Market Focus - Data I/O Corporation's programming solutions target high-growth areas, particularly automotive electronics and IoT systems, with a focus on security deployment and IP protection[11]. - The company is focusing on strategic growth markets including automotive electronics, IoT, and security deployment, with plans to expand hiring and R&D related to the SentriX platform in 2020[45]. - Growth drivers for automotive electronics include increasing microcontroller density and the demand for advanced features in vehicles[31]. Sales Performance - In 2019, equipment sales accounted for 58% of total sales, down from 65% in 2018, while software and maintenance sales increased to 16% from 11%[23]. - U.S. net sales for 2019 were $1.7 million, a decrease from $3.4 million in 2018 and $2.9 million in 2017[34]. - International sales accounted for approximately 92% of net sales in 2019, with net international sales of $19.8 million, down from $25.8 million in 2018 and $31.2 million in 2017[36][37]. - In 2019, one customer, Data Copy Limited, accounted for approximately 11% of net sales, while Bosch and Data Copy represented 16% and 13% of net sales in 2018[32]. - The backlog of pending orders was approximately $2.9 million as of December 31, 2019, compared to $1.9 million in 2018 and $4.0 million in 2017[44]. Product Offerings - The PSV family of automated programming systems includes the PSV2800, PSV7000, PSV5000, and PSV3000, with prices ranging from $75,000 to $550,000[19]. - The SentriX security deployment system operates on a pay-per-part basis, contributing to recurring revenue through consumables and service fees[21]. - The company’s automated programming systems integrate data programming and security deployment, addressing the increasing complexity and security needs of modern electronic devices[15]. - The SentriX system allows secure provisioning of keys and certificates, enhancing the security of IoT devices across a global network[25]. Financials and Investments - Research and development expenditures were $6.5 million in 2019, representing 29.9% of net sales, compared to $7.4 million (25.2%) in 2018 and $6.9 million (20.3%) in 2017[46]. - Data I/O's solutions are positioned to benefit from the growing semiconductor market, driven by increased demand for programmable devices and security[28]. Competition and Market Position - The competition in the programming systems market is highly fragmented, with low-cost automated solutions gaining market share, primarily competing on price[39]. - The company believes it continues to be the largest competitor in the programming systems equipment market and has been gaining market share with new products[41]. Manufacturing and Workforce - Manufacturing is primarily done in Redmond, Washington, and Shanghai, China, with both facilities ISO 9001:2015 certified[42]. - As of December 31, 2019, the company had a total of 96 employees, with 46 located outside the U.S.[50]. Regulatory and Compliance - The company has not experienced difficulties related to export regulations and has not made sales to blacklisted countries[37][38].
Data I/O (DAIO) - 2019 Q4 - Annual Report