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Smith Micro Announces 2004 Net Revenues of $13.3 Million, an Increase of 85% Over 2003; 2004 Net Income of $3.4 Million or $0.19 Per Fully Diluted Share

Feb 09, 2005
Recent EV-DO, 3G High-Speed Wireless Data Service Availability Sparks Growth

Aliso Viejo, Calif., April 22, 2004-- Smith Micro Software, Inc. (NASDAQ: SMSI), a developer and marketer of a wide range of software and service solutions for the wireless and Internet markets, today reported its fourth quarter and 2004 year-end results.

The company reported net revenues for the quarter ended December 31, 2004, of $4.2 million, an increase of 166% compared to $1.6 million recorded in the fourth quarter of 2003. The company's net income of $1.6 million in the fourth quarter of 2004 resulted in a net income of $.09 per basic and diluted share, compared to a net loss of $325,000 in the fourth quarter of 2003 or a net loss of $.02 per basic and diluted share.

For the year, the company reported net revenues of 13.3 million, an increase of 85%, when compared to net revenues of $7.2 million in 2003. Net income for the year was $3.4 million, or $0.19 per fully diluted share, compared to a net loss of $923,000 or ($0.06) per basic and diluted share last year. The company finished the year with cash and cash equivalents of $8.6 million, an increase of 132% versus the $3.7 million reported a year ago. The company also reported a backlog entering into the first quarter of 2005 of $1.0 million.

"We are very pleased with our 2004 results," said William W. Smith, Jr., President and Chief Executive Officer. "We continued to build upon the momentum we started in 2003 as the leading provider of wireless connectivity software in the fast emerging high-speed wireless data market. We grew not only our top line significantly, but returned to solid profitability in the year, highlighting the significant leverage we have in our model as we grow revenues." Mr. Smith concluded, "The high-speed wireless data market is still in its infancy with Verizon Wireless, the leader in wireless data in North America, only 6 months into its BroadbandAccess rollout. This leaves us looking forward to delivering solid growth again in 2005."

Investor Conference Call

Smith Micro will hold an investor conference call to discuss the company's results at 4:30 p.m. Eastern time, Wednesday, February 9, 2005. Investors may access the conference call over the Internet via the company's website www.smithmicro.com or at PRNewswire/Thomson.

About Smith Micro Software

Smith Micro Software, Inc., headquartered in Aliso Viejo, CA, is a developer and marketer of wireless communication, broadband, eCommerce and utility software products for multiple OS platforms. The company designs integrated cross platform, easy-to-use software for personal computing and business solutions around the world. With a focus on Wireless and Broadband and Internet technologies, the company's products and services enable wireless communications, eCommerce, eBusiness, Internet communications (voice-over-IP), video conferencing, network fax, and traditional computer telephony. Smith Micro's complete line of products is available through original equipment manufacturers (OEMs), direct sales, retail stores, and value-added resellers (VARs). 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. These forward-looking statements speak only as of the date hereof and are based upon the information currently available to the company. Such information is subject to change, and the company will not necessarily inform you of such changes. 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, unforeseen delays in the timing of orders from OEM 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.

Note: Financial Schedules follow


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

 Three Months Ended
December 31 (unaudited)
 20042003
Net Revenues:
   Products$3,980$1,353
   Services175209
 
Total Net Revenues4,1551,562
 
Cost of Revenues:
   Products728301
   Services8781
 
Total Cost of Revenues815382
 
Gross Margin3,3401,180
 
Operating Expenses:
   Selling & Marketing354359
   Research & Development634627
   General & Administrative712529
 
Total Operating Expenses1,7001,515
 
Operating Income (Loss)1,640(335)
Interest Income2510 
 
Income (Loss) Before Income Tax1,665(325)
Income Tax Expense34----- 
 
Net Income (Loss)$1,631($325)
 
Net Income (Loss) per share, basic$0.09($0.02)
 
Weighted average shares outstanding, basic17,70616,946
 
Net Income (Loss) per share, fully diluted$0.09($0.02)
 
Weighted average shares outstanding, fully diluted19,12516,946
 



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

 Twelve Months Ended
December 31 (unaudited)
 20042003
Net Revenues:
   Products$12,394$6,291
   Services922925
 
Total Net Revenues13,3167,216
 
Cost of Revenues:
   Products2,5301,350
   Services380321
 
Total Cost of Revenues2,9101,671
 
Gross Margin10,4065,545
 
Operating Expenses:
   Selling & Marketing1,5191,666
   Research & Development2,5562,506
   General & Administrative2,8682,330
 
Total Operating Expenses6,9436,502
 
Operating Income (Loss)3,463(957)
Interest Income5337 
 
Income (Loss) Before Income Tax3,516(920)
Income Tax Expense71
 
Net Income (Loss)$3,445($923)
 
Net Income (Loss) per share, basic$0.20($0.06)
 
Weighted average shares outstanding, basic17,35216,511
 
Net Income (Loss) per share, fully diluted$0.19($0.06)
 
Weighted average shares outstanding, fully diluted18,49716,511
 



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

 December 31,
2004
(unaudited)
December 31,
2003
ASSETS
Current Assets:
Cash & Cash Equivalents$8,634$3,722
Accounts Receivable, Net2,024741
Income Tax Receivable35--
Inventory, Net4722
Prepaids & Other Assets203204
 
   Total Current Assets10,9434,689
Equipment and Improvements, net11370
Intangible Assets, Net--40
Goodwill1,7151,715
Other Assets5773
 
TOTAL ASSETS$12,828$6,587
 
 
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable$939$538
Accrued Liabilities790459
 
   Total Current Liabilities1,729997
 
Common Stock18 17 
Additional Paid In Capital27,750 25,687 
Accumulated Deficit(16,669)(20,114)
 
   Total Stockholders' Equity11,0995,590
 
TOTAL LIABILITIES AND EQUITY$12,828$6,587
 
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