PalmSource Reports Slight Net Loss
PalmSource today announced consolidated results for its third fiscal quarter ended February 25, 2005. The company reported a small net loss on lower sales of mobile devices compared to the same quarter last year.
Consolidated results for the quarter included one month of financial results for China MobileSoft Ltd. (CMS), which was acquired on January 28, 2005.
PalmSource licensees reported shipping a total of approximately 1.4 million units, of which 23 percent were smartphones and 77 percent were PDA's and other mobile handheld devices. This compares to a total of approximately 2.0 million units shipped in the third quarter of fiscal 2004, of which 12 percent were smartphones and 88 percent were PDA's and other mobile handheld devices. Also during the third quarter of 2005, as reported by its licensees, CMS applications were shipped on approximately 1 million feature and voice phones into the Chinese market.
Consolidated revenue for the third quarter of 2005 was $17.2 million as compared to $21.6 million reported in the year ago quarter. Gross margin was 93 percent and was flat when compared to the year ago quarter. GAAP net loss was ($0.7) million, or ($0.05) per share, as compared to GAAP net income of $0.6 million or $0.05 per share reported in the year ago quarter.
Non-GAAP net income for the quarter was $0.6 million, or $0.04 per share as compared to non-GAAP net income of $3.6 million or $0.32 per share in the year ago quarter. Non-GAAP net income for the third quarter of 2005 excluded $1.4 million for stock-based compensation expense and $0.1 million for amortization of purchased intangible assets, which was partially offset by $0.1 million for the reversal of accrued restructuring charges. GAAP net loss per share for the third quarter of 2005 was calculated using basic shares outstanding of 15.0 million, while non-GAAP net earnings per share was calculated on a diluted basis using 15.3 million shares.
"We continue to make progress in our plan to transform PalmSource into a broad-based software provider for all mobile devices," said David Nagel, president and CEO of PalmSource. "With the completion of the China MobileSoft acquisition, we now have a foothold in the Chinese market with our voice, feature and smartphone products, a low cost, localized development and support capability, and the technology base to improve the competitiveness of our software products internationally."