Aliso Viejo, CA - July 31, 2013 - Smith Micro Software, Inc. (NASDAQ:SMSI), a leading provider of wireless and mobility solutions, today reported financial results for the second quarter ended June 30, 2013.
"Revenues for the second quarter of 2013 were up 3.1 percent versus the same quarter last year primarily due to our successful launch of Poser 10 and Poser Pro 2014," said William W. Smith, Jr., President and CEO of Smith Micro Software. "Second quarter revenues were down 9.6 percent sequentially versus the first quarter due to the maturation of the initial deployment of our NetWise Director™ solution, delays in the launch of new NetWise and CommSuite initiatives, and continued softness in our legacy connection manager business."
"As a result of our lower revenues, the Board of Directors has approved a Restructuring Plan that will reduce expenses by closing and consolidating certain facilities, and reducing our worldwide headcount by approximately 25-30 percent. We believe the cost savings from these actions will streamline our organization and put us in a better position to achieve our goal of returning to profitability by the end of this year. The cost of this Restructuring Plan will result in a one-time charge to expense of between $5.0 - $6.8 million to be recorded in the fiscal third quarter ending September 30, 2013," Mr. Smith concluded.
Smith Micro reported revenues of $10.5 million for the second quarter ended June 30, 2013, compared to $10.2 million reported in the second quarter ended June 30, 2012.
Second quarter 2013 gross profit on both a GAAP and non-GAAP basis (which excludes stock compensation) was $8.1 million compared to $8.4 million reported in the second quarter of 2012.
GAAP gross profit as a percentage of revenue was 77.1 percent for the second quarter of 2013 compared to 82.3 percent for the second quarter of 2012. Non-GAAP gross profit as a percentage of revenue was 77.2 percent for the second quarter of 2013 compared to 82.4 percent for the same quarter last year.
GAAP net loss for the second quarter of 2013 was $7.2 million, or $0.19 loss per diluted share compared to a GAAP net loss of $6.8 million, or $0.19 loss per diluted share for the second quarter of 2012.
Non-GAAP net loss (which excludes stock compensation and non-cash tax expense) for the second quarter of 2013 was $3.8 million, or $0.10 loss per diluted share compared to a non-GAAP net loss of $3.6 million, or $0.10 loss per diluted share, for the second quarter of 2012.
For the six months ended June 30, 2013, the Company reported revenues of $22.1 million, compared to $20.3 million for the six months ended June 30, 2012.
GAAP gross profit was $17.2 million for the six months ended June 30, 2013, compared to $16.3 million for the six months ended June 30, 2012. Non-GAAP gross profit (which excludes stock compensation) was $17.3 million for the six months ended June 30, 2013, compared to $16.3 million for the same period last year.
GAAP gross profit as a percentage of revenues was 78.1 percent for the six months ended June 30, 2013, compared to 80.3 percent for the same period last year. Non-GAAP gross profit as a percentage of revenues was 78.1 percent for the six months ended June 30, 2013 compared to 80.4 percent for same period last year.
GAAP net loss for the six months ended June 30, 2013 was $13.4 million, or a loss of $0.36 per diluted share, compared to a GAAP net loss for the six months ended June 30, 2012 of $16.5 million, or $0.46 loss per diluted share. Non-GAAP net loss for the six months ended June 30, 2013 was $6.9 million, or a loss of $0.19 per diluted share, compared to a non-GAAP net loss of $8.8 million, or $0.25 loss per diluted share, for the six months ended June 30, 2012.
Total cash and cash equivalents and short-term investments at June 30, 2013 were $23.5 million.
The Company uses a non-GAAP reconciliation of gross profit, loss before taxes, net loss and 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 and non-cash tax expense are excluded from the non-GAAP earnings calculation. Since we are in a loss position, the non-GAAP income tax benefit for the period ended June 30, 2013 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 2013 results at 4:30 p.m. ET, July 31, 2013. To access the call, dial (877) 941-1465 and when prompted provide 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 on the Smith Micro website in the Investor Relations section.
About Smith Micro Software:
Smith Micro Software provides solutions that simplify, secure and enhance the mobile experience. Our portfolio includes a wide range of applications that manage broadband connectivity, data traffic, devices, voice and video communications over wireless networks. With 30 years of experience developing world-class client and server software, Smith Micro helps the leading mobile network operators, device manufacturers and enterprises increase efficiency and capitalize on the growth of mobile-connected consumers and workforces. For more information, visit smithmicro.com. (NASDAQ:SMSI)
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 market opportunities and interest in the company's products and solutions, and the company's ability to increase its revenue and regain profitability by capitalizing on these new market opportunities and interest and introducing new products and solutions. Among the important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements are changes in demand for the company's products from its customers and their end-users, customer concentration given that the majority of our sales depend on a few large client relationships, including Sprint, new and changing technologies, customer acceptance and timing of deployment of those technologies, 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 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.
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