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Handspring posts $61.0 million in Q4 revenue, $67.2 million in net loss

Wed Jul 18, 2001 - 5:22 PM EDT - By Marcus Adolfsson

Handspring today announced revenue of $61.0 million for the fourth quarter of fiscal 2001 ended June 30th, 2001, compared with $51.8 million for the same period last year, an increase of 18%. For the fiscal year 2001, revenue was $370.9 million, compared to $101.9 million last year, an increase of 264%.

"While this quarter has been a challenging one for Handspring, I am pleased with the tremendous accomplishments of the company during the fiscal year," said Handspring CEO Donna Dubinsky. "We have solidified our position as leading innovators in handheld computing with a strong number two position in a relatively short time. We have adjusted to the rapid economic downturn, and have taken steps to reduce our rate of spending while continuing our investment in future products."

Pro forma net loss was $32.4 million for the quarter. Pro forma net loss excludes the effects of excess and obsolete inventory charges of $26.8 million and amortization of deferred stock compensation and intangibles of $7.9 million. Pro forma total operating expenses were $44.5 million, or 73% of revenue compared to $22.1 million for the same period last year and $46.1 million in Q3.

Actual net loss for the fourth quarter of fiscal 2001 was $67.2 million compared with a net loss of $19.5 million for the same period last year.

Pro forma net loss for fiscal 2001 was $54.1 million compared to a pro forma net loss of $20.2 for fiscal 2000. Fiscal pro-forma net loss excludes the effects of amortization of deferred stock compensation and intangibles of $32.8 million, excess and obsolete inventories of $26.8 million and in-process research and development of $12.2 million.

Actual net loss for fiscal 2001 was $126.0 million compared to $60.3 million in fiscal 2000.

Highlights of the quarter include: expansion of Visor products and Springboard modules into Korea; new distribution channels in Canada through distributor partner HartCo; shipment of VisorPhone in Europe; and a new distribution partnership with Franklin Covey. In addition, the company added a new suite of wireless applications for messaging, e-mail and web browsing to VisorPhone, and shipped a new version of its Blazer web browser, featuring content powered by Microsoft's MSN and search capabilities provided by Google.

Handspring also continued to see momentum and acceptance of its Springboard platform in the developer community, with over 11,000 developers registered and over 55 modules available today. During the quarter several Springboard expansion modules shipped from third parties. These include the SpringPort Wireless Ethernet Module by Xircom (an Intel company), PocketChess Deluxe and Pocket Recipes by Pocket Express, Hagiwara Step Keeper, PalmGear 8mb and 16mb Flash modules, and Hagiwara Backup module.

In detailing its future business directions, Handspring laid out a plan to reduce expenses while continuing to invest in future wireless products. Expense reductions include a delay of interim facilities expansion, elimination of a variety of marketing programs, a reduction in workforce of about 40 employees or roughly 9%, and an aggressive cost cutting effort across all departments.

Dubinsky added, "In structuring our business going forward, we have three key goals: ensure that our traditional handheld products are profitable by the end of our second fiscal quarter, focus our future investment in our wireless communications products and services, and reach profitability for the business overall by fiscal year-end 2002."

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