Category: Uncategorized
- Published: 29 November -0001
News Release: palmOne Reports Q3 FY'04 Results
palmOne, Inc. (Nasdaq: PLMO) today reported revenue of $242.5 million for the third quarter of fiscal year 2004, ended Feb. 27, up 22.6 percent from the $197.9 million reported during the third quarter a year ago.
For the third quarter of fiscal year 2004, net loss, in accordance with generally accepted accounting principles (GAAP), was $9.3 million, or $0.20 per share. This compares to a net loss from the year-ago quarter of $172.3 million, or $5.93 per share. The net loss of $9.3 million for this quarter included restructuring charges of $4.5 million and amortization of intangible assets and stock-based compensation of $5.4 million. Net income in the third quarter of fiscal year 2004, measured on a non- GAAP basis, totaled $0.6 million, or $0.01 per share. This compares to non- GAAP net loss in the third quarter a year ago of $24.7 million, or $0.85 per share. Non-GAAP net income (loss) excludes the effects of amortization of intangible assets and stock-based compensation, impairment charges, restructuring charges and losses from discontinued operations.
'Over the past quarter, we strengthened our leadership in handhelds and saw excellent demand for our Treo smartphone,'said Todd Bradley, palmOne president and chief executive officer. 'The strong results this quarter show that our strategy of delivering scale from the handheld product line, coupled with growth from the wireless product line, is working. We are very excited about our prospects.'
The company noted the following year-over-year operational highlights in the quarter's results:
-- Revenue up 23 percent; -- Average selling price of $233 per device, up from $169; -- Gross margin at 28.9 percent, up from 23.8 percent; -- Inventory-turn improvement to 22 from 20; and -- Cash, cash equivalents and short-term investments of $239.8 million, up from $224.8 million.
During the quarter, palmOne sold approximately 938,000 handheld computing and communications solutions, bringing the total number the company has sold to 25.3 million. In handheld computers, NPD reported that palmOne increased its market share in U.S. all-channel sales (including retail, commercial and online) by 11 percent to 57.7 percent in January, the most recent monthly report, compared with the same period a year ago.
INVESTOR'S NOTE: The company will hold a conference call for the public on Monday, March 22, at 2 p.m. Pacific/5 p.m. Eastern to discuss matters covered in this news release. The dial-in number for the call is 888-335-6680 in the United States and 973-321-1030 for international callers. No pass code is needed. A telephone call replay of the conference call will be available through April 2, 2004, beginning March 22 at approximately 7 p.m. Pacific. The dial-in number for the replay is 877-519-4471 (PIN# 4590192) in the United States and 973-341-3080 (PIN# 4590192) for international callers. The live conference call also will be available over the Internet by logging onto the investor relations section of palmOne's website at http://ir.palmOne.com . An audio replay and text transcript of the conference call also can be accessed at the same URL beginning on March 22, 2004.
To supplement the company's consolidated financial statements presented in accordance with GAAP, palmOne uses non-GAAP measures of certain components of financial performance, including operating income (loss), net income (loss) and per share data, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses. These non-GAAP measures are provided to enhance investors'overall understanding of the company's current financial performance and the company's prospects for the future. Specifically, the company believes the non-GAAP results provide useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of its core operating results. These non-GAAP results are among the primary indicators management uses as a basis for planning and forecasting of future periods and facilitating management's internal comparisons to the company's historical operating results and comparisons to competitors'operating results. In addition, because palmOne has historically reported certain non-GAAP results to investors, the company believes the inclusion of non-GAAP measures provides consistency in the company's financial reporting. These measures should be considered in addition to results prepared in accordance with generally accepted accounting principles, but should not be considered a substitute for, or superior to, GAAP results. These non-GAAP financial measures may also be different from non-GAAP financial measures used by other companies. Consistent with the company's practice, the non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure.
This press release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding our ability to grow our business, to be profitable, to remain competitive and to continue to lead our industry. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially, including, without limitation, the following: fluctuations in the demand for palmOne's existing and future products and services and growth in palmOne's industries and markets; possible defects in products and technologies developed; palmOne's ability to timely and cost-effectively obtain components and elements of our technology from suppliers; palmOne's ability to compete with existing and new competitors. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in palmOne's most recent filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the fiscal quarter ended November 28, 2003. palmOne undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.
About palmOne, Inc. Information about palmOne, Inc. is available at http://www.palmOne.com .
NOTE: palmOne, Handspring, Zire, Tungsten, Treo and Palm OS are among the trademarks or registered trademarks owned by or licensed to palmOne, Inc. or its subsidiaries. All other brand and product names are or may be trademarks of, and are used to identify products or services of, their respective owners.
palmOne, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
Feb. 28, Feb. 28, Feb. 28, Feb. 28,
2004 2003 2004 2003
Revenues $242,485 $197,864 $682,308 $620,491
Costs and operating
expenses:
Cost of revenues(**) 172,169 150,725 491,132 465,363
Sales and marketing 38,582 42,199 116,869 123,528
Research and
development 19,831 15,702 51,607 51,178
General and
administrative 9,170 9,977 27,219 27,556
Amortization of
intangible assets
and stock-based
compensation(*) 5,414 530 7,473 3,029
Impairment charges -- 102,540 -- 102,540
Restructuring charges 4,522 37,952 8,110 35,348
Total costs and
operating expenses 249,688 359,625 702,410 808,542
Operating loss (7,203) (161,761) (20,102) (188,051)
Interest and other
income (expense), net (486) (2,574) 965 2,409
Loss before income
taxes (7,689) (164,335) (19,137) (185,642)
Income tax provision 1,633 1,413 4,415 221,858
Loss from continuing
operations (9,322) (165,748) (23,552) (407,500)
Loss from discontinued
operations (net of
taxes of $0, $647,
$252 and $1,552,
respectively) -- (6,588) (11,634) (20,061)
Net loss $(9,322) $(172,336) $(35,186) $(427,561)
Net loss per share:
Basic:
Continuing
operations $(0.20) $(5.70) $(0.63) $(14.04)
Discontinued
operations -- (0.23) (0.31) (0.69)
$(0.20) $(5.93) $(0.94) $(14.73)
Diluted:
Continuing
operations $(0.20) $(5.70) $(0.63) $(14.04)
Discontinued
operations -- (0.23) (0.31) (0.69)
$(0.20) $(5.93) $(0.94) $(14.73)
Shares used in computing
per share amounts:
Basic 46,073 29,082 37,373 29,032
Diluted 46,073 29,082 37,373 29,032
(*) Amortization of
intangible assets and
stock-based compensation:
Cost of revenues $243 $67 $331 $842
Sales and marketing 4,709 205 6,366 598
Research and
development 68 126 132 1,188
General and
administrative 394 132 644 401
$5,414 $530 $7,473 $3,029
Certain prior quarter balances have been reclassified to conform to the
current quarter presentation.
palmOne's fiscal periods are generally 13 weeks in length and end on a
Friday. For presentation purposes, the periods are presented as ending on
Aug. 31, Nov. 30, Feb. 28 and May 31.
(**) Cost of revenues does not include that portion of amortization of
intangible assets and stock-based compensation related to cost of
revenues.
palmOne, Inc.
Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of
Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Three Months Ended
Feb. 28, 2004 Feb. 28, 2003
Adjust- Non- Adjust- Non-
GAAP ments GAAP GAAP ments GAAP
Revenues $242,485 $--$242,485 $197,864 $-- $197,864
Costs and operating
expenses:
Cost of
revenues(**) 172,169 -- 172,169 150,725 -- 150,725
Sales and
marketing 38,582 -- 38,582 42,199 -- 42,199
Research and
development 19,831 -- 19,831 15,702 -- 15,702
General and
administrative 9,170 -- 9,170 9,977 -- 9,977
Amortization
of intangible
assets and
stock-based
compensation(*) 5,414 (5,414) -- 530 (530) --
Impairment
charges -- -- -- 102,540 (102,540) --
Restructuring
charges 4,522 (4,522) -- 37,952 (37,952) --
Total costs
and operating
expenses 249,688 (9,936) 239,752 359,625 (141,022) 218,603
Operating income
(loss) (7,203) 9,936 2,733 (161,761) 141,022 (20,739)
Interest and
other income
(expense), net (486) -- (486) (2,574) -- (2,574)
Income (loss)
before income
taxes (7,689) 9,936 2,247 (164,335) 141,022 (23,313)
Income tax
provision 1,633 -- 1,633 1,413 -- 1,413
Income (loss)
from continuing
operations (9,322) 9,936 614 (165,748) 141,022 (24,726)
Loss from
discontinued
operations
(net of taxes
of $0 and $647,
respectively) -- -- -- (6,588) 6,588 --
Net income
(loss) $(9,322) $9,936 $614 $(172,336) $147,610 $(24,726)
Net income
(loss) per share:
Basic:
Continuing
operations $(0.20) $0.21 $0.01 $(5.70) $4.85 $(0.85)
Discontinued
operations -- -- -- (0.23) 0.23 --
$(0.20) $0.21 $0.01 $(5.93) $5.08 $(0.85)
Diluted:
Continuing
operations $(0.20) $0.21 $0.01 $(5.70) $4.85 $(0.85)
Discontinued
operations -- -- -- (0.23) 0.23 --
$(0.20) $0.21 $0.01 $(5.93) $5.08 $(0.85)
Shares used in
computing per
share amounts:
Basic 46,073 -- 46,073 29,082 -- 29,082
Diluted 46,073 -- 46,073 29,082 -- 29,082
(*) Amortization
of intangible
assets and
stock-based
compensation:
Cost of
revenues $243 $(243) $-- $67 $(67) $--
Sales and
marketing 4,709 (4,709) -- 205 (205) --
Research and
development 68 (68) -- 126 (126) --
General and
administrative 394 (394) -- 132 (132) --
$5,414 $(5,414) $-- $530 $(530) $--
The above non-GAAP amounts have been adjusted to eliminate amortization of
intangible assets and stock-based compensation, impairment charges,
restructuring charges and loss from discontinued operations.
Certain prior quarter balances have been reclassified to conform to the
current quarter presentation.
palmOne's fiscal periods are generally 13 weeks in length and end on a
Friday. For presentation purposes, the periods are presented as ending on
Aug. 31, Nov. 30, Feb. 28 and May 31.
(**) Cost of revenues does not include that portion of amortization of
intangible assets and stock-based compensation related to cost of
revenues.
palmOne, Inc.
Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements of
Operations
(In thousands, except per share data)
(Unaudited)
Nine Months Ended Nine Months Ended
Feb. 28, 2004 Feb. 28, 2003
Adjust- Non- Adjust- Non-
GAAP ments GAAP GAAP ments GAAP
Revenues $682,308 $-- $682,308 $620,491 $-- $620,491
Costs and operating
expenses:
Cost of
revenues(**) 491,132 -- 491,132 465,363 -- 465,363
Sales and
marketing 116,869 -- 116,869 123,528 -- 123,528
Research and
development 51,607 -- 51,607 51,178 -- 51,178
General and
administrative 27,219 -- 27,219 27,556 -- 27,556
Amortization of
intangible
assets and
stock-based
compensation(*) 7,473 (7,473) -- 3,029 (3,029) --
Impairment
charges -- -- -- 102,540 (102,540) --
Restructuring
charges 8,110 (8,110) -- 35,348 (35,348) --
Total costs
and operating
expenses 702,410 (15,583) 686,827 808,542 (140,917) 667,625
Operating loss (20,102) 15,583 (4,519) (188,051) 140,917 (47,134)
Interest and
other income
(expense), net 965 -- 965 2,409 -- 2,409
Loss before
income taxes (19,137) 15,583 (3,554) (185,642) 140,917 (44,725)
Income tax
provision 4,415 -- 4,415 221,858 (219,141) 2,717
Loss from
continuing
operations (23,552) 15,583 (7,969) (407,500) 360,058 (47,442)
Loss from
discontinued
operations
(net of taxes
of $252 and
$1,552,
respectively) (11,634) 11,634 -- (20,061) 20,061 --
Net loss $(35,186) $27,217 $(7,969)$(427,561) $380,119 $(47,442)
Net loss per share:
Basic
Continuing
operations $(0.63) $0.42 $(0.21) $(14.04) $12.41 $(1.63)
Discontinued
operations (0.31) 0.31 -- (0.69) 0.69 --
$(0.94) $0.73 $(0.21) $(14.73) $13.10 $(1.63)
Diluted
Continuing
operations $(0.63) $0.42 $(0.21) $(14.04) $12.41 $(1.63)
Discontinued
operations (0.31) 0.31 -- (0.69) 0.69 --
$(0.94) $0.73 $(0.21) $(14.73) $13.10 $(1.63)
Shares used in
computing per
share amounts:
Basic 37,373 -- 37,373 29,032 -- 29,032
Diluted 37,373 -- 37,373 29,032 -- 29,032
(*) Amortization
of intangible
assets and
stock-based
compensation:
Cost of
revenues $331 $(331) $-- $842 $(842) $--
Sales and
marketing 6,366 (6,366) -- 598 (598) --
Research and
development 132 (132) -- 1,188 (1,188) --
General and
administrative 644 (644) -- 401 (401) --
$7,473 $(7,473) $-- $3,029 $(3,029) $--
The above non-GAAP amounts have been adjusted to eliminate amortization of
intangible assets and stock-based compensation, impairment charges,
restructuring charges, the change in the valuation allowance for deferred
tax assets and the related income tax provision and loss from discontinued
operations.
Certain prior quarter balances have been reclassified to conform to the
current quarter presentation.
palmOne's fiscal periods are generally 13 weeks in length and end on a
Friday. For presentation purposes, the periods are presented as ending on
Aug. 31, Nov. 30, Feb. 28 and May 31.
(**) Cost of revenues does not include that portion of amortization of
intangible assets and stock-based compensation related to cost of
revenues.
palmOne, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except par value amounts)
Feb. 28, 2004 May 31, 2003
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $190,550 $204,967
Short-term investments 49,261
Accounts receivable, net of allowance for
doubtful accounts of $8,274 and $4,635,
respectively 101,452 96,784
Inventories 27,042 22,748
Investment for committed tenant improvements 7,197 --
Prepaids and other 10,404 9,039
Current assets of discontinued operations -- 37,485
Total current assets 385,906 371,023
Restricted investments 775 948
Land not in use 60,000 60,000
Property and equipment, net 22,809 31,204
Goodwill 255,327 13,815
Intangible assets, net 12,917 --
Deferred income taxes 34,800 34,800
Other assets 1,331 1,720
Non-current assets of discontinued operations -- 63,116
Total assets $773,865 $576,626
LIABILITIES AND STOCKHOLDERS'EQUITY
Current liabilities:
Accounts payable $111,033 $89,371
Accrued restructuring 33,230 34,886
Provision for committed tenant improvements 7,197 --
Other accrued liabilities 115,623 100,519
Current liabilities of discontinued operations -- 12,570
Total current liabilities 267,083 237,346
Non-current liabilities:
Long-term convertible debt 35,000 35,000
Other non-current liabilities 1,750 165
Non-current liabilities of discontinued
operations -- 48,329
Stockholders'equity:
Preferred stock, $.001 par value, 125,000
shares authorized; none outstanding -- --
Common stock, $.001 par value, 2,000,000 shares
authorized; outstanding Feb. 28, 2004, 46,191
shares; May 31, 2003, 29,230 shares 46 29
Additional paid-in capital 1,375,196 1,123,819
Unamortized deferred stock-based
compensation (2,434) (508)
Accumulated deficit (903,975) (868,789)
Accumulated other comprehensive income 1,199 1,235
Total stockholders'equity 470,032 255,786
Total liabilities and stockholders'equity $773,865 $576,626
Certain prior quarter balances have been reclassified to conform to the
current quarter presentation.
palmOne's fiscal periods are generally 13 weeks in length and end on a
Friday. For presentation purposes, the periods are presented as ending on
Aug. 31, Nov. 30, Feb. 28 and May 31.
palmOne, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
Feb. 28, 2004 Feb. 28, 2003
Cash flows from operating activities:
Loss from continuing operations $(9,322) $(165,748)
Adjustments to reconcile loss from continuing
operations to net cash provided by (used in)
operating activities:
Depreciation 5,151 6,115
Amortization 5,625 851
Impairment charges -- 102,540
Changes in assets and liabilities:
Accounts receivable 51,535 56,762
Inventories 9,294 15,235
Prepaids and other 6 7,709
Accounts payable (19,977) (37,930)
Accrued restructuring (3,055) 15,854
Other accrued liabilities (18,547) (7,121)
Net cash provided by (used in) operating
activities 20,710 (5,733)
Cash flows from investing activities:
Purchase of property and equipment (770) (1,537)
Purchase of short-term investments (98,762) --
Sale of short-term investments 49,501 17,525
Purchase of restricted investments -- (173)
Sale of restricted investments 1,041 --
Net cash provided by (used in) investing
activities (48,990) 15,815
Cash flows from financing activities:
Proceeds from issuance of common stock;
employee stock plans 635 189
Net cash provided by financing activities 635 189
Change in cash and cash equivalents (27,645) 10,271
Cash and cash equivalents, beginning of period 218,195 209,482
Cash and cash equivalents, end of period $190,550 $219,753
Other cash flow information:
Cash paid for income taxes $(582) $(1,154)
Cash paid for interest $(1,191) $(1,274)
Additional information:
Change in cash and cash equivalents $(27,645) $10,271
Change in short-term investments 49,261 (17,525)
Change in cash and cash equivalents and
short-term investments $21,616 $(7,254)
Certain prior quarter balances have been reclassified to conform to the
current quarter presentation.
palmOne's fiscal periods are generally 13 weeks in length and end on a
Friday. For presentation purposes, the periods are presented as ending on
Aug. 31, Nov. 30, Feb. 28 and May 31.
SOURCE palmOne, Inc.
Dave Vadasz, investor relations, +1-408-503-7200, or This email address is being protected from spambots. You need JavaScript enabled to view it., or Marlene Somsak, media relations, +1-408-503-2592, or This email address is being protected from spambots. You need JavaScript enabled to view it., both of palmOne, Inc.
http://www.palm.com
WEBSITE This email address is being protected from spambots. You need JavaScript enabled to view it.
