Extended Systems (Boise) is smiling

After four years, firm finally sees quarterly profits
Steve Simpson Extended Systems president

Julie Howard
The Idaho Statesman

Extended Systems´ first profitable quarter in four years is not just good news for the Boise software company but a harbinger of good news for the Treasure Valley´s high-tech industry, said local economy watchers.

Extended Systems posted a $118,000 profit for its fourth fiscal quarter of 2003 on revenues of $7.4 million. Year-end results, for the 12 months ending June 30, showed a loss of $3.8 million on revenues of $27.5 million.

“It signals that the technology sectors are probably improving, which is going to benefit not only Boise but the entire region,” said Jeff Jones, economic development manager for the city of Boise. “It creates an environment of continued investment.”

Extended Systems President and CEO Steve Simpson agreed that economic optimism is part of the success.

“We continue to be cautious, but we´re definitely seeing a stabilizing in the economy along with a greater understanding of how mobilizing a work force can provide a company with competitive advantage,” Simpson said.

Extended Systems develops and sells software that allows mobile workers to conduct business using mobile devices such as cell phones and personal digital assistants.

Simpson told analysts Monday that the firm had success in the quarter with customers including Hewlett-Packard Corp., Weight Watchers and Johnson & Johnson.

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The Extended Systems file

• Founded: 1984

• Headquarters: Boise

• What it does: Develops and sells mobile information management software

• Revenue: Fiscal year 2003 — $27.5 million

• Employees: 225 worldwide; 150 in Boise

• Ticker symbol: XTND, traded on NASDAQ

• Web site: http://www.extendedsystems.com

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Current results compare with a loss of $2.2 million for the same quarter a year ago, and a 2002 fiscal year-end loss of $7.2 million.

Jason Willey, an associate analyst for Soundview Technologies in Connecticut, said he had expected even higher revenues, but said the company has managed its expenses well.

“They´ve done a great job in bringing costs in line with what the opportunity is,” Willey said. “They´re positioned to return to profitability and generate cash.”

Karla Rosa, the firm´s chief financial officer, reported expectations of 5 percent to 20 percent revenue growth each quarter through the next 12 months. The firm expects its first quarter of fiscal year 2004 to come in between a loss of $100,000 to a profit of $650,000 on revenues of $7.4 million to $8.5 million.

“We´re here to stay,” Simpson said. “We´re making strong progress and we´re excited about the future.”

John Church, a local economist, said more positive news could be on its way. “Extended Systems has done some pretty drastic cost-cutting measures over the past few years so that, in part, is the reason for this,” Church said. “But there has been a bit of an uptick in the high-tech market. For Boise, and how much we rely on the high-tech sector here, that is a very positive sign.”

To offer story ideas or comments, contact Julie Howard
[email protected] or 373-6618

http://www.idahostatesman.com/Business/story.asp?ID=45472