Exhibit 99.1
| | | |
AT THE COMPANY: | | IR INQUIRIES: |
| Robert Elliott | | Charles Messman, Todd Kehrli |
| Chief Marketing Officer | | MKR Group |
| 949-362-5800 | | 323-468-2300 |
relliott@smithmicro.com | | ir@mkr-group.com |
SMITH MICRO SOFTWARE REPORTS THIRD QUARTER
FINANCIAL RESULTS AND ANNOUNCES COMPLETION OF CORE MOBILITY
ACQUISITION
Third Quarter 2009 EPS of $0.06 GAAP and $0.20 Non-GAAP
Aliso Viejo, CA, November 4, 2009— 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 2009 third quarter ended September 30, 2009.
“I am pleased to report another solid performance for the Company,” said William W. Smith Jr., President and CEO of Smith Micro Software. “Growth during this challenging economic environment is not easy to come by and is a testament to the strength of our connectivity solutions for our key customers.”
Mr. Smith continued, “We have expanded our footprint through our acquisition of Core Mobility, which gives us more exposure to the handset space and adds a suite of new technologies. This acquisition, which closed October 26, 2009, enhances our strategy to provide customers with embedded mobile software solutions focused on the handset.”
Smith Micro reported revenues of $27.8 million for the third quarter ended September 30, 2009; a 4% increase over the $26.6 million reported in the third quarter ended September 30, 2008 and revenues of $77.6 million for the first nine months of 2009 as compared to $72.0 million for the first nine months of 2008. Both quarterly and year to date revenue performance for 2009 are Company records.
Third quarter gross profit on a GAAP basis of $24.3 million increased $2.8 million, or 13%, from the third quarter ended September 30, 2008. On a non-GAAP basis (which excludes amortization of intangibles, stock compensation and non-cash tax expense), third quarter gross profit was $25.5 million, an increase of $3.1 million, or 14%, from the same quarter last year.
GAAP gross profit, as a percentage of revenues was 87.3% for the third quarter of 2009, compared with 80.5% for the same quarter last year. Non-GAAP gross profit as a percentage of revenues was 91.6% for the third
| | |
| | | |
| Smith Micro 2009 Third Quarter Financial Results | | Page 2 of 7 |
quarter of 2009, compared to 84.2% for the same quarter last year.
GAAP net income for the third quarter of 2009 increased to $2.0 million or $0.06 per diluted share, compared to a GAAP net loss for the third quarter of 2008 of $1.6 million, or a $0.05 loss per diluted share.
Non-GAAP net income for the third quarter of 2009 increased to $6.6 million, or $0.20 per diluted share, which compared to $6.0 million, or $0.19 per diluted share for the third quarter of 2008.
Total cash and cash equivalents and short-term investments increased $11.9 million during the first nine months of 2009 to $48.5 million, up from $36.6 million at December 31, 2008.
For the nine-months ended September 30, 2009, the Company reported revenues of $77.6 million, an 8% increase from $72.0 million for the nine months ended September 30, 2008.
GAAP gross profit of $65.6 million increased $9.4 million, or 17%, for the nine months ended September 30, 2009 compared to $56.2 million for the nine months ended September 30, 2008.
Non-GAAP gross profit (which excludes amortization of intangibles, stock compensation and non-cash tax expense) was $69.3 million for the nine months ended September 30, 2009, an increase of $10.1 million, or 17%, from the same period last year.
GAAP net income for the nine months ended September 30, 2009 was $3.5 million, or $0.11 per diluted share, compared to a GAAP net loss for the nine months ended September 30, 2008 of $2.1 million, or a $0.07 loss per diluted share. Non-GAAP net income for the nine months ended September 30, 2009 increased 27% to $16.2 million, or $0.50 per diluted share, as compared to $12.7 million, or $0.41 per diluted share, for the nine months ended September 30, 2008.
The Company uses a non-GAAP reconciliation of gross profit, 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. 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.
Financial Guidance:
| | |
| | | |
| Smith Micro 2009 Third Quarter Financial Results | | Page 3 of 7 |
Although our third quarter revenues set a record for a fiscal quarter, the continuing negative economic environment has reduced our actual third quarter revenues relative to our expectations and has created uncertainty and limited visibility in our ability to forecast fourth quarter 2009 revenues. Accordingly, we are lowering our guidance for full fiscal year 2009 revenues to $105-110 million from $110-115 million.
Investor Conference Call:
Smith Micro Software will hold an investor conference call today to discuss the Company’s third quarter results at 4:30 p.m. ET, November 4, 2009. To access the call dial (888) 561-1799 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., headquartered in Aliso Viejo, California, with offices in Europe and Asia, develops mobility solutions that enable seamless broadband connectivity and next generation media and mobile convergence products over wireless networks. Smith Micro’s complete lines of products are available through its sales groups, direct from its websites, retail distributors, and value-added resellers. Smith Micro’s common stock trades on the NASDAQ Global Market under the symbol SMSI. For more information, please visit:http://www.smithmicro.com.
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 revenue guidance for fiscal 2009, our financial prospects and other projections of our performance, the company’s ability to increase our business and the anticipated timing and financial performance of our new products 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 products from customers and their end-users, new and changing technologies, customer acceptance of those technologies, new and continuing adverse economic conditions, 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 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. Revenue guidance provided in this press release represents a point-in-time estimate and are based on
| | |
| | | |
| Smith Micro 2009 Third Quarter Financial Results | | Page 4 of 7 |
information as of the date of this press release. Management has made numerous assumptions in providing this guidance, which while believed to be reasonable, may not prove to be accurate. Numerous factors, including those noted above, may cause actual results to differ materially from the guidance provided. Smith Micro expressly disclaims any current intention or obligation to update the guidance provided or any other forward-looking statement in this press release to reflect future events or changes in facts assumed for purposes of providing this guidance or otherwise affecting the forward-looking statements contained in this press release.
Smith Micro, Smith Micro logo is 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 2009 Third Quarter Financial Results | | Page 5 of 7 |
Smith Micro Software, Inc.
Reconciliation of GAAP to Non-GAAP Results
(in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Stock | | | | | | | | | | | Non- | |
| | | GAAP | | | Comp. | | | Amort. | | | Taxes | | | GAAP | |
| Three Months Ended 9/30/09: | | | | | | | | | | | | | | | | | | | | |
| Gross profit | | $ | 24,280 | | | $ | 27 | | | $ | 1,166 | | | $ | 0 | | | $ | 25,473 | |
| Profit before taxes | | $ | 4,259 | | | $ | 2,405 | | | $ | 2,127 | | | $ | 0 | | | $ | 8,791 | |
| Net income | | $ | 1,981 | | | $ | 2,405 | | | $ | 2,127 | | | $ | 80 | | | $ | 6,593 | |
| EPS-diluted | | $ | 0.06 | | | $ | 0.07 | | | $ | 0.07 | | | $ | 0.00 | | | $ | 0.20 | |
| | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended 9/30/08: | | | | | | | | | | | | | | | | | | | | |
| Gross profit | | $ | 21,444 | | | $ | 99 | | | $ | 876 | | | $ | 0 | | | $ | 22,419 | |
| Profit before taxes | | $ | 2,153 | | | $ | 3,356 | | | $ | 1,961 | | | $ | 0 | | | $ | 7,470 | |
| Net income (loss) | | | ($1,576 | ) | | $ | 3,356 | | | $ | 1,961 | | | $ | 2,235 | | | $ | 5,976 | |
| EPS-diluted | | | ($0.05 | ) | | $ | 0.11 | | | $ | 0.06 | | | $ | 0.07 | | | $ | 0.19 | |
| | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended 9/30/09: | | | | | | | | | | | | | | | | | | | | |
| Gross profit | | $ | 65,609 | | | $ | 156 | | | $ | 3,532 | | | $ | 0 | | | $ | 69,297 | |
| Profit before taxes | | $ | 7,705 | | | $ | 7,480 | | | $ | 6,411 | | | $ | 0 | | | $ | 21,596 | |
| Net income | | $ | 3,536 | | | $ | 7,480 | | | $ | 6,411 | | | | ($1,230 | ) | | $ | 16,197 | |
| EPS-diluted | | $ | 0.11 | | | $ | 0.23 | | | $ | 0.20 | | | | ($0.04 | ) | | $ | 0.50 | |
| | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended 9/30/08: | | | | | | | | | | | | | | | | | | | | |
| Gross profit | | $ | 56,197 | | | $ | 331 | | | $ | 2,709 | | | $ | 0 | | | $ | 59,237 | |
| Profit before taxes | | $ | 212 | | | $ | 10,102 | | | $ | 5,580 | | | $ | 0 | | | $ | 15,894 | |
| Net Income (loss) | | | ($2,051 | ) | | $ | 10,102 | | | $ | 5,580 | | | | ($909 | ) | | $ | 12,722 | |
| EPS-diluted | | | ($0.07 | ) | | $ | 0.33 | | | $ | 0.18 | | | | ($0.03 | ) | | $ | 0.41 | |
| | |
| | | |
| Smith Micro 2009 Third Quarter Financial Results | | Page 6 of 7 |
Smith Micro Software, Inc.
Statement of Operations for the Three and Nine Months Ended September 30, 2009 and 2008
(in thousands, except per share amounts)
| | | | | | | | | | | | | | | | | |
| | | For the Three Months | | For the Nine Months |
| | | Ended September 30, | | Ended September 30, |
| | | 2009 | | 2008 | | 2009 | | 2008 |
| Revenues | | $ | 27,820 | | | $ | 26,641 | | | $ | 77,594 | | | $ | 71,973 | |
| Cost of revenues | | | 3,540 | | | | 5,197 | | | | 11,985 | | | | 15,776 | |
| | | | | | | | | | | | | |
| Gross profit | | | 24,280 | | | | 21,444 | | | | 65,609 | | | | 56,197 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Selling and marketing | | | 5,946 | | | | 6,255 | | | | 18,371 | | | | 18,829 | |
| Research and development | | | 9,229 | | | | 8,199 | | | | 26,066 | | | | 23,121 | |
| General and administrative | | | 4,967 | | | | 4,941 | | | | 13,962 | | | | 14,555 | |
| | | | | | | | | | | | | |
| Total operating expenses | | | 20,142 | | | | 19,395 | | | | 58,399 | | | | 56,505 | |
| | | | | | | | | | | | | |
| Operating income (loss) | | | 4,138 | | | | 2,049 | | | | 7,210 | | | | (308 | ) |
| Interest and other income | | | 121 | | | | 104 | | | | 495 | | | | 520 | |
| | | | | | | | | | | | | |
| Profit before taxes | | | 4,259 | | | | 2,153 | | | | 7,705 | | | | 212 | |
| | | | | | | | | | | | | |
| Income tax expense | | | 2,278 | | | | 3,729 | | | | 4,169 | | | | 2,263 | |
| | | | | | | | | | | | | |
| Net income (loss) | | $ | 1,981 | | | $ | (1,576 | ) | | $ | 3,536 | | | $ | (2,051 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Earnings (loss) per share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.06 | | | $ | (0.05 | ) | | $ | 0.11 | | | $ | (0.07 | ) |
| Diluted | | $ | 0.06 | | | $ | (0.05 | ) | | $ | 0.11 | | | $ | (0.07 | ) |
| | | | | | �� | | | | | | | | | | | |
| Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 32,523 | | | | 31,289 | | | | 32,182 | | | | 30,856 | |
| Diluted | | | 33,145 | | | | 31,289 | | | | 32,641 | | | | 30,856 | |
| | |
| | | |
| Smith Micro 2009 Third Quarter Financial Results | | Page 7 of 7 |
Smith Micro Software, Inc.
Consolidated Balance Sheets
(in thousands)
| | | | | | | | | |
| | | September 30, | | | December 31, | |
| | | 2009 | | | 2008 | |
| ASSETS | | | | | | | | |
| Current Assets: | | | | | | | | |
| Cash & cash equivalents | | $ | 16,175 | | | $ | 13,966 | |
| Short term investments | | | 32,361 | | | | 22,649 | |
| Accounts receivable, net | | | 23,293 | | | | 18,424 | |
| Inventory, net | | | 506 | | | | 1,097 | |
| Prepaid and other assets | | | 798 | | | | 869 | |
| Deferred tax asset | | | 1,658 | | | | 1,698 | |
| | | | | | | |
| Total current assets | | | 74,791 | | | | 58,703 | |
| Equipment & improvements, net | | | 7,046 | | | | 4,289 | |
| Goodwill | | | 83,483 | | | | 83,483 | |
| Intangible assets, net | | | 21,187 | | | | 27,603 | |
| Other assets | | | 160 | | | | 157 | |
| Deferred tax asset | | | 2,760 | | | | 2,760 | |
| | | | | | | |
| TOTAL ASSETS | | $ | 189,427 | | | $ | 176,995 | |
| | | | | | | |
| | | | | | | | | |
| LIABILITIES & STOCKHOLDERS’ EQUITY | | | | | | | | |
| Current Liabilities: | | | | | | | | |
| Accounts payable | | $ | 4,162 | | | $ | 3,492 | |
| Accrued liabilities | | | 4,936 | | | | 6,710 | |
| Deferred revenue | | | 2,331 | | | | 923 | |
| | | | | | | |
| Total current liabilities | | | 11,429 | | | | 11,125 | |
| Long-term liabilities | | | 211 | | | | 466 | |
| Stockholders’ equity: | | | | | | | | |
| Common stock | | | 33 | | | | 31 | |
| Additional paid in capital | | | 174,759 | | | | 165,864 | |
| Accumulated other comprehensive income | | | 19 | | | | 69 | |
| Accumulated earnings (deficit) | | | 2,976 | | | | (560 | ) |
| | | | | | | |
| Total stockholders’ equity | | | 177,787 | | | | 165,404 | |
| | | | | | | |
| TOTAL LIABILITIES & EQUITY | | $ | 189,427 | | | $ | 176,995 | |
| | | | | | | |
