FREMONT,
Calif., Oct. 27, 2023 /PRNewswire/ -- Socket
Mobile, Inc. (NASDAQ: SCKT), a leading provider of data capture and
delivery solutions for enhanced workplace productivity, today
reported financial results that are determined in accordance with
generally accepted accounting principles in the United States ("GAAP") for the three and
nine months ended September 30,
2023.
Third Quarter 2023 Financial Highlights:
- Revenue decreased 14% to $3.2
million, compared to $3.7
million in the prior-year quarter, and decreased by 37%
sequentially compared to $5.1 million
in Q2 2023.
- Gross margin declined to 44.2%, compared to 44.4% in the
prior-year quarter and 51.8% in the preceding quarter. The decrease
in gross margins was primarily due to the allocation of
manufacturing overhead costs across lower shipments during the
quarter ended September 30,
2023.
- Operating expenses for the third quarter of 2023 totaled
$2.8 million, an increase of 8.2%
compared to operating expenses of $2.6
million in the prior-year quarter, and a decrease of 4.3%
sequentially in the preceding quarter.
- Operating loss was $1.4 million
compared to an operating loss of $947,000 for the prior-year quarter, and
operating loss of $292,000 in the
preceding quarter.
- The cash balance was $3.1 million
as of September 30, 2023, compared to
$3.4 million as of June 30, 2023, and $3.6
million as of December 31,
2022.
"In Q3, our distribution partners reduced their inventories by
50% in response to ongoing market uncertainty and elevated interest
rates, significantly impacting our Q3 revenue. Sales to resellers
and end-users were substantially higher than the reported revenue,
which is calculated based on sales to distributors with a reserve
for estimated product returns. We believe that sales to resellers
and end-users provide a more accurate picture of the underlying
demand in our business. Throughout the quarter, we maintained a
focus on managing liquidity and expenses while continuing to invest
in critical projects," said Kevin
Mills, president, and chief executive officer.
"We launched several new products in Q3. The XtremeScan product
line, comprised of XtremeScan Case XC100, XtremeScan XS930, and
XtremeScan Grip XG930, is designed for iPhone series 15, 14, 13 and
12. This product family is engineered to withstand harsh industrial
conditions, offering robust scanning capabilities with superior
durability and support. The launch of the XtremeScan series
represents a significant milestone in our commitment to delivering
high-quality data capture solutions for our customers in industrial
and manufacturing markets.
"We've also introduced the C860, an advanced camera-based
subscription solution. It's designed for users with more demanding
scanning needs, those working in challenging conditions, or those
dealing with poorly printed or damaged barcodes. The C860 is a
follow-on to our free camera-based scanner, the C820, launched in
Q2. There are no licensing fees for App providers, enabling them to
service a wide range of customers with various data capture
requirements by integrating CaptureSDK into their applications.
This approach enables developers to service price-sensitive
end-users with the free C820 and address performance-sensitive
needs with the C860. The monthly subscription fee is $5.99, available for purchase via the Apple Store
or Google Play," continued Mills.
"Our CaptureSDK was upgraded in Q3 and is fully compatible with
iOS 17. It supports our complete range of barcode scanners and NFC
readers/writers across the entire Socket Mobile product line,
ensuring that iOS and Android application developers can fully meet
their data capture requirements and maximize performance for their
end-users. Socket Mobile's CaptureSDK has been integrated into
thousands of applications across various industries.
"During Q3, our team remained focused on delivering these
critical products, which we believe will enable Socket Mobile to
return to growth and profitability," concluded Mills.
Conference Call
The management of Socket Mobile will
hold a conference call today at 2
P.M. Pacific (5 P.M. Eastern)
to discuss the quarterly results and outlook for the future. The
dial-in number to access the live conference call is (800)
237-1091 toll-free from within the U.S. or (848)
488-9280 (toll).
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, digital ID,
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
Fremont, Calif. and can be reached
at +1-510-933-3000 or www.socketmobile.com. Follow Socket Mobile on
LinkedIn, Twitter, and keep up with our latest News and
Updates.
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, 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:
Lynn Zhao
Chief Financial Officer
510-933-3016
lynn@socketmobile.com
Socket is a registered trademark of Socket Mobile. All
other trademarks and trade names contained herein may be those of
their respective owners.
© 2023, Socket Mobile, Inc. All rights reserved.
– Financial tables to follow –
Socket Mobile,
Inc.
Condensed Summary
Statements of Operations (Unaudited)
(Amounts in
thousands except per share)
|
|
|
Three months ended Sept
30,
|
Nine months ended Sept
30,
|
|
2023
|
2022
|
2023
|
2022
|
Revenue
|
$
3,206
|
$
3,728
|
$
12,635
|
$
16,067
|
Cost of
revenue
|
1,788
|
2,073
|
6,493
|
8,249
|
Gross margin
|
1,418
|
1,655
|
6,142
|
7,818
|
Gross
margin percent
|
44.2 %
|
44.4 %
|
48.6 %
|
48.7 %
|
Research &
development
|
1,207
|
1,096
|
3,643
|
3,271
|
Sales &
marketing
|
1,002
|
865
|
3,014
|
2,729
|
General &
administrative
|
608
|
641
|
2,131
|
2,112
|
Total
operating expenses
|
2,817
|
2,602
|
8,788
|
8,112
|
Operating income
(loss)
|
(1,399)
|
(947)
|
(2,646)
|
(294)
|
Interest expense,
net
|
(76)
|
(43)
|
(170)
|
(134)
|
Income tax benefit
(expense)
|
150
|
116
|
(16)
|
--
|
Net loss
|
$
(1,325)
|
$
(874)
|
$
(2,832)
|
$
(428)
|
Net loss per
share:
|
|
|
|
|
Basic
|
$
(0.16)
|
$
(0.11)
|
$
(0.34)
|
$
(0.05)
|
Fully
diluted
|
$
(0.16)
|
$
(0.11)
|
$
(0.34)
|
$
(0.05)
|
Weighted average shares
outstanding:
Basic
Fully
diluted
|
7,320
7,320
|
7,153
7,153
|
7,197
7,197
|
7,202
7,202
|
Socket Mobile, Inc.
Condensed Summary Balance
Sheets
(Amounts in Thousands)
|
|
|
(Unaudited)
September 30,
2023
|
December 31,
2022*
|
Cash
|
$
3,094
|
$ 3,624
|
Accounts
receivable
|
1,560
|
2,660
|
Inventories
|
5,528
|
5,602
|
Deferred costs on
shipments to distributors
|
247
|
266
|
Other current
assets
|
617
|
617
|
Property, equipment and
computer software, net
|
2,558
|
1,657
|
Deferred tax
assets
|
8,652
|
8,668
|
Intangible assets,
net
|
1,591
|
1,694
|
Operating leases
right-of-use assets
|
3,208
|
3,560
|
Other long-term
assets
|
251
|
250
|
Total assets
|
$
27,306
|
$
28,598
|
Accounts payable and
accrued liabilities
|
$
1,911
|
$ 2,407
|
Bank non-formula
loan
|
--
|
125
|
Subordinated
convertible notes payable, net of discount
|
150
|
147
|
Subordinated
convertible notes payable, net of discount-related party
|
2,834
|
1,231
|
Deferred revenue on
shipments to distributors
|
596
|
595
|
Deferred service
revenue
Operating lease liabilities
|
33
3,407
|
34
3,737
|
Total
liabilities
|
8,931
|
8,276
|
Common stock
|
68,258
|
67,165
|
Accumulated
deficit
|
(48,845)
|
(46,013)
|
Treasury
stock
|
(1,038)
|
(830)
|
Total equity
|
18,375
|
20,322
|
Total liabilities and
equity
|
$
27,306
|
$
28,598
|
*Derived from audited
financial statements.
|
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SOURCE Socket Mobile, Inc.