Smith Micro Executes Previously Announced Cost Reduction Plans
Company Expects to Reach Profitability No Later Than the End of the Third Quarter of Fiscal Year 2023
PITTSBURGH, PA, March 29, 2023 – Smith Micro Software, Inc. (Nasdaq: SMSI) (“Smith Micro” or the “Company”) today provided an update to its previously announced cost reduction initiatives. In furtherance of these initiatives, the Company earlier this month executed workforce reductions in the United States and Portugal and announced the further reduction of its global workforce in Serbia and Slovakia. In the aggregate, these actions will result in a reduction of approximately 26% of the Company’s total global workforce. Along with these actions, the Company announced its decision to close its Slovakian operations, effective June 30, 2023.
In addition, the Company has reduced the base salaries of its executive team and the fees paid to its Board of Directors and suspended its quarterly bonus program, in all cases until the Company returns to profitability on a non-GAAP basis, including the effects of the restored salaries, board fees and bonus program. The Company has also continued its ongoing optimization initiatives related to third-party costs, as its efforts to migrate family safety customers to the Company’s SafePath® platform near completion.
“As we discussed on our recent earnings conference call, we are very focused on bringing our cost structure into alignment. I am pleased with the swift actions that we have taken, which we believe give us a clear path to achieve our goal of profitability no later than the end of our fiscal third quarter of this year,” said William W. Smith Jr., President and CEO of Smith Micro. “We are targeting an additional $4 million per quarter reduction in costs across the organization compared to the adjusted expenses reported for the fourth quarter of 2022.”
Mr. Smith continued, “We have made substantial progress to date, and will continue to drive cost synergies as we complete our SafePath platform migration efforts, with the expected launch by one of our Tier 1 carrier customers on the SafePath platform during the second half of this year.”
About Smith Micro Software, Inc.
Smith Micro develops software to simplify and enhance the mobile experience, providing solutions to some of the leading wireless service providers, cable MSOs and mobile device retailers around the world. From enabling the family digital lifestyle to providing powerful voice messaging capabilities, our solutions enrich today’s connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer IoT devices. The Smith Micro portfolio also includes a wide range of products for creating, sharing and monetizing rich content, such as visual voice messaging, optimizing retail content display and performing analytics on any product set. For more information, visit www.smithmicro.com.
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 owners.
Certain statements in this press release are forward-looking statements regarding future events or results within the meaning of the Private Securities Litigation Reform Act, including statements related to our financial prospects, goals, anticipated growth and potential new growth opportunities, other projections of our outlook or performance and our future business plans, and the benefits that we believe our solution will offer to our customers and its end users, and statements using such words as “expect,” “anticipate,” “believe,” “plan,” “intend,” “could,” “will,” “may” and other similar expressions. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Among the important factors that could cause or contribute to such differences are delays in our ability to fully execute on our expense reduction plans due to statutory and other requirements, reduction in revenue from a terminating customer agreement earlier or at a more rapid rate than expected, the risk of harm to our business resulting from our cost reduction efforts, customer concentration, given that the majority of our sales depend on a few large customer relationships, delay or failure of our customers to accept and deploy our products and services or new or upgraded versions thereof, delay or failure of our customers’ end users to adopt our products and services or new or upgraded versions thereof, the impact of the COVID-19 pandemic on our business and financial results, changes in demand for our products from our customers and their end-users, changes in requirements for our products imposed by our customers or by the third party providers of software and/or platforms that we use, our ability to effectively integrate, market and sell acquired product lines, new and changing technologies, customer acceptance and timing of deployment of those technologies, our ability to compete effectively with other software and technology companies, the existence and terms of our convertible notes and related agreements, including that they may restrict our ability to obtain additional financing or pursue new growth opportunities, and adversely affect our business, financial condition and cash flows from operations in the future, and our ability to obtain sufficient financing to support new growth opportunities that we identify. These and other factors discussed in our 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, and we do not undertake any obligation to update these statements to reflect events or circumstances occurring after the date of this release.