SCKT - Earnings call transcript Q3 2018

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Operator

Welcome to the Q3 2018 Socket Mobile Management Conference Call. My name is Rebecca, and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions]. is conference this note being recorded. Please now will turn the Dunlap. David to over call I

sir.. begin, may You

David Dunlap

Thank afternoon, results operator. XX, call quarter you, Good nine XXXX. today Mobile’s to and to conference Socket review ended financial months for third everybody, its September and welcome

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

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

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

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

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

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

Kevin Mills

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

same web are from higher information. the new per in updating difficult products are QX new of priority is products the products their key and way, now updates This available diminish. was improved at the news new that often The price Our partners a loss every products. were are because older QX, have our five new XXX% but four transition is of software with – most end, are switched ongoing the in new in These use for May, our good since much positive. transition. The older transitions don’t impacted very by been for our the of worthless. it in start QX and are our extremely the the them lower better they feedback Despite fully in all for I’ll quarter by customers pages who compatible. share. every of The are customers to product and their resulted bookings the just supply have a this, the $XX,XXX, $X.XX or revenue partners will own versions. saying years, in we do is to revenue as XX% guiding are of process become to

In addition, move new trouble-free easy it outreach relaunch we them our and makes in will campaign to quick way. for products the extremely a that to

new There the in the in a complete which behind QX I’d number is like transition were of much over that products to better to the once quarter suggests to expect XXXX. fully and be transition will this We us, also be to positives by things share.

our The first primarily and were has of all record need in year scanners same quickly reads scanners X, SXXX scanner. our today’s at XX% so driven XD results. the point above our future previously price our fast-moving attractive all-time our was XX% previous than SXXX were results higher XD in who companion attractive is This Sales priced barcodes, companion our highest customers last XD proofing scanner impacted – reached by $XXX to of levels the introduced level. period some sales QX. These and and new of is The – extremely both it’s world. and

to model. our and our driver results, QX, this we scanner, this SXXX, of We again, version below about a significant expect forward. attachable happy I product late previous a going continue the at price $XXX are be extremely with In point shift also the to

we we sell DuraScan to of transition. our for similar this But will positive the started impact to new has SocketScan significantly as going market We been I’d revenue not it revenue reception about impact our on our and product our ahead out like transition months positively products, less DuraScan severe. a so believe also forward. six expect experience point that

when our a of same did which our than sales the in we new and both our QX, In products last However, period future. period for new well were one the DuraScan old increase XXX% the DuraScan see year, for and were of version available, bodes older during of higher were unavailable. versions supplies poor the solid both demand sales versions

returned Finally, mid-August normal soon. availability has report transition and over sales our In normal we to on new as customers difficult will more we servicing. and levels. the summary, to products to Amazon levels Amazon and our our products back are been our All weekly ones are it current slow, be better are of happy that but of to suitable are than

been We four will the much features well to expect The to is transition that once be have things serve with our products new for customers completed. years. designed five better

the continue or the this believe our the the very we build During space maintained future. software SDK, an business launched future. We for to remain our mobile scanning the have and in well-positioned leader investment we improved long-term. We’ve are development transition, kit, and for in

complete over turn to like QX to transition expect results the and We a that better deliver James. financial to substantially in XXXX. call the in I’d now said, With

James Lopez

QX, our In of in XD you, overall an scanners. unit capture Kevin. Thank saw demand QX, led data we increase by X% over

a years newly value solution. over XX% everything our Our scanner previously and released SocketScan reads for demand QX DXXX, from longer price their application our recommendations while across still along mobile switching attracted new SocketScan increase in from coming long overall retail and scanners helped demand drive point-of-sale. partners on deep SXXX Classic XCi, our based application points and markets. XD and Unfortunately, new for qualified partners DuraScan DXXX and QX ordering demand to anticipated, as Customers universal XMi see the created for are a in universal to as SXXX, also partners. with serve released of pattern our ability is continued have we in-customers than any steady for XD scanners solution, our recent application XQi taking our

recommendations by end quarter. to the expect of We and transition application-based complete of the orders customer

and in I’d to also safety for scanner the services pest growth, gain growth recently our scanners QX. series SXXX grow this we solution lower-cost of XD of of attachable note support released our control, at last for MSRP In introduction is IPXX-rated momentum our and option. utility XD series yet reported in our SXXX gravitated with sleeve without The affordable call, equipment most DuraCase with As These attachable management. to to further in have applications like an and to started applications commercial like XD were emerge scanner introduced for two starting also our year our in scanners Socket last XXX and to we DuraScan of to that report reading QX. additional XD and future further solutions I’d it our boost sales. expect passport scanner performance $XXX, monitoring

Japan, reading prepares that family replaced and enabled as scanner. SXXX demand SXXX passport enables to is the will market attachable SXXX, DXXX XD short, as Our the complimentary reading. zone opportunities with emerge XXXX is a support, MRZ performance both the Olympics. DXXX for The from solution in a Passport something we’ve seen our machine solution DuraScan and our for new solutions readable are

mention roll out to overall our initial like Capture SDK. of Capture iOS, new efforts our SDK across our our In I’d Windows. Android we and with finalized Finally, QX,

developer SDK Capture is integration developers much and our repositories By program to launch when notifications new a approach developers before. joining applications they’re our engagements the meaning capture our easily and through for in SDK an now test market. allowing is and leveraging dependency next-generation ready call data prior to providing program, and drive with can more to our even our their Our join software more into push repositories, team device resulting SDK common ever software available updates easily management than

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

David Dunlap

James. Thank SocketScan as products into for you, the revenue to Revenue continues. our of QX $X,XXX,XXX, our family $X,XXX,XXX of quarter transitioning was similar new third

our positive amortization a to resellers, And quarter. revenue revenue including revenue our of cordless are distributors purchases capture $XXX,XXX deployments smaller for of the complex materialize, and was a related from We data in deployments. some expenses and tightly on quarter. QX third line, from the to as $X,XXX,XXX, costs $XX,XXX, production Third loss share. or a per initial benefited new in essential absorbed XX.X% $XXX,XXX in Both were without quarter the the a EBITDA $X.XX expense the of loss XX,XXX from quarter products, of back we and deployments through small and sold higher take cutting whereas as was from before operating testing QX and margins the costs margin enterprise XX% which more in as that sale expenses accessories. benefited the enterprise from XXXX, improvements of services. from we most and our to barcode for than in than the Operating several $X,XXX,XXX, XX.X% reductions manage depreciation of net second interest, the continue lower we typically improved our or units earnings quarter improved QX recognize extra third slightly was more unit larger Over enterprise had our training. in to quarter, our require second products bottom taxes, quarter scanners longer

the continue to the resellers As our improve, of completed our distributors, products return margins revenue expect by to up, new continue to profitable to and family to transition to is while we partners we our application SocketScan to pick expenses growth. growth operating and quarter, our manage during fourth

balance XX, be working at X.XX in positive, capital ratio of quarter. the ratios free and moderate Our to cash with and third increases sheet the current continue September XXXX during

partners are to registered of mobile by completed the And continue to application and released. tablets partners base application Our pace. applications at grow use as us our applications annual benefit continues those with created smartphones for and a will healthy

well to DuraScan, and SocketScan the of attachable tools partners development families our are new quality responding under of scanners. development barcode Our our

operate revenue, our profitably. manage Our our costs grow financial to and goals to remain

Now turn questions. the the let Operator? your operator back me call to for

Operator

you. Thank

We [Operator And Rider Instructions] begin from from Capital our first question-and-answer [Christian question the is [ph]. ] session. will now Green

is line open. Your

Unidentified Analyst

you classic the transition, shipping older this did model? stop With when

Kevin Mills

models. We have not shipping classic older stopped the

So they…

Unidentified Analyst

ahead. go Yes,

Kevin Mills

– our normally has would side. programs created I to So been things they happened they’re do customers that think other and both with confusion seeing what not and we waiting the to as that some I get over think have our other we’ve is, the marketing customers

those type are the things. So of

But get to still in products basically, people we yes. the over the are other are some ways, side. created So waiting to available, old as a slowdown

Unidentified Analyst

okay. Okay,

the in still next how everybody months shipping if out you’re run few So inventory will of old?

Kevin Mills

the three probably I in then to we channel four of weeks and be November, would the Well, to say, And for we fulfill disappear. unable in channel. orders they’ll any have, will, inventory new

Unidentified Analyst

okay. Okay,

So stop that’s when them. you shipping

Okay, okay.

Kevin Mills

Yes.

get just I So to bit to And we be they probably a two get we’ve number everybody’s busy with we aggressive it’s they’ll tried the benefit priority. But is their been more four and of three to transition. don’t have have again, hindsight, should or languishing or with one what at discovered when priority a us. number number think the it and

QX, in it to get we’re will pretty they convinced. So

Unidentified Analyst

Right. Yes, okay, yes. okay. They won’t have a choice,

Kevin Mills

They won’t a have choice.

Unidentified Analyst

G&A cut long-term I and future and percentage you of much marketing to you the in the that revenues going to and that base investing higher so through any back revenues R&D, Okay. that the as XXXX, need them, of XXXX, permanently a [ph] a where going are for higher to and for the understand maintain or or just you Are even go percentage And years. R&D in five expense it levels, is were I expect your revenue? get have at than as sales you you are to as they X are a of can past percentage

Kevin Mills

fall, that investments to revenue will they believe are we real as percentage, not rise. dollar our They a therefore, terms. will cause And but in

the be expectation. would that So

Unidentified Analyst

that. luck good with okay, Okay,

Kevin Mills

Okay.

Unidentified Analyst

I’d see as well. work one that

Kevin Mills

Okay.

Unidentified Analyst

Okay.

So those questions. my are you. Thank

Kevin Mills

Christian. Thank you much, very

Operator

this at questions further no have time. We

Kevin Mills

and all afternoon. everyone to like call, wish just you. We Thank for you today’s participating good in a Okay. thank

Operator

Thank participating. conference. gentlemen. and today’s This you ladies you, concludes for Thank

disconnect. You now may

Socket Mobile (SCKT) 25 Oct 182018 Q3 Earnings call transcript