NEWARK, Calif., Oct. 26, 2017 /PRNewswire/ -- Socket Mobile,
Inc. (NASDAQ: SCKT), a leading innovator of data capture and
delivery solutions for enhanced productivity, today reported
financial results for its 2017 third quarter and nine months ended
September 30, 2017.
Revenue for the third quarter of 2017 was $5.5 million, an increase of 7 percent compared
to revenue of $5.1 million for the
same quarter a year ago. Cordless barcode scanner revenue was
$5.0 million for the third quarter of
2017, an increase of 8 percent over the same quarter a year ago.
Net income before income taxes for the third quarter of 2017 was
$754,000 compared to $689,000 a year ago, an increase year over year
of 9 percent. Net income for the third quarter of 2017 was
$414,000, or $0.06 per fully diluted share, compared to net
income of $669,000, or $0.10 per fully diluted share, in the third
quarter of 2016, reflecting a change in accounting for income taxes
from a full valuation allowance in 2016 to full income tax accruals
in 2017. Income tax payments are sheltered by our net
operating loss carryforwards in both years. The Company pays
minimum Federal and State taxes.
Gross profit margins for the third quarter of 2017 were 55.6
percent, up from margins of 51.5 percent for the third quarter a
year ago. Non-cordless products and services in the third quarter
of 2017 increased quarterly margins by 2.0 percent.
Operating expenses for the third quarter of 2017 were
$2.3 million compared to operating
expenses for the same quarter a year ago of $1.9 million, an increase of 19 percent.
For the nine months ended September 30,
2017, revenue was $16.9
million, an increase of 10 percent compared to revenue of
$15.4 million for the same period a
year ago. Nine month cordless barcode scanner revenue was
$16.3 million in 2017 compared to
$12.7 million in 2016, a year over
year increase of 28 percent. Net income before income taxes for the
nine months ended September 30, 2017
was $2.3 million compared to
$1.8 million in the year ago period,
an increase of 27 percent. Net income for the nine months ended
September 30, 2017 was $1.3 million or $0.19 per fully diluted share, compared to net
income of $1.7 million, or
$0.25 per fully diluted share, in the
year ago period. In 2017, the Company changed its accounting method
for accounting for income taxes from a full valuation allowance in
2016 to full income tax accruals in 2017. Income tax payments
are sheltered by net operating loss carryforwards in both years and
the Company pays minimum Federal and State taxes.
Gross profit margins for the nine months ended September 30, 2017 were 53.7 percent, up from
margins of 50.2 percent for the same period in 2016. Operating
expenses for the nine months ended September
30, 2017 were $6.7 million, an
increase of 15 percent compared to operating expenses of
$5.8 million in the same period a
year ago.
Cash and cash equivalents were $2.9
million at September 30, 2017
compared to $1.3 million at
December 31, 2016. During the third
quarter of 2017, the Company converted its four-year subordinated
convertible notes plus accrued interest totaling $1.2 million into 972,884 shares of common stock.
The Company's current ratio (current assets divided by current
liabilities) at September 30, 2017
increased to 3.7 compared to a current ratio of 1.4 at December 31, 2016. Stockholders' Equity at
September 30, 2017 increased to
$19.8 million from $16.2 million at December
31, 2016.
Kevin Mills, Socket Mobile's
President and CEO, commented, "The emerging mobile scanning market
that has been our focus is now being tracked by VDC Research. VDC
Research has identified three segments. companion barcode scanners;
sled/sleeve barcode scanners; and ring barcode scanners. VDC
Research has recognized Socket Mobile as a worldwide leader in
sales of companion barcode scanners used with business mobile
applications running on smart phones and tablets. Currently we do
not have any significant share of the sled/sleeve market, but our
DuraCase solution is now enabling us to compete for business in
this portion of the market.
"Our nine month cordless barcode scanning revenue in 2017 has
grown to $16.3 million from
$12.7 million last year, a year over
year increase of 28%. Our growth is driven by the development
and deployment pace of our registered developers who integrate our
sophisticated barcode scanning capabilities into their
applications. Our mobile application focus is broadening
beyond specialty mobile point of sale to manufacturing,
transportation, hospitality and health care. Our commitment
to our developer community is to provide them with the data capture
products they need to serve their customers. Our online reseller
distribution channels make our products readily available almost
anywhere in the world.
"Profitable growth has strengthened our balance sheet and is
providing the working capital we need to support future
growth. We thank our stakeholders for their continued
support," Mr. Mills concluded.
Conference Call
Management of Socket Mobile will hold
a conference call and audio web cast today at 2 PM Pacific (5 PM
Eastern) to discuss the quarterly results and outlook for the
future. The dial-in number for live access to the call is (888)
424-8151 from within the U.S. Passcode is 8483007. From
international locations you may obtain a local dial-in number
through your web browser at
http://web.meetme.net/r.aspx?p=11&a=UqCokSUBaETdjh.
The call will also be carried live and will be available via replay
for one year through a link on Socket Mobile's website at
www.socketmobile.com. From the home page, choose "About
Us"/"Investor Relations"/"Conference Calls and Events."
About Socket Mobile, Inc.
Socket Mobile is a leading provider of data capture and delivery
solutions for enhanced productivity in workforce mobilization.
Socket Mobile's revenue is primarily driven by the deployment of
third party barcode enabled mobile applications that integrate
Socket Mobile's cordless barcode scanners and contactless
reader/writers. Mobile Applications servicing the specialty
retailer, field service, transportation, and manufacturing markets
are the primary revenue drivers. Socket Mobile has a network of
thousands of developers who use its software developer tools to add
sophisticated data capture to their mobile applications. Socket
Mobile is headquartered in Newark,
Calif. and can be reached at +1-510-933-3000 or
www.socketmobile.com. Follow Socket Mobile on Facebook and Twitter
@socketmobile and subscribe to SocketTalk the company's
official blog.
Forward-Looking Statements
This press release
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Such
forward-looking statements include, but are not limited to,
statements regarding new mobile computer and data collection
products, including details on the timing, distribution and market
acceptance of the products, and statements predicting trends, sales
and market conditions and opportunities in the markets in which we
sell our products. Such statements involve risks and
uncertainties, and actual results could differ materially from the
results anticipated in such forward-looking statements as a result
of a number of factors, including, but not limited to, the risk
that our new products may be delayed or not rollout as predicted,
if ever, due to technological, market, or financial factors,
including the availability of necessary working capital, the risk
that market acceptance and sales opportunities may not happen as
anticipated, the risk that our application partners and current
distribution channels may choose not to distribute the new products
or may not be successful in doing so, the risk that acceptance of
our new products in vertical application markets may not happen as
anticipated, and other risks described in our most recent Form 10-K
and 10-Q reports filed with the Securities and Exchange
Commission.
Socket Mobile Investor Contact:
Dave Dunlap
Chief Financial Officer
510-933-3035
dave@socketmobile.com
Socket, DuraScan and SocketScan are trademarks or registered
trademarks of Socket Mobile. All other trademarks and trade names
contained herein may be those of their respective owners. © 2017,
Socket Mobile, Inc. All rights reserved.
Socket Mobile,
Inc.
|
Summary Statements
of Operations (Unaudited)
|
(Amounts in
Thousands)
|
|
|
Three months ended
Sept 30,
|
Nine months ended
Sept 30,
|
|
2017
|
2016
|
2017
|
2016
|
Revenue
|
$
5,475
|
$
5,102
|
$
16,903
|
$
15,358
|
Cost of
revenue
|
2,429
|
2,472
|
7,834
|
7,642
|
Gross
profit
|
3,046
|
2,630
|
9,069
|
7,716
|
Gross
profit percent
|
55.6%
|
51.5%
|
53.7%
|
50.2%
|
Research and
development
|
874
|
705
|
2,529
|
2,102
|
Sales and
marketing
|
737
|
694
|
2,238
|
2,064
|
General and
administrative
|
660
|
513
|
1,950
|
1,652
|
Total
operating expenses
|
2,271
|
1,912
|
6,717
|
5,818
|
Operating
income
|
775
|
718
|
2,352
|
1,898
|
Interest expense,
net
|
21
|
29
|
81
|
103
|
Net income before
income taxes
|
754
|
689
|
2,271
|
1,795
|
Income taxes -
current
|
28
|
12
|
54
|
37
|
Income taxes -
deferred
|
312
|
8
|
927
|
24
|
|
|
|
|
|
Net income
|
$
414
|
$
669
|
$
1,290
|
$
1,734
|
Net income per
share:
|
|
|
|
|
Basic
|
$
0.07
|
$
0.11
|
$
0.21
|
$
0.30
|
Diluted
|
$
0.06
|
$
0.10
|
$
0.19
|
$
0.25
|
Weighted average
shares outstanding:
|
|
|
|
|
Basic
|
6,261
|
5,843
|
6,048
|
5,770
|
Diluted
|
7,130
|
7,282
|
6,936
|
7,182
|
|
Reconciliation of
GAAP Net Income to Income Before Interest, Taxes, Depreciation and
Amortization (EBITDA) (Unaudited)
|
|
Three months
ended
Sept 30,
|
Nine months
ended
Sep 30,
|
|
2017
|
2016
|
2017
|
2016
|
Net income
GAAP
|
$
414
|
$
669
|
$
1,290
|
$ 1,734
|
Interest expense,
net
|
21
|
29
|
81
|
103
|
Income tax
expense
|
340
|
20
|
981
|
61
|
Depreciation
|
77
|
77
|
236
|
210
|
Stock option
compensation expense
|
112
|
93
|
315
|
244
|
Net income
EBITDA
|
$
964
|
$
888
|
$
2,903
|
$
2,352
|
Socket Mobile,
Inc.
|
Condensed Summary
Balance Sheets
|
(Amounts in
Thousands)
|
|
|
September 30,
2017
(Unaudited)
|
December 31,
2016*
|
Cash
|
$
2,867
|
$
1,319
|
Accounts
receivable
|
3,414
|
2,867
|
Inventories
|
2,246
|
1,538
|
Deferred costs on
shipments to distributors
|
241
|
948
|
Other current
assets
|
446
|
259
|
Total current assets
|
9,214
|
6,931
|
Property and
equipment, net
|
524
|
564
|
Goodwill
|
4,427
|
4,427
|
Deferred tax
assets
|
8,330
|
9,589
|
Other
assets
|
63
|
76
|
Total
assets
|
$
22,558
|
$
21,587
|
Accounts payable and
accrued liabilities
|
$
1,744
|
$
2,214
|
Convertible notes
payable
|
--
|
753
|
Deferred income on
shipments to distributors
|
634
|
2,010
|
Other current
liabilities
|
88
|
87
|
Total current
liabilities
|
2,466
|
5,064
|
Non-current
liabilities
|
315
|
353
|
Total
liabilities
|
2,781
|
5,417
|
Common
stock
|
64,710
|
62,896
|
Accumulated
deficit
|
(44,933)
|
(46,726)
|
Total stockholders'
equity
|
19,777
|
16,170
|
Total liabilities and
equity
|
$
22,558
|
$
21,587
|
*Derived from audited
financial statements.
|
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SOURCE Socket Mobile, Inc.