Sonim Technologies Reports First Quarter Financial Results

AUSTIN, Texas, May 14, 2020 /PRNewswire/ -- 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 first quarter ended March 31, 2020.

First Quarter 2020 Highlights

    --  Net revenues were $12.7 million
    --  Gross profit was $2.2 million
    --  GAAP net loss totaled $10.0 million

"We are hopeful that the first quarter will be the trough in our on-going transformation of Sonim into a growing rugged mobility business driven by a leaner, lower cost team focused on the path to profitability," said Tom Wilkinson, Chief Executive Officer. "Like most businesses, the COVID-19 pandemic caused some disruption to our operations in the first quarter, including a three-week closure of our factory in Shenzhen, and will continue to have an impact on our supply chain. Despite these challenges, we are expecting an increase in demand in the second quarter and can now focus on quarterly sales to a broader range of carrier and enterprise customers."

"While the COVID-19 pandemic continues to generate a great deal of uncertainty in any forecast, we presently anticipate revenue and gross margin improvement in the second quarter, relative to the first quarter, while maintaining our focus on lean operations and cash efficiency. Additionally, operational changes implemented over the past few months have enabled the company to grow its cash balance to $12.4 million at the end of Q1 2020. This added liquidity will help the company drive future product development."

COVID-19 Impacts
Sonim experienced a shutdown of its manufacturing facility in Shenzhen, China for approximately 3 weeks in Q1 as a result of the COVID-19 pandemic. As of March 31, manufacturing operations were once again fully operational. Sonim has implemented safeguards in its facilities to protect employees, including increased frequency of cleaning and disinfecting facilities, social distancing practices and other measures consistent with guidance from local health authorities.

Sonim's other global teams are complying with work-from-home and shelter-in-place requirements while continuing to support deployments to first responders and public safety workers. Sonim has been designated an Essential Supplier by a major US carrier that provides critical services to ensure first responders, emergency responders, public messaging, 911 communications and other critical communications remain functional. Select Sonim staff have traveled to support critical deployments of Sonim mobile devices for emergency management services and other agencies.

First Quarter 2020 Financial Results
Net revenues for the first quarter of 2020 decreased 52% to $12.7 million from $26.5 million in the first quarter of 2019. The decrease in net revenues was primarily attributable to lower volumes of devices sold due to one key US carrier that completed a prior minimum required purchase agreement in 2019. Sonim is now selling through existing inventory in collaboration with that carrier while also increasing sales through other customers and channels. Sonim expects the carrier to complete the sell through of existing inventory and become a purchaser of additional devices again in 2020 as it continues to expand its business with the Company.

Gross profit for the first quarter of 2020 decreased to $2.2 million (17% of net revenues) from $9.0 million (34% of net revenues) in the first quarter of 2019. The decrease in gross profit was primarily attributable to overhead related to the temporary shutdown of our manufacturing facility in Shenzhen in Q1 2020, a one-time event which artificially increased cost of goods in the quarter.

Operating expenses for the first quarter decreased by approximately $2 million as compared to the prior year first quarter, and by approximately $3 million excluding restructuring charges. This reflects our ongoing work to reduce operating costs.

Net loss for the first quarter of 2020 totaled $10.0 million or $(0.48) per basic and diluted share (based on 20.6 million shares), compared to net loss of $5.1 million, or $(0.32) per basic and diluted share (based on 15.8 million shares), in the first quarter of 2019.

Conference Call
Sonim Technologies will hold a conference call today, Thursday May 14, at 2:00 p.m. Pacific time (5 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 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 10144028.

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

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, 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 and other documents on file with the Securities and Exchange Commission (available at 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.



              MARCH 31, 2020 and DECEMBER 31, 2019 (UNAUDITED)


              PER SHARE AMOUNTS)

                                                      March 31, 2020                                                  December 31, 2019


     Cash and cash equivalents                                                   $
            12,362                                      $

     Accounts receivable, net                                                               4,999                                              10,082

     Inventory                                                                             16,135                                              19,531

     Prepaid expenses and other current assets                                              5,064                                               6,430

     Total current assets                                                                  38,560                                              47,341

     Property and equipment, net                                                            1,447                                               1,442

     Other assets                                                                           6,002                                               6,676

     Total assets                                                                $
            46,009                                      $

     Liabilities and stockholders' equity

     Current portion of long-term debt                                           $
            10,107                                       $

     Accounts payable                                                                       5,608                                               7,234

     Accrued expenses                                                                      11,618                                              10,265

     Deferred revenue                                                                         306                                                 291

     Total current liabilities                                                             27,639                                              27,611

     Income tax payable                                                                     2,051                                               1,961

     Long-term debt, less current portion                                                     325                                                 362

     Total liabilities                                                                     30,015                                              29,934

     Stockholders' equity

      Common stock, $0.001 par value per share;
       100,000,000 shares authorized: and
       20,677,360 and 20,437,235 shares issued and
       outstanding at March 31, 2020 and
       December 31, 2019, respectively.                                                         21                                                  20

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

     Additional paid-in capital                                                           192,183                                             191,751

     Accumulated deficit                                                                (176,210)                                          (166,246)

     Total stockholders' equity                                                            15,994                                              25,525

      Total liabilities and stockholders' equity                                  $
            46,009                                      $

                SONIM TECHNOLOGIES, INC.


               THREE MONTHS ENDED MARCH 31, 2020 and 2019 


                                                2020                                           2019

     Net revenues                                      $
              12,706                                $

     Cost of revenues                                              10,541                                       17,463

     Gross profit                                                   2,165                                        9,021

      Operating expenses:

      Research and development                                       3,936                                        6,961

      Sales and marketing                                            3,131                                        3,726

      General and administrative                                     3,072                                        2,476

      Restructuring costs                                            1,087

      Total operating expenses                                      11,226                                       13,163

      Loss from operations                                         (9,061)                                     (4,142)

     Interest expense                                               (319)                                       (422)

     Other expense, net                                             (401)                                       (265)

      Loss before income taxes                                     (9,781)                                     (4,829)

     Income tax expense                                             (183)                                       (295)

     Net loss                                         $
              (9,964)                              $

      Net loss per share, basic and
       diluted                                          $
              (0.48)                               $

      Weighted-average shares used
       in computing net loss per
       share attributable to common
                 basic and diluted                              20,613,849                                   15,783,744

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SOURCE Sonim Technologies, Inc.