Sonim Reports Third Quarter 2021 Financial Results
Sonim Technologies (Nasdaq: SONM) reported Q3 2021 financial results, achieving $14.4 million in net revenues, a 20% increase from the previous quarter. However, the company posted a net loss of $10.9 million, up from $6.7 million. Gross profit decreased to 12.4%, impacted by product mix and supply chain costs. Sonim launched the XP3plus device with major carriers and plans additional rugged phones for 2022. The company ended Q3 with $10.2 million in cash and raised $10.4 million through equity offerings.
- Net revenues increased by 20% to $14.4 million.
- Successfully launched the XP3plus with major U.S. carriers.
- Raised $10.4 million through at-the-market equity offering.
- Net loss widened to $10.9 million from $6.7 million.
- Gross profit margin decreased to 12.4% due to product mix and supply chain constraints.
- Operating expenses increased to $12.5 million from $9.1 million.
AUSTIN, Texas, Nov. 10, 2021 /PRNewswire/ -- Sonim Technologies, Inc. (Nasdaq: SONM), a leading U.S. provider of ultra-rugged mobile devices, accessories and solutions designed specifically for task workers physically engaged in their work environments, reported financial results for the third quarter ended September 30, 2021.
Third Quarter 2021 and Recent Highlights
- Net revenues of
$14.4 million , an increase of20.0% compared with$12.0 million in the second quarter 2021. - Gross profit was
12.4% , reflecting changes in product mix and average unit pricing. - Net loss was
$10.9 million , compared with a net loss of$6.7 million in the second quarter of 2021. - Ended the quarter with cash and cash equivalents of
$10.2 million compared with$6.9 million at June 30, 2021. - Launched the Company's next generation XP3plus at major U.S. carriers and continued development of additional rugged phones for launch in 2022.
- Regained compliance with the Nasdaq continued listing standards.
Said Bob Tirva, President, Chief Financial Officer and Chief Operating Officer: "We were very pleased to see the initial sales volume for our next generation rugged flip phone, the XP3plus. We initially launched with T-Mobile, then added Verizon late in the third quarter. In the fourth quarter, we have expanded the availability to include T-Mobile retail stores and are readying a release for Canada as well as a new global variant, opening worldwide addressable market opportunities for further expansion.
"We continue to invest proactively in R&D activities to support our customer design awards. We are making good progress on additional next generation devices, including a 5G rugged smartphone, and a feature phone with expanded Push-to-Talk (PTT) capabilities. We currently expect these additional devices to be available in mid-2022. This will give Sonim a fully refreshed line of ultra-rugged mobile devices designed specifically to excel in even the most demanding work environments."
Third Quarter 2021 Financial Results
Net revenues for the third quarter of 2021 increased
Gross profit for the third quarter of 2021 declined to
Operating expenses for the third quarter were
Balance Sheet and Cash Flow
Sonim ended the quarter with
As previously announced, Sonim has retained B. Riley as its investment bank to explore strategic alternatives and capital market options, including both buy and sell side opportunities.
About Sonim Technologies, Inc.
Sonim Technologies is a leading U.S. provider of ultra-rugged mobile phones and accessories designed specifically for task workers physically engaged in their work environments, often in mission-critical roles. We currently sell our ruggedized mobility solutions to several of the largest wireless carriers in the United States— including AT&T, T-Mobile and Verizon—as well as the three largest wireless carriers in Canada—Bell, Rogers and Telus Mobility. Our phones and accessories connect workers with voice, data and workflow applications in two end markets: industrial enterprise and public sector. In 2020, we announced that we would be entering the ruggedized barcode scanner business and we began shipping our first devices in March 2021. Our barcode scanner devices, as well as our ruggedized phones and accessories, are sold through distributors in North America, South America and Europe. For more information, visit www.sonimtech.com.
Important Cautions Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements relate to, among other things, the expected timing of the launch of Sonim's next generation of products, Sonim's review of strategic alternatives, and the timing and market acceptance of new products. These forward-looking statements are based on Sonim's current expectations, estimates and projections about its business and industry, management's beliefs and certain assumptions made by Sonim, all of which are subject to change. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, "future", "believe," "expect," "may," "will," "intend," "estimate," "continue," or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Factors that may cause actual results to differ materially include, but are not limited to, the following: Sonim's ability to continue as a going concern and improve its liquidity and financial position; Sonim's exploration of strategic or financial alternatives may not result in any transaction or alternative that enhances value; Sonim's ability to continue to develop solutions to address user needs effectively, including its next generation products; anticipated sales levels of both new and legacy products; Sonim's reliance on its channel partners to generate a substantial majority of its revenues; the limited operating history in Sonim's markets; Sonim's ongoing restructuring and transformation of its business; the variation of Sonim's quarterly results; the lengthy customization and certification processes for Sonim's wireless carries customers; the impact of the COVID-19 pandemic; and the ongoing Securities and Exchange Commission investigation on Sonim's business, as well as the other risk factors described under "Risk Factors" included in Sonim's Annual Report on Form 10-K for the year ended December 31, 2020 and in Sonim's Quarterly Report on Form 10-Q for the three months ended September 30, 2021, and any risk factors contained in subsequent quarterly and annual reports it files with the Securities and Exchange Commission (available at www.sec.gov). Sonim cautions you not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Sonim assumes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release, except as required by law.
SONIM TECHNOLOGIES, INC. | ||||||||
September 30, 2021 | December 31, 2020 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 10,187 | $ | 22,141 | ||||
Accounts receivable, net | 2,798 | 4,152 | ||||||
Non-trade receivable | 2,845 | 453 | ||||||
Inventory | 9,906 | 11,344 | ||||||
Prepaid expenses and other current assets | 6,863 | 7,481 | ||||||
Total current assets | 32,599 | 45,571 | ||||||
Property and equipment, net | 570 | 843 | ||||||
Other assets | 5,023 | 3,898 | ||||||
Total assets | $ | 38,192 | $ | 50,312 | ||||
Liabilities and stockholders' equity | ||||||||
Current portion of long-term debt | $ | 177 | $ | 177 | ||||
Accounts payable | 12,563 | 8,856 | ||||||
Accrued expenses | 10,154 | 9,906 | ||||||
Warranty liability | 1,296 | 1,530 | ||||||
Deferred revenue | — | 5 | ||||||
Total current liabilities | 24,190 | 20,474 | ||||||
Income tax payable | 1,283 | 1,243 | ||||||
Long-term debt, less current portion | 74 | 185 | ||||||
Total liabilities | 25,547 | 21,902 | ||||||
Stockholders' equity | ||||||||
Common stock, | 9 | 7 | ||||||
Preferred stock, | — | — | ||||||
Additional paid-in capital | 235,719 | 224,581 | ||||||
Accumulated deficit | (223,083) | (196,178) | ||||||
Total stockholders' equity | 12,645 | 28,410 | ||||||
Total liabilities and stockholders' equity | $ | 38,192 | $ | 50,312 | ||||
* Reflects the 1-for-10 reverse stock split that became effective on September 15, 2021.
SONIM TECHNOLOGIES, INC. | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net revenues | $ | 14,445 | $ | 14,393 | $ | 38,639 | $ | 48,157 | ||||||||
Cost of revenues | 12,661 | 9,994 | 31,738 | 36,675 | ||||||||||||
Gross profit | 1,784 | 4,399 | 6,901 | 11,482 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 5,492 | 3,389 | 13,826 | 10,581 | ||||||||||||
Sales and marketing | 3,087 | 2,884 | 7,456 | 8,611 | ||||||||||||
General and administrative | 2,961 | 2,477 | 7,602 | 7,644 | ||||||||||||
Legal | 967 | 1,768 | 4,276 | 5,359 | ||||||||||||
Restructuring costs | — | — | — | 1,087 | ||||||||||||
Total operating expenses | 12,507 | 10,518 | 33,160 | 33,282 | ||||||||||||
Loss from operations | (10,723) | (6119) | (26,259) | (21,800) | ||||||||||||
Interest expense | — | (182) | — | (803) | ||||||||||||
Other expense, net | (126) | (13) | (419) | (408) | ||||||||||||
Loss before income taxes | (10,849) | (6,314) | (26,678) | (23,011) | ||||||||||||
Income tax expense | (90) | (150) | (227) | (513) | ||||||||||||
Net loss | $ | (10,939) | $ | (6,464) | $ | (26,905) | $ | (23,524) | ||||||||
Net loss per share, basic and diluted* | $ | (1.31) | $ | (0.98) | $ | (3.72) | $ | (5.96) | ||||||||
Weighted–average shares used in computing net loss per Share, basic and diluted* | 8,366,283 | 6,593,764 | 7,222,541 | 3,949,415 | ||||||||||||
* Reflects the 1-for-10 reverse stock split that became effective on September 15, 2021.
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SOURCE Sonim Technologies, Inc.
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