Phone.com Reports Fourth Quarter and Fiscal Year End

Results / Quarterly Revenues Grow to $6.7 Million; Pro Forma Net Loss per Share of $0.22 Redwood City, Calif. (PROTEXT) - Phone.com (Nasdaq: PHCM), a leading provider of software that enables the delivery of Internet-based services to mass-market wireless telephones, today announced fourth quarter and fiscal year end results for the period ending June 30, 1999. Fourth quarter revenues increased 425 percent to $6.7 million, from $1.3 million in the same period a year earlier and up 90 percent from $3.5 million in the third quarter of fiscal 1999. Deferred revenues increased 96 percent during the fourth quarter to $36.8 million, up from $18.7 million at the previous quarter end. The company incurred a net loss in the fiscal fourth quarter as it continued to aggressively execute its strategy through significant investments in research and development and sales and marketing activities. The net loss for the fourth fiscal quarter of 1999 was $6.8 million, or $0.62 per diluted share loss based on 11.0 million weighted average shares outstanding, compared to a net loss of $ $2.9 million or $0.53 per diluted share loss for the same period a year earlier, and a net loss of $5.7 million, or $0.99 per diluted share loss for the third quarter of fiscal 1999. Pro forma net loss per share using the 31.2 million shares outstanding as of June 30, 1999 was $0.22, compared to a pro forma net loss per share of $0.12 for the same period a year earlier and $0.22 per share for the third quarter of fiscal 1999. For the fiscal year-end 1999, Phone.com reported revenues of $13.4 million, an increase of 510 percent from the $2.2 million of revenues reported for the prior year. The net loss for the year was $20.8 million, or $2.98 per diluted share loss, compared with a net loss of $10.6 million, or $2.03 per diluted share loss for fiscal year 1998. Pro forma net loss per share for fiscal 1999 was $0.67, compared to a pro forma net loss per share of $0.44 for fiscal 1998. "The fourth quarter marked a defining period for Phone.com," said Alain Rossmann, chairman and chief executive officer. "Above and beyond the successful completion of our initial public offering, we also made significant strides in executing our strategy to make the convergence of the Internet and mobile telephony a reality of everyday life. In particular, we announced commercial licenses of our UP.Link(TM) Server Suite during the quarter to major wireless network operators around the world, including Sprint PCS and US West in the United States, Bell Mobility in Canada, Cegetel/SFR in France, Omnitel in Italy, DDI Corporation and IDO Corporation in Japan, and LG TeleCom in Korea. We now have commercial relationships with 31 network operators worldwide that collectively provide voice telephony services to approximately 33 percent of the world's voice subscribers. We also saw continued acceptance of Phone.com's UP.Browser(TM) microbrowser. A total of 25 wireless device manufacturers have licensed UP.Browser as of the end of the fourth quarter, an increase of one from the date we completed our initial public offering." In June 1999, Phone.com completed an initial public offering of 4.6 million shares, including 600,000 additional over- allotment shares. Net proceeds to Phone.com from the offering totaled approximately $67 million. As of June 30, 1999, the company had cash and short-term investments of $113.1 million, total assets of $138.9 million and stockholders' equity of $92.3 million. About Phone.com Phone.com, Inc. is a leading provider of software that enables the delivery of Internet-based services to mass-market wireless telephones. Using its software, wireless subscribers have access to Internet- and corporate intranet-based services, including email, news, stocks, weather, travel and sports. In addition, subscribers have access via their wireless telephones to network operators' intranet-based telephony services, which may include over-the-air activation, call management, billing history information, pricing plan subscription and voice message management. Phone.com, Inc. is headquartered in Silicon Valley, California and has regional offices in London and Tokyo. Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements involving risks and uncertainties that could cause actual results to differ materially from those in such forward- looking statements. Potential risks and uncertainties include, but are not limited to, Phone.com's limited operating history, potential fluctuations in the company's operating results, uncertainties related to the company's long sales cycle and reliance on a small number of customers, the company's dependence on the acceptance of its products by network operators and wireless subscribers, the company's ability to adequately address the rapidly-evolving market for delivery of Internet-based services through wireless telephones, the need to achieve widespread integration of Phone.com's browser in wireless telephones, competition from companies with substantially greater financial, technical, marketing and distribution resources and the ability of Phone.com to manage a complex set of engineering, marketing and distribution relationships. Further information regarding these and other risks is included in Phone.com's prospectus dated June 10, 1999 and in its other filings with the Securities and Exchange Commission. PHONE.COM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three months ended Year ended June 30, June 30, 1998 1999 1998 1999 Revenues: License $233 $3,699 $522 $5,229 Maintenance and support services 1,048 2,135 1,683 5,921 Consulting services -- 891 -- 2,292 Total revenues 1,281 6,725 2,205 13,442 Cost of revenues: License 36 199 95 371 Maintenance and support services 348 1,146 1,063 3,022 Consulting services -- 500 -- 1,146 Total cost of revenues 384 1,845 1,158 4,539 Gross profit 897 4,880 1,047 8,903 Operating expenses: Research and development 1,861 4,676 5,732 13,082 Sales and marketing 1,704 4,336 5,011 10,840 General and administrative 616 1,701 1,801 4,432 Stock-based compensation 63 227 108 1,011 Total operating expenses 4,244 10,940 12,652 29,365 Operating loss (3,347) (6,060) (11,605) (20,462) Interest income, net 454 664 982 1,803 Loss before income taxes (2,893) (5,396) (10,623) (18,659) Income taxes -- 1,394 -- 2,104 Net loss $(2,893) $(6,790) $(10,623) $(20,763) Basic and diluted net loss per share $(0.53) $(0.62) $(2.03) $(2.98) Shares used in computing basic and diluted net loss per share 5,459 11,023 5,221 6,966 PHONE.COM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) Assets June 30, 1998 1999 Current assets Cash, cash equivalents and short-term investments $33,464 $113,086 Accounts receivable 2,724 20,474 Prepaid expenses and other current assets 352 865 Total current assets 36,540 134,425 Property and equipment, net 1,336 3,014 Deposits and other assets 1,268 1,494 $39,144 $138,933 Liabilities and Stockholders' Equity Current liabilities: Current portion of equipment loan and capital lease obligations $424 $424 Accounts payable 532 1,749 Accrued liabilities 1,877 7,173 Deferred revenue 7,003 36,797 Total current liabilities 9,836 46,143 Equipment loan and capital lease obligations, less current portion 915 498 Total liabilities 10,751 46,641 Stockholders' equity 28,393 92,292 $39,144 $138,933 ots Original Text Service: Phone.com Internet: http://www.newsaktuell.de Contact: Alan Black, Chief Financial Officer of Phone.com, (in the USA) 650-562-0200, or investor@corp.phone.com; or Bonnie McBride, Managing Director of The Carson Group, (in the USA) 415-989-0399, for Phone.com Web site: http://www.phone.com Subscribers please note that material bearing the slug "PROTEXT" is not part of CTK's news service and is not to be published under the "CTK" slug. 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