been interfacing with those customers for a good deal of time will continue to do so effectively. Bruce?

I would add to that. There is a great deal of time and grade on the front lines, both in development, in services and sales. And yes, it is important to have senior management with that expertise but we can buy time in the sense of my not having that skill set by the strength of the team that we have now. All of our team, the top management team has signed up and the things that we have to do now are as much execution as it is knowledge of tel-com. And in fact, if you look at our Board of Directors, there is a great richness of knowledge of the carrier base as well. So yes of course we are going to get a CEO with knowledge, but there is a lot I can do in any regard beyond Boole & Babbage, Websense and WebTrends and WatchGuard and lot of other places had mixed ways of doing business and it’s not just the knowledge of tel-com that’s important, it’s how you do business well. And not to minimize the telcos but it’s about doing the job. And with all of us, we have to perform starting today. I have signed up for the Board of Directors to make a difference in six months, and they will expect me to do it or out then, likewise, I expect our management team to do that as well. Al Tobia - Sidus Investment Management: Okay. Just a follow-on to Peter Jacobson’s question before. The company on a non-GAAP operating basis lost $0.04 and there’s supposedly going to be a slight up tick in revenue sequentially. My assumption is that $50 million in annualized savings is 12.5 on a quarterly basis and so there is going to be some sequential improvement from layoffs. Why not be able to commit to non-GAAP operating profit in the June quarter?

I can take that question. Hi, Al, this is Anne. Al Tobia - Sidus Investment Management: Hi, Anne.

The reason why we cannot commit to in the June quarter is because as I explained Phase 2 of the restructuring impacts us in fiscal quarter four, but it tempers in terms of the operating expenses is countered by costs -- seasonal costs, which are going to increase. So in terms of where we went from quarter three into quarter four the profile on expenses is not going to see a significant reduction due to that reason. So -- and that’s fundamentally why we are committing to the savings on an ongoing basis. But with immediate effect -- not with immediate effect from fiscal quarter four. Al Tobia - Sidus Investment Management: So to pick a reference point then for expenses, there’s a $50 million number that’s out for expense savings due to the restructuring. What is the reference point that we should use for that savings in terms of OpEx? Is it the March, is it the June quarter OpEx number?

The reference point for improvement? Is that the question? Al Tobia - Sidus Investment Management: Reference point for the $50 million in savings from Phase 2.

Yeah, so the reference point for the savings should be fiscal quarter two of ‘08 for the December quarter, and the full impact of those will not be fully appreciated until the end of December as we exit fiscal quarter two. Al Tobia - Sidus Investment Management: Okay.

And so after that, that is in line with the profile of the restructuring which we introduced last year in 2007. Al Tobia - Sidus Investment Management: Right. What I’m -- I guess what I’m getting at is that I understand the idea that there are fourth quarter expenses, but saying this is $50 million savings plan that starts as of March 30th, and having expenses flat, is I understand the seasonal factors, but I’m assuming that we’re going to get a net $50 million in savings at some point. Not just get, while we save $50 million because of this restructuring that we’ve decided to spend it back in order to keep revenues flat.

No, no... Al Tobia - Sidus Investment Management: My assumption is that if revenue stays flat year-on-year, at some point in time you get the benefit of these savings net $50 million not net $20 million because in order to keep revenue flat we plowed $30 million back in OpEx.

Oh, yes, you are absolutely correct. We will see full earnings savings of $50 million on a specified timeline, but the impact -- the full impact will not be from fiscal quarter four. Al Tobia - Sidus Investment Management: And just one other -- one other question. Licenses have been increasing in the mix slightly. Is the forward trend in gross margins likely to be flat, up or down, just generally, given what you’re seeing in bookings and the license mix?

So, the real driver for an improvement in gross margin is as you say the license proportion of total revenues. The license proportion of total revenues has been increasing in the quarter that we have just exited, fiscal quarter three was $18.4 million, which was more than 30% of the general mix in terms of total revenue. So what we will see is in terms of margin, we will see a profile that mirrors what we -- in terms of the proportion that mirrors what we have reported in most recent quarters. Al Tobia - Sidus Investment Management: Thanks.

Thank you. We have time for one final question. We’ll take that question from Lauren Ye with JPMorgan. Lauren Ye - JPMorgan: Hi, guys. This is Lauren for Sterling Auty. I just had more questions around the purchase order delay. Just wanted to kind of understand a little more about these contracts. Were they new contracts, renewal contracts, I might have not touched, caught those. And was the reason that you did not receive the orders by the end of the quarter more customer specific or it was a result of macro concerns? And then I guess, I didn’t quite make the connection, and was this the reason why professional and maintenance service decreased? Or was there other contracts that might have caused that to happen? And of course, did you guys actually close these contracts yet?

Okay. So lots of questions there, let me take them one by one. The first one was around the specific nature of POs, was it one customer or was it multiple customers? It was more than one customer. It’s the significant impact with regards to our maintenance and support revenue line. The reason why it’s so significant for us is that we have a relatively conservative rev-rec policy, which means that we will not recognize revenue until we receive a PO, so we will continue to apply that policy going forward. Lauren Ye - JPMorgan: Were these new customers are -- were they renewal contract?

They were existing customers. Lauren Ye - JPMorgan: Okay. And then -- got you. And then I just wanted to ask around the 50 million savings again. I guess at what level of head count do you think you might be wanted -- I guess when would you stabilize your head count?

So, as far as the 8-K, the disclosure was that we would reduce head count by approximately 200 and given our exit from the current quarter at just under 900 our target is approximately 700 in terms of headcounts. Lauren Ye - JPMorgan: Okay. And then just lastly, can you just comment may be on a book-to-bill this quarter?

Book-to-bill, as I -- following up from my prior comment, was 0.98 to 1, so very close to 1 to 1. But what I think is more important metric is the book-to-bill on a year-to-date basis. The year-to-date basis is 1 to 1. As we’ve seen in prior quarters, there is some variability to our bookings number, and the more important metric for us is the money, the book-to-bill on a year-to-date basis. Lauren Ye - JPMorgan: Okay. And then just one last one, so I guess client side of things that’s about 19% of your revenue and location and I don’t know you guys have talked about that, but pretty much if you guys are discontinuing investments in that area, just kind of wanted to understand you are creating new customers there, but really are you expecting that area to kind of the -- a dragging part of your revenue stream or at least not a sustainable one long-term? And I guess how do you let your investors kind of feel comfortable about that given you are not investing in it and what is the long-term goal in that area?

I think investors should feel very good about it because what the management team and Board have done is look at the businesses on an NPV basis, and we think we maximize the NPV and the return to shareholders with the steps that we’ve announced and not continuing to invest more money in those areas. We will continue to sell in those areas, it will be declining over time, but we do have positive NPV from those businesses. Lauren Ye - JPMorgan: Okay. Got it. Thanks.

Thank you. And that is all the time we have for question and answers. I’d like to turn it back over to today’s presenters for any additional or closing comments.

Just like to thank everybody for being on the call today. We understand that we got an enormous challenge in front of us. We think we’ve got the right leader and the right team in place to face those challenges, and we believe we can be successful and we can do it relatively quickly.

That does conclude today’s call. You may disconnect your lines at this time.