NetManage Reports Financial Results for Second Quarter 2005; Seventh Consecutive Quarter of Operational Profitability and Fifth Consecutive Quarter of Net Income

Business Wire, July 25, 2005

CUPERTINO, Calif. -- NetManage, Inc. (NASDAQ:NETM), a leading software company that provides solutions for accessing, Web enabling and integrating enterprise information systems, today reported financial results for the second quarter ended June 30, 2005.

Net revenues for the second quarter of 2005 were $10.7 million, compared to net revenues of $11.0 million for the second quarter of 2004. Net income for the second quarter was $695,000, or $0.07 per diluted share, compared to net income in the second quarter of 2004 of $257,000, or $0.03 per diluted share.

For the six months ended June 30, 2005, net revenues were $22.8 million, compared to net revenues of $22.9 million for the same period of 2004. Net income for the six months ended June 30, 2005 was $1.5 million, or $0.15 per diluted share, compared to a net loss for the six months ended June 30, 2004 of $174,000, or $0.02 per share.

Cash and cash equivalents were $24.3 million as of June 30, 2005.

Management Commentary

"Despite a seasonally challenging period for the software industry marked by cautious IT spending, we maintained operational profitability for our seventh consecutive quarter," said Zvi Alon, chairman, president and CEO of NetManage. "We recorded sequential growth in Librados product sales and we had success cross-selling our products, securing our first OnWeb and Librados adapter order."

"We continued to add new OnWeb customers during the quarter, growing the number of customers that are benefiting from a proven Web-based solution that helps them quickly leverage their large investment in enterprise systems. We continue to expand our solutions and enhance their ease of use to help our customers maximize their return on their investment, and we expect continued progress across our business initiatives in the second half of 2005," concluded Mr. Alon.

Customer Wins

Leading organizations around the world continue to choose NetManage solutions to integrate and leverage their core business investments. During the quarter, NetManage secured business from Adobe Systems, Lear Corporation, Kraft Foods, Cincinnati Bell, Xerox Corporation, Royal Bank of Scotland, Levi Strauss, AXA Ireland, Sysco Corporation, Liberty Mutual, Royal Bank of Canada, Maryland Department of Transport and Wickes Furniture Company, among others.

Recent Operational Highlights

--The Company expanded the Librados JCA Plus Adapters' data integration capabilities with the release of the Java plug-in for Librados Adapters. This enables NetManage's enterprise customers to further reduce implementation cycles.

--The Librados business grew, with new and repeat business with customers, including: Versata, LaborLogix, Embarcadero Technologies, and Adobe Systems, among others.

--NetManage celebrated its 15th year in business marked by a number of new product offerings. With last year's acquisition of Librados, recent upgrades to the company's flagship products, RUMBA and OnWeb, and the introduction of OnWeb Mobile, NetManage continues to provide innovative solutions for the Service-Oriented Architecture, or SOA, marketplace.

Conference Call Information

The Company has scheduled a conference call to review the results at 1:30 p.m. PT (4:30 p.m. ET) on Monday, July 25, 2005. The call will be broadcast live via the Investors section on the NetManage Web site, www.netmanage.com/investors or by dialing 719-457-2680 and entering pass code 9027024. A playback of the conference call will be available until July 31, 2005, on the NetManage investor relations Web site or by dialing 719-457-0820 and entering the pass code 9027024.

NetManage will furnish this press release to the Securities and Exchange Commission on Form 8-K and will post this release in the Investors section of its Web site prior to its conference call.

About NetManage

NetManage, Inc. (NASDAQ:NETM) specializes in solutions for accessing, Web enabling, and integrating enterprise information systems. More than 10,000 customers worldwide, including 480 of the Fortune 500, have chosen NetManage for mission critical application integration. For more information, visit www.netmanage.com.

(C) 2005 NetManage, Inc., its subsidiaries, and its affiliates. All rights reserved.

NetManage, the NetManage logo, the lizard-in-the-box logo, RUMBA, ONESTEP, ViewNow, SupportNow, Librados, and OnWeb are either trademarks or registered trademarks of NetManage, Inc., its subsidiaries, and affiliates in the United States and/or other countries. All other trademarks are the property of their respective owners.

This press release contains, in addition to historical information, forward-looking statements that involve risks and uncertainties, including statements regarding improvement in the Company's competitive position, improvement in financial results and business pipeline, the Company's positioning in its market, and the progress and benefits of the Company's execution on its business plan. The Company's actual results could differ materially from the results discussed in the forward-looking statements. The factors that could cause or contribute to such differences include, among others, that competitive pressures continue to increase, that the markets for the Company's products could grow more slowly than the Company or market analysts believe, that the Company is unable to integrate or take advantage of its acquisitions successfully, or that the Company will not be able to take advantage of growth in the Company's target markets. Additional information on these and other risk factors that could affect the Company's financial results is included in the Company's Annual Report on Form 10-K, Forms 10-Q, Forms 8-K and other documents filed with the Securities and Exchange Commission.