Sales Performance - Data I/O's programming solutions generated 58% of total sales in 2021, up from 56% in 2020, driven by capacity, process improvement, and technology advancements [12]. - Adapter sales accounted for 30% of total sales in 2021, increasing from 28% in 2020, reflecting capacity utilization and new customer products [14]. - Software and maintenance sales represented 12% of total sales in 2021, down from 16% in 2020, influenced by the installed base and added capabilities [14]. - Net sales for 2021 were $25,835,000, an increase of 27.3% compared to $20,328,000 in 2020 [108]. - Net sales in the U.S. for 2021 were $2.6 million, an increase from $1.5 million in 2020 [21]. - International sales represented approximately 90% of net sales in 2021, totaling $23.2 million, up from $18.8 million in 2020 [22]. - Equipment sales rose to $14,989,000 in 2021, up from $11,480,000 in 2020, marking an increase of about 30.5% [129]. - U.S. net sales increased to $2.607 million in 2021 from $1.516 million in 2020, representing a growth of 72% [164]. Financial Performance - Gross margin for 2021 was $14,720,000, representing a gross margin percentage of 57.1%, up from $10,822,000 in 2020 [108]. - Net loss for 2021 was $555,000, a significant improvement from a net loss of $3,964,000 in 2020 [108]. - Adjusted EBITDA for 2021 was $1,451,000, compared to an adjusted EBITDA of $(366,000) in 2020 [95]. - Operating income improved to a loss of $273,000 in 2021 from a loss of $3.078 million in 2020, indicating a significant reduction in losses [164]. - The total income tax expense for 2021 was $112,000, a decrease from $387,000 in 2020, reflecting improved tax management [160]. Research and Development - Research and development expenditures were $6.6 million in 2021, representing 26% of net sales [28]. - Research and development expenses for 2021 were $6,635,000, slightly higher than $6,357,000 in 2020 [108]. - The company has approximately 20 U.S. and international awarded patents related to its SentriX platform [29]. Market Trends and Demand - The company experienced a resurgence of orders in Q2 2021, attributed to increased vaccinations and customer business resumption [9]. - Demand slowed in Q3 2021 due to semiconductor supply shortages impacting customer capacity expansion plans [9]. - Data I/O's solutions target high-growth markets, particularly automotive electronics and IoT systems, which are expected to drive future sales growth [15]. - Industry analysts project strong growth in automotive electronics over the next decade, indicating a favorable market outlook for Data I/O [9]. Supply Chain and Operations - The company has maintained a resilient supply chain model, ensuring operational continuity despite COVID-19 related challenges [9]. - The company faced a slowdown in demand in Q3 2021 due to semiconductor supply chain issues, impacting production plans [141]. - The company has implemented additional supplier monitoring and increased inventory stock levels of key parts to enhance supply chain resilience [141]. Assets and Liabilities - Total current assets increased to $25,273,000 in 2021 from $23,250,000 in 2020, reflecting a growth of 8.7% [104]. - Total assets rose to $29,057,000 in 2021, up from $25,592,000 in 2020, marking an increase of 13.5% [104]. - Total stockholders' equity increased to $19,853,000 in 2021 from $19,639,000 in 2020, reflecting a growth of 1.1% [105]. - Total accrued liabilities rose to $1,413,000 in 2021, compared to $1,307,000 in 2020, marking an 8.1% increase [146]. Employee and Compensation - The company employs 95 individuals, with 46 located outside the U.S. [30]. - Share-based compensation for the year ended December 31, 2021, was $1,238,000, compared to $1,467,000 in 2020 [114]. - The Employee Stock Purchase Plan saw 4,484 shares purchased in 2021 at an average price of $5.38 per share, compared to 7,814 shares at $3.71 in 2020 [153]. Miscellaneous - The company has not experienced difficulties related to export regulations and does not require export licenses for its products [22]. - The company has a diverse Board of Directors and is committed to ESG initiatives, including a conflict mineral policy [32]. - The company did not engage in any share repurchase programs in 2021 [158]. - No impairment or impairment-related charges were recorded in 2021, contrasting with $943,000 in impairments recognized in the fourth quarter of 2020 [165].
Data I/O (DAIO) - 2021 Q4 - Annual Report