Liberate Announces Financial Results for Fourth Quarter and Fiscal
Year Ended May 31, 2004 Conference Call July 13, 2004, at 2:00 p.m.
Pacific Time SAN MATEO, Calif., July 13 /PRNewswire-FirstCall/ --
Liberate Technologies (Pink Sheets: LBRTQ), a leading provider of
software for digital cable systems, announced financial results for
its fourth quarter and fiscal year ended May 31, 2004. Liberate's
revenues for its fourth fiscal quarter were $4.2 million, compared
to $5.1 million for the same quarter of the prior fiscal year. The
net loss for the quarter was $4.8 million, or $0.05 per share,
compared to a loss of $92.3 million, or $0.89 per share, for the
same quarter of the prior fiscal year. The revenues for the fourth
quarter of fiscal 2004 include recognition of approximately $2.3
million of revenue that had been deferred pending customer
acceptance of services work and resolution of customer claims and
uncertainties. During the fourth quarter, in conjunction with its
Chapter 11 filing, Liberate reviewed existing and potential claims
against the Company. Based on this review, the Company revised
previous estimates of liabilities and accrued expenses related to
legal costs, costs to complete customer contracts, and other items,
which resulted in a reduction of liabilities and thereby decreased
cost of revenues and expenses by approximately $3.1 million. For
the year ended May 31, 2004, Liberate's revenues were $8.6 million,
compared to $25.4 million for the prior fiscal year. The net loss
for the year was $33.4 million, or $ 0.32 per share, compared with
a net loss of $399.3 million, or $3.82 per share, for the prior
fiscal year. The net loss for the year ended May 31, 2003 included
a charge of $209.9 million for the cumulative effect of a change in
accounting principle upon the adoption of SFAS 142 "Goodwill and
Other Intangibles" on June 1, 2002. As of May 31, 2004, Liberate
had cash and cash equivalents and restricted cash of $226.7
million, a decrease of $6.5 million during the quarter. On April
30, 2004, Liberate filed a voluntary petition for reorganization
under Chapter 11 of the U.S. Bankruptcy Code to resolve certain
liabilities, reduce its costs and strengthen its business. During
the Chapter 11 proceeding, Liberate continues to execute on its
business plan and service and support its customers and their cable
subscribers. One of Liberate's significant creditors, the landlord
of its former San Carlos headquarters, has filed a motion to
dismiss the case, and the Company has filed an opposition to this
motion. "We are working hard to resolve our outstanding liabilities
and lower our costs through bankruptcy in order to strengthen the
company," said David Lockwood, Chairman and CEO of Liberate. "We
are pleased with business developments in the last quarter,
particularly the signing of new license agreements with NTL and
Telewest. We continue to execute on our business plan to develop
the best products for our customers to deliver the next generation
of digital television services." Conference Call Liberate has
scheduled a conference call on July 13, 2004, at 2:00 p.m. Pacific
Time. The call-in number is 800-732-8451. A replay of the call will
be available until July 20, 2004 on either 402-977-9140 or
800-633-8284, reservation code 21200665. The conference call can
also be accessed via live webcast at Liberate's website
(http://www.liberate.com/) and will remain available for replay.
About Liberate Technologies Liberate Technologies is a leading
provider of software for digital cable systems. Based on industry
standards, Liberate's software enables cable operators to run
multiple services -- including high-definition television, video on
demand, and personal video recorders -- on multiple platforms.
Headquartered in San Mateo, California, Liberate also has offices
in Ontario, Canada and the United Kingdom. NOTE: Liberate and the
Liberate design are registered trademarks of Liberate Technologies.
Other product names used in association with these registered
trademarks are trademarks of Liberate Technologies. "Safe Harbor"
Statement under the Private Securities Litigation Reform Act of
1995 Those statements above that involve expectations or intentions
(such as those relating to its filing under Chapter 11 of the U.S.
Bankruptcy Code, the time that a Chapter 11 case would take to
complete, the result of a Chapter 11 case, any savings or other
effects arising from such a filing, future business or financial
performance, or anticipated corporate or commercial activities) are
forward-looking statements and are not guarantees of future
performance. Actual results may vary materially due to the
uncertain market for interactive television services, dependence on
a limited number of cable network operators, business disruption
resulting from Liberate's restatement and related litigation,
necessary adjustments related to recent restructuring, other
uncertainties related to litigation and the Chapter 11 filing, and
other risks outlined in Liberate's filings with the Securities and
Exchange Commission. Contact: Greg Wood Chief Financial Officer
Liberate Technologies 650-645-4003 LIBERATE TECHNOLOGIES CONDENSED
CONSOLIDATED BALANCE SHEETS (In thousands) Unaudited May 31, May
31, 2004 2003 Assets Current assets: Cash and cash equivalents
$215,877 $261,689 Accounts receivable, net 3,143 3,310 Prepaid
expenses and other current assets 1,817 3,069 Assets of
discontinued operations -- 6,936 Total current assets 220,837
275,004 Property and equipment, net 1,851 6,113 Intangible assets,
net -- 22 Deferred costs related to warrants 3,583 14,449
Restricted cash 10,869 9,249 Other assets 268 131 Total assets
$237,408 $304,968 Liabilities and Stockholders' Equity Current
liabilities: Accounts payable $3,102 $1,888 Accrued liabilities
16,384 39,442 Accrued payroll and related expenses 685 1,562
Payable to bank 608 -- Deferred revenues 6,137 10,619 Liabilities
of discontinued operations -- 5,375 Total current liabilities
26,916 58,886 Long-term excess facilities charges 19,140 22,330
Other long-term liabilities 2,416 2,242 Total liabilities 48,472
83,458 Stockholders' equity: Common stock 1,055 1,040 Contributed
and paid-in-capital 1,503,113 1,490,125 Deferred stock-based
compensation (8,453) (194) Accumulated other comprehensive income
(loss) (2,112) 1,804 Accumulated deficit (1,304,667) (1,271,265)
Total stockholders' equity 188,936 221,510 Total liabilities and
stockholders' equity $237,408 $304,968 LIBERATE TECHNOLOGIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands,
except per share data) Unaudited Three months ended Years ended May
31, May 31, May 31, May 31, 2004 2003 2004 2003 Revenues: License
and royalty $1,412 $868 $(263) $6,501 Service 2,765 4,201 8,875
18,893 Total revenues 4,177 5,069 8,612 25,394 Cost of revenues:
License and royalty 32 214 597 1,315 Service 957 2,798 5,317 24,262
Total cost of revenues 989 3,012 5,914 25,577 Gross margin 3,188
2,057 2,698 (183) Operating expenses: Research and development
3,989 4,215 16,325 26,080 Sales and marketing 425 2,696 3,561
18,783 General and administrative 1,260 30,633 13,587 45,538
Reversal of bad debt expense (554) -- (554) -- Amortization of
deferred costs related to warrants -- 1,049 1,831 3,837
Restructuring costs (41) 2,116 1,406 8,586 Amortization and
impairment of goodwill and intangible assets - 137 22 1,670
Impairment of warrants -- -- 4,969 -- Amortization of deferred
stock-based compensation -- 282 10 1,299 Excess facilities charges
and related asset impairment 3,429 8,718 4,022 25,094 Total
operating expenses 8,508 49,846 45,179 130,887 Loss from operations
(5,320) (47,789) (42,481) (131,070) Interest income, net 530 1,058
2,224 6,977 Other income (expense), net (106) (4,803) 530 (14,028)
Loss from continuing operations before income tax provision (4,896)
(51,534) (39,727) (138,121) Income tax provision 157 517 138 1,560
Loss from continuing operations (5,053) (52,051) (39,865) (139,681)
Loss from discontinued operations -- (40,199) (3,075) (50,287) Gain
on sale of discontinued operations 252 -- 9,538 -- Cumulative
effect of a change in accounting principle -- -- -- (209,289) Net
loss $(4,801) $(92,250)$ (33,402)$(399,257) Basic and diluted
income (loss) per share: Continuing operations $(0.05) $(0.50)
$(0.38) $(1.34) Discontinued operations $-- $(0.39) $0.06 $(0.48)
Cumulative effect of a change in accounting principle $-- $-- $--
$(2.00) Basic and diluted net loss per share $(0.05) $ (0.89)
$(0.32) $(3.82) Shares used in computing basic net loss per share
105,495 104,006 104,805 104,500 LIBERATE TECHNOLOGIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per
share data) Unaudited Three months ended May 31, February 29,
November 30, August 31, 2004 2004 2003 2003 Revenues: License and
royalty $1,412 $(54) $(697) $(924) Service 2,765 1,756 1,885 2,469
Total revenues 4,177 1,702 1,188 1,545 Cost of revenues: License
and royalty 32 206 208 151 Service 957 1,549 1,368 1,443 Total cost
of revenues 989 1,755 1,576 1,594 Gross margin 3,188 (53) (388)
(49) Operating expenses: Research and development 3,989 5,022 3,647
3,667 Sales and marketing 425 703 1,004 1,429 General and
administrative 1,260 3,667 4,479 4,181 Reversal of bad debt expense
(554) -- -- -- Amortization of deferred costs related to warrants
-- -- 1,027 804 Restructuring costs (41) 86 881 480 Amortization
and impairment of goodwill and intangible assets -- -- -- 22
Impairment of warrants -- -- 4,969 -- Amortization of deferred
stock-based compensation -- -- -- 10 Excess facilities charges and
related asset impairment 3,429 -- 593 -- Total operating expenses
8,508 9,478 16,600 10,593 Loss from operations (5,320) (9,531)
(16,988) (10,642) Interest income, net 530 504 573 617 Other income
(expense), net (106) 1,184 (173) (375) Loss from continuing
operations before income tax provision (4,896) (7,843) (16,588)
(10,400) Income tax provision (benefit) 157 (122) -- 103 Loss from
continuing operations (5,053) (7,721) (16,588) (10,503) Loss from
discontinued operations -- -- (992) (2,083) Gain on sale of
discontinued operations 252 249 9,037 -- Cumulative effect of a
change in accounting principle -- -- -- -- Net loss $(4,801)
$(7,472) $(8,543) $(12,586) Basic and diluted income (loss) per
share: Continuing operations $(0.05) $(0.07) $(0.16) $(0.10)
Discontinued operations $-- $-- $0.08 $(0.02) Discontinued
operations, diluted $-- $-- $0.07 $-- Basic and diluted net loss
per share $(0.05) $(0.07) $(0.08) $(0.12) Shares used in computing
basic net loss per share 105,495 105,204 104,515 104,006
DATASOURCE: Liberate Technologies CONTACT: Greg Wood, Chief
Financial Officer of Liberate Technologies, +1-650-645-4003, or Web
site: http://www.liberate.com/
Copyright
