Open Solutions H1 revenues and profits up

Revenues for the second quarter of 2006 increased 127 percent to $107.1 million, from $47.1 million for the second quarter of 2005. Revenues for the six months ended June 30, 2006, increased 105 percent to $173.8 million, from $84.8 million for the same period of the prior year. GAAP net income per diluted share for the second quarter of 2006 increased 6 percent to $0.19 per diluted share, from $0.18 per diluted share in the second quarter of 2005. GAAP net income per diluted share for the six months ended June 30, 2006, increased 25 percent to $0.40 per diluted share, from $0.32 per diluted share for the same period of the prior year.

Earnings before interest, taxes, depreciation, amortization, stock compensation expense and nonrecurring gain as a result of an acquisition (adjusted EBITDA) for the second quarter of 2006 increased 204 percent to $28.3 million, from $9.3 million for the second quarter of 2005. Adjusted EBITDA for the six months ended June 30, 2006, increased 149 percent to $42.0 million, from $16.9 million for the same period of the prior year. Net income per diluted share adjusted for stock compensation expense and nonrecurring gain as a result of an acquisition (non-GAAP net income) for the second quarter of 2006 increased 33 percent to $0.24 per diluted share, from $0.18 per diluted share in the second quarter of 2005. Non-GAAP net income per diluted share for the six months ended June 30, 2006, increased 21 percent to $0.40 per diluted share, from $0.33 per diluted share for the same period of the prior year. A reconciliation of EBITDA, adjusted EBITDA and non-GAAP net income follows later in this release.

Our management uses non-GAAP measures to evaluate the performance of our core business, to estimate future core performance and to compensate employees. Since management finds this measure to be useful, we believe that our investors benefit from seeing our results in the same manner as management. This information facilitates our management's internal comparisons to our historical operating results as well as to the operating results of our competitors.

Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.

Open Solutions' Chairman and CEO Louis Hernandez, Jr. said, "We saw continued strong demand for Open Solutions' full suite of financial industry-focused products and services in the second quarter, as demonstrated by total revenue increasing by 127 percent and total signed contract value increasing by 55 percent over the same period in 2005. We also demonstrated increased operating leverage in the quarter, with a 10 percent decrease in operating expenses as a percentage of revenue from last year. For the remainder of 2006, we will seek to continue to balance our growth with investments in the future while maintaining improved operating leverage."