Handspring Posts Fourth-Quarter Loss
Handspring today announced that revenue for the fiscal fourth quarter was $14.5 million, down from $30.8 million the last quarter. Revenue for the quarter included $10.3 million in communicator sales and $4.2 million in sales of organizers and accessories.
Net loss shrinks
On a GAAP accounting basis, net loss for the period totaled $13.0 million, as compared to a net loss of $90.4 million in the prior quarter (which included charges for the Sunnyvale lease restructuring of $75.9 million).
Excluding the amortization of deferred stock compensation and impairment of intangible assets of $1.5 million, Handspring's non-GAAP net loss for the quarter was $11.5 million as compared to a non-GAAP net loss of $12.8 million in the prior quarter (excluding amortization of deferred stock compensation of $1.7 million and charges for the Sunnyvale lease restructuring of $75.9 million).
As of June 28, 2003, Handspring's unrestricted cash and short-term investments totaled $36.9 million, down $16.3 million sequentially.
Fiscal Year Summary
For the fiscal year 2003, Handspring's total revenue was $147.3 million, down from $240.7 million in fiscal 2002.
On a GAAP accounting basis and including the Sunnyvale lease restructuring, Handspring's fiscal year loss was $131.1 million, or $0.91 per share, compared to a loss of $91.6 million, or $0.71 per share, in fiscal 2002.
On a non-GAAP basis excluding the amortization of deferred stock compensation and impairment of intangible assets of $8.5 million and charges for the Sunnyvale lease restructuring of $75.9 million, Handspring's fiscal year net loss was $46.6 million, or $0.32 per share, compared to a net loss of $71.4 million, or $0.56 per share in the prior year, excluding amortization of deferred stock compensation and intangible assets of $20.2 million.
During the quarter, Handspring announced that the boards of directors of Palm and Handspring unanimously approved a definitive agreement for Palm to acquire Handspring to form a new, stronger market leader in mobile computing and communications. The two companies anticipate the transaction to close in the fall.
Handspring also introduced the design for its new smartphone family, the Treo 600 series.
"Our fiscal Q4 was a watershed quarter for Handspring, with two significant strategic announcements: the Palm merger and the Treo 600 introduction. We also took steps to reduce carrier inventory and manage down operating expenses while conserving cash in preparation for the introduction of the Treo 600 this fall," said Donna Dubinsky, chief executive officer. "We believe that by combining Palm's leadership position in handhelds with Handspring's breakthrough Treo product family, we are well positioned for future leadership in mobile computing and communications."
Other highlights of the fourth quarter included:
- Establishing a key partnership with Orange S.A. to bring Treo 600 to Europe
- Bringing the award-winning Treo 270 product line to the AT&T GSM/GPRS network nationwide
- Treo 600 winning Best of Show at CeBit America in New York
- Launching the Treo 270 in Brazil with partner Alldix
First Quarter Fiscal 2004 Business Outlook
Handspring's business outlook for the coming quarter will be affected by the following factors:
- The company expects first shipments of the new Treo 600 late in its fiscal Q1 ending September. Because of the challenges of manufacturing a complex, new product, the total volumes that can be built and shipped for revenue could vary widely. The company's best estimate at this time is that fiscal Q1 revenues will be comparable to the quarter just completed.
- The company expects to exit the first quarter with significant backlog that will be shippable in fiscal Q2.
- The company expects gross margins in Q1 will be comparable with gross margins in Q4, and will improve in future quarters as volumes increase.
- The company does not expect significant revenues in the future from the sale of organizers.
- The company expects operating expenses in fiscal Q1 to increase from current levels as a result of higher sales and marketing expenses associated with the launch of its new product.