Data I/O Reports Second Quarter 2016 Results
Strong Net Income Growth on Continued Momentum in Automotive Electronics
Redmond, WA, Thursday, July 28, 2016 – Data I/O Corporation (NASDAQ: DAIO), the leading global provider of advanced programming and IP management solutions for flash-memory, flash based microcontrollers and other intelligent devices, today announced financial results for the second quarter ended June 30, 2016.
Forward Looking Statement and Non-GAAP financial measures
Second Quarter 2016 Highlights (on year-over-year basis unless noted)
o Net sales of $5.8 million, up 17% from $5.0 million
o Total bookings of $5.7 million, up 13% from $5.1 million
o Gross margin of $3.1 million, up 13% from $2.7 million
o Net income of $444,000, up from $100,000
o Earnings per diluted share of $0.06, up from $0.01
o Adjusted EBITDA*, excluding equity compensation, of $789,000, up from $345,000
o Automotive electronics orders represented over half of Q2 bookings
o Post-Q2 signing of 5-year supply agreement with Bosch Car Multimedia
o Backlog of $2.0 million at end of quarter
o Repurchased approximately 31,000 shares in Q2 for total of 73,845 in first half of 2016 at average price per share of $2.33
“The momentum we experienced in the first quarter of the year continued in the second quarter of 2016,” said Anthony Ambrose, President and CEO of Data I/O Corporation. “We are pleased that the significant leverage in our model is clearly evident, with net income increasing substantially from last year. This performance is driven in large part by continued strength in our automotive electronics business, across both OEM and programming center customers.
“Automotive electronics is a key component of our long term growth outlook. Following the end of the second quarter we announced a very important contract which we believe defines our leadership position in this market. Bosch Car Multimedia, one of the world’s largest automotive electronics OEMs, selected Data I/O in a multivendor competitive bidding process for a 5-year supply agreement. This victory demonstrates our technical superiority, the ability to satisfy the extensive global requirements inherent in long term global supply agreements, and our industry leading managed and secure pre-programming capabilities rooted in our LumenTMX platform.
“The Bosch agreement is validation of the successful execution of our growth strategy, yet it was not a factor in our second quarter operating results. Based on the strong bookings in the first quarter, which were the highest level for that period in 5 years, second quarter revenue of $5.8 million was 17% higher than a year ago and up 26% from the first quarter. Strong bookings performance in the second quarter led to $5.7 million in orders. Sales to the automotive electronics market continue to be robust, and represented over half of our bookings in the quarter. The Company’s backlog was $2.0 million at the end of the second quarter. Second quarter operating income increased dramatically to 6.7% from 1.3% in the same period last year. On a material increase in sales, operating expenses were held in check as we further benefited from cost saving initiatives.
“Along with our operational strategies, our stock buyback program is an integral component of our mission to deliver value to our shareholders. During the first half of the year, we repurchased 73,845 shares under our buyback program with an average price per share of $2.33, against a current share price of $2.89 as of July 26. We remain on track for continued execution of our plan in 2016 to extend our leading market share in the automotive electronics industry, while growing our presence in the Internet of Things market.”
Net sales in the second quarter of 2016 were $5.8 million, compared with $5.0 million in the second quarter of 2015. The year-over-year increase in sales was primarily a result of strong bookings in the first quarter of 2016, particularly for automotive electronics equipment. Net sales for the first half of 2016 were $10.4 million as compared to $10.9 million for the same period last year.
For the 2016 second quarter, gross margin as a percentage of sales was 53.2%, compared to 54.9% in the second quarter of 2015. The difference in gross margin as a percentage of sales was primarily due to sales mix. For the first six months of 2016, gross margin was 53.9% compared to 51.4% in the same period last year.
Net income in the second quarter of 2016 was $444,000, or $0.06 per diluted share, compared with net income of $100,000, or $0.01 per diluted share, in the second quarter of 2015. Year-to-date, net income was $276,000, or $0.03 per diluted share, compared to $149,000, or $0.02 per diluted share for the same period last year.
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) was a $584,000 in the second quarter of 2016, compared to $197,000 in the second quarter of 2015. Adjusted EBITDA, excluding equity compensation, was $789,000 in the second quarter of 2016, compared to $345,000 in the second quarter of 2015. Year-to-date, EBITDA was $533,000, compared to $372,000 for the same period last year, while Adjusted EBITDA excluding equity compensation was $833,000 in 2016 compared to $610,000 for the same period last year.
Bookings in the second quarter of 2016 were $5.7 million, compared to $5.1 million in the second quarter of 2015, and $5.9 million in the first quarter of 2016. Backlog at June 30, 2016 was $2.0 million, as compared to $700,000 at December 31, 2015, and $2.0 million at March 31, 2016. Deferred revenue was $1.1 million at June 30, 2016, compared with $1.0 million at December 31, 2015 and $1.2 million at March 31, 2016.
Conference Call Information
A conference call discussing the second quarter ended June 30, 2016 financial results will follow this release today at 2 p.m. Pacific time/5 p.m. Eastern Time. To listen to the conference call, please dial (612) 288-0340, passcode: DAIO. A replay will be made available approximately one hour after the conclusion of the call. To access the replay, please dial (320) 365-3844, access code: 397925. The conference call will also be simultaneously webcast over the Internet; visit the News and Events section of the Data I/O Corporation website at http://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, medical, industrial/Internet-of-Things, wireless, consumer electronics, medical and military/aerospace markets. Today, our customers manufacture hundreds of millions of products each year using Data I/O programming solutions to reliably, securely, and cost-effectively deliver their Intellectual Property into programmable devices. Our expertise in programmable integrated circuits, global supply chain processes, and IP management and protection helps bring innovative new products to life. These solutions are backed by a global network of Data I/O support and service providers, assuring success for our customers.
Learn more at www.dataio.com
Statements in this news release concerning economic outlook, expected revenue, expected margins, expected savings, expected results, orders, deliveries, backlog and financial positions, 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. These factors include uncertainties as to the ability to record revenues based upon the timing of product deliveries, installations and acceptance, accrual of expenses, changes in economic conditions and other risks including those described in the Company's filings on Forms 10K and 10Q 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.
Download the complete press release here.