PLANO, Texas -- MetaSolv, Inc. (Nasdaq:MSLV), a global leader in comprehensive operational support system solutions for next-generation communications service providers, today announced financial results for the third quarter ended September 30, 2005.

Revenues for the quarter increased 15% to $23.3 million, compared to third quarter 2004 revenues of $20.2 million. MetaSolv reported a net loss for the third quarter of $2.5 million, or $0.06 per share, compared to a net loss of $2.4 million, also $0.06 per share, in the third quarter of 2004. Results for the third quarter of 2005 included a restructuring charge of $2.2 million, related to severance costs and facilities.

On a pro forma basis, the company reported third quarter net income of $0.7 million, or $0.02 per share, compared to a pro forma net loss of $1.3 million, or $0.03 per share, in the third quarter of 2004. Adjusted EBITDA for the quarter was $1.4 million, compared to adjusted EBITDA of $0.1 million for the same period in the prior year.

For the nine months ended September 30, 2005, revenues were $68.1 million, a 14% increase from $59.7 million for the same period in 2004. MetaSolv reported a net loss for the nine months of $5.2 million, or $0.13 per share, compared to a net loss of $13.5 million, or $0.34 per share, for the same period in 2004. On a pro forma basis, the company reported a net loss for the nine month period of $0.3 million, or $0.01 per share, compared to a net loss of $5.5 million, or $0.14 per share, for the same period in 2004. Adjusted EBITDA for the nine months ended September 30, 2005 was $2.1 million, compared to negative adjusted EBITDA of $1.5 million for the same period in 2004.

Pro forma results exclude amortization of intangible assets, restructuring costs, stock compensation expense and loss (gain) on investments. Adjusted EBITDA represents pro forma net income (loss) excluding income tax expense, interest and other income, and depreciation and amortization. Please see the final table below for a complete reconciliation of pro forma net loss and adjusted EBITDA to net loss reported under accounting principles generally accepted in the United States.

"We are extremely pleased to report continued revenue growth, increased levels of pro forma net income and our highest level of adjusted EBITDA in over four years," said T. Curtis Holmes, MetaSolv's President and Chief Executive Officer. "Our third quarter revenue performance was directly attributable to our continued growth in North America and execution of our globalization strategy. We achieved record license revenue from Europe and our highest quarterly revenue from the Asia-Pacific region in MetaSolv's history. Overall, our international business accounted for 59% of our third quarter revenues."

In a separate release:

PLANO, Texas -- MetaSolv, Inc. (Nasdaq:MSLV), a global leader in comprehensive operational support system solutions for next-generation communications service providers, today announced the completion of a $23 million private placement of common stock. The private placement consisted of 7,666,667 shares of common stock priced at $3.00 per share. In addition, each share of common stock included a warrant to purchase one-half share of common stock. The warrants are exercisable for a period of five years at a price of $4.00 per share. Holders are prohibited from exercising the warrants for a six-month period from the date of issuance. MetaSolv intends to use the net proceeds from the securities, which were placed through the company's financial advisor, Raymond James, primarily for general corporate purposes.

"We are extremely pleased to have completed this financing," said T. Curtis Holmes, MetaSolv's President and Chief Executive Officer. "The additional funds significantly strengthen our balance sheet and provide us flexibility to react to an ever changing landscape within the telecommunications industry."

The securities sold in this private placement have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States in the absence of an effective registration statement or exemption from applicable registration requirements. MetaSolv has agreed to file a registration statement on Form S-3 with the Securities and Exchange Commission within 15 days from today's date for purposes of registering for resale the shares of common stock issued in the offering and the shares of common stock acquired upon exercise of the warrants.

MetaSolv Software Inc.