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Smith Micro Software Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 4, 2012 02:21PM
Smith Micro Software Inc. (SMSI) filed Quarterly Report for the period ended 2012-03-31.
Highlight of Business Operations:Sales to two customers and their respective affiliates in the Wireless business segment accounted for 32.1% and 25.7% of the Companys total revenues for the three months ended March 31, 2012. Sales to four customers and their respective affiliates in the Wireless business segment accounted for 21.4%, 20.0%, 13.3% and 12.7% of the Companys total revenues for the three months ended March 31, 2011.
The table below sets forth certain statements of operations data expressed as a percentage of revenues for the three months ended March 31, 2012 and 2011. Our historical results are not necessarily indicative of the operating results that may be expected in the future.
Revenues. Revenues were $10.1 million and $17.8 million for the three months ended March 31, 2012 and 2011, respectively, representing a decrease of $7.7 million, or 43.2%. Wireless revenues decreased $7.4 million, or 46.3%, primarily due to lower sales of our connection manager products. Productivity & Graphics revenues decreased $0.3 million, or 15.3% due to lower sell through at large retailers. Due to the introduction and market acceptance of mobile hotspot devices, Tablets and Smartphones capable of functioning as a WWAN hotspot, our core connection management products continue to experience lower demand in our North American marketplace. While we have launched new wireless products that address this technology shift, they are new to the market and their rate of adoption and deployment is unknown at this time causing material uncertainty regarding the timing of our future wireless revenues.
Cost of revenues. Cost of revenues was $2.2 million and $3.8 million for the three months ended March 31, 2012 and 2011, representing a decrease of $1.6 million, or 41.9%. Direct product costs decreased $0.3 million primarily due to lower maintenance costs and other cost reductions. Amortization of intangibles decreased $1.3 million as all intangibles were fully impaired at the end of the fiscal third quarter of 2011.
Gross profit. Gross profit was $7.9 million, or 78.3% of revenues for the three months ended March 31, 2012, a decrease of $6.1 million, or 43.5%, from $14.0 million, or 78.8% of revenues for the three months ended March 31, 2011. The 0.5 percentage point decrease was primarily due to lower product margins of 7.7 points as a result of the decrease in revenues. Amortization of intangibles as a percentage of revenues decreased 7.2 points due to no amortization of intangibles this fiscal quarter versus the same fiscal period last year.