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): February 22, 2023 |
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 5.02 Departure of Directors or
Certain Officers
Item 9.01 Financial Statements and
Exhibits
______________________________________________________________________________________________________
Item 2.02 Results of Operation and
Financial Condition
A press release
announcing fourth quarter 2022 results was made February 23, 2023 and a copy of
the release is being furnished as Exhibit 99.0 in this current report.
Item 5.02 Departure of Directors or
Certain Officers
Joel Hatlen
announced his planned retirement, which is expected to take place in the second
half of 2023. This is included in the copy
of the release that is being furnished as Exhibit 99.0 in this current report.
On February 22,
2023, the Board of Directors canceled the old Director Fee Plan and unreserved
the previously reserved remaining shares of 130,763.
______________________________________________________________________________________________________
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
|
Description
|
99.0
|
Press Release: Data I/O Reports Fourth 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
|
|
|
February 23, 2023
|
By: /s/
Joel S. Hatlen
Joel S. Hatlen
Vice President
Chief Operating and Financial Officer
|
Exhibit 99.0
Data
I/O Reports Fourth Quarter 2022 Results
Momentum
Continues as Bookings and Net Income Increase in
Fourth
Quarter; Full Year Bookings Reach 4 Year High
Redmond, WA –
February 23, 2023 -- 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 VerifyBoostTM 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 VerifyBoostTM 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.
Contacts:
Joel Hatlen
|
|
Chief Operating and Financial Officer
|
|
Data I/O Corporation
6645 185th Ave. NE, Suite
100
|
|
Redmond, WA 98052
|
|
|
|
Darrow Associates, Inc.
|
|
Jordan Darrow
|
|
(512) 551-9296
jdarrow@darrowir.com
|
|
- 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
|
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