Smith Micro Software Inc. (SMSI, Financial) filed Annual Report for the period ended 2011-12-31.
Smith Micro Sof has a market cap of $98.35 million; its shares were traded at around $2.71 with and P/S ratio of 1.7. Smith Micro Sof had an annual average earning growth of 15.2% over the past 5 years.
Income tax expense. We recorded income tax expense for fiscal year 2010 in the amount of $6.2 million as a result of our pre-tax operating profit for the period and the relatively large amount of incentive stock option expense which is not deductible for tax purposes. The provision for income taxes was $6.7 million for fiscal year 2009. The lower effective tax rate in fiscal year 2010 as compared to fiscal year 2009 was primarily due to increased federal tax credits and higher disqualifying disposition deductions due to the exercise of stock options.
For our Productivity & Graphics sales, the cost of sales incentives the Company offers without charge to customers that can be used in, or that are exercisable by a customer as a result of, a single exchange transaction is accounted for as a reduction of revenue as required by FASB ASC Topic No. 985-605, Software-Revenue Recognition. We use historical redemption rates to estimate the cost of customer incentives. Total sales incentives were $1.2 million, $2.0 million, and $1.2 million for the years ended December 31, 2011, 2010 and 2009, respectively.
We capitalized internally developed software and software purchased from third parties if the related software product under development had reached technological feasibility or if there were alternative future uses for the purchased software as required by FASB ASC Topic No. 985-20, Software-Costs of Software to be Sold, Leased, or Marketed. These costs were amortized on a product-by-product basis, typically over an estimated life of five to seven years, using the larger of the amount calculated using the straight-line method or the amount calculated using the ratio between current period gross revenues and the total of current period gross revenues and estimated future gross revenues. At each balance sheet date, we evaluated on a product-by-product basis the unamortized capitalized cost of computer software compared to the net realizable value of that product. The amount by which the unamortized capitalized costs of a computer software product exceeded its net realizable value was written off.
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Smith Micro Sof has a market cap of $98.35 million; its shares were traded at around $2.71 with and P/S ratio of 1.7. Smith Micro Sof had an annual average earning growth of 15.2% over the past 5 years.
Highlight of Business Operations:
For the year ended December 31, 2011, revenues to three customers and their respective affiliates in the Wireless business segment accounted for 24.8%, 18.4% and 11.7% of the Companys total revenues and 63% of accounts receivable. For the year ended December 31, 2010, revenues to three customers and their respective affiliates in the Wireless business segment accounted for 40.1%, 13.9% and 12.3% of the Companys total revenues and 78% of accounts receivable. For the year ended December 31, 2009, revenues to four customers and their respective affiliates in the Wireless business segment accounted for 32.8%, 12.2%, 10.4% and 10.3% of the Companys total revenues and 75% of accounts receivable.Income tax expense. We recorded income tax expense for fiscal year 2010 in the amount of $6.2 million as a result of our pre-tax operating profit for the period and the relatively large amount of incentive stock option expense which is not deductible for tax purposes. The provision for income taxes was $6.7 million for fiscal year 2009. The lower effective tax rate in fiscal year 2010 as compared to fiscal year 2009 was primarily due to increased federal tax credits and higher disqualifying disposition deductions due to the exercise of stock options.
For our Productivity & Graphics sales, the cost of sales incentives the Company offers without charge to customers that can be used in, or that are exercisable by a customer as a result of, a single exchange transaction is accounted for as a reduction of revenue as required by FASB ASC Topic No. 985-605, Software-Revenue Recognition. We use historical redemption rates to estimate the cost of customer incentives. Total sales incentives were $1.2 million, $2.0 million, and $1.2 million for the years ended December 31, 2011, 2010 and 2009, respectively.
We capitalized internally developed software and software purchased from third parties if the related software product under development had reached technological feasibility or if there were alternative future uses for the purchased software as required by FASB ASC Topic No. 985-20, Software-Costs of Software to be Sold, Leased, or Marketed. These costs were amortized on a product-by-product basis, typically over an estimated life of five to seven years, using the larger of the amount calculated using the straight-line method or the amount calculated using the ratio between current period gross revenues and the total of current period gross revenues and estimated future gross revenues. At each balance sheet date, we evaluated on a product-by-product basis the unamortized capitalized cost of computer software compared to the net realizable value of that product. The amount by which the unamortized capitalized costs of a computer software product exceeded its net realizable value was written off.
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