Data I/O Corporation (NASDAQ: DAIO), the leading global provider
of advanced data and security programming solutions for flash,
flash-memory based intelligent devices and microcontrollers, today
announced financial results for the first quarter ended March 31,
2019.
First Quarter 2019 Highlights
- Net sales of $6.1 million; bookings of
$6.2 million
- Gross margin as a percentage of sales
of 60.8%
- Net income of $26,000 or $0.00 diluted
earnings per share
- Adjusted earnings before interest,
taxes, depreciation and amortization (EBITDA)*, excluding equity
compensation, of $476,000
- Cash & Equivalents of $14.8
million; no debt
- Repurchased 58,000 shares as part of a
$2 million buyback program authorized in October 2018
- Automotive electronics, advanced
programming and secure provisioning leadership
- Automotive represented 55% of bookings
for 1Q19
- Shipped 250th PSV automated device
programming system
- Key Contract Manufacturer customer
win
- Embedded World 2019 (Nuremberg,
Germany) featured Demonstrations and Presentations with SentriX®
partners Cypress, Digicert and Microchip
- Ended 1Q19 with 12 partners and 5
system deployments for SentriX system
*Adjusted EBITDA is a non-GAAP financial measure. A
reconciliation is provided in the tables of this press release.
Management Comments
Commenting on the first quarter ended March 31, 2019, Anthony
Ambrose, President and CEO of Data I/O Corporation, said, “The
first quarter was highlighted by strong margins, expense controls,
and favorable variances amid the continued down cycle for the
industry as capacity is absorbed. Discretionary and variable
spending were lower than in the prior year. Data I/O’s financial
condition remains strong and we have made continued progress as the
global leader in programming and security provisioning solutions.
Our long-term growth drivers remain intact and we continue to
invest in our future.
“Automotive customers represented 55% of our total bookings for
the quarter and we had some exciting automotive customer wins. Data
I/O systems are architected to deliver the highest programming
performance today and are extensible to meet projected performance
requirements in the future. Our announcement of TurboBoost™ in the
first quarter, effectively doubling our programming performance in
automotive infotainment applications, further enhanced our lead
over the competition. We also shipped the 250th PSV automated
device programming system in the first quarter, far exceeding any
competitor. We also secured a customer win with a Contract
Manufacturer in Southeast Asia where a competitor had been the
supplier of choice. Beyond our superior financial strength, we
believe the investments being made in our technology and our global
support are becoming more evident in the industry as major
competitive advantages.
“We are excited by the interest and momentum in our SentriX
platform for IoT security. In the first quarter, we shipped our 5th
system for deployment in Europe and expect it to come online in the
second quarter. At the Embedded World 2019 trade show in Nuremberg,
Germany in February, the transition to security in IoT was a major
theme. Data I/O presented alongside our SentriX partners Cypress
Semiconductor, and Microchip and DigiCert. As we progress through
2019, we are encouraged by the prospect of expanding our SentriX
platform and bringing early customers to revenue. We believe the
evolution toward secure programming is inevitable and we have been
investing accordingly. At the same time, we will maintain our
commitment to operational excellence and further enhance our
leadership within the other markets we serve, particularly for
automotive electronics, to optimize our financial performance and
improve profitability.“
Financial Results
Net sales in the first quarter of 2019 were $6.1 million, as
compared with $7.6 million in the first quarter of 2018. The
year-over-year decline in sales was a result of strong cyclical
demand in 2017 that culminated in $4.0M of backlog at the end of
that year as compared with backlog of $1.9 million at December 31,
2018.
For the 2019 first quarter, gross margin as a percentage of
sales was 60.8%, as compared to 57.9% in the first quarter of 2018.
The first quarter 2019 level exceeded the higher end of the
Company’s anticipated target due to a favorable channel and product
mix, and one time variances.
Total operating expenses in the first quarter of 2019 were $3.7
million, down from $4.1 million in the 2018 period. The most
significant reduction in expenses on a year-over-year basis
pertains to lower variable incentive compensation accrual, as most
other expense categories were lower as compared to prior periods.
Data I/O continues to actively engage in market development and
R&D initiatives while emphasizing ongoing expense management
practices.
Operating income was $29,000 for the first quarter of 2019, down
from $344,000 for the first quarter of 2018. Net income in the
first quarter of 2019 was $26,000, or $0.00 per diluted share,
compared with net income of $130,000, or $0.02 per diluted share,
in the first quarter of 2018.
Earnings Before Interest, Taxes, Depreciation and Amortization
(“EBITDA”) was $189,000 in the first quarter of 2019, compared to
$397,000 in the first quarter of 2018. Adjusted EBITDA, excluding
equity compensation, was $476,000 in the first quarter of 2019,
compared to $574,000 in the first quarter of 2018.
Bookings in the first quarter of 2019 were $6.2 million,
compared to $6.2 million in the first quarter of 2018 and $6.5
million in the fourth quarter of 2018. Backlog at March 31, 2019
was $2.0 million, as compared with $1.9 million at December 31,
2018.
Data I/O’s financial condition remains strong with cash of $14.8
million at March 31, 2019, down from $18.3 million at December 31,
2018 and $16.8 million at March 31, 2018. Cash was used to fund the
inventory buildup, stock buyback, increased receivables and pay
year end accrued incentive compensation and 401(k) matching.
The first quarter 2019 balance sheet reflects changes made to
accounting for leases (ASC 842) which recognizes a right-of-use
asset and a corresponding liability. As a result, a $2.4 million
long term asset, $660,000 of short term liability, and $1.70
million long term liability are recognized on the balance sheet.
Net working capital of $20.4 million at March 31, 2019 reflects
this $660,000 short term liability, resulting in a net decrease to
working capital of $648,000 from $21.1 million at December 31, 2018
and $500,000 from $19.9 million at March 31, 2018. The Company
continues to have no debt.
Conference Call Information
A conference call discussing the first quarter ended March 31,
2019, financial results will follow this release today at 2 p.m.
Pacific Time/5 p.m. Eastern Time. To listen to the conference call,
please dial 412-902-6510. A replay will be made available
approximately one hour after the conclusion of the call. To access
the replay, please dial 412-317-0088, access code 10130524. The
conference call will also be simultaneously webcast over the
Internet; visit the News and Events section of the Data I/O
Corporation website at dataio.com to access the call from the site.
This webcast will be recorded and available for replay on the Data
I/O Corporation website approximately one hour after the conclusion
of the conference call.
About Data I/O Corporation
Since 1972 Data I/O has developed innovative solutions to enable
the design and manufacture of electronic products for automotive,
Internet-of-Things, medical, wireless, consumer electronics,
industrial controls and other markets. Today, our customers
manufacture hundreds of millions of products each year using Data
I/O programming solutions to reliably, securely, and
cost-effectively bring innovative new products to life. These
solutions are backed by a global network of Data I/O support and
service professionals, assuring success for our customers.
Learn more at dataio.com
Forward Looking Statement and Non-GAAP financial
measures
Statements in this news release concerning economic outlook,
expected revenue, expected margins, expected savings, expected
results, orders, deliveries, backlog and financial positions, as
well as any other statement that may be construed as a prediction
of future performance or events are forward-looking statements
which involve known and unknown risks, uncertainties and other
factors which may cause actual results to differ materially from
those expressed or implied by such statements. These factors
include uncertainties as to the ability to record revenues based
upon the timing of product deliveries, installations and
acceptance, accrual of expenses, changes in economic conditions and
other risks including those described in the Company's filings on
Forms 10K and 10Q with the Securities and Exchange Commission
(SEC), press releases and other communications.
Non-GAAP financial measures, such as EBITDA and Adjusted EBITDA
excluding equity compensation, should not be considered a
substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP. We believe that these non-GAAP
financial measures provide meaningful supplemental information
regarding the Company’s results and facilitate the comparison of
results.
- tables follow -
DATA I/O CORPORATION CONSOLIDATED STATEMENTS OF
OPERATIONS (in thousands, except per share amounts)
(UNAUDITED)
Three Months EndedMarch
31,
2019 2018 Net Sales $ 6,058 $ 7,629
Cost of goods sold 2,373 3,213 Gross
margin 3,685 4,416 Operating expenses: Research and development
1,681 1,879 Selling, general and administrative 1,975
2,193 Total operating expenses 3,656
4,072 Operating income 29 344 Non-operating income
(expense): Interest income 12 7 Gain on sale of assets 60 - Foreign
currency transaction gain (loss) (104 ) (176 ) Total
non-operating income (expense) (32 ) (169 ) Income
(loss) before income taxes (3 ) 175 Income tax (expense) benefit
29 (45 ) Net income $ 26 $ 130
Basic earnings per share $ 0.00 $ 0.02 Diluted
earnings per share $ 0.00 $ 0.02 Weighted-average basic shares
8,303 8,287 Weighted-average diluted shares 8,417 8,542
DATA I/O CORPORATION CONSOLIDATED BALANCE
SHEETS (in thousands, except share data)
(UNAUDITED)
March 31,2019
December 31,2018
ASSETS CURRENT ASSETS: Cash and cash equivalents $
14,782 $ 18,343 Trade accounts receivable, net of allowance for
doubtful accounts of $87 and $75, respectively 4,663 3,771
Inventories 5,744 5,185 Other current assets 854 621
TOTAL CURRENT ASSETS 26,043 27,920 Property, plant and
equipment – net 1,969 1,985 Income tax receivable 640 598 Other
assets 2,618 220 TOTAL ASSETS $ 31,270 $ 30,723
LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT
LIABILITIES: Accounts payable $ 1,236 $ 1,755 Accrued compensation
1,401 2,872 Deferred revenue 1,436 1,392 Other accrued liabilities
1,508 789 Income taxes payable 44 47 TOTAL CURRENT
LIABILITIES 5,625 6,855 Long-term other payables 2,153 511
COMMITMENTS - - STOCKHOLDERS’ EQUITY Preferred stock
- Authorized, 5,000,000 shares, including 200,000 shares of Series
A Junior Participating Issued and outstanding, none - - Common
stock, at stated value - Authorized, 30,000,000 shares Issued and
outstanding, 8,287,825 shares as of March 31, 2019 and 8,338,628
shares as of December 31, 2018 19,235 19,254 Accumulated earnings
3,721 3,695 Accumulated other comprehensive income 536
408 TOTAL STOCKHOLDERS’ EQUITY 23,492 23,357
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 31,270 $ 30,723
DATA I/O CORPORATION NON-GAAP FINANCIAL MEASURE
RECONCILIATION
Three Months EndedMarch
31,
2019 2018 (in thousands) Net Income $ 26 $ 130
Interest (income) (12 ) (7 ) Taxes (29 ) 45 Depreciation and
amortization 204 229 EBITDA earnings $
189 $ 397 Equity compensation 287 177
Adjusted EBITDA earnings, excluding equity compensation $
476 $ 574
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190425005939/en/
Joel HatlenChief Operating and Financial OfficerData I/O
Corporation(425) 881-6444
Darrow Associates, Inc.Jordan Darrow(512)
551-9296jdarrow@darrowir.com
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