NetManage Reports $4.7 Million Net Income for Fiscal Year 2005, Up From $1.4 Million Net Income in Fiscal Year 2004; Ninth Consecutive Quarter of Operating Profit and Seventh Consecutive Quarter of Net Income

Business Wire, Jan 30, 2006

CUPERTINO, Calif. -- NetManage, Inc. (Nasdaq:NETM), a software company that provides solutions for accessing, Web enabling and integrating enterprise information systems, today reported financial results for the fourth quarter and fiscal year ended December 31, 2005.

Net revenues for the fourth quarter of 2005 were $10.7 million compared to net revenues of $13.2 million in the fourth quarter of 2004. Net income for the quarter was $1.6 million, or $0.17 per diluted share, including tax benefits of $0.6 million, or $0.06 per diluted share. This was up from net income of $0.7 million, or $0.08 per diluted share, during the same period in the prior year.

Net revenues for the fiscal year ended December 31, 2005 were $43.4 million, compared to net revenues of $47.7 million, for the fiscal year ended December 31, 2004. The Company reported net income for the fiscal year ended December 31, 2005 of $4.7 million, or $0.49 per diluted share, including tax benefits of $1.8 million, or $0.19 per diluted share. This was an improvement from net income in 2004 of $1.4 million, or $0.15 per diluted share.

Cash, cash equivalents and investments were $23.1 million at December 31, 2005, up from $19.8 million at December 31, 2004.

Management Commentary

"The fourth quarter of 2005 delivered many positives, including the continued migration by our customers to our newer technologies, the addition of new customers for our OnWeb and Librados solutions and the introduction of NetManage OnWeb for iSeries," explained Zvi Alon, chairman, president and CEO of NetManage. "We are pleased with the operating efficiencies we achieved this year resulting in a reduction in expenses and improvement in operating income. We believe we have made significant progress during 2005 toward creating a more profitable and productive organization. We are confident that we will continue to improve and deliver significant value to both our customers and shareholders in 2006."

Customer Wins

During the quarter, the Company received new and renewed business from such customers as Arizona Department of Economic Security, Alaska Airlines, MGM Studios, La Poste, American Stock Exchange, Fox Television, Newsweek, BNP Paribus, Yellow Roadway Technologies, Employers Direct Insurance Company, Honda Motor Company, California State University Long Beach, and the US Department of Agriculture, among others.

Recent Operational Highlights:

--In December, George Bennett was appointed as Vice President of North America Sales to spearhead the sales strategy.

--The Company announced a global partnership with Gush, a Web-based customer relationship management (CRM) provider, to extend their CRM back-end integration capabilities.

--NetManage announced OnWeb(R) for the IBM iSeries product family extending OnWeb's capabilities to simplify the path to the Web and SOA for iSeries Applications.

--The Company joined the JBoss Certified Partner Program to offer Librados JCA Adapters to support the JBoss leading open source middleware platform.

--NetManage announced it has ranked among the world's foremost software and services providers in Software Magazine's Software 500 listing for the fourth consecutive year.

Conference Call Information

The Company has scheduled a conference call to discuss the results at 1:30 p.m. PT (4:30 p.m. ET) on Monday, January 30, 2006. The call will be broadcast live via the Investors section on the NetManage Web site, www.netmanage.com/investors or by dialing 719-457-2617 and entering the reservation number 2314329. A playback of the conference call can be accessed beginning January 30, 2006 at 4:30 p.m. PT and is available through 10:00 p.m. PT on February 5, 2006. The playback will be broadcast via the Investors section on the NetManage Web site, www.netmanage.com/investors or by dialing 719-457-0820 and entering the reservation number 2314329. NetManage will furnish this press release to the Securities and Exchange Commission on a 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) is a software company that provides solutions for accessing, Web enabling, and integrating enterprise information systems. More than 10,000 customers worldwide, including 480 of the Fortune 500, rely on NetManage for mission critical application integration. For more information, visit www.netmanage.com.

(C) 2006 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.