Revenue in Line with Preannouncement;
Bookings of $6.2 Million
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 Creator™ 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.
- tables follow -
DATA I/O CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per
share amounts)
(UNAUDITED)
Three Months Ended March
31,
2022
2021
Net Sales
$4,965
$6,015
Cost of goods sold
2,662
2,677
Gross margin
2,303
3,338
Operating expenses:
Research and development
1,616
1,606
Selling, general and administrative
2,048
2,062
Total operating expenses
3,664
3,668
Operating income (loss)
(1,361)
(330)
Non-operating income (loss):
Interest income
1
3
Gain on sale of assets
58
-
Foreign currency transaction gain
(loss)
(60)
26
Total non-operating income (loss)
(1)
29
Income (loss) before income taxes
(1,362)
(301)
Income tax (expense) benefit
(458)
(32)
Net income (loss)
($1,820)
($333)
Basic earnings (loss) per share
($0.21)
($0.04)
Diluted earnings (loss) per share
($0.21)
($0.04)
Weighted-average basic shares
8,622
8,420
Weighted-average diluted shares
8,622
8,420
DATA I/O CORPORATION
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
data)
(UNAUDITED)
March 31, 2022
December 31, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$12,296
$14,190
Trade accounts receivable, net of
allowance for
doubtful accounts of $73 and $89,
respectively
3,055
3,995
Inventories
6,625
6,351
Other current assets
817
737
TOTAL CURRENT ASSETS
22,793
25,273
Property, plant and equipment – net
953
946
Other assets
2,742
2,838
TOTAL ASSETS
$26,488
$29,057
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$1,463
$1,373
Accrued compensation
1,526
2,496
Deferred revenue
1,466
1,507
Other accrued liabilities
1,439
1,413
Income taxes payable
3
-
TOTAL CURRENT LIABILITIES
5,897
6,789
Operating lease liabilities
2,138
2,277
Long-term other payables
193
138
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, 8,622,369 shares
as of March 31,
2022 and 8,621,007 shares as of December
31, 2021
21,183
20,886
Accumulated earnings (deficit)
(3,831)
(2,011)
Accumulated other comprehensive income
908
978
TOTAL STOCKHOLDERS’ EQUITY
18,260
19,853
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$26,488
$29,057
DATA I/O CORPORATION
NON-GAAP FINANCIAL MEASURE
RECONCILIATION
Three Months Ended March
31,
2022
2021
(in thousands)
Net Income (loss)
($1,820)
($333)
Interest (income)
(1)
(3)
Taxes
458
32
Depreciation and amortization
140
199
EBITDA earnings (loss)
($1,223)
($105)
Equity compensation
291
278
Adjusted EBITDA, excluding equity
compensation
($932)
$173
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220428006040/en/
Joel Hatlen Chief Operating and Financial Officer Data I/O
Corporation
Darrow Associates, Inc. Jordan Darrow (512) 551-9296
jdarrow@darrowir.com
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