TMWD Tumbleweed Communications Corp (MM)

/C O R R E C T I O N -- Tumbleweed Communications Corp./ In the news release, Tumbleweed (NASDAQ:TMWD) Announces Record Revenue in 2004, issued Monday, Jan. 24, 2005 by Tumbleweed Communications Corp. over PR Newswire, we are advised by a representative of the company that the Condensed Consolidated Statements of Operations table contained one typographical error, namely, it stated that Tumbleweed's BASIC AND DILUTED NET INCOME (LOSS) PER SHARE for the three months ended December 31, 2003 was (0.04). The correct number is (0.02). The corrected financial statements are attached hereto. Tumbleweed Communications Corp. Condensed Consolidated Statements of Operations December 31, 2004 (in 000s, except per share data) Three Months Twelve Months Ended Ended December 31, December 31, (unaudited) (unaudited) 2004 2003 2004 2003 REVENUES Product revenue $5,925 $5,369 $19,628 $16,342 Service revenue 5,790 4,008 21,934 12,648 Intellectual property and other revenue 360 670 1,876 1,605 NET REVENUE 12,075 10,047 43,438 30,595 COSTS OF REVENUES Cost of product and service revenue 1,971 918 6,112 4,894 Amortization of intangible assets 510 216 1,837 750 GROSS PROFIT 9,594 8,913 35,489 24,951 OPERATING EXPENSES Research and development 2,735 2,554 11,563 9,127 Sales and marketing 5,722 4,730 23,125 15,857 General and administrative 1,630 1,681 5,319 6,170 SUB-TOTAL OPERATING EXPENSES 10,087 8,965 40,007 31,154 Stock-based compensation expense 118 42 640 166 Amortization of intangible assets 321 306 1,458 532 Amortization of in-process research and development -- -- -- 100 Merger-related and other costs 76 473 1,078 2,909 TOTAL OPERATING EXPENSES 10,602 9,786 43,183 34,861 OPERATING LOSS (1,008) (873) (7,694) (9,910) NON-OPERATING INCOME (EXPENSE) Other income (expense), net 72 175 213 752 NET LOSS BEFORE TAXES (936) (698) (7,481) (9,158) Provision for income taxes (13) 5 16 29 NET LOSS $(923) $(703) $(7,497) $(9,187) Shares used in computing basic and diluted Net loss per share 48,082 42,006 46,777 36,007 BASIC AND DILUTED NET INCOME (LOSS) PER SHARE $(0.02) $(0.02) $(0.16) $(0.26) Reconciliation to Non-GAAP Net Income (Loss) NET LOSS $(923) $(703) $(7,497) $(9,187) Stock-based compensation expense 118 42 640 166 Amortization of intangible assets 831 522 3,295 1,282 Amortization of in-process research and development -- -- -- 100 Merger-related and other costs 76 473 1,078 2,909 NON-GAAP NET INCOME (LOSS) $102 $334 $(2,484) $(4,730) NON-GAAP BASIC AND DILUTED NET INCOME (LOSS) PER SHARE $0.00 $0.01 $(0.05) $(0.13) Tumbleweed Communications Corp. Condensed Consolidated Balance Sheets December 31, 2004 (in 000s) 12/31/2004 12/31/2003 ASSETS (unaudited) (unaudited) CURRENT ASSETS Cash and cash equivalents $21,435 $25,351 Accounts receivable, net 7,459 10,039 Other current assets 1,544 1,068 TOTAL CURRENT ASSETS 30,438 36,458 Goodwill 48,074 13,308 Intangible assets, net 7,299 4,392 Property and equipment, net 1,316 1,648 Other assets 589 540 TOTAL ASSETS $87,716 $56,346 LIABILITIES & EQUITY CURRENT LIABILITIES Accounts payable $324 $250 Current installments of long-term debt 267 267 Accrued liabilities 5,006 6,791 Accrued merger-related and other costs 775 485 Deferred revenue 13,915 11,808 TOTAL CURRENT LIABILITIES 20,287 19,601 LONG TERM LIABILITIES Long-term debt, excluding current installments 200 467 Accrued merger-related and other costs, excluding current portion 430 540 Deferred revenue, excluding current portion 4,248 2,984 Other long term liabilities 147 159 TOTAL LONG TERM LIABILITIES 5,025 4,150 TOTAL LIABILITIES 25,312 23,751 STOCKHOLDERS' EQUITY Common stock 49 43 Additional paid-in capital 351,121 313,532 Treasury stock (796) (796) Deferred stock compensation expense (525) (302) Accumulated other comprehensive loss (648) (585) Accumulated deficit (286,797) (279,297) TOTAL STOCKHOLDERS' EQUITY 62,404 32,595 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $87,716 $56,346 DATASOURCE: Tumbleweed Communications Corp. CONTACT: Charles Messman, or Todd Kehrli, both of MKR Group, LLC, +1-818-556-3700, , both for Tumbleweed Communications Corp.; or Tim Conley, VP Finance & CFO of Tumbleweed Communications Corp., +1-650-216-2066,

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