SYMBOL(TM)
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The Enterprise Mobility Company(TM)
SYMBOL TECHNOLOGIES, INC.
Q1 2004 FINANCIAL RESULTS
MAY 10, 2004
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
SAFE HARBOR PROVISION
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During the course of this presentation, we may make projections or other
forward-looking statements regarding future events or the future financial
performance of the company.
Such statements are just estimates, and actual events or results may differ
materially. We refer you to the documents that Symbol files from time to time
with the SEC. These documents contain and identify forward factors, risks and
uncertainties that could cause actual results to differ materially from those
contained in our projections or forward-looking statements.
This presentation includes certain non-GAAP financial measures as defined under
SEC rules. As required, in this slide presentation, we have provided a
reconciliation of those measures to the most directly comparable GAAP measures.
Copies of our SEC filings are available upon request or by accessing our company
website at www.symbol.com.
SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 2
AGENDA
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o First-quarter 2004 results
o Business update
o Bookings and backlog
o Update to 2004 guidance
SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 3
STATEMENT OF OPERATIONS - Q1 2004
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$US Millions Q1'04 Q4'03 Q1'03
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Product $348.2 $314.1 $310.7
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Services 71.4 78.9 75.6
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Total 419.7 393.0 386.3
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Gross Margin 194.9 184.1 171.9
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GM as a % of Revenue 46.5% 46.8% 44.5%
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Operating Expense 165.5 161.7 208.9
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Operating Expenses as a % of Revenue 39.4% 41.2% 54.1%
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Earnings/(Loss) from operations 29.4 22.4 (37.1)
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Earnings/(Loss) Before Tax 30.4 21.0 (41.1)
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Provision for/(Benefit from) Income Taxes 23.6 4.8 (10.1)
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NET EARNINGS/(LOSS) $ 6.8 $ 16.2 $(31.0)
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EARNINGS PER SHARE
Diluted $ 0.03 $ 0.07 (0.13)
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Sequential - Revenue Growth 6.8% 4.2% 3.6%
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Year over Year - Revenue Growth 8.6% 5.4% 21.6%
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RECONCILIATION OF NON-GAAP EARNINGS TO GAAP EARNINGS
AMT. E.P.S
----- -----
EARNINGS BEFORE TAX $30.4
INC. TAX ON EARNINGS 10.1
-----
NON-GAAP EARNINGS 20.3 $0.08
DTA IMPAIRMENT 13.5
-----
GAAP EARNINGS $ 6.8 $0.03
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MEMO:
Restatement expenses included in OPEX:
Q1 04 $1.0 Million
Q4 03 $6.1 Million
Q1 03 $5.3 Million
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SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 4 UNAUDITED
OPERATING EXPENSE OVERVIEW
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Total Engineering SG&A
------- ----------- ---------
1Q '04 $ 165.5 $ 41.6 $ 123.9
4Q '03 161.7 38.9 122.9
------- ----------- ---------
o/(u) $ 3.7 2.7 1.0
======= =========== =========
EXPLANATION:
ENGINEERING:
Engineering expense $ 2.0
Severance 0.7
-----------
$ 2.7
===========
SG&A:
Equity related comp. chrgs. (2.1)
Restatement (5.1)
Severance 2.8
Sarbanes Oxley 0.7
Other SG&A 4.7
---------
$ 1.0
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% OF REVENUE
TOTAL ENG. SG&A
----- ------ ------
39.4% 9.9% 29.5%
41.1% 9.9% 31.2%
----- ------ ------
(1.8)Pts 0.0% (1.7)Pts
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COMMENTS
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Principally related to ODM (3rd party Eng.), merit & promotion
Principally related to R&D, MC, & ADC business units
1Q ESPP & Stock option adj. of $5.1M vs. 4Q of $7.2M
1Q restatement expenses of $1.0M vs. 4Q of $6.1M
Executive severance
Principally investment in Sales, Marketing, H/R & Finance
SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 5 UNAUDITED
BALANCE SHEET-- MARCH 31, 2004
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$US Millions Q1'04 Q4'03 Q1'03
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CASH $ 179.0 $ 150.0 $ 98.6
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RECEIVABLES 119.6 152.4 140.0
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DSOs 26 35 33
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INVENTORY 211.7 212.9 240.5
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Turns 4.2 3.9 3.6
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OTHER CURRENT 166.9 218.8 197.1
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TOTAL CURRENT ASSETS 677.2 734.0 676.2
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FIXED ASSETS 207.5 210.9 205.2
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OTHER 705.2 701.6 680.5
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TOTAL ASSETS $1,590.0 $1,646.5 $1,561.8
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CURRENT LIABILITIES 489.0 536.2 578.0
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LONG TERM LIABILITIES 166.6 189.7 126.4
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EQUITY 934.4 920.6 857.5
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TOTAL LIABILITIES &
EQUITY $1,590.0 $1,646.5 $1,561.8
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SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 6 UNAUDITED
STATEMENT OF CASH FLOW
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$US Millions Q1'04 Q4 03 Q1 03
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CASH PROVIDED BY OPERATIONS
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Net Income/(Loss) $ 6.8 $ 16.2 $(31.0)
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Adjustments
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Depreciation & Amortization 18.0 17.0 16.6
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Non-Cash Compensation 2.2 7.2 0.8
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Provision for legal settlements 0.0 0.0 72.0
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Changes in Accounts Receivable 28.2 (22.5) 23.7
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Changes in Accounts Payable (47.9) 19.4 (19.6)
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Changes in inventory 1.4 (13.1) 21.0
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Other changes, net 32.1 23.0 (12.2)
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NET CASH PROVIDED BY OPERATIONS 40.8 47.2 71.3
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CASH USED IN INVESTING
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Purchases of Property Plant & Equipment (11.2) (24.2) (10.6)
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Other Investing, net (4.1) (0.3) (2.5)
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NET CASH USED IN INVESTING ACTIVITIES (15.2) (24.5) (13.2)
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CASH USED IN FINANCING
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Net changes in debt 13.7 (0.1) (36.6)
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Other financing, net (10.3) 6.4 0.9
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NET CASH (USED IN)/PROVIDED BY FINANCING (INC. FX) 3.4 6.3 (35.7)
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Net increase in cash 29.0 29.1 22.5
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Cash, beginning of period 150.0 120.9 76.1
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CASH, END OF PERIOD $179.0 $150.0 $ 98.6
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SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 7 UNAUDITED
PRODUCT REVENUE DISTRIBUTION BY SALES THEATER
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Q1'04
TASS EMEA APAC
---- ---- ----
Product 66% 26% 8%
Q4'03
TASS EMEA APAC
---- ---- ----
Product 63% 27% 10%
Q1'03
TASS EMEA APAC
---- ---- ----
Product 59% 34% 7%
SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 8
THE AMERICAS
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TASS EMEA APAC
---- ---- ----
Product 66% 26% 8%
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o 66% OF PRODUCT REVENUE
o Revenue increased
o Up 16% vs. Q4-03
o Up 24% vs. Q1-03
o Bookings increased
o Up 1% vs. Q4-03
o Up 30% vs. Q1-03
o Broadening our foot-print and relevance
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SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 9
EUROPE, MIDDLE EAST, AFRICA
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TASS EMEA APAC
---- ---- ----
Product 66% 26% 8%
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o 26% OF PRODUCT REVENUE
o Revenue variance
o Up 5% vs. Q4-03
o Down 15% vs. Q1-03
o Bookings increased
o Up 13% vs. Q4-03
o Up 29% vs. Q1-03
o New products and features - opportunities to expand market share
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SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 10
ASIA PACIFIC
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TASS EMEA APAC
---- ---- ----
Product 66% 26% 8%
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o 8% OF PRODUCT REVENUE
o Revenue variance
o Down 5% vs. Q4-03
o Up 44% vs. Q1-03
o Bookings increased
o Up 18% vs. Q4-03
o Up 90% vs. Q1-03
o Six-point growth strategy working
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SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 11
REVENUE DISTRIBUTION BY PRODUCT GROUP
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Q1'04
Scanners Scan Engines Mobile Computers Wireless Other
-------- ------------ ---------------- -------- -----
Product 25% 6% 58% 10% 1%
Q4'03
Scanners Scan Engines Mobile Computers Wireless Other
-------- ------------ ---------------- -------- -----
Product 24% 6% 59% 10% 1%
Q1'03
Scanners Scan Engines Mobile Computers Wireless Other
-------- ------------ ---------------- -------- -----
Product 22% 6% 63% 8% 1%
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[ ] Scanners [ ] Scan Engines [ ] Mobile Computers [ ] Wireless [ ] Other
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SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 12
MOBILE COMPUTING
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Scanners Scan Engines Mobile Computers Wireless Other
-------- ------------ ---------------- -------- -----
Product 25% 6% 58% 10% 1%
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APPARENT MARKET SHARE GAINS
---------------------------
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o 58% OF PRODUCT REVENUE
o Revenue increased
o Up 10% vs. Q4-03
o Up 4% vs. Q1-03
o Bookings increased
o Up 5% vs. Q4-03
o Up 32% vs. Q1 03
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-----------------------------------
SYMBOL HOLDS THE NO. 1 POSITION
FOR RUGGED HANDHELDS,
A SEGMENT FORECAST
TO EXCEED $2.7 BILLION BY 2007.
-- VDC
-----------------------------------
SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 13
ADVANCED DATA CAPTURE
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Scanners Scan Engines Mobile Computers Wireless Other
-------- ------------ ---------------- -------- -----
Product 25% 6% 58% 10% 1%
-----------------------
ADC'S BEST QUARTER EVER
-----------------------
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o SCANNERS: 25% OF REVENUE
o Revenue increased
o Up 13% vs. Q4-03
o Up 28% vs. Q1-03
o Bookings variance
o Down 6% vs. Q4-03
o Up 19% vs. Q1-03
o SCAN ENGINES: 6% OF REVENUE
o Revenue increased
o Up 11% vs. Q4-03
o Up 22% vs. Q1-03
o Bookings increased
o Up 27% vs. Q4-03
o Up 25% vs. Q1-03
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SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 14
WIRELESS INFRASTRUCTURE
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Scanners Scan Engines Mobile Computers Wireless Other
-------- ------------ ---------------- -------- -----
Product 25% 6% 58% 10% 1%
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o 10% OF PRODUCT REVENUE
o Revenue increased
o Up 11% vs. Q4-03
o Up 27% vs. Q1-03
o Bookings increased
o Up 28% vs. Q4-03
o Up 98% vs. Q1 03
o Gaining mind-share & market share
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SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 15
Cm2(TM)
RFID UPDATE
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o Customers piloting today
o Engaged in WAL-MART pilot
o Expansion in 2005 as retailer & DOD mandates
commence
o Working through technology challenges
[GRAPHIC OMITTED]
o EPCglobal involvement
o Standards development
o EPC-compliant mobile computer with RFID
capability
o Complete EPC-based product set
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[EPCGLOBAL LOGO]
SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 16
COCA-COLA ENTERPRISES
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ENTERPRISE MOBILITY SOLUTION
--------
`CCE CONSIDERS SYMBOL A STRATEGIC MC9000
TECHNOLOGY PARTNER.... THIS NEW --------
TECHNOLOGY WILL PROVIDE THE FOUNDATION [MC9000 GRAPHICS OMITTED]
FOR DELIVERING INNOVATIVE MOBILE
SOLUTIONS THAT ENHANCE PRODUCTIVITY
AND MAXIMIZE CUSTOMER VALUE.'
- - Christopher Koterski, CCE manager
Mobile Computing & Cold Drink Technology
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FIELD SERVICE APPLICATION
ENTERPRISE MOBILITY
Logistics, delivery and service SOLUTION FOR
applications to maximize 28,000 MOBILE WORKERS
efficiencies and customer IN N. AMERICA & EUROPE
service
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----------------------------------------
WORLD'S LARGEST PRODUCER, BOTTLER AND
DISTRIBUTOR OF NON-ALCOHOLIC BEVERAGES
----------------------------------------
SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 17
Albertsons Installs the SYMBOL PERSONAL
SHOPPING SYSTEM (PSS) in 100+ Stores
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`CUSTOMERS HAVE TOLD US THEY WANT
`Dallas is the most MORE CONTROL OF THEIR SHOPPING EXPERIENCE,
competitive market AND THEY WANT TO ELIMINATE LINES AT THE
in the U.S., CHECKOUT COUNTER. USING THE SHOP `N SCAN
and we're committed ALLOWS US TO DELIVER ON BOTH COUNTS.'
to giving our
customers the best Larry Johnston
shopping experience.' Albertsons chairman, CEO & president
---------------------------------------------
Judy Spires
Albertsons regional ---------------------------------------------
vice president `IT WORKS GREAT WHEN YOU'RE ON A BUDGET.
I KNOW HOW MUCH I'M SPENDING.'
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Maria Gutierrez, Albertson's customer
---------------------------------------------
SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 18
CHINA CHARITY LOTTERY [GRAPHIC OMITTED]
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o SYMBOL LS4008I 2D BAR CODE SCANNERS AT EACH OF 60,000 LOTTERY MACHINE
LOCATIONS NATIONWIDE
o 5,000 UNITS NOW INSTALLED, WITH 15,000 UNITS SLATED FOR INSTALLATION IN Q2
[GRAPHICS OMITTED]
SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 19
IMPROVING BACKLOG, SOLID Q1 BOOKINGS VELOCITY
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Q4'02 Q1'03 Q2'03 Q3'03 Q4'03 Q1'04 Q2'04
----- ----- ----- ----- ----- ----- -----
Shipped but not recognized 133 132 102 119 268 293.8 298
Gross Bookings 280 261 271 323 332 351.9
Product Revenue 292 311 290 309 314 348.2
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[ ] SHIPPED BUT NOT RECOGNIZED
[ ] GROSS BOOKINGS
[ ] PRODUCT REVENUE
[ ] CURRENT QTR BACKLOG
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SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 20 UNAUDITED
OUTLOOK AND Q2 `04 GUIDANCE
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o REVENUE
o 2Q '04 up approximately 2% sequentially and about 15% Yr/Yr
o FY '04 up 10% - 15% vs. FY '03
o GROSS MARGIN
o 2Q '04 unchanged to slightly lower
o OPERATING EXPENSES
o 2Q '04 slightly lower
o EFFECTIVE TAX RATE
o Q2 '04 and remaining quarters at 33%
o DILUTED EPS
o Q2 '04 at $0.09 -- $0.10
o FY '04 unchanged at $0.40 -- $0.50
SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential 21
THANK YOU
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THE PHONE LONES ARE OPEN FOR QUESTIONS
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DIAL IN PHONE NUMBER:
1+(719-457-2679)
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[*] [1]
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TO CALL IN A QUESTION PRESS *1 ON YOUR PHONE NOW
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SYMBOL(TM)
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The Enterprise Mobility Company(TM) Confidential