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Hweb2...POLA.. looking to hire 16 people for some reason.
https://polarpower.recruiterbox.com/
CNC Punch Press Operator
Gardena, California, United States
Full-time
Regional Telecom Sales Director
Gardena CA and Nationwide
Full-time
Production / Operations / Manager for Manufacturing Plant
Gardena, California, United States
Full-time
Tech Support Account Coordinator
Gardena, California, United States
Full-time
Inventory Control Specialist
Gardena, California, United States
Full-time
CNC Machinist - 2nd Shift
Gardena, California, United States
Full-time
Electrical/Mechanical Generator Tester
Gardena, California, United States
Full-time
Lead Mechanical Assembler
Gardena, California, United States
Full-time
Lead Mechanical Assembler
Gardena, California, United States
Full-time
Generator Service Technician
Gardena, California, United States
Full-time
Electro-Mechanical Assembler
Gardena, California, United States
Full-time
Digital Controls Design Engineer
Gardena, California, United States
Full-time
Engine / Generator / Assembly Mechanic
Gardena, California, United States
Full-time
Technical Sales / application engineer
Gardena, California, United States
Full-time
Application Engineer / Sales
Gardena, California, United States
Full-time
Cable Harness / Electro Mechanical Assembler
Gardena, California, United States
Full-time
Hweb2...POLA....In the 10K, it states that:
A. "As of March 9, 2017, approximately 7,383,158 shares of common stock, including the 5,578,176 shares held by Mr. Sams, are subject to a lock-up agreement with our underwriters which expires on July 7, 2017"
and
B. "As of March 9, 2017, we had 10,143,158 shares of common stock outstanding"
B - A = 2.76M shares are all that is available to trade.
You are assuming the stock is going down based on someone having knowledge. However, it's traded:
--- 3.56M shares already since March 1rst.
--- over 1.1M shares in Feb.
---approx 800K shares in Jan.
---plus what they did from initial IPO through December.
Imo, the stock is being used as a trade vehicle for entities bigger than any of us. That doesn't mean that there isn't something else doing on (knowledge unknown to the rest of us), but it also is important to point out that the churn on shares is abnormally high for what should be considered normal trading for a stock this size.
POLA....even I couldn't resist buying some.
Here is a link to their ROTH presentation:
https://ir.polarpower.com/investors/events-and-presentations/
bbotcs...SCKT...institutional ownership. Have you seen the latest numbers? 8 months ago it was zero institutions for zero shares. As of Dec 31rst, it is now 15 Holders for 357,000 shares. One aggressive hedge fund picked up 123K in 4th Q.
Imo, what today's earnings release and cc call shows is this is a story that still has years to grow going forward.
http://www.nasdaq.com/symbol/sckt/institutional-holdings
MANATUCK HILL PARTNERS, LLC 12/31/2016 173,430
GOLDMAN SACHS GROUP INC 12/31/2016 48,373
ROYAL BANK OF CANADA 12/31/2016 39,540
RENAISSANCE TECHNOLOGIES LLC 12/31/2016 31,000
DEUTSCHE BANK AG\ 12/31/2016 16,796
KCG HOLDINGS, INC. 12/31/2016 13,195
CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM 12/31/2016 10,520
THOMPSON DAVIS & CO., INC. 12/31/2016 9,800
UBS GROUP AG 12/31/2016 8,391
JAMES INVESTMENT RESEARCH INC 12/31/2016 4,300
BANK OF AMERICA CORP /DE/ 12/31/2016 1,611
BARCLAYS PLC 12/31/2016 133
SSKILLZ1....EDUC
It was one of the most unique cc calls I've ever heard. A good ol' boy from Oklahoma who just laid it all out there.
linuspop...SCKT...thanks. I was just about to contact the company myself for this info.
FYI....The OEM company is Spinal Modulation. It is a division of St Jude medical (NYSE: STJ). The board is used in their pain device.
Hweb2....SCKT...I can't remember what Somo margins are anymore. I think they were lower. I'm sure the OEM order was discounted quite a bit for the volume it was. I'd reach out to the company to ask but I just sent an e-mail to the CFO and CEO yesterday expressing my displeasure with them for the scanner revenue, the fact they didn't address/explain it well, and that they need to stop being so damn conservative on the cc calls and open up a bit more about what they see the future being. They don't need to give guidance, but they do need to be more open.
IPAS.....does anyone else like it? I bought a nice position in the low $1.20 range a couple of weeks ago. The company has issues (no profits, revenue dropping for years), but $17M in cash and no debt is nice. They are forecasting exciting things. If you read the last 3 conference calls in a row, you can see this new CEO and the team he has brought in have some great ideas and are hungry. I don't think it's b.s either. There was a shareholder revolt in 2015 and 3 major investors took over most of the Board of Directors and have pushed for the new CEO + 2 rounds of employee cuts to make them leaner.
The stock has moved to $1.55 already. They report on August 3rd. I don't expect them to be profitable, but I do expect to hear continued improvement in operations.
SCKT.....thoughts on the quarter and ahead.
I haven't read all the posts on SCKT here, but let me correct one thing that was discussed....2Q last year scanners did $3.95M. 3Q = $4.1M. 4Q = $4.2M. So the second half of the year is the strongest. In my inventory tracking, I saw good numbers all the way till the first half of December (October was the best month of the whole year). So the idea that 4th Q is weaker is false. It was in 2014, but not 2015. Retail POS sales went for a lot longer than management expected.
Do I think the selling was overdone?!? I don't know. Stocks are like stories that build chapter by chapter. The 2Q report tore a few pages out of it all and now the reader (investor) is a bit unsure. Uncertainty is never a good thing in the stock market. I had taken profits on a few shares in the upper $3s. I actually bought part of those shares back in the $2.90 range today.
The reality is they are a Nasdaq company with a solid balance sheet now, good cash flow, nice margins, and a unique niche they are expanding in. The future story is still there. However, it's slower to play out than I ever thought it'd be. That doesn't mean it can't ramp up going forward. As such, I still am hanging in there.
One plus going forward is the Somo is finally gone. Even if revenue takes a drop it cleans the story up. Yes, dilution is a concern as is the bump in expenses. The scanner revenue will need to start to ramp up to overcome these things. Time will tell. I still think it will.
bbotcs...SCKT...
From what I track & my best guess, I think we get $5.3M and 10 cents for sure. This assumes they did around $100K in a large scanner deal (plus the rest of the OEM deal + misc Somo + reg Service). They did $800K in large deals in 2Q two years ago and $400K last year in 2Q. I'm assuming it to be $100K this year to be conservative.
For 3Q and beyond..........The CFO has also told me and other shareholders that (his words) "There are some more significant orders in the pipeline that could materialize beginning in Q3 that would also help replace the contribution from SoMo that we've enjoyed in the first two quarters of 2016."
I'd like to see some real volume hit this stock.
OT: Yahoo Finance.....a solution:
Go to https://ca.finance.yahoo.com/
The Canadian site is still the old style. I have to thank Curlews for this. He suggested to go to the Yahoo forum to add our complaints. In there I saw someone suggest it. Hopefully it doesn't change for awhile.
"When is Lee going to take his company to the next level?"
Hmmm.....better questions are:
1. Are they actually going to become SEC compliant? Do they really want to tell everyone the fine details? Sure Lee says he does but does everyone really believe it? Has he told anyone who they are using for auditors? Is it a super-secret thing? Or maybe he's using his cousin down the road or, better yet, Marty's bookkeeping service.
2. Are they going to dump Marty from the Board of Directors? What legitimate company has the paid I.R. person also be an "independent" Board member to represent shareholders?
3. Are they going to stop diluting the stock like it's Halloween candy being handed out? Someone responded back to a post of mine before saying 800M shares in a penny stock is nothing. Really? Well, I hope you all are happy with it being worth 1 cent then when there is over 1B shares outstanding.
4. Is Lee going to stop b.s'ing about Nigeria and Niger? Nigeria just free-floated their currency and it dropped 40%. What bank in the world is going to make loans in that environment? Nigeria is now being rumored for a military coup. As for Niger, it's so poor it's unreal. Toss in the refugee and fighting issues and it's not a place a bank is going to foolishly loan money into either. It's so obvious that is not even funny.
5. Is anyone on the next cc call (if there is one) going to ask a real questions or is just going to be "do you think this stock really could go to 23 cents?!!!!!!!!!!!!!" Hump, pump, try and make the stock bump up.
6. This company has a 100% legitimate rental business and used equipment business. It's a money maker. This is the real winner here. Can the company actually focus on emphasizing this and not Lee's hair-brained Africa lottery tickets?
This isn't a 1 cent stock if it was run legitimately with SEC reporting and a management team that stops promising crazy dreams and focuses on reality. The problem then is that it might attract real investors who put the screws to management if they over promise and under perform. On the other hand, right now Lee can get away with anything he wants and penny-stock flipping shareholders love it.
kpo107...."I still have no idea what IR did to earn 25M shares".
It helps when Marty Tullio is on the Board of Directors acting as an Independent Director while also being paid as the company's IR agent. A wee bit of conflict of interest?? It might be for a listed company or an OTC company but I'm sure someone will probably tell me it isn't when compared to most penny stocks on the pink sheets.
http://www.ammx.net/profiles/investor/Directors.asp?BzID=1512
To the Board: I apologize about some of my wording in my last message. It was inappropriate and was pointed out to me in a private message by one of the board moderators. I appreciate people being enthusiastic about a company, but it bothers me when people are too much so rather than asking harder questions. I bring this up because, on my initial research so far, AMMX has solid possibilities of moving from a penny stock to a legitimate and very profitable investment for shareholders who can be patient. It has issues though and investors who would put big $ into this stock will want them resolved. It's tough to find the posts on this message board that ask these tough questions when they are overwhelmed in massive numbers by enthusiastic posters that don't really say anything.
One real and very serious problem with AMMX is dilution that has occurred so far and could come in the future. Let's be realistic----they have 770M shares outstanding and very little to show for it. Going forward, they will need capital. There isn't anything that can be done about this. However, it's important to decide if management is here to reward themselves or everyone, including shareholders. A CEO giving himself 50M shares for part of a $700K loan is a good sign if the terms are fair. However, I'm not sure shareholders got anything for that 50M other than the initial set up of the loan. What are the ongoing terms? How much more dilution can come from this? 25M shares for IR? 90M shares in 1rst Q alone is a lot of dilution. It's why I'm trying to get the CFO to answer these questions.
I wish they had done a cc call after 1rst Q so these issues could of been raised by someone and answered publicly.
Ivorytower----If the $400K line of credit is from a hedge fund, than I really do want to know the terms since it most likely won't be just for interest. Hedge funds don't just loan money for 8%. They take skin in the game too.
I'm not looking at this as a 1.3 cent stock that can go to 15 cents. I look at it as a stock with 770M shares outstanding that did $1.2M in net income last quarter primarily from rentals and some equipment sales. If they became serious about being a public company and did a 1 for 50 reverse split, that give a 65 cent stock with 15.4M shares outstanding that did $1.2M in net income. That's 8 cents/share for the quarter for a 55 cent stock. That's solid! This company doesn't need the African deals to make it worthwhile to investors. The real investment here is the rental business which is a cash cow. This is ongoing revenue that large investors will want to see. Any large deals are just icing on the cake. What it needs more than anything though is to be legitimate. That begins with being fully audited and SEC reporting. That's a great sign they are moving forward on this. The next step is keeping an eye on share count and starting to minimize dilution to shareholders as much as possible.
stervc....There are 3 things about AMMX that concern me. I have an email into Marty that answered part of it and am hoping to get the CFO to answer the questions below. I will ask you, in case you know the answer, since, unlike most of the people who post cheerleading worthless babble on this message board, your post is one of the first intelligent ones I've read in awhile.
At the end of 1rst Q, the financials show:
$700K in current notes payable. This is a loan from Lee Hamre that was initiated in 1rst Q. He received 50M shares for "partial payment" towards it. However, as of March 31rst (after he had received the 50M shares), the whole balance still remains. What did he get for those shares? Interest only? Was that just initial payment to set it up? What are the terms of that $700K loan? Shareholders got diluted out by around 7% already from this deal. What's the balance going to cost?
There is also a $400K line of credit that has been drawn from that wasn't there at the end of 2015. Who is this with and what are the terms of this?
Marty and her agency received 25M shares in 1rst Q for services provided in 2015. The stock price was approx .006-.008 in 1rst Q. Does that mean IR costs $150K to $200K per year? What services are worth diluting out shareholders by 3.3% for 12 months of effort?
I ask these things because I'd like to know how much more dilution is coming??? I can shout out "to the moon" as loud as anyone. However, I kind of like to know who is raiding the cookie jar that I'm going to put my money into.
The reality is no respectable investor will ever buy into a stock with 700M shares outstanding. However, with SEC reporting status and fully audited books + a 1 for 50 reverse split, this could set them up well on the OTC market. I'm involved in another stock that 2 years ago was 75 cents on the OTCBB, had a weak balance sheet, but a legitimate business behind it. Today it's $3.50, has a solid balance sheet and is in the process of applying to the Nasdaq. The real question is AMMX serious about becoming a real company? The first place that starts with is not giving away shares like lollipops on Halloween to everyone. The second question is shareholders interested in treating it like a real company? If so, then it's important to know what is happening with those shares and being upset that the company is diluting them out unnecessarily.
Question for the board:
In the March 23rd press release for 2015 year-end results, the company lists "Total Number of Shares Issued and Outstanding: 664.9 million".
http://finance.yahoo.com/news/ameramex-international-reports-2015-end-152651855.html
In the May 16th press release for 1rst Q results, the company lists "Total number of shares issued and outstanding: 778.2 million".
http://finance.yahoo.com/news/ameramex-international-reports-revenue-3-110000477.html
Does anyone know why the large jump in dilution?!?
Nelson1234....SCKT
I'm glad to see you've made some $ from Socket. I'm not sure how much higher it will go without more news. I'm still thinking it will break into the low $4s with a Nasdaq listing. I think at that price there will be more people who bought in the low $2s who will start taking profits. I think it breaks over $4.50 in 2Q earnings based on my expectations of revenue + net income.
(my inventory tracking is running just under 20% growth compared to what I saw in 1rst Q 2016 and 2Q 2015 ---both had very similar numbers for me. When combined with the rest of the Somo orders, OEM, + service/warranty, I can see $5.5M and 12 cent/share as of now).
After that, does it hold $4.50 or move higher for the 2nd half of the year? I think only if momentum traders latched onto it. 3Q and 4th Q are a concern without the Somo involved. Scanners need to move closer to 22% y.o.y growth or more to counterbalance some of the dilution that has occurred as the stock has moved up and more of the convertible debt and options have to be accounted for. 22% growth on scanners would give 11 cents/share basic, 9 cents diluted for those quarters. I think it's important that scanners, minus Somo/OEM, can show 28 cents for the year if it had been calculated alone. I think that type of net income from scanners + a Nasdaq listing + a balance sheet that is looking sharp again holds the stock somewhere in the $4s, but doesn't necessarily make it more than that.
1rst Q 2017.......the new accounting rules come into play so that will be a strong quarter as the new international/domestic ruling on accounting moves sales from "end customer" to "out the door". It means for someone like Socket, all the deferred revenue at distributors (minus a buffer for returns) will be moved up in the sales chain and be counted as revenue immediately. That's a nice sales bump.
2q-4thQ 2017. Retail POS makes up 75-80% of their scanner sales now. This will keep plugging along at 18-22% growth probably. The key to the stock and how high it can go is how much do the new industrial scanners, Duracase D750 (now) and the D730 and D700 (coming in the next 30 days and 60 days) + new Duracase for 8 series scanner (coming around July 1) start to open up new markets in logistics, warehouse, manufacturing. Can they add another $1M/qtr by 3Q 2017 on top of the already expected growth? If they can, then the future is strong. In the last cc call the thought was that retail POS will eventually only be 30% of the scanner revenue. It means this new area would have to grow huge to do that. Will it??? We won't know until it plays out more and we see how many and which software partners utilize them.
To me, 3Q 2016 needs to be 25% scanner growth ($4.1M x 1.25) + $100K service/warranty = $5.23M or so. They need to start to get more large deals done.
Then in 3Q 2017, it needs to grow 20% from that on retail POS ($6.0M) + another $1.0M in new area growth. No one is pushing this stock to $10 unless the outlook to $10M/qtr in revenue is looking like a real possibility. My opinion is these markets aren't going to be larger than retail POS for Socket unless they actually take off strong. I will be watching this closely in my tracking as time goes by.
It'd be even nicer if some of these new scanner markets would start to come into play in 4th Q this year.
Curlews....It's been a long haul, but I'm hoping this is step 1 (finally) of multiple good things to come. If they can grow scanners 25% year-over-year this year with the exposure a Nasdaq listing brings, then the stock price will take care of itself going forward for sure. The extra Somo stuff will just be frosting on the cake per se.
There will be another Seeking Alpha article coming out. I sent a note to the guy who did this one last fall
http://seekingalpha.com/article/3510946-play-socket-mobile-rise-mpos-near-term-catalyst-continual-growing-profitability
He indicated he'd do a follow up on it now that 4th Q numbers are out. It's not a big deal, but every little bit of exposure helps right now.
Feb 20th: My Latest, Greatest Report on SCKT......
I'm probably still the #1 expert on this company. More by the process of attrition as the other long-term shareholders have fallen at the wayside while I trudged on. I have been a bigger poster on SCKT on the MicroCap Club with my research over the last year. I will share some of it here now and in the future, but only after it goes there first. It's a quid pro quo type of thing---the Club gives a lot back in research to me on other stocks. I want to reward them back in turn.
To start my post here, I will reiterate why I'm in this stock and have stuck with it through the hard times.
The reality is I have a love/hate relationship with Socket Mobile.....
I love their business plan. We are all starting to see the benefit it in 3Q and now 4th Q. Build a business that uses an SDK (software development kit) to capture software partners. This is their moat against competition. Who is going to pay the software developers later to change their code to use a competitor's barcode scanner? It's not just plug/play. If you want to customize the data and usage that the scanner produces, you need an SDK built into the main software code do deal with all the functions. The mobile/tablet market is not your grandpa's previous PC computer industry. It's different. By being first (and most aggressive) to market to software app developers with their SDK, Socket has captured a good portion of the tablet/smartphone barcode business before the competition is even realizing it. The plus is that they did it while their balance sheet sucked. Now that they are becoming a cash cow, they can fight even harder.
Capture the developers, capture the market! The developer then tells the final customer what barcode scanner to use. ex. NCR Silver only has the Socket scanner as an option on their webpage to order with their system. The final customer usually doesn't get a choice. Socket then, in effect, will eventually have 1000+ software companies being their sales force. This is why Socket has engineers, a crew of gals in the backroom who snap scanners together, people for marketing, but little sales force expenses. This is how they can grow sales going forward with minimal expense increases. That's leverage! Their plan is it to produce the best SDK on the market & then innovate by providing every type of scanner (color, hardness, 1D vs 2D, anti-microbial coatings, accessories) that a developer and their end customer could want. NCR, Shopify, Square, Lightspeed (all these are $1B companies) + lots more are using their SDK in their software. The found Socket in the first place. If they are happy, why change? You could say that someone will undercut Socket on prices in the future? Really? Their margins are 50% and will go higher as they sell more and more (as cost to produce goes down per unit due to volume in manufacturing). Perhaps as volume increases, they keep them at 50% and just drop the price of the scanner then to fend off competition. It's nice what a very profitable low expense company can do once the ball starts to roll. And, again, who is going to pay the software developer to change the code? These developers are in the software business, not the hardware. They just want a reliable solid partner for scanners. They aren't in business to cater to the Motorola's or the Honeywell's of the world. These big players can't muscle their way around so easily anymore.
Increasing scanners sales + increasing margins (due to lower cost to manufacturer per unit) + limited expenses + LOTS of tax loss carry forward = $ flows to the bottom line nicely = microcap cash cow :)
What I don't like about the company: The industry has taken off slower than I thought and it's frustrated me. Socket grows as fast as their software partners do. The growth is coming. The use of the Cloud by retail, warehouse, field, hospitality operations is only at it's infancy. I'm hoping 2016 starts to build up at a faster rate. As they said on the cc call----the connections they did 2 years ago are what's paying off now. It will just keep pyramiding as time goes by and more and more of their partners release their software and expand their business. If you read the transcript, James Lopez is THE guy at the company leading the direction. He is the one building the relationships with the developers on what they need and what Socket can do for them. It's like their new RFID TouchPoint product. I can talk about this more later as I've talked to the company about it all, but the idea is to go after a market that really won't exist for another year or two. If you want to be a player in this new area later, then they have to work with everyone as it emerges, not chase after it later. I do know the TouchPoint idea builds on the scanner business nicely.
I have to keep reminding myself of something.....this is NOT the same business it was 3-4 years ago. The whole scanner business plan is coming together, the Somo going away, they have proven they are tight on expenses, the balance sheet is getting cleaned up nicely. This isn't the same ol' Socket Mobile of before. If you just look at what has happened in the last 2 years separately (from the prior 15 years before debacle), this is actually a great little company. This is the kind of investment that a lot of microcap investors should like.
4th Q Analysis:
Solid quarter obviously. Everyone here is a big boy/girl and can read the pr and cc call transcript on their own for the main info. Here is some extra I've found out:
1. As explained in the cc call, $320K of the $850K of Somo revenue was 20% of the big $1.6M OEM contract. This surprised me as so little was shipped. The order is firm and so the next $1.3M (shipped in 1rst? 2nd? part of 3rd?) will be a nice boost.
More info.....$400K of the Somo revenue was "regular Somo sales to customers". This was up from $350K in 3rd Q. As the Somo is going end-of-life, businesses who use it will want to buy what they can. The Somo has sold over 85K units in it's lifetime and is still be used by long-term customers. I will discuss the future of this down below.
$120K of the Somo was 1/2 of the 600 unit Japanese order. The other 1/2 of this order (ie. another $120K) will ship in 1rst Q. This will give 1rst Q a nice boost.
2. After asking the previous question, I also noticed that inventory numbers were up quite a bit for the end of the quarter compared to normal.
End of 4th Q 2015: $957K
1rst Q 2016: $808K
2nd Q 2016: $621K
3rd Q 2016: $972K
4th Q 2016: $1.326M
I asked about this too thinking it might be Somo related. It is. I was told that a good portion of it was that they bought bulk supplies of the Somo components to last them through the balance of their orders in 2016. It was more efficient (and less costly) to have their manufacturer produce it in an extra large lot size. As explained in the 3Q cc call---there are certain components in time that won't be available and Socket stocked up on them.
----two things about this: It means they should have reasonably firm orders going forward for these Somos. Kevin said on the 3Q cc call and it's been repeated to me that they don't want a bunch of extra inventory of Somo's later. They are only intending to build what they can sell in the future for sure.
Also, the build up in inventory means they will be generating more Somo revenue for the foreseeable future. That means 1rst Q for sure, probably 2nd, some into 3rd Q?
No investor wants to pay for the revenue generated by a legacy product, however, also keep in mind the extra sales from the Somo now are cleaning up the balance sheet (fast!) and will get them to the Nasdaq (which is a high priority for them). The future is the scanners and so it'll be important to watch what their year-over-year growth rate is (more on this later).
NASDAQ LISTING:
A NASDAQ listing after 1rst Q......there are 3 main requirements:
1. Closing price above $3 for 5 consecutive days.
2. $4.0M in shareholder equity, of which Socket now has $3.34M. They need $666K more. They added $1.05M in 4th Q.
3. $750K in net income in "latest fiscal year".
I know for sure that the company is adamant they are going after a listing as soon as they qualify and that they will do a mid-year audit to make it happen. I was wondering about requirement #3. Does this mean $750K in net income in 2016 if you are doing a full audit after 1rst Q or does 2015's #s satisfy it? I reached out to the company and asked to see if they had gotten clarification on it. They had. Dave Dunlap spoke with the Nasdaq already as they weren't sure themselves. The answer was that 2015's net income of $1.8M will satisfy the latest fiscal year requirement and so #3 is already done.
Can they do a Nasdaq listing after 1rst Q?? I'd put the odds at 75% if none of the $1.3M OEM order is shipped in 1rst Q. I doubt that to be the case. My guess is it's closer to $600K (of the $1.3M total) that gets shipped which will make them getting to the necessary $4.0M in shareholder equity a done deal when you add in scanner growth + regular Somo + service revenue + 1/2 of 600 unit Japanese order.
Do I want off the Nasdaq vs staying on the OTC market? Darn right I do. I've pushed the company hard on this, not that it's needed as they are agreeing 100%. This wouldn't be a $2.70 stock based on what's happening if it was on a listed market. They need to get away from penny stock flippers and go after more serious investors and institutions. Only 4 years ago Socket had 7-8 institutional owners. When they dropped to the OTC market they all sold out. It'd be nice for the company to pursue them again. As you heard on the cc call, they intend to put the time and $ into publicizing the stock only after they get a Nasdaq listing. It's smart imo.
Scanners for 1rst Q: For 4th Q, in my inventory tracking, I saw the numbers go from (imo estimate) $1.99M in 2014 to $2.7M in 2015 = 35% growth rate. As such, I knew 4th Q would be good at some level. The true scanner plus accessory revenue overall went from $3.1M in 2014 to $4.2M in 2015 = 35%.
Overall, scanners did 65K units in 2015 vs 55K in 2014 = 19% growth. Scanner revenue grew from $3.66M in 2014 to $4.25M in 2015 = 16% growth. Everyone needs to remember something.....2014 were skewed by a non-POS related large order in 2Q and 3Q. 2014 had an extra $600K in 2Q and 3Q combined from this. (I found out this later after the numbers came out in 3Q in 2015). 2015 was more small true retail POS orders representing the future here. When you look at it that way, the core of the scanner business grew nicely in 2015 overall.
2016: I was told last fall that they expect larger enterprise deals to have much more of an impact on 2016 than 2015. These deals take a long time to develop. I don't have anymore info than that. They refuse to discuss them in detail.
(side note: On this last comment....they are and intend to be conservative in their forecasts. It's 100% opposite of they way they once were. Their opinion is to let the #s do the talking for them. 4th Q's numbers sang a sweet song.)
International orders......they made up 20% of the total scanner revenue. This is an area I'm hoping builds and grows faster than domestic growth rate in 2016 (vs lagging before). Several of the large retail POS developers that sell Socket scanners in the U.S. have now set up large operations in the U.K. Plus, the Yen is 10% higher than it was just in November. Since Socket has their products priced in dollars there, they are now 10% cheaper. This should help scanner. It should also help those business that have used the Somo there (it has always done well in Japan) to buy the units they need for the future now while the currency exchange is more favorable.
1rst Q estimates: It's too early to make a prediction here. My inventory tracking, as of last week, was up 25% for the first six weeks of the year vs a year ago. I haven't added up the numbers for this week yet. I do know it was a weaker week, so that % probably slid a little. March will be the #1 month this quarter for sure. 40% of the scanners inventory I tracked in 1rst Q last year happened in March. The retail POS industry starts to kick into gear in late February and keeps building.
As they said on the cc call, this POS season extended later this year. It made sense to me as I was seeing very strong scanner sales into December still.
That's about it for now.
Traderfan, Bbotcs....SCKT....I don't have a premium membership anymore. It wasn't really worth renewing as I didn't use it much. (I'm using Happy Hour right now to post this). I actually don't use iHub much anymore either. I post all the information I have on SCKT almost exclusively on the MicroCap Club where I'm a member. It's less hype and more substance on the research there. Plus, the members there aren't necessarily looking to flip in/flip out for 30 cent profits on microcaps. They like to build larger positions and hold to get multi-baggers.
If you want to start to converse over on the actual iHub SCKT board, I'd be happy to start to share what I know there.
http://investorshub.advfn.com/Socket-Mobile-Inc-SCKT-21753/
hweb2.....Socket....also, I was told they are on a tight development schedule but they expect to have working prototypes of their new RFID/NFC products at partner booths at the Big NRF (National Retail Federation) show on Jan 17th. There will be new product announcements before then. This should help bring in a little bit of buzz over the next 8-10 weeks. They will also be at the LD Micro Conference again in early December.
Hweb2.....Socket Mobile...here is the latest 3Q newsletter from one of the Unigroup (United Van Lines/Mayflower) Agents telling his drivers that the FastTrack Inventory system is mandatory going into 2016. If the orders from this finally started to really materialize, it could give a strong additional boost to 4th Q and 1rst Q that no one expects. In the 1rst Q the newsletter had indicated that the deadline was Dec 31rst and that their driver's group was only 10% ready.
http://vanop.planesinc.com/Driver_Portal/RoadReviews.pdf
Here is the equipment ordering website:
http://www.fasttrackequipment.com/
I saw an order of 720 7ci units go out of Ingram Micro on Oct 26th. Not sure if this is related to the van lines. I'm watching to see if another order like that happens this month. If the van line deal did happen (and is "supposed" to go through Ingram from what I hear), then there will be multiple large orders happening going forward.
SCKT...Obviously international sales need to pick up for them to grow at a faster rate in 2016. Lightspeed POS announced yesterday that they are expanding aggressively to the UK and Europe more. This is the company that recently raised $61M from venture capitalists in their latest yearly capital infusion. They were already in the UK and Europe some, but will now start selling their Retail Cloud POS system there and make a major push.
http://finextra.com/news/announcement.aspx?pressreleaseid=61909
This benefits Socket in that Lightspeed POS is one of the partners who automatically puts a Socket scanner in every "Retail POS Kit" sold:
http://www.lightspeedpos.com/pos-hardware/
This is on top of ShopKeep moving to the UK this year also after their big infusion of cash:
http://techcitynews.com/2015/07/29/shopkeep-receives-60m-in-series-d-funding-to-enter-uk-market/
ShopKeep also uses only Socket scanners:
https://shop.shopkeep.com/barcode-scanners
Nelson...SCKT....Some thoughts + assumptions on 4th Q and beyond:
4th Q 2015:
----Kevin Mills said in the cc call that scanners will fall between 4th Q last year ($3.101M for scanners + accessories) and 3rd Q this year ($4.0M).
----60% of the $1.6M Somo order will occur in 4th Q. A portion of the 600 unit Somo order from Japan will occur.
----Dave Dunlap said margins should be around 1% less than what they did in 3rd Q, which then means = 48.5%
----Expenses will go up a bit because of a couple of new hires.
We now know that 2Q and 3Q 2014 scanner numbers were falsely high due to $900K in large orders in 2Q last year and $600K in large orders in 3Q last year. I found out most of those were not POS related, but a unique order that wrapped around both quarters. As such, it boosted sales growth last year in a way that made for tough comparisons. The numbers this year for large orders were $400K in 2Q and $270K in 3Q. However, "run rate" to small businesses through their partnerships with tablet/mPOS partners grew 27% in 2Q and 16% in 3Q. I don't know the % of large orders that occurred in 1rst Q 2015. I asked awhile back but they didn't respond with specifics other than saying not much occurs there. Scanner sales (scanners + accessories) grew 19% year over year in 1rst Q.
4th Q last year did $3.101M in scanner sales. I will assume it grows 15% year-over-year. That's fair when you look at the "run rate" growth of the previous quarters. If you take out the large deals from 2014 that skewed those numbers falsely upward, 15% growth rate in 4th Q is conservative imo. October this year should get some rollover from Sept + regular organic growth rate + more of the 8ci inventory related sales happening this year. I will assume $0 of the "van line deal"----it never seems to happen (though the driver newsletter claims it is moving forward) and so I will leave it out. As such, I will say $3.101 x 1.15 = $3.56M in scanner related income.
$960K from the large Somo deal. They did $379K in regular Somo sales in 3Q. I'm going to say this will be repeated. I still can track Somo sales reasonably well and the numbers in Oct are similar to what I saw in June. I will assume the portion of the Japanese 600 unit order will make this $379K rock solid, but not add to it. Obviously there is upside potential here, but I will be conservative. Somo = $960K + $379K = $1.339M.
$100K Service. This has been running around $125K-$150K each quarter. I will say Service is just $100K to be conservative.
Total Revenue for 4th Q = $3.56M + $1.339M + $100K = $4.99M. I'll say $5.0M to make my math easier. Does all of this sound reasonable?? I think it does. Now we will make the "Socket Mobile" correction to it.........namely "nothing ever goes as planned!". We will minus off $200K from this total. I don't where my assumption is too great as I think I'm being conservative, but it's better to be too low than too high. As such, $4.8M is my revenue prediction for 4th Q.
Gross Profit: Dunlap said 48.5% margins. I will go less and say 48% margins. As such, $4.8M x 48% = $2.30M gross income.
Expenses: Expenses in 3Q were $1.71M. They are expected to go up a bit. I think Expenses = $1.80M would be a "too high" of a number and I will use that to be conservative.
Net income: That comes out to $500K in net income. 6.0M shares is a proper number for full dilution. As such, net income/share = 8.33 cents/share. This would give them 22 cents/share (fully diluted) net income for the year.
What if........ What if I don't subtract out the extra $200K as a "downside" assumption + that the Somo is $50K more because of the Japanese order + margins really are 48.5% + expenses are closer to $1.75M, then you are looking at $720K in net income and 12 cents/share. This is probably too much "what if".
What about 2016...... I think 1rst Q 2016 produces numbers very similar to 4th Q. Yes, there will only be 40% of the large Somo order vs 60%, but scanner sales will be higher. The last 2 years 1rst Q scanner sales grew sequentially over 4th Q. They did $3.48M in scanner related sales this year and should grow above that. As such, I could easily see another $4.8M in revenues. I will say 7 cents/share because of added expenses for the audit and possibly dilution is just a bit higher.
2Q and 3rd Q 2016.......Both these quarters easily come in above 10 cents/share imo. I will worry about the details here another day. The point I'm trying to make is that the next 4 quarters are rock solid. The big things are the following: what are the POS partners growing at and are they pushing inventory tracking more and more to small businesses? Is business enterprise/inventory type of applications taking off in 2016? Can they get some Tier 2 and 3 businesses putting in large orders for POS? Are international scanner sales finally starting to grow? These will determine revenue growth rate.
4th Q 2016 and 1rst Q 2017........Now this is where the scanner growth rate starts to make a difference. If it's growing 15% a year next year, then these quarters will have tough comps and that will be an issue. If it's growing 25% a year, then scanner growth makes up for the loss of the Somo product line. The revenue may end up similar, but the margins will be higher and the net income will do well. Also, can they squeeze anymore Somo sales out or get the new RFID/NFC products to trickle in some revenue to the mix? These 2 quarters are what may produce a speed bump going forward. The plus here is that either a NASDAQ listing has already occurred (i.e. the do a mid-year audit after 2nd Q) or it's obvious that one will happen for sure in early 2017. They are at $2.2M in shareholder equity now and will break the $4.0M they need by 2nd Q next year imo (they did $680K in cashflow this quarter).
2Q 2017 and beyond: By then the RFID/NFC products will start to contribute revenue and it's back to doing well.
Overall Thoughts: They did 9 cents/share in 2014. They should do around 22 cents/share in 2015. 2016 will be at least 35 cents/share and could be much better depending on scanner growth rates. 2017 will have RFID/NFC products starting to add to the mix in meaningful revenue. The balance sheet is cleaning up fast. The next 4 quarters should do $600K+ in cashflow. The market cap currently is around 5x the cashflow that will be generated over the next 12 months.
Overall, I thought the scanner growth rate would be better. Little did I know that scanner revenue in 2014 was heavily weighted to unique large orders in 2Q and 3Q. I get impatient at times and it will probably still continue. I try and remind myself that this is not too shabby of an investment right now as it stands plus there is still a chance for a very nice upside surprise if the industry ramps up.
SCKT....Some thoughts + assumptions on 4th Q and beyond:
4th Q 2015:
----Kevin Mills said in the cc call that scanners will fall between 4th Q last year ($3.101M for scanners + accessories) and 3rd Q this year ($4.0M).
----60% of the $1.6M Somo order will occur in 4th Q. A portion of the 600 unit Somo order from Japan will occur.
----Dave Dunlap said margins should be around 1% less than what they did in 3rd Q, which then means = 48.5%
----Expenses will go up a bit because of a couple of new hires.
We now know that 2Q and 3Q 2014 scanner numbers were falsely high due to $900K in large orders in 2Q last year and $600K in large orders in 3Q last year. I found out most of those were not POS related, but a unique order that wrapped around both quarters. As such, it boosted sales growth last year in a way that made for tough comparisons. The numbers this year for large orders were $400K in 2Q and $270K in 3Q. However, "run rate" to small businesses through their partnerships with tablet/mPOS partners grew 27% in 2Q and 16% in 3Q. I don't know the % of large orders that occurred in 1rst Q 2015. I asked awhile back but they didn't respond with specifics other than saying not much occurs there. Scanner sales (scanners + accessories) grew 19% year over year in 1rst Q.
4th Q last year did $3.101M in scanner sales. I will assume it grows 15% year-over-year. That's fair when you look at the "run rate" growth of the previous quarters. If you take out the large deals from 2014 that skewed those numbers falsely upward, 15% growth rate in 4th Q is conservative imo. October this year should get some rollover from Sept + regular organic growth rate + more of the 8ci inventory related sales happening this year. I will assume $0 of the "van line deal"----it never seems to happen (though the driver newsletter claims it is moving forward) and so I will leave it out. As such, I will say $3.101 x 1.15 = $3.56M in scanner related income.
$960K from the large Somo deal. They did $379K in regular Somo sales in 3Q. I'm going to say this will be repeated. I still can track Somo sales reasonably well and the numbers in Oct are similar to what I saw in June. I will assume the portion of the Japanese 600 unit order will make this $379K rock solid, but not add to it. Obviously there is upside potential here, but I will be conservative. Somo = $960K + $379K = $1.339M.
$100K Service. This has been running around $125K-$150K each quarter. I will say Service is just $100K to be conservative.
Total Revenue for 4th Q = $3.56M + $1.339M + $100K = $4.99M. I'll say $5.0M to make my math easier. Does all of this sound reasonable?? I think it does. Now we will make the "Socket Mobile" correction to it.........namely "nothing ever goes as planned!". We will minus off $200K from this total. I don't where my assumption is too great as I think I'm being conservative, but it's better to be too low than too high. As such, $4.8M is my revenue prediction for 4th Q.
Gross Profit: Dunlap said 48.5% margins. I will go less and say 48% margins. As such, $4.8M x 48% = $2.30M gross income.
Expenses: Expenses in 3Q were $1.71M. They are expected to go up a bit. I think Expenses = $1.80M would be a "too high" of a number and I will use that to be conservative.
Net income: That comes out to $500K in net income. 6.0M shares is a proper number for full dilution. As such, net income/share = 8.33 cents/share. This would give them 22 cents/share (fully diluted) net income for the year.
What if........ What if I don't subtract out the extra $200K as a "downside" assumption + that the Somo is $50K more because of the Japanese order + margins really are 48.5% + expenses are closer to $1.75M, then you are looking at $720K in net income and 12 cents/share.
What about 2016...... I think 1rst Q 2016 produces numbers very similar to 4th Q. Yes, there will only be 40% of the large Somo order vs 60%, but scanner sales will be higher. The last 2 years 1rst Q scanner sales grew sequentially over 4th Q. They did $3.48M in scanner related sales this year and should grow above that. As such, I could easily see another $4.8M in revenues. I will say 7 cents/share because of added expenses for the audit and possibly dilution is just a bit higher.
2Q and 3rd Q 2016.......Both these quarters easily come in above 10 cents/share imo. I will worry about the details here another day. The point I'm trying to make is that the next 4 quarters are rock solid. The big things are the following: what are the POS partners growing at and are they pushing inventory tracking more and more to small businesses? Is business enterprise/inventory type of applications taking off in 2016? Can they get some Tier 2 and 3 businesses putting in large orders for POS? Are international scanner sales finally starting to grow? These will determine revenue growth rate.
4th Q 2016 and 1rst Q 2017........Now this is where the scanner growth rate starts to make a difference. If it's growing 15% a year next year, then these quarters will have tough comps and that will be an issue. If it's growing 25% a year, then scanner growth makes up for the loss of the Somo product line. The revenue may end up similar, but the margins will be higher and the net income will do well. Also, can they squeeze anymore Somo sales out or get the new RFID/NFC products to trickle in some revenue to the mix? These 2 quarters are what may produce a speed bump going forward. The plus here is that either a NASDAQ listing has already occurred (i.e. the do a mid-year audit after 2nd Q) or it's obvious that one will happen for sure in early 2017. They are at $2.2M in shareholder equity now and will break the $4.0M they need by 2nd Q next year imo (they did $680K in cashflow this quarter).
2Q 2017 and beyond: By then the RFID/NFC products will start to contribute revenue and it's back to doing well.
Overall Thoughts: They did 9 cents/share in 2014. They should do around 22 cents/share in 2015. 2016 will be at least 35 cents/share and could be much better depending on scanner growth rates. 2017 will have RFID/NFC products starting to add to the mix in meaningful revenue. The balance sheet is cleaning up fast. The next 4 quarters should do $600K+ in cashflow. The market cap currently is around 5x the cashflow that will be generated over the next 12 months.
Overall, I thought the scanner growth rate would be better. Little did I know that scanner revenue in 2014 was heavily weighted to unique large orders in 2Q and 3Q. I get impatient at times and it will probably still continue. I try and remind myself that this is not too shabby of an investment right now as it stands plus there is still a chance for a very nice upside surprise if the industry ramps up.
SCKT...Software Dev Kit (SDK) is driving hardware sales
It hasn't really started to show up in revenues yet, but it will in time.
"The SDK is used by Socket Mobile's thriving developer community of over 1,400 developers to incorporate the use of Socket Mobile barcode scanners into their applications........Our developers have introduced into the market hundreds of applications in Commercial Services, Construction, Engineering, Event & Guest Management, E-Ticketing, Healthcare, Hospitality, Logistics and more. Using Socket Mobile barcode scanners, critical business processes are reliably automated with accuracy and ease"
http://finance.yahoo.com/news/socket-mobile-releases-updated-sdk-103000931.html
SCKT...my added comment to the Seeking Alpha article
Here is the link again to the article. http://seekingalpha.com/article/3510946-play-socket-mobile-for-the-rise-in-mpos-and-the-near-term-catalyst-of-continual-growing-profitability
Here is the comment I added to it. I think it's worth posting here also. I've followed (and suffered) with this company for quite awhile. I've stuck with it because their business model can produce some great returns. It's finally starting to pay off and should ramp up nicely in 2016 and beyond. I don't know how many barcode scanners they will sell in the future, but those that they do will produce some nice net income with the fixed expenses involved.
"Very good article Nicholas. Thank you for writing it. I look forward to your follow ups. I've followed and owned SCKT for several years now. Socket management has done a good job of position themselves in this emerging market. One thing I'd like to point out about with the competition (and let you think about going forward)......"he who controls the developer, controls the market going forward".
The way the industry traditionally works is the large hardware manufacturers (ex. Motorola) would tell the distributors (ex. Ingram Micro) "push my scanners over the competitions or else we'll do business with one of the other distributors." A little company like Socket had no chance. However, this new cloud based industry is completely different. Socket's SDK (software development kit) is what's made them the leader here. It came out like 3 years ago and they were absolutely giddy about it at the time. They have put a lot of time and effort into making it the best out there. The biggest thing it brings them is that once it's written into the POS and business enterprise software, it's going to be tough to remove them as the preferred scanner of choice.
These software companies aren't in the hardware business-----they just want a solid barcode scanner (with lots of different models to choose from) that their end customers are happy with. The end customer is just going to buy what the developer tells them. The competition (be it Zebra Technology or Honeywell or Opticon or Komatac) is going to have a difficult time getting the main software code changed in the future to support their scanners instead of Socket's. Is Opticon going to pay each developer to re-write that section of code? Why would the developer do it for free? The distributor has no say in it. The customer buys what the developer tells them to. Even in private business enterprises software----the guy writing the software is going to chose the best/easiest SDK system he can work with. He isn't being paid to make his life difficult. Once the code is inserted into the main software, he will tell the company this is the scanner choice, go demo it to make sure, and then plan on buying in big batches.
Socket right now has sold 1500+ SDK's I believe which are now in hundreds and hundreds of finished software apps and growing (you would have to ask the company the actual numbers). This has resulted in them being a very different kind of hardware company. The best SDK on the market captures the developers, the developers then make your scanner the preferred choice, and the hundreds (eventually a thousand) developers are the sales force for the company (which Socket pays nothing for). As the developers grow in size, they sell more Socket scanners (ex. Lightspeed POS just raised $61M this week to expand their tablet pos system worldwide). Socket then just delivers scanners on time and be's the best partner they can to these developers to keep them happy.
I was discussing this 2 years ago with Kevin Mills. He said he didn't think the competition realized this was a different game than before. Whoever controls the developers, controls the market. It's why Socket has put so much effort into their SDK and have created a dozen different models (1D, 2D, diff hardness cases, anti-bacterial cases, diff colors, accessories......). They are bending over backwards to show the developers there is no reason to go elsewhere. It's how a little company can go from nowhere to now starting to emerge as a leader in a new industry. I've always said it that if they succeed it will be tough to take their market share away. It'll be easier to just buy them out in time. "
SCKT.....some updates I know of:
1. They closed on a 600 Somo order in Japan (to a long-term customer who is a surveying company). It was on their blog. This is equivalent to approx. $250K. I'm not sure the delivery schedule but it's probably over the next 3-6 months. This is on top of the $1.6M order in 4th Q and 1rst Q from the OEM buyer.
There will probably be more and more orders like this. The Somo itself isn't end-of-life, but some of the components are (as mentioned on the cc call). I talked to the company and they said they can stock-pile those components ahead of time. What it does for larger long-term customers is force them to start to put their orders in now for the next few years so Socket can be sure to get enough parts.
The Somo isn't a cutting edge product anymore, but it works very well for certain customers. Socket has sold 60K+ of them over the years. The last time Socket did an end-of-life announcement on a product (a bluetooth component 6+ years ago) they got several million in extra orders.
2. Socket's parnter, Lightspeed POS, just raised $61M in a capital raise for rapid expansion. This brings the total to $121M they have raised. This is similar to the $60M that ShopKeep raised in June. The Tablet POS industry is only going one direction......up.
http://www.lightspeedpos.com/pos-hardware/
http://techcrunch.com/2015/09/16/lightspeed-61m-pos/
3. There are supposed to be several new products coming this fall. I know one of them (it was shown on their UK Twitter page): It's a combination tablet stand & barcode scanner charger. Not sure if it's Socket alone or a partnership.
4. They have started to promote the company a bit. They were invited last week and met in a round table presentation with 20 select microcap investors in S.F.
5. The iPad Pro is coming out. Here's an interesting article on it and Business Enterprise. Socket has said in the past that business enterprise sales could match or be bigger than the sales they do with Point-of-Sale.
http://www.forbes.com/sites/alexkonrad/2015/09/09/with-new-ipad-pro-apple-makes-its-move-to-dominate-the-enterprise-mobility-market/
6. I liked the Seeking Alpha article: http://seekingalpha.com/article/3510946-play-socket-mobile-for-the-rise-in-mpos-and-the-near-term-catalyst-of-continual-growing-profitability
I think he seriously underestimates 4th Q, but that's just my opinion and I won't go into detail on it until after the 3Q earnings come out.
Nelson....hopefully you got it at $2.11 or so (whatever someone dumped it at). I reached out the the company after the cc call and asked a few questions. The one with the most interesting answer involves their "project based scanner orders" (i.e. large orders). They expect this to ramp up quite a bit going forward in 2016 and beyond as most of the warehouse, hospitality, health care, and transportation orders they foresee will be to larger Tier 1 and 2 companies, not to Tier 3 & 4 companies (i.e. Mom & Pop and little chains) that the "run rate orders" represents (i.e. mostly tablet POS sales). It will mean organizational buying to outfit a lot of employees, not buying just 1-2 scanners/customer. No details beyond that though it was suggested I ask about it on the next cc call for further insight.
SCKT...you've got me who's selling. I only see good things happening. Ingram Micro has the biggest incoming order I've ever seen in all my tracking, in all my years of doing so, for the 7ci (grey) scanner. They obviously are expecting good things.
102 units in stock, 1460 on order: http://www.shopblt.com/cgi-bin/shop/shop.cgi?action=thispage&thispage=01100U01U0521_BNV7343P.shtml&order_id=!ORDERID!
Note: I know that this website tracks exactly what's at Ingram Micro's warehouse distribution centers.
SCKT......2016 growth
The scanners are growing and the big Somo order will make sure the 4th Q and 1rst Q stays strong. What's important in the long run is 2016. A few things that will help Socket ramp up growth:
1. ShopKeep (which is an iPad system to replace cash registers adn uses Socket scanners exclusively https://shop.shopkeep.com/barcode-scanners) just raised $60M in late July to expand rapidly
https://www.google.com/search?q=shopkeep+%2460+million&ie=utf-8&oe=utf-8
2. NCR & their NCR Silver system. They use the Socket 7ci scanner exlusively. This has never been the big winner that was expected. The CEO at one time (about 3 summers ago) talked about how NCR was going to go after 4M small businesses in the U.S. and 8M worldwide. The problem is NCR doesn't have the mentality to target small business vs their regular large ones. They did something bold this spring that may pay of-----they brought in a new President for that division and is letting him run it like a start-up and be super aggressive. Since he's come on board, a lot of improvements have come to their system.
http://atlantaforward.blog.ajc.com/2015/05/12/atlantas-tech-start-up-scene/
3. Square is looking at doing an IPO. They are all over the map with what they do, but a portion of it involves tablets and Socket scanners. More importantly than anything the IPO will draw eyes to the industry. Socket is a good microcap play on that.
http://www.cnbc.com/2015/07/24/square-confidentially-files-for-ipo-report.html
4. Now that Shopify is public, they are expanding their iPad pos system for their brick n mortar companies:
http://techcrunch.com/2015/07/21/shopifys-ipad-point-of-sale-system-gets-its-own-apps/
There is plenty more. The industry is expanding. 2016 will definitely have more growth for Socket. 2Q revenue numbers were a little lean for me (though I loved the margins and expenses). I'd like to see 2015 finish strong and 2016 to kick it up another notch or two (again, with expanding margins & limited expenses)
Nelson....I reached out to the company. What I was told was this order is on top of the normal Somo sales that will be expected. It's from the OEM buyer who purchased some last year ($250K worth in 3rd Q). They want enough units to last them until the transition to the next generation product. However, this is not the end of the Somo. Some of the components are "end of life" (as said on the cc call), but the suppliers are letting them know which and Socket is stockpiling them. They intend to continue selling the Somo to supply their regular customers and expect revenue to continue in 2016 for that division.
If it can still generate some revenue in 2016 (which I'm sure it will if long-term customers need to buy enough to last) that would be great. In 2017 it will be meaningless compared to scanners anyway.
Nelson1234...SCKT
Did you listen to the cc call? It's good. 3rd Q is expected to be better than 2nd and 4th Q will have at least 1/2 of a $1.6M Somo order (with 1rst Q next year getting the rest). What this means is multiple quarters of good numbers coming (i.e. no winter drop in revenue).
Hweb2....SCKT
Overall revenue isn't up much. Last year they did $650K or so in Somo revenue. I'm sure that was lower. Scanners were up solidly considering there was $500K less in a large deal vs a year ago.
However, 47% margins and flat expenses make up for the lower revenue. It shows how profitable their business plan can be. As scanner revenue grows, a lot of it should flow to the bottom line.
SCKT....some of my inventory #s updated for people to see what's happening.
I'll be the first person to admit that my inventory tracking numbers aren't necessarily the best predictor of a quarter. What's tough is that I only see between 55% and 68% of the total # of scanners sold overall (it's varied that much over the last 6 quarters). Also, scanners need to clear the whole sales channel before they are counted as revenue. As such, does the quarter end on the last day of the 3rd month or does it end 6-7 business days before? I don't know. What it does help me see is a bit of what's happening trend wise. Ex. Just like was said on the cc calls over the last year, I saw the "peak" in August last year, I saw the slowdown in early October because of the iPad issues followed by a strong 2nd half of the month, I saw the slowdown in the holidays, I saw where January and February were only "slightly above last year". All these comments were made by Kevin Mills at one point in the cc call and all of them showed up in my trend I track. I overestimated 4th Q numbers because I was too "hopeful" in things happening that I don't track. I don't do that so much anymore. It's why I've come to say I believe my numbers more than anything. If I can't track the trend at some level, then it's probably not happening.
23 weeks have expired this year so far. I'm going to list my numbers from Jan 1 to present week. None of these numbers have been adjusted at all (i.e. even if the most popular unit was sold out at Scansource and Bluestar for 3-4 days, I did not make any corrections or estimations on what was lost. These are the actual numbers I saw go out of inventory).
564
835
560
611
610
758
635
813
840
605
830
795
810 (last few days of March, start of April)
580 (the next 2 weeks had a lot of units out of stock, but I made no corrections for it)
573
916
739
888
564 (If the trend had continued, this would of tied August last year as "best 21 business days/month I've tracked" until this oddball number came up)
1070 (This is the best 1 week I ever tracked, at least at that point)
559 (Memorial Day holiday week)
1498
1104 ----newest # added on.
Obviously numbers mean nothing if it isn't put into perspective. To put into terms that are easier to understand, the most I've ever tracked in a single month (August 2014, 21 business days) = 3633 units for my estimate of $855.7K. If I do the last 21 days that have happened now = 4439 units for an estimate of $988.5K (this includes the really bad Memorial Day week). As such, what I'm tracking now is telling me, imo, that it's the highest rate the company has ever done.
What does it mean for 2Q? I don't know for sure. I don't track:
1. International sales. These have grown from 2Q 2014 of approx $500K to 1rst Q 2015 of $900K. Will this continue to $1.0-$1.1M in 2Q?
2. Sales in N.A. that include any medium to large order that is drop shipped (200 units or more), Amazon, direct sales from their website, sales that occur when my inventory tracking is sold out & hasn't been restocked yet, scanner accessories, warranty/service contracts. All together, this is quite a bit. It was in the $1.0 to $1.1M range last 2Q and 3Q when more medium to large orders occur. It was around $500K-$600K in 1rst Q when sales are slower overall.
I'm saying $4.8M and 7 cents/share because I try not to overestimate #1 and #2 anymore. There is lots of room here to add on revenue if things are going strong. 1 large order can move #2. The plus to revenue estimates is that the Somo is becoming meaningless. It was $480K in 1rst Q. The numbers I track are showing it down just a small amount. I'm still being even more conservative and saying it's just $400K in 2Q to be safe.
Overall, I like $4.8M as a conservative revenue estimate based on what I'm tracking and the latest trend. I like to think this is "worst case scenario".
Day dreaming: What becomes interesting is if the increasing trend of units sold per week continues into July and we get 13 weeks of #s like that. You then start to talk about a scanner revenue number that, with #1 and #2 added on top of it, becomes very exciting to what it would do to revenue and net income.
An interesting table for you all. This shows all scanner related revenue combined (from 10Qs) showing the progressive growth:
-------------------------- 2012 ---------- 2013 ------------ 2014 ---------- 2015
1rst Quarter ----- $1.51M ------- $2.43M ------- $2.91M ------- $3.48M
2nd Quarter ------ $1.59M ------- $2.64M ------- $3.73M ------- $4.4M (my conservative estimate)
3rd Quarter ------ $1.30M ------- $2.19M ------- $3.92M
4th Quarter ------ $1.55M ------- $2.49M ------- $3.10M
It shows that the growth may not be a rocketship, but it is progressing and should start to make an impact on the bottom line.
SSKILLZ1.... With SCKT, I've fallen off the limb too many times to crawl out on it very far anymore :) I won't address your estimates. I will say I'm very comfortable with $4.8M and 7 cents/share for 2Q. Do I think they will beat that? I won't go there anymore. I will say based on what I'm tracking and what should be happening internationally, I feel very good with my estimate and don't expect to be disappointed.
Growth--- I wish they would emphasize international scanner growth more. In 2Q last year they did approx $500K. They did $900K in 1rst Q this year. It should expand on that in 2Q.
Latest collaboration with Ram Mounting Systems. I heard that customers are wanting a solution to be able to charge the 8 series scanner + phone at the same time. I think the weak point in the 8 series scanner is it's attachment to the phone. I think building a protective case that incorporates the scanner and charging will only help sales. I heard they reiterated to a shareholder just yesterday (similar to what's been said in the last cc call) that they aren't expecting any large business enterprise deployments in the 2Q, but they are feeling confident about 4th Q starting to see some---ie. large business orders other than point-of-sale systems. Perhaps this new product is part of that process. Ram Systems does make some solid cases and "mounting" systems are their specialty. That's a positive for field operations. They also said that 4th Q may not be as significant of a slowdown as they have experienced before but they won't say more until the next cc call on that.
Inventory tracking---- I won't go into much detail here. The quarter is on target to being the "best I've seen", but it's not that exciting in growth. However, June has started at levels I've never seen before. To put into perspective, the best week I've ever seen is 1071 scanners (3rd week of May this year). They already have done 1375 so far this week(not counting today, though Friday's are usually slow). That's a $300K week just from what I track.
If this continues (who knows what next week will bring), will this change my estimate? No. I always assume too much anyways so I figure that it just solidifies my $4.8M and 7 cent/share estimate. Anything above that just surprises me for a change :)
I will say it would be nice to start 3Q off at very strong numbers. August was the peak month I saw last year.
Future -- I'm figuring only $400K in Somo sales this quarter (down from $480K in 1rst Q). It means over 92%+ of sales are coming from the scanners. This will only grow going forward in 2016 and 2017. Higher margins, minimal rising expenses, NOL used on profits = a nice cash cow still. It's no longer a turnaround, but is a real growth story. I get disappointed thinking about what this stock could be if the Somo had just stayed at $1.5M/qtr, but that's just the way it is.
Somo -- I hear the OEM buyer is progressing through the review with the FDA. They expect a final answer before the end of the year. Even if they get it, I don't expect it to change the fortunes of the Somo. It'd just be nice if 1 year from now it was still doing $400K/qtr. In 2017 it can fade away for all I care. By then it will be a rounding error for the most part to scanner numbers.
Overall--I'm tired of the investment, but I still like it very much. They're in a solid niche with a strong product line up. The industry is only going to grow. I like the collaboration with Ram Mounting Systems----they are staying focused on scanners and letting someone else create products they aren't familiar with. It's how they keep expenses down. I don't know how far the stock will go in the next 2 years, but at $2 there isn't an downside here. Literally none. 2Q will be solid. 3Q will beat 2Q for sure. If 4th Q doesn't slide much, it makes for solid numbers for the year and lines them up for 2016 nicely.
I tell myself that it doesn't matter what the current stock price is, and it doesn't matter if I'm tired of using the words 'Socket Mobile' enough to last me a life time, if they keep growing scanner #s that's all that matters. There is money to be made here and I'm certainly not going to sell shares right when it finally starts to outgrow the Somo decline and be a real company again. I'm riding this darn horse to Shangri-La even if I can't stand it anymore!
Curlews....SCKT.
Hopefully those that read this post will listen to the cc call. It was actually rather good. There really is a future here. I don't know to what level yet (2Q and 3Q will tell the story more), but it is starting. The 4 things that matter to shareholders:
1. International sales They were $1.16M in 1rst Q. In 2Q last year they did just $774K in international sales. After that it picked up. 3Q did $1.2M. 4th Q did $1.05M. There is growth just from that on 2Q numbers.
2. 22% year-over-year growth on the scanners That is the future. Can it keep building and compounding going forward? They did $3.7M in scanner growth last year, but only $400K or so came from 2014 1rst Q numbers. As such, there is the opportunity for a lot more growth to happen going forward as the year plays out.
3. Margins You can't complain about 45.1% margins on just $4.0M in revenue. They should keep inching up as the do more and more sales.
4. Expenses It's nice to see that they should drop again in 2Q. They are keeping an eye on them.
The downside is the Somo. It keeps taking a step back and that extra $200K/qtr in revenue lost is disappointing as it "hides" the growth in scanners still.
SCKT...I was going to post last night but the site kept saying it was down. Obviously the quarter did NOT turn out as I had thought. The seasonality was greater than I expected. My inventory tracking definitely showed part of it, but it was even greater than I thought (I put too much "hope" into the equation, especially after seeing many good things happen in 3Q that I didn't track). I should know better at this point.
Positives: Expenses are being kept in check, they are focusing on margins, the number of developers buying their SDK are up (1200+ vs 580 last year). The question is when does the growth come from all of these applications that are eventually created? A plus to their business model is that a tremendous amount of money flows to the bottom line as they rely on the partners to sell the scanners for the. The downside is that if the partners/industry are weak for a quarter than there isn't anything they can do about it.
I downplay my inventory tracking efforts, but perhaps it still is worthwhile. My numbers are showing Jan & Feb to be slightly better than last year, but still weak compared to 2Q and 3Q numbers of last year (they are on a run rate similar to 4th Q). Last year there was a big jump in April. It was like the switch was turned "on". It will be interesting to see when that happens this year. I'm not expecting any number much better for 1rst Q. Probably low $4M range at best now and 1 cent/share or less net income.
The story here is 2Q. That, imo, will show what this company can do and where it can go. I had always thought they would come in the high $5M range. Perhaps the low $5M range is more realistic?!? It will be interesting to see what my inventory numbers start to do going forward. I would like to see March or April be at levels I saw at the peak of last summer. Time will tell.
I'm not sure I said much here. This is a story for 2015, 2016, 2017. I get frustrated because I'm tired that it isn't moving at the speed/pace as I had always hoped and assumed it would. I think it's moving slower than they always thought too. It still doesn't mean it isn't dead. The business model is set up. They are holding to it. It just needs the developers to keep expanding.
KiK...I reached out to the company and the wouldn't elaborate on the 8K other than say Lee Bailiff has been working closely with Tim Miller lately and they expect the transition to go smoothly. Who knows why? It may have to wait till the cc call on Feb 18th when earnings are expected.