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Smith Micro Announces 2001 Year-End Results Including Profitable Fourth Quarter, Best Since 1996

Feb 07, 2002
Fourth Quarter revenue up 56% from Third Quarter

Aliso Viejo, CA -- Smith Micro Software, Inc. (Nasdaq: SMSI), a developer and marketer of a wide range of software and service solutions for the Internet and wireless markets, today reported its year-end 2001 results which included a fourth quarter 2001 profit.

The company reported net revenues for the quarter ended December 31, 2001, of $3.9 million, an increase of 56 percent from the $2.5 million reported in the third quarter of 2001. The company's net income of $116,000 in the fourth quarter resulted in earnings of $.01 per basic and diluted share, an increase of $910,000 over the third quarter 2001 net loss of $794,000, a loss of ($.05) per diluted share.

For the full year, net revenues for 2001 were $10.8 million compared to $13.7 million in 2000. The net loss for 2001 was $6.1 million, ($0.38) per diluted share compared to a net loss of $3.2 million, ($0.20) per diluted share, in 2000.

"We posted our first profitable quarter since first quarter 1998 and the most profitable quarter since the fourth quarter of 1996," said William W. Smith, Jr., President and Chief Executive Officer. "On our last quarterly conference call, we forecasted a breakeven to marginally profitable fourth quarter. We did a little better than that posting a gain of one cent per basic and diluted share which included $116,000 in net income."

"Overall, although we saw a decline in revenue from 2000 to 2001, we feel positive about the progress that we made during the second half of 2001 particularly in the fourth quarter in light of the recession that is impacting all of us and the tragedy of September 11," Mr. Smith highlighted.

"I continue to believe in the statement I made at the beginning of 2001 that the Wireless and Broadband market is where we should and will continue to commit resources to improve our business case going forward."

Investor Conference Call

Smith Micro will hold an investor conference call to discuss the company's results at 4:30 p.m. Eastern time later today. Investors may access the conference call over the Internet via the company's website www.smithmicro.com or www.vcall.com. For those who cannot listen to the live broadcast, a replay will be available on the Web site through February 28, 2002.

About Smith Micro Software

Smith Micro Software, Inc., headquartered in Aliso Viejo, CA, is a developer and marketer of wireless communication and utility software products. The company designs integrated, cross platform, easy-to-use software for personal computing and business solutions around the world. With a focus on the Internet, Wireless, and Broadband technologies, the company's products and services enable wireless communications, eCommerce, eBusiness, Internet communications (voice-over-IP), video conferencing, and network fax, along with traditional computer telephony. Smith Micro's complete line of products is available through direct sales, retail stores, value-added resellers (VARs) and original equipment manufacturers (OEMs). Smith Micro's common stock trades on The Nasdaq Stock Market® under the symbol SMSI. For more information, contact Smith Micro at (949) 362-5800.

This release may contain forward-looking statements that involve risks and uncertainties, including without limitation risks and uncertainties relating to the company's financial prospects and projections, the company's plans for returning to sustained profitability and the company's ability to increase its business in the Wireless and Broadband segments. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are new and changing technologies, customer acceptance of those technologies, fluctuations or cancellations in orders from distribution customers, new and continuing adverse economic conditions, and the company's ability to compete effectively with other software companies. These and other factors could cause actual results to differ materially from those presented in any forward-looking statement and are discussed in the company's filings with the Securities and Exchange Commission including its recent filings on Forms 10-K and 10-Q.

Smith Micro and the Smith Micro logo are trademarks or registered trademarks of Smith Micro Software, Inc. All other trademarks and product names are the property of their respective companies.

Financial Schedules follow

Smith Micro Software, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

 Three Months Ended
December 31
(unaudited)
 20012000
Net Revenues
   Software3,4083,135
   Consulting506933

Total Net Revenues3,9144,068
Cost of Revenues
   Software720865
   Consulting418628

Total Cost of Revenues1,1381,493

Gross Margin2,7762,575
 
 
   Sales & Marketing1,4901,342
   Research & Development5221,131
   Restructuring----------
   General & Administrative6601,182

Total Operating Expenses2,6723,655

Operating Loss104(1,080)
Other Income, net1093

Income (Loss) Before Income Tax114(987)
Income Tax (Benefit) Expense(2)2

Net Income (Loss)$116$(989)

Net Income (Loss) per share, basic$0.01$(0.06)

Weighted average shares outstanding, basic16,23216,232

Net Income (Loss) per share, diluted$0.01$(0.06)

Weighted average shares outstanding, diluted16,26616,232

Smith Micro Software, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

 Twelve Months Ended
December 31
 20012000
Net Revenues
   Software8,21811,143
   Consulting2,5442,595

Total Net Revenues10,76213,738
Cost of Revenues
   Software1,8802,499
   Consulting2,0481,150

Total Cost of Revenues3,9283,649

Gross Margin6,83410,089
 
 
   Sales & Marketing5,8445,578
   Research & Development2,9974,041
   Restructuring380-----
   General & Administrative3,7343,985

Total Operating Expenses12,95513,604

Operating Loss(6,121)(3,515)
Other Income, net86414

Loss Before Income Tax(6,035)(3,101)
Income Tax Expense9054

Net Loss$(6,125)$(3,155)

Net loss per share, basic and diluted$(0.38)$(0.20)

Weighted average shares outstanding, basic and diluted16,23215,984

Smith Micro Software, Inc.
Consolidated Balance Sheets
(in thousands)

 December 31,
2001
December 31,
2000
ASSETS
Current Assets:
Cash & Cash Equivalents$3,226$6,178
Accounts Receivable (Net)2,7244,750
Inventory295338
Prepaids & Other Assets265294

   Total Current Assets6,51011,560
Equipment and Improvements, net482737
Other Assets4289
Intangible Assets2,2232,928

TOTAL ASSETS$9,257$15,314

 
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable$1,160$1,590
Accrued Liabilities1,7951,297

   Total Current Liabilities2,9552,887
 
Common Stock1616
Additional Paid In Capital24,78924,789
Accumulated Deficit(18,503)(12,378)

   Total Stockholders' Equity6,30212,427

TOTAL LIABILITIES AND EQUITY$9,257$15,314

Smith Micro Software, Inc.
Business Division Revenue
(in thousands, unaudited)

 Quarter Ended December 31, 2001
(UNAUDITED)
 Software Products

 
 WAB

 Mac 

 Retail 

Total SW

ISS

Total

Net Revenue$1,364$560$1,432$3,356$558$3,914
Cost of Revenue   7104281,138
 
Gross Profit   $2,646$130$2,776
 

 Twelve Months Ended December 31, 2001
(UNAUDITED)
 Software Products

 
 WAB

 Mac 

 Retail 

Total SW

ISS

Total

Net Revenue$3,964$1,364$2,607$7,935$2,827
Cost of Revenue   2,0001,9283,928
 
Gross Profit   $5,935$899$6,834
 

 Quarter Ended December 31, 2000
(UNAUDITED)
 Software Products

 
 WAB

 Mac 

 Retail 

Total SW

ISS

Total

Net Revenue$1,311$598$1,053$2,962$1,106$4,068
Cost of Revenue   9305631,493
 
Gross Profit   $2,032$543$2,575
 

 Twelve Months Ended December 31, 2000
(UNAUDITED)
 Software Products

 
 WAB

 Mac 

 Retail 

Total SW

ISS

Total

Net Revenue$4,996$1,634$3,553$10,183$3,555$13,738
Cost of Revenue   2,3291,3203,649
 
Gross Profit   $7,854$2,235$10,089
 
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