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Smith Micro Cutting Back After Big Loss

April 25, 2001

Smith Micro Software Inc., reporting a greater-than-expected first-quarter loss, said Tuesday that it is laying off more than 20% of its work force and closing plants in Colorado and Oregon.

The Aliso Viejo developer and marketer of wireless communication and software products said at least 23 of its 114 workers would be cut as it strives to return to profitability.

The reductions will come from all departments throughout the company, with its biggest business, Internet solutions, taking the biggest hit, said William W. Smith Jr., the company's chairman. Smith said the company has not yet determined its cost for the layoffs.

The "major contributor" in the poor results, he said, was the slowdown in the company's Internet division as businesses put holds on product orders.

Smith Micro posted a quarterly net loss of $1.6 million, or 10 cents a share, compared with a net loss of $659,000, or 4 cents a share, for last year's first three months. Revenue increased 6% to $3.2 million.

"The quarterly loss was much larger than anticipated," Smith said, forcing the company to take action quickly. The plants to be closed are in Boulder, Colo., and Portland, Ore.

Smith remained positive about the company's outlook, saying that the pipeline of Internet product orders is growing again, though the company expects to see a greater number of smaller orders.

Smith Micro stock gained 5 cents to close at $1.57 a share on Nasdaq.

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