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02/16 16:17 Socket Communications, Inc. Reports 1999 Operating Results;
Forty-six <SCKT.OB>
Socket Communications, Inc. Reports 1999 Operating Results; Forty-six percent increase in Q4 revenue contributes to record year; Nasdaq listing application filed
NEWARK, Calif.--(BUSINESS WIRE)--Feb. 16, 2000--Socket Communications, Inc. (OTCBB:SCKT and SCKTW; Pacific Stock Exchange SOK) today reported record revenue for the year ended December 31, 1999 of $6.9 million, an increase of 26 percent compared to revenue of $5.5 million for the same period a year ago.
The net loss applicable to common stockholders for the year of $1.1 million ($0.11 per share) represented a decrease of 30 percent compared to a net loss applicable to common stockholders of $1.5 million ($0.22 per share) for the same period a year ago. Revenue for the fourth quarter ended December 31, 1999 was a record $2.1 million, an increase of 46 percent compared to revenue of $1.4 million for the same quarter a year ago. The net loss applicable to common stockholders for the quarter was $173,000 ($0.01 per share), compared to a net loss applicable to common stockholders of $405,000 ($0.05 per share) for the same period in 1998.
Revenue growth in 1999 occurred across all of the Company's four product lines. The largest revenue increases were in sales of peripheral connection products, particularly sales of dual serial and CompactFlash serial cards and sales of peripheral connection products to original equipment manufacturers for sale with their products. Increased sales of bar code scanning products were due to higher sales of bar code wand connection products and to new products introduced in 1999, including connection cards for Symbol bar code laser scanning guns and the integrated In-Hand Scanner introduced in the fourth quarter. Higher sales of Ethernet network connection cards were driven by sales of CompactFlash low power Ethernet cards for Windows-powered handheld computers. Increased sales of digital phone connection cards in the fourth quarter of 1999 were due to the introduction of these cards in the Company's worldwide distribution channels. The Company maintained gross margins of 59 percent in both 1999 and 1998. Gross margins for the fourth quarter of 1999 improved to 59 percent compared to margins of 57 percent in 1998 due to product cost reductions in 1999.
Operating expenses for the year increased 16 percent from $4.2 million during 1998 to $4.9 million in fiscal 1999. Research and development expenses increased 24 percent from $1.0 million in 1998 to $1.2 million in 1999 reflecting increased development activities. Sales and marketing expense increased 18 percent from $2.0 million in 1998 to $2.4 million in 1999 reflecting increases in personnel and increased selling and marketing activities associated with an expanding product line. General and administrative expenses increased 7 percent from $1.2 million in 1998 to $1.3 million in 1999 resulting from moderate increases in personnel costs and higher costs of outside professional services. Operating expenses for the fourth quarter of 1999 compared to the same quarter a year ago increased 21 percent. Research and development expense for the quarter increased 47 percent due to increased development activities. Sales and marketing expense for the quarter increased 28 percent over the year-ago period due to increases in personnel and increased selling activities. General and administrative expenses decreased 9 percent for the quarter compared to the same quarter in the previous year due to charges in the fourth quarter of 1998 for stock options granted to consultants, partially offset by increased personnel costs in 1999.
During the fourth quarter of 1999, the Company completed a common stock private placement financing of $4.7 million. As a result of this financing and the Company's increased market capitalization, the Company has applied for listing on the Nasdaq National Market Exchange. During 1999, $3.1 million of preferred stock converted into common stock, reducing total preferred stock outstanding at December 31, 1999 to $0.9 million. The Company's cash balance at December 31, 1999 was $4.3 million.
Product development activities completed by the Company during 1999 included the introduction of digital phone cards connecting handheld computers and laptops to data-enabled digital phones from the largest phone manufacturers for the worldwide CDMA and GSM mobile phone markets. These cards allow a mobile computer user to connect to the Internet or corporate email with a mobile computer's web browser or email programs through the digital phone, and to transfer full Internet graphics and email attachments to a mobile computer. The Company also introduced in the fourth quarter of 1999 its In-Hand Scan Card, which combines a laser engine from Symbol Technologies with a CompactFlash card for insertion in a Palm-size or Pocket PC or other handheld computer. When inserted, the mobile computer's buttons activate the bar code scanner as a completely portable integrated laser bar code scanner that can be operated with one hand. The Company also introduced a new high speed, low power ASIC chip into its peripheral connection products, bar code scanning products and telephone connection products. For 2000, Socket is adding a flash memory slot to its CompactFlash input output cards using MMC flash memory from SanDisk Corporation which can be used as removable memory for music, video, maps, books or large data files. These combination cards are expected to be available during the summer of 2000. The Company is also developing a Bluetooth cordless communications module for mobile computers to enable close proximity cordless communications between a mobile computer and other Bluetooth enabled devices such as mobile phones, desktop computers, computer peripherals or other mobile computers. The Bluetooth communications module is expected to be available in the second half of 2000.
"1999 was a very positive year for Socket," said Charlie Bass, Chairman and Chief Executive Officer. "We introduced several significant new connection products such as our Digital Phone Card and our In-Hand Scan Card. We are continuing our leadership role in creating new and innovative connection products in 2000 for mobile computers including cards that combine input/output capability with removable memory, and Bluetooth communications products enabling wireless personal area networking. We achieved good revenue growth and maintained excellent gross margins while managing growth in our expenses to those needed to aggressively pursue and maintain our lead in providing innovative connection solutions for the rapidly emerging mobile computer market. Our increasing common stock price and the additional equity capital we raised in 1999 have allowed us to apply for listing on the Nasdaq National Market Exchange, and we anticipate that Nasdaq will complete their review of our listing application around the end of March."
"With strategic relationships with industry leaders like Microsoft, SanDisk, Symbol, and Windows-powered mobile computer manufacturers including Hewlett-Packard, Compaq, Casio, and Hitachi, Socket has positioned itself to be a leading supplier of connectivity products to the emerging Windows-powered mobile computing market," said Bass. "With a family of Windows-powered computers, which range from Palm-size and Pocket to notebook size, now available, we expect increased adoption by corporations and mobile professionals to follow, along with growth in wired and wireless applications for these platforms using the Company's connection solutions." Internet Conference Call Broadcast
Investors will have the opportunity to listen to Socket's year-end conference call over the Internet through Vcall at vcall.com or through Streetfusion at streetfusion.com. The conference call begins 2:00 p.m. Pacific Standard Time. To listen to the live call, go to the Vcall or Streetfusion Web sites at least 15 minutes before the start of the call to register, download, and install any necessary audio software. A replay of the call will be available shortly after the call is completed and up to 90 days thereafter. A transcript will be available on Vcall.com two to three days after the live call. About Socket Communications
Socket Communications, Inc. sells connection products for Windows-powered mobile 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 wireless Internet connectivity, bar code scanning, data communication, and networking. 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 www.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
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