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Palm Reports Q4 and FY 2008 Results

Palm, Inc. today reported that total revenue in the fourth quarter of fiscal year 2008, ended May 30, was $296.2 million. Smartphone sell-through for the quarter reached a record high, totaling 968,000 units, up 29 percent year over year.

"We continue to invest in Palm's future and remain focused on building long-term value," said Ed Colligan, president and chief executive officer for Palm, Inc. "Centro is a tremendous hit, we are gaining market share, and we believe with this momentum, and the launch of new Windows Mobile products, we will turn the corner and return to revenue and margin growth."

Net loss applicable to common shareholders for the fourth fiscal quarter was $43.4 million, or $(0.40) per diluted share. Net loss applicable to common shareholders included stock-based compensation of $5.5 million, amortization of intangible assets of $0.9 million, restructuring charges of $1.3 million, impairment of non-current auction rate securities of $6.7 million and accretion of series B convertible preferred stock of $2.4 million. This compares to net income for the fourth quarter of fiscal year 2007 of $15.4 million, or $0.15 per diluted share, which included stock-based compensation of $5.4 million and amortization of intangible assets of $1.0 million.

Net loss for the fourth fiscal quarter, measured on a non-GAAP(1) basis, totaled $23.9 million, or $(0.22) per diluted share, excluding stock-based compensation, amortization of intangible assets, restructuring charges, impairment of non-current auction rate securities and accretion of series B convertible preferred stock and adjusting the related income tax provision to 40 percent. This compares to non-GAAP net income for the fourth quarter of fiscal year 2007 of $17.8 million, or $0.17 per diluted share, which excluded the effects of stock-based compensation, amortization of intangible assets and adjusting the related income tax provision to 40 percent.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the fourth fiscal quarter totaled negative $40.4 million. EBITDA, adjusted to add back stock-based compensation, other non-operating expense, restructuring charges and impairment of non-current auction rate securities, or Adjusted EBITDA, totaled negative $26.4 million.

Fiscal Year 2008 Results

Revenue for the full fiscal year 2008 was $1.32 billion. Smartphone sell-through for the full year reached a record high, totaling 3.2 million units, up 19 percent year over year.

Net loss applicable to common shareholders for fiscal year 2008 was $110.9 million, or $(1.05) per diluted share. Net loss applicable to common shareholders included stock-based compensation of $31.1 million, amortization of intangible assets of $3.8 million, patent acquisition cost of $5.0 million, restructuring charges of $30.4 million, gain on sale of land of $4.4 million, impairment of non-current auction rate securities of $32.2 million and accretion of series B convertible preferred stock of $5.5 million. This compares to net income in fiscal year 2007 of $56.4 million, or $0.54 per diluted share, which included stock-based compensation of $24.3 million, amortization of intangible assets of $2.0 million and in-process research and development of $3.7 million.

Net loss for fiscal year 2008, on a non-GAAP basis, totaled $36.2 million, or $(0.34) per diluted share, excluding stock-based compensation, amortization of intangible assets, patent acquisition cost, restructuring charges, gain on sale of land, impairment of non-current auction rate securities and accretion of series B convertible preferred stock and adjusting the related income tax provision to 40 percent. This compares to non-GAAP net income in fiscal year 2007 of $73.4 million, or $0.70 per diluted share, which excluded the effects of stock-based compensation, amortization of intangible assets and in-process research and development and adjusting the related income tax provision to 40 percent.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, for fiscal year 2008 totaled negative $123.5 million. EBITDA, adjusted to add back stock-based compensation, other non-operating expense, patent acquisition cost, restructuring charges, gain on sale of land and impairment of non-current auction rate securities, or Adjusted EBITDA, totaled negative $27.8 million.

Source: Palm Inc. Press Release

Also - Read our coverage of Palm's Q4 FY2008 Conference Call.

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No WiFi Way

LiveFaith @ 6/26/2008 5:21:10 PM # Q
Are you crazy Ed? Nobody wants or needs WiFi on a cell phone. 3G is gonna replace all that. What is all this 800w, 850 WiFi lunacy that you expect to buy precious market share and profitability? No way folks today with 3G would want this battery hogging, expensive, and limited wireless standard when they rejected it for the past 4 years and were thankful to have EGDE.
After all, it was you who trained us all to believe it.
The cops have already shown up and the FD has hosed all the revelers, but I guess it's better late to the party than never. :-D

Pat Horne
RE: No WiFi Way
aviduser @ 6/27/2008 1:48:47 PM # Q
I disagree. I think that the T-Mobile plan that enables switching between cellular and Wi-Fi will be the wave of the future and other carriers will do it too. It will ease up demands on cell bandwidth and feed into the replacement of the land line phone.

I just hope that Palm gets its act together and releases a Treo that (1) runs some significantly updated version of Palm OS (hate WinMob); (2) includes 3G for all handsets; (3) includes Wi-Fi with the ability to route voice over Wi-Fi; (4) includes GPS or modified GPS; and (5) does all the stuff I have come to rely on my Treo for doing (DateBk6, email, etc).

~aviduser

1995- Newton Message Pad 2000
1998- Palm V
1999- Plam V8 (upgrade)
2000- Palm m505
2001- Palm m515
2003- Kyocera 7135
2004- Treo 600
2006- Treo 700p
2007- Treo 680
Still searching for the perfect unit . . . ?

RE: No WiFi Way
LiveFaith @ 6/27/2008 4:20:00 PM # Q
That was sarcasm tainted with a touch of bitterness from years of disappointment with Palm's baffling product decisions and stupid public statements to follow. I agree with your assessment. What a wonderful marriage that would be.

Pat Horne
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Wanna bet?

hkklife @ 6/27/2008 9:15:45 AM # Q
Wanna bet that as soon as the 850 & 800W are both on the market, Palm will EOL the TX and/or start really clearing stocks, as they won't need to keep the "token wi-fi" device in the lineup?

Pilot 1000->Pilot 5000->PalmPilot Pro->IIIe->Vx->m505->T|T->T|T2->T|C->T|T3->T|T5->Zodiac 2->TX->Verizon Treo 700P->Verizon Treo 755p
RE: Wanna bet?
LiveFaith @ 6/27/2008 10:50:28 AM # Q
They never needed WiFi anyway Khris. Wake up man. Nobody uses WiFi anymore. Actually they never did. It was just a gimmick by Starbucks and Borders to sell books and coffee. Only failing device makers like Nokia, Apple, HTC, and RIM even put that on their phones. And just look at what's happened to them!

Pat Horne
RE: Wanna bet?
LiveFaith @ 6/27/2008 10:58:04 AM # Q
Kris,
On a more serious note. I am stunned that Palm is apparently going to just cede their retail channels and relationships to others. That must have taken some serious energy in the 90's to build all that. If you are correct (I think you are) then not one device will grace the shelves of a tradional B&M store. What an amazing free fall from the days when Office Depot had working Palms displayed front and center when the doors slid open.

I guess the Foleo revolution was supposed to re-energize all that last year. :-
Pat Horne

RE: Wanna bet?
SeldomVisitor @ 6/27/2008 11:35:19 AM # Q
I have seen no evidence that the "850w" is going to be released in the US.

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