ALISO VIEJO, Calif.,
Oct. 26, 2016 /PRNewswire/
-- Smith Micro Software, Inc. (NASDAQ:SMSI) today reported
financial results for its third quarter ended September 30, 2016.
"As previously announced, revenue for the third quarter of 2016
was $6.5 million," said William W.
Smith Jr., President and CEO of Smith Micro Software. "During
the quarter, revenue was significantly impacted by two large orders
that did not close as expected, due to timing issues with our
customers. We currently expect to receive these orders over the
next few quarters.
"With the shortfall in near term revenues, the Company has begun
making some significant changes throughout the organization,
lowering costs, better integrating the teams from our recent
acquisitions, and streamlining our operations. We don't
expect these changes to have an impact on our ability to grow
revenue as we look to return to profitability."
Fiscal Third Quarter 2016 Financial Results:
Smith Micro Software reported revenues of $6.5 million for the third quarter ended
September 30, 2016, compared to
$9.6 million reported in the third
quarter ended September 30, 2015.
Third quarter 2016 gross profit on both a GAAP and non-GAAP
basis (which excludes stock-based compensation) was $4.7 million, compared to $7.6 million reported in the third quarter of
2015.
GAAP gross profit as a percentage of revenue was 72.2 percent
for the third quarter of 2016, compared to 79.6 percent for the
third quarter of 2015. Non-GAAP gross profit as a percentage
of revenue was 72.3 percent for the third quarter of 2016, compared
to 79.6 percent for the same quarter last year.
GAAP net loss for the third quarter of 2016 was $4.3 million, or $0.35 loss per diluted share, compared to a GAAP
net loss of $0.8 million, or
$0.07 loss per diluted share, for the
third quarter of 2015.
Non-GAAP net loss (which excludes stock-based compensation,
amortization of intangibles, and non-cash tax expense) for the
third quarter of 2016 was $2.4
million, or $0.19 loss per
diluted share, compared to a non-GAAP net loss of $0.1 million, or $0.01 loss per diluted share, for the third
quarter of 2015.
Fiscal September Year-To-Date 2016 Financial Results:
For the nine months ended September 30,
2016, the Company reported revenues of $21.2 million, compared to $29.5 million for the nine months ended
September 30, 2015.
GAAP and non-GAAP (which excludes stock-based compensation)
gross profit was $15.3 million for
the nine months ended September 30,
2016, compared to $23.4
million for the nine months ended September 30, 2015.
GAAP and non-GAAP gross profit as a percentage of revenues was
72.5 percent for the nine months ended September 30, 2016, compared to 79.2 percent for
the same period last year.
GAAP net loss for the nine months ended September 30, 2016 was $11.3 million, or a loss of $0.96 per diluted share, compared to a GAAP net
loss for the nine months ended September 30,
2015 of $2.0 million, a loss
of $0.17 per diluted share.
Non-GAAP net loss (which excludes stock-based compensation,
amortization of intangibles, and non-cash tax expense) for the nine
months ended September 30, 2016 was
$6.2 million, or $0.52 loss per diluted share, compared to a
non-GAAP net loss of $0.2 million, or
$0.02 per diluted share, for the nine
months ended September 30,
2015.
Total cash and cash equivalents and short-term investments at
September 30, 2016 were $5.9 million.
Fully diluted weighted average common shares outstanding as of
September 30, 2016 were 11.8 million,
compared to 11.5 million fully diluted weighted average common
shares outstanding as of September 30,
2015.
The Company uses a non-GAAP reconciliation of gross profit,
income (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 and the amortization of intangible assets are 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
September 30, 2016 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 loss 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.
Investor Conference Call:
Smith Micro Software will hold an investor conference call today
to discuss the Company's third quarter 2016 results at 4:30 p.m. ET, October 26,
2016. To access the call, dial (800) 343-0821, international
participants can call 785-830-1978, when prompted provide the
participant pass code 2135096. 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 develops software to simplify and enhance the mobile
experience, providing solutions to some of the leading wireless
service providers, device manufacturers, and enterprise businesses
around the world. From optimizing wireless networks to
uncovering customer experience insights, and from streamlining
Wi-Fi access to ensuring family safety, our solutions enrich
today's connected lifestyles while creating new opportunities to
engage consumers via smartphones. Our portfolio also includes a
wide range of products for creating, sharing and monetizing rich
content, such as visual messaging, video streaming, and 2D/3D
graphics applications. 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 financial
prospects and other projections of its performance, the existence
of new sales opportunities and interest in the company's products
and solutions, the company's ability to increase its revenue by
capitalizing on new opportunities, and customer concentration given
that the majority of our sales depend on a few large client
relationships, including Sprint. 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, customer acceptance and
timing of deployment of those technologies, and the company's
ability to compete effectively with other software and technology
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.
Smith Micro
Software, Inc.
|
Reconciliation of
GAAP to Non-GAAP Results
|
(in thousands, except
per share amounts) - unaudited
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Non-
|
|
GAAP
|
Compensation
|
Amortization
|
Taxes
|
GAAP
|
Three Months Ended
9/30/16:
|
|
|
|
|
|
Gross
profit
|
$4,680
|
$1
|
$-
|
$-
|
$4,681
|
Loss before
provision for income taxes
|
($4,303)
|
$408
|
$85
|
$-
|
($3,810)
|
Net
loss
|
($4,314)
|
$408
|
$85
|
$1,459
|
($2,362)
|
EPS-diluted
|
($0.35)
|
$0.03
|
$0.01
|
$0.12
|
($0.19)
|
|
|
|
|
|
|
Three Months Ended
9/30/15:
|
|
|
|
|
|
Gross
profit
|
$7,627
|
$3
|
$-
|
$-
|
$7,630
|
Loss before
provision for income taxes
|
($764)
|
$544
|
$-
|
$-
|
($220)
|
Net
loss
|
($770)
|
$544
|
$-
|
$89
|
($137)
|
EPS-diluted
|
($0.07)
|
$0.05
|
$0.00
|
$0.01
|
($0.01)
|
|
|
|
|
|
|
Nine Months Ended
9/30/16:
|
|
|
|
|
|
Gross
profit
|
$15,327
|
$3
|
$-
|
$-
|
$15,330
|
Loss before
provision for income taxes
|
($11,252)
|
$1,175
|
$112
|
$-
|
($9,965)
|
Net
loss
|
($11,300)
|
$1,175
|
$112
|
$3,835
|
($6,178)
|
EPS-diluted
|
($0.96)
|
$0.10
|
$0.01
|
$0.33
|
($0.52)
|
|
|
|
|
|
|
Nine Months Ended
9/30/15:
|
|
|
|
|
|
Gross
profit
|
$23,353
|
$9
|
$-
|
$-
|
$23,362
|
Loss before
provision for income taxes
|
($1,988)
|
$1,697
|
$-
|
$-
|
($291)
|
Net
loss
|
($2,011)
|
$1,697
|
$-
|
$133
|
($181)
|
EPS-diluted
|
($0.17)
|
$0.15
|
$0.00
|
$0.00
|
($0.02)
|
Smith Micro
Software, Inc.
|
Statements of
Operations and Comprehensive Loss for the Three and Nine Months
Ended September 30, 2016 and 2015
|
(in thousands, except
per share amounts) - unaudited
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Nine
Months
|
|
Ended September
30,
|
|
Ended September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues
|
$
6,478
|
|
$
9,586
|
|
$
21,151
|
|
$ 29,501
|
Cost of
revenues
|
1,798
|
|
1,959
|
|
5,824
|
|
6,148
|
Gross
profit
|
4,680
|
|
7,627
|
|
15,327
|
|
23,353
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Selling and
marketing
|
2,541
|
|
2,220
|
|
7,389
|
|
6,639
|
Research and
development
|
4,174
|
|
3,480
|
|
12,204
|
|
10,268
|
General and
administrative
|
2,522
|
|
2,695
|
|
7,878
|
|
8,437
|
Total operating
expenses
|
9,237
|
|
8,395
|
|
27,471
|
|
25,344
|
Operating
loss
|
(4,557)
|
|
(768)
|
|
(12,144)
|
|
(1,991)
|
Non-operating
income:
|
|
|
|
|
|
|
|
Change in fair
value of warrant liability
|
335
|
|
-
|
|
335
|
|
-
|
Change in fair
value of contingent liability
|
11
|
|
-
|
|
668
|
|
-
|
Interest
income (expense), net
|
(83)
|
|
-
|
|
(81)
|
|
-
|
Other income
(expense), net
|
(9)
|
|
4
|
|
(30)
|
|
3
|
Loss before provision
for income taxes
|
(4,303)
|
|
(764)
|
|
(11,252)
|
|
(1,988)
|
Provision for income
tax expense
|
11
|
|
6
|
|
48
|
|
23
|
Net loss
|
$ (4,314)
|
|
$
(770)
|
|
$ (11,300)
|
|
$
(2,011)
|
|
|
|
|
|
|
|
|
Other comprehensive
income, before tax:
|
|
|
|
|
|
|
|
Unrealized
holding gains on available-for-sale securities
|
-
|
|
-
|
|
2
|
|
1
|
Other
comprehensive income, net of tax
|
-
|
|
-
|
|
2
|
|
1
|
Comprehensive
loss
|
$ (4,314)
|
|
$
(770)
|
|
$ (11,298)
|
|
$
(2,010)
|
|
|
|
|
|
|
|
|
Loss per
share:
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
(0.35)
|
|
$
(0.07)
|
|
$
(0.96)
|
|
$
(0.17)
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic and
diluted
|
12,209
|
|
11,540
|
|
11,826
|
|
11,494
|
Smith Micro
Software, Inc.
|
Consolidated
Balance Sheets
|
(in
thousands)
|
|
September
30,
|
|
December
31,
|
|
2016
|
|
2015
|
|
(unaudited)
|
|
(audited)
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash & cash
equivalents
|
$
5,943
|
|
$
8,819
|
Short term
investments
|
1
|
|
4,078
|
Accounts receivable,
net
|
5,257
|
|
8,145
|
Income tax
receivable
|
17
|
|
13
|
Inventory,
net
|
18
|
|
39
|
Prepaid and other
assets
|
1,225
|
|
692
|
Total current
assets
|
12,461
|
|
21,786
|
Equipment &
improvements, net
|
1,834
|
|
2,492
|
Other
assets
|
154
|
|
195
|
Intangible assets,
net
|
1,241
|
|
-
|
Goodwill
|
3,368
|
|
-
|
TOTAL
ASSETS
|
$
19,058
|
|
$
24,473
|
|
|
|
|
LIABILITIES &
STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
1,775
|
|
$
1,708
|
Accrued
liabilities
|
4,665
|
|
5,064
|
Warrant
liability
|
1,761
|
|
-
|
Deferred
revenue
|
591
|
|
440
|
Total
current liabilities
|
8,792
|
|
7,212
|
|
|
|
|
Related party notes
payable, net
|
883
|
|
-
|
Notes payable,
net
|
883
|
|
-
|
Other long-term
liabilities
|
3,108
|
|
3,235
|
Total
non-current liabilities
|
4,874
|
|
3,235
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
Common
stock
|
12
|
|
46
|
Additional
paid in capital
|
227,565
|
|
224,867
|
Accumulated
comprehensive deficit
|
(222,185)
|
|
(210,887)
|
Total
stockholders' equity
|
5,392
|
|
14,026
|
TOTAL LIABILITIES
& STOCKHOLDERS' EQUITY
|
$
19,058
|
|
$
24,473
|
PR
INQUIRIES:
|
IR
INQUIRIES:
|
Suzanne
Runald
|
Charles
Messman
|
Public
Relations
|
Investors
Relations
|
949-362-5800
|
949-362-5800
|
pr@smithmicro.com
|
IR@smithmicro.com
|
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SOURCE Smith Micro Software, Inc.