Highest Bookings in 4 Years Driven by
Automotive Electronics Acceleration
Progress on SentriX® Security Deployment
Platform and Software Monetization
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 second quarter ended June 30, 2021.
Second Quarter 2021 Highlights
- Net sales of $6.7 million, up 45% from the prior year; bookings
of $8.9 million, up 79% from the prior year
- Strong quarter-end backlog of $5.0 million
- Gross margin as a percentage of sales of 57.0%
- Net loss of ($29,000) or ($0.00) earnings per share
- Adjusted EBITDA* of $597,000
- Cash & Equivalents of $13.0 million; no debt
- Automotive Electronics represented 56% of second quarter 2021
bookings
- Six new customer wins in the quarter
- Growth in SentriX® Security Deployment Platform supports and
design wins
- First booking of SentriX capital equipment sale with software
license
- Qualification of PSV5000 for field upgrades; completed first
PSV7000 field conversion to 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 second quarter ended June 30, 2021, Anthony
Ambrose, President and CEO of Data I/O Corporation, said, “The
second quarter was very strong across the board, with sizeable
growth in revenues and bookings across all geographic regions.
Tailwinds have continued in both the automotive and industrial
electronics sectors. We added six new customers in each of the
first and second quarters of the year, including a marquee SentriX
system win. Bookings of $8.9 million were the highest for any
quarter in 4 years as order flow gained momentum and left us with a
quarter-end backlog of $5.0 million.
“Recurring and consumable revenues which include adapter sales,
software, maintenance and SentriX fees were $2.6 million second
quarter of 2021. These revenue streams collectively increased
approximately 19% from last year’s second quarter, while adapter
bookings in the second quarter of 2021 reached the highest level in
the PSV era. The strong level of adapter sales reflects the
increasing number of PSV units deployed globally and increasing
utilization of our equipment by customers.
“In another milestone for the Company, we booked our first
SentriX system for an Artificial Intelligence application. During
the second quarter, we also qualified our PSV5000 machines for
field upgrades to SentriX security provisioning capabilities, which
follows our first PSV7000 field conversion to SentriX in the first
quarter.
“While our operating performance has been excellent, it is not
without challenges. The pandemic and supply chain bottlenecks
within the automotive electronics and semiconductor sectors
persist. We are fighting shortages globally but our operations
staff in the USA and China have been highly effective in planning,
advance ordering and logistical management.
“We believe Data I/O has established itself as the most
resilient market leader with industry leading secure programming
technologies and the strongest balance sheet. Furthermore, our
efforts to attract and retain highly qualified professionals are
paying off in how we positioned the company during the pandemic and
cyclical downturn to enhance our business processes, reshape our
revenue models, and improve the value proposition for our
customers.”
Financial Results
Net sales in the second quarter of 2021 were $6.7 million, up
45% as compared with $4.7 million in the second quarter of 2020.
The increase from the prior year period primarily reflects higher
overall demand for equipment 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 $2.6 million or 39% of total
revenues in the second quarter 2021, as compared with $2.2 million
or 47% of the lower second quarter 2020 total.
Second quarter 2021 bookings were $8.9 million, up 79% from $5.0
million in the second quarter of the prior year. Backlog at June
30, 2021 was approximately $5.0 million, up from $3.0 million at
March 31, 2021 and $2.8 million at June 30, 2020.
Gross margin as a percentage of sales was 57.0% in the second
quarter of 2021, as compared to 52.4% in the same period of the
prior year. The difference in gross margin as a percentage of sales
primarily reflects higher revenues, improved factory variances and
channel and product mix.
Total operating expenses in the second quarter of 2021 were $3.7
million, as compared to operating expenses of $3.3 million in the
2020 period. Data I/O maintained relatively consistent R&D
expenses of approximately $1.7 million in the second quarter of
2021 and $1.6 million in the second quarter of 2020. Selling,
general and administrative expenses in the second quarter of 2021
increased by approximately $351,000 from the prior year period
primarily due to higher sales commissions associated with the
channel mix and sharply increased demand for programming equipment
as well as higher incentive compensation as the Company returned to
profitability on an operating income basis.
Net loss in the second quarter of 2021 was ($29,000), or ($0.00)
per share, compared with a net loss of ($1,057,000), or ($0.13) per
share, for the second quarter of 2020. Included in net loss are
foreign currency transaction losses of ($64,000) for the 2021
period and ($83,000) for the second quarter of 2020.
Adjusted earnings before interest, taxes, depreciation and
amortization (“Adjusted EBITDA”), which excludes equity
compensation, was $597,000 in the second quarter of 2021, compared
to Adjusted EBITDA of ($231,000) in the second quarter of 2020.
Data I/O’s financial condition remained strong with cash of
$13.0 million at June 30, 2021, down from $13.6 million at March
31, 2021, and $14.2 million at December 31, 2020. The difference
from the end of the first quarter primarily reflects the shift in
working capital to increased receivables and inventory related to
the high level of bookings and revenues in the second quarter. Data
I/O had net working capital of $18.2 million at June 30, 2021, up
from $18.1 million at March 31, 2021, and December 31, 2020, and
continues to have no debt.
Conference Call Information
A conference call discussing financial results for the second
quarter ended June 30, 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 10158294. 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.
- tables follow -
DATA I/O CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per
share amounts)
(UNAUDITED)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Net Sales
$
6,733
$
4,655
$
12,748
$
9,440
Cost of goods sold
2,896
2,216
5,573
4,217
Gross margin
3,837
2,439
7,175
5,223
Operating expenses:
Research and development
1,673
1,614
3,279
3,196
Selling, general and administrative
2,054
1,703
4,116
3,514
Total operating expenses
3,727
3,317
7,395
6,710
Operating income (loss)
110
(878
)
(220
)
(1,487
)
Non-operating income:
Interest income
-
1
3
9
Foreign currency transaction gain
(loss)
(64
)
(83
)
(38
)
(31
)
Total non-operating income
(64
)
(82
)
(35
)
(22
)
Income (loss) before income taxes
46
(960
)
(255
)
(1,509
)
Income tax (expense) benefit
(75
)
(97
)
(107
)
(102
)
Net income (loss)
($
29
)
($
1,057
)
($
362
)
($
1,611
)
Basic earnings (loss) per share
$
0.00
($
0.13
)
($
0.04
)
($
0.19
)
Diluted earnings (loss) per share
$
0.00
($
0.13
)
($
0.04
)
($
0.19
)
Weighted-average basic shares
8,517
8,302
8,469
8,261
Weighted-average diluted shares
8,517
8,302
8,469
8,261
DATA I/O CORPORATION
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
data)
(UNAUDITED)
June 30, 2021
December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
13,013
$
14,167
Trade accounts receivable, net of
allowance for doubtful accounts of $83 and $66, respectively
4,502
2,494
Inventories
5,611
5,270
Other current assets
1,179
1,319
TOTAL CURRENT ASSETS
24,305
23,250
Property, plant and equipment – net
971
1,216
Other assets
1,614
1,126
TOTAL ASSETS
$
26,890
$
25,592
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
1,720
$
1,245
Accrued compensation
1,700
1,509
Deferred revenue
1,340
1,068
Other accrued liabilities
1,293
1,307
Income taxes payable
93
62
TOTAL CURRENT LIABILITIES
6,146
5,191
Operating lease liabilities
1,085
588
Long-term other payables
161
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, 8,619,522 shares as of June 30, 2021 and 8,416,335
shares as of December 31, 2020
20,320
20,071
Accumulated earnings
(1,818
)
(1,456
)
Accumulated other comprehensive income
996
1,024
TOTAL STOCKHOLDERS’ EQUITY
19,498
19,639
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
26,890
$
25,592
DATA I/O CORPORATION
NON-GAAP FINANCIAL MEASURE
RECONCILIATION
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(in thousands)
Net Income (loss)
($
29
)
($
1,057
)
($
362
)
($
1,611
)
Interest (income)
-
(1
)
(3
)
(9
)
Taxes
75
97
107
102
Depreciation and amortization
150
249
348
447
EBITDA
$
196
($
712
)
$
90
($
1,071
)
Equity compensation
401
481
680
730
Adjusted EBITDA, excluding equity
compensation
$
597
($
231
)
$
770
($
341
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210729006030/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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