Financial Performance - Data I/O reported net sales of $6.2 million for Q1 2025, a 1.3% increase from $6.1 million in Q1 2024, driven by business recovery and backlog deliveries in the Americas and Europe[87]. - The company experienced a significant increase in U.S. sales, which rose by 234.5% to $756,000, while international sales decreased by 7.7% to $5.42 million, representing 88% of total net sales[86][89]. - Gross margin for Q1 2025 was $3.19 million, accounting for 51.6% of net sales, down from 52.8% in Q1 2024, primarily due to a higher mix of system sales revenue[90]. - New bookings for Q1 2025 were $4.6 million, an increase from $4.1 million in Q4 2024 but a decrease from $8.1 million in Q1 2024, influenced by delays in customer purchase decisions[88]. - The backlog as of March 31, 2025, was $2.9 million, a decrease of $0.6 million from December 31, 2024, with deferred revenue at approximately $1.5 million[88]. Operational Strategy - The company is focusing on diversifying its end markets and enhancing its consultative sales process to drive revenue growth[66]. - Data I/O has implemented a resilient supply chain with dual manufacturing capabilities in the U.S. and China, positioning itself to manage emerging tariff policies effectively[67]. - The company is considering additional manufacturing locations in Europe to further enhance its operational capabilities[67]. Economic Outlook - Despite economic uncertainties, Data I/O remains focused on sustainable growth through innovation and improving its value proposition[68]. Expenses and Income - Research and development (R&D) expenses decreased to $1,515,000 in Q1 2025, a 4.2% decline from $1,582,000 in Q1 2024, representing 24.5% of net sales compared to 25.9% in the prior year[91]. - Selling, general and administrative (SG&A) expenses fell to $2,050,000 in Q1 2025, down 17.9% from $2,498,000 in Q1 2024, accounting for 33.2% of net sales versus 41.0% previously[92]. - Interest income dropped to $38,000 in Q1 2025, a 52.5% decrease from $80,000 in Q1 2024, attributed to lower interest rates and invested balances[94]. - The income tax expense for Q1 2025 was $21,000, down 48.8% from $41,000 in Q1 2024, primarily related to foreign and state taxes[96]. Cash and Working Capital - Working capital as of March 31, 2025, was approximately $16,014,000, a slight decrease of $71,000 from $16,085,000 at the end of 2024[98]. - Cash increased to $10,500,000, up $159,000 from December 31, 2024, due to higher sales and improved cost structure[98]. EBITDA and Valuation - EBITDA for Q1 2025 was ($272,000), an improvement from ($645,000) in Q1 2024, while adjusted EBITDA was ($98,000) compared to ($364,000) in the prior year[104]. - The company maintains a valuation allowance of $8,900,000 as of March 31, 2025, due to uncertainties related to loss history and economic outlook[97]. Capital Expenditure and Debt - The company has no significant capital expenditure plans but will continue to manage expenditures to support business development and new product releases[99]. - The company has no debt and believes it has sufficient cash and working capital to fund operations and capital requirements for the next year and beyond[101].
Data I/O (DAIO) - 2025 Q1 - Quarterly Report