EXHIBIT 99.1
[GRAPHIC OMITTED]
NEOWARE PRESS RELEASE
NEOWARE REPORTS PRELIMINARY FIRST QUARTER RESULTS
KING OF PRUSSIA, PA., OCTOBER 5, 2005 -- Neoware Systems, Inc. (Nasdaq:
NWRE), the leading supplier of enterprise software, thin client appliances and
related services that make computing more open, secure, reliable, affordable,
and manageable, today reported preliminary results for its fiscal first quarter
ended September 30, 2005.
Based upon initial information and subject to the completion of the
Company's financial review, revenues for the quarter ended September 30, 2005
are expected to be approximately $26 million or greater, above the Company's
prior guidance of $22 to $24 million, and an increase of approximately 60% or
greater from $16.3 million in the prior year September quarter, representing a
record for the Company.
Gross profit margin as a percentage of revenue is expected to be at the
low end of the Company's guidance at approximately 39 to 40 percent, but higher
than expected in absolute dollars due to higher revenues. This is the result of
significant initial shipments of the Neoware e900 thin client, which has average
selling prices of approximately $3,000 per unit, lower gross margins as a
percentage of revenues, and significantly higher gross margin dollars per unit
than other Neoware products. Gross profit margin for other revenue in the
quarter is expected to be in the same range as the past several quarters.
"We expect to report all-time record revenue for the quarter ending
September 30, 2005 as a result of strong demand for Neoware's thin client
solutions and especially strong demand for our new Neoware e900 products,"
stated Michael Kantrowitz, Neoware's Chairman and CEO. "Neoware provides
demonstrable security, cost and manageability benefits to enterprises, and we
have a global organization to support the largest thin client deployments.
According to IDC, our market is experiencing robust growth, and we believe that
this will translate into continued revenue growth in our current fiscal year."
The Company expects its fully diluted share count to increase to
approximately 17 million shares due to the increase in the Company's stock price
and its effect on calculating dilution from stock options using the treasury
stock method.
Neoware will issue its first quarter earnings release after the close
of the market and host a conference call at 5:00 PM on November 2, 2005. The
conference call will be available live at www.vcall.com and on the Neoware
website at www.neoware.com. To participate, please go to the website 10 minutes
prior to the call to register, download and install any necessary audio
software. If you are unable to attend the live conference call, an Internet
replay of the call will be archived and available after the call.
The call will also be accessible by dialing 800-895-1715 for domestic
calls and +1-785-424-1059 for international calls. The conference ID will be
NEOWARE. A replay of the call will be available through January 1, 2006 by
dialing 1-888-566-0148 domestically and +1-402-220-9184 internationally. A copy
of the press release announcing the Company's earnings and other financial and
statistical information about the period to be presented in the conference call
will be available at the section of the Company's website entitled "News" at
www.neoware.com.
ABOUT NEOWARE
Neoware is a leading provider of enterprise software, thin client
appliances, and related services that make computing more open, secure,
reliable, affordable and manageable. Neoware was recently ranked America's
eighth fastest-growing company by Fortune Magazine. By leveraging open
technologies and eliminating the obsolescence that is built into standard PC
architectures, Neoware enables enterprises to leverage server-based computing
architectures to increase security, flexibility and choice, as well as lower
up-front and total costs.
Neoware's software products enable enterprises to gain control of their
desktops, stream software on-demand, and to integrate mainframe, midrange, UNIX
and Linux applications with Windows(R) environments and the web. Neoware's thin
client appliances and software enable enterprises to run applications on servers
and to display them across wired or wireless networks on secure, managed,
reliable appliances that cost as little as one-fourth the price of today's
typical business PC. Neoware's global development, services, and support provide
customers with customized solutions that facilitate their specialized computing
needs.
Neoware's products are available worldwide from IBM, as well as from
select, knowledgeable resellers. More information about Neoware can be found on
the Web at http://www.neoware.com or via email at info@neoware.com. Neoware's
global headquarters is in King of Prussia, PA.
# # #
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including statements regarding
the anticipated revenues and gross profit margin for the quarter ended September
30, 2005, strong demand from customers for our thin client solutions and our
e900 thin client product line, and our expectation of continued strong revenue
growth in our current fiscal year. These forward-looking statements involve
risks and uncertainties. Factors that could cause our actual results to differ
materially from those predicted in such forward-looking statements include: the
timing and receipt of future orders; our timely development and customers'
acceptance of our products; pricing pressures; rapid technological changes in
the industry; growth of overall thin client sales through the capture of a
greater portion of the PC market, including sales to large enterprise customers;
our dependence on our suppliers; our continued ability to sell our products
through IBM and Lenovo to their customers; increased competition; our ability to
attract and retain qualified personnel, including the former employees of the
businesses we acquired; the economic viability of our suppliers and channel
partners; adverse changes in customer order patterns; our ability to identify
future acquisitions and to successfully consummate and integrate recently
completed and future acquisitions (including the TeleVideo acquisition); adverse
changes in general economic conditions in the U. S. and internationally; risks
associated with foreign operations; and political and economic uncertainties
associated with current world events. These and other risks are detailed from
time to time in Neoware's periodic reports filed with the Securities and
Exchange Commission, including, but not limited to, its report on Form 10-K for
the year ended June 30, 2005.
Neoware is a trademark of Neoware Systems, Inc. All other names products and
services are trademarks or registered trademarks of their respective holders.
CONTACT:
Investor Relations:
Cameron Associates
Kevin McGrath
(212) 245-8000 x 203
kevin@cameronassoc.com
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Neoware Systems, Inc.
Keith Schneck, CFO
(610) 277-8300
invest@neoware.com
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