Transcript of - MKR Group

Transcript of 

Socket Mobile, Inc. 

First Quarter 2012 Management Conference Call 

April 24, 2012 

Participants 

Jim Byers – SVP, MKR Group 

Kevin Mills – President and CEO 

Dave Dunlap – CFO and VP, Finance and Administration and Secretary 

Vcall 

601 Moorefield Park Dr. 

Richmond, VA 23236 

Phone: 888-301-5399 

Fax: 804-327-7554 

info@vcall.com 

www.vcall.com 

www.investorcalendar.com 

Presentation 

Operator 

Greetings and welcome to the Socket Mobile First Quarter 2012 Management 

Conference Call. At this time all participants are in a listen-only mode. A brief 

question and answer session will follow the formal presentation. As a reminder this 

conference is being recorded. 

It is now my pleasure to introduce your host Mr. Jim Byers of MKR Group. 

Jim Byers – SVP, MKR Group 

Thank you, operator. Good afternoon and welcome to Socket’s conference call today 

to review financial results for its 2012 first quarter ended March 31, 2012. On the call 

today from Socket are Kevin Mills, President and CEO; and Dave Dunlap, Chief 

Financial Officer. 

Socket Mobile distributed its earnings release over the wire service at the close of the 

market today. The release has also been posted on Socket’s website at 

www.socketmobile.com. In addition, a replay of today’s call will be available at 

vcall.com shortly after the call’s completion, and a transcript of this call will be posted 

on Socket’s website within a few days. We’ve also posted replay numbers in today’s 

press release for those wishing to replay this call by phone. The phone replays will be 

available for one week. 

Before we begin, I would like to remind everyone that this conference call may contain 

forward-looking statements within the meaning of Section 27-A of the Securities Act of 

1933 as amended and Section 21-E of the Securities Exchange Act of 1934 as 

amended. Such forward-looking statements include, but are not limited to, statements 

regarding mobile computer data collection and OEM products including details on 

timing, distribution, and market acceptance of products and statements predicting 

trends, sales, and market conditions and opportunities in the markets in which Socket 

sells its 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 

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Transcript: 



April 24, 2012 

of a number of factors including, but not limited to, the risk that manufacture of 

Socket’s products may be delayed or not rolled out as predicted due to technological, 

market or financial factors, including the availability of product components and 

necessary working capital, the risk that market acceptance and sales opportunities 

may not happen as anticipated, the risk that Socket’s application partners and current 

distribution channels may choose not to distribute the products or may not be 

successful in doing so, and the risk that acceptance of Socket products in vertical 

application markets may not happen as anticipated and other risks described in 

Socket’s most recent Form 10-K and 10-Q reports filed with the Securities and 

Exchange Commission. Socket does not undertake any obligation to update any such 

forward-looking statements. 

Vcall 



Phone: 888-301-5399 

Fax: 804-327-7554 


www.vcall.com 


Now with that said, I’d like to turn the call over to Socket’s President and CEO, Kevin 

Mills. 


Thanks Jim. Good afternoon everyone, and thank you for joining us today. In today’s 

call, I will begin with a brief review of our Q1 results and then discuss the business 

opportunities we see ahead and our outlook for 2012. Our revenue for the first 

quarter was $4 million consisting of $2.2 million of SoMo related sales, $1.5 million of 

cordless scanning related sales and $300,000 from service and other related 

products. 

Q1 revenue was essentially flat compared to Q1 of last year, reflecting the impact of 

the transitions we are currently going through with both our product families. Revenue 

from our SoMo product was impacted by customers waiting for our next generation 

SoMo 655 which was announced in Q1 with Q2 availability. We expected this 

transition to impact Q1 sales as we noted on our last conference call. 

On our cordless scanning side, sales were also impacted by two transitions. One 

related to the introduction of our new low cost 7Ci barcode scanner. The second by 

the Apple iPad transition. As you may recall, the 7Ci is our Apple certified low cost 1D 

barcode scanner that addresses the need of the large Apple community that needs a 

1D only solution. The release of the new iPad and introduction of the 7Ci combined to 

delay sales as customers were evaluating the new offerings. 

I’d now like to provide more detail on each of the product families starting with the 

SoMo. We expect the transition to our new and enhanced SoMo 655 to be completed 

later this quarter when it ships. Currently, we have provided 18 customers with early 

development units to allow them to qualify their solution on the new platform. Getting 

these early units into the hands of our customers serves several purposes. It provides 

us with valuable feedback from numerous environments and ensures the product is 

optimized prior to mass production. It enables our key customers to evaluate the new 

hardware so they can assure themselves that their software runs perfectly and that 

the overall solution will meet their customers’ requirements, and it ensures that there 

is demand for the new product when we are ready to ship. I am happy to report that 

feedback from this customer group has been excellent and customers are 

overwhelmingly very happy with the improvements we’ve made on the performance of 

the new hardware and associated software. 

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April 24, 2012 

In addition, our commitment to have the new SoMo 655 device in the market for five 

years has been noted by a number of customers as a key purchasing consideration, 

especially those who are transitioning from HP and for those customers that have 

made significant investments in their Windows Mobile software. 

During the transition, we continue to serve the demands from customers for the 

existing SoMo 650, which has remained solid. In Q1, we sold about 3,500 standard 

SoMo 650s, which is a solid number, especially when compared to about the 3,600 

units sold in Q4 and about the 1,600 units sold in Q1 of last year. I am excluding 

OEM customers from these unit numbers to better reflect the underlying demands 

from the market for a standard PDA. Our SoMo is typical of an iPAQ traditionally sold 

by HP. Obviously, with HP’s departure we expect to have a substantially bigger share 

of the market going forward. 

Vcall 



Phone: 888-301-5399 

Fax: 804-327-7554 


www.vcall.com 


A quick update on Epocal, one of our larger OEM customers: we completed our 

contract with them in Q1, shipping the last remaining SoMo 650 units, and don’t 

expect to ship any more units until they have qualified the new SoMo 655. Overall, 

we are feeling very good about the SoMo transition and remain on schedule to ship 

the SoMo 655 to customers by early June. 

Turning to our cordless scanning business: cordless scanning revenue in Q1 was 

$1.5 million, which was slightly lower than our Q4 number due to the transitions and 

was somewhat of a disappointment. However, we are excited about the introduction 

of our new 7Ci and low cost 1D Apple certified scanner to help us better address the 

Apple 1D market. Our 7Ci is about half the cost of our 7Xi but only reads 1D 

barcodes. The significant price difference, which is about $300 per unit, coupled with 

the fact that many of our existing customers don’t typically need 2D scanners, likely 

impacted our Q1 revenues as customers decided to wait for the lower cost version. 

In addition, Apple pre-announced the new iPad in late February, which we believe 

caused customers to delay any decision on purchases until they could also review the 

new tablet. As the new iPads didn’t ship until March 16, it impacted much of March. 

March is by far the most important month of the first quarter and typically represents 

over 40 percent of the entire quarter’s revenue. This resulted in lower than expected 

sales of our Apple scanners in Q1. However, we are confident this will be corrected 

this quarter, now that the new iPad is released and our 7Ci is available. 

The introduction of our 7Ci is very important to the long-term health of our Apple 

centric scanning business, as we are now offering both an aggressively priced 1D 

scanner and a sophisticated 2D scanner, both of which are Apple certified and 

supported by a single common SDK. It is unrealistic to expect customers to pay for a 

2D scanner when they have a 1D only requirement because the cost difference is a 

very significant $300 MSRP. Obviously in the development phase, customers are less 

price-sensitive as you are only buying a few scanners for your development team. 

However, when you move into the deployment phase, it makes a significant 

difference. We believe having both these offerings is the right recipe for success as 

customers can choose the right solution for their situation. The 7Ci is now shipping so 

3




April 24, 2012 

that scanning transition is behind us and we expect to see good growth in our 

scanning business in Q2. 

In summary, as we anticipated, Q1 was very much a transition quarter. However, we 

now have the cordless scanning product transition complete and believe we have 

established a stronger position in the market. We expect to resume growth in Q2 and 

see solid growth continue in the coming quarters. We expect our cordless scanning 

sales to continue to be driven by the growth of mobile phones and tablets as business 

application devices with a scanning requirement. 

Vcall 



Phone: 888-301-5399 

Fax: 804-327-7554 


www.vcall.com 


The SoMo transition will be completed this quarter, which will enable us to resume 

growth in the SoMo business as well. The SoMo 655 is being very well received by 

both our new and existing customers. Having visited a number of customers within 

the past few weeks, I am very excited about the level of interest we are seeing and 

expect to see this interest convert to sales as we start to ship. 

I would now like to turn the call over to Dave for a review of the financials. 


Thank you Kevin. Our first quarter 2012 revenue was $4 million, flat with the first 

quarter a year ago and sequentially down from revenue of $4.4 million in the fourth 

quarter of 2011. As Kevin noted, our new model 7Ci linear low cost Apple certified 

barcode scanner began shipping in April. Predictably that slowed down first quarter 

customer purchases of our higher performance model 7Xi Apple barcode scanners 

and our entry level barcode scanner, our model 7E, as customers evaluated whether 

the new Apple certified linear scanner could meet their requirements at a lower price 

point. With the new low cost Apple certified barcode scanner now in the channel, the 

growth momentum with our cordless scanning products is expected to resume. 

Addressing our SoMo handheld computer, we’ve placed sufficient SoMo model 650 

product into the channel to meet estimated customer demand during the first and 

second quarters. The sales of nearly 4,000 SoMo 650 units during the first quarter 

were similar to the sales volumes for this product in the previous quarter. 

But the announcement of the new SoMo 655 predictably caused some customers to 

wait for its arrival, so SoMo model 650 product sales in the first quarter were flat 

instead of growing. Customers who have sampled the new SoMo 655, as Kevin 

noted, have been quite pleased with the product and we expect strong and growing 

demand once we commence SoMo 655 shipments in early June. 

The SoMo handheld computer is an ideal replacement for the HP 200 Series and 

other discontinued HP Windows Mobile based PDAs as the model 650 or 655 will run 

the same application software without modification and the products have a similar 

look and feel, minimizing any training requirements for employees. As Kevin reported, 

we are in the final stages of gearing up production for the SoMo 655, which has been 

doing well. We will continue to offer our SoMo 650 handheld computers until the 

supply is exhausted. With the channel fully stocked, order backlog entering in the 

second quarter has returned to more normal reorder levels of approximately $1 million 

for all of our products. 

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April 24, 2012 

Our first quarter operations resulted in a net loss of $872,000 or $0.18 per share 

compared to a first quarter net loss a year ago of $928,000 or $0.24 per share and a 

fourth quarter 2011 net loss of $375,000 or $0.08 per share. 

Our margins improve with higher sales which better absorbs manufacturing overhead. 

Thus our margins at $4 million in revenue were 38.5% in 2012 and 37.5% in 2011, 

whereas at $4.4 million in Q4 2011, our margins were 43.1%. As our revenues grow, 

we expect our gross margins to continue to improve. Our operating expenses in the 

first quarter of 2012 were $2.4 million, up from $2.3 million in Q4 primarily reflecting 

the bulk of the annual cost of our year-end audits, which are incurred primarily in the 

first quarter. 

Vcall 



Phone: 888-301-5399 

Fax: 804-327-7554 


www.vcall.com 


In the second quarter, we would expect increases in revenue as the product 

transitions complete, improving gross margins with higher volume sales, and relatively 

flat operating costs. Our operating costs in the second quarter will include 

development costs associated with new products including products for release later 

this year and higher sales and marketing costs as we ramp up selling and marketing 

activities relating to our new products. 

Our second quarter revenue will be helped by sales of the new 7Ci barcode scanner. 

Sales of the SoMo 650 are likely to continue throughout the quarter with upside 

revenue opportunities from handheld computer sales if we deliver the SoMo 655 in 

early June as scheduled, providing time for the channel to process and ship the initial 

deliveries. We held our cash balances at the end of March level with end of year 

balances at just under $1 million. 

We will continue to closely manage our working capital, hold down our expenses to 

those deemed essential and stay focused on our new product launches to move the 

products into and through the channel quickly while building customer demand. We 

continue to enjoy close cooperation and support from our suppliers, our customers 

and our employees. Our objective in 2012 remains focused on serving the emerging 

mobility markets in business and healthcare, growing Socket’s revenues to profitable 

operating levels, and building shareholder value. 

Our annual meeting of stockholders is scheduled for tomorrow, April 25, at the 

company’s facility in Newark, California. On the ballot are the election of current 

directors and the ratification of Moss Adams to continue to serve as our independent 

auditors for 2012. 

Now let me turn the call back to the operator for your questions. 

Operator 

Our first question is from the line of Brian Swift with Security Research Associates. 

: Sorry, I got a call during the conference so I didn’t catch all of it, but maybe you 

can fill in something for me. You mentioned as part of your SoMo sales, you had 

some OEM revenues that were kind of end of life on that product. Could you give us 

an idea of what the significance of that was for the quarter and how long it will be 

before they ramp-up again 

5




April 24, 2012 


Sure. So I was referring to Epocal. I think the significance for the quarter was 

probably less than $100,000. And Epocal, we signed a deal with them for 5,000 units 

almost two years ago. Essentially we’ve been fulfilling that contract over the last two 

years. To give you some comparison, if I look at Q1 2011, Epocal represented 

$800,000 of our SoMo revenue; $800,000 of our $4 million. As the year went on, they 

phased down because the contract was coming to an end. We will provide them with 

the 655. We’re waiting for another special component for them that we will have 

probably in another month or so and we believe then they will be ready to qualify the 

new product. So I think the earliest they could ramp back up is probably late Q3, early 

Q4. 

Vcall 



Phone: 888-301-5399 

Fax: 804-327-7554 


www.vcall.com 


: Could you give us any kind of color on some of the customers that you have in 

the pipeline for the 655. What do you anticipate the rollout of that product to do and 

then when do you think the 650 will be done 


I think that we stay true to our hospitality and healthcare related customers. We 

currently have about 18 customers who have evaluated the SoMo655. We seem to 

have a lot of interest from the hospitality markets, particularly tableside ordering. I 

would say the upside looks very, very strong but it’s too early. I mean it’s easy for 

people during an evaluation phase to be very bullish. While there seems to sizeable 

opportunities in the several thousands of units at some of these customers that are 

now evaluating the product, we’re also able to now deal with the HP customers who 

want to transition. 

Previously with the 650, probably the first question we got asked was if I transition to 

the SoMo 650, can you guarantee it’s going to be available for three to five years 

We didn’t have a good answer for that. Now we have a very good answer for that with 

the 655 and its components. We are pretty confident it will be available for five years, 

and therefore I would commit to customers that if they go with us we will then be able 

to support them for multiple years. 

A lot of these applications are critical. On this recent trip, I visited two or three different 

hospitals, observing things like the phlebotomy departments where they are using our 

device to scan patients prior to drawing blood and then print a label for the blood that 

goes on the vial. That application is still in trial. We seem to be a logical candidate in 

many of these process improvement applications. 

I would hope that the ramp-up of the 655 is pretty strong, particularly in the second 

half, but I don’t have firm numbers yet. I have projections from customers but until we 

start shipping, I think it’s too early to be giving out numbers. As regard to the 650, I 

think as Dave mentioned we have stock available. We will continue to sell that. I 

think we will be all done by July or August at the latest. It’s not possible to have the 

655 available in all territories at the same time. So we will move out of territories like 

Japan last, where we have to go through extra certifications. So 650s might still be 

shipping there in August whereas they might not ship in Europe after June. 

6




April 24, 2012 

We do have a plan to make sure that the inventory is all used up and today demand 

would strongly suggest that we won’t have a surplus on the 650. Sorry, that’s a long 

answer. I think that should give you a lot of color on the situation. 

Operator 

Our next question is from the line of Bernard Fidel, a private investor. 

: Well it looks like we’re getting out of the transition things, so what do you look 

for this quarter You look for growth in sales 

Vcall 



Phone: 888-301-5399 

Fax: 804-327-7554 


www.vcall.com 



Well on the scanning side, we’re through the transition so we are able to basically 

service the requirements pretty well. We’re pleased to have both the 7Ci, which is 

aggressively priced and very good in terms of 1D scanning, and the more 

sophisticated 2D model. When we started last quarter, even at our conference call, 

we didn’t know that Apple was going to announce the new iPad. So that was a bit of a 

surprise, but they generally surprise the world anyway. 

So I think that the two big transitions are behind us. We would expect to see good 

growth in cordless scanning this quarter. On the SoMo side, the most important thing 

we have to do is to ship the 655 on time. We’re able to service existing customers 

with the 650, but realistically we can’t service any of the new demands for new 

deployments until the 655 ships. So those customers are obviously waiting and we 

already have a number of them lined up. 

So I would expect the SoMo to be generally flat to marginally up, but generally flat. 

But we’ll be through the transition this quarter and we will be able to service the 

demand we’re seeing from customers who want to transition from HP and customers 

who want to deploy new solutions. We expect the SoMo 650 to support existing 

customers, but you’re not going to get a lot of new customers going to a product that’s 

already been in the market for five years, with its new version just around the corner. 

: Well we’re almost through April, how does the sales for April, particularly on the 

scanners, do you see a pick up on it 


Yes, I mean April has been okay. Easter and Passover were in the first two weeks of 

April and were pretty dead as a lot of people take time off, particularly in Europe and 

other places in the world. We’ve seen things pick back up since mid-April. But I 

would say we remain on track. We have seen deployments of the 7Ci starting 

already, which is very encouraging. But it’s very early days of the quarter, and 

particularly on the back of that two week holiday for most of the world, to be saying if 

we’re ahead or behind. 

I would say on the scanning side, we’re not worried at all at this stage. Things are 

very much in line with our expectations. 

7




April 24, 2012 


But by just comparing the flow in April versus the flow in January, we’re a week before 

the end of April and we’re about even with where we were in January. So we’re 

already seeing some pickup even without any of the new products contributing much 

to revenue growth on the scanning side and certainly the 655 contribution, if any, 

would be in the June time period. 

So we’re running consistently as we would expect, perhaps a little bit ahead of the first 

quarter, but as Kevin points out, it’s very early in the measurement period. The 

momentum for this quarter will clearly be in the second half of the quarter. 

Vcall 



Phone: 888-301-5399 

Fax: 804-327-7554 


www.vcall.com 


: Now do you have any of estimates of what you see for the second quarter 

sales 


Yes, I mean obviously we have an estimate but we’re expecting to see it up and to be 

a little bit stronger priced and to resume growth. Because our numbers are still 

relatively small, it’s very difficult to peg a number. One or two deals make a difference. 

A deal can be a quarter of a million dollars. So I think that from my point of view there 

are two things that are very important in Q2, which is, we have to ship the 655 on 

time, and we basically need to get as close as we can to cash breakeven or above. 

Those are our two main concerns and that would give us reasonable growth over Q1. 

Launching the products and getting the SoMo business growing again, we have 

already pent-up demand delivering against that which I think is key. There is work to 

do, and we have people working very hard to make sure this happens. 


And you recall, Dr. Fidel, our revenue recognition is based on what we sell out of the 

channel. So shipping these new products into the channel is step one, but it doesn’t 

get to the point of revenue recognition until the channel can turn it around and ship it 

on to their customers. So there is always some time delay. We don’t control the 

timing of what the distributors are doing. Again, the important thing for us, as Kevin is 

noting, is getting these products into the channel as early as we can. 

There is not an issue with the barcode scanner because we’re still early in the quarter, 

but when we get to the point of being end of May or early June with the SoMo655, a 

week or two makes a big difference. 


I am just back from a trip to customers and I have to say I was extremely encouraged 

by the feedback we’ve gotten on the 655 and the improvements seem to be absolutely 

in line with people’s expectations and requirements. So I think the 655 will be a 

substantially better PDA and basically equivalent in price. Without HP in the market, 

we’ll be both a low price leader as well as a very, very full featured SoMo device. 

So a lot of hard work has gone into this. We’re not there yet, but we’re desperately 

close enough. 

8




April 24, 2012 

: Well on the 655, let’s assume that you have it available at the end of May 

beginning to June. 


Yes. 

: Do you have orders for them already 


Yes. We certainly do. Having orders is part of the process of working with the 18 

customers that we selected to get early units. It had multiple purposes. Obviously 

they are 18 different types of environments so we got and are getting lots of feedback 

from different environments to make sure that the units are really robust and 

dependable before we turn on mass production. 

Vcall 



Phone: 888-301-5399 

Fax: 804-327-7554 


www.vcall.com 


But all of these customers are in need of units to deploy. So yes, we expect to 

receive orders from them and have received orders already from some of them. So I 

don’t have a big concern that we’ll have orders on the books waiting for the 655 when 

it comes along. 

: Two more questions. For this quarter, could you see cash flow positive What 

do you need to – how many – what do sales have to be for that 


If you look at our operating expense levels, about $2.4 million this quarter. Let’s say 

at $2.4 million, included within that total are at least $300,000 of non-cash costs such 

as stock option expensing and depreciation. So to achieve breakeven results, we 

would need to fund $2.1 million in operating costs from gross margin contributions 

from sales. With about a 40 percent margin but with improved coverage of fixed 

costs, you’re talking about getting up into the high $4 million level for cash breakeven 

and the mid-to high $5 million level for being both profitable and cash flow positive. 

For profitability, you’ve got to cover that $300,000 of non-cash costs so around $5.5 to 

$5.6 million gets you to profitability. 

: Now do you expect to be profitable in the second half 


Yes in the second half of the year. I think that we said on the previous call that 

transitions are difficult because there is a great deal of uncertainty. You don’t know 

which way customers are going to go. Some will go for the 650 because it’s less 

expensive and they’ve tested and qualified it, and some will wait. I think we’ll be 

through the transition by the end of this quarter, and we’ll have a very clean product 

line, with our sales channel lined up and certainly based on early indications, I don’t 

think that we will have demand issues for the 655. That will give us the additional 

revenue to get into profitable territory. 

9




April 24, 2012 


And you recall, Dr. Fidel, our growth rate on revenues last year was 30% overall, 

covering both of our major product categories, both barcode scanning and our 

handheld computers. We’ve actually got stronger opportunities in the second half of 

this year once we get the new products out. We now are addressing with the low cost 

barcode scanner the 60% or 70% of the market that only does 1D scanning, and the 

lower costs will open up scanning to more people using the Apple products as well as 

other products since the scanner works with multiple smartphones and tablets. 

Vcall 



Phone: 888-301-5399 

Fax: 804-327-7554 


www.vcall.com 


The SoMo 655 really opens up opportunities for a number of HP customers that by 

now are seriously looking to phase in the SoMo655 as an alternative without having to 

abandon their applications. So the opportunities we see in the second half of this 

year, we like. 

: So you can see the third quarter being potentially a profitable quarter, is that a 

fair statement 


I think that’s a fair statement, yes. 

: For the quarter we’re in now; could that be a cash flow positive In other 

words, would we get growth from the first quarter, let’s put it that way 


Yes, I think we’re comfortable we have growth in the first quarter, and we will strive to 

get as close to cash positive as we can and beyond. So we’re doing everything to 

basically get cash positive. I just think we have to be a realistic. A lot comes down to 

when we ship the 655, and as Dave mentioned, the difference of a week could make 

the difference of several hundred thousand dollars whether it clears the channel or 

does not clear the channel. We just don’t know that at this stage of the game. 


But for those who want the 650, there is plenty of product in the channel and we can 

hit the cash breakeven targets for the second quarter even if there were some delays 

in shipping the 655, but the question is how many of those will ship out of the channel 

by the end of June. It will get harder and harder to locate 650’s as you go on through 

this quarter and into next quarter because those products are spread throughout the 

distribution channel. Customers have relationships with some but not with all. We 

can certainly guide and direct people to where the product is, but once the company is 

out of the 650, then the product availability with be in the distribution channels, and as 

quickly as they sell out that will complete the life of that product. 

So we’re hopeful that customers will take advantage of the availability today and bring 

in the 650s that they need and we’ll get the 655s out just as quickly as we can. 

: Just one question, I think you mentioned, but I didn’t quite understand that, the 

Canadian company that you have 

10




April 24, 2012 


Epocal. 

: Epocal, right. 


Yes. 

: When were you going to contract with them In other words, are you going to 

be meeting with them or something … 

Vcall 



Phone: 888-301-5399 

Fax: 804-327-7554 


www.vcall.com 



Yes, first of all we have to get them a final version of our 655 with some additional 

componentry which we will have ready soon. They have to qualify us and then we 

can have a contract discussion. If they don’t qualify the device, there is nothing to 

discuss. So that’s the process and we would expect to start it this quarter, and 

probably finish it, hopefully before Q3, but it’s up to them in terms of the timing. They 

are the customer. I think that what we have to offer will be better and less expensive 

for them than what we offered them previously, which they liked. 

So I can’t give you any guarantees, but yes, we will be meeting with them and we will 

provide samples so they can qualify the 655. We’ve built in a number of features in 

the device that were specifically for them. So we feel there is a good possibility that 

they will be a customer going forward again. 


And Epocal has inventory of our 650s so we’re not disrupting their ability to ship their 

products as we move through this transition. It’s all been coordinated with them and 

we expect it will be a smooth transition. 

Operator 

Thank you. We have no further questions in queue at this time. 


We would just like to thank everyone for participating in today’s call. I wish you all a 

good afternoon. Thank you very much. 

Operator 

Thank you. Ladies and gentlemen, this concludes today’s teleconference. You may 

disconnect your lines at this time. Thank you for your participation. 

11

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