Larry,
This is off the Yahoo newswire, doesn't look too good.
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Smith Micro Software Reports Financial Results For The Third Quarter Of Fiscal
1996
ALISO VIEJO, Calif., Oct. 24 /PRNewswire/ -- Smith Micro Software today reported financial results for the quarter and nine months
ended September 30, 1996.
For the third quarter, consolidated revenues decreased 24% to $3,841,000 and net income decreased 67% to $390,000 while earnings
per share decreased to $0.03 per share. By comparison, the company reported revenues of $5,054,000 and pro forma net income of
$1,112,000, or $0.09 per share, for the same period in 1995.
Gross margins during the third quarter increased to 80% from 66% in the third quarter of 1995. Margins in the most recent quarter
increased primarily due to the increase in retail sales and increased royalty arrangements with OEM customers.
For the first nine months, revenues increased 31% to $17,147,000 and pro forma net income, before a one-time write-off of in-process
R&D related to the acquisition of Performance Computing Inc., increased 16% to $3,088,000. Earnings per share increased to $0.22 per
share. By comparison, the Company reported revenues of $13,077,000 and pro forma net income of $2,658,000, or $0.21 per share,
for the same period in 1995.
"In this third quarter, we believe, that the modem industry was affected by an oversupply in the distribution channel," said William W.
Smith, Jr., Smith Micro President and CEO. "Even with our growing retail presence, our revenues are still heavily OEM-oriented,
therefore the decline in our OEM orders had a significant impact on our revenues," Mr. Smith continues.
Significant agreements and new business relationships that occurred during the third quarter included:
-- An exclusive agreement with modem manufacturer Archtek was signed. Archtek will ship Smith Micro's QuickLink(R) products
exclusively with their modems worldwide.
-- Best Data Products chose to ship QuickLink MessageCenter with their new 33.6 kbs modems and to migrate other modem lines to
the QuickLink product line.
-- A custom version of QuickLink was developed for Brother International's MFC-4550 multi-function fax machine.
-- Digi International entered into the ISDN modem market bundling QuickLink. A worldwide exclusive agreement was signed where
Digi's DataFire Go! Series modems will include either QuickLink(R) II Fax, QuickLink Mobile, QuickLink MessageCenter, or
VideoLink(TM) for Windows 3.x, Windows 95 and Windows NT.
-- A new type of OEM customer, MediaSonic, a video conference hardware manufacturer, will bundle VideoLink with their products.
-- HotFax(R) MeassageCenter, a fully integrated fax, data and voice application began shipping into the distribution channel and has
made its way to the retail shelf.
With headquarters in Aliso Viejo, California, Smith Micro provides communication (fax/data/voice/video) software for personal
computers. The Company offers its software products for use on the Windows 95, Windows, DOS, and Macintosh operating systems,
and is developing products for OS/2. The Company markets its products worldwide through a network of OEMs and retail distributors.
Smith Micro may be contacted at 51 Columbia, Aliso Viejo, CA 92656, or at the company's worldwide web site at
smithmicro.com. Phone (714) 362-5800. Smith Micro is publicly traded on Nasdaq under the symbol SMSI.
This news release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. The Company's actual results could differ materially from those projected in the forward-looking
statements as a result of numerous factors, including, without limitation, general market conditions in the software industry; ordering
patterns of the Company's largest customers, including U.S. Robotics; demand for the Company's primary product, QuickLink; changes
in technology; actions by Microsoft; the Company's ability to successfully launch new product offerings; successful implementation of
the Company's retail product strategy, retaining key personnel; risks associated with international sales; successful integration of acquired
companies and products; diversifying the Company's product mix; meeting product development schedules; controlling expenses; and
other risks that are discussed in documents which the Company files with the Securities and Exchange Commission. For a discussion of
such risks, see Management's Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors in the
Company's most recent Form 10-Ks and 10-Qs filed with the SEC.
Smith Micro Software, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
$(000 except per share amounts)
Three Months Ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
(Unaudited) (Unaudited)
Net Revenues $3,841 $5,054 $17,147 $13,077
Cost of Sales 778 1,704 5,541 4,187
Gross Margin 3,063 3,3501 1,606 8,890
Operating Expenses:
Sales & Marketing 574 458 1,857 1,468
Research & Development 957 409 2,409 1,201
General & Administrative 1,088 667 2,829 1,980
Total Operating Expenses 2,619 1,534 7,09 4,649
Operating Income 444 1,816 4,511 4,241
Acquired Research & Development 5,169
Other Income, net 205 37 674 60
Income (Loss) Before Income Tax 649 1,853 16 4,301
Income (Loss) Tax Expense 259 142 2,097 176
Net Income (Loss) $390 $1,711 ($2,081) $4,125
Pro Forma Information
Income (Loss) Before Income Tax $649 $1,853 $16 $4,301
Pro Forma Provision
for Income Taxes 259 741(a) 2,097 1,643(a)
Pro Forma Net Income (Loss) 390 1,112 (2,081) 2,658
Pro Forma Net Income
(Loss) per Share 0.03 0.09 (0.15) 0.21
Pro Forma Net Income
Prior to Acquired R&D Expenses $390 $1,112 $3,088(b) $2,658
Pro Forma Net Income
per Share, Prior 0.03 0.09 0.22 0.21
to Acquired R&D Expenses
Weighted Average
Shares Outstanding 14,085 12,678 14,049 12,678
Note a: Prior to the public offering of the Company's common stock, the Company was taxed as an S Corporation for Federal and State
tax purposes. Concurrent with the public offering concluded in September, 1995, the Company began to be taxed as a C Corporation.
Pro Forma income data is presented to show the tax provision as if the Company had been a C Corporation throughout all periods.
Note b: During the first quarter of 1996, Smith Micro acquired Performance Computing Inc. This resulted in a one-time pre-tax charge
in the first quarter of $5,169 million. As a result, all financial tables include financial results of Performance Computing Inc. from the
date of acquisition. Pro Forma income data is presented to show the comparable business operations exclusive of this one-time charge.
SOURCE Smith Micro Software, Inc. |
