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): August 4, 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))
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 Second 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
|
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 Second Quarter 2020 Results
Redmond, WA --
August 4, 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 second quarter
ended June 30, 2020.
Second Quarter 2020 Highlights
·
Net sales of $4.7 million;
bookings of $5.0 million
·
Gross margin as a percentage of
sales of 52.4 %
·
Net loss of ($1,057,000) or
($0.13) per share
·
Adjusted earnings before interest,
taxes, depreciation and amortization (EBITDA)*, excluding equity compensation,
of ($231,000)
·
Cash & Equivalents of $13.3
million; no debt
·
Automotive electronics, advanced
programming and secure provisioning leadership
o
Automotive Electronics represented
approximately 50% of second quarter 2020 bookings
o
Wins in UFS infotainment, vehicle
electrification, and competitive replacement within the automotive sector
o
Win at Asia-based IoT manufacturer
for multiple PSV family systems
o
300th PSV family system deployed
o
Shipments began for the SentriX®
supported PSoC 64 Standard Secure Amazon
Web Services (AWS) microcontroller (MCU)
*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 second quarter ended June 30, 2020, Anthony Ambrose, President and CEO of Data I/O
Corporation, said, “In a COVID-19 pandemic-stricken world, we are grateful for
the health of our staff, customers, partners, stakeholders and families, and
appreciate the sacrifices made by healthcare responders around the world.
Under the circumstances during the better part of the past six months, global
commerce has been anything but predictable. Expectations in general have been
reduced, and our performance in the second quarter reflected these business
conditions.
“For Data I/O, our second quarter
revenues of $4.7 million were modestly under the $4.8 million recorded in the
first quarter. Second quarter bookings improved to $5.0 million from $4.3M in
the first quarter. Backlog strengthened at June 30 to $2.8 million from $2.3
million at March 31.
“During the second quarter, global COVID-19 negatively
affected many of our customers and our business. We saw many automotive
manufacturing facilities temporarily closing. In turn, this delayed equipment
and consumable purchases. Within automotive, the market for electric vehicles
has been emerging to complement our strength in ADAS and infotainment segments.
In the second quarter, we shipped a PSV7000 unit for use in a major European OEM’s electrification program, and we
are actively pursuing more opportunities in this area. We also had other
competitive automotive wins in Asia and Latin America. While the traditional automotive
capital equipment market has been challenging, we experienced pockets of
strength within the broader industrial/IoT electronics market as well as from
other sectors. We gained a significant new IoT customer in Asia in the second
quarter. We are pleased
to have reached the milestone of deploying our 300th PSV unit during
the second quarter.
“SentriX saw continued progress with our channel partners in
the second quarter. Through a programming center partner, we won a significant
opportunity in utilities/smart metering. Cypress, an Infineon Technologies company, announced in July
the production availability of its PSoC 64 Standard Secure Amazon Web Services
(AWS) microcontroller (MCU). The MCU provides secure IoT device management that enables OEMs to safely deploy
applications and handle data at scale. These are important highlights of our SentriX
ecosystems’ growing presence.
“The basic tenets of our success have been and will continue
to be rooted in our technology and prudent financial planning with realistic
expectations. Data I/O has built a sustainable and resilient business to withstand
down periods such as the one we are in and then to flourish from our proven
operational leverage as conditions improve. The last market cycle upswing for
Data I/O was based on our capital equipment and consumable business lines,
whereas the next cycle upswing should benefit from our SentriX platform. At
the end of the second quarter, we had $13.3 million in cash and no debt. This
provides us with ample liquidity so that we may be flexible in these
challenging times and remain committed to our long-term growth objectives.”
Financial Results
Net sales in the
second quarter of 2020 were $4.7 million, as compared with $5.8 million in the
second quarter of 2019. The year-over-year decline in sales reflects the
cyclical downtrend in the industry and the broadening impact of the COVID-19
pandemic, with particular emphasis on the automotive market.
For the 2020 second quarter, gross margin as a percentage of sales was 52.4%,
as compared to 61.4% in the second quarter of 2019. The 2020 second quarter gross
margin was primarily impacted by fixed costs being spread over lower revenue
and a less favorable revenue mix due to reduced levels of consumable sales
resulting from limited activities among automotive customers with many
temporary closures and reductions due to COVID-19.
Total operating
expenses in the second quarter of 2020 were $3.3 million, down from $3.5
million in the 2019 period. Data I/O continues to invest in research and
development and SentriX, while emphasizing ongoing expense management
practices. The second quarter of 2020 marks two consecutive quarters in which
operating expenses have been reduced.
An operating loss of
($878,000) for the second quarter of 2020 compares to operating income of
$75,000 for the second quarter of 2019. Net loss in the second quarter of 2020
was ($1,057,000), or ($0.13) per share, compared with net income of $127,000,
or $0.02 per diluted share, for the second quarter of 2019. Included in net
income are foreign currency transaction gains/(loss) of ($83,000) for the 2020
period and $69,000 for the second quarter of 2019.
Earnings
before interest, taxes, depreciation and amortization (“EBITDA”) was ($712,000)
in the second quarter of 2020, compared to EBITDA of $364,000 in the second
quarter of 2019. Adjusted EBITDA, excluding equity compensation, was
($231,000) in the second quarter of 2020, compared to adjusted EBITDA of
$728,000 in the second quarter of 2019.
Bookings in the
second quarter of 2020 were $5.0 million, compared to $4.3 million in the first
quarter of 2020 and $5.1 million in the second quarter of 2019. Backlog at
June 30, 2020 was $2.8 million, as compared with $2.3 million at March 31,
2020.
Data I/O’s financial
condition remains strong with cash of $13.3 million at June 30, 2020, as
compared with $13.8 million at March 31, 2020 and $13.9 million at December 31,
2019. The Company had net working capital of $18.0 million at June 30, 2020, a
slight reduction from $18.4 million at March 31, 2020. The Company continues to
have no debt.
Conference
Call Information
A
conference call discussing financial results for the second quarter ended June
30, 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 10146518.
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, 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. Forward-looking
statement disclaimers also apply to the global COVID-19 pandemic, including the expected effects on the Company’s
business from COVID-19, the duration and scope, impact on the demand for the
Company’s products, and the pace of recovery for the COVID-19 pandemic to
subside. 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 -