iPass Reports Fourth Quarter and Full Year 2003 Results

Revenues for the full year 2003 were $136.1 million, representing a 47% increase over revenues of $92.8 million for the full year 2002. GAAP Results: Operating income for the fourth quarter was $6.2 million, representing a 82% increase over operating income of $3.4 million for the same period last year. Net income, calculated on the basis of generally accepted accounting principles (GAAP), for the fourth quarter was $4.2 million, or $0.06 per diluted share, based on 66.8 million fully diluted shares outstanding, compared with $27.1 million, or $0.50 per diluted share, based on 53.9 million fully diluted shares outstanding, for the fourth quarter 2002. Net income for the fourth quarter 2002 included a one time $24.3 million tax benefit related to the recognition of certain deferred tax assets. There was no comparable benefit in 2003. Operating income for the full year 2003 was $22.4 million, representing a 234% increase over operating income of $6.7 million for the full year 2002. Net income for the full year 2003 was $13.9 million, or $0.23 per diluted share, based on 60.6 million fully diluted shares outstanding, compared with $29.8 million, or $0.57 per diluted share, based on 51.9 million fully diluted shares outstanding, for the full year 2002. Net income for 2002 included the one time $24.3 million tax benefit. There was no comparable benefit in 2003. Pro-forma Results: The following numbers are pro forma and exclude non-cash amortization of stock-based compensation. Investors are encouraged to refer to the table that reconciles the companys GAAP results to its pro forma results in the back of this press release. Pro forma net income for the fourth quarter was $5.2 million, or $0.08 per diluted share, based on 66.8 million fully diluted shares outstanding, compared with $27.8 million, or $0.51 per diluted share, based on 53.9 million fully diluted shares outstanding, for the same period last year. Pro forma net income for the full year 2003 was $18.0 million, or $0.30 per diluted share, based on 60.6 million fully diluted shares outstanding, compared with $32.5 million, or $0.63 per diluted share, based on 51.9 million fully diluted shares outstanding, for the full year 2002. Business Highlights Business highlights for the fourth quarter and full year 2003 included: - In 2003 the company added 50 more Forbes Global 2000 customers to bring its total to 202. - iPass entered a multifaceted agreement with SAIC, in which SAIC will become both a customer and reseller of iPass’ global enterprise connectivity services. SAIC will deploy the iPass service to more than 20,000 employees around the world. SAIC will also resell the iPass service in conjunction with their own managed service offerings in the areas of VPN, personal firewall, anti-virus and authentication. SAICs managed service offerings will address the business need of providing a ubiquitous yet highly secure method of accessing corporate information and systems. - The company reported that there were 447,000 distinct end users of its services in the month of December 2003 compared with 286,000 in December 2002 and 415,000 in September 2003. - The company ended the quarter with $139 million in cash, cash equivalents and short-term investments and no debt. This total compares to a balance of $132 million at the end of the September quarter. During the quarter, this balance increased by $7 million due principally to strong positive cash flow from operations. - iPass introduced its Endpoint Policy Management service. This new service helps the IT department stay out in front of threats to the corporate network caused by worms, viruses and other malicious agents, reducing the risk of lost productivity and network downtime. It ensures that access to the corporate network is only given to end users who are