9/26/2000 Palm, Inc.:
Palm Q1 2001 revenues rise 127%; Pro forma net income up 140%; Third consecutive quarter of 100%+ year-over-year revenue growth
SEP 26, 2000, M2 Communications - LONDON -- Palm, Inc. (Nasdaq: PALM chart, msgs) today reported record revenues of $401.0 million for the first quarter of fiscal 2001, up 127 percent from year-ago revenues of $176.5 million. Sequentially, revenue was up 14 percent in the quarter ended Sept. 1, from the $350.2 million reported in the fourth quarter of fiscal 2000.
Pro forma net income, which excludes the effects of amortised goodwill and intangible assets, purchased in-process technology and separation costs, rose 140 percent to $23.9 million, or $0.04 per share, compared to pro forma net income of $10.0 million, or $0.02 per share, for the first quarter of fiscal 2000. Pro forma net income also increased 39 percent compared with pro forma net income of $17.2 million, or $0.03 per share, for the fourth quarter of fiscal 2000. Actual net income for the first quarter of fiscal 2001 was $17.3 million, or $0.03 per share, compared with $9.7 million, or $0.02 per share, for the first quarter of fiscal 2000.
"The Palm team again delivered stellar results on multiple fronts: revenue, units shipped, profitability, and content and platform momentum," said Carl Yankowski, Palm's chief executive officer. "This is our third consecutive quarter of 100 percent plus year-over-year revenue growth, and we achieved it in an environment of increased competition and continued component constraints."
Palm shipped approximately 1.5 million devices in the quarter, which increases cumulative shipments to more than 8.7 million.
"Our fall line-up of new products has been a hit," Yankowski said. "The volume in the global m100 launch was extraordinary. With its $149 price, ergonomic design, interchangeable colour faceplates and electronic note-pad feature, this product is reaching well beyond the mobile professional and early adopter. Early market research indicates we've tapped into the student population in a very big way."
Palm's push into business and government markets also gained momentum this quarter, reflecting the introduction of new products, programs and services, including Ethernet cradles, the Enterprise Alliance program and Palm's new support services.
"We recently topped the 100,000 registered developer milestone," Yankowski said. "And two-thirds of our developers are focused on business applications -- a strong indicator of the growing importance of the Palm Economy in the enterprise." According to company studies, more than 80 percent of Palm(TM) handhelds are synchronised with PCs in the workplace, and about 40 percent of Palm products are reimbursed or purchased directly by employers.
Marketplace Outlook and Palm's Wireless Internet Strategy
"The Internet has gone mobile, and we're leading the transformation with devices that connect wirelessly, and by providing content and services that increase the value and enhance the capability of each Palm Powered(TM) handheld," Yankowski said.
Palm's execution of a wireless strategy began in fall 1999, when the company introduced the Palm VII handheld, the industry's first integrated wireless handheld to provide e-mail and Internet access. Palm is rapidly evolving its Personal Information Management (PIM) leadership position to include online PIM, communications, e-mail solutions, server synchronisation and advanced security.
Palm advanced its wireless strategy this summer by announcing a software solution called the Mobile Internet Kit. This software provides wireless connectivity for Palm III, Palm V and m100 handhelds when used with an infrared-capable phone or when connected via a cable to several non-IR data mobile phones. It is slated to ship by the end of the calendar year, and users will be able to access more than 400 Web clipping applications in addition to e-mail.
Bringing voice and data together is a key part of Palm's wireless strategy, and those efforts took a giant step forward in the last four business days.
In addition to having a licensing and co-development agreement with Nokia for smart phones (Oct. 3, 1999), the following announcements were made:
* Palm licensed its operating system to Kyocera Wireless Corp. for the foundation of a new line of Palm Powered handsets (Sept. 20);
* Palm and RealVision announced a sleek GSM phone and Internet attachment for customers in Europe and Asia, addressing the most significant global GSM markets. The phone will snap on to Palm V series handhelds and feature easy dialling and instant messaging, and let users better manage their address books (Sept. 22); and
* Palm and Motorola announced they will extend the Palm user experience into a groundbreaking smart phone built exclusively around the Palm OS. The two industry leaders will co-develop and co-brand an innovative tri-band, GSM smart phone that is neither voice- nor data-centric. It is expected to be available in early 2002. (Sept. 25).
The next wave in the mobile Internet's development will involve personalised information access and retrieval. To this end, Palm is building on its acquisition of AnyDay.com to transform its Palm.Net(TM) service into a personal mobile portal. The initial capabilities, expected to be available by calendar year end, will feature improved calendar synchronisation, organised content and application categories on the Palm website and handheld, wireless Internet search and browse, and the ability to download applications wirelessly.
Over the next few quarters, Palm will extend these capabilities by providing greater benefits of personalization plus active calendaring, such as wireless synchronisation, the ability to schedule and RSVP to meetings with friends and colleagues. Added to this, Palm will offer integrated services within a person's calendar, such as notification that a meeting or flight has been changed. Additional PIM features that Palm will bring to market include wireless access to corporate e-mail with notification, instant messaging, and the ability to wirelessly add names and phone numbers to address books. Beyond PIM, Palm's portal will bring to market e-wallet features along with location- and time-based services.
"The flexibility and robust features of our operating system make it perfect for handheld computing as well as for integrated telephony and data products," Yankowski said. "Our OS supports multiple expansion technologies -- Springboard; MemoryStick; Compact flash; and, very soon, small, high-density SecureDigital cards, our choice for Palm-branded products. The possibilities for Palm Powered wireless Internet connectivity are limitless and consumers will have many choices of form factors."
"Our company is thriving, but we are not complacent. There is much yet to do," Yankowski said. "We are determined to accelerate our development of the mobile Internet, and committed to delivering increasingly innovative, easy-to-use, hardware and software solutions. By expanding choices in wireless content and access, we will continue to enhance the Palm experience in personal and professional life. And we will work much more closely with the members of the global Palm Economy to help guide Palm and to speed the delivery of the Palm experience across a range of products, services and form factors."
Headquarters Plans
Palm also said it has signed a land lease for its future corporate headquarters, a 39-acre site in San Jose, Calif., about a mile from its current location. Societe Generale Financial Corporation (SGFC) purchased the property from 3Com Corporation and simultaneously entered into a land lease and other agreements with Palm. Under the terms of the lease, Palm has agreed to restrict on its balance sheet approximately $220 million invested in government securities as collateral for its obligations. The lease is for one year, and Palm and SGFC expect they will enter into additional agreements to finance the construction of the corporate campus. Palm expects to close a seven-year lease agreement for land and improvements in the second fiscal quarter. Terms have not been determined.
Palm initially plans to build about 500,000 square feet of headquarters space on this land, which can support 1.6 million square feet of construction. Groundbreaking is expected Oct. 26, with occupancy to begin in mid-2002. Building plans, which will be executed in stages to track with Palm's growth, have not been finalised. |
