Handspring Revenues Grow Despite Losses

Handspring Inc. announced Thursday drastically increased sales for the
just-ended quarter compared to the same quarter a year ago, but only modest gains over the
previous quarter.

The company said that its revenues of $123.8 million for the third quarter that ended March 31
was a 261 percent increase over the same quarter a year ago. A year ago, however, the
company had not entered the retail channel with its handhelds, selling them only over the Web.

By comparison, its third quarter sales increased only by seven percent over the previous
quarter, the company said.

The company reported a net loss of $6.7 million for the third quarter excluding items such as
amortization of deferred stock compensation and in-process research and development. Much of
the excluded money was related to the company’s acquisition of Bluelark Systems. Including that
acquisition, the company lost $27.2 million for the quarter.

Still, the company expressed satisfaction with its results.

“We are pleased with ability to achieve revenue growth in what is usually a sequentially down
quarter in our industry,” said founder and CEO Donna Dubinsky. “We believe this growth demonstrates both acceptance
of our new products and ongoing growth in the handheld computing sector in spite of an economic slowdown.”