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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)
: July 27, 2017
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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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Press Release: Data I/O Reports Second Quarter 2017 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 Second Quarter 2017 Results
Revenue
Grows 57%; Bookings Increase 75%; Advancements in Next Generation SentriX™
Managed and Secure Programming Technology to Democratize IoT Security
Redmond, WA,
Thursday, July 27, 2017
– Data I/O Corporation
(NASDAQ: DAIO), the leading global provider of advanced data and security
programming and IP management solutions for flash-memory, flash based
microcontrollers and other intelligent devices, today announced financial
results for the second quarter ended June 30, 2017.
Second Quarter 2017 Highlights
(on year-over-year basis unless noted)
·
Net sales of $9.1 million, a
17-year high
·
Total bookings of $10.1 million, a
17-year high
·
Gross margin as a percentage of
sales of 56.9%, up from 53.2% in 2Q16
·
Net income of $1.2 million or
$0.14 diluted earnings per share, up from $444,000 or $0.06 diluted earnings
per share in 2Q16
·
Adjusted EBITDA*, excluding equity
compensation, of $1.7 million, up from $789,000 in 2Q16
·
Backlog of $4.7 million at end of
quarter, compared with $4.9 million at March 31, 2017 and $3.2 million at
December 31, 2016
·
Deferred revenue of $2.8 million,
including 3 systems
·
Cash and securities of $12.0
million at June 30, 2017, compared with $10.5 million at March 31, 2017 and
$11.6 million at December 31, 2016
·
Progress for SentriX™ Managed and
Secure Programming Platform
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Additional
Secure Elements enablement orders received
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Leadership
team bolstered
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On
track for system release in second half of 2017
Management Comments
“Our second quarter
financial and operating performances were outstanding,” said Anthony Ambrose, President and CEO of Data I/O Corporation. “Building
upon the progress achieved in the first quarter, revenue and bookings in the
second quarter reached the highest level in 17 years. During the second
quarter, we shipped our 150
th
PSV family system, extending our
global market share leadership.
“The turnaround strategy
we started over 4 years ago has delivered our best quarter since the year 2000.
We are delivering operational excellence across the board: sales, engineering,
service and operations all drove our performance.
“Automotive
electronics were over 50% of bookings in the first half of 2017, continuing a
multiyear growth trend. We booked multiple systems from an international
automotive electronics company, and shipped 2 systems to them in the second
quarter. Reflecting our growing base of installed systems, revenue from
adapters in the second quarter increased 72% from the prior year period to $2.1
million, or 23% of consolidated revenue.
“While we continue to experience high demand and interest in
our product platforms, our second quarter bookings of $10.1 million were
unusually strong. Second quarter bookings are likely to be the peak level for
the year due to unprecedented demand in
the first half of 2017 and our seasonal sales funnel.
“We improved overall
profitability while increasing investment in research and development for our Managed and
Secure Programming (“MSP”) technology and automotive targeted products. In June, we announced organizational changes that significantly strengthen our management
team to enable us to better address our new opportunities from MSP. Through our continued work on the MSP platform, we
are developing the technologies behind a new generation of security solutions for
authentication devices, secure elements and secure microcontrollers. The
mission of Data I/O’s MSP platform is to enable a democratization of security
capabilities for OEMs globally.”
Financial Results
Net sales in the second
quarter of 2017 were $9.1 million, compared with $5.8 million in the second quarter
of 2016.
For the 2017 second quarter,
gross margin as a percentage of sales was 56.9%, compared to 53.2% in the second
quarter of 2016. The improvement in gross margin as a percentage of sales for
the second quarter compared to the same period in 2016 was primarily due to
higher order volume and favorable product mix, particularly from demand for the
PSV family of products by automotive electronics and programming center
customers.
Net income in the second
quarter of 2017 was $1.2 million, or $0.14 per diluted share, compared with net
income of $444,000, or $0.06 per diluted share, in the second quarter of 2016.
Earnings
Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) was $1.5
million in the second quarter of 2017, compared to $584,000 in the second quarter
of 2016. Adjusted EBITDA, excluding equity compensation, was $1.7 million in
the second quarter of 2017, compared to $789,000 in the second quarter of
2016.
Bookings in the second
quarter of 2017 reached the highest level in 17 years at $10.1 million,
compared to $5.7 million in the second quarter of 2016 and $8.4 million in the
first quarter of 2017. Backlog at June 30, 2017 was $4.7 million as compared
to $4.9 million at March 31, 2017 and $3.2 million at December 31, 2016.
Deferred revenue doubled to $2.8M at June 30, 2017, up from $1.4 million at March
31, 2017.
Spending in the second
quarter was up approximately $1.2 million from the same period of 2016. Approximately
$600,000 of the increase was SG&A variable costs related to the increased
level of business activity. Approximately $600,000 of the increase reflects
additional spending on research and development to support new product
development for the SentriX platform, the ConneX™ factory automation software,
LumenX™ programmer features and enhancements to other products. The majority
of this was personnel related, including additional headcount in engineering. The
Company continues to invest to support automotive demands in the near term and
security opportunities in future years.
The Company’s
operating leverage continues to produce meaningful incremental profitability
with revenue growth, which is partially offset by spending on the new Managed
and Secure Programming platform. Data
I/O’s financial condition remains strong with a cash position of $12.0 million
and working capital of $16.9 million at June 30, 2017. The Company continues
to have no debt.
Conference
Call Information
A
conference call discussing the second quarter ended June 30, 2017 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 (612) 234-9959, passcode:
DAIO. A replay will be made available approximately one hour after the
conclusion of the call. To access the replay, please dial (320) 365-3844,
access code: 426476. 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
http://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,
industrial/Internet-of-Things, wireless, consumer electronics, medical and
military/aerospace markets. Today, our customers manufacture tens of millions of
products each year using Data I/O programming solutions to reliably, securely,
and cost-effectively deliver their Intellectual Property into programmable devices. Our expertise in programmable integrated circuits, global supply chain processes, and IP management and protection helps bring innovative new products to life. These solutions are backed by a global network of Data I/O support and service providers, assuring success for our customers.
Learn more at www.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.
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tables follow -