Data I/O Reports First Quarter 2024 Results

Rhea-AI Summary

Data I/O (NASDAQ: DAIO) reported strong financial results for the first quarter of 2024, with net sales of $6.1 million and bookings of $8.1 million. The company achieved a major milestone with the sale of its 500th PSV system. Despite a net loss of ($807,000), Data I/O remains debt-free with cash and equivalents of $12.0 million. The company focuses on growth in Automotive, Industrial, and Programming Center markets, with a strong backlog of $4.5 million at the end of the quarter.

Positive

• Strong bookings quarter with orders reaching $8.1 million
• Reported net sales of $6.1 million and achieved a major milestone with 500th PSV system sale
• Net loss of ($807,000) or ($0.09) per share
• Adjusted EBITDA of ($364,000)
• Cash & Equivalents of $12.0 million with no debt
• 5 new customer wins and focus on Automotive, Industrial, and Programming Center markets
• Backlog of $4.5 million with expected revenue recognition in the second half of 2024
• Gross margin of 52.8% and operating expenses reduction
• Decline in net sales by 16% compared to the prior year period
• First quarter bookings increased by 41% from the previous year
• Operating expenses decreased by 1% compared to the prior year
• Net loss in the first quarter of ($807,000) compared to net income in the previous year
• Adjusted EBITDA decreased to ($364,000) from $502,000 in the prior year
• Strong balance sheet with cash of $12.0 million and no debt

Negative

• Net sales decreased by 16% compared to the previous year
• Gross margin as a percentage of sales declined to 52.8% from 59.5% in the prior year
• Net loss of ($807,000) in the first quarter
• Adjusted EBITDA decreased to ($364,000) from $502,000 in the prior year

Insights

Financial Analyst

Data I/O Corporation's recent financial disclosure indicates a notable increase in bookings by 41% year-over-year, signaling a robust demand pipeline, particularly in the European and Asian markets. However, this surge did not translate into immediate revenue, with sales witnessing a 16% decline compared to the same quarter last year. This suggests a lag between order bookings and revenue recognition, which may impact cash flow and indicates a need for closer inspection of the company's revenue cycle management.

Moreover, the reported net loss of ($807,000), alongside a contraction in gross margin from 59.5% to 52.8%, could signal underlying operational challenges. It's important to note that the company's ability to maintain a strong balance sheet with $12.0 million in cash and no debt provides a cushion for short-term volatility and supports ongoing business activities. However, investors should monitor subsequent quarters for improvements in margin and profitability to assess the sustainability of the company's growth trajectory.

Market Research Analyst

The milestone of the 500th PSV system sale is indicative of Data I/O's stronghold in the automated programming system industry. The significance of this lies not just in the number but in what it represents — market acceptance and potential brand loyalty. While this is a positive sign, the key takeaway for investors would be to understand the competitive landscape of the market and evaluate whether Data I/O can maintain its edge amidst evolving technology and increasing competition.

Given the company's focus on the Automotive, Industrial and Programming Center markets, these sectors' growth trends could act as a harbinger for Data I/O's future performance. Investors should gauge industry health and demand forecasts, which could serve as precursors to the company's sales momentum in upcoming quarters.

Operational Efficiency Expert

Attention to operating expenses, which have decreased marginally by 1% in the face of inflationary pressures, indicates management's commitment to cost containment and efficiency. This is critical given the evident pressure on gross margins due to product mix and sales volume changes. The slight increase in inventory despite lower sales may need monitoring for potential overstocking risks, but it could also represent a strategic build-up in anticipation of future sales fulfillment.

Investors should appreciate the intricate balance between cost reduction efforts and the need to invest in R&D for product innovation. With operational expenses being carefully managed, the ability of Data I/O to strategically allocate resources towards growth-centric R&D without compromising financial stability is a positive indicator of prudent management.

Bookings Momentum Continues with Orders of $8.1 Million in the Quarter

Major Milestone with 500^th PSV System Sale

REDMOND, Wash.--(BUSINESS WIRE)-- 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 first quarter ended March 31, 2024.

First Quarter 2024 Highlights

• Net sales of $6.1 million; bookings of $8.1 million
• Quarter-end backlog of $4.5 million
• Gross margin as a percentage of sales of 52.8%
• Net loss of ($807,000) or ($0.09) per share
• Adjusted EBITDA* of ($364,000)
• Cash & Equivalents of $12.0 million; no debt
• 5 new customer wins
• Achieved major milestone with the sale of 500^th PSV system

*Adjusted EBITDA is a non-GAAP financial measure. A reconciliation is provided in the tables of this press release.

Management Comments

Commenting on the first quarter ended March 31, 2024, Anthony Ambrose, President and CEO of Data I/O Corporation, said, “We had a strong bookings quarter, which included our 500^th PSV family system order. Bookings reached the highest level in 11 quarters, aided by strength in the Programming Center market and 5 new customer and location wins in the first quarter of 2024, driven by ever growing and increasingly complex programming requirements. These short term and long term achievements underscore why the PSV family is recognized as the most successful automated programming system in the industry.

“Our revenues for the first quarter were slightly lower than anticipated due to the timing of system orders and deliveries. Backlog was $4.5 million at the end of the quarter and most of these orders are expected to be shipped and recognized as revenue in the second half of 2024. Looking forward, we see strength in EMEA and Asia, as the Americas region digests the strong CAPEX orders from the prior 2 years for the next 1 to 2 quarters.

“Our focus is growth from the Automotive, Industrial and Programming Center markets worldwide combined with tighter spending controls, process efficiencies and operating leverage. In the first quarter, we continued to reduce operating expenses while expanding our market penetration. This approach to disciplined growth remains a priority in 2024.”

Financial Results

Net sales in the first quarter 2024 were $6.1 million, down 16% compared with $7.2 million in the first quarter of 2023. The decrease from the prior year period primarily reflects timing of shipments on new bookings and comparison to a favorable post-lockdown recovery one year ago. First quarter 2024 bookings were $8.1 million, up 41% from the prior year on strong opportunity conversion in Europe and Asia. Backlog increased $1.7 million in the first quarter to $4.5 million as of March 31, 2024.

Gross margin as a percentage of sales was 52.8% in the first quarter 2024, as compared to 59.5% in the prior year period. The difference in gross margin as a percentage of sales primarily reflects lower sales volume on relatively fixed manufacturing and service costs and product mix. Ongoing initiatives to reduce direct product costs partially offset the sales decline and product mix impacts.

Operating expenses in the first quarter 2024 were under $4.1 million, down $53,000 or 1% from the prior year period. First quarter operating expenses are typically higher than other quarters of the year due to public company costs including audit, regulatory filings and NASDAQ fees. First quarter R&D and SG&A expenses of $1.6 million and $2.5 million, respectively, were marginally lower compared to the prior year period with compensation and inflationary increases offset by continued efficiency improvements and cost reduction efforts.

Net loss in the first quarter 2024 was ($807,000), or ($0.09) per share, compared with net income of $95,000, or $0.01 per share, in the first quarter of 2023. The decline was due largely to lower revenue, its impact on gross margin offset by lower operating expenses, higher interest earnings and a small gain on foreign currency transactions. Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), which excludes equity compensation, was ($364,000) in the first quarter 2024, compared to Adjusted EBITDA of $502,000 in the first quarter 2023.

The Company’s balance sheet remained strong with cash of $12.0 million at the end of the first quarter compared to $12.3 million on December 31, 2023. Cash declined as expected due to higher cash expenses paid annually in the first quarter. Inventory at $6.4 million at the end of the first quarter increased slightly from $5.9 million on December 31, 2023, due to lower revenue. Data I/O had net working capital of $18.1 million on March 31, 2024 compared to $18.4 million on December 31, 2023. The company continues to have no debt.

Conference Call Information

A conference call discussing financial results for the first quarter ended March 31, 2024 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 7614033. 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/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 demand for the Company’s products and the impact from geopolitical conditions 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 March 31,
		2024		2023
Net Sales		$6,099		$7,231
Cost of goods sold		2,879		2,929
Gross margin		3,220		4,302
Operating expenses:
Research and development		1,582		1,625
Selling, general and administrative		2,498		2,508
Total operating expenses		4,080		4,133
Operating income (loss)		(860)		169
Non-operating income (loss):
Interest income		80		35
Foreign currency transaction gain (loss)		14		(74)
Total non-operating income (loss)		94		(39)
Income (loss) before income taxes		(766)		130
Income tax (expense) benefit		(41)		(35)
Net income (loss)		($807)		$95
Basic earnings (loss) per share		($0.09)		$0.01
Diluted earnings (loss) per share		($0.09)		$0.01
Weighted-average basic shares		9,023		8,818
Weighted-average diluted shares		9,023		9,029

DATA I/O CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(UNAUDITED)
		March 31, 2024		December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$11,999		$12,341
Trade accounts receivable, net of allowance for
credit losses of $71 and $72, respectively		4,822		5,707
Inventories		6,372		5,875
Other current assets		739		690
TOTAL CURRENT ASSETS		23,932		24,613
Property, plant and equipment – net		1,044		1,359
Other assets		1,228		1,429
TOTAL ASSETS		$26,204		$27,401
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$1,544		$1,272
Accrued compensation		1,318		2,003
Deferred revenue		1,606		1,362
Other accrued liabilities		1,271		1,438
Income taxes payable		45		113
TOTAL CURRENT LIABILITIES		5,784		6,188
Operating lease liabilities		562		702
Long-term other payables		226		192
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, 9,024,959 shares as of March 31,
2024 and 9,020,819 shares as of December 31, 2023		23,019		22,731
Accumulated earnings (deficit)		(3,452)		(2,645)
Accumulated other comprehensive income		65		233
TOTAL STOCKHOLDERS’ EQUITY		19,632		20,319
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$26,204		$27,401

DATA I/O CORPORATION
NON-GAAP FINANCIAL MEASURE RECONCILIATION
		Three Months Ended March 31,
		2024		2023
(in thousands)
Net Income (loss)		($807)		$95
Interest (income)		(80)		(35)
Taxes		41		35
Depreciation and amortization		201		158
EBITDA earnings		($645)		$253
Equity compensation		281		249
Adjusted EBITDA, excluding equity compensation		($364)		$502

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240425983912/en/

Gerald Ng

Vice President and CFO

Data I/O Corporation

Investor-Relations@dataio.com

Darrow Associates, Inc.

Jordan Darrow

(512) 551-9296

jdarrow@darrowir.com

Source: Data I/O Corporation

FAQ

What were Data I/O 's net sales in the first quarter of 2024?

Data I/O reported net sales of $6.1 million in the first quarter of 2024.

How many bookings did Data I/O have in the first quarter of 2024?

Data I/O had bookings of $8.1 million in the first quarter of 2024.

What was Data I/O 's net loss per share in the first quarter of 2024?

Data I/O reported a net loss of ($0.09) per share in the first quarter of 2024.

Did Data I/O achieve any major milestones in the first quarter of 2024?

Yes, Data I/O achieved a major milestone with the sale of its 500th PSV system in the first quarter of 2024.

How much cash and equivalents does Data I/O have at the end of the first quarter of 2024?

Data I/O has $12.0 million in cash and equivalents at the end of the first quarter of 2024.

What markets is Data I/O focusing on for growth?

Data I/O is focusing on growth in Automotive, Industrial, and Programming Center markets.

What was Data I/O 's backlog at the end of the first quarter of 2024?

Data I/O 's backlog was $4.5 million at the end of the first quarter of 2024.

How did Data I/O 's gross margin change in the first quarter of 2024 compared to the prior year period?

Data I/O 's gross margin decreased to 52.8% in the first quarter of 2024 from 59.5% in the prior year period.

What was the percentage change in net sales for Data I/O in the first quarter of 2024 compared to the previous year?

Data I/O 's net sales decreased by 16% in the first quarter of 2024 compared to the previous year.

What was the percentage change in bookings for Data I/O in the first quarter of 2024 compared to the prior year?

Data I/O 's bookings increased by 41% in the first quarter of 2024 compared to the prior year.