SCKT - Earnings call transcript Q1 2018

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Operator

Welcome to the Socket Mobile Q1 Management Conference Call. My name is Ellen, and I will be your operator for today's call. [Operator Instructions]. Please note that this conference is being recorded. I will now turn the call over to David Dunlap. begin. may you Sir,

David Dunlap

Good review welcome first financial XXXX. March Operator. call quarter Socket's today XX, to results afternoon, you, to and conference ended Thank for its

and from Marketing, of and to Developer Dunlap, Kevin On answer Vice Dave Sales Socket and Financial call Lopez, Socket's today Mills, the President Chief CEO; Programs; your James President are Officer questions.

also at earnings service earlier release has Socket socketmobile.com. wire today. website Socket's the Mobile been release distributed on over its posted The

call of will a completion on today's available will In shortly website call's addition, of website few a posted the be through socketmobile.com, after replay within be Socket the and this company's days. the a transcript call

the not Act of the Before amended, are like this and XXXX not limited data in remind products. risks statements. on acceptance be uncertainties necessary including and manufacture and we sales XXE anticipated; or delayed opportunities that to not that as of anticipated in products call the the in successful and XX-K markets the risks results Because that as products data vertical of distribute reports and forward-looking technological, I factors, acceptance statements Such XXA Section market of channels materially products filed mobile Exchange risks of and but market be may everyone sells to as would statements XX-Q of that and Socket described the may the and timing, acceptance of well market may happen statements collection involve application Commission. risk the a and sales risk Securities opportunities of details amended. anticipated choose XXXX Socket's Form collection meaning forward-looking Section working but predicting regarding products, Exchange or statements or market not products product as availability as most and conditions trends such differ not Securities could doing predicted, Socket's of as from distribution may markets may so; not recent out the and distribution factors the to Such at of of including, as current and Act mobile partners may to; Socket's statements due number begin, the within Securities risks conference happen Socket's its in the capital; limited and contain which with including and results actual not to, and in application forward-looking financial include, components rolled of the other

obligation Socket does such forward-looking statements. not undertake any any update to

turn Kevin? like Mills. that with to and Socket's President the said, Now CEO, over to I'd Kevin call

Kevin Mills

the XX% Dave. disappointing reported with revenue a Good afternoon, thank from you today. We QX Thanks, of for million, QX a in decrease $X us everyone, joining and revenue XXXX.

Our unexpected a lower of like several revenue for results revenue, or the the highlight. QX to were loss share. I'd which $XXX,XXX per lower behind resulted There quarter in $X.XX

our newest in first new QX. line expecting started launch product We year shipping The products. our the delays to made being SocketScan our

However, design scheduled we These the delays the are design to issues They in improvements our The solved from a in have we completed. the we development delay that and quarter. our fulfill all qualifying delay discovered best what was shipping revenue SocketScan about technical us some now and in ship orders $XXX,XXX the our QX following not unable fully date. impacted in process, required improvements. product inconsequential. few The product to way, of were we been is the believe to of concerns, impact prevented

about pending the of inventory distributors and anticipation demand the of $XXX,XXX in we products. into our in the SocketScan was arrival QX In despite between our QX. it for to current measuring had sales slightly addition, lower new their of the in of products caused of The demand of their distribution QX better In current this, impact scanners. products than distribution out availability sales in our new product,

viewed -- said, the the distribution. We our reflection reported sales and behind into a SocketScan of happy out are with of are on based product also our better we based sales us to now have have are on distribution family revenue be truly we market. being That sales years. always many our reported we demand, to out for distribution revenue of and we delays Today, delivering

efforts towards our in see Series our retail where growth. partners. SocketScan we certainly application We with fueling Looking see

base Our and a building base higher-paced providing through larger see pace efforts. growth for future while smaller acquisition we demand, established of customer partners applications steady customer opportunities their core have and a provided emerging

retail business, currently growth. represents of plus As of growth determine the retail will XX% our overall our in most

to features. more cost-efficient work continue through for believe Series. are these of features rates type DuraScan functions and application Today, significant businesses, our not progress are required small with our scanning, with management existing achieve of fully discount efforts retail customer better seen providers. increase we in drive new, overall and and ideal support barcode-centric we And like So have both solutions to in to to coupons, which inventory an these higher areas scanners for we and retail provide SocketScan partners connect

these over of SXXX a scanner. and it with pursue new a applications the as introduction Both a is XD scanner. for premium of from our XX% they and work level support entry Bluetooth, new $XXX. new solutions, XD makes and sample noteworthy is scanner. XQi A our our $XXX. to less our our point current Particularly SXXX our the recommended price XD continue SDK. SXXX partners' best-selling of our up The to establishes than recommended applications, providing price efforts drop quality within The product. will Apple-certified SocketScan point price We aggressive $XXX XCi, price This have including

of future in end-users rapidly selling our we for our existing levels drive It point world. base. flexibility increased to our customer We changing our to capability From application-driven Socket's and higher view, point universal, offers community. The for scanner. average of to everything adoption our expect proofing this is greater developer reads price new benefits price

Looking nonretail outside business the grow throughout we it year. rate and to expect our a the strong is retail, of continue in to growth

in Our just ways, many many we nonretail beginning, and next business, zero. is from to are build seeing customers

the impact year. growth in but our to the rates So of also rate Capture SDK. until are completion like I very the won't numbers later positive overall our highlight new the growth would

preferred Capture as and CocoaPods iOS by in integrate developers support. make scanner easier and new and will environment, and next our week, SDK, quicker existing better officially enabling development released it support such which Maven, been Android to develop Our their to be restructured has to them

environments Capture the and that support developers as addition, the Java, Xamarin high-level corporate many to us to In development prefer, Cordova name a such SDK enables few.

typically development expect We applications. environments scanners our to these who it higher-level Capture organizations support with to larger use easier for make their

I term. many our remain QX impact despite by As cannot long But the knowing results. the current in to this, out times, pointed we our short due revenue sales cycle, work disappointed our

future, addition QX improved substantially On our that the work our our the we of family. improved of with did with development products We did we the impact our tools SDK. SocketScan launch Capture in immediate

in focused now health With our the that for going So comments. -- and quarter. over expect on I remain We will long-term call turn it forward. business, results to long-term our his was I a said, of strongly which building the bittersweet better believe James we

James Lopez

Kevin. you, Thank

like the represents As compared perhaps to part, was this analysis impact fact with -- better QX new that in Kevin we which quarter. overall lingering part part which slightly continued of to as Series demand we some markets companion walk in to I through. quarter our dynamics our large that out noted demand not the see seasonality, In for in which through flat February, earlier, in scanners expected of sell-through, to SocketScan XXXX. new end-consumer that to achieved ship QX part, We our the playing did in in purchases, scanner flat and would

note the These scanner haven't contrasts average development in testing -- of deployment last Enterprise yield number customers, expect every period which take can projects we time field the reach and are couple quiet, involved usually an with and are dynamic typically in enterprise-level same sales the forecasting Unfortunately, quarters, activity. large particularly hard first trials. of projects we convoluted very we of projects year-long activity unusually quarter. cycles and continued stage. QX, has where had many them. project been This enterprise-level and year to last seen difficulty deployment and The

we're their But partners a at scanner-enabled seeing see and new the second development loyalty service from end-customer a focus manage application to companions applications This scanner slowing connect merchants. higher-performance bring scanner dynamic of efforts. with the effect growing SDK new higher and pace We for the had drive customer the potential retention The and customers inventory for base constant rates, of to and see some as such to partners deeper available, applications has applications sales into to continue We small our and shift Socket timing scanning, rates. loyalty point-of-sale expected market steady of the and involves like inventory net companion development scanner-enabled when these, apps. as release scanners. having customer and of demand connect secondary also

code more wherever partnership will these our efforts, our So in and along. price these to points solutions Socket help to possible assist feed along help new intends SDK and products through which efforts sample to prescanner-integrated

expect SXXX SocketScan we see mobile which new Key is VDC's only Looking scanner rate of forward annual scanners global X.X%. of and our were yesterday. of to SXXX, our year, announced in growth barcode with to SXXX, projections alignment compound a growth the ahead remainder Series growth all XXX market to

Series developers to payments, of that to couponing, also scanning the the indicators, XD price end of with of of scanning codes, this and upgrade. that With part, scanning. and further our upgrade ergonomics, of a user XD worked applications couple for best us applications battery XD up and redesigned reasonable of was customers features which performance cycle, are base, are Particularly truly creating And new our better name both a would SXXX, customers promote they're a would as which improved for This opens create to first-time and in significant solution point expensive Unfortunately, cost we and XD solutions, a XD the scanning step twice SXXX, partners This where equally, the a In new is Our solutions expand barcodes and effect universal a symbologies base, is universal new limits life. is extended inventory, XD and around solution, we solution scanner the order allows for create an to partners noteworthy performance, serviceability loyalty, years XD entry-level SocketScan would use matrix our future-proof, customer built owners. technology have lets last XD to because, to whole the break ready-to-use lower considerably our path for new applications consumer or scanner managed are and purchase most and because applications price cost-effective yet, the intuitive the few. buying to scanning a today, alike. creating scanning has track had this XD open. universal price. installed a the an generate barcodes trace to like possibilities XD ticketing SXXX such and

of the X Series throughout expect remainder replace Series Classic XXX to our We of the our new organically SocketScan year. products

SDK Mobile In Capture we'll were offer for easier soon development hand-in-hand our release and SocketScan Series, our Socket to SDK. is our finalizing efforts Socket partners. SocketScan Capture all and addition our announce our development DuraScan application and integration The and scanners designed around new and to

better develop SDK and to to by restructured is it our Kevin As our development mentioned, developers as enabling in support been iOS environment, and prefer, Capture scanners Maven, Android quicker such them that and their and scanner simpler Cordova, high-level existing also CocoaPods to and Xamarin organizations preferred support making to many our Capture for environments developers supports such with as development ease. integrate larger the making Java, it easier support. corporate has

available app, our count partners. SDK, Capture to companion available registered scanner The apps, is applications the also leverageable our is development are sample code as as our demo built now, which on stock first own

needs We updates expect the Capture SDK, to frequent end our and as and of to further developers throughout more the customers. sample deliver to year, apps we respond

like things Now I'd Dave. over to hand to

David Dunlap

James. you, Thank

describe almost the We revenue three segments. entirely $X of Our barcode under sale million, was in scanners. XXXX first quarter cordless from our revenues just

XXXX, were quarters about prior total designed revenue of Enterprise deployments quantities tablets, applications but larger first and first to smartphones enterprise The to reflects and to two new in XX% of our applications which heavily deployment, weighted work deployments, decisions segment, devices for enterprise of products often mobile associated the with year. products the from the our special-purpose our purchase with. are transfer or are of into

of the of the same compared $XXX,XXX XXXX, first year a in ago, million year-over-year reduction quarter quarter For to were deployments $X,XXX a $XXX,XXX.

our The retailers, in second Many we we two-tier to refer running majority small of of segment many run to revenue sell quantities products resellers the products as point-of-sale through from our distribution, of small are which purchased sales. by rate is customers, applications. our usually

worldwide, being Our and resellers largest hundreds resellers the our with in number CDW. Amazon

first sale both legacy of The in and cordless last products For segments -- of represent rate years. relates $X.X XX% quarter XXXX million. first of first quarter Together service revenue or and total down for represented total was the our XX% from of of sales $X.X products. the sales was million, two XXXX, $XXX,XXX quarter the run were XXXX, data-capture X% first revenue that of the to

As and orders the are the declines be on ship good will fully a January, we first began now in as and products products around our reduce of the pleased news The team the occurred turn of in eventually when SocketScan in new with to announced The satisfied our by that XX, shipping channel channel until of pace and didn't will was very new quarter down our quarters. brought Kevin we we distribution quarter. our April distribution with revenue likely is until and shipping. inventory their first performance James, higher-order But second the products. new the the development third replaced, commence plans our in ourselves to noted some in to first slowed

unit Our sold. a both costs, in and smaller products and XX.X% in were in cost first number overhead first year quarter the reductions sales despite margins this of quarter reflecting a quarter ago, reductions

in up. our beyond, our back as volumes pick We margins of to QX expect benefit and sales

the engineering were and XXXX, of XX% the of operating ago, million, Engineering product increases were nearly with X% overall of income first compared the in our year-over-year. $XXX,XXX quarter SocketScan expenses Our as a We small in year or with higher in the slowdown in or our timing XXXX products first combination partially engineering The offset from now are moderately increased reduction of share, caused cost marketing costs, X.X% sales compared that to a first expense and the ago. the shipping. XXXX quarter of higher increased of operating $X.X quarter and new development year expense costs in general first costs by resulted orders announcements by in net the such resources $X.XX quarter first new $X.XX per quarter loss net to a certification up of $XXX,XXX per a by share. in

continue elected participate state alternative earnings offer per the members the to The of The stock have to from XXXX, company's to carryforwards, benefit have X, of not offer and were number rate be tender shares conversion offer. the several completion by an XX.X% notes levels effective tender our completion $X.XX and to almost XXXX. but returned for is the also federal selling per shares outstanding not executive outstanding, X,XXX,XXX we the tender to zero The completed of purpose options. under tax directors in shares shares, XXXX, to improve taxes experienced the purchase offer XX% to numbers been number of rate share was come. per of offer that XXXX common retire of share convertible purchase and tax effective due taxes the from equity in loss expect pay into the compared shares and and XXX,XXX which Note the many we years new by weeks, because Earnings added was exercise to Mobile's of as purchased following because reduce holders. of on minimum will and outstanding, in because to fewer expect share was or following tax subordinated successfully our shares in in oversubscribed for corporate tender were March and of XX% price the XXXX. Socket eliminated, higher-than-normal team increased we rules that of and -- rate approximately but will lower operating

As that way a stated million was in the value. holders operating offer return to believe the cash has and results the accumulated dollars three good we past several offer, tender to to in share for profitable for years increase

several higher the to Although expect to loan in we needed. help the next from made the and $X.X $X purchase, we finance of continue And term paydowns loan months amount $X a million in reported at The we revolving million. down million. we borrowed have million being term unused March another of over of the repaid was loan the to cash since credit line by and from pay end million $X than of that loan $X the are an the

who you at will Meeting company. able the on For are California Annual of a.m. our Northern XX, to those Area, held May of Bay at XX:XX to morning, Wednesday be in Stockholders the get --

We update overview. display. And on our company Kevin will have new will products our

We NFC/RFID our our serve products, expanded growth are employees and of will and post meeting. Kevin's scanning profitability. of developer mobile we continued such the increasing investors. community, our and Reader/Writer, with number barcode on our new driving after growth SDK We as DuraCase and are development continued the update community registered durable our our support the The and in customers, on DXXX interest Capture suppliers, and tools an our applications, of combination new appreciate developer website the markets

turn Now back let to Kevin the call me

Kevin Mills

These two work expectations company revenue incorporate customer over both our it set us the They moving to Mobile both stronger Thanks, of for ease enable SocketScan us their your end-user coming took a Series the forward products much developer and but would operating makes over of return summary, will will for new I company. a The and use We some new and said, Dave. our a for to past forward. completed form Operator? bittersweet. as Capture quarters. will projects I Mobile better important years communities. in We truly that forward the of to fundamentally Socket levels call missed going In that to SDK questions. believe operator years. Socket QX and the a With of our turn be to profitable feedback substantially and investment R&D impact much experience, describe enable level foundation look the

Operator

Instructions]. [Operator

question is first Our from Galinko Sidoti. Matthew with

Matthew Galinko

a around enterprise be impeding little finish business. bit it if get on like First year wondering closure mentioned ago? can a deals. were go you could of just the or one why is sounds you was you the ability to if they predict difficult now than on front line there anything to business things murkier your It little a competitive those to some of there -- any more the are elaborate think there there's that more wondering I'm could

James Lopez

is this James. Matt, Hey,

enterprise thing when primary visibility you the So good and projects there's would competitive for the relationships, because competitive have but usually that see from we our see bids. the are out, hitting be there type, for the be into you usually bids of a pretty the are just things going visibility deployment proposals see competitor even in high-level the on bid that's can those standpoint those, going the equipment competitive front, account-based for bidding see the in purposes. a ever for bids don't course, secondary of the And market. they're and have some if of we only request typically we preventing a after lot The process equipment from we of bids, a would

Kevin Mills

decline maybe number in well. of add, And seen to we've those requests as a

it's that out. in at that believe not we largely So happened seeing moment time. and bids not the this we that It's the bids lost we're happening

James Lopez

quiet. The is very activity in general just

Matthew Galinko

you. Got

little to really of a are scanner sorts a back I that atypical, anything understand been you've of could the I it terms in the things? of a in bit market? for a I little kind -- business, is bit who in longer those in but you've go little is Just there these the that to newer bit compared -- history cycle story, guess, to the guess, kind if Is this 'XX, you it's more. Okay. of time over further, seasonal your color down,

Kevin Mills

we point retail-centric mid-February years. would a to Well, historical from the our view, from say, of few so part last as of I as particularly mid-November the year, become view, deadest we over

is than recovered we back their their year, little probably buy years, that American that People last our weak of of in to lot because a weakness large season. period speaking, at we did February substantially. we extended exact bit with equipment would I the busiest say a saw augmented reasonably me, don't in past, retail selling firm I the very called that in generally have few into a When So January, Greetings. had a we've about say, And it's we more well front a period. last saw a numbers but March. in look don't which the in but then would lot talked related numbers, I the deployments, numbers certainly scanning of we

say, I don't numbers go reasonably if whatever, it back have I of in or flat. I those XXXX really So again, front would was to me.

that don't I enough if but... you gives So color, know

Matthew Galinko

RFPs increase just the you've seen like sounds Maybe not really of a I lines seeing, is pace the Is it unusual just it more this at. -- something even that's is but the guess getting -- revenue that down. along -- what just of or really necessarily you're I'm before? the

Kevin Mills

unusual. I little it's a bit would say

people, periods a other the of it We have to in us past. of in for this seen or longer whether not quarter quiet this -- level be lack deployments, or

I that question. unusually it your is quiet, say if would answers So does

Matthew Galinko

in then was you for I We it guess, One does. queue. last talked It quarter, I'll and the back jump in February. more

But -- of you expectations I rate It retail You were business in the seemed little kind your sounds bit. changed. a growth the kind like have little there. the market of priorities of know more -- on partners, the and downstream and fixed rate guess, can is optimistic, run that sort point-of-sale I do of kind you something just XXXX relatively you see changing sudden new normal? back course your that over shift that a it's or you something a of as think that of think the the that's is

Kevin Mills

and let add I'll I'll start maybe James something fresh. then Well, Okay.

James Lopez

Matt, So we to that in development, hope the a always scanning, little continue a on the efforts. think because customer to the looked been works. important. The be do bit and of a back seat, of drive applications to applications are that bit surprise of that inventory by applications kick-start in and They're little de-prioritized kind they're is They have but some we the promised for it customers. retention Loyalty of programs they're perpetually

And the require we've by to promotion ourselves the to tried our still move continue SDK these that. we to end to the to so those to applications things do of and doing do move work help some to do them push what our their and forward and to partners integration customers. we're But do is in going to forward, these

we So going help, that continue we're that's they little the moment customer do, certainly base we've to frustrating open they a to and the but that know established.

And that. proposal. continue exciting an we're certainly just to that's to going So pursue

Kevin Mills

of things itself. from growth and back, we of that install can was one base that of just our with that hindsight, the their add Maybe on I as think look the focus we rates didn't benefit growth we not certainly were benefiting I from the

scanners of I and just customer, just from take a sell say X,XXX seen we we one as they a So to probably and scanners. X,XXX lot QX. can large new customers, scanners growth a but they've an in in sell Square, QX. X,XXX scanners And they have They've gone if added because X,XXX haven't X,XXX example,

that matured, of new after things as they're they've revenue monthly growth, and our sign-ups stream. I as which have really had one their stopped think going acquisitions, slowed companies is aggressively they of rates profitable the that have on and focused has become happened these

quicker with moment rate of we okay. have growth are enough really seen smaller And change customers. we to slower yes, have our So the customers that, growing of a who don't the larger at

that their passed certainly, say, they growth a have their on that from become and growth feature of and growth, from their we sets and would there as are realization I So of the critical benefit don't profitable is you mass benefit they sensing slowed, the we more rates number. focused rates

Operator

from Troy [ph],who is Al next is Private Investor. a The question

Unidentified Analyst

few don't purpose what the when that pay share you have was the Dutch questions going under on and $X.XX just was I be the doing a auction. first a when I of quarter know knew to to good circumstances, it, these not a was. for it I explain you flow shares back the brought besides, know purpose much and that as And have not could of what volume is so the less price. well Could and you there's don't many outstanding small, please it?

David Dunlap

And company. explained we close be added to have value continuing bit a per that offer, in share in to and XXXX a added there were Yes, in on in X.X the the year-over-year. the shares were we shares Al, and as million tender were general, drag those of

questions as to you put As to how our and you investors accumulating also know, lots cash getting use. cash and could been that of we from growing had

taking effectively that be returning that the the was was of conclusion some some to the the market of So of would that off our decision. that shares was shareholders, cash genesis and what

at market of means oversubscribed, Dutch versus early It range conditions offer time well was was in we price that In offer a below period. which that paid was was $X.XX. was $X.XX successful. time auction the the timing, and the February maximum. the on was It maximum the entered into, that set pricing was which the And based the pricing tender terms of

was selling. it $XXX,XXX. offer, So wound into because that it of saved the $X a would that better tender shot saw up up part But the the during of company range a lot we oversubscribed, with also the price

from lot who were $X.XX XX,XXX to got of that, a were them than looking more XX,XXX up think, we for and had that moved level because shares was And people they level. they the average Our selling. back to decided tender shares

to to effect pick shareholders for increase. opportunity two we a hope on up shipping company like the went the reduced an will see and investor events, first We that, would for price. We moves I weeks. think became guess, pricing other that for the are would quarter, that, about delays as long-term community, and not it will past be the the So recognized stock at obviously them by those and that

Unidentified Analyst

did dividends let who've on time pay you been Okay. I would to such And outstanding. get their just back to don't around think some shareholders understand cash them amount it of a long the low have why a and shares investments. with I that for better been

David Dunlap

inputs. we received the that. Troy, and levels inputs. this case, and was We pricing of best of in all that carefully way of inputs the And all received other like was proceed, at the of very reviewed determination company. and like, the deliberation a long period There many We've appreciate to your

Unidentified Analyst

to a Okay. but I I'm kind when stock's mean, going to tomorrow, the $X.XX $X.XX that, down ridiculous. pay share not happy seems about for with it of

David Dunlap

question? Troy, did any have I'm sorry. you other

Unidentified Analyst

second at all? revenue guys, you, projections the Do have quarter No. for any

Kevin Mills

levels in make in back don't We working operating we you QX, we're and As will back sure provide QX. we're believe projections. we revenue know, bounce at hard profitable to

Operator

next Swanson, The is Private Steve question from Investor.

Steve Swanson

Asia? any and And Europe what have we growth so, did that Dave, quarter? first was in revenue the if in

Kevin Mills

a -- and than in both in in substantially better up Asia both both in and first was the the did U.S, would it lot growth we and me. QX revenue new I had think acquiring coming of have seeing But countries. year-over-year. are new Asia applications I of various don't a -- And have number -- I so to the lot in -- QX. as what would a seeing in about Europe better QX of what I don't markets saw Europe year in in the companies describe -- We being I did we behind say exact we in We're front users. Europe quarter. well

So In Japan. -- never we we focused feel business in really think, our Asia, actually I been is healthier. has on Europe

next and say, we're sold in believe markets. the very one would traction application and some making quarters. two the over is solid already we'll testing We're them Today, -- we of solutions. we're think I I there who, providers by three being by the third have the owned coming iOS-based sold point-of-sale be Japanese in

ideally lot retailers. They suited when a but and tend slowly, Our move have market they Japanese to they small products move, they are to of move.

revenue expected resolved. ran in of dispute our think We being I a many over which China. well. and a into do name very was of to all We overseas have we number outside trademark, one do U.S. QX, some And been but doing it which time there was discovered be us, In the and XX% much forward. better So to of difficulties, expect was we XX%. had biggest we're The That's going from behind stronger QX, in resolve. our to resolved took

Steve Swanson

what -- all to done revenue to year, was math if you've was out the what of the And Yes, the at you if the and to XQ U.S. both growing I to the growth I asking. that I'm quarter. Asia. will where Asia started and the why to the trying I see think, when mean, understand was in yet in was that least out had understand had I relative revenue growth wondering just last breaking go on this -- to double the yet revenue drop and I drop-off and the last in I'm if you really Europe year that were year, was -- big for hoping guess, on regions is I trying we what digit you done math Qs I for in for XQ Europe. XX% was realized the that's in

Kevin Mills

back would don't a Asia than XX%, guess and -- be come I give would Europe. -- I was that it number you on I more would the We guess. actually can exact to

David Dunlap

in the I'd filing middle but you. send to now, by be the go about May, Q of two probably be we'll And ahead to information, and weeks it get that and from I'll happy

Steve Swanson

Okay.

the paid how much $X question looked we for presuming months is Was loan. I just Another we are had interest interest? on that It quarter the paying two first million or one month? what is, the $XXk like I'm in

David Dunlap

but we the drew Xst combination, it interest is the loan the was Well, term of a -- on March.

things. that bit a debt, there little lease we include but And bank And include some in largest service was so from also of so have combination of piece, charges. a it's we interest -- the

Steve Swanson

Okay.

in the or that the $X end Is million that. principal off looking of right, that you said quarter you We release since a ask I the you've guess. at you've -- over. different I the me had, started on I think Let the think note actually was XXst mean, you on way of March, then, -- said I the a on pay begun already Dave? to

David Dunlap

end dollar the the We've down probably the to $X correct. now already down loan we it'll expect million, That's quarter come increments million in between the and do of to about second and term level. taken

Steve Swanson

though And on like, XX% sounds be cash down on then -- quarterly that's a it basis still basis the Okay. gone? paying flow until off presume a a amount, even it that excess you've the we'll for taken substantial on quarterly I

David Dunlap

the XX-month that worked we've And we've be that with bank. down a we've once over then it'll think it amortized probably fine-tuned I No, million we the period. -- now to out get to completed dollar level,

be flow So it'll a there. steady from

Steve Swanson

So to try a about it to is then through a on of million loan? $X off to the $X the basis to your nominal and get it million from down pay term intent

David Dunlap

of that the our unused also bank. the That's own revolving an And had we've cash which doing we're with from of combination correct. credit, line and

Steve Swanson

million? with spent a and "wasted" Okay. it get wasn't really a then a technical money a Was fix there or queue. how I that was whole scanners? we just it timing we trying much to lot just timing? one over it guess, Do fix $X.XX to guesstimate this question money I'll other this? issue in have the $XXX,XXX? back Or Was to as of the the thing Was again -- it the was

Kevin Mills

certainly, say wasn't on working a recertified. and was relay Well, be need money. $XXXk. if thing substantial get than something, boards our should of And next I was a lot them it not We on. would the efforts. engineers But working of it they you to on it fixing amount less working your they're have I say would

Steve Swanson

costs delivery, weeks It it about in four sounded like? Okay.

Kevin Mills

yes. least, At

David Dunlap

At least.

Operator

we have [Operator Instructions]. few a questions. more And

We have [indiscernible].

Unidentified Analyst

few got a I've questions.

you you're one off lower scanner. wanted like trying people mean point? that people you're and to Does going buying the first price XD a to that margins lower just sounds get on XD buy scanners, at to gross them it XD to The have on if the these, incentivize new

Kevin Mills

Well, we will have the similar gross margin but margin there'll be less gross dollars.

will Obviously, are So would that for lose people who lower currently gross a cost dollars. it buying XD, we the go to margin depends. XD,

gain and be we a gross an probably scanners, increase have dollars. XX% percentage, to Today, are anyway, effect around XD we who same -- to gross people currently margin as the upgrade XD, net at right. dollars in the buying margin expected people For XXs XD would a high of buying is

markets. more fundamental you I think to think pointed And our it as somewhat out, also a get change James brings I trapped.

If provide they none then only can their scanners tell wrong development you want end-users that your only scanners, partners scanner. sell solutions brought around XD because of the them XD to

those And available. would of the So place. some scanners part would XD raise scanner in things, applications of have the that scanners or it is you XD have people to other couponing it a higher knowing features, is of that percent first are to to better encourage enable the that XD further whether need a we fact

So plan. it's a longer-term part of

Unidentified Analyst

you're subsidize not... know if Yes, prices, lower yes, by to didn't I I'm going got in but it. that time

David Dunlap

No.

Kevin Mills

term. No, that we're not subsidizing longer

David Dunlap

product was redesigned. That

Kevin Mills

Yes.

Unidentified Analyst

had hour. last like at the sort this? time shipping Got some it. delay And When two-month was eleventh the on these, guess, of you delay the I

Kevin Mills

we But Well, often. least we it's years I say, probably had two been new I well, introduce -- say very would don't such since at a would similar products delay.

Unidentified Analyst

okay. Okay,

in every not once year but So XX about years? every

Kevin Mills

Yes.

Unidentified Analyst

decision X% at still the shares? time. Can I are as you still year, you share make any from since long you precluded -- issuing the prevented? like purchase, And based you're diluting the repurchases term you are Especially information every on loan is you last making question. can You share the as the had the -- outstanding? you're repurchase

Kevin Mills

market part we But are the of that purchase the volume. shares limited of of -- can. the did We daily we open not reasons off one to that XX% the is

a like that. can't But we the we're do a precluded we is lot, offer right. This in place. did tender not why stuff doing So from first

Unidentified Analyst

Okay.

could do you chose you to, another tender offer? if So

Kevin Mills

we to, could choose tender we another offer, yes. If do

Operator

with The next question Matthew from Sidoti. is a Galinko follow-up

Matthew Galinko

You mentioned door. pretty being the a product to line offer it get out the substantial new

department. I think of mentioned years labor about your you on there two engineering

So the your now for just where and behind priority you, R&D? shift where now curious, do is that's that, focus the

Kevin Mills

do going much support certainly work to have the more think to will the let's we a SDK. will more I -- in community The on of because there portion. the with Well, start bigger we're to that do be SDK fact developers,

SDK, we iOS primarily writing -- were in the we were supported Historically, or to writing probably the up. Android So in investment me, the stepping community who in the community, Apple the native were Android.

into go of the community, So a lot for it will bigger enhancing right.

continue will SDKs So forward. I would expect invest we that heavily the going in to

we fix XD, many for switch And As between them. to that regards to XD, on to that's and our XXX that. products, the particularly same where customers Today, our hardware agenda. guys, our we big our XXX we the too Series, follow-on have where focus our we problem need step Series do will still have is in the next

Matthew Galinko

Got you.

into Series being the to lend So it shorter the XXX little bit you easier? put itself improvements the work does Series, or XXX

Kevin Mills

the again, that is and product one on one designs, of things bring so do across market. we have this the XCi with we mean, because added it as slightly move we because before to to a Historically, developments. a two XCi were If line of had it, highlight over the on We that in XXi, it once or maybe do wanted to way opportunity we the yes, was we our the the lot consolidate we forward, was Absolutely. I time. XXi feature expose really then different, products that change to could our the improvements didn't step. used that of can it

common make will across Going to responsive forward, And the be whole much those will we will, core, leverageable you can and more markets adjustments adjustments be use if the quicker. we the product line. that so

James Lopez

Yes, it. there Matt, our that efficiencies And fully to a very approach of took DuraScan. into we've been designed redesigned the platform, similar are lot on a as it's we

forward. moving that of benefits the reap to hope we So

Kevin Mills

designed. the have last that products is thing And been

were a in where increase really not can So the cost reduce, that Historically, and as position. we we're merits. now volume in we position volume

it. not substantially weren't products, really these these other have good, leg are the that some better but So underneath products

James Lopez

flavor one on add to last Just that. bit

One designed the the just one with worldwide. one ship worldwide is whole product changed And old that their ability it of of nonissue. we've this that a into we had designs we've of that kind is the so And shipping that's subtle difficulties with the of advantages the things of some to the architecture, battery was platform.

Operator

And questions we have no at time. further this

Kevin Mills

wish like by participating you. good Thank in afternoon. just and to call, close for a thanking Okay. all everyone would you today's I

Operator

participating. Thank today's you and may Thank now for And you, conference. This gentlemen. you disconnect. concludes ladies

Socket Mobile (SCKT) 26 Apr 182018 Q1 Earnings call transcript