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Smith Micro Reports 2016 First Quarter Financial Results

Apr 26, 2016
Growing pipeline positions company for strong second half of fiscal 2016

Aliso Viejo, CA, April 26, 2016Smith Micro Software, Inc. (NASDAQ:SMSI) today reported financial results for its first quarter ended March 31, 2016. 

“Revenue for the first quarter of 2016 was $7.2 million, which was above previous guidance,” said William W. Smith Jr., President and CEO of Smith Micro Software.  “We have managed our cash well, ending the quarter at $13.1 million, and we remain on track to accelerate our growth in the second half of the year based on the new agreements we signed during the fourth quarter of last year and a strong sales pipeline.”

“We completed the Birdstep acquisition on April 7, 2016. The integration is underway and we are very excited about the new opportunities, complementary technologies, and the talented team we gained as part of the transaction.  We remain very optimistic as we look at the second half of the fiscal year, building momentum around new deals and the expansion of business with our current customers,” Mr. Smith concluded.

Fiscal First Quarter 2016 Financial Results:

Smith Micro Software reported revenue of $7.2 million for the first quarter ended March 31, 2016, compared to $10.5 million reported in the first quarter of 2015.

First quarter gross profit on a GAAP and non-GAAP (which excludes stock compensation) basis was $5.1 million, compared to $8.4 million reported in the first quarter of 2015. 

GAAP and non-GAAP gross profit as a percentage of revenue was 70.7 percent for the first quarter of 2016, compared to 79.9 percent for the same quarter last year. 

GAAP net loss for the first quarter of 2016 was $3.7 million or a loss of $0.08 per share, compared to GAAP net loss of $10,000, or $0.00 per share, for the first quarter of 2015.

Non-GAAP net loss (which excludes stock compensation and normalizes tax expense) for the first quarter of 2016 was $2.1 million, or $0.04 loss per diluted share, compared to a net income of $0.4 million, or $0.01 earnings per diluted share, for the first quarter of 2015.

Total cash and cash equivalents and short-term investments increased by $0.2 million from year-end ending March 31, 2016 at $13.1 million.

Fully diluted weighted average common shares outstanding as of March 31, 2016 were 46.1 million, compared to 45.5 million fully diluted weighted average common shares outstanding as of March 31, 2015.

The Company uses a non-GAAP reconciliation of gross profit, income (loss) before taxes, net income (loss) and earnings (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 is excluded from the non-GAAP earnings calculation and adjustments are made for Proforma taxes. Since we are in a cumulative loss position, the non-GAAP income tax expense (benefit) for the fiscal year 2016 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 first quarter 2016 results at 4:30 p.m. ET, April 26, 2016. To access the call, dial 888-539-3678, international participants can call 719-325-2361, when prompted provide the participant pass code 4383527.  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, Inc.:
Smith Micro provides software to simplify and enhance the mobile experience. Our network access, insights, and optimization solutions ensure the best Quality of Experience for wireless users, while embedded mobile software creates new opportunities for wireless service providers and B2C businesses to engage with consumers via smartphones.  Our portfolio also includes content monetization solutions such as visual messaging, video streaming, and a variety of 2D and 3D graphics applications.  For more information, visit (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 sales opportunities and interest in the company’s products and solutions, the company's ability to increase its revenue by capitalizing on new opportunities, customer concentration given that the majority of our sales depend on a few large client relationships, including Sprint, and the risk of being delisted from NASDAQ if we fail to meet any of the listing requirements. 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, new and changing technologies, customer acceptance and timing of deployment of those technologies, and the company's ability to compete effectively with other software and technology companies. These and other factors discussed in the company's filings with the Securities and Exchange Commission, including our 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.

Note:  Financial Schedules Attached


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