UNITED
STATES
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SECURITIES
AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
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CURRENT
REPORT
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Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date
of Report
(Date of earliest event
reported)
: April 25, 2019
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Data I/O
Corporation
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(Exact
name of registrant as specified in its charter)
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Washington
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0-10394
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91-0864123
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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6645
185th Ave. N.E., Suite 100, Redmond, WA 98052
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(Address
of principal executive offices, including zip code)
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(425)
881-6444
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(Registrant’s
telephone number, including area code)
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Not
Applicable
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(Former
name or former address, if changed since last report)
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Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions:
□
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
□ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
□
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
□
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the
registrant is an emerging growth company as defined in Rule 405 of the
Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company □
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act □
EXHIBIT INDEX
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Description
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Press Release: Data I/O Reports First Quarter 2019 Results
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Joel Hatlen
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Darrow
Associates, Inc.
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Chief
Operating and Financial Officer
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Jordan
Darrow
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Data
I/O Corporation
6645
185
th
Ave. NE, Suite 100
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(512)
551-9296
jdarrow@darrowir.com
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Redmond,
WA 98052
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|
(425)
881-6444
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|
Data
I/O Reports First Quarter 2019 Results
Redmond, WA,
Thursday – April 25, 2019 --
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
o
Automotive represented 55% of bookings for 1Q19
o
Shipped 250
th
PSV automated device programming system
o
Key Contract Manufacturer customer win
o
Embedded World 2019 (Nuremberg, Germany) featured Demonstrations
and Presentations with SentriX® partners Cypress, Digicert and Microchip
o
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 250
th
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 5
th
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 -