(SCKTW)(SOK) Socket Communications, Inc. Reports First Quarter 2000 Operating
Results
NEWARK, Calif., Apr 26, 2000 (BUSINESS WIRE) --
New Product Development for Bluetooth and for Removable Memory
Cards, Preparations for Expanded Digital Phone Card Rollouts,
Increased Capital from Warrant Exercises and Key Personnel Additions
Highlight the Quarter
Socket Communications, Inc. (OTC: Bulletin Board SCKT and SCKTW; Pacific
Exchange SOK) today reported revenue for the quarter ended March 31, 2000 of
$2,003,800, an increase of 37 percent compared to revenue of $1,460,607 for the
same period a year ago.
Gross margins of 58 percent were similar in both periods. The net loss
applicable to common stockholders for the quarter was $427,072 ($0.02 per
share), compared to a net loss applicable to common stockholders of $456,837
($0.06 per share) for the first quarter of 1999.
Higher quarterly revenue in 2000 compared to the same period a year ago was due
to sales of new products introduced during the second half of 1999, including
the In-Hand Scan card and the Digital Phone Card, and higher sales of peripheral
connection products, including increased sales to OEMs. Sales of Ethernet
connection cards were flat between the two periods, with increases in low power
Ethernet sales for Windows-powered handheld computers in the first quarter of
2000 offset by decreased sales of standard Ethernet products compared to the
same quarter one year ago.
Operating expenses for the quarter ended March 31, 2000 were $1,648,285, an
increase of 36 percent over the same period a year ago. Research and development
expense of $500,261 nearly doubled over the previous year expense of $267,781
due to higher levels of development activity, including an increase in the
number of engineering employees, relating to two major new products: a Bluetooth
wireless Personal Area Network Card(tm) and a combination input/output card with
removable memory. Both products are expected to be released in the fourth
quarter of 2000. The Company also expanded its family of Digital Phone Cards
which now give more than 50 data-enabled phones the ability to connect mobile
computers to the Internet, and to retrieve email and other information while
mobile. Selling and marketing expense of $764,089 in 2000 increased 37 percent
over the previous year expense of $556,387, reflecting increased selling
activities and the addition of key personnel, including John Adams, Jr. who
joined Socket as its vice president of sales during the quarter. The Company's
general and administrative expense of $383,935 was flat with the previous year
expense of $391,738.
"The first quarter was a building quarter for Socket, in which we increased our
investment in new product development as we seek to expand and improve
connectivity for mobile computer users, and we began investing in the people we
need to manage our expected near-term growth," said Kevin Mills, president and
chief executive officer. "Our Bluetooth development programs will enable most
mobile computers to communicate wirelessly with other Bluetooth-enabled
electronic devices such as mobile phones for Internet access. Socket's
combination input/output memory cards will add removable memory to the
input/output card, and the additional memory can be used to store, play and
transfer rich information content such as MP3 music files. In addition, our
recently completed contract with Sprint PCS is a major step in expanding the
distribution of our Digital Phone Cards," he said.
The Company's cash balance at March 31, 2000 was $8.1 million, an increase of
approximately $3.8 million from its cash balance of $4.3 million at December 31,
1999. The increase in cash reflects the exercise of $3.5 million of warrants and
stock options during the quarter and the sale of $0.5 million of common stock
pursuant to the exercise of preemptive rights to participate in the Company's
most recent equity financing in December 1999, less $0.1 million in cash used
for operations and $0.1 million in cash used for investment in property and
equipment. Interest income in the first quarter of 2000 was $63,735 compared to
zero in the same quarter one year ago, reflecting interest on higher cash
balances during the quarter. Preferred shareholders also converted $0.5 million
of preferred stock to common stock during the quarter, further decreasing
dividends payable on preferred stock from $83,860 in the first quarter of 1999
to $13,318 in the first quarter of 2000. Common shares outstanding at March 31,
2000 were 19.8 million shares, an increase of 3.9 million shares during the
quarter.
About Socket Communications
Socket Communications, Inc. develops and sells connection products for
Windows-powered computers and other devices. Socket's products include the
Battery Friendly(tm) family of plug-in cards for enhancing Windows-powered
handheld and laptop computers by adding networking, bar code scanning and
printing, data communication, 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, the availability of new products under development, and
the benefits from new contracts. 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 risk of delays in the availability
of new products and services due to technological, market or financial factors
including the availability of necessary working capital, delays in the
implementation of new contracts, the market acceptance of Windows-powered mobile
computers and the Company's related connection products, or the other factors
described in the Company's most recent Form 10-KSB filed with the Securities and
Exchange Commission.
Socket Communications, Inc.
Condensed Summary Statements of Operations
(Amounts in Thousands except Per Share)
-----------------------------------------------------------
(Unaudited)
Three months ended March 31,
-----------------------------------------------------------
-----------------------------------------------------------
2000 1999
-----------------------------------------------------------
Revenues $ 2,003 $ 1,461
Cost of revenues 832 611
--------
--------
Gross margin 1,171 850
--------
--------
Gross margin percentage 58.4% 58.2%
--------
Research and development 500 268
Sales and marketing 764 556
General and administrative 384 392
Interest (income) expense, net (63) 7
--------
--------
Net loss (414) (373)
Preferred stock dividends (13) (84)
--------
--------
Net loss attributable to
common stockholders $ (427) $ (457)
--------
--------
Basic and diluted net
loss attributable to
common stockholders per share $ (0.02) $ (0.06)
--------
--------
Weighted Average Shares Outstanding 17,663 7,492
--------
Condensed Summary Balance Sheets
(Amounts in Thousands)
(Unaudited)
March 31, 2000 December 31,1999(a)
----------------------------------------
Cash $ 8,129 $ 4,285
Receivables 1,346 1,557
Inventories 787 736
Other current assets 157 41
Property and equipment, net 397 320
Other assets 89 73
--------
---------------------------------------- -------- --------
Total Assets $ 10,905 $ 7,012
---------------------------------------- -------- --------
--------
Accounts payable
and accrued liabilities $ 1,791 $ 1,657
Deferred revenue 364 347
Convertible preferred stock 360 888
Common stock 27,886 23,190
Accumulated deficit (19,496) (19,070)
-------- --------
---------------------------------------- -------- --------
Total Liabilities and Equity $ 10,905 $ 7,012
---------------------------------------- -------- --------
(a)Derived from audited financial statements.
Distributed via COMTEX.
Copyright (C) 2000 Business Wire. All rights reserved.
-0-
CONTACT: Socket Communications, Inc.
David Dunlap, 510/744-2735
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: NETWORKING
TELECOMMUNICATIONS
HARDWARE
INTERNET
EARNINGS
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
URL: businesswire.com |
