SCKT...Inventory update for end of May......
(This is an update to the inventory I track at Ingram, Scansource, and Bluestar for N.A. distributors).
I have to admit that scanner sales are getting harder to track and one reason is that they have made a HUGE difference in the amount of inventory they are carrying at distributors. One of my worries has always been is that Socket would be seen as a poor supplier since they always seemed to have units backlogged (ex. at the beginning of May, they only had 255 units total (of all models combined) in the three distributors I keep an eye on in N.A. (Ingram, Scansource, Bluestar). There was a backlog of almost 300 7ci units at that time! Sales have been growing sequentially each month, but Socket didn't seem to be able to keep up at times. Small companies often fail from being able to keep up with growth.
This has completely changed in the last 3 weeks. As of last night, they currently have 1655 units total (again, all models combined at all N.A. distributors). If we say that the average scanner price is $240 (it's weighted to the downside since more 7ci's are in inventory than the more expensive units), that's $397K in inventory now vs $80K or so just 30 days ago. Even now, they continue to get new inventory delivered as soon as it is selling. They obviously have the capital to do it and the kinks in the supply chain have been smoothed out. I know distributors only take orders based on what their end customers are asking for so it's looking pretty good here.
Their plan appears to be coming together nicely. I'm not sure what this will mean in 2nd Q numbers. I'd be happy with $5M and 4 cents/share. There will be strong growth in scanners for certain, the key will be what type of growth do they have in the Somo side of the business to add to it. I do know they will have around $200k in extra expenses as all employees are back to full-time work. Going into 3rd Q, that increase in expenses shouldn't happen and so the additional sequential growth that will occur should hit the bottom line nicely.
Dave
