Open Solutions Reports Record Second Quarter 2005 Revenues and EBITDA up 116% and 119%

Open Solutions Inc., a provider of integrated enabling technologies for financial institutions throughout the United States and Canada, today reported financial results for the three months and six months ended June 30, 2005.

Revenue for the second quarter of 2005 increased 116 percent to $47.1 million, from $21.8 million for the second quarter of 2004. Revenues for the six months ended June 30, 2005 increased 98 percent to $84.8 million, from $42.8 million for the same period of the prior year.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of 2005 increased 119 percent to $9.2 million, from $4.2 million for the second quarter of 2004. EBITDA for the six months ended June 30, 2005 increased 101 percent to $16.7 million, from $8.3 million for the same period of the prior year. Net income for the three months ended June 30, 2005 was $0.18 per diluted share compared to $0.10 per diluted share on a pro forma basis for the same period of the prior year assuming a 40 percent effective tax rate for that period, or $0.16 per diluted share as reported with a 4 percent effective tax rate. Net income for the six months ended June 30, 2005 was $0.32 per diluted share compared to $0.20 per diluted share on a pro forma basis for the same period of the prior year assuming a 40 percent effective tax rate for that period, or $0.32 per diluted share as reported with a 5 percent effective tax rate. A reconciliation of EBITDA and pro forma 2004 earnings per share, assuming a 40 percent effective tax rate in 2004, to GAAP results is provided as part of this press release.

The Company is providing non-GAAP financial measures because the Company believes that these figures are helpful in allowing individuals to more accurately assess the ongoing financial performance of the business. The Company uses the presented non-GAAP financial measures internally to focus management on period-to-period changes in the Company's core business. Therefore, the Company believes that this information is meaningful when considered in connection with the information contained in the GAAP presentation of financial information.

Open Solutions' Chairman and CEO, Louis Hernandez, Jr. said, "The second quarter of 2005 was another quarter of impressive growth for Open Solutions. We saw strong demand for our products as demonstrated by not only total revenue more than doubling compared to the second quarter of 2004, which includes a 64 percent growth in license revenue, but also 62 percent growth in signed contract value and 80 percent growth in pro forma EPS over the same period last year. We expect continued growth for the rest of 2005, driven by increased recurring revenues and strong momentum in both our core processing and complementary product businesses. Looking out to 2006, we believe that increased demand for our products outside of the United States, especially in Canada, will be an added driver as we seek to expand our business internationally."

Second Quarter 2005 Highlights

-- Signed new contracts valued at $36.4 million in the second quarter of 2005 compared to $22.4 million in the first quarter of 2005 and $22.5 million in the second quarter of the prior year, representing an increase of 63 percent over the first quarter of 2005 and 62 percent over the second quarter of the prior year. We define contract value as total revenues to be received over the life of the contract for all elements of the contract, including license, hardware, installation, maintenance and other services, and do not include contract renewals in this figure.

-- Completed the acquisitions of SOSystems, a provider of in-house core data processing and services to credit unions, and Financial Data Solutions, Inc., a provider of image and remittance item processing, and image statement and rendering services.

-- Expanded our technology product and service offerings through the launch of the Interaction Management Center (IMC) product and the enhancement of the FTI Financial Technologies' Financial Accounting Suite.

-- Signed our first Canadian core contract with Community Savings, a credit union in Red Deer, Alberta, Canada with assets of C$1.8 billion.

-- Increased recurring revenue for the second quarter of 2005 to 63 percent of total revenue from 52 percent for the second quarter of 2004. Recurring revenue also increased for the six months ended June 30, 2005 to 65 percent of total revenue from 51 percent for the six months ended June 30, 2004. We define recurring revenue as revenue from maintenance and data center hosting contracts and the quarterly minimum payments from our resellers.

-- Internal revenue growth was 22 percent for the second quarter of 2005. Internal revenue growth percentages are measured as the increase in revenue for the current period less "acquired revenue from acquisitions" divided by revenues from the prior period plus "annualized revenue from acquisitions."

Internal Growth Calculation Three Months Ended
June 30,
2005 2004
--------------------------
Revenues for period (1) $47,087 $21,820
Acquired revenues from acquisitions (2) (19,133) NA
Annualized revenues from acquisitions (3) NA 1,183
--------------------------
Adjusted internal revenues for period $27,954 $23,003
==========================


(1) Includes revenue from FiTech and EastPoint Technologies, LLC, which are acquired companies with products no longer being marketed. The revenue recognized from these business units was $3.9 million for the three months ended June 30, 2005 and, when EastPoint's revenue is annualized, $4.0 million for the three months ended June 30, 2004. If these business units are excluded from the calculation above, the Company's internal growth for the three months ended June 30, 2005 would be 27%.

(2) Includes 2005 revenue related to business units acquired since June 30, 2004, which are re:Member Data Services, Inc., Omega Systems of North America, LLC, Datawest Solutions, Inc., CGI's US Services to Credit Unions business unit, SOSystems, and Financial Data Solutions, Inc.

(3) Includes the incremental revenue for the three months ended June 30, 2004 used to annualize that period's revenue related to business units acquired in that period to show the effect as if those business units were included in Open Solutions' operating results for the full period. The business unit acquired in this period was EastPoint.

2005 Business Outlook

The following statements are forward looking and actual results may differ materially. Our guidance includes the effect of all acquisitions completed to date, but does not give effect to any additional potential mergers or acquisitions that the Company may consummate in 2005.

Third Quarter 2005

The Company expects revenues in the range of $47.5 and $49.5 million, net income between $4.4 and $4.9 million, EBITDA between $10.8 and $11.6 million and earnings per diluted share between $0.20 and $0.21. For purposes of comparison, the fully taxed earnings per diluted share, assuming an effective tax rate of 40%, for the third quarter of 2004 would have been $0.14.

Full Year 2005

The Company expects revenues in the range of $183.7 and $188.8 million (compared to our previous expected revenue range of $177.0 and $185.0 million), net income between $17.4 and $18.4 million (compared to our previous expected net income range of $16.5 and $18.4 million), EBITDA between $42.3 and $44.0 million (compared to our previous expected EBITDA range of $40.0 and $43.5 million) and earnings per diluted share between $0.79 and $0.84 (compared to our previous expected earnings per diluted range of $0.76 and $0.84). On a pro forma basis, earnings per diluted share, assuming an effective tax rate of 40% for our full year 2004, would have been $0.53. The above guidance for full year 2005 does not include the effect of expensing stock options. The Company will begin expensing stock options as currently mandated by the Financial Accounting Standards Board on a prospective basis starting January 1, 2006.

About Open Solutions Inc.

Open Solutions Inc. offers a fully featured strategic product platform that integrates core data processing applications, built on a single centralized Oracle(R) relational database, with Internet banking, cash management, CRM/business intelligence, financial accounting tools, Check 21, electronic image/item processing, payment and loan origination solutions. Open Solutions' full suite of products and services allows banks, thrifts and credit unions in the United States and Canada to better compete in today's aggressive financial services marketplace, and expand and tap their trusted financial relationships, client affinity, community presence and personalized service.

For more information about Open Solutions, or its financial product line, contact Mickey Goldwasser by email at mgoldwasser@opensolutions.com, by phone at 860.652.3153 or via fax at 860.652.3156. For Investor Relations issues please contact David Henderson by email at ir@opensolutions.com or by phone at 860.652.3155. Visit Open Solutions' Internet site at www.opensolutions.com.

Open Solutions Inc.(R) is a registered trademark of Open Solutions Inc. All other company and product names may be trademarks of their respective owners. Copyright (C) 2005 Open Solutions Inc. All rights reserved.

Safe Harbor Statement

Statements made in this press release that state Open Solutions Inc.'s or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Readers are cautioned that these statements are only predictions and may differ materially from actual future events or results. All forward looking-statements are only as of the date of this press release and Open Solutions Inc. undertakes no obligation to update or revise them. Such forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause Open Solutions Inc.'s actual results to differ materially from those projected in such forward-looking statements. Factors which could cause our actual results to differ materially from those projected in forward-looking statements include, without limitation, economic, competitive, governmental and technological factors affecting the banking and credit union industry and/or Open Solutions Inc.'s operations, markets, products, services, prices and other factors set forth under the heading "Factors Affecting Future Operating Results" in the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2005, as filed with the Securities and Exchange Commission.

OPEN SOLUTIONS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
------------------- -------------------

Revenues:
Software license $ 11,349 $ 6,914 $ 19,254 $ 13,355
Service, maintenance and
hardware 35,738 14,906 65,559 29,415
------------------- -------------------
Total revenues 47,087 21,820 84,813 42,770

Cost of revenues:
Software license 1,638 1,223 2,828 2,543
Service, maintenance and
hardware 18,741 7,862 33,943 15,597
------------------- -------------------
Total cost of
revenues 20,379 9,085 36,771 18,140
------------------- -------------------
Gross profit 26,708 12,735 48,042 24,630

Operating expenses:
Sales and marketing 6,003 3,400 10,808 6,299
Product development 5,080 2,221 9,105 4,183
General and
administrative 9,169 4,108 16,762 8,217
------------------- -------------------
Total operating
expenses 20,252 9,729 36,675 18,699

Income from operations 6,456 3,006 11,367 5,931
Interest and other
income (expense), net (40) 274 (27) 522
------------------- -------------------
Income before income taxes 6,416 3,280 11,340 6,453
Income tax provision (2,581) (141) (4,540) (312)
------------------- -------------------
Net income $ 3,835 $ 3,139 $ 6,800 $ 6,141
=================== ===================


Net income per common share
-----Basic $ 0.20 $ 0.18 $ 0.35 $ 0.35
-----Diluted (Note 1) $ 0.18 $ 0.16 $ 0.32 $ 0.32
Shares used to compute net
income per common share
-----Basic 19,373 17,905 19,412 17,411
-----Diluted 25,399 19,789 24,638 19,405

Pro forma 2004 net income and
earnings per share
calculation:
Income before income
taxes $ 6,416 $ 3,280 $ 11,340 $ 6,453
Income tax provision
(assuming 40% tax rate
for 2004) (2,581) (1,312) (4,540) (2,581)
------------------- -------------------
Pro forma net income $ 3,835 $ 1,968 $ 6,800 $ 3,872
=================== ===================

Pro forma net income per
common share
-----Basic $ 0.20 $ 0.11 $ 0.35 $ 0.22
-----Diluted $ 0.18 $ 0.10 $ 0.32 $ 0.20

Reconciliation of net
income to EBITDA:
Net income $ 3,835 $ 3,139 $ 6,800 $ 6,141
Interest and other
income (expense), net 40 (274) 27 (522)
Income tax provision 2,581 141 4,540 312
Depreciation and
amortization 2,764 1,193 5,342 2,329
------------------- -------------------
EBITDA $ 9,220 $ 4,199 $ 16,709 $ 8,260
=================== ===================


Note 1- Diluted earnings per share for the three months ended June 30, 2005 includes the impact of the convertible notes, which is calculated by adding back to net income the tax effected interest cost associated with the convertible notes and by adding the if-converted shares to the shares used to compute net income per share. For the three months ended June 30, 2005, 4,964,204 if-converted shares were added to the shares used to compute net income per share, and for the six months ended June 30, 2005, 4,086,555 if-converted shares were added to the shares used to compute net income per share. The six month number is a weighted average because the convertible note offering closed during the first quarter of 2005.

OPEN SOLUTIONS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)

June 30, Dec. 31,
2005 2004
----------- -----------
Assets
Current assets:
Cash and investments $ 153,897 $ 62,183
Accounts receivable, net 33,912 19,975
Prepaid expenses and other current
assets 8,521 5,989
Deferred tax assets 11,757 12,356
----------- -----------
Total current assets 208,087 100,503

Fixed assets, net 17,170 14,410
Intangible assets, net 42,819 37,379
Goodwill 96,668 66,548
Deferred tax asset 2,830 4,560
Other assets 7,064 2,074
----------- -----------
Total assets $ 374,638 $ 225,474
=========== ===========


Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 3,885 $ 2,521
Accrued expenses 16,671 15,338
Deferred revenue, current portion 26,929 21,586
Long-term debt from customers, current
portion - 1,239
Capital lease obligations, current
portion 296 735
----------- -----------
Total current liabilities 47,781 41,419
----------- -----------

Convertible notes payable 144,061 -
Deferred revenue, less current portion 3,190 2,706
Other long-term liabilities 1,619 1,300
Long-term debt from customers, less
current portion - 1,736
----------- -----------
Total liabilities 196,651 47,161

Total stockholders' equity 177,987 178,313
----------- -----------

----------- -----------
Total liabilities and stockholders'
equity $ 374,638 $ 225,474
=========== ===========

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