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July 28, 1999 16:15
Socket Communications, Inc. Reports Record Second Quarter Operating Results
Record Revenues and Results Attributed to New Products and To Growing Windows CE Market
NEWARK, Calif., July 28 /PRNewswire/ -- Socket Communications, Inc. (OTC Bulletin Board: SCKT, SCKTW; PCX: SOK) today reported record revenue for the quarter ended June 30, 1999 of $1,802,298, an increase of 21% compared to revenue of $1,486,262 for the same period a year ago. Net loss applicable to common shareholders for the quarter was $110,327 ($0.01 per share) compared to a net loss applicable to common shareholders of $204,030 ($0.03 per share) for the second quarter of 1998.
Revenue for the six months ended June 30, 1999 was $3,262,905, an increase of 23% compared to revenue of $2,661,932 for the same period a year ago. Net loss applicable to common shareholders for the six months ended June 30, 1999 was $567,164 ($0.07 per share), compared to a net loss applicable to common shareholders of $883,438 ($0.13 per share) for the same period in 1998.
The Company attributed its revenue growth in 1999 to its newer products designed for the Windows CE handheld computing marketplace, particularly its bar code scanning and low power Ethernet cards, and to higher demand generated by increasing sales of Windows CE handheld computers. The Company experienced higher sales volumes across all of its product lines including its data communications, network connection, and barcode scanning products.
Operating results for the quarter and six months ended June 30, 1999 compared to the same periods in 1998 were similar. The lower net loss for the second quarter and six months ended June 30, 1999 reflected higher contribution from increased revenues in 1999, partially offset by moderately increased operating expenses. Gross margins for the quarter were 61% in 1999 compared to 62% in 1998 and were 60% for the six month period in 1999 compared to 59% in 1998. Net loss (before dividends and accretion of preferred stock) was $35,184 and $408,161 for the three and six months periods ended June 30 1999 compared to $136,635 and $551,249 for the same periods one year ago. The net loss for the six months ended June 30, 1998 includes an accretion charge in the first quarter of 1998 of $250,000 related to an equity financing issued at a discount to market.
"Socket's record second quarter operating results reflect Socket's success in delivering quality low power connection solutions into the growing Windows CE marketplace," said Socket's Chairman and Chief Executive Officer Charlie Bass. "We expect to continue to grow with the Windows CE market and are focused on achieving near-term profitability. This growth will be helped by an expanding product family which complements the array of applications being served by Windows CE. This family now includes an integrated laser scanner card developed in cooperation with Symbol Technologies which turns a Palm-size PC into a completely portable laser scanner. We are also excited about our recently announced strategic relationships with Zebra Technologies to bring Windows CE connection solutions to barcode printing and with Unisys, which selected our low-power Ethernet card for a new Windows CE check reader. These products are scheduled for release in the third quarter and we expect to see volume shipments beginning in the fourth quarter."
"We also announced in June with Microsoft a digital telephone connection kit to connect digital cellular telephones to Windows CE handheld computers to enable connections to the Internet and corporate e-mail systems while remaining completely mobile. The kit will include browser and installation software from Microsoft and be available this fall for both the North American CDMA and European GSM markets," Bass said.
About Socket Communications
Socket Communications, Inc. develops and sells connection products for Windows CE-based computers and other devices. Socket's products include the Battery Friendly(TM) family of plug-in cards for enhancing Windows CE-based computers by adding data communications, networking, bar code scanning and printing, data collection, and wireless Internet connectivity. Socket's products utilize the company's low power chip technology, making them ideal for battery-operated mobile computers. Information about Socket's complete range of products is available on the company's web site at socketcom.com .
Forward Looking Statements
This press release contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements forecasting future revenue growth and activities relating to this growth including growth of the Windows CE handheld computing market, the introduction of new products for this market, and our expectations for our strategic partnerships. Such statements involve risks and uncertainties, and actual results could differ materially from the results anticipated in such forward looking statements as a result of a number of factors, including, but not limited to, the inability of the Company to raise capital on acceptable terms, the risk of delays in the availability of new products due to technological, market or financial factors including the availability of necessary working capital, the availability of announced Windows CE hardware and software, the market acceptance of Windows CE computers and the Company's related connection products, the failure of our strategic partnerships to benefit our business as expected or the other factors described in the Company's most recent Form 10-KSB filed with the Securities and Exchange Commission.
Condensed Summary Statements of Operations (Unaudited) (Amounts in Thousands except per share)
Three months ended Six months ended
June 30, June 30,
1999 1998 1999 1998
Revenues $1,802 $1,486 $3,263 $2,662
Cost of revenues 703 564 1,314 1,084
Gross Margin 1,099 922 1,949 1,578
GM Percent 61% 62% 60% 59%
R&D 294 254 562 506
Sales & marketing 550 501 1,106 958
General/administrative 279 290 671 589
Interest expense, net 11 14 18 76
Net loss (35) (137) (408) (551)
Preferred Stock Dividends (75) (67) (159) (82)
Accretion of Preferred Stock -- -- -- (250)
Net loss applicable
to common shareholders $(110) $(204) $(567) $(883)
Net loss per share $(0.01) $(0.03) $(0.07) $(0.13)
Weighted Avg. Shares O/S 8,259 7,230 7,875 6,866
Condensed Summary Balance Sheets
(Amounts in Thousands)
June 30, December 31,
1999 1998(a)
(Unaudited) (Unaudited)
Cash $419 $971
Receivables 1,223 875
Inventories 588 480
Other current assets 24 42
Property and Equipment, net 267 226
Other assets 71 68
Total Assets $2,592 $2,662
Accounts payable and accrued liabilities $1,601 $1,564
Bank line of credit 691 521
Deferred revenue 321 240
Capital leases - current portion 13 41
Convertible preferred stock 2,491 4,050
Common stock 16,021 14,225
Accumulated deficit (18,546) (17,979)
Total Liabilities and Equity $2,592 $2,662
(a) Derived from audited financial statements.
SOURCE Socket Communications, Inc.
/CONTACT: David Dunlap, CFO of Socket Communications
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