Exhibit
99.1
Socket
Mobile Reports Second Quarter and Six-Month Results
NEWARK,
Calif., – July 30, 2020 – Socket Mobile, Inc. (NASDAQ: SCKT), a leading innovator of data capture and delivery
solutions for enhanced productivity, today reported 2020 second quarter results, which include the early stages of COVID-19 impacts.
Revenue
for the second quarter of 2020 was $2.7 million, a decrease of 46 percent over revenue of $5.1 million for the same quarter a
year ago and a decrease of 36 percent sequentially from revenue of $4.2 million in the immediately preceding quarter. Net loss
for the second quarter of 2020 was $768,000, compared to net income of $120,000 in the second quarter of 2019, and net loss of
$90,000 in the immediately preceding quarter.
Revenue
for the six months ended June 30, 2020 was $6.9 million, a decrease of 28 percent from revenue of $9.7 million in the same period
a year ago. Net loss for the six months ended June 30, 2020 was $858,000, compared to net income of $132,000 for the same period
a year ago.
Gross
margins on revenue for the three-month and six-month periods ended June 30, 2020 was 50 percent and 52 percent, respectively,
compared to gross margins on revenue of 52 percent for the corresponding periods in 2019.
Operating
expenses for the second quarter of 2020 were $2.2 million, a decrease of 10 percent compared to operating expenses of $2.4 million
for the same quarter a year ago, and a decrease of 6 percent sequentially from the immediately preceding quarter. Operating expenses
for the six months ended June 30, 2020 were $4.5 million, a decrease of 6 percent compared to operating expenses of $4.8 million
for the same period a year ago.
“As
anticipated, following the effects of the COVID-19 pandemic on our revenues in the first quarter of 2020, we experienced significant
revenue declines in the second quarter. We expect our business to be adversely impacted by COVID-19 for the foreseeable future.
In Q2, we received $1.06M in PPP loan, most of which is likely to be forgiven, and implemented cost reduction measures, enabling
us to preserve cash. The Company will continue taking actions in Q3 in response to market conditions and operational disruptions”
said Kevin Mills, president and chief executive officer.
“It
should be noted that our first and foremost concern remains the health and safety of our employees. Accordingly, we have
implemented appropriate policies and procedures to ensure that our operation is in as safe a manner as possible. We are maintaining
a remote work program for all functions other than manufacturing that cannot be completed remotely. The Company has continued
all business operations and is manufacturing and delivering products to our customers worldwide. We are dedicated to serving our
customers through this uncertain time.
“The
Company continues to develop new data capture options for its customers, so together we can enable better solutions in emerging
market segments. We launched two new DuraSled scanners for the XCover Pro and one medical-grade DuraScan scanner on Monday July
27th and Wednesday July 29th, respectively.
“Looking
ahead, the uncertainty regarding the spread of the COVID-19 pandemic and the timing of the economic recovery could continue to
materially impact our results of operations and cash flows. Nonetheless, we will remain proactive in our efforts to minimize the
negative impact of COVID-19 on our business. Our online business model, which was created a few years ago, enables us to cope
with today’s new operating environment. We will continue improving our service to our customer,” 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 7255 653. From international
locations, obtain the local dial-in number through your web browser at http://web.meetme.net/r.aspx?p=11&a=UHlYWhfNPMzivt.
A live and replay audio webcast of the conference call can be accessed through the link, https://onlinexperiences.com/Launch/QReg/ShowUUID=D2BDF2C9-5AA2-4BA5-8E2A-DCE59A0494D3&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 |
| 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.
Summary
Statements of Operations (Unaudited)
(Amounts
in Thousands except per share amounts and percentages)
| | |
Three months ended June 30, | |
Six months ended June 30, |
| | |
2020 | |
2019 | |
2020 | |
2019 |
| Revenue | |
$ | 2,715 | | |
$ | 5,060 | | |
$ | 6,936 | | |
$ | 9,688 | |
| Cost of revenue | |
| 1,354 | | |
| 2,430 | | |
| 3,351 | | |
| 4,659 | |
| Gross margin | |
| 1,361 | | |
| 2,630 | | |
| 3,585 | | |
| 5,029 | |
| Gross margin percent | |
| 50.1 | % | |
| 52.0 | % | |
| 51.7 | % | |
| 51.9 | % |
Research & development
| |
| 859 | | |
| 998 | | |
| 1,740 | | |
| 1,891 | |
| Sales & marketing | |
| 722 | | |
| 771 | | |
| 1,490 | | |
| 1,527 | |
| General & administrative | |
| 590 | | |
| 643 | | |
| 1,256 | | |
| 1,346 | |
| Total operating expenses | |
| 2,171 | | |
| 2,412 | | |
| 4,486 | | |
| 4,764 | |
| Operating income (loss) | |
| (810 | ) | |
| 218 | | |
| (901 | ) | |
| 265 | |
| Other income | |
| 50 | | |
| — | | |
| 70 | | |
| — | |
| Interest income (expense), net | |
| (8 | ) | |
| (29 | ) | |
| (27 | ) | |
| (58 | ) |
| Income tax (expense) benefit | |
| — | | |
| (69 | ) | |
| — | | |
| (75 | ) |
| Net income (loss) | |
$ | (768 | ) | |
$ | 120 | | |
$ | (858 | ) | |
$ | 132 | |
| Earnings (loss) per share: | |
| | | |
| | | |
| | | |
| | |
| Basic | |
$ | (0.13 | ) | |
$ | 0.02 | | |
$ | (0.14 | ) | |
$ | 0.02 | |
| Fully diluted | |
$ | (0.13 | ) | |
$ | 0.02 | | |
$ | (0.14 | ) | |
$ | 0.02 | |
Weighted average shares outstanding:
Basic
Fully diluted | |
| 6,009 6,009 | | |
| 5,999 6,272 | | |
| 6,012 6,012 | | |
| 5,970 6,204 | |
Socket
Mobile, Inc.
Condensed
Summary Balance Sheets
(Amounts
in Thousands)
| | |
June 30, 2020
(Unaudited) | |
December 31, 2019* |
| Cash | |
$ | 927 | | |
$ | 959 | |
| Accounts receivable | |
| 1,770 | | |
| 2,837 | |
| Inventories | |
| 3,253 | | |
| 3,179 | |
| Deferred costs on shipments to distributors | |
| 154 | | |
| 234 | |
| Other current assets | |
| 255 | | |
| 312 | |
| Property and equipment, net | |
| 852 | | |
| 864 | |
| Goodwill | |
| 4,427 | | |
| 4,427 | |
| Deferred tax assets | |
| 5,507 | | |
| 5,507 | |
| Operating leases capitalized | |
| 795 | | |
| 937 | |
| Other assets | |
| 181 | | |
| 202 | |
| Total assets | |
$ | 18,121 | | |
$ | 19,458 | |
| Accounts payable and accrued liabilities | |
$ | 2,290 | | |
$ | 2,651 | |
| Bank line of credit | |
| 450 | | |
| 1,413 | |
| Notes payable | |
| 1,292 | | |
| 333 | |
| Deferred revenue on shipments to distributors | |
| 433 | | |
| 611 | |
| Deferred service revenue | |
| 61 | | |
| 74 | |
| Operating lease liabilities | |
| 964 | | |
| 1,134 | |
| Other liabilities | |
| — | | |
| 8 | |
| Total liabilities | |
| 5,490 | | |
| 6,224 | |
| Common stock | |
| 61,328 | | |
| 61,073 | |
| Accumulated deficit | |
| (48,697 | ) | |
| (47,839 | ) |
| Total equity | |
| 12,631 | | |
| 13,234 | |
| Total liabilities and equity | |
$ | 18,121 | | |
$ | 19,458 | |
*Derived
from audited financial statements.
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