Extended Systems (NASDAQ:XTND)
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Extended Systems Incorporated (Nasdaq:XTND), a leading
provider of mobile software solutions, today reported net revenue of
$10.7 million for the fourth quarter of fiscal 2005 ended June 30,
2005, an increase of 37% over net revenue of $7.8 million for the
fourth quarter of fiscal 2004. Extended Systems attributed the revenue
growth to payments received from Samsung Electronics for ESI products
included in previously shipped handsets. Extended Systems also
reported growth from enterprise mobility products as more enterprise
customers purchased and deployed Extended Systems' mobility solution.
For the fiscal year ended June 30, 2005, the Company reported revenue
of $40.1 million, an increase of 25% over $32.2 million reported for
fiscal year 2004.
Extended Systems reported net income of $636,000, or $0.04 per
share, for the fourth quarter of fiscal 2005, compared to a net loss
of $188,000, or $(0.01) per share, for the same quarter last year. Net
income for the fiscal year ended June 30, 2005, was $4.0 million or
$0.25 cents per share as compared to a net loss of $3.3 million or
($0.23) per share for fiscal year 2004.
Cash and cash equivalents were $13.6 million as of June 30, 2005,
compared to $9.8 million as of March 31, 2005, and $7.2 million as of
June 30, 2004.
On July 29, Extended Systems reported that it signed a definitive
agreement to be acquired by Sybase, Inc. (NYSE:SY) for approximately
$71.3 million, or $4.460847 per share. The transaction, which is
subject to regulatory approval, Extended Systems' stockholder approval
and other specified closing conditions, is expected to close in the
fourth calendar quarter of 2005.
Other Highlights:
-- Announced that British Airways has equipped its top managers
with wireless e-mail capabilities using OneBridge Mobile
Groupware.
-- Helped Grania Willis, correspondent with The Irish Times, send
wireless e-mail messages during her ascent of the technically
challenging north side of Mount Everest. The story, which
received global attention, solidified the point that OneBridge
can be used in any place at any time to connect people to
information.
-- Awarded "Best Mobile Solution" by the editors of Windows IT
Pro and SQL Server Magazine during Microsoft's annual TechEd
2005 conference.
-- Launched OneBridge Mobile Platform 4.5. This release enables
developers to retrofit existing, legacy applications with
real-time push capabilities.
-- Announced partnership with mobile security vendor Pointsec.
Extended Systems and Pointsec will work together to bring
secure mobile solutions to the enterprise. The partnership
allows each company to offer an integrated OEM version of the
other's solutions to its customers.
Conference Call
Extended Systems will hold a conference call today at 5 p.m.
Eastern to discuss its quarterly financial results, business
highlights and outlook. Those wishing to participate should dial
866-323-7215 for domestic callers and 706-679-0866 for international
callers and reference Conference ID number 8092213 at approximately
4:50 p.m. Eastern. At this time, management will answer questions
concerning business and financial developments and trends,
management's current view on revenue and earnings forecasts and other
business and financial matters affecting Extended Systems.
A simultaneous live web cast and replay of the call will be
available on the Extended Systems' web site at
www.extendedsystems.com/q4call. A replay of the call will also be
available by telephone two hours after completion of the conference
call through August 9, 2005. To hear the replay dial 800-642-1687 for
domestic callers and 706-645-9291 for international callers and enter
Conference ID number 8092213.
About Extended Systems
Extended Systems provides the expertise, strategy and solutions to
help enterprise organizations streamline their business processes
through mobile technology. The Company's OneBridge mobile solutions
suite enables companies to mobilize critical enterprise applications
such as e-mail, field service, sales force automation (SFA),
enterprise resource planning (ERP) and customer relationship
management (CRM). Extended Systems has more than 2,500 enterprise
customers worldwide and key alliance relationships. Founded in 1984,
Extended Systems has offices and subsidiaries in the United States and
worldwide. For more information, call 1-800-235-7576 or visit the
Company web site.
This press release contains forward-looking statements, including
statements relating to the Company's position as a leading provider of
mobile software solutions, the Company's ongoing relationships with
British Airways and Pointsec, the success and capabilities of
OneBridge Mobile Platform 4.5, the proposed transaction between Sybase
and Extended Systems, the expected timetable for completing the merger
transaction, benefits of the transaction, future opportunities for the
combined company and products and any other statements regarding
Sybase's or Extended Systems' future expectations, beliefs, goals or
prospects. These statements are subject to risks and uncertainties.
These risks and uncertainties include the success of the Company's
customer relationships and other key business relationships; overall
economic conditions and the level of information technology spending
by existing and potential customers; the timing of purchases by
significant customers; the Company's ability to control costs; the
perceived and realized benefits of mobile devices; the acceptance of
specific industry-wide standards and protocols; the timely development
and acceptance of new products and technologies; the risks associated
with development of new products and product enhancements; the impact
of competitive products and pricing; the risks associated with
international sales and operations; the Company's ability along with
Sybase to consummate the transaction; the conditions to the completion
of the merger transaction may not be satisfied, or the regulatory
approvals required for the transaction may not be obtained on the
terms expected or on the anticipated schedule; the possibility that
the parties may be unable to achieve all of the benefits of the merger
within the expected time-frames or at all and to successfully
integrate Extended Systems' operations into those of Sybase; operating
costs, customer loss and business disruption (including, without
limitation, difficulties in maintaining relationships with employees,
customers, clients or suppliers) may be greater than expected
following the transaction; the retention of certain key employees at
Extended Systems and other risks as detailed from time-to-time in the
Company's SEC filings, including its 2004 Annual Report on Form 10-K
filed on September 29, 2004 and its 2005 Quarterly Reports on Form
10-Q.
Additional Information and Where to Find It
In connection with the merger, Extended Systems has agreed to file
a proxy statement and other relevant documents concerning the
transaction with the Securities and Exchange Commission (SEC).
STOCKHOLDERS OF EXTENDED SYSTEMS ARE URGED TO READ THE PROXY STATEMENT
AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors
and security holders can obtain free copies of the proxy statement and
other documents when they become available by contacting Investor
Relations, Extended Systems, 5777 North Meeker Avenue, Boise, Idaho
83713 (Telephone: 800-235-7576 ext. 6276). In addition, documents
filed with the SEC by Extended Systems will be available free of
charge at the SEC's web site at http://www.sec.gov.
Information regarding the identity of the persons who may, under
SEC rules, be deemed to be participants in the solicitation of
stockholders of Extended Systems in connection with the transaction,
and their interests in the solicitation, will be set forth in a proxy
statement that will be filed by Extended Systems with the SEC.
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Extended Systems Incorporated
CONSOLIDATED STATEMENT OF OPERATIONS DATA
(in thousands, except per share amounts)
(unaudited)
Three months Years
ended June 30, ended June 30,
2005 2004 2005 2004
------- ------- ------- -------
Revenue:
License fees and royalties $ 8,270 $ 6,124 $31,148 $25,028
Services and other 2,443 1,693 8,925 7,158
------- ------- ------- -------
Total net revenue 10,713 7,817 40,073 32,186
Costs and expenses:
Cost of license fees and
royalties 173 24 470 382
Cost of services and other 1,116 860 4,260 4,059
Amortization of identifiable
intangibles 43 139 204 621
Research and development 2,155 1,870 7,858 6,858
Marketing and sales 3,951 3,348 15,096 13,391
General and administrative 2,108 1,307 6,480 5,312
Restructuring charges - - - 1,446
Patent litigation fees, license
and settlement - - - 3,425
Non-cash stock-based compensation 38 153 516 490
------- ------- ------- -------
Total costs and expenses 9,584 7,701 34,884 35,984
------- ------- ------- -------
Income (loss) from operations 1,129 116 5,189 (3,798)
Other income (expense), net (148) (97) (341) (51)
Gain on sale of land - - - 1,058
Interest expense (120) (135) (511) (453)
------- ------- ------- -------
Income (loss) before income
taxes 861 (116) 4,337 (3,244)
Income tax provision 225 72 379 94
------- ------- ------- -------
Income (loss) from continuing
operations 636 (188) 3,958 (3,338)
Income from discontinued
operations, net of tax - - - 88
------- ------- ------- -------
Net income (loss) $ 636 $ (188) $ 3,958 $(3,250)
======= ======= ======= =======
Earnings (loss) per share from
continuing operations:
Basic $ 0.04 $ (0.01) $ 0.26 $ (0.23)
Diluted $ 0.04 $ (0.01) $ 0.25 $ (0.23)
Earnings per share from
discontinued operations:
Basic $ 0.00 $ 0.00 $ 0.00 $ 0.00
Diluted $ 0.00 $ 0.00 $ 0.00 $ 0.00
Earnings (loss) per share:
Basic $ 0.04 $ (0.01) $ 0.26 $ (0.23)
Diluted $ 0.04 $ (0.01) $ 0.25 $ (0.23)
Number of shares used in per share
calculations:
Basic 15,614 14,776 15,313 14,370
Diluted 15,882 14,776 15,546 14,370
Extended Systems Incorporated
CONSOLIDATED BALANCE SHEET DATA
(in thousands, except par value amounts)
(unaudited)
June 30, June 30,
2005 2004
--------- ---------
ASSETS
Current:
Cash and cash equivalents $ 13,617 $ 7,225
Receivables, net of allowances of $549 and $446 7,058 6,772
Prepaid and other 1,620 1,449
-------- --------
Total current assets 22,295 15,446
Property and equipment, net 4,703 4,331
Construction in progress 12 384
Goodwill 12,489 12,489
Intangibles, net 373 576
Other long-term assets 114 130
-------- --------
Total assets $ 39,986 $ 33,356
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
Accounts payable $ 1,835 $ 1,639
Accrued expenses 5,346 3,556
Deferred revenue 3,543 3,569
Accrued restructuring - 116
Note payable 579 -
Current portion of long-term debt - 325
Current portion of capital leases 11 25
-------- --------
Total current liabilities 11,314 9,230
Non-current:
Long-term debt 4,800 4,800
Capital leases 7 17
Other long-term liabilities 92 153
-------- --------
Total non-current liabilities 4,899 4,970
-------- --------
Total liabilities 16,213 14,200
Stockholders' equity:
Preferred Stock; $0.001 par value per share,
5,000 shares authorized; no shares issued or
outstanding - -
Common stock; $0.001 par value per share, 75,000
shares authorized; 15,623 and 15,078 shares
issued and outstanding 16 15
Additional paid-in capital 49,501 48,005
Treasury stock; $0.001 par value per share,
4 and 0 common shares - -
Accumulated deficit (23,175) (27,134)
Unamortized stock-based compensation (63) (231)
Accumulated other comprehensive loss (2,506) (1,499)
-------- --------
Total stockholders' equity 23,773 19,156
-------- --------
Total liabilities and stockholders' equity $ 39,986 $ 33,356
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