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.
