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8-K - FORM 8-K - SMITH MICRO SOFTWARE, INC.d915409d8k.htm

Exhibit 99.1

 

LOGO

 

AT THE COMPANY: IR INQUIRIES:
Suzanne Runald Todd Kehrli or Jim Byers

Public Relations

949-362-5800

pr@smithmicro.com

MKR Group

323-468-2300

smsi@mkr-group.com

Smith Micro Software Achieves First Quarter Revenue Growth of 25% Year over Year

and Non-GAAP Profitability

Company Reiterates Fiscal 2015 Guidance

Aliso Viejo, CA, April 28, 2015Smith Micro Software, Inc. (NASDAQ:SMSI), a leading provider of wireless and mobility solutions, today reported financial results for its first quarter ended March 31, 2015.

“Revenue for the first quarter of 2015 was $10.5 million, up 24.6 percent compared to the first quarter of last year, and essentially flat compared to the fourth quarter of 2014 which is a significant accomplishment considering the historic seasonality of our business,” said William W. Smith Jr., President and CEO of Smith Micro Software. “The increase in revenues year-over-year was primarily due to new NetWise business at Comcast, our first MSO customer, and continued strong revenues for both NetWise and CommSuite products at Sprint. GAAP net income was essentially breakeven for the quarter and we were non-GAAP net income positive for the second consecutive quarter.”

“We continue to enhance our product portfolio, work on closing additional new deals that will bring us a predictable base of business, and keep our expenses under control. As such, we are reiterating our previously announced guidance for fiscal 2015 of revenue between $45 and $49 million, which would represent year-over-year growth in the range of 22 to 33 percent, and expect to be non-GAAP profitable for the year,” Mr. Smith concluded.

Fiscal First Quarter 2015 Financial Results:

Smith Micro Software reported revenue of $10.5 million for the first quarter ended March 31, 2015, compared to $8.4 million reported in the first quarter of 2014.


Smith Micro Software First Quarter 2015 Financial Results Page 2 of 6

 

First quarter gross profit on a GAAP and non-GAAP (which excludes stock compensation) basis was $8.4 million, compared to $6.0 million reported in the first quarter of 2014.

GAAP and non-GAAP gross profit as a percentage of revenue was 79.9 percent for the first quarter of 2015, compared to 71.4 percent for the same quarter last year.

GAAP net loss for the first quarter of 2015 was $10,000 or a loss of $0.00 per share, compared to GAAP net loss of $5.2 million, or $0.14 per share, for the first quarter of 2014.

Non-GAAP net income (which excludes stock compensation and non-cash tax expense) for the first quarter of 2015 was $0.4 million, or $0.01 earnings per diluted share, compared to a net loss of $2.7 million, or $0.07 loss per diluted share, for the first quarter of 2014.

Total cash and cash equivalents and short-term investments increased for the third consecutive quarter ending March 31, 2015 at $13.8 million.

Fully diluted weighted average common shares outstanding as of March 31, 2015 were 45.5 million, compared to 37.7 million fully diluted weighted average common shares outstanding as of March 31, 2014.

Fiscal 2015 Guidance:

 

    Revenue for fiscal 2015 is expected to be between $45 million and $49 million, which would represent year-over-year growth in the range of 22 to 33 percent.

 

    The Company expects to be non-GAAP profitable for the fiscal year 2015.

The Company uses a non-GAAP reconciliation of gross profit, profit (loss) before taxes, net income (loss) and earnings (loss) 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 stock-based compensation is excluded from the non-GAAP earnings calculation and adjustments are made for Proforma taxes. Since we are in a cumulative loss position, the non-GAAP income tax expense (benefit) for the period ended March 31, 2015 was computed by using a tax rate of 38 percent using the Company’s normalized combined U.S. federal, state and foreign statutory tax rates less various tax adjustments. 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 (loss) on an absolute and per-


Smith Micro Software First Quarter 2015 Financial Results Page 3 of 6

 

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.

Investor Conference Call:

Smith Micro Software will hold an investor conference call today to discuss the Company’s first quarter 2015 results at 4:30 p.m. ET, April 28, 2015. To access the call, dial (888) 539-3678 and when prompted provide the participant pass code 7522177. Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. In addition, the conference call will be available on the Smith Micro website in the Investor Relations section.

About Smith Micro Software, Inc.:

Smith Micro provides software to simplify and enhance the mobile experience. As the leader in wireless connectivity, our applications ensure the best Quality of Experience for mobile users while optimizing networks for service providers and enterprises. Using our intelligent policy-on-device platform, along with premium voice, video and content monetization services, we create new opportunities to engage consumers and capitalize on the growth of connected devices. For more information, visit smithmicro.com. (NASDAQ: SMSI)

Safe Harbor Statement:

This release contains forward-looking statements that involve risks and uncertainties, including without limitation, forward-looking statements relating to the company’s customer concentration given that the majority of our sales depend on a few large client relationships, including Sprint, the risk of being delisted from the NASDAQ Global Select Market if we fail to meet any of the listing requirements, financial prospects and other projections of its performance, the existence of new market opportunities and interest in the company’s products and solutions, and the company’s ability to increase its revenue by capitalizing on these new market opportunities. Among the important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements are the risk that we may need to raise additional capital to fund our operations and such capital may not be available to us at commercially reasonable terms or at all, changes in demand for the company’s products from its customers and their end-users, new and changing technologies, customer acceptance and timing of deployment of those technologies, 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.

Smith Micro 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 2015 Financial Results    Page 4 of 6

 

Smith Micro Software, Inc.

Reconciliation of GAAP to Non-GAAP Results

(in thousands, except per share amounts) - unaudited

 

           Stock            Non-  
     GAAP     Compensation      Taxes     GAAP  

Three Months Ended 3/31/15:

         

Gross profit

   $ 8,411      $ 3       $ —        $ 8,414   

Profit before provision for income taxes

   $ 1      $ 609       $ —        $ 610   

Net income (loss)

   ($ 10   $ 609       ($ 221   $ 378   

EPS-diluted

   ($ 0.00   $ 0.01       ($ 0.00   $ 0.01   

Three Months Ended 3/31/14:

         

Gross profit

   $ 6,029      $ 5       $ —        $ 6,034   

Loss before provision for income taxes

   ($ 5,134   $ 798       $ —        ($ 4,336

Net loss

   ($ 5,167   $ 798       $ 1,681      ($ 2,688

EPS-diluted

   ($ 0.14   $ 0.02       $ 0.05      ($ 0.07


Smith Micro Software First Quarter 2015 Financial Results Page 5 of 6

 

Smith Micro Software, Inc.

Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2015 and 2014

(in thousands, except per share amounts) - unaudited

 

    

For the Three Months

 
     Ended March 31,  
     2015     2014  

Revenues

   $ 10,529      $ 8,449   

Cost of revenues

     2,118        2,420   
  

 

 

   

 

 

 

Gross profit

  8,411      6,029   

Operating expenses:

Selling and marketing

  2,191      3,036   

Research and development

  3,341      4,249   

General and administrative

  2,877      3,878   
  

 

 

   

 

 

 

Total operating expenses

  8,409      11,163   
  

 

 

   

 

 

 

Operating income (loss)

  2      (5,134

Interest and other income (expense), net

  (1   —     
  

 

 

   

 

 

 

Income (loss) before provision for income taxes

  1      (5,134
  

 

 

   

 

 

 

Provision for income tax expense

  11      33   
  

 

 

   

 

 

 

Net loss

$ (10 $ (5,167
  

 

 

   

 

 

 

Other comprehensive income, before tax:

Unrealized holding gains on available-for-sale securities

  1      —     

Income tax expense related to items of other comprehensive income

  —        —     
  

 

 

   

 

 

 

Other comprehensive income, net of tax

  1      —     
  

 

 

   

 

 

 

Comprehensive loss

$ (9 $ (5,167
  

 

 

   

 

 

 

Earnings (loss) per share:

Basic and diluted

$ (0.00 $ (0.14

Weighted average shares outstanding:

Basic and diluted

  45,501      37,714   


Smith Micro Software First Quarter 2015 Financial Results Page 6 of 6

 

Smith Micro Software, Inc.

Consolidated Balance Sheets

(in thousands)

 

     March 31,     December 31,  
     2015     2014  
     (unaudited)     (audited)  

ASSETS

    

Current Assets:

    

Cash & cash equivalents

   $ 9,977      $ 10,165   

Short term investments

     3,800        2,880   

Accounts receivable, net

     7,598        8,216   

Income tax receivable

     33        706   

Inventory, net

     87        97   

Prepaid and other assets

     696        765   
  

 

 

   

 

 

 

Total current assets

  22,191      22,829   

Equipment & improvements, net

  3,799      4,273   

Other assets

  221      214   

Deferred tax asset

  74      74   
  

 

 

   

 

 

 

TOTAL ASSETS

$ 26,285    $ 27,390   
  

 

 

   

 

 

 

LIABILITIES & STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

$ 1,660    $ 1,521   

Accrued liabilities

  5,129      5,752   

Deferred revenue

  331      1,498   

Deferred tax liability

  74      74   
  

 

 

   

 

 

 

Total current liabilities

  7,194      8,845   

Long-term liabilities

  3,766      3,643   
  

 

 

   

 

 

 

Total non-current liabilities

  3,766      3,643   

Stockholders’ Equity:

Common stock

  46      45   

Additional paid in capital

  223,572      223,141   

Accumulated comprehensive deficit

  (208,293   (208,284
  

 

 

   

 

 

 

Total stockholders’ equity

  15,325      14,902   
  

 

 

   

 

 

 

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY

$ 26,285    $ 27,390