Alphasmart (NASDAQ:ALSM)
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AlphaSmart Announces Preliminary Third Quarter Results, Revises
Full Year 2004 Guidance
LOS GATOS, Calif., Oct. 5 /PRNewswire-FirstCall/ -- AlphaSmart, Inc.
(NASDAQ:ALSM) today announced its preliminary expectations of operating results
for the third quarter ended September 30, 2004. The company also revised its
forward-looking guidance for the fiscal year ending December 31, 2004.
For the third quarter of 2004, AlphaSmart expects to report net revenue ranging
from $8.7 million to $8.8 million and net income of $0.05 to $0.07 per share on
a fully diluted basis, calculated in accordance with U.S. generally accepted
accounting principles (GAAP). The company acknowledges that anticipated third
quarter results are preliminary and subject to change as a result of final
review by management and independent auditors and closing adjustments for the
quarter. AlphaSmart plans to report final third quarter results after the
close of the financial markets on October 14, 2004.
AlphaSmart also announced today a revision of its guidance for full year 2004
results, as disclosed publicly with second quarter results on July 15, 2004.
The company currently expects 2004 net revenue to range from $38 million to $40
million and GAAP net income per share on a fully diluted basis to range from
$0.24 to $0.27. Excluding the effect of $588,000 in interest and a redemption
premium paid on mandatorily redeemable preferred stock in the first quarter of
2004, pro forma net income per share on a fully diluted basis for the full year
is currently expected to range from $0.28 to $0.31.
AlphaSmart attributed its revised expectations to lower than anticipated demand
in the K-12 education market. "We have seen continued softness in technology
spending, causing our third quarter revenue to be lower than expected," said
Ketan Kothari, chairman and chief executive officer of AlphaSmart. "While we
expect fourth quarter revenue and earnings per share to be up slightly from the
same period of last year, we do not believe that this will make up for the
shortfall in the third quarter."
Quarterly Teleconference and Webcast
AlphaSmart management plans to conduct its regular quarterly teleconference
following the release of final third quarter results on October 14. This call
will be webcast live for all investors and archived on the company's website.
Details for accessing the webcast are as follows:
AlphaSmart 3Q04 Results Teleconference
October 14, 2004
2:00 p.m. PDT / 5:00 p.m. EDT
Go to the Investor Relations page of the AlphaSmart website at
http://www.alphasmart.com/ir/, and click on the webcast icon. From this site,
you can listen to the teleconference, assuming that your computer system is
configured properly. In addition to the webcast replay, a phone replay will be
available for seven days after the live call at 719-457-0820, code #889148.
AlphaSmart intends to discuss financial and other statistical information on
this teleconference. This information will also be available on the company's
website at http://www.alphasmart.com/ir/, either in this news release, in the
news release on final results for the third quarter of 2004, or in the live and
archived webcasts described above.
Use of Non-GAAP Financial Measures
AlphaSmart believes that the supplemental presentation of projected net income
per share calculations, excluding the effects of interest and a redemption
premium paid on mandatorily redeemable preferred stock in the first quarter of
2004, provides meaningful non-GAAP financial measures to help investors
understand and compare business trends among different reporting periods on a
consistent basis, independently of events impacted by the company's initial
public offering in February 2004 or other infrequent or unusual events.
AlphaSmart management also uses pro forma financial measures to plan and
forecast results for future periods. Readers are cautioned not to view
non-GAAP results as an alternative to GAAP results or as being comparable to
results reported or forecasted by other companies. Readers should refer to the
reconciliation information provided above in reviewing the non-GAAP guidance.
AlphaSmart, Inc.
AlphaSmart, Inc. is a provider of technology solutions for education and
productivity. Its portable computer-companion products are used by students to
enhance writing, keyboarding and comprehension, and have been adopted by more
than 8,000 school districts in the United States and other countries. Based in
Los Gatos, California, the company was founded in 1992 by former Apple Computer
engineers.
Forward-Looking Statements Safe Harbor
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including statements regarding AlphaSmart's expected net
revenue and net income per share on a fully diluted basis for the third quarter
of 2004, its forecasted net revenue and net income per share under GAAP and on
a pro forma basis for full year 2004, its comparison of expected net revenue
and net income per share for the fourth quarter of 2004 with actual net revenue
and net income per share reported for the fourth quarter of 2003, and the
company's belief that a slightly favorable year-over-year comparison will not
make up for the third quarter 2004 shortfall. AlphaSmart's expectations and
beliefs regarding these matters may not materialize. Actual results in future
periods are subject to risks and uncertainties that could cause actual results
to differ materially from those projected. These risks include: the potential
impact of spending by certain school districts, particularly those that rely on
federal funding, on AlphaSmart's quarterly revenue and earnings; fewer teachers
and administrators embracing technology solutions and one-to-one computing than
AlphaSmart expects; AlphaSmart's platforms failing to obtain broad market
acceptance; a decline in investment in, or a loss or reduction of funding for,
educational institutions; AlphaSmart's need to maintain and develop strong
brand identity; AlphaSmart's potential customers choosing the greater
functionality offered by PCs over its platforms; the risk that some government
initiatives may not endorse, or be complementary to, AlphaSmart's platforms;
risks associated with the lack of diversity among AlphaSmart's product
offerings; the Dana by AlphaSmart platform's dependence on AlphaSmart's license
with PalmSource; and AlphaSmart's dependence on its suppliers, particularly its
single-source suppliers, among other risks. The forward-looking statements
contained in this press release are also subject to other risks and
uncertainties, including those more fully described in AlphaSmart's filings
with the Securities and Exchange Commission, including its quarterly report on
Form 10-Q related to the three-month period ended June 30, 2004. AlphaSmart
does not undertake to update any forward-looking statements.
NOTE: AlphaSmart is a registered trademark of AlphaSmart, Inc. in the United
States and other countries. All other trademarks are the property of their
respective owners.
DATASOURCE: AlphaSmart, Inc.
CONTACT: investors, James M. Walker, Vice President, Chief Financial
Officer and Chief Operating Officer of AlphaSmart, Inc., +1-408-355-1029, or
Web site: http://www.alphasmart.com/