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Sunday, 02/01/2004 4:52:55 PM

Sunday, February 01, 2004 4:52:55 PM

Post# of 38
Extended sees gains at end of ’03
Strong European sales contribute to profitability
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Charles Jepson
President, CEO



Julie Howard
The Idaho Statesman

Extended Systems Inc. seesawed back into profitability at the end of 2003, reporting on Thursday its largest quarterly gain in more than four years.
The Boise company´s executives credited strong European sales of its software that allows mobile workers to conduct business using mobile devices such as cell phones and personal digital assistants.

The Boise software company reported profits of $459,000 on sales of $8.5 million for its second fiscal quarter that ended Dec. 31. That compares to a loss of $1.3 million on sales of $6.9 million for the same period a year ago.

The company has emerged from losses only one other quarter in the past four years, when it reported a $118,000 profit six months ago.

“We continue to grow our business through a concentrated focus on mobile workers,” said Charles Jepson, Extended Systems´ president and CEO.

Jepson said the firm´s products have gained a foothold in Europe, where mobile devices are more prevalent.

More than half of the company´s sales are outside the United States, with the bulk of overseas sales coming from Europe.

“Everybody has a mobile phone in Europe,” he said. “When we introduced our wireless e-mail products, the uptake has been much faster.”

Extended Systems´ software allows mobile workers, such as those in sales or repairs, to receive live information on a handheld device. That ability, Jepson said, results in efficiencies and cost savings for companies.

Valerie Heusinkveld, vice president of finance and chief financial officer, projected that the firm could have sales of up to $9 million for its current quarter ending in March.

Heusinkveld added that legal fees related to a patent infringement lawsuit against the Boise company would be nearly $1 million as the firm moves closer to a trial.

Pumatech Inc., a Silicon Valley-based rival, has charged that Extended Systems owes royalty fees for technology it uses. A trial on the lawsuit has been set for April in U.S. District Court in California.

The lawsuit prompted the last industry analyst covering Extended Systems to discontinue coverage, citing his own inability to determine whether the lawsuit was valid and thus any potential impact on the Boise firm.

Extended Systems´ executives pointed to a stronger bottom line, with cash and equivalents of $8.8 million compared to $3.5 million six months ago. The increase primarily came when the company sold and then leased back its Boise headquarters building, netting $4.6 million. The company also sold additional land for a net of $1.1 million.

The company sells to a number of industries, including financial services, health care and manufacturing.

To offer story ideas or comments, contact Julie Howard
jhoward@idahostatesman.com or 373-6618

Edition Date: 01-30-2004


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