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Smith Micro Software Reports 2013 First Quarter Financial Results

Smith Micro Software Reports 2013 First Quarter Financial Results 
ALISO VIEJO, CA -- (Marketwired) -- 05/01/13 --  Smith Micro
Software, Inc. (NASDAQ: SMSI), a leading provider of wireless and
mobility solutions, today reported financial results for its first
quarter ended March 31, 2013. 
"Our first quarter revenues of $11.6 million were up 14.7 percent
from the same period last year primarily due to the deployment of our
NetWise Director product and continued growth in our CommSuite
(Visual Voicemail and Voice-to-Text) solutions," said William W.
Smith Jr., President and CEO of Smith Micro Software. "First quarter
non-GAAP loss per share of $0.08 was nearly cut in half from last
year's $0.15 non-GAAP loss per share due to higher revenues and last
year's cost restructuring."  
Smith Micro reported revenue of $11.6 million for the first quarter
ended March 31, 2013, compared to $10.1 million reported in the first
quarter ended March 31, 2012. 
First quarter gross profit on a GAAP and non-GAAP (which excludes
stock compensation) basis was $9.2 million, compared to $7.9 million
reported in the first quarter of 2012.  
GAAP gross profit as a percentage of revenue was 78.9 percent for the
first quarter of 2013, compared to 78.3 percent for the same quarter
last year. Non-GAAP gross profit as a percentage of revenue was 79.0
percent for the first quarter of 2013, compared to 78.3 percent for
the same quarter last year primarily due to our increased revenues.  
GAAP net loss for the first quarter of 2013 was $6.2 million, or a
loss of $0.17 per share, compared to GAAP net loss of $9.7 million,
or $0.27 per share, for the first quarter of 2012. 
Non-GAAP net loss (which excludes stock compensation and non-cash tax
expense) for the first quarter of 2013 was $3.1 million, or a loss of
$0.08 per share, compared to a net loss of $5.3 million, or $0.15 per
share, for the first quarter of 2012. 
Total cash and cash equivalents and short-term investments at March
31, 2013 were $28.3 million. 
Fully diluted weighted average common shares outstanding as of March
31, 2013 were 36.6 million compared to 35.6 million fully diluted
weighted average common shares outstanding as of March 31, 2012. 
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
March 31, 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 first quarter 2013 results at 4:30 p.m. ET, May
1, 2013. To access the call, dial (877) 941-9205 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, Inc.: 
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, NetWise, CommSuite 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. 


 
                                                                            
                                                                            
Smith Micro Software, Inc.                                                  
Reconciliation of GAAP to Non-GAAP Results                                  
(in thousands, except per share amounts) - unaudited                        
                                                                            
                                                 Stock               Non-   
                                     GAAP    Compensation   Taxes    GAAP   
                                   --------  ------------ -------- -------- 
Three Months Ended 3/31/13:                                                 
  Gross profit                     $  9,158  $          5 $      - $  9,163 
  Loss before provision for income                                          
   taxes                           $ (6,089) $      1,072 $      - $ (5,017)
  Net loss                         $ (6,158) $      1,072 $  1,975 $ (3,111)
  EPS-diluted        
              $  (0.17) $       0.03 $   0.06 $  (0.08)
                                                                            
Three Months Ended 3/31/12:                                                 
  Gross profit                     $  7,919  $          4 $      - $  7,923 
  Loss before provision for income                                          
   taxes                           $ (9,592) $      1,141 $      - $ (8,451)
  Net loss                         $ (9,682) $      1,141 $  3,276 $ (5,265)
  EPS-diluted                      $  (0.27) $       0.03 $   0.09 $  (0.15)
                                                                            
                                                                            
                                                                            
                                                                            
Smith Micro Software, Inc.                                                  
Statements of Comprehensive Loss for the Three Months Ended March 31, 2013  
 and 2012                                                                   
(in thousands, except per share amounts) - unaudited                        
                                                                            
                                                       For the Three Months 
                                                          Ended March 31,   
                                                                            
                                                          2013       2012   
                                                       ---------  --------- 
Revenues                                               $  11,602  $  10,114 
Cost of revenues                                           2,444      2,195 
                                                       ---------  --------- 
Gross profit                                               9,158      7,919 
                                                                            
Operating expenses:                                                         
  Selling and marketing                                    4,381      4,592 
  Research and development                                 5,936      7,104 
  General and administrative                               4,942      5,504 
  Restructuring expenses                                       -        334 
                                                       ---------  --------- 
Total operating expenses                                  15,259     17,534 
                                                       ---------  --------- 
Operating loss                                            (6,101)    (9,615)
  Interest and other income, net                              12         23 
                                                       ---------  --------- 
Loss before provision for income taxes                    (6,089)    (9,592)
                                                       ---------  --------- 
Provision for income tax expense                              69         90 
                                                       ---------  --------- 
Net loss                                               $  (6,158) $  (9,682)
                                                       ---------  --------- 
                                                                            
Other comprehensive income, before tax:                                     
  Unrealized holding gains on available-for-sale                            
   securities                                                 18         40 
  Income tax expense related to items of other                              
   comprehensive income                                        -          6 
                                                       ---------  --------- 
  Other comprehensive income, net of tax                      18         34 
                                                       ---------  --------- 
Comprehensive loss                                     $  (6,140) $  (9,648)
                                                       =========  ========= 
                                                                            
Loss per share:                                                             
  Basic and diluted                                    $   (0.17) $   (0.27)
                                                                            
Weighted average shares outstanding:                                        
  Basic and diluted                                       36,614     35,590 
                                                                            
                                                                            
                                                                            
                                                                            
Smith Micro Software, Inc.                                                  
Consolidated Balance Sheets                                                 
(in thousands)                                                              
                                                 March 31,     December 31, 
                                                    2013           2012     
                                               -------------  ------------- 
                                                (unaudited)     (audited)   
ASSETS                                                                      
Current Assets:                                                             
Cash & cash equivalents                        $      12,751  $      18,873 
Short term investments                                15,513         13,328 
Accounts receivable, net                               9,804          8,953 
Income tax receivable                                    681            681 
Inventory, net                                           133            176 
Prepaid and other assets                                 729            903 
Deferred tax asset                                        89             89 
                                               -------------  ------------- 
  Total current assets                                39,700         43,003 
Equipment & improvements, net                         10,228         11,211 
Other assets                                             184            181 
                                               -------------  ------------- 
TOTAL ASSETS                                   $      50,112  $      54,395 
                                               =============  ============= 
                                                                            
LIABILITIES & STOCKHOLDERS' EQUITY                                          
Current Liabilities:                                                        
  Accounts payable                             $       1,788  $       1,978 
  Accrued liabilities                                  6,227          4,829 
  Deferred revenue                                     1,605          1,436 
                                               -------------  ------------- 
    Total current liabilities                          9,620          8,243 
                                                                            
Long-term liabilities                                  2,960          3,399 
Deferred tax liability                                    91             91 
                                               -------------  ------------- 
    Total non-current liabilities                      3,051          3,490 
                                                                            
Stockholders' Equity:                                                       
  Common stock                                            37             36 
  Additional paid in capital                         212,083        211,165 
  Accumulated comprehensive deficit                 (174,679)      (168,539)
                                               -------------  ------------- 
    Total stockholders' equity                        37,441         42,662 
                                               -------------  ------------- 
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY       $      50,112  $
      54,395 
                                               =============  ============= 

  
AT THE COMPANY:
Suzanne Runald
Public Relations
949-362-5800
pr@smithmicro.com 
IR INQUIRIES:
Todd Kehrli
MKR Group
323-468-2300
ir@mkr-group.com 
 
 
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