PalmSource Reports Q3 FY04 Results

PalmSource today reported revenues of $21.6 million for the third quarter ended February 27, 2004, as compared to revenues of $26.3 million for the same quarter of the prior fiscal year.

Net income for the third quarter of fiscal year 2004 was $0.6 million, or $0.05 per share. Net income for the same quarter of the prior fiscal year was $0.7 million, or $0.07 per share on a fully-diluted basis.

This quarters results were within the high end of the companies previous quarterly estimates. Although the company was profitable for the period, revenues and earning were down compared with the same quarter in the fiscal year 2003. CEO David Nagel said the company is making good progress towards their goal of sustained profitability and is encouraged that the handheld market is recovering from previous declines.

At February 27, 2004, cash, cash equivalents and restricted investments were $33.3 million. Cash utilized for operating activities during the third quarter was $2.2 million.

PalmSource management's provided outlook estimates for the next fiscal quarter. It expects revenues to be in the range of $17 million, plus or minus 5%. Financial results on a GAAP basis are expected to be in the range of a net loss of $4 million to $7 million and cash flow used by operating activities is expected to be in the range of $4 million to $6 million.

Third Quarter Highlights
During the third quarter PalmSource introduced Palm OS Cobalt, a new enhanced version of the Palm operating system designed to enable the creation of innovative smartphones and new categories of devices for the communications, enterprise, education and entertainment markets. PalmSource also announced Palm OS Garnet, the latest version of the popular Palm OS 5, designed to accelerate the development of Palm Powered handhelds and smartphones.

Palm OS Cobalt made its public debut at the PalmSource Developer Conference held in San Jose, CA that featured the latest offerings from licensees, partners and developers. "Palm OS Cobalt is the most significant new software product we've developed," said David Nagel, The new Cobalt platform is optimized for the development of state-of-the-art smartphones, enterprise-strength smart mobile devices, and it will enable the creation of new classes of mobile devices to serve a wide variety of market segments."