EX-99.1 2 a53328exv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
(SMITHMICRO SOFTWARE LOGO)
     
AT THE COMPANY:
  IR INQUIRIES:
Robert Elliott
  Charles Messman, Todd Kehrli
Chief Marketing Officer
  MKR Group
949-362-5800
  323-468-2300
relliott@smithmicro.com
  ir@mkr-group.com
 
SMITH MICRO SOFTWARE REPORTS RECORD SECOND QUARTER
FINANCIAL RESULTS
Second Quarter 2009 Revenues Increase 11% to a Q2 Record of $26.0 Million;
EPS of $0.04 GAAP or $0.17 Non-GAAP
Aliso Viejo, CA, August 3, 2009 — Smith Micro Software, Inc. (NASDAQ: SMSI), a leading developer and marketer of software solutions and services for the mobility market, today reported financial results for its 2009 second quarter ended June 30, 2009.
“I am pleased to report another strong financial quarter for the company, where even in the current economic environment, we achieved record Q2 revenues of $26.0 million,” said William W. Smith Jr., President and CEO of Smith Micro Software. “Our second quarter results reflect the continued momentum we are generating in the marketplace with both new and existing customers led by our wireless business segment that grew 27% over last year to $21.4 million.”
Mr. Smith continued, “During the quarter we also significantly expanded our addressable market by signing our first cable operator that recently began offering mobile services. We also saw our carrier customers launch the first wave of Netbooks that are inherently designed for mobile connectivity. We look to expand our leadership as we capitalize on the opportunity to outfit these devices with our connectivity and security management solutions.”
Mr. Smith concluded, “We remain very optimistic about our business as we look to the remainder of our fiscal year 2009. We offer the leading software mobility platform in the marketplace today, and see significant opportunities in our business pipeline, as we continue to benefit from the strong growth of the broadband connectivity marketplace.”
Smith Micro reported revenues of $26.0 million for the second quarter ended June 30, 2009, an 11% increase over the $23.5 million reported in the second quarter ended June 30, 2008. This was a record revenue number for our fiscal second quarter.

 


 

Smith Micro 2009 Second Quarter Financial Results   Page 2 of 7
Second quarter gross profit on a GAAP basis of $22.1 million increased $4.1 million, or 23%, from the second quarter ended June 30, 2008. On a non-GAAP basis (which excludes amortization of intangibles, stock compensation and non-cash tax expense), second quarter gross profit was $23.3 million, an increase of $4.3 million, or 23%, from the same quarter last year.
GAAP gross profit, as a percentage of revenues was 84.9% for the second quarter of 2009, compared with 76.7% for the same quarter last year. Non-GAAP gross profit as a percentage of revenues was 89.7% for the second quarter of 2009, compared to 81.0% for the same quarter last year.
GAAP net income for the second quarter of 2009 increased to $1.3 million or $0.04 per diluted share, compared to a GAAP net loss for the second quarter of 2008 of $0.2 million, or a $0.01 loss per diluted share.
Non-GAAP net income for the second quarter of 2009 increased 54% to $5.6 million, or $0.17 per diluted share, compared to $3.6 million, or $0.12 per diluted share, for the second quarter of 2008.
Total cash and cash equivalents and short-term investments increased $7.2 million during the first six months of 2009 to $43.8 million, up from $36.6 million at December 31, 2008.
For the six-months ended June 30, 2009, the Company reported revenues of $49.8 million, a 10% increase from $45.3 million for the six months ended June 30, 2008.
GAAP gross profit of $41.3 million increased $6.6 million, or 19%, for the six months ended June 30, 2009 compared to $34.7 million for the six months ended June 30, 2008. The increase in gross profit was primarily due to improved product margins resulting from a more favorable product mix.
Non-GAAP gross profit (which excludes amortization of intangibles, stock compensation and non-cash tax expense) was $43.8 million for the six months ended June 30, 2009, an increase of $7.0 million, or 19%, from the same period last year.
GAAP net income for the six months ended June 30, 2009 was $1.6 million, or $0.05 per diluted share, compared to a GAAP net loss for the six months ended June 30, 2008 of $0.5 million, or a $0.02 loss per diluted share. Non-GAAP net income for the six months ended June 30, 2009 increased 42% to $9.6 million, or $0.30 per diluted share, as compared to $6.7 million, or $0.22 per diluted share, for the six months ended June 30, 2008.
The Company uses a non-GAAP reconciliation of gross profit, net income and earnings per share in the presentation of financial results in this press release. Management believes that this presentation may be more meaningful in analyzing our income generation, since amortization of intangibles from acquisitions, stock-based

 


 

Smith Micro 2009 Second Quarter Financial Results   Page 3 of 7
compensation, and non-cash tax expense are excluded from the non-GAAP earnings calculation. This presentation may be considered more indicative of our ongoing operational performance. The tables below present the differences between non-GAAP earnings and net income on an absolute and per-share basis. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and the non-financial measures as reported by Smith Micro Software may not be comparable to similarly titled amounts reported by other companies.
Financial Guidance:
Smith Micro Software is reiterating its previous guidance for fiscal year 2009 of revenues of $110 million to $115 million based on current financial data and management’s current plans and assumptions.
Investor Conference Call:
Smith Micro Software will hold an investor conference call to discuss the Company’s second quarter results at 4:30 p.m. Eastern time today, August 3, 2009. Dialing (877) 941-0844 and providing the pass code “SMSI” can access the call. 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, Inc.:
Smith Micro Software, Inc., headquartered in Aliso Viejo, California, with offices in Europe and Asia, develops mobility solutions that enable seamless broadband connectivity and next generation media and mobile convergence products over wireless networks. Smith Micro’s complete lines of products are available through our sales groups, direct from our websites, retail distributors, and value-added resellers. Smith Micro’s common stock trades on the NASDAQ Global Market under the symbol SMSI. For more information, please visit: www.smithmicro.com.
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 revenues guidance for fiscal 2009, our financial prospects and other projections of our performance, the company’s ability to increase its business and the anticipated timing and financial performance of our new products and potential acquisitions. Among the important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements are changes in demand for our products from our customers and their end-users, new and changing technologies, customer acceptance of those technologies, new and continuing adverse

 


 

Smith Micro 2009 Second Quarter Financial Results   Page 4 of 7
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 our filings on Forms 10-K and 10-Q, could cause actual results to differ materially from those expressed or implied in any forward-looking statements. The forward-looking statements contained in this release are made on the basis of the views and assumptions of management regarding future events and business performance as of the date of this release, and the company does not undertake any obligation to update these statements to reflect events or circumstances occurring after the date of this release. Revenues guidance provided in this press release represent a point-in-time estimate and are based on information as of the date of this press release. Management has made numerous assumptions in providing this guidance, which while believed to be reasonable, may not prove to be accurate. Numerous factors, including those noted above, may cause actual results to differ materially from the guidance provided. Smith Micro expressly disclaims any current intention or obligation to update the guidance provided or any other forward-looking statement in this press release to reflect future events or changes in facts assumed for purposes of providing this guidance or otherwise affecting the forward-looking statements contained in this press release.
Smith Micro, Smith Micro logo are registered trademarks or 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 2009 Second Quarter Financial Results   Page 5 of 7
Smith Micro Software, Inc.
Reconciliation of GAAP to Non-GAAP Results
(in thousands, except per share amounts)
                                         
            Stock                   Non-
    GAAP   Comp.   Amort.   Taxes   GAAP
Three Months Ended 6/30/09:
                                       
Gross profit
  $ 22,064     $ 56     $ 1,179     $ 0     $ 23,299  
Profit before taxes
  $ 2,802     $ 2,483     $ 2,138     $ 0     $ 7,423  
Net income
  $ 1,277     $ 2,483     $ 2,138       ($331 )   $ 5,567  
EPS-diluted
  $ 0.04     $ 0.08     $ 0.06       ($0.01 )   $ 0.17  
 
                                       
Three Months Ended 6/30/08:
                                       
Gross profit
  $ 17,989     $ 132     $ 876     $ 0     $ 18,997  
Profit (loss) before taxes
    ($328 )   $ 3,104     $ 1,742     $ 0     $ 4,518  
Net income (loss)
    ($158 )   $ 3,104     $ 1,742       ($1,067 )   $ 3,621  
EPS-diluted
    ($0.01 )   $ 0.10     $ 0.06       ($0.03 )   $ 0.12  
 
                                       
Six Months Ended 6/30/09:
                                       
Gross profit
  $ 41,329     $ 129     $ 2,366     $ 0     $ 43,824  
Profit before taxes
  $ 3,446     $ 5,075     $ 4,284     $ 0     $ 12,805  
Net income
  $ 1,555     $ 5,075     $ 4,284       ($1,310 )   $ 9,604  
EPS-diluted
  $ 0.05     $ 0.16     $ 0.13       ($0.04 )   $ 0.30  
 
                                       
Six Months Ended 6/30/08:
                                       
Gross profit
  $ 34,753     $ 232     $ 1,833     $ 0     $ 36,818  
Profit (loss) before taxes
    ($1,941 )   $ 6,746     $ 3,619     $ 0     $ 8,424  
Net income (loss)
    ($475 )   $ 6,746     $ 3,619       ($3,144 )   $ 6,746  
EPS-diluted
    ($0.02 )   $ 0.22     $ 0.12       ($0.10 )   $ 0.22  


 

Smith Micro 2009 Second Quarter Financial Results   Page 6 of 7
Smith Micro Software, Inc.
Statement of Operations for the Three and Six Months Ended June 30, 2009 and 2008
(in thousands, except per share amounts)
                                 
    For the Three Months   For the Six Months
    Ended June 30,   Ended June 30,
    2009     2008     2009     2008  
Revenues
  $ 25,986     $ 23,452     $ 49,774     $ 45,332  
Cost of revenues
    3,922       5,463       8,445       10,579  
                       
Gross profit
    22,064       17,989       41,329       34,753  
 
                               
Operating expenses:
                               
Selling and marketing
    6,148       5,839       12,425       12,574  
Research and development
    8,725       7,853       16,837       14,922  
General and administrative
    4,508       4,766       8,995       9,614  
                       
Total operating expenses
    19,381       18,458       38,257       37,110  
                       
Operating income (loss)
    2,683       (469 )     3,072       (2,357 )
Interest and other income
    119       141       374       416  
                       
Profit (loss) before taxes
    2,802       (328 )     3,446       (1,941 )
Income tax expense (benefit)
    1,525       (170 )     1,891       (1,466 )
                       
Net income (loss)
  $ 1,277     $ (158 )   $ 1,555     $ (475 )
                         
 
                               
Earnings (loss) per share:
                               
Basic
  $ 0.04     $ (0.01 )   $ 0.05     $ (0.02 )
Diluted
  $ 0.04     $ (0.01 )   $ 0.05     $ (0.02 )
 
                               
Weighted average shares outstanding:
                               
Basic
    32,338       30,855       32,008       30,637  
Diluted
    32,955       30,855       32,464       30,637  


 

Smith Micro 2009 Second Quarter Financial Results   Page 7 of 7
Smith Micro Software, Inc.
Consolidated Balance Sheets

(in thousands)
                 
    June 30,     December 31,  
    2009     2008  
ASSETS
               
Current Assets:
               
Cash & cash equivalents
  $ 14,048     $ 13,966  
Short-term investments
    29,784       22,649  
Accounts receivable, net
    22,126       18,424  
Inventory, net
    609       1,097  
Prepaid and other assets
    1,127       1,026  
Deferred tax asset
    1,412       1,698  
 
           
Total current assets
    69,106       58,860  
Equipment & improvements, net
    6,815       4,289  
Goodwill
    83,483       83,483  
Intangible assets, net
    23,316       27,603  
Deferred tax asset
    2,760       2,760  
 
           
TOTAL ASSETS
  $ 185,480     $ 176,995  
 
           
 
               
LIABILITIES & STOCKHOLDERS’ EQUITY
               
Current Liabilities:
               
Accounts payable
  $ 3,742     $ 3,492  
Accrued liabilities
    6,194       6,710  
Deferred revenue
    3,299       923  
 
           
Total current liabilities
    13,235       11,125  
Long-term liabilities
    343       466  
Stockholders’ equity:
               
Common stock
    32       31  
Additional paid in capital
    170,843       165,864  
Accumulated other comprehensive income
    32       69  
Accumulated earnings (deficit)
    995       (560 )
 
           
Total stockholders’ equity
    171,902       165,404  
 
           
TOTAL LIABILITIES & EQUITY
  $ 185,480     $ 176,995