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Exhibit 99.1
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[CIDCO LOGO]
FOR IMMEDIATE RELEASE
CIDCO COMPLETES SALE OF TELEPHONE EQUIPMENT BUSINESS
Sale frees up more than $15 million in working capital for growing Internet
appliance business
MORGAN HILL, Calif., December 14, 2000--CIDCO Inc. (NASDAQ:CDCO), announced
today the completion of the sale of its telephone equipment business, following
approval by stockholders in a special meeting held December 8, 2000. The company
announced in September the agreement to sell the Telco business to a new company
led by technology investor and executive David S. Lee in a transaction valued at
$15 million to $20 million. The sale consisted of CIDCO's entire line of
telephones and telephony products.
Paul Locklin, CIDCO president and chief executive officer, said, "Our purpose in
selling the telephone equipment business was to allow us to focus entirely on
our Internet appliance business, a completely different business model that
allows us to build recurring, subscriber-based revenue through Internet-related
products and services that provide higher margins. This milestone means added
resources to speed the development of the business by monetizing fixed assets
and inventory and by freeing up substantial working capital, as well as enabling
us to remain debt-free. This strategic shift to the Internet appliance market is
already being validated as we remain on course towards achieving our first-phase
goal of 100,000 MailStation subscribers, clearly establishing CIDCO as a leader
in the Internet appliance industry."
The cash transaction includes the present value of future payments for inventory
and a royalty on product sales by the new company. At the closing of the
transaction, CIDCO received an initial cash payment of $5 million for a portion
of the inventory and the purchase of its capital equipment related to the
telephone equipment business. Remaining inventory will be purchased by the new
company as it is drawn down in the normal course of business. CIDCO will also be
paid a decreasing royalty on the revenue of the new company over a four-year
period and also retained the accounts receivable as of the closing of the
transaction.
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CIDCO Completes Sale of Telephone Equipment Business -2-
Rick Kent, CIDCO chief operating officer and chief financial officer, said, "The
net result is that we are freeing up working capital in excess of $15 million
and receiving future royalty payments of up to $10 million."
CIDCO Incorporated (NASDAQ:CDCO), founded in 1988, is a worldwide leader in
personal Internet communications products and services that empower consumers to
communicate simply and easily over the Internet. CIDCO introduced its first
Internet appliance in 1998 for a world moving into the developing Internet
appliance era and is extending this vision to devices that will make e-mail and
other Internet based information readily available to consumers that don't have
access to traditional computers or who prefer the convenience of e-mail when and
where they want. As the innovator of caller ID and having originated the e-mail
Internet appliance category with the launch of the MailStation, CIDCO takes a
unique approach with its offerings by providing integrated products and services
in a seamless manner. CIDCO allows for a better user experience through this
approach, and as a result its industry leading MailStation is gaining stature as
the device of choice amongst those seeking simple, convenient, and affordable
electronic communication as illustrated by the rapidly growing user base. The
company is headquartered in Morgan Hill, California at the south end of Silicon
Valley. For additional information, visit www.CIDCO.com or call (408) 779-1162.
MailStation and CIDCO are trademarks of CIDCO Incorporated. All other trademarks
are the property of their respective owners.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This news release contains forward-looking statements or predictions, including
statements regarding the amount of freed up working capital, expected royalty
payments, and the company's ability to speed up the development of its Internet
appliance business. These statements represent our judgment as of this date and
are subject to risks and uncertainties that could cause actual results or events
to differ materially from those expressed in such forward-looking statements.
Potential risks and uncertainties include, without limitation, performance by
the purchaser of the Telco business, those associated with economic conditions
both domestic and international in the Internet and Internet appliance industry,
failure to successfully implement a national retail distribution channel and a
brand marketing campaign, failure to obtain the estimated subscriber growth
discussed above, competitive factors, lower than expected consumer product
acceptance, technological and business difficulties, government regulations and
delays or other problems with product development. These and other factors are
discussed in more depth in CIDCO, Inc. filings with the SEC, copies of which may
be accessed through the SEC's World Wide Web site at http://www.sec.gov.
COMPANY CONTACT: MEDIA CONTACT:
RICHARD KENT DON KING
CHIEF FINANCIAL OFFICER BATES CHURCHILL INVESTOR RELATIONS
408-779-1162 713-267-7280
[email protected]
