Be Reports Growth of 27% For Six Months Ended 6/30/99

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Be Incorporated Reports Revenue Growth of 27% For The Six Months Ended June 30, 1999

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Be, Inc.
Wesley S. Saia
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investors@be.com
Be Incorporated Reports Revenue Growth of 27% For The Six Months Ended June 30, 1999

MENLO PARK, CA, August 16, 1999 - Be ® Incorporated (Nasdaq: BEOS) today reported financial results for the quarter and six months ended June 30, 1999.
Net revenues for the second quarter of 1999 were $537,000, an increase of 74% from $309,000 reported for the first quarter of 1999, and a decrease of 11% from $602,000 in the same period in 1998. For the six months ended June 30, 1999, the Company reported revenue of $846,000, an increase of 27% from $666,000 reported in the first half of 1998.

Excluding non-cash expenses associated with the amortization of deferred compensation and preferred stock accretion, the Company reported a net loss for the second quarter of $4.7 million, or $1.11 per share, as compared to a net loss of $4.5 million, or $1.47 per share, for the same period in 1998, and a net loss of $4.2 million, or $1.08 per share in the first quarter of 1999. Including non-cash expenses associated with the amortization of deferred compensation and preferred stock accretion, net loss for the second quarter of 1999 was $6.6 million, or $1.54 per share compared to $5.7 million or $1.86 per share for the same period in 1998 and $6.0 million or $1.54 per share for the first quarter of 1999.

Excluding non-cash expenses associated with the amortization of deferred compensation and preferred stock accretion, the Company reported a net loss for the first half of 1999 of $8.9 million, or $2.18 per share, as compared to a net loss of $6.9 million or $2.37 per share for the first half of 1998. Including non-cash expenses associated with the amortization of deferred compensation and preferred stock accretion, net loss for the first half of 1999 was $12.6 million, or $3.07 per share as compared to a net loss of $8.6 million or $2.99 per share reported in the first half of 1998.

"This is the first time we are reporting financial results as a public company, and we are pleased to have posted revenue growth" commented Jean-Louis Gassée, president and chief executive officer. He added, "In mid-June, we released version R4.5 of our operating system. This milestone release includes software developments and increased hardware support to further enhance the broadband digital media experience of our users."

"With the emergence of digital media - from digital video cameras, and DVD players to MP3 - the need for desktops and Internet appliances to handle multiple, simultaneous streams of digital media is increasing. The new release of BeOSâ increases Be’s technology leadership in providing these platforms with enhanced support for multi-stream audio and video," said Roy Graham, senior vice president and chief marketing officer at Be. "In this context, Be announced new OEM relationships with AST and iDOT during the quarter. These follow previously announced relationships with Hitachi in Japan and Fujitsu in Europe."

"In conjunction with the new release of BeOS, a number of key application vendors also announced their commitment to BeOS. These include BeatWare, EventLoop, Human Touch, Lost Marble, Nichimen, Virtual DSP, MetaCreations and Opera Software, covering audio, video, games, graphics and browser applications" concluded Roy Graham.

In July 1999, Be Incorporated completed an initial public offering of 6.0 million shares. Net proceeds to Be Incorporated from the offering totaled approximately $32.4 million.

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Forward Looking Statements

The statements contained in this Press Release may contain "forward-looking statements." Actual events or results may differ materially as a result of risks facing Be Incorporated or actual results differing from the assumptions underlying such statements. Such risks and assumptions include, but are not limited to, risks related to competition and market acceptance of BeOS, ability to establish and maintain strategic relationships, availability of third party applications that operate on BeOS, and ability to increase sales and market awareness for BeOS. All forward-looking statements are expressly qualified in their entirety by the "Risk Factors" and other cautionary statements included in the Company's prospectus filed pursuant to Rule 424(b) of the Securities Act of 1933, with the Securities and Exchange Commission on July 20, 1999 (Commission File No. 333- 77855).

About Be®

Be Incorporated offers the BeOS® operating system, an operating system designed for digital media applications and Internet appliances. BeOS is capable of providing faster and more predictable processing times for digital media applications than traditional desktop operating systems. BeOS can run on a wide range of devices including Internet appliances, desktop PCs and high-performance multiprocessor workstations. BeOS is promoted through relationships with OEMs, applications developers, consumer electronic manufacturers and Internet service and content providers. Be Incorporated was founded in 1990, is headquartered in Menlo Park, California and has offices in Asia and in Europe. Be is publicly traded on Nasdaq under the symbol BEOS and can be reached at (650) 462-4100 or http://www.be.com.

BE INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 1999 1998 1999 1998 Net revenues $ 537 $ 602 $ 846 $ 666 Cost of revenues 239 1,620 324 1,763 ------- ------- ------- ------- Gross profit (loss) 298 (1,018) 522 (1,097) Operating expenses: Research and development 1,783 1,951 3,670 3,026 Sales and marketing 2,587 1,027 4,341 1,883 General and administrative 694 678 1,559 1,129 Amortization of deferred stock compensation 1,713 1,078 3,378 1,615 ------- ------ ------- ------- Total operating expenses 6,777 4,734 12,948 7,653 ------- ------ ------- ------- Loss from operations (6,479) (5,752) (12,426) (8,750) Other income, net 32 195 133 269 ------- ------ ------- ------- Net Loss $(6,447) $(5,557) $(12,293) $(8,481) ======= ======= ======= ====== Net loss attributable to common stockholders $(6,578) $(5,654) $(12,557) $(8,644) ======= ======= ======= ====== Basic and diluted net loss per share $ (1.54) (1.86) $ (3.07) $ (2.99) ======= ======= ====== ====== Shares used to compute basic and diluted net loss per share 4,266 3,046 4,090 2,893 ======= ======= ====== ====== Net loss per share excluding amortization of deferred compensation and preferred stock accretion $ (1.11) $ (1.47) $ (2.18) $ (2.37) ======= ======= ======= =======

BE INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (Unaudited) (Audited) June 30, December 31, ASSETS 1999 1998 ---- ---- Current assets: Cash and cash equivalents $ 3,653 $ 11,648 Accounts receivable, net 242 477 Prepaid expenses and other 259 327 ------------- ------------- Total current assets 4,154 12,452 Property and equipment, net 578 403 Other assets 1,669 779 ------------- ------------- Total Assets $ 6,401 $ 13,634 ============= ============= LIABILITIES MANDATORILY REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT Current Liabilities: Accounts payable $ 1,098 $ 576 Accrued Expenses 1,826 1,094 Technology license obligations 723 688 Deferred revenue 566 392 ------------- ------------- Total current liabilities 4,213 2,750 Technology license obligations 446 779 Mandatorily redeemable preferred stock 38,268 38,005 Total stockholders' equity (36,526) (27,900) ------------- ------------- Total Liabilities, Mandatorily Redeemable Preferred Stock and Stockholders' Deficit $ 6,401 $ 13,634 ============= =============

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