Press Room
Palm Reports Q2 FY06 Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--Dec. 20, 2005-- Quarterly Revenue $444.6 M; Up 18% Year-over-year; Company Achieves 36% U.S. Converged Device Market Share
Palm, Inc. (Nasdaq:PALM) today reported revenue of $444.6 million in its second quarter of fiscal year 2006, ended Dec. 2, up 18 percent from the year-ago period.
"Achieving the eighth consecutive quarter of year-over-year double-digit revenue growth and growing our converged device market share to 36 percent in the United States(1) are significant accomplishments," said Ed Colligan, president and chief executive officer of Palm. "We'll roll out the Palm Treo 700w smartphone based on Microsoft's Windows Mobile, and we'll announce three additional new smartphones during calendar year 2006."
Net income was $260.9 million, or $5.02 per diluted share. Net income reflected the effect of a partial reversal of a deferred tax asset valuation allowance of $226.3 million. This compares to net income for the second quarter of fiscal year 2005 of $24.7 million, or $0.48 per diluted share.
Net income in the second fiscal quarter, on a non-GAAP(2) basis, totaled $24.4 million, or $0.47 per diluted share, excluding the effects of restructuring charges, amortization of intangible assets and deferred stock-based compensation, the related income tax provision, and the partial reversal of our valuation allowance against our deferred tax asset. This compares to non-GAAP net income in the second quarter of fiscal year 2005 of $27.2 million, or $0.53 per diluted share, which excluded the effects of amortization of intangible assets and deferred stock-based compensation. Non-GAAP net income in the second quarter of fiscal year 2005 was calculated utilizing a tax rate of approximately 19 percent, compared to the 40 percent tax rate in the second quarter of fiscal year 2006.
"During the second quarter, we added seven new carriers to expand the geographic reach of our products, and for the first time we began selling Treo smartphones in China," Colligan said. "We shipped more than 1 million Treo smartphones during the first half of fiscal year 2006, which is just shy of what we shipped in all of fiscal year 2005. With our strong market position, and excellent execution, I have confidence in our long-term growth opportunity."
Fiscal Year 2006 Third Quarter Outlook
Based on current trends, Palm is providing its outlook for financial results in the third quarter of fiscal year 2006, ending March 3, 2006. At this time, the company expects:
-- Revenue in the range of $370 million to $375 million; -- Gross margin between 33.0 percent and 33.5 percent; -- Operating expenses between $100 million and $102 million on a GAAP basis and between $99 million and $101 million on a non-GAAP basis; and -- Earnings per diluted share between $0.46 and $0.49 on a GAAP basis and between $0.31 and $0.33 on a non-GAAP basis, which excludes amortization of intangible assets and deferred stock-based compensation and reflects the difference between utilizing a 40 percent effective tax rate on a non-GAAP basis, compared to approximately 7 percent to 8 percent effective tax rate on a GAAP basis. Strategic Highlights
During the second quarter of fiscal 2006, the company accomplished the following:
-- Announced the development of a next-generation Palm(R) Treo(TM) smartphone, the Treo 700w, which will be introduced to the marketplace in early calendar year 2006. This product is based on Windows Mobile 5.0 and runs on the Verizon Wireless EV-DO network; -- Announced the availability of BlackBerry Connect capability in early 2006 for current and future Treo 650 smartphone users with service through certified carriers; -- Opened its European Engineering Centre in Dublin, where engineers will develop custom software for Palm smartphones in close collaboration with mobile operators in the Europe/Middle East/Africa (EMEA) region; -- Expanded business with seven new carriers during the quarter. They are Hutch in India; TIM in Brazil; TELUS Mobility in Canada; Entel in Chile; Alltel in the United States; and Telefonica/movistar and Iusacell, both in Mexico; and -- Introduced two new handheld computers, the Palm TX, featuring integrated Wi-Fi and Bluetooth(R) wireless technologies and a large, high-resolution color screen, and the Palm Z22, an easy-to-use and compact color organizer priced to compete with paper organizer systems.
INVESTOR'S NOTE: The company will hold a conference call for the public today at 2 p.m. Pacific/ 5 p.m. Eastern to discuss matters covered in this news release. The dial-in number is 866.203.3436 with a passcode of 53266970 in the United States and 617.213.8849 for international callers, with the same passcode of 53266970. A telephonic replay of the conference call will be available through Dec. 27, 2005, beginning today at approximately 6 p.m. Pacific. The domestic dial-in number for the replay is 888.286.8010 and for international callers, it is 617.801.6888, with a passcode of 10980938 for both. The live conference call and slide presentation will be available over the Internet by logging onto the investor relations section of Palm's website at http://ir.Palm.com. An audio replay and text transcript of the conference call also can be accessed at the same URL beginning today at approximately 6 p.m. Pacific.
NON-GAAP FINANCIAL MEASURES: To supplement the company's consolidated financial statements presented in accordance with GAAP, Palm uses non-GAAP measures of certain components of financial performance, including operating income (loss), net income (loss) and per share data, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses. These non-GAAP measures are provided to enhance investors' overall understanding of the company's current financial performance and the company's prospects for the future. Specifically, the company believes the non-GAAP results provide useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of its core operating results. These non-GAAP results are among the primary indicators management uses as a basis for planning and forecasting of future periods and facilitating management's internal comparisons to the company's historical operating results and comparisons to competitors' operating results. In addition, because Palm has historically reported certain non-GAAP results to investors, the company believes the inclusion of non-GAAP measures provides consistency in the company's financial reporting. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. These non-GAAP financial measures may also be different from non-GAAP financial measures used by other companies. Consistent with the company's practice, the non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding Palm's expected third quarter of fiscal year 2006 revenue, gross margin, operating expenses and earnings per share, its tax provision and tax rate, its growth opportunity and the introduction of new product and service offerings. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially, including, without limitation, the following: fluctuations in the demand for Palm's existing and future products and services and growth in Palm's industries and markets; Palm's ability to forecast demand for its products; possible defects in products and technologies developed; Palm's ability to introduce new products and services successfully and in a cost-effective and timely manner; Palm's ability to timely and cost-effectively obtain components and elements of its technology from suppliers; Palm's ability to obtain other key technology from third parties free from errors and defects, integrate it with Palm's products and meet certification requirements, all on a timely basis; Palm's ability to compete with existing and new competitors; Palm's dependence on wireless carriers and ability to meet wireless-carrier certification requirements; Palm's ability to utilize its net operating losses. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in Palm's most recent filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the fiscal quarter ended Sept. 2, 2005 and its Annual Report on Form 10-K for the fiscal year ended June 3, 2005. Palm undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.
About Palm, Inc.
Palm, Inc., a leader in mobile computing, strives to put the power of computing in people's hands so they can access and share their most important information. The company's products for consumers, mobile professionals and businesses include Palm(R) handheld computers, Palm Treo(TM) smartphones, Palm LifeDrive(TM) mobile managers, as well as software, services and accessories.
Palm products are sold through select Internet, retail, reseller and wireless operator channels throughout the world, and at Palm Retail Stores and Palm online stores (http://www.palm.com/store).
More information about Palm, Inc. is available at http://www.palm.com.
(1) Canalys Research Shipment Data, Third Quarter Calendar 2005 (2) GAAP stands for Generally Accepted Accounting Principles.
Palm, Treo and LifeDrive are among the trademarks or registered trademarks owned by or licensed to Palm, Inc. All other brand and product names are or may be trademarks of, and are used to identify products or services of, their respective owners.
Palm, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
Nov. 30, Nov. 30, Nov. 30, Nov. 30,
2005 2004 2005 2004
--------- --------- -------- ---------
Revenues $ 444,633 $376,180 $ 786,833 $649,325
Costs and operating expenses:
Cost of revenues (a) 308,688 266,478 546,532 448,281
Sales and marketing 54,175 45,048 99,476 82,603
Research and development 31,144 20,407 60,110 38,975
General and administrative 11,800 11,312 20,705 21,111
Amortization of intangible
assets and deferred stock-
based compensation (b) 2,072 2,527 4,946 4,866
Restructuring charges 1,954 - 1,954 -
--------- -------- --------- --------
Total costs and operating
expenses 409,833 345,772 733,723 595,836
--------- -------- --------- --------
Operating income 34,800 30,408 53,110 53,489
Interest and other income
(expense), net 1,871 611 3,574 577
--------- -------- --------- --------
Income before income taxes 36,671 31,019 56,684 54,066
Income tax provision (benefit) (224,218) 6,328 (222,382) 9,781
--------- -------- --------- --------
Net income $ 260,889 $ 24,691 $ 279,066 $ 44,285
========= ======== ========= ========
Net income per share:
Basic $ 5.21 $ 0.51 $ 5.60 $ 0.92
========= ======== ========= ========
Diluted (c) $ 5.02 $ 0.48 $ 5.36 $ 0.86
========= ======== ========= ========
Shares used in computing per share amounts:
Basic 50,076 48,381 49,852 48,005
Diluted 52,048 51,442 52,198 51,223
(a) Cost of revenues does not include that portion of amortization of
intangible assets and deferred stock-based compensation related to
cost of revenues.
(b) Amortization of intangible assets and deferred stock-based
compensation:
Cost of revenues $ 155 $ 351 $ 385 $ 663
Sales and marketing 1,535 1,714 3,580 3,368
Research and development 64 64 128 128
General and administrative 318 398 853 707
--------- -------- --------- --------
$ 2,072 $ 2,527 $ 4,946 $ 4,866
========= ======== ========= ========
(c) Diluted net income per share accounts for the effect of the
long-term convertible debt using the "if converted" method:
Numerator for basic net income
per share $ 260,889 $ 24,691 $ 279,066 $ 44,285
Effect of dilutive securities:
Interest expense on long-
term convertible
debt, net of taxes 263 - 525 -
--------- -------- --------- --------
Numerator for diluted net
income per share $ 261,152 $ 24,691 $ 279,591 $ 44,285
========= ======== ========= ========
Palm's fiscal periods are generally 13 weeks in length and end on a
Friday. For presentation purposes, the periods are presented as
ending on Aug. 31, Nov. 30, Feb. 28 and May 31.
Palm, Inc.
Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements
of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended
Nov. 30, 2005
GAAP Adjustments Non-GAAP
----------- --------- --------
Revenues $ 444,633 $ - $444,633
Costs and operating expenses:
Cost of revenues (a) 308,688 - 308,688
Sales and marketing 54,175 - 54,175
Research and development 31,144 - 31,144
General and administrative 11,800 - 11,800
Amortization of intangible assets and
deferred stock-based compensation (b) 2,072 (2,072) -
Restructuring charges 1,954 (1,954) -
--------- --------- --------
Total costs and operating expenses 409,833 (4,026) 405,807
--------- --------- --------
Operating income 34,800 4,026 38,826
Interest and other income (expense), net 1,871 - 1,871
---------- --------- --------
Income before income taxes 36,671 4,026 40,697
Income tax provision (benefit) (224,218) 240,497 16,279
--------- --------- --------
Net income $ 260,889 $(236,471)$ 24,418
========= ========= ========
Net income per share:
Basic $ 5.21 $ (4.72)$ 0.49
========= ========= ========
Diluted (c) $ 5.02 $ (4.55)$ 0.47
========= ========= ========
Shares used in computing per share
amounts:
Basic 50,076 - 50,076
Diluted 52,048 (542) 51,506
(a) Cost of revenues does not include that portion of amortization of
intangible assets and deferred stock-based compensation related to
cost of revenues.
(b)Amortization of intangible assets and deferred stock-based
compensation:
Cost of revenues $ 155 $ (155)$ -
Sales and marketing 1,535 (1,535) -
Research and development 64 (64) -
General and administrative 318 (318) -
--------- --------- --------
$ 2,072 $ (2,072)$ -
========= ========= ========
(c) Diluted net income per share accounts for the effect of the long-
term convertible debt using the "if converted" method:
Numerator for basic net income per share 260,889 (236,471) 24,418
Effect of dilutive securities:
Interest expense on long-term
convertible debt, net of taxes 263 (263) -
--------- --------- --------
Numerator for diluted net income per
share $ 261,152 $(236,734)$ 24,418
========= ========= ========
The above non-GAAP amounts have been adjusted to eliminate
amortization of intangible assets and deferred stock-based
compensation, restructuring charges, and the change in the valuation
allowance against our deferred tax assets and assumes a 40% effective
tax rate which is the expected normalized rate for future years. Net
income per diluted share amounts exclude the dilutive effect of the
long-term convertible debt using the "if converted" method because on
a non-GAAP basis it is anti-dilutive.
Palm's fiscal periods are generally 13 weeks in length and end on a
Friday. For presentation purposes, the periods are presented as ending
on Aug. 31, Nov. 30, Feb. 28 and May 31.
Palm, Inc.
Reconciliation of GAAP to Non-GAAP Condensed Consolidated Statements
of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended
Nov. 30, 2004
GAAP Adjustments Non-GAAP
------------------------------
Revenues $376,180 $ - $376,180
Costs and operating expenses:
Cost of revenues (a) 266,478 - 266,478
Sales and marketing 45,048 - 45,048
Research and development 20,407 - 20,407
General and administrative 11,312 - 11,312
Amortization of intangible assets and
deferred stock-based compensation (b) 2,527 (2,527) -
Restructuring charges - - -
-------- -------- --------
Total costs and operating expenses 345,772 (2,527) 343,245
-------- -------- --------
Operating income 30,408 2,527 32,935
Interest and other income (expense), net 611 - 611
--------- ---------- --------
Income before income taxes 31,019 2,527 33,546
Income tax provision (benefit) 6,328 - 6,328
---------- --------- --------
Net income $ 24,691 $ 2,527 $27,218
======== ======== ========
Net income per share:
Basic $ 0.51 $ 0.05 $0.56
======== ========
Diluted (c) $ 0.48 $ 0.05 $0.53
======== ======== ========
Shares used in computing per share
amounts:
Basic 48,381 - 48,381
Diluted 51,442 - 51,442
(a) Cost of revenues does not include that portion of amortization of
intangible assets and deferred stock-based compensation related to
cost of revenues.
(b)Amortization of intangible assets and deferred stock-based
compensation:
Cost of revenues $ 351 $ (351)$ -
Sales and marketing 1,714 (1,714) -
Research and development 64 (64) -
General and administrative 398 (398) -
-------- -------- --------
$ 2,527 $ (2,527)$ -
======== ======== ========
(c) Diluted net income per share accounts for the effect of the long-
term convertible debt using the "if converted" method:
Numerator for basic net income per share 24,691 2,527 27,218
Effect of dilutive securities:
Interest expense on long-term
convertible debt, net of taxes - - -
---------- --------- --------
Numerator for diluted net income per
share $ 24,691 $2,527 $ 27,218
======== ======== ========
The above non-GAAP amounts have been adjusted to eliminate
amortization of intangible assets and deferred stock-based
compensation, restructuring charges, and the change in the valuation
allowance against our deferred tax assets and assumes a 40% effective
tax rate which is the expected normalized rate for future years. Net
income per diluted share amounts exclude the dilutive effect of the
long-term convertible debt using the "if converted" method because on
a non-GAAP basis it is anti-dilutive.
Palm's fiscal periods are generally 13 weeks in length and end on a
Friday. For presentation purposes, the periods are presented as ending
on Aug. 31, Nov. 30, Feb. 28 and May 31.
Palm, Inc.
Reconciliation of GAAP to Non-GAAP Condensed Consolidated
Statements of Operations
(In thousands, except per share data)
(Unaudited)
Six Months Ended Nov. 30, 2005
GAAP Adjustments Non-GAAP
Revenues $ 786,833 $ - $ 786,833
Costs and operating expenses:
Cost of revenues (a) 546,532 - 546,532
Sales and marketing 99,476 - 99,476
Research and development 60,110 - 60,110
General and administrative 20,705 - 20,705
Amortization of intangible
assets and deferred
stock-based compensation (b) 4,946 (4,946) -
Restructuring charges 1,954 (1,954) -
--------- --------- --------
Total costs and
operating expenses 733,723 (6,900) 726,823
--------- --------- --------
Operating income 53,110 6,900 60,010
Interest and other income
(expense), net 3,574 - 3,574
--------- --------- --------
Income before income taxes 56,684 6,900 63,584
Income tax provision (222,382) 247,816 25,434
--------- --------- --------
Net income $ 279,066 $ (240,916) $ 38,150
========= ========= ========
Net income per share:
Basic $ 5.60 $ (4.83) $ 0.77
========= ========= ========
Diluted $ 5.36 $ (4.62) $ 0.74
========= ========= ========
Shares used in computing
per share amounts:
Basic 49,852 - 49,852
Diluted (c) 52,198 (542) 51,656
(a) Cost of revenues does not include that portion of amortization of
intangible assets and deferred stock-based compensation related to
cost of revenues.
(b) Amortization of intangible assets and deferred stock-based
compensation:
Cost of revenues $ 385 $ (385) $ -
Sales and marketing 3,580 (3,580) -
Research and development 128 (128) -
General and administrative 853 (853) -
--------- --------- ---------
$ 4,946 $ (4,946) $ -
========= ========== =========
c) Diluted net income per share accounts for the effect of the
long-term convertible debt using the "if converted" method:
Numerator for basic net
income per share 279,066 (240,916) 38,150
Effect of dilutive securities:
Interest expense on
long-term convertible
debt, net of taxes 525 (525) -
--------- --------- ---------
Numerator for diluted
net income per share $ 279,591 $ (241,441) $ 38,150
========= ========= ========
Six Months Ended Nov. 30, 2004
GAAP Adjustments Non-GAAP
Revenues $ 649,325 $ - $649,325
Costs and operating expenses:
Cost of revenues (a) 448,281 - 448,281
Sales and marketing 82,603 - 82,603
Research and development 38,975 - 38,975
General and administrative 21,111 - 21,111
Amortization of intangible
assets and deferred
stock-based compensation (b) 4,866 (4,866) -
Restructuring charges - - -
-------- ------- --------
Total costs and
operating expenses 595,836 (4,866) 590,970
-------- ------- --------
Operating income 53,489 4,866 58,355
Interest and other income
(expense), net 577 - 577
-------- ------- --------
Income before income taxes 54,066 4,866 58,932
Income tax provision 9,781 - 9,781
-------- ------- --------
Net income $ 44,285 $ 4,866 $ 49,151
======== ======= ========
Net income per share:
Basic $ 0.92 $ 0.10 $ 1.02
======== ======= ========
Diluted $ 0.86 $ 0.10 $ 0.96
======== ======= ========
Shares used in computing
per share amounts:
Basic 48,005 - 48,005
Diluted (c) 51,223 - 51,223
(a) Cost of revenues does not include that portion of amortization of
intangible assets and deferred stock-based compensation related to
cost of revenues.
(b) Amortization of intangible assets and deferred stock-based
compensation:
Cost of revenues $ 663 $ (663) $ -
Sales and marketing 3,368 3,368) -
Research and development 128 (128) -
General and administrative 707 (707) -
$ 4,866 $(4,866) $ -
========= ======= ========
c) Diluted net income per share accounts for the effect of the
long-term convertible debt using the "if converted" method:
Numerator for basic net
income per share 44,285 4,866 49,151
Effect of dilutive securities:
Interest expense on
long-term convertible
debt, net of taxes - - -
--------- ------- --------
Numerator for diluted
net income per share $ 44,285 $ 4,866 $ 49,151
======== ======= ========
The above non-GAAP amounts have been adjusted to eliminate
amortization of intangible assets and deferred stock-based
compensation, restructuring charges, and the change in the valuation
allowance against our deferred tax assets and assumes a 40% effective
tax rate, which is the expected normalized rate for future years. Net
income per diluted share amounts exclude the dilutive effect of the
long-term convertible debt using the "if converted" method because on
a non-GAAP basis it is anti-dilutive.
Palm's fiscal periods are generally 13 weeks in length and end on
a Friday. For presentation purposes, the periods are presented as
ending on Aug. 31, Nov. 30, Feb. 28 and May 31.
Palm, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except par value amounts)
(Unaudited)
November 30, 2005 May 31, 2005
----------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 181,350 $ 128,164
Short-term investments 255,512 234,535
Accounts receivable, net of
allowance for doubtful
accounts of $6,149 and $6,874,
respectively 203,509 140,162
Inventories 30,995 35,544
Deferred income taxes 80,025 -
Investment for committed tenant
improvements 5,196 6,182
Prepaids and other 13,387 8,225
---------- ----------
Total current assets 769,974 552,812
Restricted investments 775 775
Land held for sale 60,000 -
Land not in use - 60,000
Property and equipment, net 22,842 19,158
Goodwill 166,538 249,161
Intangible assets, net 26,463 30,373
Deferred income taxes 324,738 36,217
Other assets 1,461 1,536
---------- ----------
Total assets $1,372,791 $ 950,032
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 168,878 $ 135,720
Income taxes payable 52,979 8,441
Accrued restructuring 13,822 15,400
Provision for committed tenant
improvements 5,196 6,182
Other accrued liabilities 194,779 156,009
---------- ----------
Total current liabilities 435,654 321,752
Non-current liabilities:
Long-term convertible debt 35,000 35,000
Other non-current liabilities 13,158 12,257
Stockholders' equity:
Preferred stock, $.001 par value,
125,000 shares authorized; none outstanding - -
Common stock, $.001 par value,
2,000,000 shares authorized;
outstanding: 50,276 shares and
49,488 shares, respectively 50 49
Additional paid-in capital 1,435,657 1,406,935
Unamortized deferred stock-based
compensation (1,906) (2,422)
Accumulated deficit (545,185) (824, 251)
Accumulated other comprehensive income 363 712
---------- ----------
Total stockholders' equity 888,979 581,023
---------- ----------
Total liabilities and stockholders' equity $1,372,791 $ 950,032
========== ==========
Palm's fiscal periods are generally 13 weeks in length and end on
a Friday. For presentation purposes, the periods are presented as
ending on Aug. 31, Nov. 30, Feb. 28 and May 31.
Certain prior balances have been reclassified to conform to
current quarter presentation.
Palm, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
Nov. 30, 2005 Nov. 30, 2004
------------- -------------
Cash flows from operating activities:
Net income $ 260,889 $ 24,691
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation 4,038 3,728
Amortization 2,072 2,527
Deferred income taxes (268,976) -
Changes in assets and liabilities:
Accounts receivable (75,018) (85,802)
Inventories 7,273 (9,967)
Prepaids and other (2,899) (2,095)
Accounts payable 29,882 56,217
Income taxes payable 44,080 1,540
Accrued restructuring (374) (1,174)
Other accrued liabilities 25,630 34,010
---------- ---------
Net cash provided by operating
activities 26,597 23,675
---------- ----------
Cash flows from investing activities:
Purchase of property and equipment (4,792) (4,853)
Purchase of short-term investments (54,762) (126,529)
Sale of short-term investments 62,191 91,637
---------- ----------
Net cash provided by (used in) investing
activities 2,637 (39,745)
---------- ----------
Cash flows from financing activities:
Proceeds from issuance of common
stock; employee stock plans 4,519 4,325
---------- ----------
Net cash provided by
financing activities 4,519 4,325
---------- ----------
Change in cash and cash equivalents 33,753 (11,745)
Cash and cash equivalents, beginning of
period (1) 147,597 101,466
---------- ----------
Cash and cash equivalents, end of
period (1) $ 181,350 $ 89,721
=========== ============
Other cash flow information:
Cash paid for income taxes $ 1,519 $ 2,005
=========== ============
Cash paid for interest $ 8 $ 33
=========== ============
(1) In the third quarter of fiscal year 2005, the Company began to
classify its investment in auction-rate securities as short-term
investments. These investments were included in cash and cash
equivalents in previous periods ($146.4 million at November 30,
2004 and $109.5 million at August 31, 2004), and such amounts have
been reclassified in the accompanying financial statements to
conform to the current period classification. This change in
classification had no effect on the amounts of total current
assets, total assets, net income or cash flow from operations of
the Company.
Palm's fiscal periods are generally 13 weeks in length and end on
a Friday. For presentation purposes, the periods are presented as
ending on Aug. 31, Nov. 30, Feb. 28 and May 31.
Certain prior balances have been reclassified to conform to
current quarter presentation.
