Metasolv (MSLV) 8-K Metasolv Reports First Quarter Financial Results

EXHIBIT 99.1

Contacts:
Investor Relations	Media Relations
Glenn Etherington	Ed Bryson
Chief Financial Officer	Public Relations Manager
(972) 403-8501	(972) 543-5117
getherington@metasolv.com	ebryson@metasolv.com

METASOLV REPORTS FIRST QUARTER FINANCIAL RESULTS

PLANO, Texas, April 23, 2003 – MetaSolv, Inc. (Nasdaq: MSLV), a global leader in communications management solutions for traditional and next-generation networks and services, today announced financial results for the first quarter ended March 31, 2003.

Revenues for the quarter were $21.1 million compared with $21.9 million for the first quarter of 2002. MetaSolv reported a loss of $9.9 million, or $0.26 per diluted share, compared with a loss of $9.0 million, or $0.24 per diluted share, for the first quarter last year.

During the first quarter of 2003, MetaSolv completed the acquisition of London-based Orchestream Holdings plc, and the results of Orchestream are included with MetaSolv’s results effective February 1, 2003. In February 2002, MetaSolv acquired certain operations support systems (OSS) assets from Nortel Networks. Excluding amortization of intangible assets, purchased in-process research and development, restructuring costs, goodwill impairment, and related tax benefits, MetaSolv’s pro forma loss was $3.4 million, or $0.09 per diluted share in each period (please see page 5 for a complete reconciliation of pro forma results with those reported under Generally Accepted Accounting Principles).

“While it is clear the overall communications market has not significantly improved, we continue to make progress on our key strategic goals, including extending our reach into top tier global service providers and supporting fulfillment of advanced mobile and IP-based services,” said MetaSolv CEO Jim Janicki. “Our recent acquisition of Orchestream demonstrates our determination to continue to enhance our leadership in delivering comprehensive operations support system software solutions.”

Highlights of MetaSolv’s first quarter results include:

· increased international revenues, with approximately 52% of first quarter revenues from outside the United States, compared to 27% for the prior-year first quarter;

· further penetration of the wireless service provider market, which contributed approximately 37% of first quarter revenues, compared to 12% for the prior-year first quarter;

· increased revenue from tier 1 service providers, which accounted for 66% of first quarter revenues, compared to 45% for the prior-year first quarter; and

· the completion of the acquisition of London-based Orchestream Holdings plc, a recognized leader in IP service activation solutions for both wireline and wireless customers.

-MORE-

MetaSolv Reports First Quarter Results

Page 5

“We are pleased with the positive reaction from customers and partners to the Orchestream acquisition, which provides us with the industry’s recognized leading solution for activating IP services,” said Curtis Holmes, MetaSolv president and COO. “We see significant opportunities to deliver the Orchestream products to our existing customer base of more than 170 service providers, and to build on Orchestream’s global channel relationships. We expect the integration of the two companies to be completed by the end of our second quarter.”

MetaSolv paid approximately $13.0 million for Orchestream, which had net tangible assets of approximately $6.1 million, and cash of approximately $10.0 million as of the date of acquisition. At the end of the first quarter, the company’s balance sheet remained strong, with cash and short-term investments of approximately $58.2 million.

Conference call notice

MetaSolv will hold a conference call to discuss this press release today at 5:00 p.m. Eastern time. Investors may listen to the conference call over the Internet by going to www.metasolv.com (click on the link to Investor Relations) and at www.streetevents.com. The on-line replay will be available shortly after the call and continue for 30 days.

A dial-in telephone replay of the conference call will be available from 8:00 p.m. ET on Wednesday, April 23, through April 30. The dial-in replay number is 719-457-0820, and the confirmation number is 524984.

About MetaSolv

MetaSolv, Inc. (Nasdaq:MSLV) is a leading, global provider of comprehensive service fulfillment software solutions for communications service providers. MetaSolv’s advanced operations support system (OSS) solutions integrate and automate key operational processes and functions, including service and subscriber provisioning, network resource management, network data collection, and service quality management. More than 170 global fixed-line and mobile operators – including Nextel, BT, Vodafone, Cable & Wireless, T-Mobile, Brasil Telecom, Telstra, and others – use MetaSolv’s products and services to achieve increased revenues, reduced costs, and enhanced customer service. MetaSolv is a global company, headquartered in Plano, Texas, with regional offices in Toronto, Ottawa, London, Sophia-Antipolis, France, Rio de Janeiro, and other key global cities. MetaSolv’s web site iswww.metasolv.com.

MetaSolv is a registered trademark. The MetaSolv logo and MetaSolv Solution are trademarks of MetaSolv Software, Inc. All other trademarks are property of their respective owners.

This press release contains forward-looking statements that are based upon current expectations and assumptions and involve a number of risks and uncertainties. Actual results could differ materially from MetaSolv’s current expectations. MetaSolv assumes no obligation to update any such forward-looking statement. Using the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, MetaSolv cautions you that these statements may be affected by the important factors, among others, described in the documents and reports filed by MetaSolv from time to time with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for 2002, as well as by other factors, including, but not limited to: the variance of quarterly operating results; the Company’s ability to successfully manage and integrate acquisitions; the Company’s reliance on sales of its software; the need to expand sales and distribution capabilities; the need to expand to new customer markets; the Company’s continued use of strategic relationships; its ability to manage growth; the Company’s international operations; its ability to meet customer expectations; the quality of the Company’s software delivered; competition; consolidation within the telecommunications industry; and limitations on the ability of customers to obtain adequate financing.

-MORE-

MetaSolv Reports First Quarter Results

Page 6

METASOLV, INC.

Summary Financial Information

(In thousands, except per share data)

	Three Months Ended March 31,
	2003			2002
Revenues	$	21,125		$	21,862
Loss from operations	$	(12,901	)	$	(15,102	)
Net loss	$	(9,852	)	$	(9,019	)
Loss per share:
Basic	$	(0.26	)	$	(0.24	)
Diluted	$	(0.26	)	$	(0.24	)
Weighted average shares outstanding:
Basic		37,940			37,483
Diluted		37,940			37,483
Pro forma(1)
Net loss	$	(3,385	)	$	(3,418	)
Basic and diluted loss per share	$	(0.09	)	$	(0.09	)

(1) See the attached Pro Forma Condensed Consolidated Statements of Income for a reconciliation of Pro Forma Net loss and the Net loss in accordance with Generally Accepted Accounting Principles.

-MORE-

MetaSolv Reports First Quarter Results

Page 7

METASOLV, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended March 31,
	2003			2002
	(Unaudited)
Revenues:
License	$	7,576		$	7,027
Service		13,549			14,835
Total revenues		21,125			21,862
Cost of revenues:
License		534			156
Amortization of intangible assets		1,613			2,271
Service		8,291			7,091
Total cost of revenues		10,438			9,518
Gross profit		10,687			12,344
Operating expenses:
Research and development		7,826			9,651
Sales and marketing		6,118			7,139
General and administrative		4,450			3,809
Restructuring and other costs		1,327			2,787
In-process research and development write-off		1,640			4,060
Goodwill impairment		2,227			—
Total operating expenses		23,588			27,446
Loss from operations		(12,901	)		(15,102	)
Interest and other income, net		334			515
Loss before taxes		(12,567	)		(14,587	)
Income tax benefit		(2,479	)		(5,568	)
Minority interest		236			—
Net loss	$	(9,852	)	$	(9,019	)
Loss per share of common stock:
Basic	$	(0.26	)	$	(0.24	)
Diluted	$	(0.26	)	$	(0.24	)
Weighted average basic and diluted shares outstanding		37,940			37,483

-MORE-

MetaSolv Reports First Quarter Results

Page 8

METASOLV, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended March 31,
	2003			2002
	(Unaudited)
Revenues:
License	$	7,576		$	7,027
Service		13,549			14,835
Total revenues		21,125			21,862
Cost of revenues:
License		534			156
Service		8,291			7,091
Total cost of revenues		8,825			7,247
Gross profit		12,300			14,615
Operating expenses:
Research and development		7,826			9,651
Sales and marketing		6,118			7,139
General and administrative		4,450			3,809
Total operating expenses		18,394			20,599
Loss from operations		(6,094	)		(5,984	)
Interest and other income, net		302			515
Loss before taxes		(5,792	)		(5,469	)
Income tax benefit		(2,171	)		(2,051	)
Minority interest		236			—
Net loss	$	(3,385	)	$	(3,418	)
Loss per share of common stock:
Basic	$	(0.09	)	$	(0.09	)
Diluted	$	(0.09	)	$	(0.09	)
Weighted average basic and diluted shares outstanding		37,940			37,483

Note: The above pro forma amounts for the quarters ended March 31, have been adjusted to remove the following items:

Pro forma net loss	$	(3,385	)	$	(3,418	)
Amortization of intangible assets		(1,613	)		(2,271	)
Restructuring and other costs		(1,327	)		(2,787	)
In-process research and development write-off		(1,640	)		(4,060	)
Goodwill impairment		(2,227	)		—
Gain on investments		32			—
Tax benefit		308			3,517
Net loss as reported	$	(9,852	)	$	(9,019	)

-MORE-

MetaSolv Reports First Quarter Results

Page 9

METASOLV, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	March 31, 2003			December 31, 2002
	(Unaudited)
Current assets:
Cash and cash equivalents	$	29,202		$	28,113
Restricted cash		989			12,666
Marketable securities		28,005			30,001
Trade accounts receivable, less allowance for doubtful accounts of $3,931 in 2003 and $3,825 in 2002		15,131			17,025
Unbilled receivables		2,999			1,738
Prepaid expenses		5,147			5,119
Deferred tax assets		5,040			5,943
Other current assets		6,741			4,666
Total current assets		93,254			105,271
Property and equipment, net		16,765			16,185
Intangible assets		10,541			6,127
Deferred tax assets and other assets		12,366			10,786
Total assets	$	132,926		$	138,369
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	5,078		$	7,251
Accrued expenses		27,015			22,780
Deferred revenue		11,854			9,317
Total current liabilities		43,947			39,348
Deferred income taxes		—			—
Stockholders’ equity:
Preferred stock, $.01 par value, 10,000,000 shares authorized, no shares issued or outstanding		—			—
Common stock, $.005 par value, 100,000,000 shares authorized, shares issued and outstanding: 37,940,698 in 2003, and 37,939,738 in 2002		190			190
Additional paid-in capital		144,219			144,388
Deferred compensation		(24	)		(66	)
Accumulated other comprehensive income		(25	)		38
Accumulated deficit		(55,381	)		(45,529	)
Total stockholders’ equity		88,979			99,021
Total liabilities and stockholders’ equity	$	132,926		$	138,369

# # #

-MORE-