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Pumatech, Inc. Announces Fiscal Third Quarter 2002 Results

SAN JOSE, Calif., May 23, 2002 (BUSINESS WIRE) -- Pumatech, Inc. (PUMA), a leading provider of enterprise-level software products and services that deliver highly relevant information - wherever and whenever it's needed, today announced results for its third quarter of fiscal 2002 ended April 30, 2002. For the third fiscal quarter of 2002, Pumatech Inc. reported revenues of $5,722,000 compared to $6,163,000 reported last fiscal quarter and $10,213,000 reported in the third fiscal quarter of 2001. Revenue for the nine-month period ended April 30, 2002 was $18,536,000 compared to $31,232,000 reported in the same nine-month period last year.

Reported diluted loss per share this quarter was $(0.21), compared to $(0.14) reported last fiscal quarter and $(0.21) reported in the third fiscal quarter of 2001. Reported diluted loss per share for the first nine months of fiscal 2002 was $(0.49) compared to $(0.48) for the comparable period a year ago.

Pro-forma diluted loss per share excluding amortization of intangible assets, non-cash compensation charges, non-recurring severance and facilities costs and other than temporary impairment of investments was $(0.10) this quarter as compared to $(0.10) last fiscal quarter and $(0.11) in the third fiscal quarter of fiscal 2001. Pro-forma diluted loss per share for the first nine months of fiscal 2002 was $(0.31) compared to $(0.29) reported in the same nine-month period last year.

For the third quarter of fiscal 2002, revenue contribution from the Company's two core revenue segments was approximately 59% enterprise and 41% technology licensing. Enterprise revenue includes channel and direct sales of the Company's Intellisync(R), Enterprise Intellisync(TM) and Satellite Forms(R) products licensed to corporations for internal use. Technology licensing revenue includes platform licensing and related professional services for corporations choosing to integrate or embed the Company's various technologies.

The Company ended the quarter with cash and short-term investments of approximately $37.3 million representing a cash value of approximately $0.82 per share and reported a current ratio of 3.4X with no long-term debt obligations. Deferred revenues within the quarter increased approximately $387,000 primarily as a result of increased maintenance renewals associated with existing enterprise customers and new technology licensing agreements signed within the quarter for which future obligations need to be performed.

EXPENSE MANAGEMENT

"This quarter's reported expenses excluding one-time charges were better than our original expectations and slightly better than last quarter's reported expenses since the majority of the recent restructuring activities occurred throughout the past three months," said Kelly Hicks, Pumatech's CFO and vice president of operations. "Looking ahead to fiscal Q4, we expect to see the majority of the financial benefits relating to both our California and New Hampshire facilities consolidations and to our streamlined domestic engineering workforce which is now supplemented by a dramatically larger, lower cost, offshore development team. In addition to increased gross margin percentages moving forward, we expect below the line expenses in aggregate to be reduced greater than $2.0 million next fiscal quarter and our quarterly net cash burn to be reduced to an estimated $2.0 million in fiscal Q4 from the $5.0 million we used this quarter. Our reported cash and tangible worth per share values as well as strong current and quick ratios illustrate our financial strength and liquidity. Our continued commitment to expense management in the current market environment continues to preserve our cash and ensure our staying power as we focus our attention to predictable and sustainable top-line growth moving forward."

Q3 SIGNALS A TURNING POINT FOR PUMATECH

"Q3 signaled a turning point for the Company, and I believe we're well-positioned to build momentum as the economy starts to rebound," said Brad Rowe, president and CEO of Pumatech. "Our technology-licensing group signed 11 new deals in Q3, up from three in the previous quarter. These deals included three server-to-server sync deals, which represents an exciting and potentially vast new marketplace for our core sync technology, considering the size and breadth of server-based groupware, CRM, and other enterprise application deployments worldwide. Additionally, direct licensing activity for our Intellisync products was strong as compared to the previous quarter, and we released two important new enterprise products. Enterprise Intellisync, Second Edition is an entirely new server-based product that provides centralized IT management as well as the ability to synchronize both PIM and custom database information among PCs, servers and mobile devices. Satellite Forms 5.0 leverages the same Enterprise Intellisync server technology to provide seamless integration with back-end corporate data from custom handheld applications on both Pocket PC and Palm OS-based devices, the only cross-platform solution of its kind.

"These important new product releases, combined with a redoubled focus on our core business and key channels and a corresponding emphasis on cost-containment, will lead to significantly improved bottom-line results, beginning next quarter, as we continue to work hard to re-establish revenue growth," Rowe added.

THIRD QUARTER HIGHLIGHTS
-- Announced availability of Enterprise Intellisync, Second
Edition software, an all-in-one solution that synchronizes PIM
(personal information management), email and custom database
information among desktop PCs, servers and mobile devices,
both locally and remotely. In addition, it provides IT with a
centralized Administrator's Console for securely configuring,
deploying and upgrading mobile software applications, and for
managing handheld devices.
-- Introduced Satellite Forms MobileApp Designer 5.0 software,
which enables rapid development of sophisticated handheld
applications that integrate seamlessly with desktop database
applications or directly with server-based data via Enterprise
Intellisync Server technology (included with Satellite Forms).
This latest version of Satellite Forms now allows development
of custom applications for Pocket PC 2002 handhelds, in
addition to Palm OS(R)-based devices.
-- Announced a technology licensing and distribution agreement
with Deltek Systems, Inc., through which Deltek is purchasing
a license to create server-to-server connectivity between its
Deltek Vision software and Pumatech's Enterprise Intellisync
Server product using Pumatech's XML toolkit. The solution will
enable users of Deltek's newest Web-based professional
services automation solution (PSA), Deltek Vision, to
synchronize their calendar, contacts, tasks and e-mail between
Deltek Vision and Microsoft Outlook (via Microsoft Exchange),
Lotus Notes (via Lotus Domino), and PDA and wireless devices.
-- Entered into a licensing agreement with Meeting Maker, Inc., a
leading developer of cross-platform, collaborative group
calendaring and scheduling solutions. Meeting Maker will
utilize Pumatech's Intellisync for Web XML toolkit software to
integrate the Intellisync synchronization engine into the new
Meetingmaker 7.1 group calendaring and scheduling platform.
-- Announced implementation of a global software development
program that will assist in the development of custom
applications for the Real-time Enterprise. Pumatech selected
Romania-based SoftVision as its initial development partner,
with intentions to further extend offshore engineering to
include other development organizations in 2002.
-- Filed a patent infringement suit against Extended Systems,
Inc., alleging infringement of seven of Pumatech's
synchronization-related patents by Extended Systems' server
and desktop products. Pumatech is seeking an injunction
against future sales of Extended Systems' infringing server
and desktop products, as well as damages for past sales of the
infringing products. Pumatech has alleged that Extended
Systems' infringement of the seven synchronization patents was
willful and deliberate, entitling Pumatech to an award of
treble damages, costs and reasonable attorneys' fees.
INVESTOR CONFERENCE CALL
Pumatech, Inc. will announce its fiscal third quarter 2002 results on Thursday, May 23, 2002. The announcement will begin at 2 p.m. Pacific / 5 p.m. Eastern. Management will discuss results and hold a question-and-answer session following the announcement. To participate, please dial the access number a few minutes prior to the conference call. A live webcast will be available on Pumatech's Web site at www.pumatech.com.

If you are unable to participate, a replay will be available two hours after the call. The replay can be accessed for 48 hours, ending at 12 a.m. on Saturday, May 25, 2002. To access the replay, please dial 1-800-642-1687, or 706-645-9291 (International), reservation number 4136507. A replay of the conference call will also be available for 90 days via the Internet at www.pumatech.com.


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