Socket Mobile Takes Goodwill Impairment Charge in Q3 2020
NEWARK, Calif., Nov. 17, 2020 /PRNewswire/ -- Socket Mobile, Inc. (NASDAQ: SCKT), a leading innovator of data capture and delivery solutions for enhanced productivity, announced today that it has completed the annual goodwill impairment test required by generally accepted accounting principles. As a result of the lower stock price from the beginning of 2020 through the annual goodwill measurement date of September 30(th), the Company concluded that an adjustment to its fair value was required.
The non-cash impairment charge totaled $4.4 million and was recorded in the Company's Q3 2020 results. The impairment charge does not affect the Company's cash position, cash flow from operating activities, bank debt covenants, and does not have any impact on future operations.
The revised financial tables reflecting the goodwill impairment can be found at the end of this press release. For detailed information, please refer to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 at https://www.sec.gov/Archives/edgar/data/944075/000094407520000048/q3-2020.htm
About Socket Mobile, Inc.
Socket Mobile is a leading provider of data capture and delivery solutions for enhanced productivity in workforce mobilization. Socket Mobile's revenue is primarily driven by the deployment of third-party barcode enabled mobile applications that integrate Socket Mobile's cordless barcode scanners and contactless reader/writers. Mobile Applications servicing the specialty retailer, field service, transportation, and manufacturing markets are the primary revenue drivers. Socket Mobile has a network of thousands of developers who use its software developer tools to add sophisticated data capture to their mobile applications. Socket Mobile is headquartered in Newark, Calif. and can be reached at +1-510-933-3000 or www.socketmobile.com. Follow Socket Mobile on Facebook, Twitter @socketmobile and on our sockettalk blog.
Socket Mobile Investor Contact:
Lynn Zhao
Chief Financial Officer
510-933-3016
lynn@socketmobile.com
Socket is a registered trademark of Socket Mobile. All other trademarks and trade names contained herein may be those of their respective owners.
© 2020, Socket Mobile, Inc. All rights reserved.
-- Revised financial tables to follow --
Socket Mobile, Inc.
Summary Statements of Operations (Unaudited)
(
Amounts in Thousands except per share amounts and percentages)
Three months ended Nine months ended
Sept 30, Sept 30,
---
2020 2019 2020 2019
---
Revenue $4,109 $4,980 $11,044 $14,668
Cost of revenue 1,835 2,344 5,186 7,003
--- ---
Gross margin 2,274 2,636 5,858 7,665
--- ---
Gross margin percent 55.3% 52.9% 53.0% 52.3%
--- ---
Research &
development 681 1,015 2,421 2,906
Sales & marketing 658 785 2,148 2,312
General &
administrative 486 707 1,741 2,053
Goodwill impairment
charges 4,427 4,427 --
Total operating
expenses 6,252 2,507 10,737 7,271
---
Operating income
(loss) (3,978) 129 (4,879) 394
--- ---
Other income 70 --
---
Interest income
(expense), net (24) (25) (51) (83)
--- ---
Income tax (expense)
benefit (1) (10) (1) (85)
--- ---
Net income (loss)
$ (4,003)* $94
$ (4,861)* $226
---
Earnings (loss) per share:
Basic
$ (0.62)* $0.02
$ (0.76)* $0.04
Diluted
$ (0.62)* $0.01
$ (0.76)* $0.04
---
Weighted average shares outstanding:
Basic 6,038 5,999 6,020 5,980
Diluted 6,038 6,317 6,020 6,237
---
*Included goodwill impairment
adjustment of $4.43 million
recorded as of September 30,
2020
Socket Mobile, Inc.
Condensed Summary Balance Sheets
(Amounts in Thousands)
September 30,
December 31,
2020 2019**
---
Cash $1,775 $959
Accounts
receivable,
net 2,359 2,837
Inventories,
net 3,362 3,179
Deferred
cost
on
shipments
to
distributors 179 234
Other
current
assets 317 312
Property
and
equipment,
net 835 864
Goodwill -- 4,427
Deferred
tax
assets 5,507 5,507
Operating
leases
right-
of-
use
assets 704 937
Other
long-
term
assets 170 202
Total
assets
$ 15,208* $19,458
---
Accounts
payable
and
accrued
liabilities $2,417 $2,651
Bank
line
of
credit -- 1,413
Notes
payable 1,059 333
Subordinated
convertible
notes
payable,
net
of
discount 168 --
Subordinated
convertible
notes
payable,
net
of
discount-
related
party 1,265 --
Deferred
revenue
on
shipments
to
distributors 557 611
Deferred
service
revenue 55 74
Operating
lease
liabilities 855 1,134
Other
liabilities -- 8
---
Total
liabilities 6,376 6,224
Common
stock 61,532 61,073
Accumulated
deficit
(52,700)* (47,839)
---
Total
equity
8,832* 13,234
--- ---
Total
liabilities
and
equity
$ 15,208* $19,458
--- ---
*Included goodwill impairment
adjustment of $4.43 million
recorded as of September 30,
2020
**Derived from audited
financial statements.
View original content to download multimedia:http://www.prnewswire.com/news-releases/socket-mobile-takes-goodwill-impairment-charge-in-q3-2020-301174223.html
SOURCE Socket Mobile, Inc.
