Automotive Electronics Momentum Drives 32%
Growth in Bookings From First Quarter 2023
Significant Year-over-year Increases in
Sales and Profits
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, 2023.
Second Quarter 2023 Highlights
- Net sales of $7.4 million; bookings of $7.6 million
- Quarter-end backlog of $3.8 million
- Gross margin as a percentage of sales of 59.1%
- Net income of $300,000 or $0.03 per diluted share
- Adjusted EBITDA* of $869,000
- Cash & Equivalents of $11.9 million; no debt
- Automotive Electronics represented 63% of year to date 2023
bookings
- SentriX® security provisioning platform delivering increased
growth of pay-per-use revenues
- 5 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 second quarter ended June 30, 2023, Anthony
Ambrose, President and CEO of Data I/O Corporation, said, “We
delivered a strong quarter with revenue and bookings at multiyear
highs. Business momentum accelerated through the second quarter
2023 primarily due to strength in automotive and industrial
electronics demand in the Americas and Europe. Relative weakness in
China has been more than offset by strength elsewhere. Through the
first half of 2023, revenues increased by 50% from the prior year,
and bookings in the second quarter of $7.6 million achieved the
highest quarterly level in two years. We secured five new customer
wins in the second quarter, including a marquee win at a global EV
OEM. Data I/O continues to be the clear leader in EV vehicle
programming worldwide. SentriX, our patented security provisioning
platform, delivered increasing pay-per-use revenues as customers
ramp their production volumes of secure IoT devices.
“Our continued momentum and the successful implementation of our
growth initiatives are fueling our positive outlook. We expect to
benefit from long term secular and regulatory growth catalysts,
including EV demand, growth in IoT and mandated security
requirements. Semiconductor growth in automotive electronics is
forecasted to grow 10-15% per year for several years, driving
demand for programming worldwide.”
Financial Results
Data I/O’s financial results featured strong revenues, gross
margin, profitability and bookings for the second quarter 2023.
This is combined with a strong balance sheet that is debt free.
Net sales in the second quarter 2023 were $7.4 million, up 55%
as compared with $4.8 million in the second quarter 2022. The
increase from the prior year period primarily reflects a more
normalized operating environment and increased activity within the
automotive electronics industry. Second quarter 2023 bookings were
$7.6 million, up 32% from $5.7 million in the first quarter 2023
and 19% from $6.4 million in the second quarter 2022. There was an
increase in orders from customers in the Americas and Europe. Asia
showed moderately improved order flow but overall demand continues
to be impacted by the slower than expected economic recovery in
China. Automotive electronics represented 63% of year to date
bookings compared to 61% for all of 2022. Backlog at the end of
second quarter 2023 remained strong at $3.8 million, and the
Company ended the period with deferred revenue of $1.6 million. The
Company expects a larger than normal percentage of scheduled
backlog to be recognized as revenue in Q4.
Gross margin as a percentage of sales was 59.1% in the second
quarter 2023, as compared to 57.8% in the same period of the prior
year. The difference in gross margin as a percentage of sales
reflects higher sales volume on relatively fixed costs, channel mix
and product mix.
Total operating expenses in the second quarter 2023 of $4.2
million were up approximately $724,000 as compared to $3.5 million
in the second quarter of the prior year. R&D expenses were $1.7
million in the second quarter 2023 compared to $1.6 million in the
second quarter of the prior year reflecting continued investment in
the Company’s technology platform to support continued and future
growth. Selling, general and administrative (“SG&A”) expenses
were $2.5 million in the second quarter 2023 compared to $1.9
million in the second quarter of the prior year. The higher
SG&A expenses are primarily a result of higher channel and
incentive compensation and IT spending.
Net income in the second quarter 2023 was $300,000, or $0.03 per
diluted share, compared with a net loss of ($657,000), or ($0.08)
per share, in the second quarter 2022. Included in net income is a
foreign currency transaction gain of $196,000 for the second
quarter of 2023 and $130,000 for the second quarter of 2022. Also
included in net income is income tax expense for foreign
subsidiaries of $109,000 for the second quarter of 2023 and $61,000
for the second quarter of 2022.
Adjusted earnings before interest, taxes, depreciation and
amortization (“Adjusted EBITDA”), which excludes equity
compensation, was $869,000 in the second quarter 2023, compared to
Adjusted EBITDA of ($65,000) in the second quarter 2022.
Data I/O’s balance sheet remained strong with cash at the end of
the second quarter 2023 of $11.9 million, up from $11.5 million on
December 31, 2022. The increase in cash from December 31, 2022
primarily reflects operating profitability, favorable foreign
currency exchange rates and increased net interest income. Data I/O
had net working capital of $18.0 million on June 30, 2023, up from
$17.6 million on December 31, 2022. The Company continues to have
no debt.
CFO Succession
As previously announced on June 30, Gerald Ng joined the Company
as Vice President of Finance on July 1, 2023. Effective August 16,
2023, he will become Chief Financial Officer, succeeding Joel
Hatlen who is retiring after 32 years with the Company. “We express
deep appreciation for the key role Joel has played over 32 years at
the company. Our employees, customers, partners and shareholders
all hold him in the highest esteem. We wish Joel well in
retirement,” concluded Mr. Ambrose.
Financial Outlook for 2023
The Company provided a financial outlook for 2023 upon reporting
year end 2022 results. The second quarter 2023 financial results
affirm the improved visibility and ongoing strength in the
Company’s primary end markets. For 2023, the Company now
expects:
- Double-digit revenue growth for the year, consistent with the
long-term double-digit semiconductor growth rate in the automotive
electronics industry;
- Gross margins to be in the mid-to-high 50% range for the year;
and
- Operating expenses for the year to be higher than 2022
primarily due to increased R&D spending, sales commissions,
variable compensation and currency effects.
Conference Call Information
A conference call discussing financial results for the second
quarter ended June 30, 2023 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 9954796. 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, expected expenses, 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 effects on the Company’s business
from Shanghai’s COVID-19 lockdowns and recovery, impact on the
demand for the Company’s products, 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 June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net Sales
$7,398
$4,769
$14,629
$9,734
Cost of goods sold
3,025
2,011
5,954
4,673
Gross margin
4,373
2,758
8,675
5,061
Operating expenses:
Research and development
1,720
1,557
3,345
3,173
Selling, general and administrative
2,489
1,928
4,997
3,976
Total operating expenses
4,209
3,485
8,342
7,149
Operating income (loss)
164
(727)
333
(2,088)
Non-operating income (loss):
Interest income
49
1
84
2
Gain on sale of assets
-
-
-
57
Foreign currency transaction gain
(loss)
196
130
122
71
Total non-operating income (loss)
245
131
206
130
Income (loss) before income taxes
409
(596)
539
(1,958)
Income tax (expense) benefit
(109)
(61)
(144)
(519)
Net income (loss)
$300
($657)
$395
($2,477)
Basic earnings (loss) per share
$0.03
($0.08)
$0.04
($0.29)
Diluted earnings (loss) per share
$0.03
($0.08)
$0.04
($0.29)
Weighted-average basic shares
8,904
8,709
8,861
8,665
Weighted-average diluted shares
9,075
8,709
9,052
8,665
DATA I/O CORPORATION
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
data)
(UNAUDITED)
June 30, 2023
December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$11,870
$11,510
Trade accounts receivable, net of
allowance for
doubtful accounts of $135 and $147,
respectively
4,725
4,992
Inventories
6,868
6,751
Other current assets
847
645
TOTAL CURRENT ASSETS
24,310
23,898
Property, plant and equipment – net
989
1,072
Other assets
1,802
2,195
TOTAL ASSETS
$27,101
$27,165
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$1,590
$1,366
Accrued compensation
1,723
1,670
Deferred revenue
1,363
1,575
Other accrued liabilities
1,542
1,596
Income taxes payable
91
112
TOTAL CURRENT LIABILITIES
6,309
6,319
Operating lease liabilities
1,087
1,500
Long-term other payables
218
237
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, 9,018,875 shares
as of June 30,
2023 and 8,816,381 shares as of December
31, 2022
22,165
21,897
Accumulated earnings (deficit)
(2,736)
(3,131)
Accumulated other comprehensive income
58
343
TOTAL STOCKHOLDERS’ EQUITY
19,487
19,109
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$27,101
$27,165
DATA I/O CORPORATION
NON-GAAP FINANCIAL MEASURE
RECONCILIATION
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
(in thousands)
Net Income (loss)
$300
($657)
$395
($2,477)
Interest (income)
(49)
(1)
(84)
(2)
Taxes
109
61
144
519
Depreciation and amortization
130
152
288
293
EBITDA earnings (loss)
$490
($445)
$743
($1,667)
Equity compensation
379
380
628
671
Adjusted EBITDA, excluding equity
compensation
$869
($65)
$1,371
($996)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230727840338/en/
Joel Hatlen Data I/O Corporation Darrow Associates, Inc. Jordan
Darrow (512) 551-9296 jdarrow@darrowir.com
Data I O (NASDAQ:DAIO)
Historical Stock Chart
From Jul 2024 to Jul 2024
Data I O (NASDAQ:DAIO)
Historical Stock Chart
From Jul 2023 to Jul 2024