Data I/O Reports Third Quarter 2017 Results
Third Quarter Net Income up 176% as Revenue Grows 46% to a 17-Year High;
First Deployment of Next Generation SentriX™ Security Provisioning Technology
Redmond, WA, Thursday -- October 26, 2017 -- Data I/O Corporation (NASDAQ: DAIO), a leading global provider of advanced data programming and security provisioning solutions for flash-memory, flash based microcontrollers and Secure Elements, today announced financial results for the third quarter ended September 30, 2017.
Third Quarter 2017 Highlights (on year-over-year basis unless noted)
- Net sales of $9.6 million, a 17-year high, up 46% from $6.6 million in 3Q16
- Total bookings of $8.2 million, a 10-year high for the third quarter
- Gross margin as a percentage of sales of 62.1%, up from 55.3% in 3Q16
- Net income of $1.7 million or $0.20 diluted earnings per share, up from $625,000 or $0.08 diluted earnings per share in 3Q16
Key win at European customer with multiple automated systems ordered at a location previously supported by Data I/O’s competitors
Momentum for SentriX™ Security Provisioning Platform
“We achieved multi-year highs in key financial performance metrics in the third quarter of 2017,” said Anthony Ambrose, President and CEO of Data I/O Corporation. “Simply put, we have been ‘running on all cylinders’ with excellent performance in operations, service, sales and engineering. Data I/O has delivered continued increases in revenues and profitability while investing in future growth initiatives in the automotive electronics and IoT markets.”
“Total revenues of $9.6 million increased by 46% from the prior third quarter, reaching the highest level of quarterly revenue in 17 years. Bookings for the quarter were $8.2 million, with over 51% of these orders year-to-date coming from OEMs in the automotive sector. Sales of the PSV7000 product line, our most advanced automated programming system for high capacity applications and offering the industry’s lowest total cost of ownership, grew by 137% in the third quarter with strong demand from Europe and the Americas.”
“In addition to the strong current performance driven by the automotive electronics market, we are very pleased in the deployment of our first SentriX Security Provisioning System. This system was placed with a leading European programming center. After the quarter ended, we also announced our collaboration with Maxim Integrated to support personalized, secure provisioning of Maxim’s DS28C36 and DS2476 DeepCover ICs on the SentriX Platform. Semiconductor companies can expand their addressable markets and better support customers with personalized, secure authentication when they collaborate with Data I/O and the SentriX platform.”
Investors and customers will have an opportunity to see Data I/O’s latest products at the upcoming Productronica Show in Munich, Germany, from November 14-18, prominently located in Hall 2, Booth 205.
Net sales in the third quarter of 2017 were $9.6 million, compared with $6.6 million in the third quarter of 2016 and $9.1 million in the second quarter of 2017.
For the 2017 third quarter, gross margin as a percentage of sales was 62.1%, compared to 55.3% in the third quarter of 2016 and 56.9% in the second quarter of 2017. The improvement in gross margin as a percentage of sales compared to earlier periods was primarily due to higher order volume and favorable product mix, particularly from demand for the PSV family of products by automotive electronics and programming center customers, and improved factory utilization.
Net income in the third quarter of 2017 was $1.7 million, or $0.20 per diluted share, compared with net income of $625,000, or $0.08 per diluted share, in the third quarter of 2016.
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) was $2.1 million in the third quarter of 2017, compared to $755,000 in the third quarter of 2016. Adjusted EBITDA, excluding equity compensation, was $2.3 million in the third quarter of 2017, compared to $865,000 in the third quarter of 2016.
Bookings in the third quarter of 2017 were $8.2 million, compared to $7.9 million in the third quarter of 2016. Backlog at September 30, 2017 was $4.6 million, compared to $4.7 million at June 30, 2017 and $3.2 million at December 31, 2016. Deferred revenue was $1.6 million at September 30, 2017, down from $2.8 million at June 30, 2017 and $1.9 million at December 31, 2016.
Spending in the third quarter was up approximately $1.1 million from the same period of 2016. Approximately $655,000 of the increase was selling, general and administrative variable costs related to the increased level of business activity. Approximately $456,000 of the increase reflects additional spending on research and development to support new product development for the SentriX platform, LumenX™ programmer capabilities and features, ConneX™ software, and enhancements to other products. The majority of this was personnel related, including additional headcount in engineering. The Company continues to invest to support automotive demands in the near term and security opportunities in future years.
Data I/O’s financial condition remains strong with an increase in its cash position to $15.2 million at September 30, 2017 from $12.0 million at June 30, 2017 and working capital of $18.4 million at September 30, 2017. The Company continues to have no debt.
Conference Call Information
A conference call discussing the third quarter ended September 30, 2017 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) 234-9959, 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: 431940. 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, industrial/Internet-of-Things, wireless, consumer electronics, medical and military/aerospace markets. Today, our customers manufacture tens 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.
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, 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.
Read the complete press relase with financial tables here