Additional New Carrier Devices Planned for Launch in 3Q 2022
AUSTIN, Texas, March 21, 2022 /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 fourth quarter and full year ended December 31, 2021.
Fourth Quarter 2021 and Recent Highlights
- Net revenues in the fourth quarter of 2021 were $15.9 million, an increase of 10.4% compared with $14.4 million in the third quarter 2021.
- Net loss in the fourth quarter of 2021 was $11.7 million, compared with a net loss of $10.9 million in the third quarter of 2021.
- Launched unlocked versions of the ultra-rugged XP3plus phone for global markets and versions for Canada with Telus and Bell.
- Secured design win awards from two Canadian carrier customers for Sonim’s next-generation ultra-rugged 5G smartphone and PTT-focused feature phone, planned to launch in 3Q 2022.
- Ended the quarter with cash and cash equivalents of $11.2 million compared with $10.2 million at September 30, 2021.
- Announced Sonim’s XP8 smartphone is now supported by the Walkie Talkie app for Microsoft Teams, offering expanded PTT communications to frontline workers.
- Sonim raised $17.4 million in net proceeds through its at-the-market equity offering program in the fourth quarter of 2021, and does not expect to utilize its at-the-market equity offering program in the first quarter of 2022.
Said Bob Tirva, President, Chief Financial Officer and Chief Operating Officer: “We are pleased with the response to our XP3plus next generation rugged flip phone that is now available across multiple major U.S. carriers, Canadian carriers, and for the first time in the Company’s history, opening worldwide addressable market opportunities for further international expansion. We continued to make good progress with the development of our additional next generation products scheduled for initial release in the third quarter. These additional products include a new 5G rugged smartphone and a feature phone with new features commonly found on radios, making it an ideal solution for the growing Push-to-Talk over Cellular (PTToC) market. With the launch of these additional devices, we believe Sonim will have a fully refreshed line of ultra-rugged mobile devices tailored to large global addressable markets where our unique design features deliver significant value to enterprise and public sector customers.”
2021 Financial Results
Revenue for the full year 2021 was $54.6 million, compared with $64.0 million in the full year 2020. Revenue reflected changes in product mix as well as declining sales of certain legacy products in Sonim’s product refresh cycle, partially offset by increased sales of flip phones, driven by the launch of Sonim’s new XP3plus device.
Gross profit for the year ended December 31, 2021, was $6.4 million, or 11.8% of revenues, versus 23.8% of revenues for the year ended December 31, 2020. The decrease in gross profit margin was primarily attributable to product sales mix as Sonim transitions to its next generation devices. Higher product costs due to supply chain issues, higher shipping costs, and one-time discounting of our scanner line, contributed to lower margins. Sales of the next generation XP3plus and of the XP5s increased in 2021, but were offset by lower sales of the XP8 as it approaches end of life. The launch of an updated smartphone in the third quarter of 2022 is expected to replace the XP8 and increase unit sales of our higher margin smartphones in the second half of 2022.
Operating expenses for 2021 were $44.4 million, versus $44.5 million in 2020. In 2021, lower personnel costs were partially offset by higher R&D expenses associated with developing our next generation products, higher legal expense that is expected to decline in 2022, and one-time bad debt expense. Net loss for 2021 was $38.6 million, compared with $29.9 million in 2020.
Balance Sheet and Cash Flow
Sonim ended the year with $11.2 million in cash and equivalents and remained essentially debt free. Accounts receivable increased to $10.8 million, and inventory was $5.5 million. The company raised an additional $17.4 million in net proceeds through its at-the-market equity offering program during the fourth quarter. The company does not expect to utilize this program during the first quarter of 2022.
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. 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, the timing and market acceptance of new products, and expectations regarding Sonim’s at-the-market-equity program. 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; risks related to Sonim’s ability to comply with the continued listing standards of the Nasdaq Stock Market and the potential delisting of Sonim’s common stock; 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 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.