Exhibit 99.1

 

LOGO

Sonim Reports 66% Sequential Revenue Increase in Second Quarter

Net Revenues $21.1 Million, Gross Margin Increases to 23.4%

Austin, Texas – August 12, 2020 – Sonim Technologies, Inc. (Nasdaq: SONM), a leading U.S. provider of ultra-rugged mobility solutions designed specifically for task workers physically engaged in their work environments, reported financial results for the second quarter ended June 30, 2020.

Sequential Second Quarter 2020 and Recent Highlights

 

   

Net revenues of $21.1 million, an increase of 65.7% from the first quarter

 

   

Gross margin increased to 23.4%, compared with 17.0% in the first quarter

 

   

GAAP net loss declined to $7.1 million, from $10.0 million in the first quarter

 

   

Raised $27.6 million in gross proceeds from a public offering

 

   

Eliminated $10.2 million in debt and accrued interest through repayment and conversion

 

   

Ended the quarter with cash and equivalents of $38.1 million.

Year-Over-Year Second Quarter 2020 Highlights

 

   

Net revenues of $21.1 million, a decrease of 51.9% from the 2019 second quarter

 

   

Gross margin decreased to 23.4%, compared with 33.0% in the prior year second quarter

 

   

GAAP net loss increased to $7.1 million, from $5.6 million in the 2019 second quarter

Said Tom Wilkinson, Chief Executive Officer: “Our improved carrier relationships and increased marketing drove a 65.7% sequential increase in revenue compared to our first quarter of 2020 as we execute on our turnaround plan. We also improved gross margin sequentially to more than 23% in spite of the ongoing effects of the COVID-19 pandemic on our supply chain.”

Wilkinson added: “We continued to expand our relationships with both carrier and enterprise customers and evaluated opportunities to deploy capital into organic and strategic opportunities. In addition to a 39% decrease in operating expense from the prior year, we have drastically improved our balance sheet, resulting in a well-capitalized company with a solid foundation for future innovation and growth.”

Second Quarter 2020 Financial Results

Net revenues for the second quarter of 2020 increased 65.7% to $21.1 million from $12.7 million in the first quarter of 2020. The increase in net revenues was primarily attributable to expanded carrier relationships and enterprise distribution capabilities.

Gross profit for the second quarter of 2020 increased sequentially to $4.9 million (23.4% of net revenues) from $2.2 million (17.0% of net revenues) in the first quarter of 2020. The sequential increase in gross profit was primarily attributable to increased sales activity over which to spread production


costs as well as the absence of the temporary shutdown that affected the Shenzhen manufacturing facility in the first quarter of 2020, an event which increased cost of goods in the preceding quarter.

Operating expenses for the second quarter were approximately $0.3 million higher than in the first quarter, but down 39% year-over-year. Second quarter GAAP operating expenses included a one-time charge of $2 million for the proposed settlement of prior shareholder suits and associated legal expenses of approximately $0.4 million, which settlement is subject to court approval. Both Research and Development and Sales and Marketing expenses declined sequentially as Sonim seeks to maximize efficiency of its operating costs, consistent with its goal to lean out operations under its new business model.

Net loss for the second quarter of 2020 totaled $7.1 million or $(0.22) per basic and diluted share (based on 31.6 million shares), compared to net loss of $10.0 million, or $(0.48) per basic and diluted share (based on 20.6 million shares), in the first quarter of 2020.

Balance Sheet

Sonim ended the quarter with $38.1 million in cash and equivalents, and no long-term debt. Net cash provided by operating activities was $5.7 million through the first six months of 2020. Inventory was $15.2 million at quarter end, and accounts receivable $5.3 million. Working capital totaled $36.2 million, up from $19.7 million at December 31, 2019.

Conference Call

Sonim Technologies will hold a conference call today, Wednesday August 12, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss these results and provide an update on business conditions. To join the call, please dial +1-412-317-6060. To listen to a live webcast of the call, please visit https://www.sonimtech.com/ and select About, then Investor Relations. The webcast will be available as a replay on Sonim’s website following completion of the call. A telephonic replay will be available for 14 days approximately 3 hours after the call concludes by dialing +1-412-317-0088 and entering access code 10146839.

About Sonim Technologies, Inc.

Sonim Technologies is a leading U.S. provider of ultra-rugged mobility solutions designed specifically for task workers physically engaged in their work environments, often in mission-critical roles. The Sonim solution includes ultra-rugged mobile phones, a suite of industrial-grade accessories, and data and workflow applications which are collectively designed to increase worker productivity, communication and safety on the job site. 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. These statements relate to, among other things, future growth, profitability, continued market acceptance of the Company’s products. These forward-looking statements are based on Sonim’s current expectations, estimates and projections about its business and industry,

 

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management’s beliefs and certain assumptions made by the Company, 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 Sonim’s ability to continue to generate positive cash flow, and ability to be profitable; anticipated trends, such as the use of and demand for its products; its ability to attract and retain customers to purchase and use its products; its ability to attract wireless carriers as customers for its products; the evolution of technology affecting its products and markets; its ability to successfully address the technical issues identified with respect to its products; its ability to introduce new products and enhance existing products, as well as the other potential factors described under “Risk Factors” included in Sonim’s Quarterly Report on Form 10-Q for the three months ended March 31, 2020, the Form 10-Q for the three months ended June 30, 2020 expected to be filed not later than August 14, 2020, and other documents on file with the Securities and Exchange Commission (available at www.sec.gov). Sonim cautions you not to place undue reliance on forward-looking statements, which reflect an analysis only and 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 Contacts

Robert Tirva, Chief Financial Officer

Sonim Technologies, Inc.

IR@sonimtech.com

Matt Kreps, Managing Director

Darrow Associates Investor Relations

mkreps@darrowir.com

(214) 597-8200

 

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SONIM TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

JUNE 30, 2020 (UNAUDITED) and DECEMBER 31, 2019

(IN THOUSANDS OF U.S. DOLLARS EXCEPT SHARE AND

PER SHARE AMOUNTS)

 

     June 30,
2020
    December 31,
2019
 

Assets

    

Cash and cash equivalents

   $ 38,062     $ 11,298  

Accounts receivable, net

     5,268       10,082  

Inventory

     15,225       19,531  

Prepaid expenses and other current assets

     6,342       6,430  
  

 

 

   

 

 

 

Total current assets

     64,894       47,341  

Property and equipment, net

     1,291       1,442  

Other assets

     5,264       6,676  
  

 

 

   

 

 

 

Total assets

   $ 71,452     $ 55,459  
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current portion of long-term debt

   $ 147     $ 9,821  

Accounts payable

     10,104       7,234  

Accrued expenses

     16,895       10,265  

Insurance premiums due

     1,240       —    

Deferred revenue

     346       291  
  

 

 

   

 

 

 

Total current liabilities

     28,732       27,611  

Income tax payable

     2,140       1,961  

Long-term debt, less current portion

     325       362  
  

 

 

   

 

 

 

Total liabilities

     31,197       29,934  
  

 

 

   

 

 

 

Stockholders’ equity

    

Common stock, $0.001 par value per share; 100,000,000 shares authorized: and 65,927,316 and 20,437,235 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively.

     66       20  

Preferred Stock, $0.001 par value per share, 5,000,000 shares authorized

     —         —    

Additional paid-in capital

     223,495       191,751  

Accumulated deficit

     (183,306     (166,246
  

 

 

   

 

 

 

Total stockholders’ equity

     40,255       25,525  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 71,452     $ 55,459  
  

 

 

   

 

 

 

 

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SONIM TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2020 and 2019 (UNAUDITED)

(IN THOUSANDS OF U.S. DOLLARS EXCEPT SHARE AND PER SHARE AMOUNTS)

 

     Three Months Ended      Six Months Ended  
     June 30      June 30  
     2020     2019      2020     2019  

Net revenues

   $ 21,058     $ 43,747      $ 33,764     $ 70,231  

Cost of revenues

     16,140       29,302        26,681       46,765  
  

 

 

   

 

 

    

 

 

   

 

 

 

Gross profit

     4,918       14,445        7,083       23,466  
  

 

 

   

 

 

    

 

 

   

 

 

 

Operating expenses:

         

Research and development

     3,256       7,384        7,192       14,345  

Sales and marketing

     2,596       4,218        5,727       7,944  

General and administrative

     5,686       7,424        8,758       9,900  

Restructuring costs

     —         —          1,087       —    
  

 

 

   

 

 

    

 

 

   

 

 

 

Total operating expenses

     11,538       19,026        22,764       32,189  
  

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) from operations

     (6,620     (4,581      (15,681     (8,723

Interest expense

     (302     (555      (621     (977

Other expense, net

     6       (6      (395     (271
  

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before income taxes

     (6,916     (5,142      (16,697     (9,971

Income tax expense

     (180     (457      (363     (752
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (7,096   $ (5,599    $ (17,060   $ (10,723
  

 

 

   

 

 

    

 

 

   

 

 

 

Net loss per share attributable to common stockholders, basic and diluted

   $ (0.22   $ (0.31    $ (0.65   $ (0.63
  

 

 

   

 

 

    

 

 

   

 

 

 

Weighted–average shares used in computing net loss per share attributable to common stockholders, basic and diluted

     31,638,250       18,120,143        26,126,037       16,950,375  
  

 

 

   

 

 

    

 

 

   

 

 

 

 

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