Momentum Continues as Bookings and Net
Income Increase in Fourth Quarter; Full Year Bookings Reach
4 Year High
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 fourth quarter ended December 31,
2022.
Fourth Quarter 2022 Highlights
- Net sales of $7.3 million; bookings of $6.8 million
- Quarter-end backlog of $4.8 million
- Gross margin as a percentage of sales of 55.5%
- Net income of $510,000 or $0.06 per diluted share
- Adjusted EBITDA* of $831,000
- Cash & Equivalents of $11.5 million; no debt
- Very strong APEX industry trade show (January 2023 in San
Diego, CA) with Data I/O booth visitation up by more than 125% over
2021
- Lumen®X Programmers with new VerifyBoost™ technology deliver
64% increase in programming performance
- 5 new customer wins
Full Year 2022 Highlights
- Net sales of $24.2 million; bookings of $26.4 million which are
a 4 year high
- Gross margin as a percentage of sales of 54.5%
- Net loss of ($1,120,000) or ($0.13) per share
- Adjusted EBITDA of $1.3 million
- Automotive Electronics represented 61% of bookings for
2022
- SentriX® bookings and revenue increased over 100% for second
consecutive year
- Deployment of over 440 PSV systems worldwide
- 21 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 year ended December 31, 2022, Anthony
Ambrose, President and CEO of Data I/O Corporation, said, “Our
performance in the second half of the year rebounded sharply from
challenging global business conditions in the first half, as we
continued strong sales and operational momentum from the third
quarter.
“Revenue increased 14% in the fourth quarter, year over year.
For the fifth consecutive quarter, we achieved bookings in excess
of $6.0 million, with fourth quarter 2022 bookings of $6.8 million
reaching the highest level for the fourth quarter since 2019.
Backlog at the end of 2022 was $4.8 million. Demand is being driven
by the continuing recovery in the automotive electronics market,
strength in the industrial sector, and recovery in Europe.
“Automotive and industrial automation continue to represent the
largest, fastest growing and most attractive market segments for
our programming technologies. We have extended our leadership
position in automotive electronics, with this market accounting for
over 60% of bookings for the year. We had over 20 new customer wins
in automotive and industrial during 2022, and our worldwide
installed base of PSV systems increased by 58 machines in 2022 to
over 440 from 390 at the end of 2021.
“New product launches included VerifyBoost™ technology to
support the automotive memory market with significantly improved
UFS programming times by accelerating the verify portion of the
programming cycle over 4.5x. We demonstrated connected factory
enablement with ConneX Software, significantly improving factory
integration with programming. And as we believe the world is
entering into a golden age for security technology, we are pleased
to report that our total SentriX® bookings and revenue increased by
over 100% for the second consecutive year. In the fourth quarter we
set a record for units programmed with SentriX as customers went
into volume production. We continue to add products and
capabilities to the platform and are pleased to have announced our
new partnership in Japan earlier this week.
“Amid an economic backdrop where we expect a moderate recession
and soft landing, we have positioned the Company for revenue
growth, increased net income and cash flow generation in 2023. We
maintain a positive outlook with a high level of backlog and
deferred revenue, combined with a strong sales funnel and a weaker
US dollar. Our end markets of automotive and industrial electronics
continue their long-term growth in semiconductor consumption, with
fewer supply chain issues. There is a surge of investment in and
availability of electric vehicles (EVs) which are estimated to
require 2-3x the amount of electronics content per vehicle as
compared with internal combustion engine models. Finally, our
demand profile may benefit from the potential impact of
governmental reforms such as the Creating Helpful Incentives to
Produce Semiconductors and Science Act of 2022 (CHIPS Act) and the
Inflation Reduction Act of 2022. We are very encouraged with Data
I/O’s outlook for 2023 and beyond.”
Financial Results
Net sales in the fourth quarter of 2022 were $7.3 million, up
14% as compared with $6.4 million in the fourth quarter of 2021.
The increase from the prior year period primarily reflects a more
normalized operating environment in the Americas and Asia which
resulted in higher overall demand for equipment and higher adapter
usage on business spread over a growing installed base of systems
throughout the world. Fourth quarter revenues also reflect the
shipment of a majority of backlog and systems in deferred revenue
as of September 30, 2022. The higher revenues were partially offset
by the impact of a strong US dollar.
For all of 2022, net sales were $24.2 million, down 6% from
$25.8 million in 2021, reflecting lockdowns/port closures in China
and global supply chain shortages negatively impacting financial
results through the first half of the year and strength of the US
dollar as compared with foreign currencies which reduced revenues
in 2022 by an estimated $1 million. Total recurring and consumable
revenues represented $2.7 million or 38% of total revenues in the
fourth quarter 2022, as compared with $2.9 million or 46% in the
fourth quarter 2021. Total recurring and consumable revenues
represented 43% of the total in 2022, an increase from 42% in
2021.
Fourth quarter 2022 bookings were $6.8 million, up from $6.2
million in the fourth quarter 2021. Bookings for all of 2022 were
$26.5 million, up from $25.5 million in 2021. Backlog at December
31, 2022 was approximately $4.8 million, down from approximately
$4.9 million on September 30, 2022 and up from approximately $2.9
million at December 31, 2021. Additionally, deferred revenue is
approximately $1.8 million at December 31, 2022.
Gross margin as a percentage of sales was 55.5% in the fourth
quarter of 2022, as compared to 54.4% in the same period of the
prior year. The difference in gross margin as a percentage of sales
primarily reflects the impact of higher sales volume on relatively
fixed costs, and product mix in the 2022 period, partially offset
by inventory charges and currency strength of the US dollar. For
all of 2022, gross margin was 54.5%, compared to 57.0% for the
prior year.
Total operating expenses in the fourth quarter of 2022 of $3.4
million were down approximately $241,000 or 6.6% as compared to the
2021 period of $3.7 million. R&D expenses were $1.5 million in
the fourth quarter of 2022 compared to $1.6 million in the fourth
quarter of the prior year. Selling, general and administrative
(“SG&A”) expenses were $1.9 million in the fourth quarter of
2022 compared to $2.0 million in the fourth quarter of the prior
year. The lower operating expenses in the fourth quarter of 2022
was primarily a result of disciplined spending, lower incentive
compensation and effects of the strong US dollar. For the full
year, total operating expenses were $14.0 million, down
approximately $1.0 million or 6.9% as compared with the prior year.
R&D and SG&A expenses were $6.1 and $7.9 million,
respectively, down from $6.6 and $8.4 million in 2021,
respectively.
Net income in the fourth quarter of 2022 was $510,000, or $0.06
per diluted share, compared with a net loss of ($205,000), or
($0.02) per share, for the fourth quarter of 2021. Included in net
loss are foreign currency transaction losses of ($156,000) for the
fourth quarter of 2022 and ($138,000) for the fourth quarter of
2021. For the full year, a net loss of ($1,120,000), or ($0.13) per
share, in 2022 compared to a net loss of ($555,000), or ($0.06) per
share, in 2021. For the year 2022, the impacts of the weaker US
dollar, war in Ukraine, COVID shutdown in Shanghai, China and
semiconductor supply chain shortages resulted in a decline in
revenue and increased losses in the first half of 2022 compared to
2021.
Adjusted earnings before interest, taxes, depreciation and
amortization (“Adjusted EBITDA”), which excludes equity
compensation, was $831,000 in the fourth quarter of 2022, compared
to Adjusted EBITDA of $117,000 in the fourth quarter of 2021. For
the full year, Adjusted EBITDA was $1,265,000 in 2022, compared to
$1,451,000 in 2021.
Data I/O’s balance sheet remained strong with cash at the end of
the fourth quarter of 2022 of $11.5 million, up from $11.0 million
at September 30, 2022 and down from $14.2 million at December 31,
2021. The increase in cash from September 30, 2022 primarily
reflects operating profitability during the quarter. As is
customary in the first quarter of each year, the Company expects a
net use of cash for the payment of annual public company costs and
satisfaction of year-end compensation. Data I/O had net working
capital of $17.6 million at December 31, 2022, up from $16.5
million at September 30, 2022 and down from $18.5 million at the
end of the 2021. The Company continues to have no debt.
Financial Outlook for 2023
Based on improved visibility and ongoing strength in its primary
end markets, the Company is providing its financial outlook for
2023. Data I/O expects double-digit bookings growth in 2023,
consistent with the long-term double-digit semiconductor growth
rate in the automotive electronics industry. Gross margins are
expected to be in the mid-to-high 50% range for the year. Operating
expenses for 2023 are expected to be consistent with 2022, except
for variability in incentive compensation, sales commissions, and
currency.
Data I/O also announced today that after over 30 years with the
company its Chief Operating and Financial Officer, Joel Hatlen,
intends to retire in the second half of 2023. A succession plan is
being implemented to ensure a smooth transition.
Conference Call Information
A conference call discussing financial results for the fourth
quarter ended December 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 3804255. 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. See:
dataio.com/Company/Patents.
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 and Adjusted EBITDA,
excluding equity compensation, 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
December 31,
Twelve Months Ended
December 31,
2022
2021
2022
2021
Net Sales
$7,271
$6,357
$24,217
$25,835
Cost of goods sold
3,233
2,900
11,007
11,115
Gross margin
4,038
3,457
13,210
14,720
Operating expenses:
Research and development
1,478
1,626
6,083
6,635
Selling, general and administrative
1,933
2,026
7,876
8,358
Total operating expenses
3,411
3,652
13,959
14,993
Operating income (loss)
627
(195
)
(749
)
(273
)
Non-operating income (loss):
Interest income
23
-
34
11
Gain on sale of assets
(1
)
21
57
21
Foreign currency transaction gain
(loss)
(156
)
(138
)
221
(202
)
Total non-operating income (loss)
(134
)
(117
)
312
(170
)
Income (loss) before income taxes
493
(312
)
(437
)
(443
)
Income tax (expense) benefit
17
107
(683
)
(112
)
Net income (loss)
$510
($205
)
($1,120
)
($555
)
Basic earnings (loss) per share
$0.06
($0.02
)
($0.13
)
($0.06
)
Diluted earnings (loss) per share
$0.06
($0.02
)
($0.13
)
($0.06
)
Weighted-average basic shares
8,816
8,621
8,741
8,545
Weighted-average diluted shares
8,942
8,621
8,741
8,545
DATA I/O CORPORATION
CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
(UNAUDITED)
December 31,
2022
December 31,
2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$11,510
$14,190
Trade accounts receivable, net of
allowance for doubtful accounts of $147 and $89, respectively
4,992
3,995
Inventories
6,751
6,351
Other current assets
645
737
TOTAL CURRENT ASSETS
23,898
25,273
Property, plant and equipment – net
1,072
946
Other assets
2,195
2,838
TOTAL ASSETS
$27,165
$29,057
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$1,366
$1,373
Accrued compensation
1,670
2,496
Deferred revenue
1,575
1,507
Other accrued liabilities
1,596
1,413
Income taxes payable
112
-
TOTAL CURRENT LIABILITIES
6,319
6,789
Operating lease liabilities
1,500
2,277
Long-term other payables
237
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, 8,816,381 shares as of December 31, 2022 and 8,621,007
shares as of December 31, 2021
21,897
20,886
Accumulated earnings (deficit)
(3,131
)
(2,011
)
Accumulated other comprehensive income
343
978
TOTAL STOCKHOLDERS’ EQUITY
19,109
19,853
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$27,165
$29,057
DATA I/O CORPORATION NON-GAAP
FINANCIAL MEASURE RECONCILIATION
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2022
2021
2022
2021
(in thousands)
Net Income (loss)
$510
($205
)
($1,120
)
($555
)
Interest (income)
(23
)
-
(34
)
(11
)
Taxes
(17
)
(107
)
683
112
Depreciation and amortization
120
150
560
667
EBITDA earnings (loss)
$590
($162
)
$89
$213
Equity compensation
241
279
1,176
1,238
Adjusted EBITDA, excluding equity
compensation
$831
$117
$1,265
$1,451
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230223005825/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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