While there is much yet to do, we made significant progress on key
operational goals in the quarter despite continuing worldwide economic
uncertainty and growing competition, said Carl Yankowski, Palm’s
chief executive officer. We delivered revenue and gross margin within our
target range and reduced our pro forma operating expenses by almost one
quarter to match economic realities. We aggressively marketed our products,
reducing channel inventories, and we recruited several senior executives in
our solutions and platform organizations to build on Palm’s leadership and
exploit the promising long-term market for handheld computing.
The Palm brand, customer satisfaction and loyalty continue to be robust,
he said. Our device and OS leadership remained strong over the quarter in
the face of significantly increased competition.(1)
Pro forma net loss which excludes the effects of excess inventory and
related costs/benefit (included in cost of revenues), amortization of goodwill
and intangible assets, purchased in-process technology, separation costs, and
restructuring charges totaled $38.7 million, or $0.07 per share, compared
with pro forma net income of $23.9 million, or $0.04 per share, for the first
quarter of fiscal year 2001. Pro forma net loss was 57 percent less than the
pro forma net loss of $89.2 million, or $0.16 per share, reported in the
fourth quarter of fiscal year 2001. Actual net loss for the first quarter of
fiscal year 2002 was $32.4 million, or $0.06 per share, compared with net
income of $17.3 million, or $0.03 per share, for the first quarter of fiscal
year 2001.
During the quarter, the group responsible for Palm(TM) branded handhelds,
accessories and add-on hardware and software saw good progress and momentum on
a number of fronts.
We completed the global rollout of our new m500 family of handhelds and
today introduced the m125 handheld, giving us the broadest and best
price/value portfolio of handheld solutions in our company’s history and,
indeed, in the industry, Yankowski said. Mobile individual professionals
and enterprises find our new m500 family of products very attractive. This
family features internal expansion through standards-based Secure Digital and
MultiMediaCard media and external expansion with its Palm Universal Connector.
It is gaining excellent momentum on corporate standards lists, and expansion
cards are selling well. The m125 handheld also takes advantage of dual
expansion, and we expect it will be appealing to first-time buyers, educators,
students and customers who want to upgrade from earlier models.
The Palm m125 handheld lets people carry and share office-productivity and
education software, eBooks, photos, short videos, extensive reference
materials and extra memory. Customers also can attach add-on modules, such as
collapsible keyboards, digital cameras and modems. It has an estimated
U.S. street price of $249 and includes bundled software valued at more than
$100.
We also are encouraged by exciting new hardware and software from the
Palm Economy that expands the capabilities of our products, Yankowski said.
For example, Xircom, an Intel subsidiary, is selling an 802.11b sled for
wireless email access, wireless networking in enterprises and other enterprise
application access. And Palm m500 series handhelds, which already could edit
Microsoft Word files and Microsoft Excel spreadsheets using DataViz’s valuable
in-the-box Documents To Go(R) software, got an added advantage. The new
version Documents To Go 4.0, which is being incorporated in the box for
m500 series handhelds and also is available for download to existing m500
series handheld owners allows customers to display Microsoft PowerPoint
presentations on their Palm handhelds, an industry first.
During the quarter, Palm shipped approximately 750,000 Palm branded
devices, which brings cumulative shipments to more than 14 million.
SOURCE: COMPANY PRESS RELEASE
