Socket Mobile A Mobile Data Capture Company 5/16/2018

Transcription

1 Socket Mobile A Mobile Data Capture Company 5/16/2018

2 Forward Looking Statements During the course of this presentation, we may make forward-looking statements that involve risks and uncertainties, including without limitation risks and uncertainties relating to the company's financial prospects and projections, the company's ability to market its products and increase its business in the Mobile markets. These forward-looking statements speak only as of the date hereof and are based upon the information currently available to the company. Such information is subject to change, and the company will not necessarily inform you of such changes. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are new and changing technologies, customer acceptance of those technologies, fluctuations or cancellations in orders from distribution customers, new and continuing adverse economic conditions, availability of working capital and the company's ability to compete effectively with other products. These and other factors could cause actual results to differ materially from those presented in any forward-looking statement and are discussed in the company's filings with the Securities and Exchange Commission including its recent filings on Forms 10-K and10-q. 2

3 We Provide Data Capture Solutions For Mobile Business Applications The Primary Markets served: Retail, Industrial & Manufacturing, Transportation & Logistics, Health Care, and Commercial Services 3

4 Socket Mobile is a Mobile Application Driven Business Mobile applications have changed the world Everyone is comfortable with Mobile apps and businesses are becoming dependent on them Application accessories are needed for business level performance in many situations Socket Mobile is the appcessory of choice for mobile data capture How the world has changed Historically, small shops used a Casio Cash Register and Excel to run their business Today, a POS application provides a tablet cash register, epayment and business analytics Socket Mobile application developers include Square, Shopify, ShopKeep, Vend, TeamWork Retail, Lightspeed, etc. About 10-20% of merchants need a scanner today depending on what they are selling 4

5 The Application is the Primary Purchase End customers are primarily buying the application much like a car is a primary purchase Socket Mobile scanners are the equivalent to performance tires on that car Just like all cars come with tires, all applications can support camera based scanning Better cars have performance tires for speed and performance some need performance scanners Socket Mobile provides the app with the needed data capture speed and performance 6 Most of our work is with the car designers we benefit when the car is sold 5

6 Why Do Developers (Designers) Choose Socket Mobile We offer the best performance, control, flexibility The developers (designers) are our primary customers and our focus Socket Mobile s integrated advanced barcode scanning software does all the work Scans, edits and delivers the barcoded information as instructed by the application. Accurate, high-speed barcode scanning in multiple environments it just works. Our focus has been ios and Android developers We do the work so the developers don t have to worry We have always maintained forward compatibility and updated our SDK within weeks of a new version from Apple and Google Our Capture SDK adds popular development framework tools to simplify integration Supports high level frameworks such as Cordova, Xamarin and React. Easy to install and update with popular SDK distribution systems including CocoaPods, Maven, and Nuget. Enables us to better service our existing developers and many more new developers 6

7 After the App Development is Complete The application becomes our sales force The application is the primary purchase Socket Mobile scanners are purchased by those app users who need performance scanning Socket Mobile scanners are purchased from multiple sources including: App provider s webpages Square, ShopKeep On-line resellers Amazon, CDW, other 4 Application Driven Business is: Very leverageable, as Socket Mobile doesn t have a traditional sales force Highly efficient for everyone involved, is close to a self-service model Well understood and optimized, especially in the US Gaining traction internationally 7

8 Many Developer Websites Offer our Products Examples : Square & ShopKeep - POS Application Providers 8

9 Meet the Family SocketScan Colorful Series (Companion) S700: 1D Imager S730: 1D Laser S740: 2D Imager 9

10 Meet the Family DuraScan Ruggedized Series (Companion) D600: NFC D700: 1D Imager D730: 1D Laser D740/50: 2D Imager RFID/NFC 10

11 Newest Family Member D600 RFID and Near Field Communications (NFC) Data capture goes beyond barcode scanners New product (D600) will read and write to RFID tags including NFC Widespread availability today of Near Field Communication in Smartphones will encourage consumer adoption and use, while business will leverage dedicated NFC readers for performance. Capture SDK supports RFID and NFC products and enable developers to modify data, control data placement, and provide full control of their user experience. Examples of RFID and NFC usage: Asset Identification and Tracking Personal ID at Hospitality Events Brand and Label Authentication Manufacturing Process Controls 11

12 Global Market for Mobile Barcode Companion Scanners Total WW Mobile Barcode Scanner Market $124M, 7.2% CAGR WW Companion Scanning Market $55M Socket Mobile 30% Socket Mobile is not active in this Market segment Socket Mobile active In this market segment since 2013 Others 70% Socket Mobile active in this market segment since 2016 Socket Mobile is the world leader in companion scanning ipad based POS system is the main driver today Over 150 POS application systems support our scanners: Square, ShopKeep, Vend..plus many more Other application categories are being developed Field Service, Logistics and Manufacturing Companion Scanning Sled/Sleeve Scanning Ring Scanning 12

13 Socket Mobile Has Entered the Mobile Sled/Sleeve Market 1 2 Sled/sleeve market typically combines scanner and smartphone into a single handed scanner. Task requires one hand free. Socket Mobile did not offer a solution for these customer until Q DuraCase combines selected host devices and Socket S800 series (flat sided) scanners, both 1D and 2D Selected host devices include Apple ipod, Samsung J3 and J5. Apple smartphones coming in 2H 2018 Devices charge together, work together. 4 No one develops apps for hardware that does not exist.even if it s promised soon We always need to produce the hardware first Application development follows, which in turn leads to sales Currently many developers are focused on our solutions in the sled/sleeve market 13

14 Meet the Family SocketScan S800 Series DuraCase: S800 1D Imager S850 2D Imager Smart Devices: ipod Touch Samsung J3/J5/S7 Apple iphone: coming 14

15 Global Market for Mobile Barcode Sled/Sleeve Scanners Total WW Mobile Barcode Scanning Market $124M, 7.2% CAGR WW Sled/Sleeve Scanning Market - $25M Socket Mobile 15% Socket Mobile is not active in this Market segment Socket Mobile active In this market segment since 2013 Others 85% Socket Mobile active in this market segment since 2016 Companion Scanning Sled/Sleeve Scanning Ring Scanning One handed scanning with DuraCase: Combines S8xx+ smartphone/ipod Used together as one unit Typical applications: Physical inventory, Ticketing Fits in your pocket or purse 15

16 Our Business Is Very Leveraged but Takes Time It s a design win business Developers - Are the new car designers Pilots Deployments Test track time Initial Deployment First road tests Deployments Available to public Once Approved Brings benefit of the app (car) sales team Our success is tied to their success We move on to the next model Manufacturing 19% Healthcare 5% Hospitality 5% Transportation 10% Apps developed in 2018 will add to revenue in Retail 53% 16

17 Annual Operating Results Continue Positive Trends (Millions) Cordless = Dark Blue $25 $20 $15 $10 $5 Margin Contribution Operating Expense Revenue $15.7M 61% $6.3 (40%) $6.4 79% $7.4 (44%) $17.0M $6.5 By Year $18.4M 85% $8.9 (49%) $6.8 $20.8M $10.4 (50.0%) $21.3M 86% 96% $7.9 $11.4 (53.5%) $9.0 $0 -$5 Operating Income ($Mil) 2013 EPS: $(0.13) $(0.1) 2014 EPS: $ EPS: $0.33 $0.9 $ EPS: $0.41* *Before one time setup of deferred taxes in 2016 and one time deferred tax rate adjustment in 2017 $ EPS: $0.22* $2.4 17

18 Why Socket Mobile? Nasdaq: SCKT Today, Socket Mobile is a big fish in a small and growing pond We have grown our business by focusing on the mobile scanning market Cordless scanning revenue grew 358% in 5 years. We have established a market leader position with our development partners We have over 700 scanner enabled apps in the public Apple App Store, more in other app stores These apps are our sales force and are driving sales, and continue to grow on a daily basis We are positioned to service the market today and are ready for growth We support small deployments, using Amazon and CDW, via our WW distribution network We support larger deployments via our WW distribution network We don t need a lot of capital to support growth, as our model is highly leveraged The pond is expected to grow If the pond grows slowly, as VDC predicts, we ll have less competition and should continue to grow slowly If the pond grows quickly, we are ready and will be able to respond and grow quickly Either way, we expect to become the dominant supplier in this emerging mobile scanning market 18

19 Thank You!