EX-99.1 2 a59416exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(SmithMicro logo)
     
AT THE COMPANY:
Thomas P. Matthews
Chief Strategy Officer
949-362-5800
  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.”

 

 

Smith Micro Software First Quarter 2011 Financial Results   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 Company’s 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.

 

 

Smith Micro Software First Quarter 2011 Financial Results   Page 3 of 7
Financial Guidance:
Based on current financial data and management’s 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 Company’s 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 Micro’s 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 company’s quarterly revenues guidance, its financial prospects and other projections of its performance, the company’s 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 company’s 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 company’s ability to compete effectively with other software providers. 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 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.

 

 

Smith Micro Software First Quarter 2011 Financial Results   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

 

 

Smith Micro Software First Quarter 2011 Financial Results   Page 5 of 7
Smith Micro Software, Inc.
Reconciliation of GAAP to Non-GAAP Results
(in thousands, except per share amounts — unaudited)
                                         
            Stock                     Non-  
    GAAP     Comp.     Amort.     Taxes     GAAP  
Three Months Ended 03/31/11:
                                        
Gross profit
   $ 14,015     $ 17     $ 1,260     $ 0     $ 15,292  
Income (loss) before taxes
     ($12,969 )   $ 3,009     $ 2,030     $ 0       ($7,930 )
Net income (loss)
     ($7,753 )   $ 3,009     $ 2,030       ($2,028 )     ($4,742 )
EPS-diluted
     ($0.22 )   $ 0.09     $ 0.06       ($0.06 )     ($0.13 )
 
                                        
Three Months Ended 03/31/10:
                                        
Gross profit
   $ 26,130     $ 28     $ 1,484     $ 0     $ 27,642  
Income before taxes
   $ 2,946     $ 2,802     $ 2,253     $ 0     $ 8,001  
Net income (loss)
   $ 1,592     $ 2,802     $ 2,253       ($486 )   $ 6,161  
EPS-diluted
   $ 0.05     $ 0.08     $ 0.07       ($0.02 )   $ 0.18  

 

 

Smith Micro Software First Quarter 2011 Financial Results   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)
                 
    For the Three Months  
    Ended March 31  
    2011     2010  
    (unaudited)     (unaudited)  
Revenues
   $ 17,791     $ 29,862  
Cost of revenues
     3,776       3,732  
 
            
Gross profit
     14,015       26,130  
 
                
Operating expenses:
                
Selling and marketing
     8,362       7,290  
Research and development
     11,680       10,128  
General and administrative
     6,985       5,806  
 
            
Total operating expenses
     27,027       23,224  
 
            
Operating income (loss)
     (13,012 )     2,906  
Interest and other income
     43       40  
 
            
Income (loss) before taxes
     (12,969 )     2,946  
Income tax expense (benefit)
     (5,216 )     1,354  
 
            
Net income (loss)
   $ (7,753 )   $ 1,592  
 
            
 
                
Earnings (loss) per share:
                
Basic
   $ (0.22 )   $ 0.05  
Diluted
   $ (0.22 )   $ 0.05  
 
                
Weighted average shares outstanding:
                
Basic
     35,263       33,730  
Diluted
     35,263       34,176  

 

 

Smith Micro Software First Quarter 2011 Financial Results   Page 7 of 7
Smith Micro Software, Inc.
Consolidated Balance Sheets
(in thousands)
                 
    March 31,     December 31,  
    2011     2010  
    (unaudited)     (audited)  
ASSETS
                
Current Assets:
                
Cash & cash equivalents
   $ 7,689     $ 17,856  
Short term investments
     56,683       54,694  
Accounts receivable, net
     24,810       29,812  
Income tax receivable
     2,872       2,872  
Inventory, net
     352       370  
Prepaid and other assets
     1,407       1,167  
Deferred tax asset
     1,852       2,565  
 
            
Total current assets
     95,665       109,336  
Equipment & improvements, net
     17,478       11,623  
Goodwill
     94,231       94,231  
Intangible assets, net
     17,429       19,459  
Other assets
     240       243  
Deferred tax asset
     6,253       —  
 
            
TOTAL ASSETS
   $ 231,296     $ 234,892  
 
            
 
                
LIABILITIES & STOCKHOLDERS’ EQUITY
                
Current Liabilities:
                
Accounts payable
   $ 7,224     $ 4,592  
Accrued liabilities
     8,253       8,444  
Deferred revenue
     438       1,667  
 
            
Total current liabilities
     15,915       14,703  
 
Long-term liabilities
     525       197  
Deferred tax liability
     1,727       1,727  
 
            
Total non-current liabilities
     2,252       1,924  
 
                
Stockholders’ equity:
                
Common stock
     36       35  
Additional paid in capital
     204,314       201,702  
Accumulated other comprehensive loss
     (6 )     (10 )
Accumulated earnings
     8,785       16,538  
 
            
Total stockholders’ equity
     213,129       218,265  
 
            
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY
   $ 231,296     $ 234,892