Pumatech Narrows Q4 Loss

SAN JOSE, Calif. -- Pumatech, Inc. (NASDAQ NM: PUMA), a leading provider of synchronization software and services, today reported net revenue of $7,304,000 for the fourth quarter of fiscal 2003 that ended July 31, 2003 - the Company's fourth consecutive quarter of revenue growth. This compares to revenue of $6,725,000 reported last fiscal quarter and $4,404,000 reported in the fourth quarter of fiscal 2002, and represents year-over-year revenue growth of 66 percent for the fourth fiscal quarter.

Reported loss in the fourth fiscal quarter of 2003 was $1,800,000, compared to a loss of $3,813,000 reported last fiscal quarter and a loss of $12,367,000 reported in the fourth fiscal quarter of 2002. Reported loss per share for fiscal 2003 was $.17, compared to a loss of $.77 in fiscal 2002. Pro-forma loss was $159,000 this quarter, compared to earnings of $7,000 last fiscal quarter and a loss of $2,838,000 in the fourth fiscal quarter of fiscal 2002. Pro-forma loss per share for fiscal 2003 was $.04, compared to a loss of $.38 reported in fiscal 2002. (Pro-forma profit or loss represents a non-GAAP financial measure. A table reconciling this measure to the appropriate GAAP (Generally Accepted Accounting Principles) measure is included in the condensed consolidated financial statements attached to this release.)

Pumatech's fourth-quarter 66 percent year-over-year revenue growth was fueled by wins in both the technology licensing and enterprise sales arenas. In fiscal 2003, Pumatech signed agreements with a host of leading companies, including Microsoft, Oracle, Sharp, SAP, Hitachi, America Online, PeopleSoft, NEC, Intuit and Saratoga Systems. In addition, Pumatech extended relationships with a number of enterprise customers, including Procter & Gamble, Morgan Stanley, Eastman Kodak and General Motors. Pumatech also continued to accelerate its synchronization leadership position in Japan, supported by server-based deals with customers such as Kajima Corporation, J-PHONE Co. Ltd., Meiji Life Insurance Company and Hiroshima Gas Co., Ltd.

In a report released in July 2003 by IDC research, Worldwide Mobile Middleware Competitive Analysis, 2003: Forecast for 2003-2007, Pumatech was rated as a "Leader" in the "Pure Play Enterprise-centric Mobile Middleware" market, while Pumatech's wholly owned subsidiary, Starfish Software, achieved "Leadership" status in the "Pure Play Mobile Operator-centric Mobile Middleware" category.

Woodson (Woody) Hobbs, president and CEO of Pumatech, said, "Our improved financial results in 2003 were the product of our outstanding team's excellent execution. While the industry and the economy were struggling, we posted revenue increases in every quarter. Our recent acquisitions and internal development have all been aimed at shifting our focus from cabled PDAs to wireless handhelds, smartphones, laptops and tablets. We continue to dominate the Application Data Synchronization arena, where we have deals with most of the major CRM/SFA vendors. We are well along our way toward integrating our recent acquisitions into our operations, and we believe the technologies acquired from Starfish and Loudfire will make positive revenue contributions in fiscal 2004."

For the fourth quarter of fiscal 2003, 56 percent of revenue came from Pumatech's technology licensing offerings, while 44 percent was attributed to the Company's enterprise and retail software. Technology licensing revenue includes platform licensing and related professional services for corporations choosing to integrate or embed the Company's various technologies, including those of Pumatech's recently acquired subsidiary, Starfish Software, Inc. Enterprise and retail revenue includes channel and direct sales of the Company's Intellisync(R), Enterprise Intellisync(R), Enterprise Intellisync Server and Satellite Forms(R) products licensed to corporations for internal use. Total license revenues grew 10 percent in the fourth quarter compared to the prior quarter, despite seasonal slowness in Europe and the retail channel.

The Company ended the quarter with cash and short-term investments of approximately $27.2 million, with no long-term debt obligations.

"We made solid progress during fiscal 2003, both in terms of revenue growth and the bottom line," explained Keith Kitchen, Pumatech's vice-president of finance and chief accounting officer. "By refining our Company's focus and controlling expenses, we were able to improve from a loss per share of $.77 in fiscal 2002 to just $.17 in fiscal 2003. On the revenue side, despite difficult market conditions, our average compound quarterly revenue growth in fiscal 2003 was nearly 14 percent - well within the 10 to 20 percent range for average compound quarterly revenue growth announced earlier this year."

PUMATECH FOURTH-QUARTER HIGHLIGHTS

Pumatech Inc.