Revenue Increased to $8.4 Million
Smith Micro Software, Inc. (NASDAQ: SMSI) (“Smith Micro” or the
“Company”) today reported financial results for its first quarter
ended March 31, 2019.
“We delivered a very solid quarter for the Company as we
launched our 2019 fiscal year,” said William W. Smith Jr.,
President and CEO of Smith Micro Software. “We saw accelerated
revenue growth with our SafePath® platform, a sixth consecutive
quarter of subscriber revenue growth from the CommSuite® platform,
and strong contribution from ViewSpot™, our recent Smart Retail
acquisition that closed in early January.”
Mr. Smith concluded, “We are off to a solid start to the fiscal
year. Our sales pipeline continues to grow across all three of our
core wireless solutions, with a broader geographical reach and a
more viable ecosystem of opportunities than we have seen in several
years. Moving forward, we will leverage and build upon that
momentum and continue to deliver growth and profitability
throughout 2019.”
First Quarter 2019 Financial Results:
Smith Micro reported revenue of $8.4 million for the first
quarter ended March 31, 2019, compared to $5.5 million reported in
the first quarter ended March 31, 2018.
First quarter 2019 gross profit was $7.5 million compared to
$4.2 million reported in the first quarter of 2018.
Gross profit as a percentage of revenue was 89 percent for the
first quarter of 2019 compared to 76 percent for the first quarter
of 2018.
Generally accepted accounting principles in the United States
(“GAAP”) net income available to common stockholders for the first
quarter of 2019 was $14 thousand, or break-even earnings per share,
compared to a GAAP net loss available to common stockholders of
$2.5 million, or $0.16 loss per share, for the first quarter of
2018.
Non-GAAP net income (which excludes stock-based compensation,
amortization of intangibles, debt issuance and discount costs, fair
value adjustments, acquisition costs, preferred stock dividends,
and a normalized tax expense) for the first quarter of 2019 was
$0.6 million, or $0.02 earnings per share, compared to a non-GAAP
net loss of $1.5 million, or $0.10 loss per share, for the first
quarter of 2018.
Total cash and cash equivalents at March 31, 2019 were $7.4
million.
To supplement our financial information presented in accordance
with GAAP, the Company considers and has included in this press
release certain non-GAAP financial measures, including a non-GAAP
reconciliation of gross profit, income (loss) before taxes, net
income (loss) available to common stockholders, and earnings (loss)
per share in the presentation of financial results in this press
release. Management believes this non-GAAP presentation may be more
meaningful in analyzing our income generation and has therefore
excluded the following items from GAAP earnings calculations:
stock-based compensation, amortization of intangibles, debt
issuance and discount costs, fair value adjustments, acquisition
costs, and preferred stock dividends. Additionally, since we are in
a cumulative loss position, a non-GAAP income tax expense (benefit)
was computed using a 24 percent tax rate for 2019 and 2018 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 table below presents the differences between
non-GAAP net income (loss) and net income (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 will hold an investor conference call today, May 8,
2019 at 4:30 p.m. EDT, to discuss the Company’s first quarter 2019
financial results. To access the call, dial 1-877-270-2148;
international participants can call 1-412-902-6510. A passcode is
not required to join the call; ask the operator to be placed into
the Smith Micro conference. 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 and cable MSOs around the world. From
enabling the family digital lifestyle to providing powerful voice
messaging capabilities, our solutions enrich today’s connected
lifestyles while creating new opportunities to engage consumers via
smartphones and consumer IoT devices. The Smith Micro portfolio
also includes a wide range of products for creating, sharing and
monetizing rich content, such as visual voice messaging, optimizing
retail content display, performing analytics on any product set,
and 2D/3D graphics applications. For more information,
visit www.smithmicro.com.
Smith Micro, the Smith Micro logo, SafePath, CommSuite and
ViewSpot are registered trademarks or trademarks of Smith Micro
Software, Inc. Third-party trademarks mentioned are the property of
their respective owners.
Forward-Looking Statements:
Certain statements in this press release are, and certain
statements on the related conference call may be, forward-looking
statements regarding future events or results, including statements
related to our financial prospects and other projections of our
performance and our future business plans, and statements using
such words as “expect,” “anticipate,” “believe,” “plan,” “intend,”
“could,” “will” and other similar expressions. Forward-looking
statements involve risks and uncertainties, which could cause
actual results to differ materially from those expressed or implied
in the forward-looking statements. Among the important factors that
could cause or contribute to such differences are changes in demand
for our products from our customers and their end-users, customer
concentration, given that the majority of our sales depend on a few
large customer relationships, changes in requirements for our
products imposed by our customers or by the third party providers
of software and/or platforms that we use, our ability to
effectively integrate, market and sell acquired product lines, new
and changing technologies, customer acceptance and timing of
deployment of those technologies, and our ability to compete
effectively with other software and technology companies. These and
other factors discussed in our 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, and we do not
undertake any obligation to update these statements to reflect
events or circumstances occurring after the date of this
release.
Smith Micro Software,
Inc. Reconciliation of GAAP to Non-GAAP Results
(in thousands, except per share amounts) –
unaudited
GAAP
StockCompensation
IntangiblesAmortization
Note
Issue/
Discount
Fair Value Adjustments
Acquisition Costs
Preferred Stock
Dividends
Taxes Non-
GAAP
Three Months Ended 3/31/19: Gross profit $ 7,516 $ - $ - $ -
$ - $ - $ - $ - $ 7,516
Income before provision for income
taxes
52 456 196 - - 76 - - 780
Net income available to common
stockholders
14 456 196 - - 76 34 (183 ) 593 Earnings per share: basic 0.00 0.01
0.01 - - 0.00 0.00 (0.01 ) 0.02 Earnings per share: diluted 0.00
0.01 0.01 - - 0.00 0.00 (0.01 ) 0.02
Three Months Ended
3/31/18: Gross profit $ 4,154 $ - $ - $ - $ - $ - $ - $ - $
4,154
Loss before provision for income taxes
(2,371 ) 163 64 65 139 - - - (1,940 )
Net loss available to common
stockholders
(2,522 ) 163 64 65 139 - 141 476 (1,474 )
Loss per share: basic and diluted
(0.16 ) 0.01 0.00 0.00 0.01 - 0.01 0.03 (0.10 ) Note: Loss
per share: basic and diluted - may be impacted by rounding to allow
rows to calculate.
Smith Micro Software, Inc.
Statements of Operations
(in thousands, except per share amounts) -
unaudited
For the Three Months Ended March 31,
2019 2018 Revenues $ 8,432 $ 5,463 Cost of
revenues 916 1,309 Gross profit 7,516 4,154
Operating expenses: Selling and marketing 1,968 1,730 Research and
development 2,682 2,255 General and administrative 2,700 2,190
Restructuring expense 104 - Total operating expenses
7,454 6,175 Operating income (loss) 62 (2,021 )
Non-operating expenses: Interest expense, net - (171 ) Change in
fair value of warrant liability - (139 ) Other expense, net
(10 ) (40 ) Income (loss) before provision for income taxes
52 (2,371 ) Provision for income tax expense 4 10 Net
income (loss) 48 (2,381 ) Less preferred stock dividends (34
) (141 ) Net income (loss) available to common stockholders
$ 14 $ (2,522 ) Earnings (loss) per share: Basic $ 0.00 $
(0.16 ) Diluted $ 0.00 $ (0.16 ) Weighted average shares
outstanding: Basic 31,297 15,299 Diluted 31,323 15,299
Smith Micro Software, Inc. Consolidated Balance
Sheets
(in thousands)
March 31, December 31, 2019
2018 ASSETS Current Assets: Cash & cash equivalents $
7,378 $ 12,159 Accounts receivable, net 8,951 7,130 Prepaid and
other assets 565 795 Total current assets 16,894
20,084 Equipment & improvements, net 852 865 Right-of-use
assets 2,419 - Deferred tax asset, net 191 191 Other assets 175 140
Intangible assets, net 5,270 238 Goodwill 7,797 3,685
TOTAL ASSETS $ 33,598 $ 25,203 LIABILITIES &
STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 1,249
$ 1,160 Accrued payroll and benefits 2,121 1,745 Current operating
lease liabilities 987 - Other accrued liabilities 330 450 Deferred
revenue 234 28 Total current liabilities 4,921 3,383
Lease liabilities 1,876 - Deferred rent 578 723 Other
long-term liabilities 185 534 Total non-current
liabilities 2,639 1,257 Stockholders' Equity: Preferred
stock - - Common stock 32 28 Additional paid in capital 261,990
256,626 Accumulated comprehensive deficit (235,984 )
(236,091 ) Total stockholders' equity 26,038 20,563
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 33,598 $ 25,203
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version on businesswire.com: https://www.businesswire.com/news/home/20190508005746/en/
IR INQUIRIES:Charles MessmanInvestor
Relations949-362-5800IR@smithmicro.com
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