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.
