Hweb2....SCKT...I'd estimated $4.6-4.7M but I assumed that OEM/Service was coming in at $500K as they said on the last cc call (as a new OEM customer was ordering). It ended up at $300K and that was where my estimate missed for the most part (that and I thought the Somo unit would do $1.6M).
Negatives first: Obviously $4.4M doesn't excite anyone. It sure didn't get me smiling. Yes, you can back out the $600K Japanese order that boosted 1rst Q numbers and say that cordless scanners then grew from $1.8M in broad based orders to $2.6M but that's a between the lines type of thing. I want strong sequential growth quarter to quarter no matter what and this doesn't cut it.
3rd Q doesn't sound exciting either. Europe is always hard for sales in the summer.
Positives:
Expenses. Even with all employees back and full salaries, expenses only went up 5%. 3rd Q may even be less. Right now this is what's keeping them net income positive. If they maintain these levels going forward then a lot of money will flow to the bottom line. They could keep expenses below $2M for a long time potentially.
4th Q. United Van Line contract is 5K or so that needs to be purchased before the end of the year. I can track this order through Ingram Micro easily. Very little has happened so if it hits a lot in the 4th Q, then it will add up. 4th Q should also get the Japanese deal delivering again. Possibly the UK deal with 2500-3000 scanners. I know there is a German deal for 12K scanners still in play. They need to continue to get sequential day-to-day sales happening and then when these big deals hit it's going to be a breakout quarter for revenue. This is when low expenses are the real positive.
New 8ci product. It's good to hear that it will be available by Sept 1 and that they expect acceptance of it and impact on revenues starting in November. A 2D model coming soon is good too. I know at the Shareholder's Meeting that everyone thought this product line could be bigger than the cordless scanner going forward.
Outlook on stock: It depends on people's time line and how far does the market look ahead? 4th Q numbers will start to build finally to solid results (should know by end of Oct in the 3rd Q cc call how the month has already started)---CEO said "breakout" revenue....we'll see. I will say that 12 months from now cordless scanners could be doing $4M/qtr, new product $2M/qtr, Somo $1.8M (I don't expect much here anymore), and OEM of $300K. That's $8.1M. By then gross margins will be 42% or so. If they stay aggressive on expenses and keep them below $2M, then that's $1.4M in net income (no taxes with the tax loss carry forward they have). That's a lot of $$ that can flow to the bottom line of a low float stock.
On the other hand, people may say 3rd Q isn't going to be exciting so I'll sell now and go chase some hot stock elsewhere and come back.
AI
