Current Report Filing (8-k)
July 29 2022 - 9:26AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
|
CURRENT REPORT |
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|
Date of Report (Date of earliest event reported): July 28, 2022 |
Data I/O Corporation |
(Exact name of registrant as specified in its charter) |
|
Washington |
0-10394 |
91-0864123 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
6645 185th Ave. N.E., Suite 100, Redmond, WA 98052 |
(Address of principal executive offices, including zip code) |
|
(425) 881-6444 |
(Registrant’s telephone number, including area code) |
|
Not Applicable |
(Former name or former address, if changed since last report) |
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: |
|
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Stock |
DAIO |
NASDAQ |
|
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 second quarter 2022 results was made July 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.
|
Description
|
99.0
|
Press Release: Data I/O Reports Second Quarter 2022 Results
|
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.
|
Data I/O
Corporation
|
|
|
July 28, 2022
|
By: /s/
Joel S. Hatlen
Joel S. Hatlen
Vice President
Chief Operating and Financial Officer
|
Exhibit 99.0
Data
I/O Reports Second Quarter 2022 Results
Strong
Bookings of $6.4 Million and Record Backlog of $5.8 Million
Redmond, WA –
July 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 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.
Contacts:
Joel Hatlen
|
|
Chief Operating and Financial Officer
|
|
Data I/O Corporation
6645 185th Ave. NE, Suite
100
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Redmond, WA 98052
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|
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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)
|
|
Three
Months Ended
June 30,
|
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Six
Months Ended
June 30,
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2022
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2021
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|
2022
|
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2021
|
|
|
|
|
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|
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Net Sales
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$4,769
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$6,733
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$9,734
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$12,748
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Cost of goods sold
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2,011
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2,896
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4,673
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5,573
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Gross
margin
|
|
2,758
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3,837
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|
5,061
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7,175
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Operating expenses:
|
|
|
|
|
|
|
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Research
and development
|
|
1,557
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1,673
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3,173
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3,279
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Selling,
general and administrative
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1,928
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2,054
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3,976
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4,116
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Total
operating expenses
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3,485
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3,727
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|
7,149
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7,395
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Operating income (loss)
|
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(727)
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110
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|
(2,088)
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|
(220)
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Non-operating income
(loss):
|
|
|
|
|
|
|
|
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Interest
income
|
|
1
|
|
-
|
|
2
|
|
3
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Gain on
sale of assets
|
|
-
|
|
-
|
|
57
|
|
-
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Foreign
currency transaction gain (loss)
|
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130
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|
(64)
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71
|
|
(38)
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Total
non-operating income (loss)
|
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131
|
|
(64)
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|
130
|
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(35)
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Income (loss) before
income taxes
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(596)
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|
46
|
|
(1,958)
|
|
(255)
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Income tax (expense)
benefit
|
|
(61)
|
|
(75)
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(519)
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(107)
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Net income (loss)
|
|
($657)
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($29)
|
|
($2,477)
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($362)
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|
|
|
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|
|
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|
|
|
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Basic
earnings (loss) per share
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($0.08)
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$0.00
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($0.29)
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($0.04)
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Diluted
earnings (loss) per share
|
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($0.08)
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$0.00
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($0.29)
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($0.04)
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Weighted-average
basic shares
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8,709
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8,517
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8,665
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|
8,469
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Weighted-average
diluted shares
|
|
8,709
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8,517
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8,665
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8,469
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DATA I/O CORPORATION
CONSOLIDATED
BALANCE SHEETS
(in
thousands, except share data)
(UNAUDITED)
|
June 30,
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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$10,291
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$14,190
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Trade
accounts receivable, net of allowance for
|
|
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doubtful accounts of $83 and $89, respectively
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4,165
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3,995
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Inventories
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6,925
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6,351
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Other
current assets
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575
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737
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TOTAL
CURRENT ASSETS
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21,956
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25,273
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|
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Property, plant and
equipment – net
|
1,040
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946
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Other assets
|
2,542
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|
2,838
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TOTAL
ASSETS
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$25,538
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$29,057
|
|
|
|
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LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
Accounts
payable
|
$1,848
|
|
$1,373
|
Accrued
compensation
|
1,557
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|
2,496
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Deferred
revenue
|
1,252
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|
1,507
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Other
accrued liabilities
|
1,374
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|
1,413
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Income
taxes payable
|
60
|
|
-
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TOTAL
CURRENT LIABILITIES
|
6,091
|
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6,789
|
|
|
|
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Operating lease
liabilities
|
1,897
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|
2,277
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Long-term other payables
|
198
|
|
138
|
|
|
|
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COMMITMENTS
|
-
|
|
-
|
|
|
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STOCKHOLDERS’ EQUITY
|
|
|
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Preferred stock -
|
|
|
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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
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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
|
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