Socket Mobile Reports 2019 Full Year Revenue up 17% – Profitable Fourth Quarter and Year

- February 12, 2020 -

NEWARK, Calif., – February 12, 2020 – Socket Mobile, Inc. (NASDAQ: SCKT), a leading innovator of data capture and delivery solutions for enhanced productivity, today reported financial results for the fourth quarter and year ended December 31, 2019.

Revenue for 2019 was $19.3 million, an increase of 17 percent versus 2018 revenue of $16.5 million.

Gross margins in 2019 were $10.1 million, or 52.5 percent of revenue, up from $8.5 million, or 51.4 percent of revenue in 2018. Operating expenses were $9.5 million for 2019 and $9.0 million in 2018. Operating results in 2019 were a net income before tax of $0.5 million compared to a net loss before tax of $0.7 million in 2018. The Company’s net income in 2019 was $0.3 million or $0.05 per share compared to a net loss of $0.6 million or $0.09 per share in 2018. 

The Company’s balance sheet at December 31, 2019 included cash of $1.0 million compared to cash of $1.1 million at December 31, 2018. The current ratio (current assets divided by current liabilities) was 1.38 at December 31, 2019 compared to a current ratio of 1.32 at December 31, 2018. Shareholders’ equity at December 31, 2019 was $13.2 million compared to shareholders’ equity at December 31, 2018 of $12.4 million.   

Revenue for the fourth quarter of 2019 was $4.6 million, with gross margins of 53.1 percent, operating expenses of $2.2 million, and net income before income taxes of $0.2 million. Revenue in the fourth quarter of 2018 was $4.1 million with gross margins of 50.3%, operating expenses of $2.2 million and net loss before income taxes of $0.2 million. Net income for the fourth quarter of 2019 was $0.1 million or $0.01 per share compared to a net loss for the fourth quarter of 2018 of $0.2 million or $0.03 per share.  

Kevin Mills, president and chief executive officer, commented, “2019 was the turnaround year we expected in which we returned to profitable growth. Our SocketScan barcode scanner products are well received and were the foundation of our growth. Our revenue grew year over year at 17 percent. We improved our gross margins and kept the operating expenses under control, enabling us to return to profitability.

“In 2019 we maintained an active product development program to ensure that we achieve continued growth.  We expanded our product line with a new family of products; DuraSled for the iPhone models 6,7,8, X and 11. The DuraSled combines the iPhone and a scanner to make a single-handed solution. The DuraSeld both protects the phones from impact damage and provides a robust charging solution for all environments. We also redesigned and retooled our entire DuraScan family of products to better serve the market.

“We completed the development of S550, our NFC compatible Contactless Membership Card Reader/Writer and the units are currently available for the developers. The S550 will enable us to expand our business into the emerging market for tap-and-go solutions that have traditionally been limited to payment solutions, like Apple Pay, but can now be used for ticketing, access and identification applications.

“Our growth continues to be driven by the deployment of mobile applications integrated with our barcode scanning capabilities. In 2019, we updated our Capture SDK for iOS 13 and iPadOS 13 compatibility and maintained a track record of 100% compatibility with all iOS versions. Capture SDK for both Android and Windows are also available and fully compatible with the latest version. Our Capture SDK supports all our devices. We will continue promoting our Capture SDK with the use of developer tools and provide responsive support to our growing developer community as needed.

“Our primary goals for 2020 are to continue revenue growth and profitability.” Mills concluded.

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 7857 219. From international locations, obtain the local dial-in number through your web browser at http://web.meetme.net/r.aspx?p=12&a=UOfVwMzQqfCBsO.  A live and replay audio webcast of the conference call can be accessed through a link http://event.onlineseminarsolutions.com/wcc/r/2187248-1/610568111C0939452F424DA04B495C82.

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
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.

© 2020, Socket Mobile, Inc. All rights reserved.

–Financial tables to follow –

Socket Mobile, Inc.
Condensed Summary Statements of Operations
(Amounts in thousands except per share amounts)

 

Year ended 
Dec 31,

Three Months ended 
Dec 31,

 

(Unaudited)
2019


2018*

(Unaudited)
2019


2018*

Revenue

$ 19,253

$ 16,454

$ 4,584

$ 4,144

Cost of revenue

9,152

7,998

2,149

2,061

Gross profit

10,101

8,456

2,435

2,083

Gross profit percent

52.5%

51.4%

53.1%

50.3%

Research and development

3,894

3,640

987

892

Sales and marketing

3,015

2,982

703

771

General and administrative

2,585

2,420

533

546

Total operating expenses

9,494

9,042

2,223

2,209

Interest income (expense), net

(101)

(129)

(17)

(29)

Net income (loss) before income taxes

506

(715)

195

(155)

Income tax expense (benefit)

219

(144)

134

8

Net income (loss)

$ 287

$ (571)

$ 61

$ (163)

Net income (loss) per share:

Basic
Fully Diluted

 

$ 0.05
$ 0.05

 

$ (0.09)
$ (0.09)

 

$ 0.01
$ 0.01

 

$ (0.03)
$ (0.03)

Weighted average shares outstanding:

Basic
Fully Diluted

 

5,985
6,208

 

6,095
6,095

 

5,998
6,156

 

5,883
5,883

*Derived from audited financial statements.

 

Socket Mobile, Inc.
Condensed Summary Balance Sheets
(Amounts in Thousands)

 

December 31,

 

(Unaudited)
2019

2018*

Cash

$ 959

$ 1,085

Accounts receivable

2,837

2,367

Inventories

3,179

2,272

Deferred costs on shipments to distributors

234

165

Other current assets

312

308

Property and equipment, net

864

689

Goodwill

4,427

4,427

Deferred tax assets

5,507

5,781

Operating leases capitalized

937

1,266

Other assets

202

237

Total Assets

$ 19,458

$ 18,597

Accounts payable and accrued liabilities

$ 2,651

$ 2,046

Bank line of credit

1,413

1,317

Term loan

333

833

Deferred revenue on shipments to distributors

611

397

Deferred service revenue

74

65

Operating lease liabilities

1,134

1,511

Other liabilities

8

23

Total liabilities

$ 6,224

$ 6,192

Common stock

61,073

60,530

Accumulated deficit

(47,839)

(48,125)

Total stockholder equity

$ 13,234

$ 12,405

Total Liabilities and Equity

$ 19,458

$ 18,597

*Derived from audited financial statements.                                  

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