Sales Performance - In 2024, equipment sales accounted for 51% of total sales, down from 58% in 2023, while adapter sales increased to 33% from 29%[27]. - Net sales in the U.S. for 2024 were $1.4 million, a decrease from $2.8 million in 2023 and $1.8 million in 2022[33]. - Total net sales decreased to $21,769 million in 2024 from $28,064 million in 2023, representing a decline of approximately 22%[191]. - Total revenue for 2024 was $21.769 million, a decrease of 22.4% from $28.064 million in 2023[224]. - Equipment sales decreased by 32.8% to $10.985 million in 2024 from $16.343 million in 2023[224]. - International sales accounted for approximately 94%, 90%, and 93% of net sales in 2024, 2023, and 2022, respectively, indicating a strong reliance on global markets[87]. Financial Results - Gross margin fell to $11,606 million in 2024, down from $16,186 million in 2023, a decrease of about 28%[191]. - Operating loss for 2024 was $3,038 million compared to an operating income of $448 million in 2023, indicating a significant downturn[191]. - Net loss for 2024 was $3,093 million, contrasting with a net income of $486 million in 2023[191]. - Total current assets decreased to $21,157 million in 2024 from $24,613 million in 2023, a reduction of approximately 14%[189]. - Total liabilities decreased to $7,344 million in 2024 from $7,882 million in 2023, a decline of about 7%[190]. - Cash and cash equivalents at the end of 2024 were $10,326 million, down from $12,341 million at the end of 2023, a decrease of approximately 16%[198]. - Total stockholders' equity decreased to $17,626 million in 2024 from $20,319 million in 2023, a decline of approximately 13%[190]. Customer and Market Dynamics - The company sold products to approximately 197 customers globally in 2024, with two customers representing 34% of net sales[30][31]. - The company has concentrated on automotive electronics customers, with orders from this segment representing 59% in 2024, 63% in 2023, and 61% in 2022, highlighting potential risks if demand decreases[68]. - Significant customers represented 34% of net sales in 2024, up from 24% in 2023[235]. Research and Development - Research and development expenditures were $6.2 million in 2024, representing 29% of net sales, compared to $6.5 million (23%) in 2023 and $6.1 million (25%) in 2022[45]. - The company is investing significantly in new product initiatives, particularly in security deployment, although market acceptance remains uncertain, which could affect expected returns on investment[64]. Operational Challenges - The company experienced lower shipments of automated systems in the Americas and Europe due to economic uncertainties, partially offset by revenue growth in Asia[17]. - The company faces challenges in adapting to new technological trends, which could impact competitiveness and financial results if timely product innovation is not achieved[66]. - The company relies on a small number of suppliers for key components, which may lead to shortages and adversely affect business operations[81]. - Fluctuations in quarterly operating results are expected, with revenue heavily dependent on orders received within each quarter, potentially leading to financial instability[91]. Management and Governance - The new CEO, William Wentworth, was appointed in the fourth quarter of 2024 following the retirement of Anthony Ambrose[18]. - The company is committed to environmental, social, and governance (ESG) responsibilities, including purchasing sustainable electric power and reducing carbon emissions[50][52]. - The company must navigate compliance with various international regulations, including CE certification and RoHS directives, to maintain market access in Europe[88]. Risks and Uncertainties - The company is exposed to geopolitical risks, including trade tensions and conflicts, which could disrupt supply chains and impact financial performance[63]. - Cybersecurity risks could lead to liabilities and costs, as well as damage to data or customer access to information systems[103]. - The company has incurred operating losses in five of the last ten years and may struggle to generate sufficient revenue to achieve profitability[96]. - The company may need to raise additional capital due to past and future revenues being insufficient to support operational expenses and business expansion[98]. Employee and Workforce - As of December 31, 2024, the company had a total of 95 employees, with 45 located outside the U.S., and emphasizes competitive pay and benefits to attract and retain skilled employees[49]. - The loss of key employees could adversely affect operations, as many employees are highly skilled and in great demand within the industry[97].
Data I/O (DAIO) - 2024 Q4 - Annual Report