CIDCO Reports 4th Quarter MailStation Financial Results; MailStation Subscriber Base Grows From 78,000 At Year-End to 95,000 At End of January.Business Editors & High Tech Writers MORGAN Morgan, American family of financiers and philanthropists. Junius Spencer Morgan, 1813–90, b. West Springfield, Mass., prospered at investment banking. HILL, Calif.--(BUSINESS WIRE)--Feb. 1, 2001 CIDCO CIDCO City and Industrial Development Corporation (Mumbai, India) Inc. (Nasdaq:CDCO CDCO Curriculum Design, Content and Organization CDCO Classified Document Control Office ) today announced financial results for the fourth quarter ended Dec. 31, 2000. Sales from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the were $3.7 million, representing only retail and subscription sales of e-mail appliances A device that is specialized for accessing e-mail. Pocket-sized models are designed for portability, while desktop models are geared for ease of use and eliminate the need to turn a computer on and launch an e-mail program just to check mail. , compared with $628,000 in the fourth quarter of 1999. The year-ago sales do not include a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and sale of $3.1 million to a large customer. The company reported a net loss for the fourth quarter from continuing operations of $18.4 million, or $1.32 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with a net loss of $2.5 million, or $.18 per basic and diluted share, for the same period in 1999. The loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. for the quarter was $7.8 million, or $.56 per basic and diluted share, compared with a loss of $1.6 million, or $.12 per basic and diluted share, for the year-ago quarter. Financial results from continuing operations represents the activities of the company's Internet appliance Also called "information appliance," "smart appliance," and "Web appliance," it is a device specialized for accessing the Web and/or e-mail. Designed for ease of use, it plugs into a telephone jack or LAN connection for Internet hookup. business, while results from discontinued operations refer to the company's telephone equipment business, which was sold in December December: see month. 2000. The results reported for discontinued operations do not imply any change from the company's prior descriptions of the financial impact of the transaction. For the fiscal year ended Dec. 31, 2000, sales from continuing operations were $12.5 million, including $6.3 million in OEM sales, compared with $9.1 million for the year ended in 1999, with OEM sales accounting for $8.2 million of the total. For 2000, the company recorded a net loss from continuing operations of $23.4 million, or $1.68 per basic and diluted share, compared with a net loss of $11.1 million from continuing operations in 1999, or $.81 per basic and diluted share. The net loss for the year from discontinued operations was $17.4 million, or $1.25 per basic and diluted share, compared with net income of $11.0 million, or $.81 per basic share, for 1999. Highlights of the Quarter "We had a number of positive events during the fourth quarter which will be instrumental in achieving our goals for 2001 and beyond," said Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. Locklin, president and chief executive officer. "As we reported in December, the sale of our telephone equipment business was completed, a milestone that will provide the resources to further develop our Internet appliance business." The company reported in December that the transaction, valued at $15 to $20 million, will free up more than $15 million in working capital and provide up to $10 million in future royalty payments. Locklin added that the fourth quarter results for discontinued operations include typical one-time and non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. associated with the closing of a business line. "The important issue now in front of us is leveraging the early success of MailStation into the marketing of our MIVO family of e-mail appliances and continuing to establish a growing and stable base of recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. , subscriber-based revenue," Locklin said. "We ended the year with 78,000 activated activated a state of being more than usually active. In biological systems this is usually brought about by chemical or electrical means. Commonly said of pharmaceutical and chemical products. customers and total MailStation sales of more than 110,000 through the retail channel, including 76,000 in the fourth quarter alone. As of yesterday, we had more than 95,000 activated subscriptions as holiday gift recipients continued to sign up for our services, with 46,000 of those coming in the fourth quarter. Another accomplishment during 2000 that we're we're Contraction of we are. we're we are very pleased with is penetration of the retail market channel, an absolute must for products and services such as ours. We ended the year with more than 14,000 storefronts of major national retail chains, from consumer electronics to mass merchandise chains. So we have in place a lot of enthusiastic retailers who have experienced the potential sales power of our Internet appliances and who are providing more and better shelf space and increasing their participation in retail circular promotions. "Our retail channel success brings up the issue of our selling and marketing budget, the vast majority of which was $12.6 million in advertising expenditures during the fourth quarter. We consider the advertising program another key accomplishment, since it was a critical component of our retail strategy. First, it generated sales of 76,000 MailStations in the quarter which, based on a very conservative customer retention model, translates to as much as $23 million in revenue over the expected term of those subscriptions. Secondly, it built awareness of the category, of our e-mail appliances and services, and will serve as a solid foundation for future marketing programs. Third, it cemented relationships with the national retailers carrying our products and demonstrated CIDCO's commitment to them. Based on those results and our expectations for recurring revenue, we think it was a very sound and necessary investment. "Other important achievements include the new design and engineering of the advanced features that will be represented in the MIVO series, which will be key to our success in 2001," said Locklin. "Success in the consumer space requires that we meet the demand for look and feel as well as for functionality. The MIVO 200 and 300 series will provide the consumer with a choice of features and subscription offers, which in turn will give CIDCO the opportunity to build a tiered suite of services and a growing base of recurring revenues. Our consumer surveys indicate a high degree of satisfaction with MailStation, and that is demonstrated by the low turnover rate in subscribers. Overall, we're excited about where we stand today in relation to our business plan and our prospects for the future. Our challenge now is to build critical mass that translates to significant revenues and eventual profitability." Additional Financial Information Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying at Dec. 31, 2000 were $17.4 million, compared to $21.2 million at Sept. 30, 2000. DSOs declined to 76 days in the fourth quarter from 90 days in the third quarter of 2000. Net inventories declined to $13.7 million from $19.3 million at Sept. 30, due primarily to the sale of the telephone equipment business. The company remains debt-free with working capital at Dec. 31 of $35.8 million. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. was $39.2 million at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. . Conference Call Information The company has scheduled a conference call to discuss fourth quarter financial results on Thursday Thursday: see week. , Feb. 1, at approximately 4:30 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. (1:30 p.m. PST PST Paroxysmal supraventricular tachycardia, see there ). To participate in the call, dial 1-888-222-2994 or International dial 973-694-6836, 10 minutes before the conference call begins and ask for the CIDCO conference call. A replay will be available approximately one hour after the conclusion of the call until Feb. 2, 2001 at 3:30 p.m. PST. To access the replay, dial 1-800-428-6051 using a pass code of 158039 or International dial 973-709-2089 using a pass code of 158039. There will also be a real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. audio webcast of the conference call at the company's Web site, www.cidco.com by Vcall. To listen to the live call, select Vcall at least 15 minutes before the start of the call to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. CIDCO Incorporated (Nasdaq:CDCO), is a worldwide leader in personal Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the communications products and services that empower empower verb To encourage or provide a person with the means or information to become involved in solving his/her own problems consumers to communicate simply and easily over the Internet. CIDCO introduced its first Internet appliance in 1998 for a world moving into the developing Internet appliance era and is now extending this vision to devices that will make e-mail and other Internet-based information readily available to consumers. Having originated the e-mail Internet appliance category with the launch of the MailStation, CIDCO takes a unique approach with its offerings by providing integrated products and services in a seamless manner, allowing for a better user experience. As a result, the MailStation is rapidly gaining stature stature /sta·ture/ (stach´ur) the height or tallness of a person standing.stat´ural stat·ure n. The height of a person. stature the height of an animal in the standing position. as the device of choice amongst those seeking simple, convenient, and affordable electronic communication. The company is headquartered in Morgan Hill, Calif., at the south end of Silicon Valley. For additional information, visit www.CIDCO.com or call (408) 779-1162. MailStation, MIVO and CIDCO are trademarks of CIDCO Incorporated. All other trademarks are the property of their respective owners. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. or predictions, including statements regarding the amount of freed-up working capital, expected royalty payments, and the company's ability to speed up the development of its Internet appliance business. These statements represent our judgment as of this date and are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed in such forward-looking statements. Potential risks and uncertainties include, without limitation, performance by the purchaser of the Telco business, those associated with economic conditions both domestic and international in the Internet and Internet appliance industry, failure to successfully implement a national retail distribution channel and a brand marketing campaign, failure to obtain the estimated subscriber growth discussed above, competitive factors, lower than expected consumer product acceptance, technological and business difficulties, government regulations and delays or other problems with product development. These and other factors are discussed in more depth in CIDCO Inc. filings with the SEC, copies of which may be accessed through the SEC's World Wide Web site at http://www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. .
CIDCO Inc. Q4 FY00 Results
Statement of Operations
(in thousands, except per share data)
Three months ended Year ended
December 31, December 31,
-------------------- --------------------
2000 1999 2000 1999
-------- -------- -------- --------
Sales:
Service $1,560 $74 $2,696 $97
Hardware 2,130 554 3,462 821
OEM -- 3,087 6,302 8,225
-------- -------- -------- --------
Total sales 3,690 3,715 12,460 9,143
Cost of sales 4,686 2,942 12,976 8,609
-------- -------- -------- --------
Gross margin (996) 773 (516) 534
Operating expenses:
Research and
development 1,342 708 3,635 2,653
Selling and
marketing 15,826 2,014 31,919 5,733
General and
administrative 789 908 4,011 4,426
-------- -------- -------- --------
Total operating
expenses 17,957 3,630 39,565 12,812
-------- -------- -------- --------
Loss from operations (18,953) (2,857) (40,081) (12,278)
Other income, net 566 338 16,720 1,205
-------- -------- -------- --------
Loss before income
taxes (18,387) (2,519) (23,361) (11,073)
Provision for income
taxes -- -- -- --
-------- -------- -------- --------
Net loss from
continuing
operations (18,387) (2,519) (23,361) (11,073)
Income (loss) from
discontinued
operations (7,769) (1,615) (17,384) 11,043
-------- -------- -------- --------
Net loss $(26,156) $(4,134) $(40,745) $(30)
======== ======== ======== ========
Net earnings (loss)
per share -- basic
and diluted:
Continuing
operations $(1.32) $(0.18) $(1.68) $(0.81)
Discontinued
operations (0.56) (0.12) (1.25) 0.81
-------- -------- -------- --------
Net loss $(1.88) $(0.30) $(2.94) $(0.00)
======== ======== ======== ========
Shares used in
per-share
calculation 13,946 13,719 13,882 13,608
Condensed Balance sheet
(in thousands) December 31,
----------------------------
2000 1999
------------ ------------
Assets:
Cash and marketable securities $ 24,800 $ 39,870
Net accounts receivable 17,391 22,407
Net inventories 13,694 25,688
Other current assets 14,295 1,002
Long-term assets 3,398 7,364
------------ ------------
Total assets $ 73,578 $ 96,331
============ ============
Liabilities and stockholders' equity:
Current liabilities $ 34,389 $ 18,150
Stockholders' equity 39,189 78,181
------------ ------------
Total liabilities and stockholders'
equity $ 73,578 $ 96,331
============ ============
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