Socket Mobile Reports Second Quarter and Six-Month 2023 Results
Second Quarter 2023 Financial Highlights:
- Revenue decreased
15% to$5.1 million $6.0 million 19% sequentially compared to$4.3 million - Gross margin improved to
51.8% , compared to50.2% in the prior-year quarter and48.1% in the preceding quarter. - Operating expenses for the second quarter of 2023 were
$2.9 million 3% compared to operating expenses of$2.8 million 3% sequentially in the preceding quarter. - Operating loss was
$292,000 $189,000 $955,000 - Strengthened the balance sheet through a secured subordinated convertible note financing of
$1.6 million $3.4 million $3.0 million $3.6 million
"During Q2, we continued to face challenges driven by external factors such as the weakness of the retail sector, which is the primary source of our revenues. These challenges had a significant impact on our financial performance, resulting in lower than anticipated revenue for the quarter," said Kevin Mills, President, and Chief Executive Officer.
"While we faced challenges and uncertainties in the retail sector, we continue to invest in expanding the use of our technology beyond retail. We believe that this approach will not only drive our growth but also reduce our heavy reliance on the retail sector. Our primary focus has been on adapting our products for industrial environments, such as warehousing and logistics. As part of this effort, we recently announced our latest product, the DuraScan Wear DW930, a revolutionary wearable barcode scanner designed to offer hands-free, versatile barcode scanning capability in rigorous work environments such as warehousing, manufacturing, and distribution.
"In addition to this, we have updated our CaptureSDK to support SocketScan S370 (NFC & QR code reader) and SocketScan S550 (NFC reader). This enhancement will ensure that our development partners can incorporate some of the new features expected in iOS 17 associated with personal identification," continued Mills.
"We are delighted to share that our SocketScan S550, NFC Mobile Wallet Reader has been awarded FeliCa certification. FeliCa is a contactless RFID smart card technology developed by Sony in
"These advancements in our product offerings demonstrate our dedication to meeting the evolving needs of our app partners and industry. While we acknowledge the current difficulties, we believe in our long-term vision and perseverance, which will drive us towards success," concluded Mills.
Conference Call
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
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
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 amounts) | ||||
Three months ended June 30, | Six months ended June 30, | |||
2023 | 2022 | 2023 | 2022 | |
Revenue | $ 5,117 | $ 6,046 | $ 9,429
| $ 12,339
|
Cost of revenue | 2,466 | 3,010 | 4,705 | 6,176 |
Gross margin | 2,651 | 3,036 | 4,724 | 6,163 |
Gross margin percent | 51.8 % | 50.2 % | 50.1 % | 50.0 % |
Research & development | 1,190 | 1,121 | 2,437 | 2,175 |
Sales & marketing | 1,004 | 964 | 2,011 | 1,864 |
General & administrative | 749 | 762 | 1,523 | 1,471 |
Total operating expenses | 2,943 | 2,847 | 5,971 | 5,510 |
Operating income (loss) | (292) | 189 | (1,247) | 653 |
Other income | -- | -- | -- | -- |
Interest expense, net | (55) | (45) | (93) | (91) |
Income tax benefit (expense) | (166) | (40) | (166) | (116) |
Net income (loss) | $ (513) | $ 104 | (1,506) | $ 446 |
Net income (loss) per share: | ||||
Basic | $ (0.06) | $ 0.01 | $ (0.18) | $ 0.06 |
Fully diluted | $ (0.06) | $ 0.01 | $ (0.18) | $ 0.05 |
Weighted average shares outstanding: Basic |
7,164 |
7,220 |
7,135 |
7,226 |
Fully diluted | 7,164 | 7,643 | 7,135 | 7,673 |
Socket Mobile, Inc. Condensed Summary Balance Sheets (Amounts in Thousands) | ||
(Unaudited) June 30, 2023 | December 31, | |
Cash | $ 3,431 | $ 3,624 |
Accounts receivable | 3,200 | 2,660 |
Inventories | 5,509 | 5,602 |
Deferred costs on shipments to distributors Other current assets | 413 618 | 266 617 |
Property, equipment and computer software, net | 2,413 | 1,657 |
Deferred tax assets | 8,502 | 8,668 |
Intangible assets, net | 1,623 | 1,694 |
Operating leases right-of-use assets | 3,327 | 3,560 |
Other long-term assets | 275 | 250 |
Total assets | $ 29,311 | $ 28,598 |
Accounts payable and accrued liabilities | $ 2,439 | $ 2,407 |
Bank non-formula loan | -- | 125 |
Subordinated convertible notes payable, net of discount | 149 | 147 |
Subordinated convertible notes payable, net of discount-related party | 2,828 | 1,231 |
Deferred revenue on shipments to distributors | 942 | 595 |
Deferred service revenue | 33 | 34 |
Operating lease liabilities | 3,520 | 3,737 |
Total liabilities | 9,911 | 8,276 |
Common stock | 67,957 | 67,165 |
Accumulated deficit | (47,519) | (46,013) |
Treasury stock | (1,038) | (830) |
Total equity | 19,400 | 20,322 |
Total liabilities and equity | $ 29,311 | $ 28,598 |
*Derived from audited financial statements. | ||
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SOURCE Socket Mobile, Inc.
