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Handspring Press Release Archive
Handspring Reports Third Quarter Results
MOUNTAIN VIEW, Calif., (April 15, 2003)-- Handspring, Inc. (Nasdaq: HAND) today reported results for the third quarter of fiscal 2003 ended March 29, 2003.
Revenue for the third quarter of fiscal 2003 was $30.8 million, down from $47.8 million in the second quarter of fiscal 2003 and from $59.7 million in the third quarter a year ago. Revenue for the quarter included $21.1 million in communicator sales and $9.7 million in sales of organizers and accessories. On a GAAP accounting basis, net loss for the period totaled $90.4 million, or $.62 per share as compared to a net loss of $12.3 million, or $.08 per share in the prior quarter. Excluding charges for the Sunnyvale lease restructuring of $75.9 million and the amortization of deferred stock compensation of $1.7 million, Handspring's non-GAAP net loss for the quarter was $12.8 million, or $.09 per share as compared to a non-GAAP net loss of $10 million, or $.07 per share, excluding amortization of deferred stock compensation of $2.3 million, in the prior quarter.
As of March 29, 2003, Handspring's unrestricted cash and short-term investments totaled $53.2 million, down $12.5 million sequentially.
Handspring also said it has signed an agreement with Orange SA, one of the world's largest communications companies, to work together to develop future smartphones designed for the Orange network in Europe, with product shipments expected to begin this fall.
"We've continued to grow our Treo installed base through a difficult quarter, reaching 180,000 customers, while investing in a significant new product due this fall," said Handspring CEO Donna Dubinsky. "The near-term outlook will be challenging due to a weak economic environment and lower-than- expected sell-in of current products for the coming quarter."
Highlights of the third quarter included:
- The launch of the Treo 270 in T-Mobile retail stores.
- A significant reduction of operating expenses due to the restructuring
of the Sunnyvale lease obligations.
- Treo communicator sell through for the quarter of approximately 39,000
worldwide. To date, total communicator sell through is approximately
180,000 worldwide.
- The Launch of Treo 270 with Brightstar Corp. throughout all of Latin
America (except Mexico and Brazil).
- A new developer program to fuel development of wireless, business and
consumer applications for the Treo communicator.
- GPRS availability for Cingular Treo customers that provides easy access
to corporate or internet e-mail.
FOURTH QUARTER FISCAL 2003 BUSINESS OUTLOOK
Handspring's business outlook will be affected by the following factors.
- Communicator revenue will be significantly lower as the company focuses
on reducing channel inventory in anticipation of a major new product
launch.
- Organizer sales will be minimal going forward as inventory is depleted.
- The company expects to announce a new smartphone product with delivery
scheduled for the fall, as well as support for this product from major
carriers around the world.
- Expenses will decline as previous cost reducing activities are
realized.
- Cash burn will increase due to a larger operating loss and the expected
timing of receivables.
- The company is pursuing additional financing.
ACCOUNTING FOR LEASE RESTRUCTURING
Handspring recorded a charge against earnings of $75.9 million in the third fiscal quarter to account for the Sunnyvale lease restructuring. The restructured lease agreements allow Handspring to reduce substantially its previous lease obligations of approximately $350 million over the next 12 years. Handspring was required to pay a total consideration of approximately $61.2 million to the building landlord and contractor in connection with the lease restructuring. Of this consideration, $15.3 million was paid in third fiscal quarter from the company's unrestricted cash and $40.9 million was paid from previously restricted cash. Handspring will pay an additional $5.0 million plus interest in various debt and lease payments over the next 5 years. Handspring also issued the landlord warrants to purchase 10 million shares of Handspring common stock.
CONFERENCE CALL INFORMATION
Handspring's earnings conference call will be webcast on its web site at www.handspring.com, live at 2 p.m. PDT (Pacific Daylight Time) on Tuesday, April 15th, 2003, and archived through Tuesday, April 22th, 2003. The audio replay of the company's Q3 conference call can be accessed via telephone after 4:30 p.m. PDT Tuesday, April 15th, 2003 until 4:30 p.m. PDT Tuesday, April 25th, 2003 by calling 402-977-9140 and entering the reservation number 21138381.
ABOUT HANDSPRING
Handspring is a leading innovator in personal communications and handheld computing. The company's products include the Treo wireless communicators and Treo 90 organizer, the Visor expandable handheld computers, and client and server software for fast Web access from handheld devices and mobile phones. Today Handspring products and accessories are sold at www.handspring.com and through select Internet, retail and carrier partners in the United States, Europe, Asia, Australia, New Zealand, Canada, Middle East, and Mexico/Latin America.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that involve risks and uncertainties, including those relating to: Handspring's expected shipment of a new smartphone for use on Orange's network this fall; the company's fourth quarter outlook for revenue, expenses and cash burn; and the Company's expectation that major carriers around the world will support the company's new smartphone product. Actual results may differ materially due to a number of factors including, among others: Handspring's ability to develop and deliver innovative communicator products that meet carriers' specifications and expected delivery dates; demand for communicator products in general and Handspring's products in particular from both carriers and end users; the timing of the build-out of advanced wireless networks and the quality and scope of voice and data service coverage offered by wireless carriers; the degree to which wireless carriers will facilitate the successful introduction of Handspring's wireless products; Handspring's dependence on third parties to supply components in sufficient volumes and at satisfactory quality levels; Handspring's ability to accurately forecast future demand; and the rapid pace of technological change and competitive developments in the wireless communications industry. Reported results should not be considered as an indication of future performance. The matters discussed in this press release also involve risks and uncertainties described in Handspring's in most recent filings with the Securities and Exchange Commission. Handspring assumes no obligation to update the forward-looking information contained in this press release.
NOTE: Handspring, the Handspring logo, Treo, the Treo logo, and Visor are trademarks of Handspring, Inc. and may be registered in certain jurisdictions. All other brand names are trademarks of their respective owners.
HANDSPRING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 29, 2003 June 29, 2002
-------------- -------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $45,200 $85,554
Short-term investments 8,006 15,235
Accounts receivable, net 536 20,491
Prepaid expenses and other current assets 3,718 3,667
Inventories 5,766 20,084
-------------- -------------
Total current assets 63,226 145,031
Restricted investments for committed
tenant improvements and other 11,131 50,644
Property and equipment, net 6,966 12,478
Construction in progress-Sunnyvale
tenant improvements -- 6,614
Construction in progress-Sunnyvale property 13,982 73,979
Other assets 4,089 1,408
-------------- -------------
Total assets $99,394 $290,154
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $14,820 $44,490
Provision for committed tenant
improvements and other 11,131 --
Non-cash obligations for CIP-
Sunnyvale property 13,982 73,979
Accrued liabilities 38,922 48,779
-------------- -------------
Total current liabilities 78,855 167,248
Long-term liabilities:
Sunnyvale note payable-LT 2,300 --
Stockholders' equity:
Common stock 148 143
Additional paid-in capital 425,844 419,256
Deferred stock compensation (2,500) (9,468)
Accumulated other comprehensive loss (1,011) (793)
Accumulated deficit (404,242) (286,232)
-------------- -------------
Total stockholders' equity 18,239 122,906
-------------- -------------
Total liabilities and
stockholders' equity $99,394 $290,154
============== =============
HANDSPRING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 29, 2003
--------------------------------
GAAP(1) Difference Non-GAAP(2)
Revenue $30,848 $30,848
--------------------------------
Costs and operating expenses:
Cost of revenue 25,250 25,250
Research and development 5,734 5,734
Selling, general and administrative 13,069 13,069
Amortization of deferred stock
compensation and intangibles (*) 1,730 $(1,730)(3) --
Sunnyvale lease restructuring 75,931 (75,931)(5) --
--------------------------------
Total costs and operating
expenses 121,714 (77,661) 44,053
--------------------------------
Loss from operations (90,866) 77,661 (13,205)
Interest and other income, net 470 470
--------------------------------
Loss before taxes (90,396) 77,661 (12,735)
Income tax provision 38 38
--------------------------------
Net income (loss) $(90,434) $77,661 $(12,773)
================================
Basic and diluted net loss per share $(0.62) $0.53 $(0.09)
================================
Shares used in calculating basic and
diluted net loss per share 146,657 146,657 146,657
================================
(*) Amortization of deferred stock
compensation:
Cost of revenue $228
Research and development 335
Selling, general and
administrative 1,167
------
$1,730
======
(1) Reflects operating results based on U.S. generally accepted
accounting principles (or GAAP).
(2) Non-GAAP amounts exclude amortization of deferred stock
compensation and intangibles and restructuring charges associated
with the Sunnyvale lease restructuring.
(3) Non-cash charge related to the amortization of deferred stock
compensation primarily related to stock options granted prior to our
IPO.
(4) Non-cash charge related to the amortization of deferred stock
compensation, primarily related to stock options granted prior to
our IPO, and intangibles, consisting of goodwill and assembled
workforce as part of the acquistion of BlueLark Systems.
(5) One-time charge for the restructuring of leases associated with the
Sunnyvale facility.
Three Months Ended
March 30, 2002
GAAP(1) Difference Non-GAAP(2)
Revenue $59,715 $59,715
--------------------------------
Costs and operating expenses:
Cost of revenue 54,241 54,241
Research and development 6,340 6,340
Selling, general and administrative 18,993 18,993
Amortization of deferred stock
compensation and intangibles (*) 4,510 $(4,510)(4) --
Sunnyvale lease restructuring -- --
--------------------------------
Total costs and operating
expenses 84,084 (4,510) 79,574
--------------------------------
Loss from operations (24,369) 4,510 (19,859)
Interest and other income, net 809 809
--------------------------------
Loss before taxes (23,560) 4,510 (19,050)
Income tax provision 100 100
--------------------------------
Net income (loss) $(23,660) $4,510 $(19,150)
================================
Basic and diluted net loss per share $(0.18) $0.03 $(0.14)
================================
Shares used in calculating basic and
diluted net loss per share 134,903 134,903 134,903
================================
(*) Amortization of deferred stock
compensation:
Cost of revenue $582
Research and development 1,030
Selling, general and
administrative 2,898
------
$4,510
======
(1) Reflects operating results based on U.S. generally accepted
accounting principles (or GAAP).
(2) Non-GAAP amounts exclude amortization of deferred stock
compensation and intangibles and restructuring charges associated
with the Sunnyvale lease restructuring.
(3) Non-cash charge related to the amortization of deferred stock
compensation primarily related to stock options granted prior to our
IPO.
(4) Non-cash charge related to the amortization of deferred stock
compensation, primarily related to stock options granted prior to
our IPO, and intangibles, consisting of goodwill and assembled
workforce as part of the acquistion of BlueLark Systems.
(5) One-time charge for the restructuring of leases associated with the
Sunnyvale facility.
HANDSPRING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Nine Months Ended
March 29, 2003
--------------------------------
GAAP(1) Difference Non-GAAP(2)
--------------------------------
Revenue $132,793 $132,793
--------------------------------
Costs and operating expenses:
Cost of revenue 100,926 100,926
Research and development 16,510 16,510
Selling, general and administrative 51,761 51,761
Amortization of deferred stock
compensation and intangibles (*) 6,968 $(6,968)(3) --
Sunnyvale lease restructuring 75,931 (75,931)(5) --
--------------------------------
Total costs and operating
expenses 252,096 (82,899) 169,197
--------------------------------
Loss from operations (119,303) 82,899 (36,404)
Interest and other income, net 1,531 1,531
--------------------------------
Loss before taxes (117,772) 82,899 (34,873)
Income tax provision 238 238
--------------------------------
Net income (loss) $(118,010) $82,899 $(35,111)
================================
Basic and diluted net loss per share $(0.81) $0.57 $(0.24)
================================
Shares used in calculating basic and
diluted net loss per share 144,815 144,815 144,815
================================
(*) Amortization of deferred stock
compensation:
Cost of revenue $919
Research and development 1,415
Selling, general and
administrative 4,634
------
$6,968
======
(1) Reflects operating results based on U.S. generally accepted
accounting principles (or GAAP).
(2) Non-GAAP amounts exclude amortization of deferred stock
compensation and intangibles and restructuring charges associated
with the Sunnyvale lease restructuring.
(3) Non-cash charge related to the amortization of deferred stock
compensation primarily related to stock options granted prior to our
IPO.
(4) Non-cash charge related to the amortization of deferred stock
compensation, primarily related to stock options granted prior to
our IPO, and intangibles, consisting of goodwill and assembled
workforce as part of the acquistion of BlueLark Systems.
(5) One-time charge for the restructuring of leases associated with the
Sunnyvale facility.
Nine Months Ended
March 30, 2002
--------------------------------
GAAP(1) Difference Non-GAAP(2)
--------------------------------
Revenue $191,641 $191,641
--------------------------------
Costs and operating expenses:
Cost of revenue 168,934 168,934
Research and development 19,318 19,318
Selling, general and administrative 66,679 66,679
Amortization of deferred stock
compensation and intangibles (*) 16,476 $(16,476)(4) --
Sunnyvale lease restructuring -- --
--------------------------------
Total costs and operating
expenses 271,407 (16,476) 254,931
--------------------------------
Loss from operations (79,766) 16,476 (63,290)
Interest and other income, net 4,520 4,520
--------------------------------
Loss before taxes (75,246) 16,476 (58,770)
Income tax provision 950 950
--------------------------------
Net income (loss) $(76,196) $16,476 $(59,720)
================================
Basic and diluted net loss per share $(0.61) $0.13 $(0.48)
================================
Shares used in calculating basic and
diluted net loss per share 124,568 124,568 124,568
================================
(*) Amortization of deferred stock
compensation:
Cost of revenue $2,107
Research and development 3,836
Selling, general and
administrative 10,533
------
$16,476
======
(1) Reflects operating results based on U.S. generally accepted
accounting principles (or GAAP).
(2) Non-GAAP amounts exclude amortization of deferred stock
compensation and intangibles and restructuring charges associated
with the Sunnyvale lease restructuring.
(3) Non-cash charge related to the amortization of deferred stock
compensation primarily related to stock options granted prior to our
IPO.
(4) Non-cash charge related to the amortization of deferred stock
compensation, primarily related to stock options granted prior to
our IPO, and intangibles, consisting of goodwill and assembled
workforce as part of the acquistion of BlueLark Systems.
(5) One-time charge for the restructuring of leases associated with the
Sunnyvale facility.
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