Liberate Announces Financial Results for Quarter Ended February 28, 2005

Liberate Announces Financial Results for Quarter Ended February
28, 2005 


SAN MATEO, Calif., April 4  /PRNewswire-FirstCall/ -- Liberate Technologies
(Pink Sheets: LBRT), a leading provider of software for digital cable systems,
announced financial results for its third fiscal quarter ended February 28,
2005.

Liberate's revenues for its third fiscal quarter were $0.1 million, compared to
$1.7 million for the same quarter of the prior fiscal year.  The net loss for
the quarter was $7.9 million, or $0.07 per share, compared to a loss of $7.5
million, or $0.07 per share, for the same quarter of the prior fiscal year.

As of February 28, 2005, Liberate had cash and cash equivalents of $194.4
million.  In addition, the Company had $10.7 million in restricted cash held as
security for office leases. During the quarter, Liberate paid $8.8 million, net
of insurance proceeds of $5.0 million, to settle its restatement class action
litigation.

Last week, Liberate announced its Board of Directors had declared a one-time
special dividend of $2.10 per common share. The special dividend is payable to
the holders of record on April 4, 2005 upon the closing of the sale of
Liberate's North America business to Double C Technologies, LLC. The Double C
transaction is anticipated to close the week of April 4, 2005. As required by
the NASD rules governing special dividends of this magnitude, the ex-dividend
date will be set one business day after the payment date. After payment of the
special dividend, the Registrant expects to have approximately $60 million in
cash and cash equivalents on hand, including approximately $10.7 million of
restricted cash.

About Liberate Technologies

Liberate Technologies is a leading provider of software for digital cable
systems.  Based on industry standards, Liberate's software enables cable
operators to run multiple services -- including interactive programming guides,
high-definition television, video on demand, personal video recorders and games
-- on multiple platforms.  Headquartered in San Mateo, California, Liberate has
offices in Ontario, Canada, and the United Kingdom.

NOTE:  Liberate and the Liberate design are registered trademarks of Liberate
Technologies.  Other product names used in association with these registered
trademarks are trademarks of Liberate Technologies.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995

Those statements above that involve expectations or intentions (such as those
related to the announced asset sale and future business or financial
performance) are forward-looking statements, within the meaning of the U.S.
securities laws, that involve risks and uncertainties and are not guarantees of
future performance.  Factors that could cause actual results to differ
materially from these forward-looking statements include, but are not limited
to, the following: future decisions by governmental, regulatory or judicial
bodies; uncertainty in the market for interactive television services and
dependence on a limited number of cable network operators; business disruption
resulting from the announcement of the asset sale; uncertainties related to
litigation; and other risks outlined in Liberate's filings with the Securities
and Exchange Commission. Liberate disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

   Contact:
   Greg Wood
   Chief Financial Officer
   Liberate Technologies
   650-645-4003
   


                          LIBERATE TECHNOLOGIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              (In thousands)
                                Unaudited

                                               Feb. 28, 2005  May 31, 2004

                                    Assets

  Current assets:
    Cash and cash equivalents                     $194,404       $215,877
    Accounts receivable, net                         1,950          3,143
    Prepaid expenses and other current assets        1,183          1,642
    Other receivables                                4,487            175
      Total current assets                         202,024        220,837
  Property and equipment, net                        1,613          1,851
  Deferred costs related to warrants                   896          3,583
  Restricted cash                                   10,747         10,869
  Other assets                                          --            268
      Total assets                                $215,280       $237,408


                     Liabilities and Stockholders' Equity

  Current liabilities:
    Accounts payable                                $2,528         $3,102
    Accrued liabilities                             15,748         16,384
    Accrued payroll and related expenses               719            685
    Short-term borrowing from bank                      --            608
    Deferred revenues                                4,369          6,137
      Total current liabilities                     23,364         26,916
  Long-term excess facilities charges               18,214         19,140
  Long-term deferred revenues                        9,156             --
  Other long-term liabilities                        2,416          2,416
      Total liabilities                             53,150         48,472

  Commitments and contingencies
  Stockholders' equity:
    Common stock                                     1,061          1,055
    Contributed and paid-in-capital              1,502,811      1,503,113
    Deferred stock-based compensation              (6,780)        (8,453)
    Accumulated other comprehensive loss           (1,970)        (2,112)
    Accumulated deficit                        (1,332,992)    (1,304,667)
      Total stockholders' equity                   162,130        188,936
      Total liabilities and
       stockholders' equity                       $215,280       $237,408


                          LIBERATE TECHNOLOGIES
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In thousands, except per share data)
                                Unaudited

                                Three months ended     Nine months ended
                               Feb. 28,   Feb. 29,    Feb. 28,  Feb. 29,
                                  2005       2004       2005        2004
  Revenues:
    License and royalty         $(612)      $(54)      $(883)   $(1,675)
    Service                        732      1,756       2,783      6,110
      Total revenues               120      1,702       1,900      4,435
  Cost of revenues:
    License and royalty             15        206          49        565
    Service                        444      1,549       2,716      4,360
      Total cost of revenues       459      1,755       2,765      4,925
      Gross loss                 (339)       (53)       (865)      (490)
  Operating expenses:
    Research and development     4,508      5,022      12,107     12,336
    Sales and marketing            388        703       1,692      3,136
    General and administrative   3,113      3,667       9,921     12,327
    Amortization of deferred
     costs related to warrants      --         --          --      1,831
    Restructuring costs             --         86          --      1,447
    Amortization and impairment
   of goodwill and intangible
   assets                           --         --          --         22
    Impairment of deferred
     costs related to warrants      --         --          --      4,969
    Amortization of deferred
     stock-based compensation       --         --          --         10
    Excess facilities charges
     and related asset
     impairment                    486         --       6,108        593
      Total operating expenses   8,495      9,478      29,828     36,671
      Loss from operations     (8,834)    (9,531)    (30,693)   (37,161)
  Interest income, net           1,025        504       2,196      1,694
  Other income (expense),
   net                            (37)      1,184         245        636
      Loss from continuing
       operations before
       income tax provision    (7,846)    (7,843)    (28,252)   (34,831)
  Income tax provision
   (benefit)                        18      (122)         153       (19)
      Loss from continuing
       operations              (7,864)    (7,721)    (28,405)   (34,812)
   Loss from discontinued
   operations                       --         --          --    (3,075)
  Gain on sale of
   discontinued
   operations                       --        249          80      9,286
      Net loss                $(7,864)   $(7,472)   $(28,325)  $(28,601)
  Basic and diluted
   income (loss)
   per share:
      Continuing operation,
       basic and diluted       $(0.07)    $(0.07)     $(0.27)    $(0.33)
      Discontinued
       operations, basic           $--      $0.00       $0.00      $0.06
      Discontinued
       operations, diluted         $--      $0.00       $0.00      $0.06
  Basic and diluted net
   loss per share              $(0.07)    $(0.07)     $(0.27)    $(0.27)
  Shares used in
   computing basic and
   diluted net loss
   per share                   105,911    105,204     105,751    104,573

  Shares used in
   computing diluted net
   gain per share from
   discontinued operations          --    110,476     109,015    109,117


DATASOURCE: Liberate Technologies



CONTACT:  Greg Wood, Chief Financial Officer of Liberate Technologies,

[phone], or 



Web site:  http://www.liberate.com/ 

Copyright