Pumatech, Inc. announces second quarter 2002 results

Feb. 27, 2002--Pumatech, Inc. a leading provider of enterprise-level software products and services that deliver highly relevant information -- wherever and whenever it's needed, today announced results for its second fiscal quarter ended January 31, 2002. The Company reported revenues of $6,265,000 this quarter as compared to $6,772,000 reported last fiscal quarter and $11,311,000 reported in the second fiscal quarter of 2001. Revenue for the six-month period ended January 31, 2002 was $13,037,000 compared to $21,234,000 reported in the same period last year.

Reported diluted loss per share for this quarter was $(0.14), compared to $(0.15) reported last fiscal quarter and in fiscal Q2 of 2001. Reported diluted loss per share for the first six months of fiscal 2002 was $(0.29), compared to $(0.27) for the comparable period a year ago.

Pro-forma diluted loss per share, excluding amortization of intangible assets and non-cash compensation charges, was $(0.10) in the second fiscal quarter of 2002, compared to $(0.11) reported last quarter and $(0.09) reported in the comparable quarter of fiscal 2001. Pro-forma diluted loss per share was $(0.21) for the six-month period ended January 31, 2002, compared to a pro-forma diluted loss per share of $(0.17) in the same period last year.

For the second quarter of fiscal 2002, revenue contribution from the Company's two core revenue segments was approximately 56% enterprise and 44% technology licensing. Enterprise revenue includes channel and direct sales of the Company's IntellisyncŪ and Satellite FormsŪ products licensed to corporations for internal use. Technology licensing revenue includes platform licensing and related professional services for corporations choosing to integrate or embed the Company's various technologies.

Quarterly Highlights

Pumatech launched three product upgrades/extensions during the second fiscal quarter:

In addition, Pumatech made the following announcements during its second fiscal quarter:

Expense Management
``Over the past several quarters, Pumatech has resized and streamlined its operations in an effort to generate a pro-forma profit and become cash-flow positive by the end of our second fiscal quarter of 2003,'' stated Kelly Hicks, Pumatech's vice president of operations and CFO. ``The most recent round of expense control initiatives, announced yesterday, is expected to result in ongoing quarterly operational savings in excess of $2 million beginning in our fourth fiscal quarter.'' Hicks continued, ``Our commitment to expense management is aimed at preserving cash as we refocus our efforts on top-line growth and improved financial results moving forward.''

Optimistic for the Future
Brad Rowe, Pumatech's president and CEO, stated, ``The mobile and wireless sector continues to be faced with many challenges, and Pumatech has not been immune. During this time, we have continued to forge new alliances, secure new customers and develop and deliver new and innovative products to better serve our customers' needs. Additionally, we have prudently managed our expenses to preserve our cash and maintain our financial strength. We continue to believe that our synchronization products are essential to extending corporate information wherever and whenever it's needed, and are committed to maintaining our position as a leading provider of solutions that enable the Real-time Enterprise.''

Investor Conference Call
Management will discuss second-quarter results and the company's outlook and hold a question-and-answer session for investors on February 27, 2002, at 5:00 p.m. Eastern / 2:00 p.m. Pacific. To participate, call 212/896-6065 a few minutes ahead of time (no passcode required). If you are unable to participate, a replay will be available from 7:00 p.m. Eastern on Feb. 27, 2001 for 48 hours. To access, please dial 800/633-8284, or 858/812-6440 (international), reservation number 20216527. In addition, the replay will be available for 90 days via the Internet at www.pumatech.com.

About Pumatech
Pumatech, Inc. (Nasdaq:PUMA - news) provides organizations with a comprehensive suite of enterprise-level software products and services that deliver highly relevant information -- wherever and whenever it's needed. The company's portfolio makes Pumatech a single resource, providing the infrastructure necessary to expand the boundaries of information. Organizations can choose to use Pumatech's ready-made enterprise offerings, or they can leverage Pumatech's professional services team to create custom solutions built upon Pumatech's core enterprise platform. Pumatech's customer and strategic partner base includes Global 2000 companies such as Siebel, Oracle, Yahoo!, NTT DoCoMo, Boeing, CNET and General Motors. The company has headquarters in Silicon Valley, Tokyo and London. Pumatech offers more information on its products and services at www.pumatech.com.

The forward looking statements above in this news release, including statements the amount of operating savings resulting from the recent consolidation and the timing and likelihood of anticipated return to profitability are based on current expectations and beliefs and are subject to numerous risks and uncertainties that could cause actual results to differ materially. Factors that could cause actual results to differ materially include uncertainties related to the effect of general economic factors on the overall demand for our products and services, the timing of market adoption of wireless computing devices, the timely introduction, availability and acceptance of new products and upgrades, the impact of competitive products and pricing and consummation of binding agreements with prospective business partners, as well as additional risk factors, as discussed in the ``Risk Factors'' section of Pumatech's Annual Report on Form 10-K for the year ended July 31, 2001 and Pumatech's quarterly reports filed from time to time with the U.S. Securities and Exchange Commission. Pumatech disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.



                            PUMATECH, INC.
       PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Excluding Amortization of Intangibles and Non-Cash Stock Compensation
                (In thousands, except per share data)
                 (Unaudited, Fiscal year ends July 31)



                               THREE MONTHS ENDED   SIX MONTHS ENDED
                                   JANUARY 31,        JANUARY 31,
                               ------------------   -----------------
                                  2002      2001      2002      2001
                               --------  --------   -------  --------
Revenue
  License                      $  5,199  $  9,254  $ 10,792  $ 18,044
  Services                        1,066     2,057     2,245     3,190
                               --------  --------   -------  --------
     Total revenue                6,265    11,311    13,037    21,234

Cost of revenues and
 operating expenses:
  Cost of revenue                 2,015     2,900     4,231     4,459
  Research and development        3,623     6,512     7,517    12,511
  Sales and marketing             4,455     5,124     9,128    10,497
  General and administrative      1,029     1,494     2,207     2,817
                               --------  --------   -------  --------
    Total operating expenses     11,122    16,030    23,083    30,284
                               --------  --------   -------  --------

Operating loss                   (4,857)  (4,719)   (10,046)   (9,050)
  Interest and other income,
   net                              257      763        698     1,851
                               --------  --------   -------  --------
Loss before income taxes         (4,600)  (3,956)    (9,348)   (7,199)
  Provision for income taxes        (96)     (82)      (207)     (218)
                               --------  --------   -------  --------
Net loss                       $ (4,696)$ (4,038)  $ (9,555) $ (7,417)
                               ========  ========   =======  ========
Net loss per share:
  Basic                        $  (0.10)$  (0.09)  $  (0.21) $  (0.17)
  Diluted                      $  (0.10)$  (0.09)  $  (0.21) $  (0.17)
Shares used in per
 share calculation:
  Basic                          44,821   43,658     44,731    43,166
  Diluted                        44,821   43,658     44,731    43,166


The above pro forma condensed
 consolidated statements of
 operations include operational
 depreciation of $850, $590,
 $1,698 and $1,135 and exclude
 the following items:

Amortization of intangibles    $  1,366   $ 2,314   $ 2,826   $ 3,696
Non-cash stock compensation          76       220       440       441
                               --------  --------   -------  --------
                               $  1,442   $ 2,534   $ 3,266   $ 4,137
                               ========  ========   =======  ========


                            PUMATECH, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except per share data)
                 (Unaudited, Fiscal year ends July 31)


                               THREE MONTHS ENDED   SIX MONTHS ENDED
                                   JANUARY 31,        JANUARY 31,
                               ------------------   -----------------
                                  2002      2001      2002      2001
                               --------  --------   -------  --------
Revenue
 License                       $  5,199  $  9,254  $ 10,792  $ 18,044
 Services                         1,066     2,057     2,245     3,190
                               --------  --------   -------  --------
    Total revenue                 6,265    11,311    13,037    21,234

Cost of revenues and
 operating expenses:
 Cost of revenue                  2,015     2,900     4,231     4,459
 Research and development         3,623     6,512     7,517    12,511
 Sales and marketing              4,455     5,124     9,128    10,497
 General and administrative       1,029     1,494     2,207     2,817
 Amortization of intangibles      1,366     2,314     2,826     3,696
 Non-cash stock compensation         76      220       440        441
                               --------  --------   -------  --------
     Total operating expenses    12,564    18,564    26,349    34,421
                               --------  --------   -------  --------
Operating loss                   (6,299)   (7,253)  (13,312)  (13,187)
 Interest and other income,
  net                               257       763       698     1,851
                               --------  --------   -------  --------
Loss before income taxes         (6,042)   (6,490)  (12,614)  (11,336)
 Provision for income taxes         (96)      (82)     (207)     (218)
                               --------  --------   -------  --------
Net loss                       $ (6,138) $ (6,572) $(12,821) $(11,554)
                               ========  ========   =======  ========
Net loss per share:
 Basic                         $  (0.14) $  (0.15) $  (0.29) $  (0.27)
 Diluted                       $  (0.14) $  (0.15) $  (0.29) $  (0.27)
Shares used in per share
 calculation:
 Basic                           44,821    43,658    44,731    43,166
 Diluted                         44,821    43,658    44,731    43,166


                            PUMATECH, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEET
                            (In thousands)
                              (Unaudited)


                                         JANUARY 31,   JULY 31,
                                            2002         2001
                                        -----------  ----------
ASSETS
Current assets:
  Cash and cash equivalents             $  13,093    $  18,837
  Short-term investments                   29,264       30,071
  Accounts receivable, net                  3,866        4,120
  Inventories, net                            129          233
  Other current assets                      2,092        1,970
                                        ----------   ---------
    Total current assets                   48,444       55,231
Property and equipment, net (1)             5,546        6,974
Intangible assets, net                      9,992       12,818
Restricted cash                               407          686
Other assets                                3,214        3,225
                                        ----------   ----------
      TOTAL ASSETS                      $  67,603    $  78,934
                                        ==========   ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                      $   2,105    $   2,541
  Accrued liabilities                       4,335        4,639
  Notes payable                             2,000          302
  Deferred revenue                          2,871        3,260
                                        ----------   ----------
    Total current liabilities              11,311       10,742

Commitments and contingencies

Stockholders' equity:
  Preferred stock, $0.001 par value;
   2,000 shares authorized and no
   shares issued and outstanding
   at January 31, 2002 and
   July 31, 2001                               --           --

  Common stock, $0.001 par value;
   80,000 shares authorized; 44,959
   shares issued and outstanding at
   January 31, 2002 and 44,555 shares
   issued and outstanding at
   July 31, 2001                               45           45
  Additional paid-in capital              149,203      148,479
  Receivable from stockholders               (330)        (330)
  Deferred stock compensation                (511)        (706)
  Accumulated deficit                     (92,228)     (79,407)
  Other comprehensive income                  113          111
                                        ----------   ----------
    Total stockholders' equity             56,292       68,192
                                        ----------   ----------
        TOTAL LIABILITIES AND
         STOCKHOLDERS' EQUITY           $  67,603    $  78,934
                                        =========    =========


  • (1) Capital expenditures were $98 and $235 for the three months ended January 31, 2002 and October 31, 2001, respectively.