EX-99.1 2 a29841exv99w1.htm EXHIBIT 99.1 exv99w1
 

EXHIBIT 99.1
(SmithMicro Logo)
     
AT THE COMPANY:
  IR INQUIRIES:
Bruce T. Quigley
  Charles Messman, Todd Kehrli
Vice President of Corporate Development and
  MKR Group
Investor Relations
  323-468-2300
949-362-5800
  ir@mkr-group.com
bquigley@smithmicro.com
    
 
SMITH MICRO SOFTWARE REPORTS FIRST QUARTER 2007 RESULTS
First Quarter Y-O-Y Revenues Increased 79% to $17.7 million
Pro Forma Y-O-Y Net Income Increased 113% to $6.2 million, or $0.20 per share
Aliso Viejo, Calif., May 2, 2007 — Smith Micro Software, Inc. (NASDAQ: SMSI), a developer and marketer of a wide range of software solutions for the wireless market, today reported its 2007 first quarter financial results.
First Quarter 2007 Key Financial Results:
  •   Revenue increased to $17.7 million, up 79% year-over-year.
 
  •   Pro forma net income was $6.2 million, up 113% over the same period last year.
 
  •   Pro forma earnings of $0.20 per diluted shares on 30.7 million shares, compared to $0.12 per diluted share on 24.3 million shares for the first quarter of 2006
 
  •   Cash and cash equivalents were $94.0 million, up from $92.6 million reported at December 31, 2006
Financial Discussion:
“The first quarter was marked by continued execution on many key objectives for the Company,” said William W. Smith, Jr., President and CEO of Smith Micro Software, Inc. “We made significant progress with our business case within our Multimedia business segment by signing both IUSACELL, one of Mexico’s leading technology mobile operators, and one of the largest domestic wireless carriers, Sprint, for our solution to drive its new music data plan. We see these new relationships as a significant step in the Company’s commitment to broaden and diversify our customer base.

 

 

Smith Micro 2007 First Quarter Financial Results   Page 2 of 8
Within our Multimedia business segment, we also launched our upgraded QuickLink Media solution, an intuitive, all-in-one solution that significantly expands our market reach. Our Sales pipeline remains strong and we continue to expect to sign on other new wireless carriers in 2007.”
Mr. Smith continued, “We also reached a milestone for the company in announcing joint development with Kyocera Wireless in evaluating Smith Micro’s StuffIt Wireless resource compression solution for selected Kyocera mobil phones slated for release in 2008. We believe our solution is uniquely attractive as it provides the handset manufacturer a strong return on investment, while providing the end users an enhanced experience. We continue to have discussions with several other large handset manufacturers and look to announce additional wins in the future.”
Mr. Smith concluded, “We are pleased that our QuickLink Mobile solution had another strong quarter, and we see market trends favoring continued growth in this area as the CDMA carriers roll out the EVDO-REV A service, and the GSM carriers move to HSDPA. Overall, we are exited about the progress Smith Micro has made at the start of a new year and we look forward to a successful 2007 as we continue to expand our portfolio of solutions through acquisitions and new organic technology developments. We expect to expand and diversify our customer base, pursue new markets opportunities, and continue to build upon our leadership position in the wireless software space.”
Smith Micro reported record net revenue of $17.7 million for the first quarter ended March 31, 2007, a 79% increase when compared to the $9.9 million reported in the first quarter of 2006.
Pro forma net income (which excludes amortization of intangible assets associated with acquisitions, stock compensation related expenses and non-cash tax expense) for the first quarter was $6.2 million, or $0.20 per diluted share, compared to pro forma net income of $2.9 million or $0.12 per diluted share for the first quarter of 2006. Fully diluted shares outstanding as of March 31, 2007 increased to 30.7 million as compared to 24.3 million shares outstanding as of March 31, 2006.
On a GAAP basis, which includes amortization of acquisition intangibles, stock compensation and non-cash tax expense, the Company earned $0.06 per diluted share for the first quarter of 2007, compared to $0.07 per diluted share for the first quarter of 2006.

 

 

Smith Micro 2007 First Quarter Financial Results   Page 3 of 8
Total cash and equivalents at March 31, 2007 increased to $94.0 million, compared to $92.6 million at December 31, 2006.
The Company uses a pro forma reconciliation of its condensed consolidated statements of income in the presentation of financial results in this press release. Management believes that this presentation may be more meaningful in analyzing our results of operations and income generation, since amortization of intangibles from acquisitions, amortization of deferred stock-based compensation and impairment gains and losses on investments, and non-cash tax expense are excluded from the pro forma earnings calculation. This presentation may be considered more indicative of our ongoing operational performance. The tables below present the differences between pro forma earnings and net income on an absolute and per share basis.
Investor Conference Call
Smith Micro will hold an investor conference call to discuss the company’s first quarter results at 4:30 p.m. Eastern time today, May 2, 2007. The call can be accessed by dialing (800) 218-0204 and giving the pass code “SMSI.” Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. In addition, the conference call will be available over the Internet at www.smithmicro.com in the Investor Relations section.
About Smith Micro Software:
Smith Micro Software, Inc., headquartered in Aliso Viejo, CA, is a developer and marketer of wireless communications and utility software products for multiple OS platforms. The company designs easy-to-use software for personal computing and business solutions around the world. With a focus on wireless and broadband technologies and the Internet, the company’s products and services enable wireless communications, file and image compression, and digital image and music management. In addition, Smith Micro develops and publishes award-winning software solutions for Windows and Macintosh, empowering users in the areas of information access, removal, recovery, security, and Internet distribution. Smith Micro’s leading brands are QuickLink®, StuffIt®, CheckIt®, Internet Cleanup™ and Spring Cleaning®. Smith Micro’s complete line of products is available through retail stores, Value-Added Resellers (VARs), Smith Micro’s consumer, enterprise, wireless OEM sales groups and the company’s websites. Smith Micro’s common stock trades on the NASDAQ Global Market® under the symbol SMSI.

 

 

Smith Micro 2007 First Quarter Financial Results   Page 4 of 8
Safe Harbor Statement: This release may contain forward-looking statements that involve risks and uncertainties including, without limitation, forward-looking statements relating to the company’s financial prospects and projections, the company’s ability to increase its business, and the anticipated timing and financial performance of new products and potential acquisitions. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are new and changing technologies, customer acceptance of those technologies, fluctuations or cancellations in orders from customers, new and continuing adverse economic conditions, and the company’s ability to compete effectively with other software companies. These and other factors discussed in the company’s filings with the Securities and Exchange Commission, including its filings on Forms 10-K and 10-Q, could cause actual results to differ materially from those presented in any forward-looking statements. Smith Micro assumes no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this press release.
Smith Micro and the Smith Micro logo are trademarks or registered trademarks of Smith Micro Software, Inc. All other trademarks and product names are the property of their respective companies.
Note: Financial Schedules Attached

 

 

Smith Micro 2007 First Quarter Financial Results   Page 5 of 8
Smith Micro Software, Inc.
Pro-forma Statement of Operations for the Three Months Ended March 31, 2007
(results exclude amortization of intangibles associated with the acquisitions of
Allume Systems, Inc. PhoTags, Inc. and Ecutel Systems, Inc. as well as
stock based compensation and non-cash income tax expense)
(in thousands, except per share amounts)
                         
            Unaudited        
    Per GAAP     Adjustments     Proforma  
Net Revenues
   $ 17,667     $ —     $ 17,667  
Cost of Revenues
     5,679       (312 )     5,367  
 
                  
Gross Profit
     11,988       312       12,300  
OPERATING EXPENSES
                        
Selling & Marketing
     3,459       (1,129 )     2,330  
Research & Development
     2,723       (454 )     2,269  
General & Administrative
     3,595       (1,199 )     2,396  
 
                  
Total Operating Expenses
     9,777       (2,782 )     6,995  
 
                  
Operating Income
     2,211       3,094       5,305  
Interest Income
     1,226               1,226  
 
                  
Income Before Income Taxes
     3,437       3,094       6,531  
Income Tax Expense
     1,595       (1,269 )     326  
 
                  
Net Income
   $ 1,842     $ 4,363     $ 6,205  
 
                  
 
                        
Income Per Share, Basic
   $ 0.06             $ 0.21  
 
                    
 
                        
Weighted Average Shares Outstanding, Basic
     29,051               29,051  
 
                    
 
                        
Income Per Share, Diluted
   $ 0.06             $ 0.20  
 
                    
 
                        
Weighted Average Shares Outstanding, Diluted
     30,684               30,684  
 
                    

 

 

Smith Micro 2007 First Quarter Financial Results   Page 6 of 8
Smith Micro Software, Inc.
Pro-forma Statement of Operations for the Three Months Ended March 31, 2006
(results exclude amortization of intangibles associated with the acquisition of
Allume Systems, Inc. and stock based compensation expenses)
(in thousands, except per share amounts)
                         
            Unaudited        
    Per GAAP     Adjustments     Proforma  
Net Revenues
   $ 9,885     $ —     $ 9,885  
Cost of Revenues
     3,299       (273 )     3,026  
 
                  
Gross Profit
     6,586       273       6,859  
OPERATING EXPENSES
                        
Selling & Marketing
     1,873       (349 )     1,524  
Research & Development
     1,677       (251 )     1,426  
General & Administrative
     1,409       (224 )     1,185  
 
                  
Total Operating Expenses
     4,959       (824 )     4,135  
 
                  
Operating Income
     1,627       1,097       2,724  
Interest Income
     224               224  
 
                  
Income Before Income Taxes
     1,851       1,097       2,948  
Income Tax Expense
     39               39  
 
                  
Net Income
   $ 1,812     $ 1,097     $ 2,909  
 
                  
 
                        
Income Per Share, Basic
   $ 0.08             $ 0.13  
 
                    
 
                        
Weighted Average Shares Outstanding, Basic
     22,303               22,303  
 
                    
 
                        
Income Per Share, Diluted
   $ 0.07             $ 0.12  
 
                    
 
                        
Weighted Average Shares Outstanding, Diluted
     24,284               24,284  
 
                    

 

 

Smith Micro 2007 First Quarter Financial Results   Page 7 of 8
Smith Micro Software, Inc.
Statement of Operations for the Three Months Ended March 31, 2007 and 2006
(in thousands, except per share amounts)
                 
    Unaudited  
    2007     2006  
Net Revenues
   $ 17,667     $ 9,885  
Cost of Revenues
     5,679       3,299  
 
            
Gross Profit
     11,988       6,586  
OPERATING EXPENSES
                
Selling & Marketing
     3,459       1,873  
Research & Development
     2,723       1,677  
General & Administrative
     3,595       1,409  
 
            
Total Operating Expenses
     9,777       4,959  
 
            
Operating Income
     2,211       1,627  
Interest Income
     1,226       224  
 
            
Income Before Income Taxes
     3,437       1,851  
Income Tax Expense
     1,595       39  
 
            
Net Income
   $ 1,842     $ 1,812  
 
            
 
                
Income Per Share, Basic
   $ 0.06     $ 0.08  
 
            
 
                
Weighted Average Shares Outstanding, Basic
     29,051       22,303  
 
            
 
                
Income Per Share, Diluted
   $ 0.06     $ 0.07  
 
            
 
                
Weighted Average Shares Outstanding, Diluted
     30,684       24,284  
 
            

 

 

Smith Micro 2007 First Quarter Financial Results   Page 8 of 8
Smith Micro Software, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
                 
    March 31,     December 31,  
    2007     2006  
    (unaudited)          
ASSETS
                
Current Assets:
                
Cash & Cash Equivalents
   $ 94,046     $ 92,564  
Accounts Receivable, (Net)
     9,095       9,828  
Income Taxes Receivable
     122       122  
Deferred Tax Asset
     90       90  
Inventory
     622       857  
Prepaid & Other Assets
     640       308  
 
            
Total Current Assets
     104,615       103,769  
Equipment & Improvements, Net
     505       417  
Deferred Tax Asset
     6,191       7,786  
Goodwill
     24,501       15,266  
Intangible Assets, Net
     6,149       3,788  
 
            
TOTAL ASSETS
   $ 141,961     $ 131,026  
 
            
 
                
LIABILITIES & STOCKHOLDERS’ EQUITY
                
Current Liabilities:
                
Accounts Payable
   $ 2,294     $ 2,941  
Accrued Liabilities
     2,990       2,028  
 
            
Total Current Liabilities
     5,284       4,969  
 
            
 
                
Common Stock
     30       28  
Additional Paid In Capital
     137,794       129,018  
Accumulated Deficit
     (1,147 )     (2,989 )
 
            
Total Stockholders’ Equity
     136,677       126,057  
 
              
TOTAL LIABILITIES & EQUITY
   $ 141,961     $ 131,026  
 
            
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