Automotive Electronics Sector Recovery
Accelerating
Data I/O Corporation (NASDAQ: DAIO), the leading global provider
of advanced security and data deployment solutions for
microcontrollers, security ICs and memory devices, today announced
financial results for the first quarter ended March 31, 2021.
First Quarter 2021 Highlights
- Net sales of $6.0 million; bookings of $5.4 million
- Gross margin as a percentage of sales of 55.5%
- Net loss of ($333,000) or ($0.04) earnings per share
- Adjusted EBITDA* of $173,000
- Cash & Equivalents of $13.6 million; no debt
- Automotive Electronics represented 56% of first quarter 2021
bookings
- Six new customer wins in the quarter in Asia
- Growth in SentriX® Security Deployment Platform supports and
design wins
- First field upgrade of PSV7000 to SentriX, for a customer in
Asia
- First Automotive electronics win for SentriX
*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, 2021, Anthony
Ambrose, President and CEO of Data I/O Corporation, said, “The
first quarter was our strongest revenue quarter in two years, and
continues the upward trend in automotive and industrial electronics
demand since the bottom a year ago. We are coming out of the
COVID-19 recession and are seeing a surge in business in March and
April. We believe the positive growth themes that we discussed
during our year end conference call are accelerating.
“While there are well documented short-term supply disruptions
caused by sharp increases in automotive electronics demand, the
longer-term secular growth for automotive electronics remains
intact with industry analysts and customers projecting a compounded
annual growth rate of 10-15% for the next decade. Additional
capacity is needed throughout the supply chain as evidenced by key
semiconductor companies recently committing to spending tens of
billions of dollars on capital equipment. Data I/O is answering the
call with the most advanced technologies supporting all growth
areas in automotive, including electrification, infotainment,
advanced driver assist systems, security and connectivity.
“During the quarter, we won 6 new customers in Asia, across all
markets. This illustrates our global strength, and the desire of
customers in challenging times to establish a long-term
relationship with the resilient market leader. In Q1, our sales
pipeline added significant new opportunities from many new
prospects and repeat customers alike. We see APAC and Americas
regions leading the recovery, with EMEA following 1-2 quarters
behind.
“During the capital equipment downturn in the past two years,
Data I/O remained committed to its strategy of investing in its
programming technology platforms. Research and Development
continues to be a critical and sustainable competitive advantage
for the company. COVID-19 disruption also shows the value of a
resilient supply chain in our industry and Data I/O is the only
programming supplier with two manufacturing locations. During the
past year, we optimized our operational processes and prepared for
the inevitable upturn.
“Developments for our SentriX Security Deployment Platform also
progressed in the first quarter. We won our first SentriX
automotive electronics customer with a partner in Q1. We also
deployed the first field upgrade of a PSV7000 to SentriX system for
a MNC customer’s Asia factory. We are seeing increased customer
activity from both partners and direct engagements.
“As we look ahead, we have become even more encouraged by the
global economic recovery and the demand from our key vertical
markets. With strong operating leverage, Data I/O remains very well
positioned to deliver disproportionate improvements in
profitability and cash flow as we continue our cyclical recovery
within the long-term market growth trajectory.”
Financial Results
Net sales in the first quarter of 2021 were $6.0 million, up 26%
as compared with $4.8 million in the first quarter of 2020. The
increase from the prior year period primarily reflects higher
overall demand for equipment including certain orders that had been
delayed from the fourth quarter of 2020, and higher adapter sales
associated with the increased usage and growing installed base of
machines throughout the world. Recurring and consumable revenues
which includes adapter sales represented $2.7 million or 44% of
total revenues in the first quarter 2021, as compared with $2.2
million or 46% of the first quarter 2020 total.
First quarter 2021 bookings were $5.4 million, up 26% from $4.3
million in the first quarter of the prior year. Backlog at March
31, 2021 was approximately $3.0 million, down from $3.9 million at
December 31, 2020 and up from $2.3 million at March 31, 2020. Gross
margin as a percentage of sales was 55.5%, as compared to 58.2% in
the first quarter of 2020. The difference in gross margin as a
percentage of sales primarily reflects less favorable factory
variances and channel and product mix.
Total operating expenses in the first quarter of 2021 were $3.7
million, as compared to operating expenses of $3.4 million in the
2020 period and $3.8 million (or $3.2 million when adjusted for
exclusion of one-time impairment items) in the fourth quarter of
2020. Data I/O maintained consistent R&D expenses of $1.6
million in the first quarter of 2021 as compared to the first and
fourth quarters of 2020. Selling, general and administrative
expenses in the first quarter of 2021 increased by approximately
$251,000 from the prior year period primarily due to higher sales
commissions associated with the channel mix and increased demand
for programming equipment. As compared to the fourth quarter, first
quarter operating expenses are generally higher due to the
inclusion of the majority of audit and public company related costs
for the year.
Net loss in the first quarter of 2021 was ($333,000), or ($0.04)
per share, compared with a net loss of ($554,000), or ($0.07) per
share, for the first quarter of 2020. Included in net income are
foreign currency transaction gains of $26,000 for the 2021 period
and $52,000 for the first quarter of 2020.
Adjusted earnings before interest, taxes, depreciation and
amortization (“Adjusted EBITDA”), which excludes equity
compensation, was $173,000 in the first quarter of 2021, compared
to Adjusted EBITDA of ($110,000) in the first quarter of 2020.
Data I/O’s financial condition remained strong with cash of
$13.6 million at March 31, 2021, down from $14.2 million at
December 31, 2020, which partially reflects the payment of certain
operating expenses for the year that are made in the first quarter.
Data I/O had net working capital of $18.1 million at March 31,
2021, unchanged from December 31, 2020, and continues to have no
debt.
Conference Call Information
A conference call discussing financial results for the fourth
quarter ended March 31, 2021 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 10154472. The
conference call will also be simultaneously webcast over the
Internet; visit the Webcasts and Presentations 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, Adjusted EBITDA
excluding equity compensation and impairment & related charges,
and Adjusted gross margin 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.
DATA I/O CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per
share amounts)
(UNAUDITED)
Three Months Ended March
31,
2021
2020
Net Sales
$
6,015
$
4,785
Cost of goods sold
2,677
2,001
Gross margin
3,338
2,784
Operating expenses:
Research and development
1,606
1,582
Selling, general and administrative
2,062
1,811
Total operating expenses
3,668
3,393
Operating income(loss)
(330
)
(609
)
Non-operating income:
Interest income
3
8
Foreign currency transaction gain
(loss)
26
52
Total non-operating income
29
60
Income(loss) before income taxes
(301
)
(549
)
Income tax (expense) benefit
(32
)
(5
)
Net income (loss)
($
333
)
($
554
)
Basic earnings(loss) per share
($
0.04
)
($
0.07
)
Diluted earnings(loss) per share
($
0.04
)
($
0.07
)
Weighted-average basic shares
8,420
8,219
Weighted-average diluted shares
8,420
8,219
DATA I/O CORPORATION
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
data)
(UNAUDITED)
March 31, 2021
December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
13,621
$
14,167
Trade accounts receivable, net of
allowance for doubtful accounts of $69 and $66, respectively
3,342
2,494
Inventories
5,132
5,270
Other current assets
1,282
1,319
TOTAL CURRENT ASSETS
23,377
23,250
Property, plant and equipment – net
977
1,216
Other assets
990
1,126
TOTAL ASSETS
$
25,344
$
25,592
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
1,412
$
1,245
Accrued compensation
1,250
1,509
Deferred revenue
1,269
1,068
Other accrued liabilities
1,311
1,307
Income taxes payable
54
62
TOTAL CURRENT LIABILITIES
5,296
5,191
Operating lease liabilities
482
588
Long-term other payables
150
174
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, 8,421,599 shares as of March 31, 2021 and 8,416,335
shares as of December 31, 2020
20,361
20,071
Accumulated earnings
(1,789
)
(1,456
)
Accumulated other comprehensive income
844
1,024
TOTAL STOCKHOLDERS’ EQUITY
19,416
19,639
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
25,344
$
25,592
DATA I/O CORPORATION
NON-GAAP FINANCIAL MEASURE
RECONCILIATION
Three Months Ended March
31,
2021
2020
(in thousands)
Net Income (loss)
($
333
)
($
554
)
Interest (income)
(3
)
(8
)
Taxes
32
5
Depreciation and amortization
199
198
EBITDA
($
105
)
($
359
)
Equity compensation
278
249
Adjusted EBITDA, excluding equity
compensation
$
173
($
110
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210429005967/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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