Smith Micro 1st Quarter Revenues Up 6% Over Year Ago

Company Implementing Cost-Cutting Measures That Should Help

With the Company's Goal to Return Profitability Later in 2001



Apr 24, 2001, 01:00 ET from Smith Micro Software, Inc.

    ALISO VIEJO, Calif., April 24 /PRNewswire Interactive News Release/ --
 Smith Micro Software, Inc. (Nasdaq:   SMSI), a developer and marketer of
 wireless communication and utility software products, today reported net
 revenues for the quarter ended March 31, 2001, of $3.25 million, an increase
 of 6 % over $3.07 million in the same quarter last year.  The company had a
 net loss of $1.6 million, or $0.10 per diluted share, compared with a net loss
 of $659,000 or $0.04 per diluted share in the same quarter last year.  In the
 fourth quarter of 2000, the company reported a net loss of $991,000, or
 $0.07 per diluted share, on revenues totaling $4.1 million.
     "Growing quarterly revenues on a year-over-year basis was not an easy
 accomplishment given the overall economic environment in the first quarter of
 2001.  Unsurprisingly, the holding pattern customers have placed on projects
 for our Internet Solutions Division's professional services business
 overshadowed the fact that our other businesses performed reasonably well at a
 time of industry-wide uncertainty," said William W. Smith, Jr., Chairman and
 Chief Executive Officer.
     "Our wireless and broadband products had a good quarter, especially
 considering the cutbacks in the telecom sector.  Since the beginning of 2001,
 we have announced agreements to develop or provide products to Audiovox and
 Verizon, and we are working on closing other similar deals.  Revenue from our
 retail products in the quarter rose 50% to $817,000 from the same quarter last
 year, exceeding our quarterly expectations.  This was primarily due to
 continued strength of our HotFax Message Center application and our CheckIt
 product line.  The Macintosh portion of our business declined over the same
 period last year as a result of the slowdown in computer sales...a slowdown
 that Apple currently is projecting will be reversed by the fourth quarter of
 this year," Smith added.
     Regarding the company's Internet Solutions business, Smith said, "The
 reduction in revenues from the fourth quarter of 2000 does not reflect any
 lost dotcom business, which was never our focus.  In general, our Internet
 Solutions Division works with large brick & mortar companies and most of them
 are telling us that they believe the work is there and it will be completed,
 but much of it is on hold until the economic skies clear.  In fact, we
 continue to close deals in this area, but these have been smaller,
 shorter-term projects than those a year ago."
 
     Outlook
     Smith indicated that the company has taken a number of cost-cutting
 measures, including a 20% plus headcount reduction.  "We have been very
 selective in taking these steps so that we retain the resources necessary to
 reach our goal of profitability.  Our operating plan currently calls for a
 loss in the current quarter -- although we project it to be smaller than the
 first quarter loss as we have made these efforts to cut costs out of the
 second quarter operating budget.  We then are targeting profitability later in
 the year barring any further deterioration in the general economic, business
 and consumer spending environments," Smith said.
 
     Investor Conference Call
     Smith Micro will hold an investor conference call to discuss the company's
 results at 4:30 p.m. eastern time later today.  Investors may access the
 conference call via telephone, or over the Internet via the company's website
 www.smithmicro.com or www.vcall.com.  To listen to the live call by telephone,
 please dial 888/209-3789 or go to either web site at least 15 minutes early to
 register, download, and install any necessary audio software.  For those who
 cannot listen to the live broadcast, a replay will be available through May 8
 by dialing 800-633-8284 and entering reservation number 18609612.
 
     About Smith Micro Software:
     Smith Micro Software, Inc., headquartered in Aliso Viejo, CA, is a
 developer and marketer of wireless communication and utility software
 products.  The company designs integrated, cross platform, easy-to-use
 software for personal computing and business solutions around the world.  With
 a focus on the Internet, Wireless, and Broadband technologies, the company's
 products and services enable eCommerce, eBusiness, Internet communications
 (voice-over-IP), video conferencing, wireless communications, and network fax,
 along with traditional computer telephony.  Smith Micro's complete line of
 products is available through direct sales, retail stores, value-added
 resellers (VARs) and original equipment manufacturers (OEMs).  Smith Micro's
 common stock trades on The Nasdaq Stock Market(R) under the symbol SMSI.  For
 more information, contact Smith Micro at (949) 362-5800 or visit the company's
 web site at: http://www.smithmicro.com.
 
     This release may contain forward-looking statements that involve risks and
 uncertainties, including without limitation, the company's projected return to
 profitability in the third or fourth quarters as well as an increase in
 business for our Internet Solutions Division.  Among the important factors
 that could cause actual results to differ materially from those in the
 forward-looking statements are new and changing technologies and customer
 acceptance of those technologies fluctuations or cancellations in orders from
 distribution customers, and the company's ability to compete effectively with
 other software companies.  These and other factors that could cause actual
 results to differ materially are discussed in the company's filings with the
 Securities and Exchange Commission including its recent filings on Forms 10-K
 and 10-Q.
 
     Smith Micro and the Smith Micro logo are trademarks or registered
 trademarks of Smith Micro Software, Inc.  All other trademarks and product
 names are the property of their respective companies.
 
      Smith Micro Software, Inc.
      CONSOLIDATED STATEMENTS OF INCOME
      (in thousands, except per share amounts)
 
                                                         Three Months Ended
                                                             March 31,
                                                            (UNAUDITED)
                                                        2001            2000
     Net Revenues
      Software                                         $2,629         $2,736
      Consulting                                          616            338
     Total Net Revenues                                 3,245          3,074
     Cost of Revenues
      Software                                            517            556
      Consulting                                          521             57
     Total Cost of Revenues                             1,038            613
     Gross Margin                                       2,207          2,461
 
      Sales & Marketing                                 1,719          1,379
      Research & Development                            1,007            937
      General & Administrative                          1,058            877
     Total Operating Expenses                           3,784          3,193
     Operating Income                                  (1,577)          (732)
     Other Income, net                                     32            112
     Income Before Income Tax                          (1,545)          (620)
     Income Tax Expense                                    69             39
     Net Loss                                         $(1,614)         $(659)
 
     Net loss per basic and diluted share Per Share    (0.10)         (0.04)
 
     Weighted average shares outstanding,
      basic and diluted                                16,232         15,759
 
 
      Smith Micro Software, Inc.
      Consolidated Balance Sheets
      (in thousands)
                                                    (UNAUDITED)
                                                      March 31    December 31,
                                                        2001           2000
     ASSETS
     Current Assets:
     Cash & Cash Equivalents                           $5,709         $6,178
     Accounts Receivable (Net)                          3,755          4,750
     Inventory                                            355            338
     Prepaids & Other Assets                              251            294
      Total Current Assets                             10,070         11,560
     Equipment & Improvements, net                        696            737
     Other Assets                                          52             89
     Intangible Assets                                  2,704          2,928
     TOTAL ASSETS                                     $13,522        $15,314
 
     LIABILITIES & STOCKHOLDERS' EQUITY
     Current Liabilities:
     Accounts Payable                                  $1,062         $1,590
     Accrued Liabilities                                1,647          1,297
      Total Current Liabilities                         2,709          2,887
     Common Stock                                          16             16
     Additional Paid In Capital                        24,789         24,789
     Accumulated Deficit                              (13,992)       (12,378)
      Total Stockholders' Equity                       10,813         12,427
     TOTAL LIABILITIES & EQUITY                       $13,522        $15,314
 
 
      Smith Micro Software, Inc.
      Business Segments
      (in thousands)
      March 31, 2001
      (UNAUDITED)                         Software Products
                        Wireless              Total Software Internet  Total
                    & Broadband  Macintosh Retail Products  Solutions Company
     Net Revenue       $1,394       $278    $817   $2,489      $756   $3,245
     Cost of Revenue                                  490       548    1,038
     Gross Profit                                  $1,999      $208   $2,207
 
 
     March 31, 2000
     (UNAUDITED)                        Software Products
                      Wireless                Total Software  Internet  Total
                    & Broadband  Macintosh Retail  Products Solutions  Company
     Net Revenue       $1,531       $378    $543   $2,452      $622   $3,074
     Cost of Revenue                                  498       115      613
     Gross Profit                                  $1,954      $507   $2,461
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X68023330
 
 

SOURCE Smith Micro Software, Inc.
    ALISO VIEJO, Calif., April 24 /PRNewswire Interactive News Release/ --
 Smith Micro Software, Inc. (Nasdaq:   SMSI), a developer and marketer of
 wireless communication and utility software products, today reported net
 revenues for the quarter ended March 31, 2001, of $3.25 million, an increase
 of 6 % over $3.07 million in the same quarter last year.  The company had a
 net loss of $1.6 million, or $0.10 per diluted share, compared with a net loss
 of $659,000 or $0.04 per diluted share in the same quarter last year.  In the
 fourth quarter of 2000, the company reported a net loss of $991,000, or
 $0.07 per diluted share, on revenues totaling $4.1 million.
     "Growing quarterly revenues on a year-over-year basis was not an easy
 accomplishment given the overall economic environment in the first quarter of
 2001.  Unsurprisingly, the holding pattern customers have placed on projects
 for our Internet Solutions Division's professional services business
 overshadowed the fact that our other businesses performed reasonably well at a
 time of industry-wide uncertainty," said William W. Smith, Jr., Chairman and
 Chief Executive Officer.
     "Our wireless and broadband products had a good quarter, especially
 considering the cutbacks in the telecom sector.  Since the beginning of 2001,
 we have announced agreements to develop or provide products to Audiovox and
 Verizon, and we are working on closing other similar deals.  Revenue from our
 retail products in the quarter rose 50% to $817,000 from the same quarter last
 year, exceeding our quarterly expectations.  This was primarily due to
 continued strength of our HotFax Message Center application and our CheckIt
 product line.  The Macintosh portion of our business declined over the same
 period last year as a result of the slowdown in computer sales...a slowdown
 that Apple currently is projecting will be reversed by the fourth quarter of
 this year," Smith added.
     Regarding the company's Internet Solutions business, Smith said, "The
 reduction in revenues from the fourth quarter of 2000 does not reflect any
 lost dotcom business, which was never our focus.  In general, our Internet
 Solutions Division works with large brick & mortar companies and most of them
 are telling us that they believe the work is there and it will be completed,
 but much of it is on hold until the economic skies clear.  In fact, we
 continue to close deals in this area, but these have been smaller,
 shorter-term projects than those a year ago."
 
     Outlook
     Smith indicated that the company has taken a number of cost-cutting
 measures, including a 20% plus headcount reduction.  "We have been very
 selective in taking these steps so that we retain the resources necessary to
 reach our goal of profitability.  Our operating plan currently calls for a
 loss in the current quarter -- although we project it to be smaller than the
 first quarter loss as we have made these efforts to cut costs out of the
 second quarter operating budget.  We then are targeting profitability later in
 the year barring any further deterioration in the general economic, business
 and consumer spending environments," Smith said.
 
     Investor Conference Call
     Smith Micro will hold an investor conference call to discuss the company's
 results at 4:30 p.m. eastern time later today.  Investors may access the
 conference call via telephone, or over the Internet via the company's website
 www.smithmicro.com or www.vcall.com.  To listen to the live call by telephone,
 please dial 888/209-3789 or go to either web site at least 15 minutes early to
 register, download, and install any necessary audio software.  For those who
 cannot listen to the live broadcast, a replay will be available through May 8
 by dialing 800-633-8284 and entering reservation number 18609612.
 
     About Smith Micro Software:
     Smith Micro Software, Inc., headquartered in Aliso Viejo, CA, is a
 developer and marketer of wireless communication and utility software
 products.  The company designs integrated, cross platform, easy-to-use
 software for personal computing and business solutions around the world.  With
 a focus on the Internet, Wireless, and Broadband technologies, the company's
 products and services enable eCommerce, eBusiness, Internet communications
 (voice-over-IP), video conferencing, wireless communications, and network fax,
 along with traditional computer telephony.  Smith Micro's complete line of
 products is available through direct sales, retail stores, value-added
 resellers (VARs) and original equipment manufacturers (OEMs).  Smith Micro's
 common stock trades on The Nasdaq Stock Market(R) under the symbol SMSI.  For
 more information, contact Smith Micro at (949) 362-5800 or visit the company's
 web site at: http://www.smithmicro.com.
 
     This release may contain forward-looking statements that involve risks and
 uncertainties, including without limitation, the company's projected return to
 profitability in the third or fourth quarters as well as an increase in
 business for our Internet Solutions Division.  Among the important factors
 that could cause actual results to differ materially from those in the
 forward-looking statements are new and changing technologies and customer
 acceptance of those technologies fluctuations or cancellations in orders from
 distribution customers, and the company's ability to compete effectively with
 other software companies.  These and other factors that could cause actual
 results to differ materially are discussed in the company's filings with the
 Securities and Exchange Commission including its recent filings on Forms 10-K
 and 10-Q.
 
     Smith Micro and the Smith Micro logo are trademarks or registered
 trademarks of Smith Micro Software, Inc.  All other trademarks and product
 names are the property of their respective companies.
 
      Smith Micro Software, Inc.
      CONSOLIDATED STATEMENTS OF INCOME
      (in thousands, except per share amounts)
 
                                                         Three Months Ended
                                                             March 31,
                                                            (UNAUDITED)
                                                        2001            2000
     Net Revenues
      Software                                         $2,629         $2,736
      Consulting                                          616            338
     Total Net Revenues                                 3,245          3,074
     Cost of Revenues
      Software                                            517            556
      Consulting                                          521             57
     Total Cost of Revenues                             1,038            613
     Gross Margin                                       2,207          2,461
 
      Sales & Marketing                                 1,719          1,379
      Research & Development                            1,007            937
      General & Administrative                          1,058            877
     Total Operating Expenses                           3,784          3,193
     Operating Income                                  (1,577)          (732)
     Other Income, net                                     32            112
     Income Before Income Tax                          (1,545)          (620)
     Income Tax Expense                                    69             39
     Net Loss                                         $(1,614)         $(659)
 
     Net loss per basic and diluted share Per Share    (0.10)         (0.04)
 
     Weighted average shares outstanding,
      basic and diluted                                16,232         15,759
 
 
      Smith Micro Software, Inc.
      Consolidated Balance Sheets
      (in thousands)
                                                    (UNAUDITED)
                                                      March 31    December 31,
                                                        2001           2000
     ASSETS
     Current Assets:
     Cash & Cash Equivalents                           $5,709         $6,178
     Accounts Receivable (Net)                          3,755          4,750
     Inventory                                            355            338
     Prepaids & Other Assets                              251            294
      Total Current Assets                             10,070         11,560
     Equipment & Improvements, net                        696            737
     Other Assets                                          52             89
     Intangible Assets                                  2,704          2,928
     TOTAL ASSETS                                     $13,522        $15,314
 
     LIABILITIES & STOCKHOLDERS' EQUITY
     Current Liabilities:
     Accounts Payable                                  $1,062         $1,590
     Accrued Liabilities                                1,647          1,297
      Total Current Liabilities                         2,709          2,887
     Common Stock                                          16             16
     Additional Paid In Capital                        24,789         24,789
     Accumulated Deficit                              (13,992)       (12,378)
      Total Stockholders' Equity                       10,813         12,427
     TOTAL LIABILITIES & EQUITY                       $13,522        $15,314
 
 
      Smith Micro Software, Inc.
      Business Segments
      (in thousands)
      March 31, 2001
      (UNAUDITED)                         Software Products
                        Wireless              Total Software Internet  Total
                    & Broadband  Macintosh Retail Products  Solutions Company
     Net Revenue       $1,394       $278    $817   $2,489      $756   $3,245
     Cost of Revenue                                  490       548    1,038
     Gross Profit                                  $1,999      $208   $2,207
 
 
     March 31, 2000
     (UNAUDITED)                        Software Products
                      Wireless                Total Software  Internet  Total
                    & Broadband  Macintosh Retail  Products Solutions  Company
     Net Revenue       $1,531       $378    $543   $2,452      $622   $3,074
     Cost of Revenue                                  498       115      613
     Gross Profit                                  $1,954      $507   $2,461
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X68023330
 
 SOURCE  Smith Micro Software, Inc.