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UNITED STATES
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 30, 2020
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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))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock
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DAIO
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NASDAQ
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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 2020 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
185th 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 2020 Results
Redmond, WA --
April 30, 2020 -- 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
o
Automotive Electronics represented
55% of first quarter 2020 bookings
o
New distribution partnership with
NOA Leading Co., Ltd. in Japan
o
Three new automotive wins in the
quarter in Asia, Americas and Europe
o
Growth in SentriX® devices
provisioned, device types supported, and design wins
o
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.
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tables follow -