EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
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CONTACTS:
Karla K. Rosa Joanne Taylor
Chief Financial Officer Media Relations Manager
Extended Systems Extended Systems
(208) 322-7575, 6045 (208) 322-7575, 6090
EXTENDED SYSTEMS ANNOUNCES
THIRD QUARTER RESULTS
COMPANY REPORTS RECORD SOFTWARE REVENUE,
SHOWS 26 PERCENT YEAR-OVER-YEAR AND 7 PERCENT SEQUENTIAL GROWTH
BOISE, Idaho (Apr. 21, 2003)--Extended Systems Inc. (Nasdaq:XTND), a leading
provider of mobile information management (MIM) software and services for the
enterprise, today reported net revenue of $7.4 million from continuing
operations for the third quarter of fiscal 2003 ended March 31, 2003, up seven
percent sequentially from the $6.9 million reported last quarter and up 26
percent from the $5.8 million reported during the third quarter of fiscal 2002.
The company reported a net loss of $648,000, or $.05 per share, an improvement
over a net loss of $1.3 million, or $.09 per share, reported in the second
quarter of fiscal 2003 and as compared to a net loss of $223,000, or $.02 per
share, reported in the third quarter of fiscal 2002. The loss for the third
quarter of fiscal 2003 included $361,000 of restructuring charges, primarily
related to severance. The loss for the third quarter of fiscal 2002 included the
benefit of an income tax refund of approximately $1.6 million.
At a time when many software companies are having difficulty overcoming current
economic and political hurdles, Extended Systems not only increased revenue, it
improved bottom-line results. "Our success is based on the business value and
financial benefits that companies are realizing by mobilizing enterprise
applications with Extended Systems software and services," said Extended Systems
CEO and President Steve Simpson. "While we continued to build our customer base
with new business from Global 2000 companies such as Arthur Gallagher and
Nationwide Insurance, existing customers, including 3M and UBS Warburg,
increased investments in Extended Systems' mobile technology."
Extended Systems' gross margin for continuing operations for the third quarter
of fiscal 2003 was 85 percent, up from 82 percent in the prior quarter but down
from 88 percent in the third quarter of fiscal 2002 due to an increase in lower
margin professional services revenue in fiscal 2003.
For the nine months ended March 31, 2003, Extended Systems reported net revenue
of $20.2 million, an increase of 17 percent over net revenue of $17.2 million
for the nine months ended March 31, 2002. The company reported a net loss of
$3.9 million, or $0.29 per share, for the first nine months of fiscal 2003, an
improvement of 23 percent over a net loss of $5.0 million, or $0.46 per share,
for the same period last year.
The company ended the quarter with $3.7 million in cash and cash equivalents,
compared to $4.0 million as of December 31, 2002 and $4.6 million as of March
31, 2002.
During Extended Systems' third quarter, the company completed a restructuring
plan that included the appointment of Charles Jepson as vice president of
worldwide sales and marketing. Jepson's restructuring of the company's sales and
marketing organization has resulted in the departure of Brad Surkamer, vice
president of sales, and Fernando Ruarte, vice president of products. Jepson, who
joined the company on February 28, 2003, is responsible for developing and
executing a long-term, strategic global sales and marketing strategy designed to
solidify Extended Systems' leadership position in the mobile information
management software space.
Extended Systems will hold a conference call today at 5 p.m. Eastern Time to
discuss its quarterly financial results, business highlights and outlook. At
this time, management may answer questions concerning business and financial
developments and trends, management's 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 over the
Internet at www.vcall.com and on the Extended Systems Web site at
www.extendedsystems.com on the Conference Call tab of the Investor Relations
page of the Company Information section. Replays of the call will also be
available by telephone through April 25, 2003 at (877) 660-6853 or (201)
612-7415. The account number to access the telephone replay is 1628 and the
conference identification number is 63939.
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 mobile software 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. In addition, the company offers Bluetooth and IrDA wireless
connectivity software and client/server database management systems. Extended
Systems has more than 2,500 enterprise customers worldwide and key alliance
relationships with Ericsson, Handspring, HP, IBM, Microsoft, Motorola, Nokia,
Palm, Sharp, Siemens and Toshiba.
Founded in 1984, Extended Systems has offices and subsidiaries in the United
States and worldwide. For more information, visit the company Web site at
www.extendedsystems.com.
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This press release contains forward-looking statements, including statements
relating to the company's position as a leading provider of mobile information
management software and services, continued growth in the company's customer
base and additional license purchases by existing customers, the ongoing success
of Extended Systems' relationships with Arthur Gallagher, Nationwide Insurance,
3M and UBS Warburg, and Charles Jepson's success in developing and executing a
strategy designed to solidify the company's market position. These statements
are subject to risks and uncertainties. These risks and uncertainties include
the success of the relationships between Extended Systems and Arthur Gallagher,
Nationwide Insurance, 3M, UBS Warburg 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 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, continued growth in the markets for our products, the
risks associated with acquisitions, the risks associated with international
sales and operations and other risks as detailed from time-to-time in the
company's SEC filings, including its 2002 Annual Report on Form 10-K filed on
September 23, 2002 and 2003 Quarterly Reports on Form 10-Q filed on November 14,
2002 and February 14, 2003.
EXTENDED SYSTEMS INCORPORATED
CONSOLIDATED STATEMENT OF OPERATIONS DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED MARCH 31, NINE MONTHS ENDED MARCH 31,
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2003 2002 2003 2002
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Revenue:
License fees and royalties ................. $ 5,696 $ 5,011 $ 16,012 $ 14,787
Services and other ......................... 1,665 816 4,141 2,372
-------- -------- -------- --------
Total net revenue ...................... $ 7,361 $ 5,827 $ 20,153 $ 17,159
Cost of revenue:
License fees and royalties ................. 287 351 854 996
Services and other ......................... 785 338 2,311 866
-------- -------- -------- --------
Total cost of revenue .................. 1,072 689 3,165 1,862
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Gross profit ....................... 6,289 5,138 16,988 15,297
Operating expenses:
Research and development .................... 1,709 2,406 5,558 7,950
Acquired in-process R&D ..................... -- -- 430 --
Marketing and sales ......................... 3,830 3,360 10,761 10,314
General and administrative .................. 1,240 1,143 3,747 3,273
Amortization of goodwill .................... -- 231 -- 694
Restructuring charges ....................... 361 -- 497 --
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Total operating expenses ............... 7,140 7,140 20,993 22,231
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Loss from operations ................... (851) (2,002) (4,005) (6,934)
Other expense (income), net .................... (42) 33 58 (50)
Interest expense ............................... 65 35 264 44
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Loss before income taxes ............... (874) (2,070) (4,327) (6,928)
Income tax benefit ............................. (79) (1,700) (133) (1,746)
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Loss from continuing operations ........ (795) (370) (4,194) (5,182)
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Discontinued operations, net of tax:
Net income from discontinued operations .... 147 147 316 152
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Net loss ............................... $ (648) $ (223) $ (3,878) $ (5,030)
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Loss per share from continuing operations:
Basic and diluted .......................... $ (0.06) $ (0.03) $ (0.31) $ (0.47)
Earnings per share from discontinued operations:
Basic and diluted .......................... $ 0.01 $ 0.01 $ 0.02 $ 0.01
Loss per share:
Basic and diluted .......................... $ (0.05) $ (0.02) $ (0.29) $ (0.46)
Number of shares used in per share calculations:
Basic and diluted .......................... 13,821 11,083 13,221 11,013
EXTENDED SYSTEMS INCORPORATED
CONSOLIDATED BALANCE SHEET DATA
(IN THOUSANDS, EXCEPT PAR VALUE PER SHARE AMOUNTS)
MARCH 31, JUNE 30,
2003 2002
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ASSETS
Current:
Cash and cash equivalents ........................................... $ 3,679 $ 5,439
Receivables, net .................................................... 5,767 4,284
Prepaid and other ................................................... 628 1,719
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Total current assets ............................................. 10,074 11,442
Property and equipment, net ............................................ 5,543 5,786
Goodwill ............................................................... 12,506 1,704
Intangibles, net ....................................................... 1,386 1,439
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Total assets ..................................................... $ 29,509 $ 20,371
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
Accounts payable .................................................... $ 2,594 $ 2,377
Accrued expenses .................................................... 3,178 2,739
Deferred revenue .................................................... 2,327 2,167
Accrued restructuring ............................................... 799 --
Short-term debt ..................................................... 290 --
Current portion of long term debt ................................... 434 --
Capital leases ...................................................... 25 --
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Total current liabilities ........................................ 9,647 7,283
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Non-Current:
Long-term debt ...................................................... 434 --
Accrued restructuring ............................................... 97 --
Capital leases ...................................................... 48 --
Other long-term liabilities ......................................... 127 --
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Total non-current liabilities .................................... 706 --
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Total liabilities ................................................ $ 10,353 $ 7,283
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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;
13,821 and 11,208 shares issued and outstanding .................. 14 11
Additional paid-in capital .......................................... 44,202 34,053
Accumulated deficit ................................................. (24,002) (20,124)
Accumulated other comprehensive loss ................................ (1,058) (852)
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Total stockholders' equity ....................................... 19,156 13,088
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Total liabilities and stockholders' equity ....................... $ 29,509 $ 20,371
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