Press Releases

Media Contact: pr@smithmicro.com


Browse by Year

2016   2015   2014   2013   2012   2011   2010   2009   2008   2007   2006-2004   2003-2001   2000-1998


Smith Micro Software Reports Record Third Quarter Revenue

Nov 01, 2006
Third Quarter Revenue Increased 115% To $14.8 Million;Pro Forma Net Income Increased to a Record $4.3 million;

Aliso Viejo, CA -- Smith Micro Software, Inc. (NASDAQ: SMSI), a developer and marketer of a wide range of software solutions for the wireless market, today reported its 2006 third quarter financial results.

Third Quarter 2006 Key Financial Results:

  • Revenue increased to a record $14.8 million, up 18% sequentially and 115% year-over-year.
  • Pro Forma Net Income was a record $4.3 million, compared to pro forma net income of $2.9 million in the first quarter of 2006, pro forma net income of $3.2 million in the second quarter of 2006, and pro forma net income of $2.3 million in the third quarter of 2005.
  • Pro Forma earnings were a record $0.17 per fully diluted share on 25.8 million shares, compared to pro forma earnings of $0.13 per fully diluted share in the second quarter of 2006 and compared to pro forma earnings of $0.10 per fully diluted share in the third quarter of 2005.
  • Pro Forma Gross Profit increased to $9.0 million, up 18.4% sequentially and 49.6% over Pro Forma third quarter 2005.
  • Cash and cash equivalents increased significantly to $34.9 million, compared to $21.2 million at year-end in 2005.

Third Quarter Financial Discussion:

"We are very please to report our sixth consecutive quarter of record top line and bottom line results," said William W. Smith, Jr., President and Chief Executive Officer of Smith Micro Software. "Our business continues to prosper across all of our platforms and in our OEM business division we saw a return to a more normalized growth trend for our broadband QuickLink Mobile connectivity product, which helped drive the increase in gross margins for the quarter. We also experienced significant growth with our Music Essential kit, specifically with Verizon Wireless, where we benefited from a strong marketing push and launch of the LG VX8500 Chocolate phone."

Mr. Smith continued, "We launched our QuickLink Music product during the quarter, our new music suite which offers a robust experience allowing wireless carriers the ability to brand their multimedia service offerings from online stores to mobile handsets. It also gives the end users a streamlined installation process, and the seamless operability to integrate music capable phones with a PC. We believe this is a strong launching pad, as we look to expand our wireless carrier customer base with this product in the coming months."

"Our StuffIt Wireless program continues progress on track, with several ongoing prototypes in testing with large handset manufacturers, and a wireless carrier. We see this solution becoming more relevant to the market place as the market continues to evolve every day, with more data moving through the spectrum including music, video, and photos. Specifically, we anticipate video becoming more prominent player as we look to 2007." Mr. Smith continued, "We believe we have positioned the Company very well to benefit from these additional services being offered by the wireless carriers."

Mr. Smith concluded, "In conclusion we remain optimistic about our business outlook, we expect to see a continuation of growth, and believe our recent music success can continue to grow with the launch of QuickLink Music. We believe the company is positioned well as we strive to be a leader in the wireless software space."

Smith Micro reported record net revenue of $14.8 million for the third quarter ended September 30, 2006, an 18% increase over revenue of $12.5 million in the second quarter of 2006 and an increase of 115% when compared to the $6.9 million recorded in the third quarter of 2005.

Pro forma net income (which excludes amortization of intangible assets associated with acquisitions and stock compensation related expenses) for the third quarter was $4.3 million, or $0.17 per fully diluted share, compared to pro forma net income of $2.3 million or $0.10 per fully diluted share in the third quarter of 2005. Fully diluted shares outstanding as of September 30, 2006 were 25.8 million versus the 23.2 million shares outstanding in the third quarter of 2005.

On a GAAP basis, the company earned $0.09 per fully diluted share for the third quarter of 2006 that compared to $0.08 per fully diluted share in the third quarter of 2005.

For the nine months ended September 30, 2005, the company reported record net revenues of $37.2 million, a 204% increase over the $12.3 million reported for the nine months ended September 30, 2005. Proforma net income for the nine months ended was $10.5 million, or $0.42 per diluted share, an increase of 261% when compared to the profoma net income of $2.9 million or $0.13 per fully diluted share reported for the nine months ended September 30, 2005.

Investor Conference Call

Smith Micro will hold an investor conference call to discuss the company's third quarter results at 4:30 p.m. Eastern time today, November 1, 2006. The call can be accessed by dialing (800) 218-9073 and giving 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:

Smith Micro Software, Inc., headquartered in Aliso Viejo, CA, is a developer and marketer of wireless communications and utility software products for multiple OS platforms. The company designs easy-to-use software for personal computing and business solutions around the world. With a focus on wireless and broadband technologies and the Internet, the company's products and services enable wireless communications, file and image compression, digital image and music management. In addition, Smith Micro develops and publishes award-winning software solutions for Windows and Macintosh, empowering users in the areas of information access, removal, recovery, security, and Internet distribution. Smith Micro's leading brands are QuickLink®, StuffIt®, CheckIt®, Internet Cleanup(TM) and Spring Cleaning®. Smith Micro's complete line of products is available through retail stores, Value-Added Resellers (VARs), Smith Micro's consumer, enterprise, wireless OEM sales groups and the company's websites. Smith Micro's common stock trades on The NASDAQ Stock Market® under the symbol SMSI.

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 segments of the company. 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, 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.
Pro-forma Statement of Operations for the Three Months Ended September 30, 2006
(results exclude amortization of intangibles associated with the acquisitions of
Allume Systems, Inc. and PhoTags, Inc. as well as stock based compensation)

(in thousands, except per share amounts)

 Unaudited
 Per GAAPAdjustmentsProforma
NET REVENUE:
   Products$14,619$ -$14,619
   Services182 -182
 
Total Net Revenues14,801 -14,801
 
COST OF SALES:
   Products6,030(259)5,771
   Services60060
 
Total Cost of Sales6,090(259)5,831
 
GROSS PROFIT:
   Products8,5892598,848
   Services122 -122
 
Total Gross Profit8,7112598,970
 
Operating Expenses:
   Selling & Marketing2,374(723)1,651
   Research & Development1,871(141)1,730
   General & Administrative2,329(741)1,588
 
Total Operating Expenses6,574(1,605)4,969
 
Operating Income2,1371,8644,001
Interest Income381 381
 
Income Before Income Taxes2,5181,8644,382
Income Tax Expense68 68
 
Net Income$2,450$1,864$4,314
 
Income Per Share, Basic$0.10 $0.18
 
Weighted Average Shares Outstanding, Basic24,123 24,123
 
Income Per Share, Fully Diluted$0.09 $0.17
 
Weighted Average Shares Outstanding, Fully Diluted25,794 25,794
 



Smith Micro Software, Inc.
Pro-forma Statement of Operations for the Three Months Ended September 30, 2005
(results exclude amortization of intangibles associated with the acquisition
of Allume Systems, Inc.)

(in thousands, except per share amounts)

 Unaudited
 Per GAAPAdjustmentsProforma
NET REVENUE:
   Products$6,743$ -$6,743
   Services153 -153
 
Total Net Revenues6,896 -6,896
 
COST OF SALES:
   Products1,089(267)822
   Services76076
 
Total Cost of Sales1,165(267)898
 
GROSS PROFIT:
   Products5,6542675,921
   Services77 -77
 
Total Gross Profit5,7312675,998
 
Operating Expenses:
   Selling & Marketing1,294(118)1,176
   Research & Development1,244 1,244
   General & Administrative1,430 1,430
 
Total Operating Expenses3,968(118)3,850
 
Operating Income1,7633852,148
Interest Income161 161
 
Income Before Income Taxes1,9243852,309
Income Tax Expense47 47
 
Net Income$1,877$385$2,262
 
Income Per Share, Basic$0.09 $0.10
 
Weighted Average Shares Outstanding, Basic22,016 22,016
 
Income Per Share, Fully Diluted$0.08 $0.10
 
Weighted Average Shares Outstanding, Fully Diluted23,222 23,222
 



Smith Micro Software, Inc.
Pro-forma Statement of Operations for the Nine Months Ended September 30, 2006
(results exclude amortization of intangibles associated with the acquisitions of
Allume Systems, Inc. and PhoTags, Inc. as well as stock based compensation)

(in thousands, except per share amounts)

 Unaudited
 Per GAAPAdjustmentsProforma
NET REVENUE:
   Products$36,691$ -$36,691
   Services550 -550
 
Total Net Revenues37,241 -37,241
 
COST OF SALES:
   Products14,485(859)13,626
   Services2100210
 
Total Cost of Sales14,695(859)13,836
 
GROSS PROFIT:
   Products22,20685923,065
   Services340 -340
 
Total Gross Profit22,54685923,405
 
Operating Expenses:
   Selling & Marketing6,540(1,876)4,664
   Research & Development5,625(793)4,832
   General & Administrative5,766(1,583)4,183
 
Total Operating Expenses17,931(4,252)13,679
 
Operating Income4,6155,1119,726
Interest Income871 871
 
Income Before Income Taxes5,4865,11110,597
Income Tax Expense140 140
 
Net Income$5,346$5,111$10,457
 
Income Per Share, Basic$0.23 $0.45
 
Weighted Average Shares Outstanding, Basic23,360 23,360
 
Income Per Share, Fully Diluted$0.21 $0.42
 
Weighted Average Shares Outstanding, Fully Diluted25,184 25,184
 



Smith Micro Software, Inc.
Pro-forma Statement of Operations for the Nine Months Ended September 30, 2005
(results exclude amortization of intangibles associated with the acquisition
of Allume Systems, Inc.)

(in thousands, except per share amounts)

 Unaudited
 Per GAAPAdjustmentsProforma
NET REVENUE:
   Products$11,781$ -$11,781
   Services475 -475
 
Total Net Revenues12,256 -12,256
 
COST OF SALES:
   Products1,835(267)1,568
   Services2200220
 
Total Cost of Sales2,055(267)1,788
 
GROSS PROFIT:
   Products9,94626710,213
   Services255 -255
 
Total Gross Profit10,20126710,468
 
Operating Expenses:
   Selling & Marketing2,103(118)1,985
   Research & Development2,638 2,638
   General & Administrative3,367 3,367
 
Total Operating Expenses8,108(118)7,990
 
Operating Income2,0933852,478
Interest Income475 475
 
Income Before Income Taxes2,5683852,953
Income Tax Expense55 55
 
Net Income$2,513$385$2,898
 
Income Per Share, Basic$0.12 $0.14
 
Weighted Average Shares Outstanding, Basic21,097 21,097
 
Income Per Share, Fully Diluted$0.11 $0.13
 
Weighted Average Shares Outstanding, Fully Diluted22,454 22,454
 


Smith Micro Software, Inc.
Statement of Operations for the Three Months Ended September 30, 2006 and 2005

(in thousands, except per share amounts)

 Unaudited    
 20062005
NET REVENUE:
   Products$14,619$6,743
   Services182153
 
Total Net Revenues14,8016,896
 
COST OF SALES:
   Products6,0301,089
   Services6076
 
Total Cost of Sales6,0901,165
 
GROSS PROFIT:
   Products8,5895,654
   Services12277
 
Total Gross Profit8,7115,731
 
Operating Expenses:
   Selling & Marketing2,3741,294
   Research & Development1,8711,244
   General & Administrative2,3291,430
 
Total Operating Expenses6,5743,968
 
Operating Income2,1371,763
Interest Income381161
 
Income Before Income Taxes2,5181,924
Income Tax Expense6847
 
Net Income2,4501,877
 
Income Per Share, Basic$0.10$0.09
 
Weighted Average Shares Outstanding, Basic24,12322,016
 
Income Per Share, Fully Diluted$0.09$0.08
 
Weighted Average Shares Outstanding, Fully Diluted25,79423,222
 


Smith Micro Software, Inc.
Statement of Operations for the Nine Months Ended September 30, 2006 and 2005

(in thousands, except per share amounts)

 Unaudited    
 20062005
NET REVENUE:
   Products$36,691$11,781
   Services550475
 
Total Net Revenues37,24112,256
 
COST OF SALES:
   Products14,4851,835
   Services210220
 
Total Cost of Sales14,6952,055
 
GROSS PROFIT:
   Products22,2069,946
   Services340255
 
Total Gross Profit22,54610,201
 
Operating Expenses:
   Selling & Marketing6,5402,103
   Research & Development5,6252,638
   General & Administrative5,7663,367
 
Total Operating Expenses17,9318,108
 
Operating Income4,6152,093
Interest Income871475
 
Income Before Income Taxes5,4862,568
Income Tax Expense14055
 
Net Income5,3462,513
 
Income Per Share, Basic$0.23$0.12
 
Weighted Average Shares Outstanding, Basic23,36021,097
 
Income Per Share, Fully Diluted$0.21$0.11
 
Weighted Average Shares Outstanding, Fully Diluted25,18422,454
 



Smith Micro Software, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 September 30,
2006
(unaudited)
December 31,
2005
ASSETS
Current Assets:
Cash & Cash Equivalents$34,898$21,215
Accounts Receivable, (Net)6,9436,786
Inventory1,373530
Prepaid & Other Assets243556
 
   Total Current Assets43,45729,087
Equipment and Improvements, Net376241
Goodwill15,0989,288
Intangible Assets, Net4,1564,093
Other Assets--7
 
TOTAL ASSETS$63,087$42,716
 
 
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable$4,942$2,383
Accrued Liabilities1,8811,376
 
   Total Current Liabilities6,8233,759
 
Common Stock24 22 
Additional Paid In Capital62,839 50,880 
Accumulated Deficit(6,599)(11,945)
 
   Total Stockholders' Equity56,26438,957
 
TOTAL LIABILITIES & EQUITY$63,087$42,716
 
CLOSE