Press Releases

Media Contact: pr@smithmicro.com


Browse by Year

2017   2016   2015   2014   2013   2012   2011   2010   2009   2008   2007   2006-2004   2003-2001   2000-1998


Smith Micro Software Reports Record Fourth Quarter And Fiscal 2006 Results

Feb 28, 2007
Fiscal 2006 Revenue Increased 169% to $54.5 MillionFiscal 2006 Pro Forma Earnings Increased 219% to $17.5 Million or $0.69 per Diluted Share;Fourth Quarter Revenue Increase of 115% to $17.2 MillionFourth Quarter Pro Forma Earnings Increased 168% to $7.0 Million or $0.26 per Diluted Share

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 fourth quarter and 2006 financial results.

Fourth Quarter 2006 Key Financial Results:

  • Revenue increased to a record $17.2 million, up 115% year-over-year.
  • Pro Forma Net Income was a record $7.0 million, compared to pro forma net income of $2.6 million in the fourth quarter of 2005.
  • Pro Forma earnings were a record $0.26 per diluted share on 26.7 million shares, compared to pro forma earnings of $0.11 per diluted share in the fourth quarter of 2005 on 23.9 million shares.

Fiscal Year 2006 Key Financial Results:

  • Revenue increased to a record $54.5 million, up 169% year-over-year.
  • Pro Forma Net Income was a record $17.5 million, compared to pro forma net income of $5.5 million for fiscal 2005.
  • Pro Forma earnings were a record $0.69 per diluted share on 25.3 million shares, compared to pro forma earnings of $0.24 per diluted share in Fiscal 2005 on 22.8 million shares.
  • Cash Flow from operations was $14.8 million, up $12.3 million from Fiscal 2005, or 499%.

Financial Discussion:

"We are very pleased with the fourth quarter and year-end 2006 financial results," said William W. Smith, Jr., President and CEO of Smith Micro Software, Inc. "During the fiscal year we achieved several milestones as we continue to position the Company as the leader in the wireless software marketplace. Not only did we achieve record financials results on both the top and bottom line for the seventh quarter in a row, we also significantly expanded our product solutions both internally and through acquisitions. On the acquisitions front we acquired Photags, Inc. in April 2006, which expanded our multimedia platform. We also announced two additional acquisitions, Ecutel Systems Inc., and Insignia Solutions, plc. Ecutel, whose product line adds significant technology of persistent IP roaming for our connectivity products, provides additional security and device management features for our enterprise solutions. On February 11th we also announced an agreement to acquire the assets of Insignia Solutions plc, which will bring additional wireless data services to our product offerings such as firmware update over the air and device management. Another significant synergy is Insignia's strong worldwide customer base which provides attractive cross-selling opportunities. As a whole, these acquisitions bring us instant international expansion, an expanded sales force presence, and several new development teams to drive product development."

Mr. Smith continued, "As well as acquiring new technologies and products solutions, we also launched several new products which have driven our sales growth. In September 2006, we launched our flagship product "Quicklink Music", which has been a significant revenue generator for the company. To date we have signed on two carriers, and we will continue to work hard to sign additional carriers both domestically and internationally in the coming year. We also expanded our Stuffit Wireless solution and continue to make progress with our sales efforts with major handset manufacturers."

Mr. Smith concluded, "Although we have made significant strides with our business case in 2006, I believe we have only begun to touch the surface of the opportunity that lies ahead of us. We look to 2007 and expect to see a continuation of strong financial results, continued roll out of new solutions for our growing customer base, and expansion into new market opportunities as we continue to build our leadership position in the wireless software space.

Smith Micro reported record net revenue of $17.2 million for the fourth quarter ended December 31, 2006, a 115% increase when compared to the $8.0 million recorded in the fourth quarter of 2005. Fiscal year 2006 revenue was a record $54.5 million, as compared to $20.3 million for fiscal 2005.

Pro forma net income (which excludes amortization of intangible assets associated with acquisitions, stock compensation related expenses and non-cash tax expenses) for the fourth quarter of 2006 was $7.0 million, or $0.26 per diluted share, compared to pro forma net income of $2.6 million or $0.11 per diluted share in the fourth quarter of 2005. Diluted shares outstanding as of December 31, 2006 increased significantly to 26.7 million as compared to the 23.9 million shares outstanding in the fourth quarter of 2005.

Pro forma net income for fiscal 2006 was $17.5 million or $0.69 per diluted share as compared to $5.5 million or $0.24 per diluted share for fiscal 2005. Diluted shares attributed to fiscal 2006 were 25.3 million as compared to 22.8 million in fiscal 2005.

On a GAAP basis, the company earned $0.14 per diluted share for the fourth quarter of 2006 as compared to $0.09 per diluted share in the fourth quarter of 2005. GAAP diluted EPS for fiscal 2006 was $0.35 as compared to $0.21 for fiscal 2005.

Total cash and equivalents at December 31, 2006 increased significantly to $92.6 million, compared to $21.2 million at December 31, 2005. The company successfully completed a secondary offering which brought the company an additional $55.0 million in December.

The Company uses pro forma reconciliation of its condensed consolidated statements of income in the presentation of financial results in this press release. Management believes that this presentation may be more meaningful in analyzing our results of operations and income generation, since amortization of intangibles from acquisitions, amortization of deferred stock-based compensation and impairment gains and losses on investments, and non-cash tax expense are excluded from the pro forma earnings calculation. This presentation may be considered more indicative of our ongoing operational performance. The tables below present the differences between pro forma earnings and net income on an absolute and per share basis.

Investor Conference Call

Smith Micro will hold an investor conference call to discuss the company's fourth quarter results at 4:30 p.m. Eastern time today, February 28, 2007. 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™ 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 Global Market® under the symbol SMSI.

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 financial prospects and projections, the company's ability to increase its business and the anticipated timing and financial performance of new products and potential acquisitions. 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 customers, 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 presented in any forward-looking statements. Smith Micro assumes no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this press release.

Smith Micro, the Smith Micro logo, QuickLink and StuffIt 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 December 31, 2006
(results exclude amortization of intangibles associated with the acquisitions of
Allume Systems, Inc. and PhoTags, Inc., stock based compensation and non-cash
income tax expenses)

(in thousands, except per share amounts)

 Per GAAPAdjustmentsProforma
NET REVENUE:
   Products$17,082$ -$17,082
   Services146 -146
 
Total Net Revenues17,228 -17,228
 
COST OF SALES:
   Products5,504(260)5,244
   Services60060
 
Total Cost of Sales5,564(260)5,304
 
GROSS PROFIT:
   Products11,57826011,838
   Services86 -86
 
Total Gross Profit11,66426011,924
 
Operating Expenses:
   Selling & Marketing2,517(684)1,833
   Research & Development2,274(295)1,979
   General & Administrative2,701(1,022)1,679
 
Total Operating Expenses7,492(2,001)5,491
 
Operating Income4,1722,2616,433
Interest Income532 532
 
Income Before Income Taxes4,7042,2616,965
Income Tax Expense1,094(1,094) 
 
Net Income$3,610$3,355$6,965
 
Income Per Share, Basic$0.14 $0.28
 
Weighted Average Shares Outstanding, Basic24,930 24,930
 
Income Per Share, Diluted$0.14 $0.26
 
Weighted Average Shares Outstanding, Diluted26,687 26,691
 



Smith Micro Software, Inc.
Pro-forma Statement of Operations for the Three Months Ended December 31, 2005
(results exclude amortization of intangibles associated with the acquisition
of Allume Systems, Inc.)

(in thousands, except per share amounts)

 Per GAAPAdjustmentsProforma
NET REVENUE:
   Products$7,856$ -$7,856
   Services146 -146
 
Total Net Revenues8,002 -8,002
 
COST OF SALES:
   Products1,983(267)1,716
   Services65065
 
Total Cost of Sales2,048(267)1,781
 
GROSS PROFIT:
   Products5,8732676,140
   Services81 -81
 
Total Gross Profit5,9542676,221
 
Operating Expenses:
   Selling & Marketing1,307(118)1,189
   Research & Development1,325 1,325
   General & Administrative1,254 1,254
 
Total Operating Expenses3,886(118)3,768
 
Operating Income2,0683852,453
Interest Income192 192
 
Income Before Income Taxes2,2603852,645
Income Tax Expense49 49
 
Net Income$2,211$385$2,596
 
Income Per Share, Basic$0.10 $0.12
 
Weighted Average Shares Outstanding, Basic22,106 22,106
 
Income Per Share, Diluted$0.09 $0.11
 
Weighted Average Shares Outstanding, Diluted23,900 23,900
 



Smith Micro Software, Inc.
Pro-forma Statement of Operations for the Twelve Months Ended December 31, 2006
(results exclude amortization of intangibles associated with the acquisitions of
Allume Systems, Inc. and PhoTags, Inc., stock compensation and non-cash income
tax expenses)

(in thousands, except per share amounts)

 Per GAAPAdjustmentsProforma
NET REVENUE:
   Products$53,773$ -$53,773
   Services696 -696
 
Total Net Revenues54,469 -54,469
 
COST OF SALES:
   Products19,989(1,119)18,870
   Services2700270
 
Total Cost of Sales20,259(1,119)19,140
 
GROSS PROFIT:
   Products33,7841,11934,903
   Services426 -426
 
Total Gross Profit34,2101,11935,329
 
Operating Expenses:
   Selling & Marketing9,057(2,560)6,497
   Research & Development7,899(1,088)6,811
   General & Administrative8,467(2,605)5,862
 
Total Operating Expenses25,423(6,253)19,170
 
Operating Income8,7877,37216,159
Interest Income1,403 1,403
 
Income Before Income Taxes10,1907,37217,562
Income Tax Expense1,234(1,182)52
 
Net Income$8,956$8,554$17,510
 
Income Per Share, Basic$0.38 $0.74
 
Weighted Average Shares Outstanding, Basic23,753 23,753
 
Income Per Share, Diluted$0.35 $0.69
 
Weighted Average Shares Outstanding, Diluted25,330 25,330
 



Smith Micro Software, Inc.
Pro-forma Statement of Operations for the Twelve Months Ended December 31, 2005
(results exclude amortization of intangibles associated with the acquisition
of Allume Systems, Inc.)

(in thousands, except per share amounts)

 Per GAAPAdjustmentsProforma
NET REVENUE:
   Products$19,637$ -$19,637
   Services621 -621
 
Total Net Revenues20,258 -20,258
 
COST OF SALES:
   Products3,818(534)3,284
   Services2850285
 
Total Cost of Sales4,103(534)3,569
 
GROSS PROFIT:
   Products15,81953416,353
   Services336 -336
 
Total Gross Profit16,15553416,689
 
Operating Expenses:
   Selling & Marketing3,410(236)3,174
   Research & Development3,963 3,963
   General & Administrative4,621 4,621
 
Total Operating Expenses11,994(236)11,758
 
Operating Income4,1617704,931
Interest Income667 667
 
Income Before Income Taxes4,8287705,598
Income Tax Expense104 104
 
Net Income$4,724$770$5,494
 
Income Per Share, Basic$0.22 $0.26
 
Weighted Average Shares Outstanding, Basic21,351 21,351
 
Income Per Share, Diluted$0.21 $0.24
 
Weighted Average Shares Outstanding, Diluted22,806 22,806
 


Smith Micro Software, Inc.
Statement of Operations for the Three Months Ended December 31, 2006 and 2005

(in thousands, except per share amounts)

 20062005
NET REVENUE:
   Products$17,082$7,856
   Services146146
 
Total Net Revenues17,2288,002
 
COST OF SALES:
   Products5,5041,983
   Services6065
 
Total Cost of Sales5,5642,048
 
GROSS PROFIT:
   Products11,5785,873
   Services8681
 
Total Gross Profit11,6645,954
 
Operating Expenses:
   Selling & Marketing2,5171,307
   Research & Development2,2741,325
   General & Administrative2,7011,254
 
Total Operating Expenses7,4923,886
 
Operating Income4,1722,068
Interest Income532192
 
Income Before Income Taxes4,7042,260
Income Tax Expense1,09449
 
Net Income3,6102,211
 
Income Per Share, Basic$0.14$0.10
 
Weighted Average Shares Outstanding, Basic24,93022,106
 
Income Per Share, Diluted$0.14$0.09
 
Weighted Average Shares Outstanding, Diluted26,68723,900
 


Smith Micro Software, Inc.
Statement of Operations for the Twelve Months Ended December 31, 2006 and 2005

(in thousands, except per share amounts)

 20062005
NET REVENUE:
   Products$53,773$19,637
   Services696621
 
Total Net Revenues54,46920,258
 
COST OF SALES:
   Products19,9893,818
   Services270285
 
Total Cost of Sales20,2594,103
 
GROSS PROFIT:
   Products33,78415,819
   Services426336
 
Total Gross Profit34,21016,155
 
Operating Expenses:
   Selling & Marketing9,0573,410
   Research & Development7,8993,963
   General & Administrative8,4674,621
 
Total Operating Expenses25,42311,994
 
Operating Income8,7874,161
Interest Income1,403667
 
Income Before Income Taxes10,1904,828
Income Tax Expense1,234104
 
Net Income8,9564,724
 
Income Per Share, Basic$0.38$0.22
 
Weighted Average Shares Outstanding, Basic23,75321,351
 
Income Per Share, Diluted$0.35$0.21
 
Weighted Average Shares Outstanding, Diluted25,33022,806
 



Smith Micro Software, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 December 31,
2006
December 31,
2005
ASSETS
Current Assets:
Cash & Cash Equivalents$92,564$21,215
Accounts Receivable, (Net)9,8286,786
Income Taxes Receivable122--
Deferred Tax Asset - Current90--
Inventory857530
Prepaid & Other Assets308556
 
   Total Current Assets103,76929,087
Equipment and Improvements, Net417241
Deferred Tax Asset - Long Term7,786--
Goodwill15,2669,288
Intangible Assets, Net3,7884,093
Other Assets--7
 
TOTAL ASSETS$131,026$42,716
 
 
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable$2,941$2,383
Accrued Liabilities2,0281,376
 
   Total Current Liabilities4,9693,759
 
Common Stock28 22 
Additional Paid In Capital129,018 50,880 
Accumulated Deficit(2,989)(11,945)
 
   Total Stockholders' Equity126,05738,957
 
TOTAL LIABILITIES & EQUITY$131,026$42,716
 
CLOSE