Symbol Africa's growth exceeds international average

JOHANNESBURG (11/21/2003) - Symbol Technologies Inc. Africa saw a 40 percent growth in revenue from the second quarter to the third quarter of its current financial year, far exceeding the 2 percent growth experienced for its global parent.

While the results are unaudited, Symbol believes they accurately reflect what will be reported in the company's quarterly report.

Max Stone, country manager for Symbol in SA, says the company has seen growth all round, year on year and quarter on quarter. Third quarter revenue of US$382 million is slightly up (2 percent) on the same quarter in 2002, and also higher than the second quarter revenue of $375 million.

"We are on track to see growth of 10 percent worldwide year on year for 2003," says Stone. "SA revenue represents approximately 1 percent of global revenues. While that is a small component of the Symbol organization's revenue, the office here is strategic in terms of its location and its ability to service customers in the territory.

"We have seen stronger than average interest and growth compared to Europe and North America. We had a substantially strong Q3. At the end of the quarter we are close to meeting the numbers achieved during the whole of 2002."

Worldwide, product revenue of $313 million represented a quarter-to-quarter improvement of 8 percent from $289 million in 2003's second quarter, and a year-over-year increase of 3 percent; service revenue of $69 million showed a quarter-to-quarter decline of 20 percent from $86 million and a year-over-year decrease of 10 percent.

Third quarter 2003 gross margin was $169 million, or 44.1 percent, an increase of $15 million or three percentage points, from second-quarter 2003 gross margin of $154 million or 41.1 percent.

Operating expense in the third quarter, excluding approximately $8 million associated with an accounting charge related to a change in the company's stock option plans resulting from its late filings with the SEC, was $140 million, down $6 million from the second quarter's $146 million.

Included in third quarter operating expense was $11 million in costs related to restatement activities, primarily fees for professional services. Net earnings in the period improved to $12 million from second quarter's $9 million, representing per share earnings improvement to $0.05 in the third quarter compared to $0.04 per share in the second quarter.

William Nuti, Symbol president and COO, says: "The third quarter financial results not only demonstrate that Symbol's fundamental business is on track, but also that the operational improvement efforts of the past several quarters are beginning to have positive impact.

"We are holding the line in managing operational expenses, while the pace of business is accelerating, faster than might be apparent because of the restatement's impact on the prior year's results. Symbol's new leadership team is implementing a streamlined and focused management system that will carry the company forward as the leader in enterprise mobility solutions."

Richard Bravman, Symbol CEO, says, "Symbol's financial performance has improved over the past several quarters, and we further strengthened the balance sheet, increasing cash balances to approximately $121 million, improving working capital management and reducing short-term bank debt to zero.

"In addition, the underlying improvements we saw on the income statement are even more notable given that the expenses related to restatement activities and the accounting charge related to stock options caused a drag of approximately $0.06 on EPS in the quarter. We believe Symbol is on a sound business foundation in the short term, with the ability to scale for future growth."

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