Source: GeoworksGEOWORKS ANNOUNCES REVENUE SHORTFALL FOR FOURTH QUARTER, FISCAL 1997
(ALAMEDA, CA), March 20, 1997 Geoworks (NASDAQ National Market Symbol: GWRX), a leading developer of operating system software for the emerging mobile communicating device market, said today that several factors will contribute to lower than anticipated revenue growth for the fourth quarter of fiscal 1997.
Although final quarterly revenues have not yet been determined, the company said that revenues for the fourth quarter of fiscal 1997 ending March 31, 1997, will be between approximately $1.8 and 2.2 million. This shortfall results from delays in recognition of NRE (non recurring engineering fees) and the company's adoption of a more conservative approach to estimating product revenues.
The company is taking the more conservative approach because estimating early quarterly shipments of new products is inherently difficult. The company intends to focus its estimation approach on product sell-through to the ultimate consumer. "For a market at this stage, this approach is more prudent and leads to greater predictability for the company," said David Thatcher, CFO at Geoworks.
"With our partners we are breaking new ground in technology, products and services and it is often difficult to accurately predict timing of new product ramps," said Gordon Mayer, president and CEO of Geoworks. "Interest in smart cellular phones continues to increase and product feedback has been very positive. This is a significant market opportunity for Geoworks."
Mayer said that the company is initiating a number of strategic programs to pursue its goal of achieving break-even by the fourth quarter of fiscal 1998. "Specifically, we are going to become more conservative in our estimates for early product rates and we intend to hold operating costs to a lower rate than initially planned for this coming year."
"As we announced earlier this week, we have hired a new chief financial officer, David Thatcher, whose objectives will be to complete a financial review and to revisit the strategic plan with an emphasis on enabling Geoworks to reach its goal of break-even within the next 12 months," Mayer said.
There have been several significant events for the company this quarter. Geoworks recently announced the introduction of Toshiba's new Genio PCV100 Pocket Communicator. This is the first product with the Geoworks operating system to be introduced for the Japanese domestic market, which is the world's fastest growing digital cellular market in the world. The product will cost approximately $500. In addition, the company announced the strategic acquisition of the Eden Group in the UK. This acquisition will enable Geoworks to provide a more complete operating system solution to its existing hardware customers and will enable the company to take on additional hardware customers.
Mayer also noted that the Nokia 9000, which uses the company's GEOS operating system platform, has won numerous awards in Europe and continues to receive highly positive reviews. In addition to the 9000's announced availability in the U.S. during the second half of 1997, Nokia introduced a PCN version at CeBit in Germany last week.
Based in Alameda, California, Geoworks is a leading software provider for the cellular industry and manufacturers of mobile communicating devices, including smart phones. The company has licensed its GEOS operating system to leading manufacturers such as Nokia, Ericsson, NEC, Toshiba Corporation, Hewlett-Packard Company and Brother International Corp. In addition, the company intends to work with content and service providers, and cellular operators.
In keeping with U.S. law, Geoworks notes that the statements in this announcement concerning the company's plan to achieve future revenues and profitability, and statements concerning the adoption curve for new devices, are forward looking statements. Actual results may vary. To date the company has incurred significant losses, has had substantial negative cash flows and has realized limited revenues. The company expects to continue to incur substantial annual operating losses at least through this fiscal year ending March 31, 1998. Future results depend upon the emergence of the smart communicator market, establishment of licensing relationships with leading market participants, introduction of successful products and services, and achievement and maintenance of a competitive advantage. Additional information may be found in the company's 10-K, 10-Q and other filings with the Securities and Exchange Commission.
For additional information on Geoworks and the GEOS operating system, contact Geoworks on the World Wide Web at http://www.geoworks.com.