Smith Micro Software, Inc. (NASDAQ: SMSI) today reported
financial results for its second quarter ended June 30, 2017.
“During the first half of fiscal 2017, Smith Micro completed a
significant restructure of our business, aligned our cost
structure, and created a strong foundation for growth in the second
half and 2018,” said William W. Smith, Jr., President and CEO of
Smith Micro Software.
“The success of our SafePath™ Family platform has provided us
with a strong lead product. New business wins with SafePath will
provide the company with significant new recurring revenue in the
back half of this year and accelerating into 2018. As we continue
to build our customer base, we are extremely focused and optimistic
about our future and our return to strong growth and
profitability.”
Fiscal Second Quarter 2017 Financial Results:
Smith Micro Software reported revenues of $5.9 million for the
second quarter ended June 30, 2017, compared to $7.5 million
reported in the second quarter ended June 30, 2016.
Second quarter 2017 gross profit was $4.6 million, compared to
$5.5 million reported in the second quarter of 2016.
GAAP gross profit as a percentage of revenue was 78 percent for
the second quarter of 2017, compared to 74 percent for the second
quarter of 2016.
GAAP net loss for the second quarter of 2017 was $2.6 million,
or $0.20 loss per share, compared to a GAAP net loss of $3.3
million, or $0.28 loss per share, for the second quarter of
2016.
Non-GAAP net loss (which excludes stock-based compensation,
amortization of intangibles, fair value adjustments, non-cash debt
issuance and discount costs, and normalized tax expense) for the
second quarter of 2017 was $0.8 million, or $0.06 loss per share,
compared to a non-GAAP net loss of $1.8 million, or $0.15 loss per
share, for the second quarter of 2016.
Fiscal June Year-To-Date 2017 Financial Results:
For the six months ended June 30, 2017, the Company reported
revenues of $11.4 million, compared to $14.7 million for the six
months ended June 30, 2016.
GAAP gross profit was $8.9 million for the six months ended June
30, 2017, compared to $10.6 million for the six months ended June
30, 2016.
GAAP gross profit as a percentage of revenues was 78 percent for
the six months ended June 30, 2017, compared to 73 percent for the
same period last year.
GAAP net loss for the six months ended June 30, 2017 was $4.8
million, or $0.38 loss per share, compared to a GAAP net loss for
the six months ended June 30, 2016 of $7.0 million, or $0.60 loss
per share.
Non-GAAP net loss (which excludes stock-based compensation,
amortization of intangibles, fair value adjustments, non-cash debt
issuance and discount costs, and normalized tax expense) for the
six months ended June 30, 2017 was $2.2 million, or $0.18 loss per
share, compared to a non-GAAP net loss of $3.8 million, or $0.33
loss per share, for the six months ended June 30, 2016.
Total cash and cash equivalents at June 30, 2017 were $2.4
million.
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, amortization of intangible assets, fair value
adjustments, and non-cash debt issuance and discount costs 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 fiscal
year 2017 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 second quarter 2017 results at 4:30 p.m.
ET, August 8, 2017. 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, 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.
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 the
company’s ability to continue as a going concern, our ability to
raise more funds to meet our capital needs, 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.
Note: Financial Schedules Attached
Smith Micro Software, Inc.
Reconciliation of GAAP to Non-GAAP
Results (in thousands, except per share amounts) - unaudited
Note Stock Intangibles Change in Issue/ Non-
GAAP
Compensation Amortization Fair
Value Discount Taxes
GAAP
Three Months Ended
6/30/17:
Gross profit $ 4,577 $- $- $- $- $- $4,577 Loss before provision
for income taxes ($2,569 ) $388 $65 $561 $192 $- ($1,363 ) Net loss
($2,574 ) $388 $65 $561 $192 $524 ($844 ) Loss per share: basic and
diluted ($0.20 ) $0.03 $0.00 $0.05 $0.01 $0.05 ($0.06 )
Three Months Ended
6/30/16:
Gross profit $ 5,546 $0 $- $- $- $- $5,546 Loss before provision
for income taxes ($3,269 ) $406 $27 $- $- $- ($2,836 ) Net loss
($3,280 ) $406 $27 $- $- $1,089 ($1,758 ) Loss per share: basic and
diluted ($0.28 ) $0.03 $0.00 $0.00 $0.00 $0.10 ($0.15 )
Six Months Ended
6/30/17:
Gross profit $ 8,870 $- $- $- $- $- $8,870 Loss before provision
for income taxes ($4,793 ) $834 $130 ($147 ) $382 $- ($3,594 ) Net
loss ($4,806 ) $834 $130 ($147 ) $382 $1,380 ($2,227 ) Loss per
share: basic and diluted ($0.38 ) $0.06 $0.01 ($0.01 ) $0.03 $0.11
($0.18 )
Six Months Ended
6/30/16:
Gross profit $ 10,647 $2 $- $- $- $- $10,649 Loss before provision
for income taxes ($6,949 ) $767 $27 $- $- $- ($6,155 ) Net loss
($6,986 ) $767 $27 $- $- $2,376 ($3,816 ) Loss per share: basic and
diluted ($0.60 ) $0.07 $0.00 $0.00 $0.00 $0.20 ($0.33 )
Note: Loss per share: basic and diluted - impacted by rounding to
allow rows to calculate.
Smith Micro Software, Inc.
Statements of Operations and Comprehensive Loss for the Three
and Six Months Ended June 30, 2017 and 2016 (in thousands,
except per share amounts) - unaudited For the
Three Months For the Six Months Ended June 30, Ended June 30,
2017
2016
2017
2016
Revenues $ 5,862 $ 7,459 $ 11,438 $ 14,673 Cost of revenues
1,285 1,913 2,568 4,026
Gross profit 4,577 5,546 8,870 10,647 Operating
expenses: Selling and marketing 1,461 2,478 3,254 4,848 Research
and development 2,174 4,107 4,671 8,030 General and administrative
2,239 2,870 4,428 5,356 Restructuring expense 322
- 714 - Total operating
expenses 6,196 9,455 13,067
18,234 Operating loss (1,619 ) (3,909 ) (4,197
) (7,587 ) Non-operating income: Change in carrying value of
contingent liability - 657 - 657 Change in fair value of warrant
liability (561 ) - 147 - Interest income (expense), net (390 ) (2 )
(734 ) - Other income (expense), net 1 (15 )
(9 ) (19 ) Loss before provision for income taxes
(2,569 ) (3,269 ) (4,793 ) (6,949 )
Provision for income tax expense 5 11
13 37 Net loss $ (2,574 ) $ (3,280 ) $
(4,806 ) $ (6,986 ) Other comprehensive income, before tax:
Unrealized holding gains on available-for-sale securities -
- - 2 Other
comprehensive income, net of tax - -
- 2 Comprehensive loss $ (2,574 ) $
(3,280 ) $ (4,806 ) $ (6,984 ) Loss per share: Basic and
diluted $ (0.20 ) $ (0.28 ) $ (0.38 ) $ (0.60 ) Weighted
average shares outstanding: Basic and diluted 13,179 11,741 12,674
11,632
Smith Micro Software, Inc.
Consolidated Balance Sheets (in thousands) June 30, December
31,
2017
2016
(unaudited) (audited) ASSETS Current Assets: Cash & cash
equivalents $ 2,377 $ 2,229 Accounts receivable, net 4,711 4,962
Income tax receivable 1 1 Inventory, net 13 12 Prepaid and other
assets 751 713 Total current assets
7,853 7,917 Equipment & improvements, net 1,542 1,811 Other
assets 146 149 Intangible assets, net 616 745 Goodwill 3,685
3,686 TOTAL ASSETS $ 13,842 $ 14,308
LIABILITIES & STOCKHOLDERS' EQUITY Current
Liabilities: Accounts payable $ 1,296 $ 1,907 Accrued liabilities
3,212 3,503 Related-party notes payable 2,000 - Deferred revenue
568 98 Total current liabilities 7,076
5,508 Related-party notes payable, net 1,158 967 Notes
payable, net 1,158 967 Warrant liability 1,063 1,210 Other
long-term liabilities 2,738 2,971 Deferred tax liability 181
181 Total non-current liabilities 6,298 6,296
Stockholders' Equity: Common stock 14 12 Additional paid in
capital 230,657 227,889 Accumulated comprehensive deficit
(230,203 ) (225,397 ) Total stockholders' equity 468
2,504 TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY $ 13,842 $ 14,308
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version on businesswire.com: http://www.businesswire.com/news/home/20170808006303/en/
IR INQUIRIES:Smith Micro Software, Inc.Charles
MessmanInvestor Relations949-362-5800IR@smithmicro.com
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