Pumatech, Inc. announces fourth quarter 2002 results

SAN JOSE, CA (08/29/02) - Pumatech, Inc. (NASDAQ NM: PUMA), the leading provider of synchronization software and services, today announced results for its fourth quarter of fiscal 2002 ended July 31, 2002. The Company also announced the resignations of two members of its executive management team, the resignation of one member of its Board of Directors, and the appointment of Keith Kitchen as Pumatech's new vice president of finance and chief accounting officer. For the fourth fiscal quarter of 2002, Pumatech Inc. reported revenues of $4,404,000 compared to $5,722,000 reported last fiscal quarter and $6,970,000 reported in the fourth fiscal quarter of 2001. Revenue for the 12-month period ended July 31, 2002 was $22,940,000 compared to $38,202,000 reported in the same 12-month period last year.

Reported diluted loss per share this quarter was $(0.27), compared to $(0.21) reported last fiscal quarter and $(0.47) reported in the fourth fiscal quarter of 2001. Reported diluted loss per share for fiscal 2002 was $(0.77) compared to $(0.96) in fiscal 2001.

Pro-forma diluted loss per share excluding amortization of intangible assets, non-cash compensation charges, severance, facilities costs, other than temporary impairment of investments, and other non-recurring charges was $(0.06) this quarter as compared to $(0.10) last fiscal quarter and $(0.16) in the fourth fiscal quarter of fiscal 2001. Pro-forma diluted loss per share for fiscal 2002 was $(0.38) compared to $(0.45) reported in fiscal 2001.

For the fourth quarter of fiscal 2002, revenue contribution from the Company's two core revenue segments was approximately 53% enterprise and 47% technology licensing. Enterprise revenue includes channel and direct sales of the Company's Intellisync®, Enterprise IntellisyncTM and Satellite Forms® 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.

The Company ended the quarter with cash and short-term investments of approximately $34.4 million representing a cash value of approximately $0.75 per share, and reported a current ratio of 3.7X with no long-term debt obligations. "While this quarter's revenue is below original expectations, we continue to aggressively manage our expense structure to protect our cash position," said Kelly Hicks, Pumatech's vice president of operations and CFO. "As previously announced, we have discontinued our on-line service offerings, closed our Santa Cruz and Nashua facilities and have effectively consolidated all U.S. non-field operations in San Jose. Additionally, we have restructured certain business functions, further reducing our overall headcount and have implemented a more efficient and cost-effective development model relying substantially on lower-cost offshore resources. We expect that the net result of these actions will be a significant decrease in our overall expense structure and therefore our targeted breakeven level."

Woodson (Woody) Hobbs, president and CEO of Pumatech, stated, "Our decline in revenues this quarter is largely due to the discontinuance of our online service and carrier offerings, weak general economic conditions, reduced IT spending and our delays in bringing new products and features to market. We believe that our recent restructuring will not only further reduce our expenses but it also enables us to focus our development efforts with the goal of re-establishing revenue growth and moving us along the path to sustained profitability."

Changes to Pumatech Management Team and Board of Directors

Pumatech also announced that Vice President of Operations and CFO Kelly Hicks and Vice President of Products Andre Sant'Anna are both leaving Pumatech at the end of this month to pursue other interests.

Keith Kitchen, previously Pumatech's corporate controller, has been named vice president of finance and chief accounting officer. Mr. Kitchen brings more than 15 years of financial experience to his new role. He served as vice president of finance and administration for NetMind Technologies prior to its acquisition by Pumatech in 2000, and has also held a variety of financial management positions with Bausch & Lomb, Inc.

"I'd like to thank both Kelly and Andre for their significant contributions over the past several years," said Hobbs. "Kelly has been instrumental in helping to align our expense structure with revenue levels, so that we're able to continue on the road to profitability. Andre is the architect of our Satellite Forms technology, and played a major role in the development of our Enterprise Intellisync, Second Edition software. I wish both Kelly and Andre the best in their future endeavors.

"At the same time, we're delighted to announce the appointment of Keith Kitchen as vice president of finance and chief accounting officer," Hobbs continued. "Keith has proven to be an effective leader as Pumatech's corporate controller, and as the chief financial executive at NetMind Technologies prior to joining Pumatech. His extensive experience will be a tremendous asset as we take the next step in the Company's development."

Separately, Steve Nicol has resigned his seat on the Company's Board of Directors. Pumatech is currently conducting a search and expects to appoint a new Board member after identifying a qualified replacement for Mr. Nicol.

Quarterly Highlights

Investor Conference Call
Management will discuss fourth quarter and fiscal 2002 year-end results and hold a question-and-answer session for investors on August 29, 2002, at 5 p.m. Eastern (2 p.m. Pacific). To participate, call 1-706-643-0341 a few minutes ahead of time (no passcode required). If you are unable to participate, a replay will be available two hours after the call for 48 hours, ending at midnight on Aug. 31, 2002. To access, please dial 1-800-642-1687, or 1-706-645-9291 (international), reservation number 5245528. In addition, the replay will be available for 90 days via the Internet at http://www.pumatech.com/investors/quarterearnings.html.

About Pumatech
Pumatech, Inc. (NASDAQ: PUMA) provides organizations with a comprehensive suite of software products and services that synchronizes and distributes critical information throughout an enterprise. 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 related to expense management and the benefits of such expense management including improved financial results, the timing of improved financial results, and the benefits of new business partnerships and products 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 continued weakness 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, 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, Non-Cash Stock Compensation,
    Restructuring and Other Charges, Loss on Impairment of Assets,
      Other-Than-Temporary Impairment of Direct Investments, and
                     Other Non-Recurring Charges
                (In thousands, except per share data)


                                      THREE MONTHS     TWELVE MONTHS
                                          ENDED            ENDED
                                          JULY 31,         JULY 31,
                                      ------------    --------------
                                      2002    2001     2002     2001
                                     ------- -------  -------  -------
Revenue
   License                           $3,736  $6,121  $19,167  $32,027
   Services                             668     849    3,773    6,175
                                     ------- -------  -------  -------
       Total revenue                  4,404   6,970   22,940   38,202
                                     ------- -------  -------  -------
Cost of revenues and operating
 expenses:
   Cost of revenue                      911   2,896    6,591   10,228
   Research and development           2,664   4,963   14,493   23,503
   Sales and marketing                2,544   5,417   15,125   21,084
   General and administrative         1,216   1,395    4,353    5,886
                                     ------- -------  -------  -------
       Total operating expenses       7,335  14,671   40,562   60,701
                                     ------- -------  -------  -------
Operating loss                       (2,931) (7,701) (17,622) (22,499)
   Interest and other income, net       184     727    1,140    3,344
                                     ------- -------  -------  -------
Loss before income taxes             (2,747) (6,974) (16,482) (19,155)
   Provision for income taxes           (91)   (139)    (372)    (437)
                                     ------- -------  -------  -------
Net loss                            $(2,838)$(7,113)$(16,854)$(19,592)
                                     ======= =======  =======  =======

Net loss per share:
   Basic and diluted                 $(0.06) $(0.16)  $(0.38)  $(0.45)
Shares used in per share
 calculation:
   Basic and diluted                 45,193  44,376   44,712   43,729


    The above pro forma condensed consolidated statements of
operations include operational depreciation of $744, $615, $3,241 and
$2,527 and exclude the following items:

  Amortization of intangibles        $1,086  $2,104   $5,163   $7,957
  Non-cash stock compensation            72     325      367    1,058
  Restructuring and other charges     2,027     834    5,595    1,417
  Loss on impairment of assets        5,249  10,614    5,249   10,614
  Other-than-temporary impairment of
   direct investments                   185       -      380    1,180
  Loss on impairment of engineering
   software (1)                         580       -      580        -
  Uncollectible contractual payments
   (Windward acquisition) (2)           330       -      330        -
                                     ------- -------  -------  -------
                                     $9,529 $13,877  $17,664  $22,226
                                     ======= =======  =======  =======

(1) Classified as a research and development expense in the reported
    condensed consolidated statements of operations.

(2) Classified as a general and administrative expense in the reported
    condensed consolidated statements of operations.


                            PUMATECH, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (In thousands, except per share data)

                                     THREE MONTHS       TWELVE MONTHS
                                         ENDED             ENDED
                                        JULY 31,          JULY 31,
                                      ------------    --------------
                                      2002     2001     2002     2001
                                    ------- -------  -------  -------
Revenue
   License                          $3,736   $6,121  $19,167  $32,027
   Services                            668      849    3,773    6,175
                                    ------- -------  -------  -------
       Total revenue                 4,404    6,970   22,940   38,202
                                    ------- -------  -------  -------

Cost of revenues and operating
 expenses:
   Cost of revenue                     911    2,896    6,591   10,228
   Research and development          3,244    4,963   15,073   23,503
   Sales and marketing               2,544    5,417   15,125   21,084
   General and administrative        1,546    1,395    4,683    5,886
   Amortization of intangibles       1,086    2,104    5,163    7,957
   Noncash stock compensation           72      325      367    1,058
   Restructuring and other charges   2,027      834    5,595    1,417
   Loss on impairment of assets      5,249   10,614    5,249   10,614
                                    ------- -------  -------  -------
       Total operating expenses     16,679   28,548   57,846   81,747
                                    ------- -------  -------  -------

Operating loss                     (12,275) (21,578) (34,906) (43,545)
   Interest and other income, net      184      727    1,140    3,344
   Other-than-temporary impairment
    of direct investments             (185)       -     (380)  (1,180)
                                    ------- -------  -------  -------
Loss before income taxes           (12,276) (20,851) (34,146) (41,381)
   Provision for income taxes          (91)    (139)    (372)    (437)
                                    ------- -------  -------  -------
Net loss                          $(12,367)$(20,990)$(34,518)$(41,818)
                                    ======= =======  =======  =======
Net loss per share:
   Basic and diluted                $(0.27)  $(0.47)  $(0.77)  $(0.96)
Shares used in per share
 calculation:
   Basic and diluted                45,193   44,376   44,712   43,729



                            PUMATECH, INC.
                CONDENSED CONSOLIDATED BALANCE SHEETS
                (In thousands, except per share data)


                                                 JULY 31,    JULY 31,
                                                    2002        2001
                                                 -------     -------
ASSETS
Current assets:
 Cash and cash equivalents                        $4,331     $18,837
 Short-term investments                           30,100      30,071
 Accounts receivable, net                          3,009       4,120
 Inventories, net                                     76         233
 Other current assets                              1,020       1,970
                                                 -------     -------
      Total current assets                        38,536      55,231
Property and equipment, net (a)                    2,037       6,974
Goodwill, net                                      2,731       9,559
Intangible assets, net                               565       3,259
Restricted cash                                      352         686
Other assets                                       2,781       3,225
                                                 -------     -------
      TOTAL ASSETS                               $47,002     $78,934
                                                 =======     =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                                   $995      $2,541
 Accrued liabilities                               4,764       4,639
 Notes payable                                     2,000         302
 Deferred revenue                                  2,678       3,260
                                                 -------     -------
      Total current liabilities                   10,437      10,742

Other liabilities                                  1,681          --
                                                 -------     -------
      Total liabilities                           12,118      10,742

Stockholders' equity:
 Preferred stock, $0.001 par value; 2,000 shares
  authorized and no shares issued and outstanding
  at July 31, 2002 and 2001                           --          --
 Common stock, $0.001 par value; 80,000 shares
  authorized; 45,851 and 44,555 shares issued and
  outstanding at July 31, 2002 and 2001               46          45
Additional paid-in capital                       149,503     148,479
Receivable from stockholders                        (640)       (330)
Deferred stock compensation                         (226)       (706)
Accumulated deficit                             (113,925)    (79,407)
Other comprehensive income                           126         111
                                                --------    --------
      Total stockholders' equity                  34,884      68,192
                                                --------    --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $47,002     $78,934
                                                ========    ========

Note (a): Capital expenditures were $93, $197, $98 and $235 for
the three months ended July 31, 2002, April 30, 2002, January 31, 2002
and October 31, 2001, respectively.

Pumatech, the Pumatech logo, Intellisync, Satellite Forms and Enterprise Intellisync are trademarks of Pumatech, Inc., that may be registered in certain jurisdictions. All other product and company names may be trademarks of their respective owners.