Socket Mobile Inc. has a market cap of $9.23 million; its shares were traded at around $2.14 with and P/S ratio of 0.68. Socket Mobile Inc. had an annual average earning growth of 70.3% over the past 5 years.
Highlight of Business Operations:Total revenues for the three and nine months ended September 30, 2011 were $4.7 million and $13.1 million, respectively, which represented increases of 37% and 20%, respectively, from revenues of $3.4 million and $10.9 million in the corresponding periods one year ago. Our revenues are classified into three broad product families:
Our mobile handheld computer product and related service revenues in the three and nine months ended September 30, 2011 were $2.5 million and $6.5 million, respectively, an increase of 36% and 21%, respectively, compared to revenues of $1.9 million and $5.4 million in the corresponding periods one year ago. Sales of our mobile handheld computer have been slowed as a result of shortages in the availability of LCD touch screens used in the manufacture of our mobile handheld computer. Beginning in the fourth quarter 2010, a major tablet and smartphone manufacturer secured a majority of the LCD touch screen manufacturing capacity producing LCD screens for our mobile handheld computer products causing short term supply disruptions as the LCD touch screen manufacturer reprioritized its capacity commitments. As a result of the supply disruptions our fourth quarter 2010 mobile handheld product revenues were adversely affected. The supply of this key component progressively improved in each of the first, second, and third quarters of 2011, and consequently our quarterly mobile handheld revenues have improved sequentially from fourth quarter 2010 revenues. Although the supply of LCD touch screens improved significantly in the third quarter 2011, the ensuing unit supply of mobile computers and timing thereof was not sufficient for us to complete shipment of our backlog of mobile computer orders, and as a consequence of the continued delays in our mobile computer supply chain, we were unable to ship approximately $1.4 million of our customer mobile handheld computer orders scheduled for shipment in the third quarter 2011, and have rescheduled this backlog for shipment in the fourth quarter of 2011. Additionally, as a consequence of the improving supply of mobile computers timed late in the third quarter, a significant portion of our mobile computer shipments to our distributors was shipped within the third quarter but without sufficient time to clear our distribution channel for the recognition of revenue by us. As a result, mobile computer product inventory in our distribution channel at September 30th increased by $0.7 million from levels at June 30, 2011, and is subsequently now shipping from our distributors to their customers.
Our data collection product revenues in the three and nine months ended September 30, 2011 were $1.9 million and $5.6 million, respectively, an increase of 55% and 43%, respectively, compared to revenues of $1.3 million and $3.9 million in the corresponding periods one year ago. Revenue increases of $0.7 million and $1.5 million in the comparable three and nine month periods were from increased sales volumes of our Cordless Hand Scanner. Additional revenue increases of $0.1 million and $0.6 million in the comparable three and nine month periods were from increased sales volumes of our Cordless Ring Scanner. Partially offsetting these increases in the comparable three and nine month periods were declines primarily in sales of our SDIO In-Hand Scan card. Additionally, sales of our CompactFlash In-Hand Scan card declined slightly in the comparable periods. A significant sales volume of our plug-in scan cards are sold in conjunction with our mobile handheld computer. In the fourth quarter 2010 in particular, and to sequentially lesser extents in the first, second, and third quarters of 2011, supply delays in our mobile handheld computer mentioned previously, adversely impacted our mobile handheld computer sales and consequently the companion plug-in scan card revenues as we were forced to defer shipments beyond the end of the third quarter.
Service revenues in the three and nine months ended September 30, 2011 were $224,000 and $761,000, respectively, a decline of 2% and an increase of 23%, respectively, compared to service revenues of $229,000 and $621,000 in the corresponding periods one year ago. Service revenues are included within the related product lines in the preceding table. Declines in service revenues in the comparable three months are due to declines in new SocketCare billings partially offset by increases in services not covered under the SocketCare program and increases in other out-of-warranty services. Increases in service revenues in the comparable nine month periods reflect increases in services not covered under the SocketCare program and other out-of-warranty services, partially offset by declines in the rate of new SocketCare billings in the comparable nine month periods.
Sales and marketing expense for the three months ended September 30, 2011 was $933,000, a decrease of 4% compared to sales and marketing expense of $973,000 in the corresponding period one year ago. Sales and marketing expense for the nine month period ended September 30, 2011 was $2.6 million, a decrease of 17% compared to sales and marketing expense of $3.2 million in the corresponding period one year ago. The majority of the reduction in sales and marketing expense in the nine month comparable periods was from reduced personnel costs as a result of a realignment of the sales force we initiated in the fourth 2010 quarter to emphasize inside sales personnel located at the Company’s Newark, CA headquarters to better serve our customer base, and from reductions in the related travel expense as a result of fewer outside sales personnel. Reductions in the comparable three months were primarily from reduced travel expense. Sales and marketing expense in the fourth quarter of 2011 is expected to increase slightly from third quarter levels.
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