FILED BY EXTENDED SYSTEMS, INCORPORATED
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
AND DEEMED FILED PURSUANT TO RULE 14A-12
UNDER THE SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: VIAFONE, INC.
COMMISSION FILE NO. 132-02238
THE FOLLOWING IS A TRANSCRIPT FROM EXTENDED SYSTEMS' INVESTOR CONFERENCE CALL ON
JULY 31, 2002:
Extended Systems, Inc. (XTND) - Fourth Quarter and Fiscal Year 2002 Investor
Conference Call
Wednesday, July 31, 2002 5:00 PM ET
Operator: Good afternoon, ladies and gentlemen, and welcome to the Extended
Systems' Fourth Quarter and Fiscal Year 2002 Investor Conference Call. At this
time, all participants are in a listen-only mode. A brief question and answer
session will follow the formal presentation. If anyone should require operator
assistance during the conference, please press *0 on your telephone keypad. I
would now like to turn the conference over to your host, Ms. Karla Rosa. Thank
you. You may begin.
Karla Rosa: Thank you. Good afternoon and thank you for joining us this
afternoon for Extended Systems' investor conference call for the fourth quarter
of fiscal 2002. The press release regarding Extended Systems' fourth quarter
results ran at approximately 4:45 Eastern Time this afternoon on BusinessWire,
and is also available on the Internet at extendedsystems.com. Steve Simpson,
Extended Systems' President and Chief Executive Officer will start today's call
by providing you with initial comments on our fourth quarter results. I will
then take you through our fourth quarter financial performance. Steve will then
follow with a discussion on our progress since our last update. And after
Steve's comments, I will return to take you through our forward-looking
guidance. We will conclude the call by taking your questions.
Before we begin, I would like to remind you that today's conference call will
include forward-looking statements. These statements are subject to risks and
uncertainties that may cause actual events and results to differ materially.
These risks and uncertainties are discussed in detail in Extended Systems SEC
filings, including our fiscal 2001 Form 10-K and our Form 10-Qs for fiscal 2002.
Statements regarding our business outlook are based on current expectations.
These statements are forward-looking and actual results may differ materially.
Additionally, these statements do not include the potential impact of any
mergers, acquisitions, or other business combinations, other than the ViaFone
acquisition, that may be completed after today, July 31, 2002. To adhere to the
SEC's guidance on fair and open disclosure, we have made this conference call
publicly available via telephone conference and web re broadcast.
I will now turn the call over to Steve Simpson for initial comments on today's
call.
Steve Simpson: Thank you, Karla and good afternoon. Today we announced our
results for our fourth quarter of fiscal 2002. We are disappointed that our MIM
software sales were below the expectation that we had set for the quarter. We
are pleased, however, that we have continued to
see XTNDConnect Server growth, with growth of 25 percent over this quarter of
last year. For the entire year, XTNDConnect Server revenue was up 53 percent.
We continued to expand our customer base during the quarter, closing business
with a record 204 new XTNDConnect enterprise customers - an increase of 3
percent over the third quarter and 37 percent over the fourth quarter of last
year. The breadth and depth of our Global 2000 customer base further validates
that our MIM strategic focus is right on the money.
On the Bluetooth front, we added five new design wins in the fourth quarter
bringing our total to 126. Before I go into more detail about our progress
during the quarter, I'm going to turn the call over to Karla to review our
financial performance. Then I will come back to discuss some of the significant
events of the quarter and our continued progress in mobile information
management strategy execution. Karla.
Karla Rosa: Thank you, Steve. Today we released the results for our fourth
quarter of fiscal 2002 ended June 30, 2002. For the fourth quarter of fiscal
2002, net revenue from continuing operations was $5.6 million compared to $6.3
million in the prior quarter and compared to $6.8 million in the fourth quarter
of fiscal 2001. Revenue from continuing operations for our MIM software products
for the fourth quarter of fiscal 2002 including license, royalty, and services,
was $5.1 million compared to $5.8 million in the third quarter of fiscal 2002
and compared to $5.9 million in the fourth quarter of last year.
As we discussed with you earlier this month, we generated lower than expected
revenue from software licenses primarily due to continued pressure on enterprise
spending for new technology. As Steve mentioned, we were encouraged by the
addition of a record 204 new XTNDConnect Server enterprise customers during the
fourth quarter. However, we continued to see enterprise customers exhibiting
cautious purchasing behavior resulting in enterprise customers deploying less
seats than expected.
MIM software revenue represented approximately 92 percent of our net revenue in
the fourth quarter compared to 93 percent in the third quarter of fiscal 2002
and 87 percent in the fourth quarter of fiscal 2001. Net revenue from continuing
operations for our hardware products totaled $468,000 for the fourth quarter of
fiscal 2002, up from revenue of $430,000 in the third quarter, but down from
revenue of $899,000 in the fourth quarter of fiscal 2001.
In the fourth quarter of fiscal 2002, 53 percent of our net revenue was from
outside of North America, including 40 percent from Europe and 8 percent from
Asia. This compares to 51 percent in the third quarter of fiscal 2002 and 62
percent in the fourth quarter of fiscal 2001. As a reminder, sales outside of
North America consist primarily of sales by our international subsidiaries and
sales to large multi-national OEM customers who receive delivery of our products
outside of North America.
On an ongoing basis, we expect international revenue to continue to be a large
part of the business and to continue at a range of 45 percent to 55 percent of
net revenue. For the fourth quarter of fiscal 2002, gross margin was 83 percent,
down from 85 percent in the third quarter of fiscal 2002 and up from 71 percent
in the fourth quarter of last year. The increase in gross margin from the prior
year is primarily due to software representing a higher percentage of our net
revenue and an expected decrease in sales of hardware products. The decrease
from the prior quarter is primarily due to software representing a lower
percentage of net revenue.
Our operating expenses for the fourth quarter of fiscal 2002 were $6.8 million
compared to $7.1 million in the third quarter of fiscal 2002 and compared to
$12.5 million in the fourth quarter of fiscal 2001. The decrease in operating
expenses over last quarter is primarily due to decreases in R&D spending and
decreased sales and marketing expenses resulting from lower than expected
revenue.
The decrease in operating expenses from the fourth quarter of last year is
primarily attributable to cost reductions implemented in prior quarters. We
recorded a net loss of $2.2 million or $0.19 per share in the fourth quarter of
fiscal 2002 compared to a net loss of $223,000 or $0.02 per share in the third
quarter, and a net loss of $18.4 million or $1.71 per share in the fourth
quarter of fiscal 2001. Please remember that the loss in the third quarter
included an accrual for a tax refund of $1.6 million that had the effect of
reducing the net loss by approximately $0.14 per share.
Our pro forma net loss for the fourth quarter was $1.1 million or $0.10 per
share compared to a pro forma loss of $898,000 or $0.08 per share in the third
quarter of fiscal 2002 and a pro forma loss of $2.3 million or $0.22 per share
in fourth quarter of last year. All pro forma net losses exclude amortization of
goodwill and other intangibles, valuation allowances recorded against deferred
tax assets, restructuring charges, and the gain or loss on disposition of
discontinued operations.
In addition the pro forma loss for the fourth quarter of last year excludes
expenses associated with the terminated Palm merger, and the pro forma loss for
the third quarter of fiscal 2002 excludes the effect of the tax refund of $1.6
million. We did receive the cash from that tax refund in the fourth quarter of
fiscal 2002.
Moving to the balance sheet. As of June 30, 2002, we had approximately $5.4
million in cash and cash equivalents compared to $4.6 million as of March 31 and
compared to $6.6 million as of June 30, 2001. In addition, we have an available
credit facility of up to $5 million, for which there were no outstanding draws
at the end of June.
Trade accounts receivables were $4.2 million at June 30 compared to $5.2 million
as of March 31, 2002. Our DSO's were at 50 days at the end of June compared to
63 days as of March 31. On a go-forward basis, we expect our DSOs to return to a
range of 65 to 75 days in the coming quarter and in fiscal year 2003. At June
30, 2002, we had no long-term debt. We had working capital of $4 million and a
current ratio of 1.6 to 1.
That concludes my review of our financial results for the fourth quarter and I
would now like to turn the call back over to Steve for his comments.
Steve Simpson: Thank you, Karla. The fourth quarter, once again, validated our
unrelenting strategic focus on mobile information management corporate
deployment, with our focus on the enterprise IT customers primarily within the
global 2000 companies as they provide the greatest market opportunities for our
solutions.
XTNDConnect Server, as we pointed out earlier, continued to bring a strong
solution for an ever-growing set of customers. We added a record 204 new
enterprise customers to the XTNDConnect Server family which represents a 3
percent increase over the third quarter this year and a 37 percent increase over
the fourth quarter of last year. XTNDConnect Professional edition won
PCMagazine's Editor's Choice award, beating out two competing products in a
recent comparison.
We also introduced enhancements to the XTNDConnect Groupware and Database
editions. We received SyncML certification for our OEM version of our PC-based
data synchronization software. XTNDConnect PC SyncML has been certified as
SyncML-compliant by the worldwide SyncML standards organization. The certified
software provides manufacturers that have embedded SyncML client support on
their devices with a pre-packaged device to PC synchronization solution,
significantly reducing the need for customer devised translator development and
resulting in significant time and cost savings.
SyncML certification of our OEM PC sync solution demonstrates our commitment to
support industry standards that we perceive will continue to grow the global
market. As the SyncML standard is developed in mobile phones and other mobile
devices, it will greatly increase the number of devices that can take advantage
of XTNDConnect's mobile data management capabilities.
During the quarter, we announced the planned acquisition of ViaFone. We see this
as a strong move to further strengthen Extended Systems' leadership position in
the enterprise market and to aid in executing our strategy to enable Global 2000
companies to extend business critical enterprise applications to mobile and
wireless environments. We expect the acquisition of ViaFone to significantly
accelerate Extended Systems' strategy to deliver a single mobile platform to
provide both mobile business application and groupware sync support to corporate
IT. We believe the combination of technology, as well as the addition of
ViaFone's alliance relationships and corporate accounts, will put Extended
Systems in a very strong competitive position in the enterprise market.
By integrating ViaFone's OneBridge Mobility Platform with Extended Systems'
XTNDConnect data synchronization and management software, we will further expand
our offering of real-time, as well as off-line capabilities for mobile e-mail,
personal information management, and enterprise applications. The addition of
WAP and browser-based support to current support for RIM, Pocket PC, Palm OS,
and Symbian mobile devices will enable us to provide mobile workers access to
business critical information across all major mobile devices.
Additionally, ViaFone's OneBridge solution will enhance Extended Systems'
ability to provide a complete set of tools to centrally man these mobile devices
and is expected to speed delivery of enterprise-ready mobile sales and service
applications that extend existing enterprise investments in customer
relationship management, enterprise resource planning, and specific financial
pharmaceutical and transportation business applications.
Most significant to the market, the complete package offers enterprise customers
the ability to work with a single software vendor that can meet their mobile and
wireless needs now and in the future.
Looking at North America to increase our customer activity during the quarter,
we completed installations with customers such as Prudential and 3M. In Germany,
we received additional orders from DaimlerChrysler, Airbus, as well as orders
from new customers such as WestLB Systems and Schering. In the U.K., we saw
continued rollouts with customers such as Orange Telecommunications.
As I pointed out in earlier discussions, we continue to see rollout orders, that
we define as the second significant order the key account, as a very important
indicator of XTNDConnect
technology as it reflects the fact that our customers have moved through the
evaluation stage to the rollout stage.
On the Bluetooth front during the quarter, we added five Bluetooth design wins
for a total of 126wins. In cooperation with Visteon and BMW, we demonstrated a
new Bluetooth interface system to support hands-free driving at the Bluetooth
World Congress 2002 in Amsterdam. Extended Systems' XTNDAccessBlue software in
Visteon's voice-activated technology is designed to allow drivers to control
consumer devices such as cell phones hands-free while staying focused on
driving. The MACH Voice Link system, which has already been selected for
implementation in some 2003 model year vehicles, can be used to access various
Bluetooth devices including mobile phones, PDAs, and laptop computers.
A key feature expected to derive the system's market option, is proprietary
voice-activated speaker independent control feature capable of recognizing
multiple languages and dialects while canceling out surrounding noise.
This completes my wrap-up of some of the key events during the quarter. Karla
will now take you to our forward-looking guidance. Karla.
Karla Rosa: Thank you, Steve. I will now provide you with the information to
assist you in estimating our future results. Remember that the forward-looking
comments I am about to make are subject to risks and uncertainties as described
at the beginning of this call. As we've mentioned earlier in the call today,
economic pressure and enterprise spending for new technology continues to impact
large deployments of our XTNDConnect products. We've also continued to see that
implementation of Bluetooth technology has been slower than expected, causing a
delay in sales of second-generation licenses. Because our visibility to economic
factors and the adoption rate of Bluetooth continues to be limited, our guidance
today will primarily pertain to the first quarter of fiscal 2003.
I'd like to remind you that we've historically experienced seasonality in our
business in our first fiscal quarter, that has resulted in a sequential decrease
in our revenue. This decrease is attributable to the fact that we have a large
percentage of our revenue coming from Europe, which is typically on holiday for
a good portion of the September quarter. We do expect that this seasonality may
be partially offset by revenues resulting from sales of ViaFone products sold by
us in the first quarter after the close of the acquisition. We expect software
revenue for our first quarter of fiscal 2003 to be in a range of $4.5 to $5.5
million compared to $5.1 million in the fourth quarter of fiscal 2002. Growth is
expected to come primarily from licenses of our XTNDConnect products, as well as
from services and license revenue from ViaFone products. We expect to continue
to add Bluetooth design wins in the first quarter, but do not currently expect
Bluetooth royalties to make a significant contribution to our revenue in the
first quarter.
We are projecting first quarter hardware revenue of approximately $250,000
compared to $468,000 in the fourth quarter of fiscal 2002. Looking to gross
margins. Our gross margin is dependent in part on the mix of software products
that we sell. We are expecting software products, including licenses, royalties,
and services to represent approximately 95 percent of our revenue in the first
quarter of fiscal 2003, up from 92 percent in the fourth quarter of fiscal 2002.
For the first quarter, we are expecting gross margin to be in the range of 81 to
83 percent compared to 83 percent in the fourth quarter of fiscal 2002. We
continue to believe that in the current economic environment, it is appropriate
to continue to streamline our operations with the objective of reaching
profitability in the second quarter of fiscal 2003. As a result, we expect our
operating expenses, excluding unusual items, to be in the range of $6.3 to $6.7
million in the first quarter. This reduction from the fourth quarter reflects an
expected reduction in both personnel and discretionary spending and also
reflects tight management and control over our expenses.
Please remember that our operating expenses are dependent in part on our actual
level of net revenue. Translating this revenue and gross margin and expense
guidance into operating results, we expect to incur an operating loss excluding
unusual items of $2 million to $2.5 million in the first quarter as compared to
an operating loss of $2.2 million in the fourth quarter of fiscal 2002.
Other expense in the first quarter is expected to be approximately $50,000
depending on interest rates, cash balances, and assuming no unanticipated items.
We expect to record a provision for income taxes of approximately $25,000 in the
first quarter. We had approximately 11.2 million shares outstanding as of June
30, 2002. During the quarter, we expect to issue 3 million shares in connection
with our acquisition of ViaFone. We estimate that our average shares outstanding
for the first quarter will be approximately 12.2 million shares.
Moving on to cash. As I mentioned earlier, we had approximately $5.4 million in
cash and cash equivalents as of June 30, 2002. We expect to exit the first
quarter with $4.8 to $5.2 million in cash and cash equivalents, which reflects
the cash we expect to use for operating purposes, net of the cash we expect to
add as a result of the ViaFone acquisition. We continue to believe that this
represents a healthy cash balance and gives us the needed financial resources to
execute our business plan for fiscal 2003.
This concludes the formal part of our presentation. We will now open the call up
to questions. Operator, we'll now take questions from the listeners.
Operator: At this time, we will be conducting a question and answer session. If
you would like to ask a question, please press star 1 on your telephone keypad.
To remove your question from the queue, please press star 2. For participants
using speaker equipment, it may be necessary to pick up your handset before
pressing the star keys.
Our first question comes from Mr. Hoffman with SoundView Technology Group.
Please state your question.
Matt Hoffman: Hi Karla and Steve. How are you doing today?
Karla Rosa: Hi Matt.
Steve Simpson: Hi Matt.
Matt Hoffman: I'm sorry. I'm on a cell phone, so if you can't hear me, I
apologize. Today's Microsoft and AT&T wireless announcement seems to be a
dual-edged sword. It validates the space, but puts Microsoft in as perhaps a
direct competitor. Can you address the deal and how you are going to
differentiate your product? How you're going to come to market, perhaps how
ViaFone factors in to your competitive offering going into the enterprise mobile
space?
Steve Simpson: I think, Matt, we don't really have a lot of details on the
announcement from AT&T and Microsoft. But, really my assumption continues to be,
as it has been in the past, that we are really focused on providing a, as you
know, a device agnostic and application software agnostic platform. And as a
result, we are viewed by our customers as one that they can be sure we will
provide that support, be it for Microsoft based devices and Microsoft
applications, as well
as other vendors' applications. But I think we'll continue to see the value
proposition of the -- our agnosticity, as it were, to be -- still continue to be
a very powerful value, one that clearly our customers currently value today and
indicate they're going to continue to value.
Matt Hoffman: So, until they can support Palm OS and other e-mail out and cell
phones, in addition to their PocketPC, you think you'll have a competitive
advantage?
Steve Simpson: I believe we will continue to have a competitive advantage. We,
of course, already have the technology capabilities that are in place and that
we're expanding. And again, what we've found always to be very, very strongly
the case, is our customers very much value the fact that we do not have our own,
you know, proprietary type of software solution that we have to favor. That
certainly was one of the big reasons that our customers are currently buying
from us because they believe that we will continue to provide an agnostic
platform and they're never as confident whether there's another vendor who also
has their own platform, such as Microsoft does.
Matt Hoffman: Okay. Are there any -- are you trying to muster a deal as a
carrier right now? Is that something you haven't really done in the past, but do
you see that being something you need to do to go to market?
Steve Simpson: Well, we have been in discussions with several carriers from the
point of view is, we want to make sure that between ourselves and those
carriers, that we will be able to provide a complete solution. We've also been
involved with HP and with one of the carriers and ourselves talking with
customers to provide a complete solution, with HP being the primary driver of
providing the solution for particular customers. So I think we'll see quite a
bit of activity in our case with carriers, but it will probably be in
conjunction with a partner such as HP.
Matt Hoffman: Okay. A couple questions about the guidance then real quick.
You've given a wider range to revenue guidance than you have previously given,
you know, basically a 20% range here. So what are the primarily variables
involved in hitting the low end and hitting the high end and what
[indiscernible] looking for in the quarter? And then the second question is, in
terms of employment, do you believe the fact that you are possibly laying some
people off. What is your employment -- what's your employment -- where will
those changes come? How many people do you think you'll be letting go in
relative to the ViaFone acquisition? How does that factor into what you're
guiding?
Karla Rosa: Sure, Matt. Let me take the first part of the question related to
the range of revenue guidance. You know, one of the key factors that will
influence our performance relative to guidance is the ViaFone acquisition. We do
have our shareholder meeting scheduled for August 29 and would expect that the
deal would close shortly thereafter. So part of the range of the outlook is
really dependent upon what ViaFone revenue closes within our first quarter.
The other material factor in the businesses that we have is again, just IT
spending by enterprise customers during the quarter and what we see in terms of
deployment of the XTNDConnect products in the first quarter. We are anticipating
that Europe is going to be down relative to where they were in the fourth
quarter and we had a pretty slow Q4 in Europe as well. So, you know, it's
partially the economy, partially timing of ViaFone.
With regards to the comment on reduction in personnel, we currently are
expecting that the reductions in personnel are going to come from part-time
positions that we've had that are leaving the company anyway. We are looking to
re-deploy some of our engineering team into
our professional services organization on a go-forward basis. We have not
identified any specific large areas for reduction there, but we do expect that
we will see our head count go down from where we were at, at the end of Q4.
Matt Hoffman: Can you remind us of that number real quick?
Karla Rosa: At the end of Q4, we had approximately 270 employees.
Matt Hoffman: All right. Thank you.
Steve Simpson: Thanks, Matt.
Operator: Our next question is from Mr. Giboney with D.A. Davidson & Co. Please
state your question.
Kevin Giboney: Hi Steve and Karla. How are you guys doing?
Steve Simpson: Hi Kevin.
Kevin Giboney: I just wanted to clarify, so the ViaFone acquisition is assumed
in the guidance that you gave for the first quarter, is that correct?
Karla Rosa: The ViaFone acquisition is included in that, yeah.
Kevin Giboney: Okay. And in terms of relation, I don't want to give guidance for
the year, but previously, you had talked about, I believe, a revenue range of
like $8 to $10 million incremental with the acquisition of ViaFone. Is that
still an accurate range, and if so, it seems to be a little bit lighter of a
contribution in the first quarter assuming that, I guess, would be back-end
loaded. Is that a correct way to look at that or --
Karla Rosa: Part of the contribution to ViaFone in the first quarter of fiscal
2003, really ties into the timing of when we close the deal. And when we gave
the guidance back in May when we announced the acquisition, we anticipated that
we may have a July 31 close date. Obviously, that's not going to happen. We're
now looking at, you know, most likely end of August, first part of September for
the close date. So that's one of the dynamics that's influencing the revenue
that we're seeing from ViaFone.
But we also are seeing on the ViaFone side, as well as Extended Systems, that
they are very much impacted by the same dynamics in corporate enterprise
spending that we are. And you know, we would anticipate visibility for ViaFone
is going to be somewhat the same as what we see in our business. And we're
cautious right now on what we expect to see out of enterprise accounts in the
first quarter. We don't have great visibility beyond the first quarter on
expectations either for Extended Systems or ViaFone at this point.
Kevin Giboney: Okay. So I guess in terms of loss, that's still going to be like
$300,000 to $400,000 that you were looking at before, this guidance that you
gave, or is that, I mean, updated guidance in terms of what you expect on the
bottom line side?
Karla Rosa: I don't understand the question, Kevin.
Kevin Giboney: In terms of ViaFone acquisition, previously you talked I think
about impact on the bottom line of $300,000 to $400,000 incremental --
Karla Rosa: Oh, oh, right --
Kevin Giboney: -- net income coming from that acquisition. Any additional
insight to what you expect out of that acquisition now?
Karla Rosa: We do still expect to see a positive impact on the bottom line as a
result of the acquisition of ViaFone. We have been aggressively looking at their
revenue forecast, as well as streamlining expenses, on the ViaFone side working
with them to make sure that we have an operating model that makes sense on a
go-forward basis. I would expect that the contribution that they're going to
make, you know, it's going to be somewhere, you know, a few hundred thousand
dollars for the fiscal year.
Kevin Giboney: Okay. You talked about you're still shooting for break-even in
the second quarter. What type of run rate do you think you need to get to visit
that?
Karla Rosa: We would need a run rate of approximately $7.5 million to $8 million
of revenue to be possible in the second quarter.
Kevin Giboney: Okay, great. Thank you.
Karla Rosa: Thank you, Kevin.
Operator: Mr. Simpson and Ms. Rosa, there are no further questions at this time.
Steve Simpson: Very well. Thank you very much for joining us for our fourth
quarter 2002 conference call and we look forward to talking with you at the end
of our fiscal first quarter, and we'll be able to give further information as to
the integration and the completion of the integration of ViaFone as part of
Extended Systems. We are particularly excited about bringing the ViaFone team
and the ViaFone capabilities on board because it really helps to align exactly
with our strategy going forward, which was as we said, to provide the capability
for our customers to not only deploy mobile devices in an environment for
personal information management and e-mail, but also strategic application
deployment.
ViaFone, among other things, brings us a very strong capability in that area and
helps us to move forward very rapidly in that space. We do believe now that
we're starting to see our enterprise customers much more interested in thinking
of moving forward with application deployment than we've seen previously. And we
feel that this acquisition is very, very timely for us to be able to provide
that product capability. With that, again, I'd like to thank you for joining us
and look forward to talking to you next quarter.
Operator: This concludes today's conference. Thank you for your participation.
(CONFERENCE CALL CONCLUDED)
FORWARD LOOKING STATEMENTS
This script contains forward-looking statements, including statements regarding
the future development of the SyncML standard, the ability of XTNDConnect PC
SyncML to enable device manufactures to quickly and cost effectively bring
products to market, the expected revenue, gross margins and operating expenses
for the company's first quarter of fiscal 2003, its expected cash balance as of
September 30, 2002, the execution of the company's strategy, increased future
spending by enterprise customers and its impact on Extended Systems, expected
streamlining of existing operating model, and the expected timing to close the
company's acquisition of ViaFone and the timing and ability to realize the
benefits thereof. These statements are subject to risks and uncertainties.
All statements other than statements of historical fact are statements that
could be deemed forward-looking statements, including any statements of the
plans, strategies, and objectives of management for future operations, including
the execution of integration and restructuring plans and the anticipated timing
of filings, approvals, and closings related to the merger; any statements
concerning proposed new products, services, developments, or industry rankings;
any statements regarding future economic conditions or performance; any
statement of belief; and any statement of assumptions underlying any of the
foregoing.
These risks and uncertainties and assumptions referred to above include the
overall economic conditions and the level of information technology spending by
existing and potential customers, the success of key business relationships, the
timing of the close of the ViaFone acquisition and the timing and ability to
realize the benefits thereof, continued growth in the markets for our products,
the perceived and realized benefits of mobile devices and the company's
products, 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 acquisitions, the
risk associated with international sales and operations, and other risks as
detailed from time-to-time in Extended Systems' SEC filings, including its 2001
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed in fiscal
2002.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This transcript does not constitute a solicitation of an offer to sell or a
solicitation of an offer to buy shares of common stock of Extended Systems in
connection with the proposed acquisition of ViaFone. On July 19, 2002, in
connection with the proposed acquisition, Extended Systems filed a registration
statement on Form S-4, including a joint proxy statement/prospectus, with the
Securities and Exchange Commission. Investors and security holders are urged to
read the registration statement, including the joint proxy statement/prospectus,
because the documents contain important information about Extended Systems,
ViaFone, and the proposed acquisition. Investors should carefully read the joint
proxy statement/prospectus before making any voting or investment decisions.
Investors and security holders may obtain a free copy of the registration
statement, the joint proxy statement/prospectus, and other documents filed by
Extended Systems with the Securities and Exchange Commission at the Securities
and Exchange Commission's website at http://www.sec.gov/. Free copies of the
registration statement and other documents filed by Extended Systems with the
Securities and Exchange Commission may also be obtained from Extended Systems.
Extended Systems and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from Extended Systems' stockholders
in favor of the proposed acquisition of ViaFone. Security holders may obtain
information regarding the interests of the officers and directors of Extended
Systems in the proposed acquisition by reading the joint proxy
statement/prospectus contained in the registration statement filed on Form S-4,
filed with the Securities and Exchange Commission on July 19, 2002. In addition,
information regarding such officers and directors is included in Extended
Systems' Proxy Statement for its 2001 Annual Meeting of Stockholders filed with
the Securities and Exchange Commission on September 17, 2001. This document is
available free of charge at the Securities and Exchange Commission's website at
http://www.sec.gov/ and from Extended Systems.