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bbotcs...SCKT...I bought a bunch more under $1, but the truth is my overall average is still around $2.06.
Yeah, I realized I didn't add my worries in about management and that's a necessary concern at this point. I still have hope for the industry and the partners succeeding and Socket riding their coattails to success, but I'm not sure I will ever will be completely trustful of management.
Megazoo---one last thing. Before I sound too positive let me state that I still have lots of doubts of the company to pull it off. Somehow, someway, this company seems to screw things up in the end. It's their history. I am almost certain 2Q will be solid. However, I already am starting to wonder if 3rd Q will build off it (necessary to drive the stock upward) or will some excuse come out on why they disappointed again. I have little respect for their CEO based on his past performance. Growth is nice, but when is exponential growth going to happen? Is the market for bluetooth barcode scanners with tablets big enough going forward to make this company worth a lot? I don't know. The story sure sounds good but in the end revenue and net income growth is all that matters. It's been interesting if nothing else.
Megazoo--- you nailed it in that Socket Mobile would be trading for a $30M market cap if people trusted them more. I've always said that there is a $1 discount in the stock price just for this. Who we kidding----there is pure junk companies trading for $30M market caps with no future and no real product. Socket has a future now, has $Billion dollar partners, and actually has good products.
I know for a fact that the CEO and CFO have been given specific orders by the B.O.D. to stop talking so much during the cc calls and be conservative. The CEO, Kevin, has a long history of over promising and under performing. It's why they are trying very hard to not talk about "big deals" and in the last cc call talk about "baseline numbers" (minus big deals). I think the CFO talks too much to shareholders though I have to say that as things have gotten better lately he's very closed mouth compared to before. I'm a strong believer in letting the results do the talking first and then you added on to that. I do know that they specifically hired that Director of Communication (10 years experience or so) to aid them in how they put out their message.
There are other scanners. The Motorola CS3070 is one of them. Honeywell has one. Another smaller player is Koamtec. What has given Socket the advantage (or head start) is their software development kit. You incorporate it into your software and it makes it easy to use. The most important thing about it is you click a button and the keyboard comes back up again on the tablet. You can't do that with the Motorola or the Honeywell and it's an essential feature. It's not me saying it either----it's why they have gotten so many developers lined up. Otherwise, a barcode scanner is a barcode scanner. Socket has differentiated themselves by coming up with the 1d vs 2d, all anti-microbial cases now, hard case vs soft case, laser vs optical, and lots of different colors. It's a smorgasbord of selection. Their competition has nothing like it. As Apple understands, aesthetics are important! Especially at the cash register if a retailer wants to make an impression to millenials.
What about other scanners replacing them in these software systems in the future?? Perhaps. But why would ShopKeep pay the money to have their software developers convert the software to use a Motorola scanner when ShopKeep only cares that their customers are happy? Socket's head start here is a real advantage in that it's hard to get them out of the software in the future. It's also why they went to Mexico production (from Asia) as it lowered their in house costs actually which allowed them to drop their prices last November (and makes their scanners very competitively priced). The CEO has said he knows competition will come---it's actually a positive because it means the market is exploding. I look at it that they are so small that just a solid market share means a lot of $ will flow to the bottom line with just that.
ShopKeep and Shopify are two of the partners who use Socket scanners exclusively. Shopify runs a monster of a business that helps small retail businesses do online stores. They specifically raised the $100M late last year to bring tablet POS systems to these stores. It's the idea of integrating brick and mortar into one software system that does inventory, customer tracking, inventory, check out, & accounting in the cloud. ShopKeep is a smaller business but they expanded into Ireland this year and are now opening up operations in Portland, OR for a west coast expansion.
I personally think the biggest partner Socket will have going forward is Verifone (and their GlobalBay Merchant system). NCR and their NCR Silver product is expanding with their new connection to Vantiv (which then connected with Sprint). It will be interesting to see if Oracle taking over Micros helps the Micros Kchng iPad system expand.
There are a lot of small businesses (NCR CEO estimated 4M in N.A. and 8M worldwide in an investor presentation in 2013), but I'd love to see Socket start to show up in mid-size national chains. The catch is that it's not up to Socket at all----they just tag along with the software partners. I do know the CFO has specifically said to others that there are multiple large orders (5000+) that their scanner is being considered for (no other details given than that). I have heard the Japanese Bread Co (Yamazaki who is working with Fujitsu) have been ordering more scanners this quarter in small quantities as they expand out their prior order. There are no hints yet that they will sign the definitive order for 28K more to expand into the next level of stores (Socket's CEO will know more in Sept/Oct). At least Yamazaki likes the product. The key is if they decide the scanner is essential for the next deployment. Eventually one or more of these orders will go through. Remember, it's the software partner that is essential. If the customer uses Fujitsu and Fujitsu recommends Socket than it will happen eventually.
Imo, the scanners are only going to grow for the next few years. At what level I don't know. Is this a $5 stock, a $10 stock or more? I used to think it was $10+ for certain, but I always had counted on the Somo being able to do $2M/qtr. If that was factored in now, this investment would be 100% different. What's good is the scanner growth is finally replacing the downward slide of the Somo and investors are noticing.
It's been a frustrating investment but one I've learned a lot from. I've found you really can become an expert on a company if you try hard enough. Trust me, the company knows who I am---at the Shareholder's Meeting last year they introduced me as "southacres" and all the employees had heard of me. I put my own representative on the Board last year which I chose not to do again this year after they dropped him as I didn't want to make a public display of dissatisfaction again---they dropped him because they were afraid I was going to nominate more people and go for a majority position---they know I speak with shareholders who hold over 1M shares total. They wanted to make it harder. I had threatened them with it once but wasn't really intending to follow up. I'm ok with the Board as long as the company succeeds. On the other hand, I've told them I may come back in 2015 at the Shareholders Meeting and "Carl Ichan" them if they don't get their act together! I want shareholders to be rewarded!
I do know they are very committed to keeping expenses low now and in the future and my pressure on them has played in to this.
My opinion is Honeywell (the former President of their barcode scanner division is a consultant now for Socket) or Zebra Technology (who now owns Motorola's barcode division & who is a hardware partner to Socket actually) will buy the company in time to just grab the market share immediately as it becomes obvious they missed out and are behind.
Megazoo...SCKT: Since everything has to "clear the channel" before it counts for revenue, the quarter is pretty much done.
1rst Q: I tracked $1.7M in scanner sales in N.A. out of a final N.A. total of $1.9M. There was another $850K from international. There was around $150K of the "misc" revenue that was scanner charges/accessories/warranty. The total scanner sales were $2.75M + $150K of extra.
2Q: I tracked $2.1M in scanner sales in N.A. and am being conservative so I figure I'm not seeing it all. Also, people don't realize it, but from 4th Q to 1rst Q international sales grew from $500-550K to $850K so I expect that trend to continue (perhaps not at that rate). I also started to track scanner charger stands and have seen a solid number of them sell also. I'm very confident they will do at least $3.3M in scanner sales this Q total (I'm figuring $2.25M in N.A. and $1.05M international---for a 22% sequential growth rate from 1rst Q) + the extra misc sales look on target for $150K again.
None of this includes a "big order". Is there one? I know someone who was quite upset with the company after the 1rst Q number and he was reassured there would be one this quarter (no details given other than that).
Somo---The numbers I've seen indicate that it will go lower for 2Q by a bit more. However, someone I know (another major shareholder) was told in general a month ago that the Somo was doing slightly better than 1rst Q. I take that with a grain of salt. I do know that around $450K of the 1rst Q number was N.A. and just $150K international (whereas in the past they usually ran 50/50). If there was any rebound internationally then perhaps it is doing better? I will only believe it when I see it and won't assume it. On the other hand, around $250K of the misc revenue of 1rst Q was Somo accessories and repair/warranty work. I figure that is similar as Socket is actually hiring an additional repair person to assist in this area. They have like 50-60K Somos out there they have sold in the last 6-7 years that probably need repair work done more and more.
Overall, I'm almost 100% certain they will be at $4.2M for "baseline" revenue (their estimate in the cc call). Perhaps $100K more. I think $200K is too much because of the Somo uncertainty. The key after that will be "if" and "what size" the large order is that is supposed to have occurred this quarter that gets added on to that number. It'd be nice to get a pr out on it. I do know they are working on 2 more pr's for release in the coming weeks (I thought one might of been this week).
Overall, they will be net income positive for certain---even at just $4.2M (expenses are expected to be similar to last Q, around $1.7M or less). The scanners will show nice quarterly sequential growth again that will look good. The keys will be how strong were international scanner orders--better than the $200K I estimated?, how much of N.A. sales did I not see---I'm assuming $150K?, was there a rebound in international Somo orders?, and what about the large deal? I'd love to see $4.6M or above. I think that and a positive comment towards 3rd Q would put the stock above $2 forever. Perhaps it's wishful thinking? I'd like to be surprised to the upside just once! I figure once it breaks through a 52 week high it should start to garner more attention. I know they have an investor campaign lined up with a NY firm that involve presentations to high net worth investors + an independent research report for later this year. The CFO told another shareholder they were waiting for solid revenue numbers and net income before they started it.
Things for 2014 that I know of: IR campaign, the 2d version of the 8 series scanner will be coming, a new scanner stand (that is supposed to be pretty exciting in it's design---it will hold the scanner in an upright stand next to the cash register). The new RFID/NFC scanner accessory for the Somo will be in at Ingram Micro on July 3rd (from the website I track)---I will definitely track it's sales to see if it makes any impact on the Somo.
Kozuh...SCKT...
The disappointing thing is how little of the HP iPaq remnant revenue they were able to capture (pretty much $0). It's what killed the stock price and has made this investment drag on for me way too long. I've come to realize that Socket's management doesn't have the ability or the sales people to compete. (Though they do have the engineers). The engineers are the ones who created the Software Development Kit for the scanners for integration into partners software. They have created an impressive smorgasbord selection of barcode scanners. So how does this add up??
ex. The only barcode scanner being used by the new Verifone GlobalBay Merchant POS system is a Socket scanner (and once it's integrated into their software, it's not easy for a competitor to swoop in. Plus Socket offers more choices---1d, 2d, all antimicrobial, colors, different case hardness, laser & optical---than anyone else). Today, in the Wall Street Journal, Verifone's GlobalBay POS product is being integrated with iPayment's customer software to sell in a "bundled" package (including a barcode scanner) to the 150K small businesses that iPayment processes payments for. As partners like this grow, Socket just rides their coattails.
http://www.marketwatch.com/story/ipayment-partners-with-verifone-to-bring-next-generation-pos-to-main-street-merchants-2014-05-27
Note: I'm not 100% certain that the Socket scanner is in this "bundle". However, I do know for certain that the only barcode scanner Verifone GlobalBay system uses is the 7 series scanner from Socket.
Socket: The plus to the scanner business is that, unlike the Somo, this is an up-and-coming technology with tablet POS. Socket's management doesn't really have to sell anything. The partners do it---they just have to deliver scanners to the distributors. Their expenses aren't going to go up much as revenue increases (don't need more executives, sales people, engineers. They need warehouse people). Eventually competition will come, but they have a huge head start and it's not easy to get all these partners to change their software systems just to use a different barcode scanner later. I see them getting bought out by Honeywell or Motorola in the future for the marketshare they already control.
I, and others, are still upset over the Somo. If it was doing just $2.0M/qtr, this company's stock price would be very different. On the other hand, the scanner side of the business is the future and is finally making up for the weakness of the Somo.
SCKT...$1.75...It's made a nice move here lately. A lot of it has to do with the fact that it's become obvious that they aren't going out of business. When the market cap was sub $5M, it was priced for that. Now it's about the future. The Somo side of the business has hidden it a bit because of it's weakness, but the scanners are growing. 16% sequentially in 1rst Q from 4th Q. They will grow over 20% sequentially in 2Q (my inventory numbers that I track are showing April and now May as the best months I've ever seen). The tablet and mPos use by retailers is in it's infancy and will only grow (and will one day be a hot topic among investors trying to find a way to play it). I don't necessarily have a lot of faith in Socket management, but the reality is their software development kit & the partners do all the work and Socket itself just has to deliver scanners on time to distributors. I like to think they can handle that. This stock could potentially be a solid winner over the next 2 years as revenue goes up, profit margins go up, debt gets paid off & expenses stay reasonably flat. There is risk here obviously and it needs to play out more. The reassuring thing (unlike with the Somo and the weakness that resulted from that) is that future growth is mostly a matter of Verifone, NCR, Square, Casio, Shopify, and other partners driving the sales for them and Socket riding the coattails. Based on what I'm seeing in inventory sales finally starting to happen I have to admit I actually am feeling good about this investment and where it can go.
Guy---SCKT---I think it has a good shot at being over $2 by the time 2Q numbers come out. The story of the scanners will just keep building. The tablet POS story will play out for years to come (it's the future for the most part). I still don't have a lot of faith in Socket management, but I do have faith in the story sounding "sexy" which bodes well for small cap stocks being run up by speculators.
SCKT...Refocusing the Somo on RFID & NFC
The reality is, in my opinion, Socket management couldn't sell the Somo to a child. The plus about the scanner division is that management really doesn't sell the scanners, the partners do. All Socket does is have a great software development kit, the best selection of bluetooth cordless scanners on the market, sign up developers and it's them who sell the product (NCR, Verifone, Micros, Shopify, ShopKeep, Vend.....). I like to think that Socket management can at least handle delivering the scanners to the distributor on time!
In 2Q, the scanners are growing enough now to make the company net income positive. If this new line of Somo accessories can help resurrect Somo sales just a few $100Ks, it will just help the bottom line. The Somo is good for being a small cash cow anymore till the product line dies off or is sold out. The future is the scanners imo.
Socket Mobile Focuses its SoMo 655 Mobile Handheld Computers on Emerging NFC Market
New readers support ISO 14443 and ISO 15693 RFID tags
PR Newswire
Socket Mobile 4 hours ago
NEWARK, Calif., April 28, 2014 /PRNewswire/ -- Socket Mobile, Inc. (SCKT), an innovative provider of mobile productivity solutions, today announced that commencing in June, its SoMo 655 handheld computer will be able to read and process information using Near Field Communications (NFC) technology. NFC is an RFID technology enabling the wireless transfer of information at short range with extremely simple setup. With the NFC capability, Socket's SoMo655 handheld computer can be used in:
healthcare for RFID patient identification;
hospitality applications for loyalty cards or event tickets;
retail applications for taking high-end inventories marked with RFID tags and linear barcodes.
The SoMo 655 RFID Reader with NFC operates both as a reader and writer. The SoMo 655 will read NFC High Frequency 13.56MHz contactless smart tags including those that are ISO/IEC 14443A and B compliant including Mifare and Sony FeliCa. It will also read tags that are ISO 15693 compliant, EPC GEN 2 HF and ISO 18000-3 mode 3 compliant, and will read many other proprietary tags. The RFID NFC reader plugs into the SoMo 655 handheld computer and enables single handed operations. The model 6E2 RFID reader has a U.S. Manufacturer's Suggested Retail Price (MSRP) of $225.00. The model 6P2 is a combination RFID NFC reader and barcode scanner with a U.S. MSRP of $569.00. The RFID Readers will be in black and antimicrobial white to match the SoMo 655 and 655Rx, respectively.
The Readers will be available in June through Socket's worldwide distribution channels. SKU numbers for the Model 6E2 are RF5407-1548 (black) and RF5409-1572 (white). SKU numbers for the Model 6P2 are RF5408-1549 (black) and RF5410-1573 (white).
The SoMo 655 with NFC is also supported in Socket Mobile's SoMo developer Software Developers Kit (SDK), allowing developers to embed support for the SoMo 655 handheld computer with NFC into their applications. Developers can obtain an SDK at: http://developer.socketmobile.com/. SocketScan Keyboard Wedge and SocketCare support is also available.
Knowledge is King....SCKT....1rst Q numbers were $300K less then I had expected. It came from the Somo continuing to decline further then I ever expected. I always thought it'd be around $2.6M as a floor, not $0.6M. That extra $2M lost is what's killed this company for the last 2 years. However, 1rst Q showed that the scanners are going to save them. That alone makes this company worth more than a $5M market cap.
I'm 100% certain that this stock will be become much more popular on iHub after 2nd Q numbers come out. It'll be back on the main mother board for certain. The number they gave in the cc call was extremely conservative imo. It's a "baseline" number with no large deals added in which is ridiculous because every indication is is that a large deal will be happening on top of it (plus the chance of the van line deal occurring also to some level---I know for a fact that Unigroup/United is pushing the Fasttrack Inventory system as a whole company upgrade). I know that management does not want to discuss large deals anymore on the cc call because they have no control over them and so they have decided to not mention them until they are occurring. They are tired of people constantly asking "what about this/that deal?" during each cc call. They want to under promise and over perform for a change (as they are famous for the opposite).
For inventory tracking, April is starting to explode. I tracked $1.8M of the $1.9M in scanner sales in N.A. in 1rst Q. The first week of April started slow and then "boom" it changed. The CEO mentioned in the cc call that orders picked up recently. I saw it too. It's a pick up in sales of every model at all 3 distributors, not just one item or one distributor. It's like all the POS partners came to life. April is on target to potentially doing $800K in scanner sales by itself if M, T, and W carry the trend for the last 3 days of the month. (The best month I ever saw before this was last October at $687K). Last year May, June, July & August grew sequentially. None of this growth was from the van line either imo (it was what management said too). It's just the partners starting to sell as the POS season ramps up.
I inquired about the new RFID products for the Somo today. I was told that they are upgrading their RFID accessories to the newest standard of HF RFID that does NFC also. The company believes it can put some new life back into the Somo. The products will be announced in a pr early next week. I need to research it some more once they come out and I see the specs. I'm not over excited, but if it could help the Somo stabilize in sales or pick up a bit then it becomes a more worthy cash cow with minimal expenses. That's about all it's good for imo. The future is the scanners for certain.
Management missed the mark 100% on the Somo. However, they seem to be getting the scanners set up really well. Come May 1rst they will all be antimicrobrial plastic to further improve them over the competition. It's sad that the stock and shareholders have had to suffer so much in the last 2 years. However, I keep reminding myself to not be scornful and look at it for what it is.....it's about to become a very solid turnaround play that has a market cap of $5M when it should be trading for multiples higher as people realize that they aren't going out of business but will actually thrive. My goal is to make money and so I told someone today that if I had to suffer emotionally so I could have the opportunity to buy more cheap, so be it if it makes me more money in the end.
If you own any shares, imo, whatever you do, don't sell before 2Q numbers come out. People are going to realize then what happens as sales go up and the profit margins are at 42.8% and the expenses as a company are very low and fixed for the most part. Sequential scanner growth going forward will start to get people excited again (finally).
Dave
bbotcs...SCKT....I don't post much about this anymore because I want the company to finally start to produce first so I don't have to keep talking about "potential". It's been a frustrating investment but one that I'm still fully invested in (and have actually bought more). I don't know what 1rst Q numbers will bring next week for sure, but 2nd Q numbers should be at a level that starts to put this stock on people's radar again. People may think the company is going out of business, but quite the contrary. The large deals they talked about in the past (Japan, van lines, other 10K+ scanner deals) are still being discussed with more certainty of them being deployed this year. The CEO was in Japan last week and the results of that meeting will be told during the cc call. I know that management is gearing up for an investor relations campaign with a NY firm, independent research report, and presentations to high net-worth investors starting soon. It hasn't started yet because they want to make sure sustained revenue growth is the real headline. The CFO is saying they wouldn't waste the $ doing it if it wasn't a legitimate story to tell. To me, it means the large deals will finally occur and push revenue up enough to get the company recognized. The increasing day-to-day sales of the scanners world wide will extend the story.
In case you weren't aware, I found out through research that their newest partner is Verifone.
SCKT...new bank line of credit approved. The 8K came out today after the market closed. The amount($)the can borrow is the same as before ($1.5M domestic sales, $1M international). I confirmed it with the CFO and the new interest rate is Prime, 3.25% + 1.5% + some additional fees. The net of it is 7% vs closer to a 13% rate that they got before from Silicon Bank.
I do know that there is a research report coming out in May on the company and they are going to start to present at more investor conferences after that. Also, look for press releases to start to flow more regularly in about a month.
With the stock at a $1, it's obvious that the negativity about this company has lessened. It's still a long way from being positive. They need to show that all these "trials" for scanners are going to turn into revenue. We'll see. If I was a new investor I might even be excited, but it's going on 3 years now and this has been a tiring investment to say the least. Thankfully other investments keep my spirits up.
Dave
Guy...SCKT...I wish they would publicize these things:
Verifone, yet another billion dollar partner, uses their scanners in their new worldwide application. Here is the product introduction:
http://global.verifone.com/company/press-room/press-releases/2013/verifone-delivers-pos-software-platform-for-tablets/
In the slide show from January 2014 (and on their webpage), the Socket scanner is shown as the hardware choice:
http://www.slideshare.net/verifone/verifone-globalbay-merchant-tablet
Eventually you would think this will all add up (at least I hope).
Traderfan....SCKT...we should know the future of this stock by mid-April. That's when the CEO will go to Japan again. If the next 27K stores are implemented with the bread company using a barcode scanner, then Socket will succeed even without the Somo. (FYI: Yamazaki and Fujitsu are implementing an inventory software system at all 108K locations for Yamazaki that provides real time sales data so then all the bakery plants can do "on demand" daily production levels for bread, eliminating waste and shortage. The barcode scanners are not needed in the 70K kiosks---the tablet with pictures is enough to deal with the limited selection. The first 3400 convenience stores will be done in March with the Socket scanners). Yamazaki has publicly stated that they intend to implement the whole system by September 2015, so even if the 27K scanners are spread out over 16 months, it's enough to push revenue in the $6M range soon. If it's a shorter time frame, even better.
I don't know what 1rst Q will do right now. If they get the Japan order started in 2nd Q onward, add in another large order (already has been submitted to Socket from what I hear for delivery that quarter) with the new OEM buyer of Somo guts who just got FDA approval, the van lines finally starts buying (whether it happens before May 1 or spread out over 2014, it's still 6000+ scanners and is 100% certain), plus the expected increase in day-to-day sales which will happen at some solid level, I can see them at $6M+ from 2nd Q on. There are "supposed" to be other large deals they won't discuss, but I take that as b.s. as I don't necessarily trust them.
If they don't get the Japanese deal then they will continue to survive, but the rocket ship sputters rather than takes off. My opinion is this: If they don't get the balance of the Japanese deal,then try and get your $$ back and move on. If they do, then buy everything your stomach can handle. By the time the Japanese deal ends in 2015, the POS market will have erupted big enough that there will be sales to replace it.
The CFO tells me they don't know anything about the next 27K stores for certain or when and will find out in April. However, they just hired a Director of Communications Management (they advertised for minimum of 8 years experience) to not just communicate, but to run a team under him going forward. That's a big salary for a guy like this for a company tight on money. I know they are going to start presenting through a new IR firm at conferences to high-net worth investors later this spring. If they can get the price up, they already intend to do a secondary in the $2.50-$3 range to raise money as part of their plans on how to get back to the Nasdaq (they need $5M in shareholder equity before Dec 2014 to have it audited for next spring's application). All of this makes me believe they are pretty confident in getting the balance of that contract.
April will decide.
Traderfan/bbotcs....SCKT...I'm still around. The CFO said in the cc call that the early earnings release was a mistake (I later found out that the service they use released it early when it should of been out at market close. I still communicate with the CFO and other shareholders quite a bit for information). The problem with this company (besides weak management) is that the Somo market has never materialized. It's taken 1 of their 2 growth stories out of the picture. The tablet POS industry is going to take off---there is no doubt of that. Amazon, HP, and Micros are rolling into in 2014. Apple is lining up with mobile payment system. It really is the future of retail. The question is, will all of this flow to Socket? Are they teamed up with the right partners? Will they grow the number forward? Can their management team pull it off? At this point I'm uncertain. However, I still own all my shares (and even picked up another 15K under 85 cents). At that level, there is money to be made here for sure. I'm not quite as positive on the future as before. However, I do know some people who have picked up very large positions here lately since Xmas who are bullish (perhaps because they aren't as frustrated as I have become).
OT: SCKT: Candidate for the Board of Directors? I'm looking for someone to be on the Board of Directors of Socket Mobile, SCKT. I'm serious. I know this company doesn't qualify for this board anymore for discussion, but it's off hours and I thought I'd reach out to the microcap world because it's not often any of us can truly influence a company. I have the votes to cumulate and then put someone onto the Board of Directors of SCKT to watch over management for me and help them with ideas. I did it last year and put a marketing specialist on there (who owns over 100K shares of the company), but this year I'm looking for someone with a strong technology resume. You do NOT have to be a shareholder. I just want someone who can give them ideas, perform their fiduciary requirement to protect shareholders and be truly independent in their decisions.
And, yeah, the company is going to survive. I've tracked scanner sales levels in January (a historically weak month) already starting at levels that were at the peak season last summer. The "big" van line order for scanners got delayed from Dec 31rst and is expected to start to play out in Feb-May 1rst (the start of the moving season). Ingram Micro distributor (who is coordinating the order), just got 1000 7ci scanners in stock in the last 2 days and so it should start to roll out soon. The idea is that each of the 7000 trucks will need a scanner. They are hiring a "Director of Communications Management" with a required 8+ years of experience because, I assume, they actually have a story to start to tell soon about the scanners and their partners.
The Somo side of the business sucks as usual though.
Please don't use any of the above info to actually buy the stock. I don't recommend it to anyone until it actually starts to truly come together better. I just post it to let someone know that there really is a business developing so if they are (or know) someone who would like to be on the Board, then reach out to me. I'm serious. Someone with a strong resume related to technology would be the best, especially if it relates to barcode scanners, or PDAs, or mobile technology, tablet point of sale, you get the idea. Someone with connections in the tech world. Or someone with a strong finance related resume. Something that would benefit a public company like them and help shareholders.
I communicate with over 20% of the shareholders and can cumulate them for certain and I will guarantee you a spot on the Board. I did it last year and want to do it again this year.
Please contact me personally (and not clutter up this great stock board) at iHub or at southacres@yahoo.com
Dave
SCKT...8K filing today on new bank line of credit.
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=9704143-943-6197&type=sect&dcn=0000944075-14-000001
At least this is one less worry to have to think about.
Guy...SCKT...I picked up 5000 shares yesterday at 86 cents. I might grab some more next week if I can get my anti-nausea medication renewed! I spoke to another shareholder yesterday who is going to try and get a pass to go to the big NRF show in NY in the middle of this month. Socket is supposed to be highlighted in the booths of 25-30 partners. It's be nice to get an independent report from there. I'm not worried about Socket's survival or the continued growth of the scanners, but the Somo bothers me. I always had figured this company would have "two horses in the race" and that's why I was so positive. The scanners will be enough to help us all make nice money here still, but it would of been so much easier if the Somo was turning $2M+/qtr right now.
bbotcs...SCKT...confirmation news on large Japanese deal
I let my premium membership expire since I hardly used it. As such, I'm posting it here.
Here's some worthwhile info I found out recently.
I can't access the whole article for you all at this time, but the translated summary of the news release from November 22nd, 2013 (from Yamazaki Bread Co themselves) on the Nikkei news wire is this:
(poorly translated): "Yamazaki Baking to switch to the system to use the (multi-function mobile terminal) tablet ordering of small and medium-sized food stores from next spring. Introduced to about 20,005 Senmise by September 2015. Than the current easy to using a dedicated application, read the bar code of the catalog ..."
A business associate contacted me about it to bring it to my attention. He said the full article (in Japanese) said that Yamazaki Baking Co is going to start putting the tablet POS system into 25,000 stores starting in March 2014 and going to September 2015.
This is what Socket management has been saying all along. The frustrating part is that we all have to wait till 2014 for the deals to really start to roll in. This deal is over 6 quarters. This is just one contract that Socket is involved in. I know from my own research that the van line contract is coming, but again it's taking time to play out (I did see around 140 7ci scanners sell through Ingram today which is 10x normal volume so it pretty much is van line oriented).
For those that want to access the article, you need to google the Japanese characters for Yamazaki Baking Co (you can get them from Wikipedia) and the article is on Nikkei. You need a free membership to read the whole thing, but all the directions on how to do it are in Japanese.
SCKT...bbotcs...as pathetic as I think management is, I still have hope. Not because of them, but because of the partners. Here's just one of many examples:
NCR teamed up with Vantiv awhile ago (Socket's scanners are used exclusively with NCR Silver). NCR's sales have been way lower than expected and the CEO of them even admitted they don't know how to deal with small businesses. As such, they teamed up with Vantiv which does. Vantiv has now teamed up with Sprint using NCR's hardware. I'm sure this is just one of multiple deals coming.
http://www.engadget.com/2013/11/06/sprint-vantiv-ipad-point-of-sale/?ncid=rss_truncated
The industry is lining up for growth. The question is "when? and when does it flow to Socket more?" The industry future. http://www.tabletpcreview.com/default.asp?newsID=4556&news=Apple+iPad+Cast+Register+Point+of+Sale
I still think that having another person on the Board would be helpful.
bbotcs...SCKT... I've been told (as have 2 other investors) that they fully intend to pay it off come Dec 1rst. I don't know how, but that is the intention (and it doesn't involve dilution of any way). I know they paid $300K down to suppliers last Q and have less R&D expenses this quarter (since the 8ci is now done). If the loan continues (and at that interest rate) then I intend to bring it up at the cc calls and start to challenge management directly. I will use it to build my coalition of shareholders larger and make a bigger play for the Board. They are afraid of me concerning that (it's why my letter was allowed to be discussed at the last meeting).
Larrybaz...SCKT...I'm fully aware of this b.s. interest rate. It makes me want to put a couple more people on the board of directors (our candidate kicked off one of the founders, Michael Gifford) last spring. I think this company is still going to be successful but I also don't necessarily trust them. I submitted a letter of complaint involving this interest rate and another matter that were discussed at the Board meeting on Sept 25th.
SCKT...Traderfan...it's why I picked up another 5000 shares cheap. At worst I flip them for a nice gain.
$3.3M in 3rd Q + OEM buyer coming back + Japan online since early Oct + rebound in scanners from Apple issues + potential van line deal of $1M that is easily provable when it happens = cheap stock under $1.
SCKT...Nelson----Asia numbers from CFO that I received:
"We will be reporting Asia-Pacific sales in Q3 of $142,000 compared to Asia-Pacific Sales in Q2 of $597,804. Japan is typically the largest country in those totals, but others include Australia, New Zealand, and Singapore. You can see the effect in Q3 of cutting off Japan for the full quarter, now corrected. We have been receiving orders from and shipping products to our new distributor since early October."
They lost Japan for the whole quarter obviously. Toss in the $300K that wasn't repeated from the OEM buyer (which should come back at some level in 4th Q and continue forward). There are problems with weakness in the Somo and I don't like the affect Apple has on the month of Sept every year, but the long term story isn't dead. It's frustrating though.
SCKT....bbotcs.....you are right except if the van line contract starts to go through and large numbers start to come out of Ingram's distribution. If it does, then I can prove it to everyone. Guaranteed. That alone would make this a great buy. If that large deal goes through then it shows everyone that management is just b.s. and the other deals aren't lies.
Without that deal occurring and proof of it happening, I think the stock will recover a little but stay in the doldrums.
I agree with you on management. I love their business plan of letting partners do all the work (it makes for great profits when/if revenue kicks in). The downside is when the partners are slow in taking off themselves.
Nelson.....I know. I need to find out from the CFO how much revenue actually came through from Japan. Last Q it was $600K. I think the CEO did a horrible job of even explaining the problem until Brian Swift came back on and wanted clarification. If they really got $400K or so from Japan for part of the quarter then it indicates weakness somewhere else that I need to figure out. I will know later this morning and will report.
bbotcs...SCKT... I'm going to try and find out today from the CFO how much revenue they had from Japan. I bet it was close to $0. If you take the $4.3M from last quarter, minus off $300K for not having the OEM contract involved with the Somo, minus off $600K for no Japanese revenue, you get $3.4M. I know there was a slow down in scanners in early Sept but I didn't think it was horrible. Sept was definitely the weakest of the 3 months without a doubt though. The numbers I tracked in N.A. were higher, but as I alluded to in my prior post, I'm thinking I may track more accurately now then before and, as such, I don't get the cushion of adding in "unseen revenue" as before. I will talk to the CFO more today for more accurate number breakdown.
The key here is still the same thing as always.....big contracts on top of day-to-day sales as the POS environment takes off. That doesn't mean I think the company is a steal here. It is if the van line inventory sales start to show up and they sign the big Japanese deal with the Yamazaki Baking Co that their partner, Fujitsu, is pursuing. On the other hand, when speculators get burned they usually run and that's what's happening today.
Trader---Here is what I know. In October, I've broken scanners down into 2 categories, 7ci scanners at Ingram to indicate the Van Line contract (even though not all of them are for the van line, I'm defining them to be) and all other scanners combined at all other distributors. So far in October I've seen at N.A.:
497 scanners sell through Ingram for approx $100K that goes to Socket. (The retail price is $230 or so, but the distributor gets around 10%. The CFO has told me that Socket's net is slightly above $200, but I use that number for my calculation). If the van line contract goes through completely this quarter, this number should be around 5000 units, for $1M. I've seen one day of 200 scanners go out, but nothing else to indicate the van line contract. Socket hasn't seen anything different themselves as far as I know. It's why the CEO on the cc call said we can say what we've been told (which is the same thing I found out), that is, that all trucks are supposed to be equipped with an iPad, scanner and software by the end of the year. I was told to look to the end of the year when the weather changes. The problem is if the drivers wait too long, Socket won't have enough scanners available and so there is a chance it could continue into next year. Either way, all indications are that it's going to happen 100%. The van line is determined to update their whole system (including putting a GPS unit on the trailers). I know UniGroup is hiring a Fleet Technology Administrator (it's on their website under careers) and part of the duty is to deal with the GPS system and electronic inventory. If this deal goes through then, yes, it will be breakout revenue. However, no one has seen the inventory selling yet!
For "all other scanners" combined, I've seen 1976 scanners for $590K so far this month. The best month I ever saw was August with $640K (but that was 22 days total while this has only been 20 so far). When you combine the 7ci scanners with this one, it's the best month ever and it's not done yet.
Somos---I've seen 214 sell so far this month. That's just average at best. Somos though are usually skewed to the end of the quarter. I saw 995 last quarter.
One problem with my inventory tracking is that I can track at distributor level, not end of the supply chain level (and that's when it counts towards a sell). As such, what I count in late September may actually carry into 4th Q in reality.
For 3rd Q, I tracked $1.8M in scanner sales. Last quarter I tracked $1.6M (out of the final number of $1.95M). I assumed that I was low again in 3rd Q, but one thing I'm aware of is that I think my scanner sales tracking is more accurate now that they are fully stocked on inventory all the time. Perhaps adjusting my number isn't appropriate. I will get the actual numbers from the CFO today and compare them to what I saw to understand better.
Japan is supposed to be back up online. I think, without the van line contract, they could do $4.0M in 4th Q. If the van line contract hits then I'd conservatively put them in the high $4M range. I can give everyone the links on how to watch this inventory. It's very accurate. If you see the numbers going down then you know you have a winner here.
As for 2014, the big contracts are the difference maker. If they go through then a lot of money will go to top line revenue and bottom line net income. The CEO even indicated that when he said things could get "very interesting".
SCKT...It's frustrating to say the least. I certainly wouldn't recommend buying more here. It's like they are run by tweedle dee and tweedle dumb. From the sounds of the cc call, they did almost $0 in revenue in Japan because they have one distributor who ended up with liquidity problems. Everywhere else in the world they use Ingram and Scansource as their main distributors, but in Japan it's just the one.
I have an e-mail into the CFO on the breakdown of international vs domestic. I think international killed them. I don't understand how the Somos were so horrible. It's obviously dying technology. I want to see how their numbers for scanners and Somos for N.A. compare to what I saw. I will know better tomorrow.
Would I sell here?? It depends on if you believe they will get Fujitsu to close on the Japanese contract. That's $6M right there. The UK retailer that he said would be in 2014 is $500K. I'm sure there are others. The question is can they close the frickin' contracts and get the large deployments?? If you think they can then it's worth holding. If they can't, then it's best to cash out and move on. Are they competent enough to make it work? Obviously they are frustrated that ShopKeep, Square, NCR, Vend, Shopify----all potentially big players in the POS market---aren't deploying as many systems as was projected. Is this tablet POS systems going to explode in growth? I don't know anymore.
SCKT...you are right Guy. Here are some interesting calculations:
Leviticus accounted for 82% of all selling between Aug 30th and Oct 11th !! What it means.....
Of the 218K shares that traded from Sept 1 thru Oct 11th, Leviticus was the seller for 180K of them. As of last Friday, they had 179K shares left. Since then, another 200K have traded (as of right now). What does this mean??? There really are no other sellers then Leviticus! If you aren't buying now, you may miss out when he's done taking his tax loss selling and moves on. There are no other sellers for the most part. Any good news at earnings (which I predict to show continual sequential growth) should give us a rebound in the stock price.
Hweb2...SCKT...Leviticus Partners is the seller for certain. They just filed an amended 13g/a and have gone from 357K at the end of August to 179K as of Monday, October 11th (so it doesn't include the volume of the last 3 days).
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=9557657-1754-10340&type=sect&TabIndex=2&companyid=85&ppu=%252fdefault.aspx%253fcik%253d944075
The irony of all of this is that October is lining up to be the best month in scanner sales I've ever tracked for N.A. The best month I ever saw was August ($650K before I add in for corrections which is at least another 10%). October is already at $440K at the 1/2 way mark and very little of that is 7ci units from Ingram (which means the van line contract is adding very little to the total. The total I've seen there is $40K but you can't assume all of that is the van line. Maybe $20K at best if even that).
Traderfan...SCKT...8K. I communicated with the CFO about this already. They extended the same terms as before for 3 months which the CFO said gives them time to then negotiate a long term deal. I'm sure Socket very much would like to increase the line of credit to increase working capital, but I'm sure Silicon Valley Bank would like to see them pay down more of the $500K short term loan that is outstanding. By putting it off till January, then Socket can use the expected strong cashflow from 4th Q to put themselves in a position to get better terms later.
Guy...SCKT...I will send you a p.m. where I go into more detail on why I'm almost certain it's Leviticus, the details on why I've heard he's selling and what's going to happen going forward. As far as $$, I've actually been doing the same thing as you. When he is done the window of opportunity to accumulate a large number of shares is over. Trust me, if I start tracking 100+ 7ci scanners going through Ingram (proving to me that the van line deal is a certainty), I will broadcast it to everyone and everywhere I know to buy shares just for a flip if nothing else. There won't be any cheap shares left if 4th Q is a slam dunk. Of course, that's after I back up the truck myself :)
After 3rd Q numbers come out, Socket will show around 4.5-5 cents/share trailing 9 month earnings. If the van lines add onto expected day-to-day sales for 4th Q, then net income for 2013 is going to be around 12+ cents/share with very strong growth outlook. The balance sheet problems and past will start to fade into the rear view mirror in 2014 and the Nasdaq listing will start to come into view instead as shareholder equity bounces back.
Twitter is doing an ipo. People forget that Jack Dorsey's other baby is Square, Socket's app developer partner. An ipo of Square will focus all of Wall Street's attention on point of sale systems and anything connected to them.
Hweb2....SCKT...update:
Scanners I tracked for the quarter in N.A. were $1.8M vs $1.6M last quarter. This number is intentionally conservative and, based on my history of always being at least $250-$350K low (from that conservative approach and missing sales through the 3 distributors I track, direct sales from Socket's website, not following scanner accessories at all, and a 4th minor distributor I can't follow), I'm comfortable saying N.A. scanner sales are at least $2.05M (vs $1.96M last Q). I've heard from the company that international sales did well. I know there scanners were used in more international POS systems and sold by more Japanese large retailers so I could see international sales inching up from $700K to a conservative number of $825K. I've decided a conservative number is scanners overall + misc/service (last quarter was $150K or so) for 3rd Q = $3.0M.
Somos I tracked in N.A in 2nd Q were 794 units vs an actual number of 950 units. In 3rd Q, I saw some nice things starting to happen from August on. The total I tracked this time was 992 units. I doubt I saw everything so there should be more sales on top of that. I've heard that Somo sales internationally vs domestic are "in the same ratio" as always. For 1rst and 2nd Q, that ratio was 50/50. There is no doubt the Somo side of the business is growing. This is continuing in what I've tracked in October already too.
In 2nd Q, the Somo division did $1.66M. The catch here is $300K of that was provided by an OEM medical device company who bought the "internal guts" of the Somo for their own device. I don't know who this company is, but they have European approval for their device and are getting FDA approval. They didn't buy any units in the 3rd Q, but are fully expected to be back in the 4th Q buying (and from each quarter on continuously). The catch here is if we take the $1.66M from last Q and back out $300K, that's $1.36M left. I know back in early August the idea was that the Somo could repeat 2nd Q's number even without the OEM product. I know from my sales tracking that it definitely did better in number of units sold. I'm going to be conservative and say $1.5M.
Overall, I'd take it to the bank that they did $4.5M for certain with upside potential since I like being conservative anymore. I know that they fully expect expenses to be slightly lower than 2nd Q. As such, I see continued sequential growth with continued net income positive results.
What about 4th Q and beyond?? Socket is showing that they are continuing to get traction as the point of sale industry starts to move forward (it's slower than I had expected). The number of developers is approaching 700 from what I hear. There is absolutely no doubt that scanner sales will continue to go up each quarter. The key is "at what rate??" What they need are some of the large deals that keep getting mentioned to come on top of the continued day-to-day growth.
United Van Line deal: This has been mentioned before in the cc call and by me. I have independent verification directly from Unigroup (parent company of United Van Line and Mayflower). All trucks/trailers by Dec 31rst will be fitted with a GPS unit and will be using an electronic inventory system consisting of MobileMover software, an iPad and a barcode scanner. I was told the owners of the trucks aren't excited by having to be forced to use new technology with their loading crews (they like the old paper method cause they are comfortable with it), but they won't have a choice going forward. I've researched the Mobile Mover software a lot and it's quite impressive. I was told to look for everyone to "procrastinate" and start to switch over heavily in Nov and Dec as the weather turns bad (and business slows down). I've sent this info to the CFO and he confirms it's similar to what they have been told. They are making plans to accommodate the need for a lot of units in late 4th Q. I also know that all of the sales are done through Ingram Micro and involve the 7ci unit. I can track this with a lot of accuracy as the website I use even shows expected incoming inventory. If I start to see 100+ units per day go through this channel (showing that this van line deal is going to occur for certain), I will let everyone know for sure (with links so you can track it yourself). There are over 7000 trucks with Unigroup. I also know Unigroup hired an IT guy in July to do a 9 month temp contract to deal with their new electronic inventory system and integrate it into their corporate computers system. They also just advertised for another "fleet technology" administrator 3 weeks ago and part of that job description was making sure the GPS systems are installed on trailers and helping agents with the new electronic inventory system. As such, all indications are this is going to happen in full.
The Japanese deal with Fujitsu and Yamazaki Baking Co: I've heard there have been delays in the software. The customer is very happy but wanted the software tweaked and a couple of new functions added on from the scanners. They have extended the testing period to the end of the year and expect an answer on the full contract in early January. I know from research that Fujitsu did a huge technology deal providing some device in 2002 to all of Yamazaki's drivers. As such, these two companies have a long history of working together. I'm very confident that Fujitsu can get this deal closed. That $6M would hit in 2014 then. The CFO has told me that the 3rd Q cc call is when they will give updates on all the large deals they are dealing with (and that these two are not the only ones).
I actually see good things with the Somo. The distributors I track are increasing (by 2x) the number of units they carry in stock (it's happened in the last 3 weeks). With the OEM buyer coming back, I could see this division doing $2.0M in 4th Q.
My guess right now for 4th Q is $3.1M for scanners (without the van lines added in) + $2.0M for Somo + $150K Misc/Service = $5.25M. If the van line contract really happens, then it will add on to the whole picture and revenue could break $6.0M. That would be, imo, why the CEO said in the cc call 4th Q is looking to be a "breakout". It's also why the CFO said in the last cc call that they can use cashflow to pay off that $550K short term loan they have in full. $6.0M in revenue generates around $700K in cashflow and around $550K in net income.
Who's selling and why: I'm sending you a P.M on that. I'm almost 100% certain on what's happening there. It has nothing to do with bad news leaking out. It actually is making a buying opportunity for people (as seen by the person who bought 70K shares on Friday). Anyone else can contact me directly and I will share. I also have a couple of other positive rumors I've heard too that I'll share.
Dave
SCKT: United Van Line/Mayflower Moving 4th Q contract confirmation.
The United Van Line/Mayflower Moving scanner purchase has been mentioned on the conference calls. When I was at the shareholder's meeting, the CFO told me that the deal is expected to go through Ingram Micro distributor and uses Mobile Mover software (which uses 7ci scanners). Since then, I've seen a few days of decent numbers of 7ci scanners sell through the website I use to track Ingram, but nothing definitive to show this contract is occurring.
I reached out to the CFO about a week ago and asked about it again. He confirmed what was implied in the cc call----the order is expected to occur before the end of the year.
Here is the real positive: I have verified this independent of Socket now. This is what I've been told: Most of the trucks of United/Mayflower moving (same parent company) are independently owned by "agents". The corporation is going to require (if you want to continue being associated with these van lines) for each truck to have an iPad, a printer, and scanner by Dec 31rst and the corporation will provide them with the software. It's required.
In my research, Mobile Mover software works by allowing a mover to document in detail on the tablet the condition of an item before it's packed. The box is then barcoded. All this information is sent to headquarters for their records. When the boxes are unloaded, there will be no questions about missing items or "claimed" damage by customers that isn't true. It makes the whole process fool proof. No more paper record. The moving crew on both ends needs to have this information on the iPad in both locations for the process to work.
The person I talked to said look to Oct, Nov & Dec for agents to comply with the new system requirements.
These two van lines have over 7000 trucks in use. I'm sure it's the reason why the CEO used the word "breakout" for 4th Q. There is obviously someone selling shares (most likely Leviticus Partners) but that doesn't mean they research anything anymore.
I'm being vague on the details of the conversation I had. If you want more specifics, write my directly.
SCKT: United Van Line/Mayflower Moving 4th Q contract confirmation.
The United Van Line/Mayflower Moving scanner purchase has been mentioned on the conference calls. When I was at the shareholder's meeting, the CFO told me that the deal is expected to go through Ingram Micro distributor and uses Mobile Mover software (which uses 7ci scanners). Since then, I've seen a few days of decent numbers of 7ci scanners sell through the website I use to track Ingram, but nothing definitive to show this contract is occurring.
I reached out to the CFO about a week ago and asked about it again. He confirmed what was implied in the cc call----the order is expected to occur before the end of the year.
Here is the real positive: I have verified this independent of Socket now. This is what I've been told: Most of the trucks of United/Mayflower moving (same parent company) are independently owned by "agents". The corporation is going to require (if you want to continue being associated with these van lines) for each truck to have an iPad, a printer, and scanner by Dec 31rst and the corporation will provide them with the software. It's required.
In my research, Mobile Mover software works by allowing a mover to document in detail on the tablet the condition of an item before it's packed. The box is then barcoded. All this information is sent to headquarters for their records. When the boxes are unloaded, there will be no questions about missing items or "claimed" damage by customers that isn't true. It makes the whole process fool proof. No more paper record. The moving crew on both ends needs to have this information on the iPad in both locations for the process to work.
The person I talked to said look to Oct, Nov & Dec for agents to comply with the new system requirements.
These two van lines have over 7000 trucks in use. I'm sure it's the reason why the CEO used the word "breakout" for 4th Q. There is obviously someone selling shares (most likely Leviticus Partners) but that doesn't mean they research anything anymore.
I'm being vague on the details of the conversation I had. If you want more specifics, write my directly.
Dave
bbotcs....SCKT....inventory update
The stock price is discouraging, but inventory numbers I've tracked have done well for the month. Scanners sales will end up being the best month ever---they really didn't slow down as expected the last two weeks. Right now they are on target to do over 2500 units sold and $635K. Compare that to the numbers I tracked in April & May (both just below $500K), June = $605K, July = $614K. (note: this is a low number to actual results since I know I miss scanner sales for certain, don't track accessories, and don't track two small distributors for the U.S. or direct sales from Socket's U.S. web store). Sept should be even stronger as the 3rd month of a quarter always is.
Somos slowed way down from their blazing start of the month. However, if you combine July & August together, unit sales that I tracked are up 8% compared to the numbers I saw in April & May. Again, these are the two best months I've ever tracked but it was disappointing to see the strong start of August fade.
I haven't seen sales of 7ci units going through Ingram Micro at any level of significance yet to indicate that United Van Lines is taking orders. However, the CFO mentioned that they have been in direct communication with the company recently and they are very confident in increased sales occurring going forward. They have built up inventory of 7ci units at Ingram to 933 units in anticipation of when they start coming in.
Preliminary estimates for the Q: Assuming the 3rd month of the quarter is the strongest as usual, I would put scanner sales in N.A. I track at around $1.9M for sure. I've been low $300K each quarter and I'm comfortable adding that in ($50K per month in missed sales from the distributors I track as inventory is sold on the same day inventory comes in at a greater rate. That's only 200 scanners missed/month at $250 average. Overall = $150K. $50K in accessories for the Q. Another $100K missed in direct sales and sales through the two small distributors). N.A. scanner = $2.2M.
International sales (if we back out the large Japanese trial order in 1rst Q), have gone from $250K in 1rst Q to $650K in 2nd Q. I know several new POS systems in Europe have come available using Socket scanners and more retailers in Japan are selling the Socket scanners this quarter. This one might be a reach, but I'd put sales there at $800K.
The Somo did $1.65M in 2nd Q if we add the OEM company into it. If we back out that $300K for the quarter since it won't be there , it's $1.35M. I'm going to assume they match that in 3rd Q. I'm sure it's a bit Europe (in Sept) dependent.
Service/Misc---with the OEM in the Somo area, this division only did $160K last Q. I assume it matches.
I figure the 8ci does $40K at best (200 units), but lines itself up in distribution for more sales in October.
Overall, that's $2.2M + $800K + $1.35M + $160K = $4.55M overall. They grow revenue compared to 2Q, but it's not worth much. I'm sure this will change one way or the other as Sept plays out.
4th Q though becomes interesting. Add in $300K or so in continual sequential organic 7 series scanner growth as the developers continue to put out more and more products worldwide. Add in $300K to Somos as the OEM buyer comes back and assuming no other growth (The CFO has commented they expect that amount in 4th Q and going forward each quarter from this buyer). I'd expect some additional growth from Somo's though as I hear they are around 100 developers for the Somo now creating software applications. Add in another $200K or so in 8ci sales as it slowly starts to ramp up. That puts them at $5.35M. I'm still not that excited. They need the United Van Lines contract to add in on top of this, or the Japanese order to get signed and start to deliver, or one of how many other large orders to start to produce as retailers convert their whole companies over before the holidays. IMO, this stock needs revenues in 4th Q to break $6M to jump start everything. With a gross profit margin of 40%+, expenses below $1.9M, and net income is 10 cents/share +. That kind of $$ would also start to clean up the balance sheet quickly too.
4th Q is when the continual growth of the 7 series scanners + the sales of the new 8 series, finally make up for the lagging Somo. Any increase in Somo or large orders are a huge bonus then too.
SCKT: Another large tablet POS system using Socket scanners
Shopify just debuted their system yesterday:
"Ottawa-based Shopify, the online storefront provider that helps around 65,000 retailers reach their customers on the web, including Tesla, Crossfit and others, today announced a new retail point-of-sale solution that uses iPads for its terminals. The POS solution will enable existing Shopify users to unify their online shops with their physical locations, sharing information on inventory, sales and more seamlessly between both.
We’re already doing the online thing and this seems like a natural extension,” said Shopify VP of Product Adam McNamara in an interview. “We talked to a lot of our customers, and around 30 percent of them run a physical retail store as well. We looked at this and started talking to these people, and found that most of them had some sort of in-store point-of-sale system that integrates with Shopify, or had nothing at all. But overwhelmingly, what people needed was something that allowed them to run their physical store, and run their online store, and allowed them to accept payments, and we thought ‘Well, we can do all these things"
If you go to their website and their YouTube videos, they show the Socket 7ci scanner as the one that is integrated into their system.
There have been several other smaller POS systems released recently that use Socket scanners too. Shopify already has a solid customer base to sell to.
SCKT: Summary of inventory numbers for 2013 that I track for scanners in N.A.---positive growing trend
Here are the inventory #s for the scanners sold/month that I have tracked in 2013. It shows you the positive trend and why I still like the opportunity here even with the low stock price.
Note: I track sales through the 3 N.A. distributors each day. At the end of the month I multiple the number of units of a specific model by what I assume Socket gets in gross income from them. I'm conservative in my counting and I know it underestimates. Also, there are often larger orders that never show up and occur without my tracking. I also don't track accessories such as scanner charging stands. As such, I'm very comfortable in saying that what I track is a minimum to what is really occurring in overall scanner sales in N.A.
1rst Q 2013:
January-- $355K in scanners sold that I tracked. The total # was 1266.
February- $360K
March---- $495K (the 3rd month of each quarter has historically been the strongest)
Total I tracked= $1.21M scanners sold in N.A.
Actual number= $1.5M scanners sold in N.A. (this is from reported total number and % domestic vs international). I underestimated by $300K.
2nd Q 2013:
April------ $490K
May------- $485K
June----- $605K (this was also the first month where I saw the total # break over 2000)
Total I tracked= $1.58M scanners sold in N.A.
Actual number= $1.95M scanners sold in N.A. I underestimated by $350K.
3rd Q 2013 so far:
July---- $614K
August-- $ through the first 1/2 of the month, the sales are over $325K. The 2nd half of the month is usually a bit slower but it's tracking like the numbers will be similar to July at minimum. September should be the best month of the quarter.
International sales: In 1rst Q, they were around $950K, but $600K came from the one Japanese trial order, which really means they were $350K. In 2nd Q, without any large order, they grew to $700K (up $350K).
As the # of app developers continues to grow, the trend will only grow. In 4th Q, all the large retailers who are doing demo trials should start to buy to install their systems before the Xmas season. This too will only push the sequential growth forward faster.
The weakness for the company has been the Somo side of the business. Also, Europe in the summer is so unpredictable that it's hard for the company to give any real estimates in the cc call since it's sales are September weighted. But, what my numbers I posted show, it's only a matter of time before the scanner side of the business dominates. Also, the company was VERY positive (during the shareholder's meeting) on where they think the 8ci (and eventual 8 series scanner division) will go. They think it will be larger than the 7 series scanners.
It's only a matter of time before the combination of things (including the new low expenses the company is committed to) make a winner here. With margins in the 40%+ and a low float (and tax loss carryforwards), a lot of money can hit the bottom line. Time is all that's needed for the growth trends to keep playing out.
SCKT: Summary of inventory numbers for 2013 that I track for scanners in N.A.---positive growing trend
Here are the inventory #s for the scanners sold/month that I have tracked in 2013. It shows you the positive trend and why I still like the opportunity here even with the low stock price.
Note: I track sales through the 3 N.A. distributors each day. At the end of the month I multiple the number of units of a specific model by what I assume Socket gets in gross income from them. I'm conservative in my counting and I know it underestimates. Also, there are often larger orders that never show up and occur without my tracking. I also don't track accessories such as scanner charging stands. As such, I'm very comfortable in saying that what I track is a minimum to what is really occurring in overall scanner sales in N.A.
1rst Q 2013:
January-- $355K in scanners sold that I tracked. The total # was 1266.
February- $360K
March---- $495K (the 3rd month of each quarter has historically been the strongest)
Total I tracked= $1.21M scanners sold in N.A.
Actual number= $1.5M scanners sold in N.A. (this is from reported total number and % domestic vs international). I underestimated by $300K.
2nd Q 2013:
April------ $490K
May------- $485K
June----- $605K (this was also the first month where I saw the total # break over 2000)
Total I tracked= $1.58M scanners sold in N.A.
Actual number= $1.95M scanners sold in N.A. I underestimated by $350K.
3rd Q 2013 so far:
July---- $614K
August-- $ through the first 1/2 of the month, the sales are over $325K. The 2nd half of the month is usually a bit slower but it's tracking like the numbers will be similar to July at minimum. September should be the best month of the quarter.
International sales: In 1rst Q, they were around $950K, but $600K came from the one Japanese trial order, which really means they were $350K. In 2nd Q, without any large order, they grew to $700K (up $350K).
As the # of app developers continues to grow, the trend will only grow. In 4th Q, all the large retailers who are doing demo trials should start to buy to install their systems before the Xmas season. This too will only push the sequential growth forward faster.
The weakness for the company has been the Somo side of the business. Also, Europe in the summer is so unpredictable that it's hard for the company to give any real estimates in the cc call since it's sales are September weighted. But, what my numbers I posted show, it's only a matter of time before the scanner side of the business dominates. Also, the company was VERY positive (during the shareholder's meeting) on where they think the 8ci (and eventual 8 series scanner division) will go. They think it will be larger than the 7 series scanners.
It's only a matter of time before the combination of things (including the new low expenses the company is committed to) make a winner here. With margins in the 40%+ and a low float (and tax loss carryforwards), a lot of money can hit the bottom line. Time is all that's needed for the growth trends to keep playing out.
SCKT....changes in scanner colors for 7ci and 7mi
At the end of spring, they added yellow, blue & red to the grey 7ci scanner. On the retailers sites I track, they have just added in white into the mix and also the 7mi series is getting the same mix of colors from now on too. I e-mailed the CFO asking about it. They are targeting their two most popular scanners used for POS systems due to customer interest in wanting scanner colors that match the different colored cases that so many of the POS systems offer now.
Company's offerings for scanners:
7ci---1d optical scanner in grey, yellow, red, blue, white
7di---the 7ci with a harder protective case
7diRx-the 7ci with a harder anti-bacterial case
7mi---1d laser scanner in grey, yellow, red, blue, white
7pi---1d laser scanner in harder protective case
7xi---2d optical scanner
7xiRX-the 7xi with anti-bacterial case
8ci---1d optical scanner for smartphones in black, white
If you only look at what's happened in the last 9 months or so, it's obvious the scanner side of the business is coming together. It hasn't broken out yet in sales numbers, but the app developers are approaching 600 (from when it started 12 months ago). It takes 6-9 months for the top apps to be written and approved by Apple before coming to market. As such, the number of commercial products should keep growing that sell/use the Socket scanners (I know on their Twitter and Apple iTunes store they show more and more).
I've grown pretty pessimistic on the Somo side of the business. However, I've seen some nice sales numbers going through N.A. distribution this month. I've also heard from another shareholder that the company is saying on the side that the number of Somo developers is around 100 (up from 50 from the last I heard in early summer). If it's true, then it means the whole delay in Microsoft supporting Windows Embedded 6.5 may have been true (rather than just CEO b.s) and there really is interest in the Somo as a cheap PDA for use.