Socket Mobile's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Socket Mobile, Inc. (SCKT)

Q1 2012 Earnings Call

April 24, 2012 5:00 PM ET


Jim Byers – SVP, MKR Group

Kevin Mills – President and CEO

Dave Dunlap – CFO, VP - Finance and Administration and Secretary


Brian Swift – Security Research Associates

Bernard Fidel – Private Investor



Greetings and welcome to the Socket Mobile First Quarter 2012 Management Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder this conference is being recorded. It is now my pleasure to introduce your host Mr. Jim Byers at MKR Group. Thank you Mr. Byers, you may now begin.

Jim Byers

Thank you, operator. Good afternoon and welcome to Socket’s conference call today to review financial results for its 2012 first quarter ended March 31, 2012. On the call today from Socket are Kevin Mills, President and CEO; and Dave Dunlap, Chief Financial Officer.

Socket Mobile distributed its earnings release over the wire service at the close of the market today. The release has also been posted on Socket’s website at In addition, a replay of today’s call will be available at shortly after the call’s completion and a transcript of this call will be posted on Socket’s website within a few days. We’ve also posted replay numbers in today’s press release for those wishing to replay this call by phone. The phone replays will be available for one week.

Before we begin, I would like to remind everyone that this conference call may contain forward-looking statements within the meaning of Section 27-A of the Securities Act of 1933 as amended and Section 21-E of the Securities and Exchange Act of 1934 as amended. Such forward-looking statements include, but are not limited to, statements regarding mobile computer data collection and OEM products including details on timing, distribution, and market acceptance of products and statements predicting trends, sales, and market conditions and opportunities in the markets in which Socket sells its 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 factors including, but not limited to, the risk that manufacture of Socket’s products may be delayed or not rolled out as predicated due to technological, market or financial factors, including the availability of product components and necessary working capital, the risks that market acceptance and sales opportunities may not happen as anticipated, the risks that Socket’s application partners and current distribution channels may choose not to distribute the products or may not be successful in doing so, and the risk of acceptance of Socket products in vertical application markets may not happen as anticipated and other risks described in Socket’s most recent Form 10-K and 10-Q reports filed with the Securities and Exchange Commission. Socket does not undertake any obligation to update any such forward-looking statements.

Now with that said, I’d like to turn the call over to Socket’s President and CEO, Kevin Mills.

Kevin Mills

Thanks Jim. Good afternoon everyone, and thank you for joining us today. In today’s call, I will begin with a brief review of our Q1 results and then discuss the business opportunities we see ahead and our outlook for 2012. Our revenue for the first quarter was $4 million consisting of $2.2 million of SoMo related sales, $1.5 million of cordless scanning related sales and $300,000 from service and other related products.

Q1 revenue was essentially flat compared to Q1 of last year, reflecting the impact of the transitions we are currently going through with both our product families. Revenue from our SoMo product was impacted by customers waiting for our next generation SoMo 655 which was announced in Q1 with Q2 availability. We expected this transition to impact Q1 sales as we noted on our last conference call.

On our cordless scanning side, sales were also impacted by two transitions. One related to the introduction of our new low cost 7Ci barcode scanner. The second by the Apple associated iPad transition. As you may recall, the 7Ci is our Apple certified low cost 1D barcode scanner that addresses the need of the large Apple community that needs a 1D only solution. The release of the new iPad and introduction of 7Ci combines to the late sales of customers who are evaluating the new offerings.

I’d now like to provide more detail on each of the product families starting with the SoMo. We expect the transition to our new and enhanced SoMo 655 to be completed later this quarter by late June [ph]. Currently, we have provided 18 customers with early development units to allow them to qualify their solution on the new platforms. Getting these early units into the hands of our customers serves several purposes. It provides us with valuable feedback from numerous environments, ensures the product is optimized prior to mass production.

It enables our key customers to evaluate new hardware, so they can assure themselves if their software runs perfectly and that the overall solution will meet their customers’ requirements. And it ensures that there is demand for the new product when we are ready to ship. I am happy to report that feedback from this customer group has been excellent and customers are overwhelmingly very happy with the improvements we’ve made on the performance of the new hardware and associated software.

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