exv99w1
Exhibit 99.1
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AT THE COMPANY:
Thomas P. Matthews
Chief Strategy Officer
949-362-5800
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IR INQUIRIES:
Charles Messman, Todd Kehrli
MKR Group
323-468-2300
ir@mkr-group.com |
SMITH MICRO SOFTWARE REPORTS 2011 FIRST QUARTER
FINANCIAL RESULTS
Aliso Viejo, CA, May 4, 2011 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 2011 first quarter ended March 31, 2011.
First quarter revenues were in line with our revised expectations, after we became aware that
orders for our core connection manager product from one of our major customers would be greatly
reduced this quarter, said William W. Smith Jr., President and CEO of Smith Micro Software. The
wireless industry continues to rapidly evolve to faster data networks and new smart phones, tablets
and laptop computers with increasing capabilities. We believe that this transition will create
significant new opportunities for Smith Micro going forward. For example, the need for software to
manage the increasing number of mobile hotspots launching in the market today is critical for the
overall user experience, as well as better enabling carriers and device manufacturers to bring new
solutions to market faster.
We made positive strides during the first quarter in preparation for the market launch later in Q2
of our QuickLink® Hotspot Manager, SODA (Secure-on Device API) and Mobile Network Director.
These powerful management products, along with our leading connection management solutions,
continue to receive a strong reception from our partners and customers. As the mobile data market
becomes increasingly complicated, the need for seamless solutions to manage the users connections
is critical to the growth of the mobile data market.
Mr. Smith concluded, We remain very positive about the long-term prospects of the Company as technology evolves in the
marketplace, and we anticipate that the pace of sales for mobile broadband devices using our
software will begin to return to improved order levels in the second half of this year.
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Smith Micro Software First Quarter 2011 Financial Results
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Page 2 of 7 |
Smith Micro reported revenue of $17.8 million for the first quarter ended March 31, 2011, compared
to $29.9 million reported in the first quarter ended March 31, 2010.
First quarter gross profit on a GAAP basis was $14.0 million, compared to $26.1 million
reported in the first quarter of 2010. On a non-GAAP basis (which excludes amortization of
intangibles and stock compensation), first quarter gross profit was $15.3 million, compared to
$27.6 million for the same quarter last year.
GAAP gross profit as a percentage of revenue was 78.8% for the first quarter of 2011, compared to
87.5% for the same quarter last year. Non-GAAP gross profit as a percentage of revenue was 86.0%
for the first quarter of 2011, compared to 92.6% for the same quarter last year primarily due to
our lower revenue.
GAAP net loss for the first quarter of 2011 was $7.8 million, or a loss of $0.22 per share,
compared to GAAP net income of $1.6 million, or $0.05 per diluted share, for the first quarter of
2010.
Non-GAAP net loss for the first quarter of 2011 was $4.7 million, or a loss of $0.13 per share,
compared to net income of $6.2 million, or $0.18 per diluted share, for the first quarter of 2010.
Total cash and cash equivalents and short-term investments at March 31, 2011 were $64.4 million.
Fully diluted weighted average common shares outstanding as of March 31, 2011 were 35.3 million
compared to 34.2 million fully diluted weighted average common shares outstanding as of March 31,
2010.
The Company uses a non-GAAP reconciliation of gross profit, income before taxes, 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 compensation, and non-cash tax expense
are excluded from the non-GAAP earnings calculation. Since we are in a loss position, the non-GAAP
income tax benefit for the first quarter 2011 is computed by using the Companys combined U.S.
federal and state statutory tax rate of 40.2%. 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.
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Smith Micro Software First Quarter 2011 Financial Results
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Page 3 of 7 |
Financial Guidance:
Based on current financial data and managements current plans and assumptions, Smith Micro is
projecting that its revenues for the second fiscal quarter of 2011 will be between $15 million to
$20 million.
Investor Conference Call:
Smith Micro Software will hold an investor conference call today to discuss the Companys first
quarter 2011 results at 4:30 p.m. ET, May 4, 2011. To access the call dial (800) 762-8908 and when
prompted provide 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, Inc.:
Smith Micro Software, Inc. creates new possibilities by developing mobile applications and
solutions to solve customer problems. Through our insight into the market, we develop new
applications that put you in control of your digital lifestyle. Our portfolio of products and
services spans Connectivity Management, Communications and Content Management solutions.
To complete Smith Micros solutions, the company also provides server software applications and
services to help its customers manage their software investments.
Safe Harbor Statement:
This release may contain forward-looking statements that involve risks and uncertainties, including
without limitation forward-looking statements relating to the companys quarterly revenues
guidance, its financial prospects and other projections of its performance, the companys ability
to increase its business and the anticipated timing and financial performance of its new products
and services 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 the companys products from its customers and their end-users, new and
changing technologies and mobile communications products, customer acceptance of those technologies
and products, new and continuing adverse economic conditions, and the companys ability to compete
effectively with other software providers. These and other factors discussed in the companys
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 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.
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Smith Micro Software First Quarter 2011 Financial Results
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Page 4 of 7 |
Smith Micro, QuickLink, SODA, Mobile Network Director and the 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
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Smith Micro Software First Quarter 2011 Financial Results
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Page 5 of 7 |
Smith
Micro Software, Inc.
Reconciliation of GAAP to Non-GAAP Results
(in thousands, except per share amounts unaudited)
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Stock |
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Non- |
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GAAP |
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Comp. |
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Amort. |
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Taxes |
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GAAP |
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Three Months Ended 03/31/11: |
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Gross profit |
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$ |
14,015 |
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$ |
17 |
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$ |
1,260 |
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$ |
0 |
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$ |
15,292 |
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Income (loss) before taxes |
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($12,969 |
) |
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$ |
3,009 |
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$ |
2,030 |
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$ |
0 |
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($7,930 |
) |
Net income (loss) |
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($7,753 |
) |
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$ |
3,009 |
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$ |
2,030 |
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($2,028 |
) |
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($4,742 |
) |
EPS-diluted |
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($0.22 |
) |
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$ |
0.09 |
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$ |
0.06 |
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($0.06 |
) |
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($0.13 |
) |
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Three Months Ended 03/31/10: |
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Gross profit |
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$ |
26,130 |
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$ |
28 |
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$ |
1,484 |
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$ |
0 |
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$ |
27,642 |
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Income before taxes |
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$ |
2,946 |
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$ |
2,802 |
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$ |
2,253 |
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$ |
0 |
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$ |
8,001 |
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Net income (loss) |
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$ |
1,592 |
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$ |
2,802 |
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$ |
2,253 |
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($486 |
) |
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$ |
6,161 |
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EPS-diluted |
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$ |
0.05 |
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$ |
0.08 |
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$ |
0.07 |
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($0.02 |
) |
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$ |
0.18 |
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Smith Micro Software First Quarter 2011 Financial Results
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Page 6 of 7 |
Smith Micro Software, Inc.
Statements of Operations for the Three Months Ended March 31, 2011 and 2010
(in thousands, except per share amounts)
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For the Three Months |
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Ended March 31 |
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2011 |
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2010 |
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(unaudited) |
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(unaudited) |
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Revenues |
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$ |
17,791 |
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$ |
29,862 |
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Cost of revenues |
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3,776 |
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3,732 |
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Gross profit |
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14,015 |
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26,130 |
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Operating expenses: |
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Selling and marketing |
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8,362 |
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7,290 |
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Research and development |
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11,680 |
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10,128 |
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General and administrative |
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6,985 |
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5,806 |
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Total operating expenses |
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27,027 |
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23,224 |
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Operating income (loss) |
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(13,012 |
) |
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2,906 |
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Interest and other income |
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43 |
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40 |
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Income (loss) before taxes |
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(12,969 |
) |
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2,946 |
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Income tax expense (benefit) |
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(5,216 |
) |
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1,354 |
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Net income (loss) |
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$ |
(7,753 |
) |
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$ |
1,592 |
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Earnings
(loss) per share: |
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Basic |
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$ |
(0.22 |
) |
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$ |
0.05 |
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Diluted |
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$ |
(0.22 |
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$ |
0.05 |
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Weighted average shares outstanding: |
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Basic |
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35,263 |
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33,730 |
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Diluted |
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35,263 |
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34,176 |
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Smith Micro Software First Quarter 2011 Financial Results
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Page 7 of 7 |
Smith Micro Software, Inc.
Consolidated Balance Sheets
(in thousands)
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March 31, |
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December 31, |
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2011 |
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2010 |
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(unaudited) |
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(audited) |
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ASSETS |
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Current Assets: |
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Cash & cash equivalents |
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$ |
7,689 |
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$ |
17,856 |
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Short term investments |
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56,683 |
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54,694 |
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Accounts receivable, net |
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24,810 |
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29,812 |
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Income tax receivable |
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2,872 |
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2,872 |
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Inventory, net |
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352 |
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370 |
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Prepaid and other assets |
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1,407 |
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|
1,167 |
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Deferred tax asset |
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1,852 |
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2,565 |
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Total current assets |
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95,665 |
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109,336 |
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Equipment & improvements, net |
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17,478 |
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11,623 |
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Goodwill |
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94,231 |
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94,231 |
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Intangible assets, net |
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17,429 |
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19,459 |
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Other assets |
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240 |
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243 |
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Deferred tax asset |
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6,253 |
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TOTAL ASSETS |
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$ |
231,296 |
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$ |
234,892 |
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LIABILITIES & STOCKHOLDERS EQUITY |
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Current Liabilities: |
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Accounts payable |
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$ |
7,224 |
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$ |
4,592 |
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Accrued liabilities |
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8,253 |
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|
8,444 |
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Deferred revenue |
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438 |
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|
1,667 |
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Total current liabilities |
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15,915 |
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|
14,703 |
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Long-term liabilities |
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525 |
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|
197 |
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Deferred tax liability |
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1,727 |
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|
1,727 |
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Total non-current liabilities |
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2,252 |
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|
1,924 |
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Stockholders equity: |
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Common stock |
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36 |
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35 |
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Additional paid in capital |
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204,314 |
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|
201,702 |
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Accumulated other comprehensive loss |
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(6 |
) |
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(10 |
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Accumulated earnings |
|
|
8,785 |
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|
16,538 |
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Total stockholders equity |
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213,129 |
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|
218,265 |
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TOTAL LIABILITIES & STOCKHOLDERS EQUITY |
|
$ |
231,296 |
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$ |
234,892 |
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