Current Report Filing (8-k)
April 29 2022 - 11:15AM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
|
|
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 28, 2022
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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 □
Items reported in this filing:
Item 2.02 Results of Operation and
Financial Condition
Item 9.01 Financial Statements and
Exhibits
______________________________________________________________________________________________________
Item 2.02 Results of Operation and
Financial Condition
A press release
announcing first quarter 2022 results was made April 28, 2022 and a copy of the
release is being furnished as Exhibit 99.0 in this current report.
______________________________________________________________________________________________________
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
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Description
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99.0
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Press Release: Data I/O Reports First Quarter 2022 Results
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SIGNATURE
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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Data I/O
Corporation
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April 28, 2022
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By: /s/
Joel S. Hatlen
Joel S. Hatlen
Vice President
Chief Operating and Financial Officer
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Exhibit 99.0
Data
I/O Reports First Quarter 2022 Results
Revenue
in Line with Preannouncement; Bookings of $6.2 Million
Redmond, WA –
April 28, 2022 -- 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, 2022.
First Quarter 2022 Highlights
· Net sales of $5.0 million; bookings of $6.2 million
·
Quarter-end backlog of $4.1
million
· Gross margin as a percentage of sales of 46.4%
· Net loss of ($1.8) million or ($0.21) per share
· Adjusted EBITDA* of ($932,000)
· Cash & Equivalents of $12.3 million; no debt
· Automotive Electronics represented 63% of first
quarter 2022 bookings
·
SentriX® security deployment platform – NXP and Avnet
collaboration
· Repatriated $4.4 million of cash from China
subsidiary, incurring dividend withholding tax of $442,000
*Adjusted EBITDA is a non-GAAP financial
measure. A reconciliation is provided in the tables of this press release.
Management
Comments
Commenting on the
fiscal first quarter ended March 31, 2022, Anthony Ambrose, President and CEO
of Data I/O Corporation, said, “Our first quarter started well but faced
curtailments and disruptions due to the Russian
invasion of Ukraine and the COVID-19 outbreaks in China. The fallout and resulting restrictions led to
business closures and reduced operating activities for several regions in China
as well as imposing widespread logistical and economic challenges for Data I/O,
our semiconductor partners, and our customers. As we announced on March 29, our
manufacturing and shipping facility operations in Shanghai were forced to shut
down. The government imposed lockdown is still in effect. With the COVID
restrictions and shutdowns impacting our facility and many of our customers and
business partners, first quarter revenue shipments of approximately $1 million
were delayed, although no orders have been cancelled.
“For the second
consecutive quarter, we achieved bookings of $6.2 million. Backlog at the end of
the first quarter was $4.1 million, compared with $2.9 million at the end of
the fourth quarter of 2021. Automotive electronics represented 63% of orders
in the first quarter, and we had 6 new customer wins.
“The Shanghai
lockdown triggered several changes in our operations. All of our
Shanghai-based employees are safe at home and working remotely, providing
technical support to our customers or assisting the transition to alternate
supply chains. We have been able to keep up with system demand through our
Redmond, Washington, USA manufacturing facility, and have accelerated ramp-up
of alternate manufacturing for our adapters. We anticipate logistics
challenges as we plan to re-open our Shanghai operations in May, including
freight forwarding capacity, partner availability and supply chain performance.
“Short-term demand
indicators are turbulent in Q2, as our main markets and customers digest the
impact of the Russia-Ukraine war and China lockdown. We expect this will
further destabilize supply chains, and we are prepared to react to shifts in
demand as we have done before. We have a strong sales funnel, bolstered by
several million dollars of increase in opportunities in Q1. Bookings in Q2
will be determined by how much of this business is awarded in Q2, and how much
is delayed to subsequent quarters.
“For our SentriX
security deployment platform, we had a significant announcement with NXP and
Avnet earlier this week. We announced support for the NXP LPC55S6x series of
microcontrollers using SentriX Product CreatorTM and the
SentriX security deployment platform offered through our partners at Avnet.
Several customers completed first articles in the quarter and we won a repeat
customer through a channel partner.
“As we look forward
to the balance of 2022, we have adjusted our growth expectations to account for
the present economic challenges, with a resumption of growth contingent upon
re-opening in China, stabilization of supply chains and restoration of business
confidence in EMEA.”
Financial Results
Due to
the previously mentioned issues with shipping $1 million of planned revenue,
many of the Company’s financial indicators are well outside normal ranges for
the quarter. Net sales in the
first quarter of 2022 were
$5.0 million, down 17% as compared with $6.0 million in the first quarter of
2021. The decrease reflects the previously
announced COVID restrictions and
shutdowns which impacted potential revenue shipments of approximately $1
million that have been held up or delayed until the second quarter. Total recurring and consumable revenues which
includes adapter sales represented $2.4 million or 48% of total revenues in the
first quarter of 2022, as compared with $2.7 million or 45% of the higher first
quarter 2021 total.
First
quarter 2022 bookings were $6.2 million, up from $5.4 million in the first
quarter of the prior year. Backlog at March 31, 2022 was approximately $4.1
million, up from $2.9 million at December 31, 2021 and $3.0 million at March
30, 2021.
Gross
margin as a percentage of sales was 46.4% in the first quarter of 2022, as
compared to 55.5% in the same period of the prior year. The difference in gross
margin as a percentage of sales primarily reflects the impact of lower sales
volume on fixed costs and the mix of channels and products.
Total
operating expenses in the first quarter of 2022 of $3.7 million were flat as
compared to the 2021 period. Data I/O maintained consistent R&D expenses
of $1.6 million in the first quarter of 2022, as compared to the first quarter
of the prior year. Lower selling commissions on reduced sales volume and
channel mix were offset by higher marketing and rent expenses.
Net loss in the
first quarter of 2022 was ($1.8 million), or ($0.21) per share, compared with a
net loss of ($333,000), or ($0.04) per share, for the first quarter of 2021.
Included in net loss are foreign currency transaction losses of ($60,000) for
the first quarter of 2022 and a gain of $26,000 for the first quarter of 2021.
Adjusted
earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), which excludes equity compensation, was
($932,000) in the first quarter of 2022, compared to Adjusted EBITDA of
$173,000 in the first quarter of 2021.
Data
I/O’s balance sheet remained strong with cash at the end of the first quarter of 2022 of $12.3 million. The use of cash was due largely to
one-time or annual seasonal cash requirements in the first quarter of 2022 of $1.6 million, consisting of cash tax withholding on
repatriation dividend, annual planned spending on incentive compensation
payouts, 401(k) annual match payments, and public company seasonal expenses.
The Company repatriated $4.4 million of
cash from China to the U.S. in the form of a one-time dividend distribution,
which led to a corresponding tax withholding expense of approximately $442,000
in the first quarter of 2022. Data
I/O had net working capital of $16.9 million at March 31, 2022. The Company
continues to have no debt.
Conference Call Information
A
conference call discussing financial results for the first quarter ended March
31, 2022 will follow this release today at 2 p.m. Pacific Time/5 p.m. Eastern
Time. To listen to the conference call, please dial 412-317-5788. 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 4785456. 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 portfolio of patents and the 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, semiconductor chip shortages,
supply chain expectations, 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 Shanghai’s COVID-19 lockdowns,
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, and the Russian invasion of Ukraine including any related
international trade restrictions. These factors include uncertainties as to the ability
to record revenues based upon the timing of product deliveries, shipping
availability, installations and acceptance, accrual of expenses, coronavirus
related business interruptions, changes in economic conditions, part shortages
and other risks including those described in the Company's filings on Forms
10-K and 10-Q 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.
Contacts:
Joel Hatlen
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Chief Operating and Financial Officer
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Data I/O Corporation
6645 185th Ave. NE, Suite
100
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Redmond, WA 98052
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Darrow Associates, Inc.
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Jordan Darrow
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(512) 551-9296
jdarrow@darrowir.com
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- tables follow -
DATA I/O CORPORATION
CONSOLIDATED
STATEMENTS OF OPERATIONS
(in
thousands, except per share amounts)
(UNAUDITED)
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Three
Months Ended
March 31,
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2022
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2021
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Net Sales
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$4,965
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$6,015
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Cost of goods sold
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2,662
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2,677
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Gross
margin
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2,303
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3,338
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Operating expenses:
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Research
and development
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1,616
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1,606
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Selling,
general and administrative
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2,048
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2,062
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Total
operating expenses
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3,664
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3,668
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Operating income (loss)
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(1,361)
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(330)
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Non-operating income
(loss):
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Interest
income
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1
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3
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Gain on
sale of assets
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58
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-
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Foreign
currency transaction gain (loss)
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(60)
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26
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Total
non-operating income (loss)
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(1)
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29
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Income (loss) before
income taxes
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(1,362)
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(301)
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Income tax (expense)
benefit
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(458)
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(32)
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Net income (loss)
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($1,820)
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($333)
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Basic
earnings (loss) per share
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($0.21)
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($0.04)
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Diluted
earnings (loss) per share
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($0.21)
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($0.04)
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Weighted-average
basic shares
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8,622
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8,420
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Weighted-average
diluted shares
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8,622
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8,420
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DATA I/O CORPORATION
CONSOLIDATED
BALANCE SHEETS
(in
thousands, except share data)
(UNAUDITED)
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March 31,
2022
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December 31,
2021
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ASSETS
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CURRENT ASSETS:
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Cash
and cash equivalents
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$12,296
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$14,190
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Trade
accounts receivable, net of allowance for
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doubtful accounts of $73 and $89, respectively
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3,055
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3,995
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Inventories
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6,625
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6,351
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Other
current assets
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817
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737
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TOTAL
CURRENT ASSETS
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22,793
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25,273
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Property, plant and
equipment – net
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953
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946
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Other assets
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2,742
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2,838
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TOTAL
ASSETS
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$26,488
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$29,057
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LIABILITIES AND
STOCKHOLDERS’ EQUITY
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CURRENT LIABILITIES:
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Accounts
payable
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$1,463
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$1,373
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Accrued
compensation
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1,526
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2,496
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Deferred
revenue
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1,466
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1,507
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Other
accrued liabilities
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1,439
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1,413
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Income
taxes payable
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3
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-
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TOTAL
CURRENT LIABILITIES
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5,897
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6,789
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Operating lease
liabilities
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2,138
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2,277
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Long-term other payables
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193
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138
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COMMITMENTS
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-
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-
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STOCKHOLDERS’ EQUITY
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Preferred stock -
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Authorized,
5,000,000 shares, including
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200,000
shares of Series A Junior Participating
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Issued
and outstanding, none
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-
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-
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Common stock, at stated
value -
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Authorized,
30,000,000 shares
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Issued
and outstanding, 8,622,369 shares as of March 31,
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2022
and 8,621,007 shares as of December 31, 2021
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21,183
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20,886
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Accumulated earnings
(deficit)
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(3,831)
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(2,011)
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Accumulated other comprehensive
income
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908
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978
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TOTAL
STOCKHOLDERS’ EQUITY
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18,260
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19,853
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TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
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$26,488
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$29,057
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DATA I/O CORPORATION
NON-GAAP
FINANCIAL MEASURE RECONCILIATION
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Three
Months Ended
March 31,
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2022
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2021
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(in thousands)
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Net Income (loss)
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($1,820)
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($333)
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Interest (income)
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(1)
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(3)
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Taxes
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458
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32
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Depreciation and amortization
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140
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199
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EBITDA earnings (loss)
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($1,223)
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($105)
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Equity compensation
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291
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278
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Adjusted EBITDA, excluding equity
compensation
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($932)
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$173
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