SOURCE: Socket Mobile

April 24, 2008 16:05 ET

Socket Mobile Reports First Quarter Revenue of $6.2 Million

Customer Deployments of Business Mobility Solutions Continue Upward Trend

NEWARK, CA--(Marketwire - April 24, 2008) - Socket Mobile, Inc. (NASDAQ: SCKT), an innovative provider of mobile productivity products, today reported financial results for the 2008 first quarter ended March 31, 2008.

Revenue for the first quarter of 2008 was $6.2 million, an increase of 11 percent compared to revenue of $5.5 million for the same quarter a year ago and a decrease of 10 percent compared to revenue of $6.8 million in the immediately preceding quarter. Net loss applicable to common stockholders for the first quarter of 2008 was $959,000, or a loss of $0.03 per share, compared to a net loss applicable to common stockholders of $1.3 million, or a loss of $0.04 per share, in the first quarter of 2007 and a net loss of $431,000, or a loss of $0.01 per share, in the immediately preceding quarter. The portion of the net loss attributable to stock option expensing in the first quarter of 2008 was $219,000, or $0.01 per share, compared to $282,000, or $0.01 per share, in the first quarter of 2007 and $231,000, or $0.01 per share, in the immediately preceding quarter.

Cash and cash equivalents were approximately $3.9 million at March 31, 2008, compared to $5.0 million at December 31, 2007.

Kevin Mills, president and chief executive officer, commented, "We made significant progress in the first quarter building market traction and sales momentum for our Business Mobility systems strategy built around the SoMo 650 handheld computer. The number of vertical industry resellers promoting our system solutions and SoMo doubled, along with the number of units sold via this channel. In addition, the number of direct end-user customers increased. While SoMo revenue of $675,000 recognized in the quarter was lower sequentially, market acceptance and product adoption are increasing."

"Indicative of this acceptance, a nationwide healthcare provider has completed their product evaluation and stated their interest in purchasing several thousand SoMo units that will roll out over a 12-month time frame, beginning late in the second quarter. To support continued growth of the SoMo and accelerate our Business Mobility market outreach, we successfully expanded our regional sales operations during the quarter, adding key sales people in the North and Southwest regions of the U.S. At the same time, we have seen increasing strength in order activity for our traditional data collection and OEM products and entered the second quarter with a record level backlog."

Conference Call

Management of Socket will hold a conference call and web cast today at 2 P.M. PDT to discuss the quarterly results and outlook for the future. The dial-in number to access the call is (877) 407-8033 from within the U.S. or (201) 689-8033 from international locations. A replay will be available via telephone for a week following the call at (877) 660-6853 from within the U.S., or (201) 612-7415 from international locations. Access code for the replay is 286# followed by conference ID 281033#. The call will also be carried live and available via replay through a link on Socket's website at www.socketmobile.com and a transcript will be posted within a few days of the call.

About Socket Mobile

Socket Mobile makes mobility computing and productivity work. The company is a one-stop supplier of mobile computing hardware systems, offering a handheld mobile computer specifically designed for business mobility use and an extensive portfolio of essential mobile data collection and networking peripherals that enable mobile automation and productivity increases. The company also offers OEM solutions. Socket Mobile is headquartered in Newark, Calif. and can be reached at 510-933-3000 or www.socketmobile.com.

Socket and SoMo are trademarks or registered trademarks of Socket Communications, Inc., dba Socket Mobile, Inc. All other trademarks and trade names contained herein may be those of their respective owners.

© 2008, Socket Communications, Inc., dba Socket Mobile, Inc. All rights reserved.

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. Such forward-looking statements include, but are not limited to, statements with respect to the distribution, timing and market acceptance of our products, and statements predicting trends, sales, order activity, backlog and market opportunities in the markets in which we sell our products. 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 that shipments of our products may be delayed or not happen as predicted, if ever, due to technological, market, or financial factors, including the availability of necessary working capital, the risk that market acceptance and sales opportunities may not happen as anticipated, the risk that our integrator program and current distribution channels may not choose to distribute our products or may not be successful in doing so, the risk that acceptance of our products in vertical application markets may not happen as anticipated, and other risks described in our most recent Form 10-K and 10-Q reports filed with the Securities and Exchange Commission. Socket Mobile does not undertake any obligation to update any forward-looking statements.

                          Socket Mobile, Inc.
          Summary Consolidated Statements of Operations (Unaudited)
              (Amounts in Thousands except per share amounts)


                                              Three months ended March 31,
                                              ----------------------------
                                                  2008           2007
                                              -------------  -------------
Revenue                                       $       6,170  $       5,548
Cost of revenue                                       3,152          2,763
                                              -------------  -------------
Gross profit                                          3,018          2,785
                                              -------------  -------------
      Gross profit percent                               49%            50%
                                              -------------  -------------
Research & development                                1,187          1,427
Sales & marketing                                     1,943          1,759
General & administrative                                806            857
Amortization of intangibles                              32             34
                                              -------------  -------------
   Total operating expenses                           3,968          4,077
Interest (income) expense, net                            1            (34)
                                              -------------  -------------
Deferred income tax expense                               8              8
                                              -------------  -------------
Net (loss)                                             (959)        (1,266)
                                              -------------  -------------
Net (loss) applicable to common stockholders
 per share:
Basic and diluted                             $       (0.03) $       (0.04)
                                              -------------  -------------
Weighted average shares outstanding:
Basic and diluted                                    32,013         31,872
                                              -------------  -------------





                            Socket Mobile, Inc.
              Condensed Consolidated Summary Balance Sheets
                          (Amounts in Thousands)


                                                 March, 31,   December 31,
                                                    2008         2007*
                                                 (Unaudited)
                                                ------------  ------------
Cash                                            $      3,943  $      4,963
Accounts receivable                                    3,225         2,615
Inventories                                            3,043         2,438
Other current assets                                     410           283
Property and equipment, net                            1,099         1,145
Goodwill                                               9,798         9,798
Intangible technology                                    442           474
Other assets                                             320           258
                                                ------------  ------------
Total assets                                    $     22,280  $     21,974
                                                ------------  ------------
Accounts payable and accrued liabilities        $      4,355  $      3,281
Bank line of credit                                    2,754         2,622
Deferred income on shipments to distributors           1,610         1,745
Other liabilities                                        752           792
Common stock                                          53,920        53,686
Accumulated deficit                                  (41,111)      (40,152)
                                                ------------  ------------
Total liabilities and equity                    $     22,280  $     21,974
                                                ------------  ------------

*Derived from audited financial statements.