Socket Mobile Reports Solid Second Quarter Results
Socket Mobile reported a solid financial performance for Q2 2021, with revenue rising 119% to $6.0 million, compared to $2.7 million in Q2 2020 and 24% up from Q1 2021's $4.8 million. Gross margin increased to 55%, up from 50% year-over-year. Operating income stood at $814,000, a significant turnaround from a loss of ($810,000) year-over-year. Net income was $2.6 million, including a tax benefit adjustment of $1.9 million. Management remains optimistic about growth opportunities, particularly in the retail sector.
- Revenue increased 119% to $6.0 million compared to $2.7 million in Q2 2020.
- Gross margin improved to 55%, up from 50% year-over-year.
- Operating income turned positive at $814,000 compared to an operating loss of ($810,000) in Q2 2020.
- Net income of $2.6 million, including a $1.9 million tax benefit adjustment.
- Operating expenses increased by 12% year-over-year to $2.4 million.
- Supply chain constraints and inflationary pressures impacting operations.
NEWARK, Calif., July 22, 2021 /PRNewswire/ -- Socket Mobile, Inc. (NASDAQ: SCKT), a leading innovator 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 six months ended June 30, 2021.
Second Quarter Financial Highlights:
- Revenue for the second quarter increased
119% to$6.0 million compared with$2.7 million for the same period in 2020 and24% from the revenue of$4.8 million in Q1 2021. The increase is primarily driven by the deployments of business applications in the retail industry. - Q2 Gross margin increased to
55% compared with50% for the same period last year and53% sequentially from the immediately preceding quarter primarily as a result of higher revenues and absorption of fixed manufacturing overhead. - Operating income for the second quarter of 2021 was
$814,000 compared to an operating loss of ($810,000) in the prior year period and an operating income of$242,000 in Q1 2021 primarily due to modestly increased operating expenses offset by higher revenues. - Operating expenses for the second quarter of 2021 were
$2.4 million , an increase of12% compared to operating expenses of$2.2 million for the same quarter a year ago, and an increase of5% sequentially from the immediately preceding quarter. - Q2 net income of
$2.6 million included an adjustment of$1.9 million related to the recognition of tax benefit resulting from the disqualified disposition of incentive stock options as of June 30th, 2021. This adjustment increased deferred tax assets.
"We are pleased with our strong performance for the second quarter of 2021.The deployments of business applications, particularly in the retail industry, have served as a key driver of our return to profitable growth we have had historically," said Kevin Mills, president and chief executive officer. "The market opportunity and positive momentum we are seeing is encouraging as it validates our application driven business model. In line with our operating plan, we are investing in both technology and talent, while remaining disciplined on costs, so we can further strengthen our application developer tools to better serve the developer community.
"We continue to experience supply chain constraints and inflationary pressure that are impacting us as well as many other companies around the world. I'm proud of our team's success in meeting customer demand and delivering a strong quarter despite the challenges.
"Our financial strength, including a strong cash balance and the available lines of credit allows us to be well-positioned to invest in new products to drive long-term profitable growth and to withstand unforeseen adversities.
"We look forward to providing more details on the key drivers of our recent performance along with updates on our business and products during our second quarter earnings call," concluded Mills.
Conference Call
Management of Socket Mobile will hold a conference call and web cast 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 call is (888) 424-8151 passcode 7569 552. From international locations, obtain the local dial-in number through your web browser at http://web.meetme.net/r.aspx?p=11&a=UDSpRFPaUkZThc. A live and replay audio webcast of the conference call can be accessed through a link https://onlinexperiences.com/Launch/QReg/ShowUUID=5595207E-339C-4EA9-83C5-9280D32559B1&LangLocaleID=1033
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, Twitter @socketmobile and on our sockettalk 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: |
Lynn Zhao |
Chief Financial Officer |
510-933-3016 |
Socket is a registered trademark of Socket Mobile. All other trademarks and trade names contained herein may be those of their respective owners.
© 2021, Socket Mobile, Inc. All rights reserved.
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, | |||
2021 | 2020 | 2021 | 2020 | |
Revenue
| $ 5,953
| $ 2,715
| $ 10,766
| $ 6,936
|
Cost of revenue | 2,698 | 1,354 | 4,937 | 3,351 |
Gross margin | 3,255 | 1,361 | 5,829 | 3,585 |
Gross margin percent | ||||
Research & development
| 972
| 859
| 1,903
| 1,740
|
Sales & marketing | 734 | 722 | 1,394 | 1,490 |
General & administrative | 735 | 590 | 1,476 | 1,256 |
Total operating expenses | 2,441 | 2,171 | 4,773 | 4,486 |
Operating income (loss) | 814 | (810) | 1,056 | (901) |
Other income | -- | 50 | 10 | 70 |
Interest expense, net | (51) | (8) | (100) | (27) |
Current income tax expense | (6) | -- | (6) | -- |
Deferred income tax benefit | 1,870 | -- | 1,870 | -- |
Net income (loss) | $ (768) | $ (858) | ||
Net income (loss) per share: | ||||
Basic | $ 0.34 | $ 0.38 | $ (0.14) | |
Fully diluted | $ 0.27 | $ 0.31 | $ (0.14) | |
Weighted average shares outstanding: Basic Fully diluted |
7,129 8,907 |
6,009 6,009 |
6,808 8,594 |
6,012 6,012 |
Socket Mobile, Inc. | ||
Condensed Summary Balance Sheets | ||
(Amounts in Thousands) | ||
June 30, 2021 (Unaudited) | December 31, | |
Cash | $ 4,920 | $ 2,122 |
Accounts receivable | 2,468 | 2,113 |
Inventories | 4,020 | 3,196 |
Deferred costs on shipments to distributors Other current assets | 179 775 | 170 335 |
Property and equipment, net | 855 | 848 |
Deferred tax assets | 7,377 | 5,507 |
Intangible assets, net | 1,878 | -- |
Operating leases right-of-use assets | 414 | 609 |
Other long-term assets | 135 | 159 |
Total assets | $ 23,021 | $ 15,059 |
Accounts payable and accrued liabilities | $ 2,371 | $ 1,748 |
Bank non-formula loan | 875 | -- |
Subordinated convertible notes payable, net of discount | 141 | 170 |
Subordinated convertible notes payable, net of discount-related party | 1,187 | 1,272 |
Deferred revenue on shipments to distributors | 530 | 451 |
Deferred service revenue | 41 508 | 54 741 |
Total liabilities | 5,653 | 4,436 |
Common stock | 65,655 | 61,740 |
Accumulated deficit | (48,287) | (51,117) |
Total equity | 17,368 | 10,623 |
Total liabilities and equity | $ 23,021 | $ 15,059 |
*Derived from audited financial statements.
View original content to download multimedia:https://www.prnewswire.com/news-releases/socket-mobile-reports-solid-second-quarter-results-301339203.html
SOURCE Socket Mobile, Inc.
