Strong Bookings of $6.4 Million and Record
Backlog of $5.8 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 second quarter ended June 30, 2022.
Second Quarter 2022 Highlights
- Net sales of $4.8 million; bookings of $6.4 million
- Quarter-end backlog of $5.8 million
- Gross margin as a percentage of sales of 57.8%
- Net loss of ($657,000) or ($0.08) per share
- Adjusted EBITDA* of ($65,000)
- Cash & Equivalents of $10.3 million; no debt
- Automotive Electronics represented 55% of second quarter 2022
bookings
- SentriX® customer moving to volume production
- 6 new customer wins
*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 second quarter ended June 30, 2022,
Anthony Ambrose, President and CEO of Data I/O Corporation, said,
“We are very pleased that China operations resumed and is fully
supporting our strong backlog. As we described in our June update,
Data I/O’s Shanghai operations partially re-opened in May. In
mid-June, we began shipping systems and adapters from Shanghai, and
cleared out the systems backlog from the first quarter. We were
successful in leveraging our resilient global supply chain to shift
some systems and adapter production from China to Redmond, WA. Lead
times from China operations are back to normal, and we expect
balance sheet items such as accounts receivables, inventories and
cash flow to return to normal levels by the end of the third
quarter.
“For the third consecutive quarter, we achieved bookings in
excess of $6.0 million, with second quarter 2022 bookings of $6.4
million reaching the highest level within this 9-month period.
Backlog at the end of the second quarter was $5.8 million, a record
for the Company reflecting strong June orders. Automotive
electronics represented 55% of orders in the second quarter, and we
had 6 new customer wins. Our sales funnel in the second quarter
continued the momentum from the first quarter with millions of
dollars of new opportunities. Increased demand from Asia and the
Americas has been partially offset by weakness in EMEA due to the
Ukraine/Russia war, inflation, energy challenges and foreign
currency devaluation against the US dollar.
“Earlier this year, we held a balanced perspective for our
resumption of growth that was contingent upon re-opening in China,
stabilization of supply chains and restoration of business
confidence in EMEA amid the war. Our financial performance in the
second quarter was impacted by these factors as well as currency
weakness which effectively reduced reported EMEA revenue by
approximately 12%. Against this backdrop, we are pleased with our
improving outlook led by strong bookings, record backlog,
operational resumption in China, and the benefits of our resilient
supply chain.
“There are two competing economic narratives for the second half
of 2022. The ‘glass half empty’ scenario describes continued
inflation and a global slowdown overall, with greatest impact to
Europe. The ‘glass half full’ scenario is what we see in our
growing sales funnel and through discussions with our growing
global customer base. Automotive and industrial markets are
expected to hold up better than consumer and enterprise markets
this year. The weakness in consumer markets may be helping
automotive ease its semiconductor supply chain issues. We are
controlling expenses overall while we prepare operations to ship
current and anticipated backlog. We are optimistic that strong
bookings through the first half of the year, an encouraging sales
pipeline, and a record backlog at June 30, 2022 will give rise to
significantly improved financial performance in the second half of
the year.”
Financial Results
Due to COVID-19 policies in China in 2022, the Company
experienced operational closures, delays and disruptions that
impacted its performance in the first and second quarters of fiscal
2022. These issues included $1 million of finished products that
were unable to be shipped at March 31, 2022 but were delivered
during the second quarter. As a result of the aforementioned, many
of the Company’s financial indicators are well outside of normal
ranges for the first and second quarters.
Net sales in the second quarter of 2022 were $4.8 million, down
40% as compared with $6.7 million in the second quarter of 2021.
The decrease reflects the impact of lower foreign currencies as
reported on a consolidated basis, the previously announced COVID
restrictions and shutdowns, and the war in Ukraine, which impacted
business development and revenue recognition for shipments that had
been held up or delayed. Total recurring and consumable revenues
including adapter sales represented $2.1 million or 45% of total
revenues in the second quarter of 2022, as compared with $2.6
million or 39% of the higher second quarter 2021 total.
Second quarter 2022 bookings were $6.4 million, up from $6.2
million in the first quarter of 2022 and down from $8.9 million in
the second quarter of the prior year. Backlog at June 30, 2022 was
approximately $5.8 million, up from $4.1 million at March 31, 2022,
and $5.0 million at June 30, 2021.
Gross margin as a percentage of sales was 57.8% in the second
quarter of 2022, as compared to 57.0% in the same period of the
prior year.
Total operating expenses in the second quarter of 2022 of $3.5
million were down approximately $242,000 as compared to the 2021
period. R&D expenses were $1.6 million in the second quarter of
2022 compared to $1.7 million in the second quarter of the prior
year.
Net loss in the second quarter of 2022 was ($657,000), or
($0.08) per share, compared with a net loss of ($29,000), or
($0.00) per share, for the second quarter of 2021. Included in net
loss is a foreign currency transaction gain of $130,000 for the
second quarter of 2022, and a loss of ($64,000) for the second
quarter of 2021.
Adjusted earnings before interest, taxes, depreciation and
amortization (“Adjusted EBITDA”), which excludes equity
compensation, was ($65,000) in the second quarter of 2022, compared
to Adjusted EBITDA of $597,000 in the second quarter of 2021.
Data I/O’s balance sheet remained strong with cash at the end of
the second quarter of 2022 of $10.3 million, down from $12.3
million at March 31, 2022 and $14.2 million at December 31, 2021.
The difference in cash from prior periods primarily reflects the
shift in working capital to increased receivables and inventory
related to the high level of bookings and delayed deliveries. In
the first quarter of 2022, 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. Data I/O had net working capital of
$15.9 million at June 30, 2022. The Company continues to have no
debt.
Conference Call Information
A conference call discussing financial results for the second
quarter ended June 30, 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 9687503. 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 electronics devices.
Today, our customers use Data I/O’s data programming solutions and
security deployment platform to secure the global electronics
supply chain and protect IoT device intellectual property from
point of inception to deployment in the field. OEMs of any size can
program and securely provision devices from early samples all the
way to high volume production prior to shipping semiconductor
devices to a manufacturing line. Data I/O enables customers to
reliably, securely, and cost-effectively bring innovative new
products to life. These solutions are backed by a portfolio of
patents and 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,
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
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
Net Sales
$4,769
$6,733
$9,734
$12,748
Cost of goods sold
2,011
2,896
4,673
5,573
Gross margin
2,758
3,837
5,061
7,175
Operating expenses:
Research and development
1,557
1,673
3,173
3,279
Selling, general and administrative
1,928
2,054
3,976
4,116
Total operating expenses
3,485
3,727
7,149
7,395
Operating income (loss)
(727
)
110
(2,088
)
(220
)
Non-operating income (loss):
Interest income
1
-
2
3
Gain on sale of assets
-
-
57
-
Foreign currency transaction gain
(loss)
130
(64
)
71
(38
)
Total non-operating income (loss)
131
(64
)
130
(35
)
Income (loss) before income taxes
(596
)
46
(1,958
)
(255
)
Income tax (expense) benefit
(61
)
(75
)
(519
)
(107
)
Net income (loss)
($657
)
($29
)
($2,477
)
($362
)
Basic earnings (loss) per share
($0.08
)
$0.00
($0.29
)
($0.04
)
Diluted earnings (loss) per share
($0.08
)
$0.00
($0.29
)
($0.04
)
Weighted-average basic shares
8,709
8,517
8,665
8,469
Weighted-average diluted shares
8,709
8,517
8,665
8,469
DATA I/O CORPORATION
CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
(UNAUDITED)
June 30,
2022
December 31,
2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$10,291
$14,190
Trade accounts receivable, net of
allowance for doubtful accounts of $83 and $89, respectively
4,165
3,995
Inventories
6,925
6,351
Other current assets
575
737
TOTAL CURRENT ASSETS
21,956
25,273
Property, plant and equipment – net
1,040
946
Other assets
2,542
2,838
TOTAL ASSETS
$25,538
$29,057
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$1,848
$1,373
Accrued compensation
1,557
2,496
Deferred revenue
1,252
1,507
Other accrued liabilities
1,374
1,413
Income taxes payable
60
-
TOTAL CURRENT LIABILITIES
6,091
6,789
Operating lease liabilities
1,897
2,277
Long-term other payables
198
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, 8,814,279 shares as of June 30, 2022 and 8,621,007
shares as of December 31, 2021
21,386
20,886
Accumulated earnings (deficit)
(4,488
)
(2,011
)
Accumulated other comprehensive income
454
978
TOTAL STOCKHOLDERS’ EQUITY
17,352
19,853
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$25,538
$29,057
DATA I/O CORPORATION NON-GAAP
FINANCIAL MEASURE RECONCILIATION
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
(in thousands)
Net Income (loss)
($657
)
($29
)
($2,477
)
($362
)
Interest (income)
(1
)
-
(2
)
(3
)
Taxes
61
75
519
107
Depreciation and amortization
152
150
293
348
EBITDA earnings (loss)
($445
)
$196
($1,667
)
$90
Equity compensation
380
401
671
680
Adjusted EBITDA, excluding equity
compensation
($65
)
$597
($996
)
$770
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220728005902/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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