Financial Performance - Third quarter revenue was $5.4 million, down 17% from $6.6 million in the prior year period[54] - Net sales in Q3 2024 were $5.4 million, down 17% from $6.6 million in Q3 2023, primarily due to increased uncertainty in automotive electronics and slowed customer capacity expansion[77] - Total programming systems revenue for the third quarter was $5.4 million, a decrease of 17.3% compared to the previous year[76] - The company reported a net loss of $307,000 in Q3 2024, compared to a loss of $53,000 in Q3 2023[92] Revenue Breakdown - Automotive market system sales were below expectations, while consumables, software, and services grew 6%, representing 50% of year-to-date revenue[55] - Automated programming systems revenue was $4.0 million, down 23.8% year-over-year, while non-automated programming systems revenue increased by 9%[76] - Recurring services and consumable adapter sales increased by 6% year-over-year, while system sales declined by 34% in the same period[78] - The Asia channel grew 29% in the third quarter and 26% year-to-date, offsetting declines in the Americas and Europe[54] Expenses and Cost Management - Operating expenses for the third quarter were $3.2 million, a decrease of $334,000 or 9% year-over-year[56] - Research and development expenses decreased by 2.1% in Q3 2024 to $1.5 million compared to $1.6 million in Q3 2023, reflecting lower consulting costs[80] - Selling, general and administrative expenses decreased by 15% in Q3 2024 to $1.7 million, primarily due to lower sales commissions and efficiency improvements[81] - The company is focusing on managing costs to mitigate revenue shortfalls and fund future growth initiatives[56] Cash and Working Capital - The company expects continued near-term market headwinds but remains financially solid with a strong cash position and no debt[57] - Working capital decreased by $811,000 to $17.6 million as of September 30, 2024, due to lower revenue and higher inventories[85] - Interest income increased by 73.2% in Q3 2024 to $71,000 compared to $41,000 in Q3 2023, driven by higher average interest rates[82] Corporate Changes and Governance - A CEO transition occurred with William "Bill" Wentworth becoming CEO effective October 1, 2024, replacing Anthony Ambrose[58] - No changes were made in internal controls that materially affected financial reporting[95] - As of September 30, 2024, the company was not a party to any material pending legal proceedings[96] Tax and Valuation - The effective tax rate was affected by a valuation allowance of $9.3 million as of September 30, 2024, limiting the recognition of net deferred tax assets[83] - The company has no significant capital expenditure plans but will continue to manage expenditures to support business development[86]
Data I/O (DAIO) - 2024 Q3 - Quarterly Report