MORGAN HILL, Calif., October 17, 2001 (PRIMEZONE) -- Cidco, Inc. (Nasdaq:CDCO) today announced financial results for the third quarter ended September 30, 2001. Sales from continuing operations, representing retail sales of e-mail appliances and subscription revenues from e-mail service, were $5.6 million, flat with the $5.6 million in the second quarter of 2001 and compared to $1.5 million during the third quarter last year. The Company reported a loss for the third quarter from continuing operations of $7.5 million, or $0.53 per basic and diluted share, compared to a loss of $6.4 million, or $0.45 per share, for the second quarter this year and a loss of $10.6 million, or $0.76 per share, for the same period in 2000. Third quarter results this year include a non-cash charge of $3.1 million for write-down of excess inventory, resulting from lower-than-expected sales during the quarter. Financial results from continuing operations represent the activities of the Company's Internet appliance business.
"The quarter was disappointing in several respects," said Paul Locklin, president and chief executive officer. "Gross subscriber activations were slightly above 13,000 for the quarter, less than 60% of plan, which resulted in a corresponding revenue shortfall. This was a result of two primary factors: a slowdown in the general economy and its impact on consumer confidence and spending and a steep decline in our participation in retailer-sponsored circular promotions. The latter is a critical element in the promotion activities that drive our sales. However, we spent less than one-third of what we had budgeted for the third quarter to participate in these promotions, due to retailer decisions to feature higher volume products in their circular promotions in this period of economic uncertainty and reduced consumer spending. The other alternative is consumer advertising programs in mass media, which require substantial capital commitments that we are unable to make."
Locklin said the quarter's results were particularly frustrating "in view of our progress on the product development front and in reducing operating expenses. We have met our commitments in the production and introduction of MIVO 250, which is now in the retail channel, and we are on schedule with MIVO 350, which is ready for production." Locklin said operating expenses for the quarter were 20% under budget.
For the nine months ended September 30, 2001, sales from continuing operations were $16.1 million, compared to $8.8 million for the same period in 2000, which included $6.3 million in OEM sales. For the nine months, the Company reported a loss from continuing operations of $25.3 million, or $1.81 per basic and diluted share, compared to a loss of $5.0 million, or $0.36 per basic and diluted share, for the year-ago period, which included a gain of $15.4 million from the sale of InfoGear.
The Company earlier today announced that it had entered into a definitive acquisition agreement with EarthLink, Inc., which provides for a cash tender offer by EarthLink to acquire all of the outstanding common stock of Cidco.
Conference Call Information
The Company's conference call will be Thursday, October 18, at 8:30 a.m. EDT (5:30 a.m. PDT). Following a brief presentation, participants will have the opportunity to ask questions. To participate in the call, dial 1-800-852-8968 ten minutes before the conference call begins and ask for the CIDCO conference. A replay will be available two hours after the conclusion of the call until, October 24, 2001. To access the replay, dial 1-800-642-1687 or for International/Local participants dial, 706-645-9291 using pass code 2053926.
This call is being webcast by CCBN and can be accessed at CIDCO's web site at www.cidco.com. To listen to the live call, click the webcast link at least 15 minutes before the start of the call to register, download, and install any necessary audio software. Individuals accessing the audio webcast will be "listen only" and will not have the capability to take part in the Q&A session.
An Internet replay will be available at the conclusion of the call. Interested individuals can access the webcast replay at www.cidco.com by pressing the webcast icon. The webcast replay will be available until November 18, 2001.
About Cidco
Cidco Inc. is a worldwide leader in personal Internet communications products and services that enable consumers to communicate simply and easily over the Internet. Cidco introduced its first Internet appliance in 1998, and now provides a family of portable, affordable, easy-to-use devices that make e-mail and other Internet-based information readily available to consumers. 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.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This news release contains forward-looking statements or predictions. In many cases, forward-looking statements can be identified by terminology such as "may," "intends," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of these terms and other comparable terminology. These statements are only predictions. 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, risks associated with economic conditions both domestic and international in the Internet and Internet appliance industry, failure to maintain a national retail distribution channel, failure to obtain subscriber growth, failure to create demand by sufficient advertising spending, failure to introduce new products and services, competitive factors, lower than expected consumer product acceptance, technological and business difficulties, government regulations, delays or other problems with product development, and risks related to financial resource constraint and/or the ability to obtain required financing. 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. CIDCO is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
MailStation, MIVO and CIDCO are trademarks of CIDCO Incorporated. All other trademarks are the property of their respective owners.
CIDCO, Inc. Q3 2001 Results
Statement of Operations
(in thousands, except per share data)
Three months ended Nine months ended
September 30, September 30,
------------------- --------------------
2001 2000 2001 2000
------- -------- -------- --------
Sales:
Service $ 2,891 $ 707 $ 9,039 $ 1,135
Hardware 2,755 800 7,054 1,332
OEM -- -- -- 6,303
------- -------- -------- --------
Total sales 5,646 1,507 16,093 8,770
Cost of sales 8,019 2,276 18,560 8,290
------- -------- -------- --------
Gross margin (2,373) (769) (2,467) 480
Operating expenses:
Research and
development 1,444 1,044 4,307 2,293
Selling and marketing 2,985 7,896 15,440 16,093
General and
administrative 973 1,084 4,672 3,222
------- -------- -------- --------
Total operating
expenses 5,402 10,024 24,419 21,608
------- -------- -------- --------
Loss from operations (7,775) (10,793) (26,886) (21,128)
Other income, net 304 238 1,602 16,154
------- -------- -------- --------
Income (Loss) before
income taxes (7,471) (10,555) (25,284) (4,974)
Provision for income
taxes -- -- -- --
------- -------- -------- --------
Income (Loss) from
continuing operations (7,471) (10,555) (25,284) (4,974)
Loss from discontinued
operations -- (1,013) -- (9,139)
------- -------- -------- --------
Net income (loss) $(7,471) $(11,568) $(25,284) $(14,113)
======= ======== ======== ========
Net income (loss)
per share - basic:
Continuing
operations $ (0.53) $ (0.76) $ (1.81) $ (0.36)
Discontinued
operations -- (0.07) -- (0.66)
------- -------- -------- --------
Net income (loss) $ (0.53) $ (0.83) $ (1.81) $ (1.02)
======= ======== ======== ========
Net income (loss)
per share - diluted:
Continuing
operations $ (0.53) $ (0.76) $ (1.81) $ (0.36)
Discontinued
operations -- (0.07) -- (0.66)
------- -------- -------- --------
Net income (loss) $ (0.53) $ (0.83) $ (1.81) $ (1.02)
======= ======== ======== ========
Shares used in
per-share calculation
- basic 14,014 13,899 13,989 13,861
Shares used in
per-share calculation
- diluted 14,014 13,899 13,989 13,861
Condensed Balance sheet
(in thousands)
Sept. 30, Dec. 31,
2001 2000
------- -------
Assets:
Cash and marketable securities $ 5,278 $24,800
Net accounts receivable 1,336 15,883
Net inventories 9,178 12,394
Other current assets 7,966 14,567
Long-term assets 2,715 3,398
------- -------
Total assets $26,473 $71,042
======= =======
Liabilities and stockholders' equity:
Current liabilities $20,363 $39,562
Stockholders' equity 6,110 31,480
------- -------
Total liabilities and stockholders' equity $26,473 $71,042
======= =======