Data I/O Corporation (NASDAQ: DAIO), the leading global provider
of advanced data and security deployment solutions for flash,
flash-memory based intelligent devices and microcontrollers, today
announced financial results for the first quarter ended March 31,
2020.
First Quarter 2020 Highlights
- Net sales of $4.8 million; bookings of $4.3 million
- Gross margin as a percentage of sales of 58.2%
- Net loss of ($554,000) or ($0.07) per share
- Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA)*, excluding equity compensation, of
($110,000)
- Cash & Equivalents of $13.8 million; no debt
- Automotive electronics, advanced programming and secure
provisioning leadership
- Automotive Electronics represented 55% of first quarter 2020
bookings
- New distribution partnership with NOA Leading Co., Ltd. in
Japan
- Three new automotive wins in the quarter in Asia, Americas and
Europe
- Growth in SentriX® devices provisioned, device types supported,
and design wins
- COVID-19 Positioning and Response
- Globally diversified manufacturing/service operations complying
with local regulations
- As an “essential” business, manufacturing facilities remain
open with core personnel onsite to service, build and ship
products
- Prioritizing COVID-19 related device supports, equipment orders
and service
- Cash conservation and expense management initiatives, including
reductions in executive and Board level compensation
*EBITDA and Adjusted EBITDA are non-GAAP
financial measures. A reconciliation is provided in the tables of
this press release.
Management Comments
Commenting on the first quarter ended March 31, 2020, Anthony
Ambrose, President and CEO of Data I/O Corporation, said, “The
first quarter delivered unprecedented worldwide conditions with the
onset of the COVID-19 pandemic just as our business seemed to be
emerging from the cyclical downtrend that commenced nearly two
years ago. Our thoughts and prayers go out to all the communities,
businesses and individuals who have been hard hit by the virus.
This has been a crisis affecting global businesses and humanity
alike, and we at Data I/O are doing our part to contribute toward
the comprehensive steps for safety and recovery.
“We are an essential supplier to the medical and aerospace
industries, and therefore need to stay open while keeping our
employees and our facilities safe. We have required most of our
workforce to operate remotely, while maintaining a core group to
staff our manufacturing, service and support operations. Our global
teams follow recommended best practices in accordance with local
government mandates. I would like to personally recognize the
efforts of our entire global workforce who have risen to the
occasion and kept our workplaces, their communities and families
safe while supporting customers.
“While we entered the crisis in a position of strength, the
unprecedented nature of the pandemic creates significant downside
risk under certain scenarios, so we are taking precautionary
measures. These include reductions and deferrals in compensation
for corporate executives and members of our Board of Directors, and
reduced work weeks for certain locations and functions as outlined
in our previous SEC filing. We also will evaluate on a case by case
basis all government programs worldwide that help preserve our
workforce and cash flow at the same time.
“Globally, the automotive manufacturing arena has been
materially impacted by plant closures. While China factories have
reopened, the US, Mexico and Europe remain largely shut-down
through April. Guidance from leading customers indicates they will
be reopening soon and ramping European and American output later in
the second quarter, with expectation of normal production by the
fourth quarter of 2020.
“Data I/O has consistently been at the forefront of the
industry. The first quarter was no different as we continued to
invest in our leading data programming and secure provisioning
platforms. Our innovations in ultra-fast performance and
reliability were recognized in the quarter, and we are honored to
have received the coveted Service Excellence Award for Device
Programming Support for the second year in a row as determined by
customer voting.
“These qualities must be resonating with our target customers
from around the world. During the first quarter, our global sales
channels and world class products enabled us to win system orders
at new automotive customers in Asia, Americas and Europe as well as
being selected by a global ventilator manufacturer to ramp its
production. We were particularly excited to rapidly support the
ventilator electronics customer with our most advanced Lumen®X
programming technology. Locations and markets may change, but the
reasons we are selected by customers remain the same: outstanding
products, great customer support, financial stability and global
capability.
“For our other key target market in IoT, the rapid adoption of
work-at-home policies amid COVID-19 underscore the importance of
security at all ends of the connected electronics ecosystem. Our
SentriX Platform, a highly robust and flexible cost-effective
security provisioning and data programming deployment system for
authentication devices, secure elements and secure
microcontrollers, has experienced steady interest despite the
recent stress on the overall economy. The low investment SentriX
model is becoming even more attractive to companies that require
solutions on tight budgets.
“In these very uncertain times, it is our intent to remain
agile, improve our processes, follow our product roadmap, protect
our superior financial condition, and grow relative to the
competitive landscape until the eventual recovery in electronics
manufacturing.”
Financial Results
Net sales in the first quarter of 2020 were $4.8 million, as
compared with $6.1 million in the first quarter of 2019. The
year-over-year decline in sales reflects the cyclical downtrend in
the industry, reduced demand resulting from international trade and
geopolitical issues and the onset of the COVID-19 pandemic which
negatively impacted automotive and industrial market
production.
For the 2020 first quarter, gross margin as a percentage of
sales was 58.2%, as compared to 60.8% in the first quarter of 2019.
The 2020 first quarter gross margin was primarily impacted by fixed
costs being spread over lower revenue, as well as increased
tariffs.
Total operating expenses in the first quarter of 2020 were $3.4
million, down from $3.7 million in the 2019 period. Data I/O
continues to invest in research and development and SentriX, while
emphasizing ongoing expense management practices.
An operating loss of ($609,000) for the first quarter of 2020
compares to operating income of $29,000 for the first quarter of
2019. Net loss in the first quarter of 2020 was ($554,000), or
($0.07) per share, compared with net income of $26,000, or $0.00
per diluted share, for the first quarter of 2019. Included in net
income are foreign currency transaction gains of $52,000 for the
2020 period and losses of ($104,000) for the first quarter of
2019.
Earnings before interest, taxes, depreciation and amortization
(“EBITDA”) was ($359,000) in the first quarter of 2020, compared to
EBITDA of $189,000 in the first quarter of 2019. Adjusted EBITDA,
excluding equity compensation, was ($110,000) in the first quarter
of 2020, compared to adjusted EBITDA of $476,000 in the first
quarter of 2019.
Bookings in the first quarter of 2020 were $4.3 million,
compared to $6.2 million in the first quarter of 2019 and $6.9
million in the fourth quarter of 2019. Backlog at March 31, 2020
was $2.3 million, as compared with $2.9 million at December 31,
2019.
Data I/O’s financial condition remains strong with cash of $13.8
million at March 31, 2020, as compared with $13.9 million at
December 31, 2019. The Company had net working capital of $18.4
million at March 31, 2020, a slight reduction from $18.5 million at
December 31, 2019. The Company continues to have no debt.
Conference Call Information
A conference call discussing financial results for the first
quarter ended March 31, 2020 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 10142430. 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 www.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 electronic devices. Today, our
customers use Data I/O security deployment and 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,
ensuring 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,
coronavirus impact, expected reopening and recovery, 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,
coronavirus related business interruptions, 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 Ended March
31,
2020
2019
Net Sales
$4,785
$6,058
Cost of goods sold
2,001
2,373
Gross margin
2,784
3,685
Operating expenses:
Research and development
1,582
1,681
Selling, general and administrative
1,811
1,975
Total operating expenses
3,393
3,656
Operating income(loss)
(609)
29
Non-operating income:
Interest income
8
12
Gain on sale of assets
-
60
Foreign currency transaction gain
(loss)
52
(104)
Total non-operating income
60
(32)
Income(loss) before income taxes
(549)
(3)
Income tax (expense) benefit
(5)
29
Net income(loss)
($554)
$26
Basic earnings(loss) per share
($0.07)
$0.00
Diluted earnings(loss) per share
($0.07)
$0.00
Weighted-average basic shares
8,219
8,303
Weighted-average diluted shares
8,219
8,417
DATA I/O CORPORATION
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
data)
(UNAUDITED)
March 31, 2020
December 31, 2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$13,814
$13,936
Trade accounts receivable, net of
allowance for doubtful accounts of $79 and $80, respectively
3,107
4,099
Inventories
4,804
5,020
Other current assets
1,709
924
TOTAL CURRENT ASSETS
23,434
23,979
Property, plant and equipment – net
1,813
1,668
Income tax receivable
-
640
Other assets
1,850
1,994
TOTAL ASSETS
$27,097
$28,281
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$1,072
$1,151
Accrued compensation
1,214
1,541
Deferred revenue
1,421
1,387
Other accrued liabilities
1,286
1,372
Income taxes payable
28
31
TOTAL CURRENT LIABILITIES
5,021
5,482
Operating lease liabilities
1,045
1,178
Long-term other payables
67
91
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, 8,221,447 shares as of March 31, 2020 and 8,212,748
shares as of December 31, 2019
19,001
18,748
Accumulated earnings
1,954
2,508
Accumulated other comprehensive income
9
274
TOTAL STOCKHOLDERS’ EQUITY
20,964
21,530
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$27,097
$28,281
DATA I/O CORPORATION
NON-GAAP FINANCIAL MEASURE
RECONCILIATION
Three Months Ended March
31,
2020
2019
(in thousands)
Net Income(loss)
($554)
$26
Interest (income)
(8)
(12)
Taxes
5
(29)
Depreciation and amortization
198
204
EBITDA earnings(loss)
($359)
$189
Equity compensation
249
287
Adjusted EBITDA earnings(loss), excluding
equity compensation
($110)
$476
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200430005839/en/
Joel Hatlen Chief Operating and Financial Officer Data I/O
Corporation (425) 881-6444
Darrow Associates, Inc. Jordan Darrow (512) 551-9296
jdarrow@darrowir.com
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