425 1 d425.htm INVESTOR ROADSHOW SLIDES FILED PURSUANT TO RULE 425 Investor Roadshow slides filed pursuant to rule 425

Filed by Palm, Inc. Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: Handspring
Commission File No.: 0-30719

The following is a series of slides used by Palm, Inc. for presentations to investors.


[PALM LOGO]
 

 

       Investor Roadshow

 

 

 

 

       June 2003


[PALM LOGO]

This presentation includes forward-looking statements about Palm and its business. We caution you that these statements are subject to risks and uncertainties that may cause actual events or results to differ materially. These risks and uncertainties are detailed in Palm’s filings with the Securities and Exchange Commission, including its Form 10-K for the fiscal year ended May 31, 2002, as amended, and its Form 10-Q for the fiscal quarter ended February 28, 2003.


[PALM LOGO]

 

 

Future of Mobile Computing

Our desktops, laptops and other terminals will be

 
peripheral to the devices that fit in our pocket  
   

 

[GRAPHIC]

[GRAPHIC]

 

 

 

 

 

 

 

[GRAPHIC]

[GRAPHIC]

 

 

 

 

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[PALM LOGO]

 
         
Palm Solutions Group Today    

 

 

 

 

 

Clear Strategic Focus

 

 

 

 

 

 

 

Large Market Opportunity

 

 

 

 

 

 

 

Market Leader

 

 

 

 

 

 

 

Operational Excellence

 

 

 

 

 

 

[PALM LOGO]           Solutions
Group

[GRAPHIC]    Zire

 

 

 

 

 

 

Delivering What Matters 

[GRAPHIC]        TUNGSTEN

 

 

   
 

 


[PALM LOGO]

 

Palm SG Strategy to Win: 

 

 

Capitalize on Leadership Position to Capture Growth 

 

         

 

  Grow the Market    

 

         

 

 

 

Attract first-time users   

 

 

 

       

 

 

 

Expand apps beyond PIM  

 

 

 

       

 

 

 

Develop new geographies  

 

 

 

       

 

 

 

Promote convergence  

 

 

 

       

 

         

 

Achieve Consistent
Profitability
 
  Maintain Industry
Leadership

 

         

 

Grow the market    Enhance user experience

 

         

 

Design for profitability    Drive business innovation

 

         

 

Increase productivity    Develop strategic relationships

 

         

 

         

 

         

  *This page contains forward-looking information that involves risks,
     uncertainties and assumptions. Please see slide 28 for additional information.

5

 

 

 


[PALM LOGO]

                Merger of Leaders

[GRAPHIC]

6


[PALM LOGO]

 

       
         

Rationale for Transaction

       

 

         

 

PalmSource Spin-Off   Handspring Acquisition

 

         

 

Enables greater clarity of
mission and focus
 

Combines operational
excellence and
innovation

 

 

         

 

Attracts more licensees
and developers
 

Creates an unmatched
portfolio of products

 

 

         

 

Fosters stronger Palm
Economy
  Strengthens distribution
channels
 

 

         

 

Attracts own investors   Combines industry
leading management
talents
 

 

         

 

[GRAPHIC]

 

         

 

 

 

       

 

 

Enhanced Shareholder Value

 

         

 

         

  *This page contains forward-looking information that involves risks,
     uncertainties and assumptions. Please see slide 28 for additional information.

7

 

 

 


[PALM LOGO]

   

 

   
Merger of Leaders    

Stronger company will emerge

 
   

 

Unique strategic opportunity in combining: 

 

     

 

Operational excellence  

 

     

 

Innovation 

 

 

     

 

Combination addresses industry dynamics
and customer requirements, creates stronger
company
 

 

     

 

Consistent with Solutions Groups
strategic objectives

 

     

 

Grow the market  

 

 

 

 

 

 

Maintain industry leadership  

 

 

 

 

 

 

Achieve consistent profitability   

 

     

 

Focus is on shareholder value creation

 

     

  *This page contains forward-looking information that involves risks,
     uncertainties and assumptions. Please see slide 28 for additional information.

 
8


[PALM LOGO]

Handheld Device Continuum

Smart Phones [GRAPHIC]
Phones with PIM capabilities
       
Converged Voice and Data
Communicators [GRAPHIC]
Wireless data plus telephony
       
Integrated and Two Piece Wireless
One-piece solution [GRAPHIC]
Two-piece solution [GRAPHIC]
Wireless data handhelds, including two-piece wide area data access
       
Traditional PDAs
[GRAPHIC]
Basic to premium form factors
     
9

 


[PALM LOGO]

Industry Dynamics
Emerging fast-growing market opportunities

[CHART]

Worldwide
Millions of Units

Total 2002-2006 CAGR = 23%
2002-2006 CAGR
Smart Phones
Data Centric Communicators
Traditional PDAs

 

Source: Gartner, Inc., IDC, Canalys and Company Data

*This page contains forward-looking information that involves risks, uncertainties and assumptions. Please see slide 28 for additional information.

10


[PALM LOGO]

Palm Solutions Group Global Leadership

•   Over 21 million Palm branded units sold  
  Zire
•   Leading 35% worldwide device market share* TUNGSTEN
  take your life with you
     –   Europe bright spot  
 
•   NPD Device Market Share [GRAPHIC]
   
     –   50% U.S. All Channel and 50% U.S. Retail (Apr ‘03)  
   
     –   U.S. Retail share up 10 points since beginning of April based on new products

*Source: IDC Q1 03

11


[PALM LOGO]

Palm Solutions Group Customer Segmentation

  Personal        
Professional
Entry
Media Savvy
Professional
Enterprise
           
Personal
Information
Media and
Personal Information
Productivity
and Performance
Connected Enterprise
Data and Groupware
               
•   Organization focused •   Media focused •   Personal and business solutions •   Simple and convenient access to data - tethered or wireless
               
Simple solutions Organization secondary Style and feature conscious Minimal compromises for mobility
             
Price conscious Technology savvy Quality and performance weighted Seamlessly fits into enterprise infrastructure

[LOGO]
[LOGO]

*This page contains forward-looking information that involves risks, uncertainties and assumptions. Please see slide 28 for additional information.

12


[PALM LOGO]

Zire – Business Innovation at Work

  Fastest growing handheld in our history
     
    Over 1M sold since October ‘02
Zire Address Book Date Book    
[GRAPHIC] PC Magazine Best Year 2002 01/2003 Strong margins

To-do List Note Pad
Organizing made easy.

 
  PC Magazine Best Product of 2002
   
  Best selling product in US retail (NPD)
   
  #1 selling handheld in 6 of the 7 largest countries in Europe (GfK)
   
  Upgrade potential

Source: NPD Q4 02; GfK Dec/Jan 03
*This page contains forward-looking information that involves risks, uncertainties and assumptions. Please see slide 28 for additional information.

13


[PALM LOGO]

Spring Launch – Media and Wireless Power!

[GRAPHIC]

[GRAPHIC]

Wi Fi
CERTIFIED
Zire 71 Tungsten C  

14


[PALM LOGO]

[GRAPHIC]

Zire 71: Multimedia Rich Device
Zire 71
TI ARM, Palm OS 5.2
16 MB Memory
640 x 480 Camera
MP3 & Video
320 x 320 Res
Transflective TFT
65,000 + colors
5-Way Nav

[GRAPHIC]


[PALM LOGO]

Tungsten C:
Expanding Our Wireless Capability

  • 400MHz Intel ARM XScale Processor                                                                                            [GRAPHIC]
  • Built-in Wi-Fi (802.11b)
  • Full work day of battery life with persistant Wi-Fi connectivity
  • Solutions Group developed memory breakthrough -- Most memory for a Palm OS® handheld at 64MB
  • 320 x 320 transflective TFT display, 65,000+ colors
  • Includes powerful pre-installed productivity applications beyond PIM
  • Voice jack for recording and future Voice Over Internet Protocol (VOIP) apps

*This page contains forward-looking information that involves risks, uncertainties and assumptions. Please see slide 28 for additional information.


[PALM LOGO]

Palm Solutions Group Product Lineup

   
TUNGSTEN T
TUNGSTEN C
TUNGSTEN W
   
[GRAPHIC]
[GRAPHIC]
[GRAPHIC]
   
$399
$499
$549*
       
*does not include
activation rebate
$99
$199
$299
[GRAPHIC]
[GRAPHIC]
[GRAPHIC] [GRAPHIC]
Zire
m130
Zire 71       m515

 

 

 


 

[PALM LOGO]

Solutions Group Operating Results

Q1 03 Q2 03 Q3 03 LTFM*
Revenue 164.7 257.9 197.9
Gross Profit 37.6 70.2 47.1
% of Rev 23% 27% 24% 25%-30%
Op Exp - Non-GAAP 69.1 66.6 68.3
% of Rev 42% 26% 35% 19%-22%
Op Inc - Non-GAAP (31.5) 3.6 (21.2)
% of Rev -19% 1% -11% 5%-7%
Pre-Tax Inc - Non-GAAP (31.3) 8.4 (23.8)
% of Rev -19% 3% -12%
Pre-Tax Inc - GAAP (32.4) 9.2 (165.1)
% of Rev -20% 4% -83%

*Reflects management’s long-term internal target for operations

This page contains forward-looking information that involves risks, uncertainties and assumptions. Please see slide 28 for additional information.


[PALM LOGO]

SG Sell-Through More Indicative than Sell-In

Revenue ($ Mill)

Yr-over-Yr Change

 

[CHART]

SG Revenue

Sell-Through Units Y/Y


[PALM LOGO]

SG Operating Expenses Tightly Controlled

Total Non-GAAP Operating Expenses
($ Mill)*

   

-19% Y/Y           

    -46% from Q4 ‘01


[CHART]

 

* Excludes intangible amortization; impairment and restructuring charges & separation costs

20


[PALM LOGO]

Operational Discipline Producing Inventory Results

Palm Ending Inventory
($ Mill)
Inventory Turns

 

[CHART]
   
Ending Inv
Inv Turns

 

21


[PALM LOGO]

Managing Working Capital

Working Capital Days
Cash Conversion Cycle Days

[CHART]

22


[PALM LOGO]

 

         
Transaction Details        

 

 

 

  

 

 

Structure

 

     

 

Simultaneous with completion of PalmSource spin-off  

 

     

 

Handspring will be merged with remaining Palm Solutions
Group of Palm

 

 

     

 

Merger consideration (following spin-off of
PalmSource)

 

     

 

Fixed exchange ratio of 0.09 Palm shares for each share
of Handspring common stock owned
 

 

 

 

 

 

 

Palm, Inc. will issue approximately 13.9 million shares of
common stock to Handspring’s shareholders on a fully
diluted basis
 

 

 

 

 

 

 

Merged company ownership

 

     

 

Handspring’s shareholders will own approximately 32.2%
of the newly combined hardware company
 

 

     

 

Palm’s shareholders will own approximately 67.8%

 

 

     

  *This page contains forward-looking information that involves risks,
     uncertainties and assumptions. Please see slide 28 for additional information.

23

 

 


[PALM LOGO]

Transaction Will Strengthen Two Industry Leaders

  [PALMSOURCE LOGO]

Step 1: PalmSource Spin-Off – Tax-free distribution of all PalmSource shares owned by Palm to Palm’s shareholders only

     
  STEP 1

Step 2: Handspring Acquisition – Occurs immediately following the spin-off of PalmSource

[PALM LOGO]         
  [PALM SOLUTIONS GROUP LOGO] Handspring shareholders to receive 0.09 Palm shares for each share of Handspring owned
     
  STEP 2 As a result, Handspring shareholders will own 32.2% and Palm shareholders 67.8% of the merged company
      
  [HANDSPRING LOGO] [GRAPHIC]

*This page contains forward-looking information that involves risks, uncertainties and assumptions. Please see slide 28 for additional information.

24


 

[PALM LOGO]

Handspring Acquisition Details
   

Implied valuation

     
  Value to be received by Handspring shareholders will be based on the per share price of (Palm less PalmSource) multiplied by 13.9 million shares
   
Conditions of closing
   
  Customary regulatory approvals and customary closing conditions
     
  Shareholder approvals
   
Others
   
  Palm received 37.5% voting commitment from Handspring principals
     
  Palm to provide initial $10M line of credit to Handspring until closing (amounts and maturity to change under certain conditions)

*This page contains forward-looking information that involves risks, uncertainties and assumptions. Please see slide 28 for additional information.

25


[PALM LOGO]

Roadmap to Completion
Expect transaction to close in Fall ‘03

[PALMSOURCE LOGO]
   

Shareholders meetings

[PALM SOLUTIONS
GROUP LOGO]   
  
Proxy mailings
SEC filings and reviews
[HANDSPRING LOGO]
Domestic and Foreign
antitrust filings and reviews
   
   
MERGED COMPANY

Announcement

   
  

Today

Palm Q4 03 Results

Palm Q1 04 Results

Fall 2003

Handspring Q4 03 Results

Handspring Q1 04 Results

*This page contains forward-looking information that involves risks, uncertainties and assumptions. Please see slide 28 for additional information.

26


[PALM LOGO]

Industry Transformation
Creating shareholder value through industry growth and strategic focus

ULTRA-MOBILE
      
 
COMMUNICATIONS
EDUCATION
 
 
[PALMSOURCE LOGO]
 
INFORMATION
INDUSTRIAL
MARKET
     
LIFESTYLE      
OPPORTUNITY
[PALM LOGO]
 
[PALM SOLUTIONS GROUP LOGO]
 
  
 
[HANDSPRING LOGO]
 
         
 
MERGED COMPANY
 

27


[PALM LOGO]

Forward Looking Statements:

This presentation contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding the following: statements regarding our long term financial model and the targeted range of our gross profit and non-GAAP operating expenses and operating income; strategies, including with respect to capturing growth, growing the market, maintaining share and achieving consistent profitability; the market opportunities available to PalmSource and combined company; the strength of the Palm economy and the attraction of additional PalmSource licensees; the ability of the Palm Solutions Group to realize its objectives of growing the market, maintaining industry leadership and achieving consistent profitability; the strategic and operational benefits to the combined company following the merger; the strength of distribution channels and the product portfolio of the combined company following the merger; Palm’s existing and future products, services, technologies and solutions; market opportunities and growth and device segments; customers and customer segmentation; financial results, operating expenses, operational discipline and working capital management; the timing of the consummation of the merger and the spin-off; the expectation of greater revenue opportunities, operating efficiencies and cost savings as a result of the merger; the transformation of the handheld industry; technologies and growth and trends relating to such technologies and factors leading to the return of growth. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including, without limitation, the following: the approval of the transaction by the Palm and Handspring stockholders; the satisfaction of closing conditions, including the receipt of regulatory approvals; the ability of Palm and PalmSource to operate as separate companies after the spin-off; the successful integration of Handspring’s employees and technologies with those of Palm; fluctuations in demand for Palm’s and Handspring’s products and solutions; the ability to successfully combine product offerings; the possibility that the business cultures of Palm and Handspring are incompatible; possible development of marketing delays relating to product offerings; the introduction of new products by competitors or the entry of new competitors into the markets for Palm’s and Handspring’s products; Palm’s ability to maintain relationships with suppliers and distributors; Palm’s ability to effectively manage its cash, inventory and expenses; Palm’s ability to obtain technology from third parties for its product and service offerings; and technological shifts in the markets in which Palm operates. The combined company may not successfully integrate the operations of Palm and Handspring in a timely manner, or at all, and the combined company may not realize the anticipated benefits or synergies of the merger. A detailed discussion of other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in Palm’s and Handspring’s most recent filings with the Securities and Exchange Commission. Palm undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date of this presentation.

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[PALM LOGO]

Additional Information and Where to Find It

Palm, Inc. and Handspring, Inc. intend to file a registration statement on Form S-4 containing a joint proxy statement/prospectus in connection with the reorganization transaction involving Palm, PalmSource, Inc. and Handspring. In addition, PalmSource intends to file a registration statement on Form S-4 containing a prospectus relating to the distribution of PalmSource shares to the existing stockholders of Palm. Investors and security holders are urged to read these filings when they become available because they will contain important information about the reorganization transaction described herein. Investors and security holders may obtain free copies of these documents (when they are available) and other documents filed with the Securities and Exchange Commission at the Securities and Exchange Commission’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the Securities and Exchange Commission by Palm by contacting of Palm Investor Relations (877-696-7256 or palm.ir@corp.Palm.com). Investors and security holders may obtain free copies of the documents filed with the Securities and Exchange Commission by Handspring by contacting Handspring Investor Relations (Brad Driver at 650-230-5070 or bdriver@Handspring.com). Investors and security holders may obtain free copies of the documents filed with the Securities and Exchange Commission by PalmSource by contacting PalmSource Investor Relations (Al Wood at 408-400-3000 or Al.Wood@Palmsource.com).

Palm and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Palm and Handspring in connection with the reorganization transaction described herein. Information regarding the special interests of these directors and executive officers in the reorganization transaction described herein will be included in the joint proxy statement/prospectus of Palm and Handspring described above. PalmSource and its directors and executive officers also may be deemed to be participants in the solicitation of proxies from the stockholders of Palm and Handspring in connection with the reorganization transaction described herein. Information regarding the special interests of these directors and executive officers in the reorganization transaction described herein will be included in the prospectus of PalmSource described above Additional information regarding the directors and executive officers of Palm is also included in Palm’s proxy statement for its 2002 Annual Meeting of Stockholders, which was filed with the Securities and Exchange Commission on or about August 26, 2002. This document is available free of charge at the Securities and Exchange Commission’s web site at www.sec.gov and from Palm by contacting Palm Investor Relations (877-696-7256 or palm.ir@corp.Palm.com).

     Handspring and its directors and executive officers also may be deemed to be participants in the solicitation of proxies from the stockholders of Handspring and Palm in connection with the reorganization transaction described herein. Information regarding the special interests of these directors and executive officers in the reorganization transaction described herein will be included in the joint proxy statement/prospectus of Palm and Handspring described above. Additional information regarding these directors and executive officers is also included in Handspring’s proxy statement for its 2002 Annual Meeting of Stockholders, which was filed with the Securities and Exchange Commission on or about October 1, 2002. This document is available free of charge at the Securities and Exchange Commission’s web site at www.sec.gov and from Handspring by contacting Handspring Investor Relations (Brad Driver at 650-230-5070 or bdriver@Handspring.com).

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[PALM LOGO]

802.11 Gaining Momentum at Work and Home

Business/Campus   Hotspots
     
~20% of large corporations have wireless LANs   Airports, hotels, retail, campus
     
300,000 PCs/month added to wireless LANs

Wi-Fi
[GRAPHIC]

>3,400 in US
>1,500 in Europe
     
80% higher-ed campuses have wireless access      Many Supporters: IBM, Intel, Carriers, Cometa, WayPort
     
Home Networking
 
55% of wireless LAN hardware purchases were made by consumers*
 
  *Q2 2002  

Sources: Gartner Group, www.wifinder.com,
US Department Education

30


[PALM LOGO]

Integrated VPN Client Allows Secure Access to Business Data

Email

[GRAPHIC]

 

• 

VersaMail 2.5 up to 8 accounts, IMAP and POP3, sync mail, SSL* — automatic retrieve with notification

     

• 

Integrates with Palm Photos, Documents To Go, Voice Memo, Web Browser

         

Web Browsing

[GRAPHIC]

 

• 

Access secure websites – company intranet
     

• 

Supports Internet standards HTML, HTTP, XHTML, JavaScript, SSL 3.0 and more
         

Wireless Synchronization

[GRAPHIC]

 

• 

Keep up-to-date with Calendar, Contacts, email, Docs, backing up data on your business PC

User-friendly VPN client, compatible with most Microsoft Windows platforms

Targeted to mobile and SOHO professionals that need behind-the-firewall access

*SSL Receive Only

31


[PALM LOGO]

Delivering Performance and
Useful Innovation to Customers

TUNGSTEN
VS
[LOGO]
iPAQ
 
Third party test measuring performance and battery life between Tungsten T and C vs HP iPAQ 1910 and 5450
 

802.11b wireless battery life —› Tungsten C battery lasted 1.5 hours longer than the 5450
 

Wireless download speed —› Tungsten C was over 2 times faster than the 5450
 
Battery life —› Tungsten C outperformed all other devices
 
Time to data loss —› Tungsten T and C lasted 5 times longer than the 5450 and 2 times longer than the 1910
   
Palm Solutions Group devices equaled or outperformed the HP devices in all tests

Source: VeriTest

32


[PALM LOGO]

Early Market Reaction to Spring Products

THE WALL STREET JOURNAL
Walt Mossberg
   “There is nothing on the market, in terms of size, price and features, quite like the Zire 71”… “I’ve found it to be a first-rate product that delivers what it promises”… The screen is “sharper and more vivid than the much-acclaimed screens on the Pocket PCs … this is simply the best screen I have ever seen on a PDA.”
  
   
[LOGO]
   
Alex Slawsby
  “The Zire [71] is well positioned for midrange dominance, which is the new battleground for consumers.”
  
   
[LOGO]
   
Richard Shim
 

“The Tungsten C and the Zire 71 are innovative devices for a company that until recently had been criticized for not innovating fast enough.”

33


[PALM LOGO]

Revenue Stability Since Spring 2001 Reset

Total Palm Revenue ($ Mill)

Palm Re-Set
[CHART]

34


[PALM LOGO]

Factors Leading to the Return of Growth

• Technology improvements – processor, displays, design

• Data-oriented networks – GPRS, 1xRTT

• New applications – MP3, Bluetooth, browsing, WiFi

• Emerging markets – China

ARM
INTEL XScale
[GRAPHIC]
[GRAPHIC]
[LOGO] BLUEBOOTH
[LOGO] Wi-Fi
[LOGO OF PALMSOURCE]
GPRS
REAL ONE
PALM OS 5

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