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Data I/O (DAIO) - 2024 Q1 - Quarterly Report

Financial Performance - First quarter revenue was $6.1 million, down 16% from $7.2 million in the prior year period, attributed to lower backlog and timing of shipments [58]. - First quarter bookings increased to $8.1 million, up 41% from the prior year, driven by strong opportunity conversion in Europe and Asia [58]. - Backlog rose by $1.7 million to $4.5 million as of March 31, 2024, compared to $3.2 million a year earlier [59]. - International sales accounted for approximately 96% of total net sales in the first quarter of 2024, up from 87% in the prior year [79]. - Gross margin for the first quarter was $3.22 million, representing 52.8% of net sales, down from 59.5% in the same period last year [80]. - EBITDA loss for Q1 2024 was $(645,000), compared to a profit of $253,000 in Q1 2023, while adjusted EBITDA was $(364,000) compared to $502,000 in the prior year [95]. Expenses and Costs - Research and development (R&D) expenses decreased by 2.6% to $1,582,000 in Q1 2024, representing 25.9% of net sales compared to 22.5% in Q1 2023 [83]. - Selling, general and administrative (SG&A) expenses slightly decreased by 0.4% to $2,498,000, accounting for 41.0% of net sales, up from 34.7% in the previous year [84]. - The income tax expense for Q1 2024 was $(41,000), a 17.1% increase from $(35,000) in Q1 2023, primarily related to foreign and state taxes [87]. Cash and Working Capital - Working capital decreased by 1.5% to $18,148,000 as of March 31, 2024, with cash decreasing to $12,000,000, down $342,000 from December 31, 2023 [90]. - The company has no debt and believes it has sufficient cash and working capital to fund operations for the next year and beyond [93]. Strategic Initiatives - Research and development efforts are focused on automotive electronics and IoT programming technologies, with ongoing investments to maintain leadership in these markets [61]. - Data I/O is implementing spending controls and process efficiencies to enhance operating leverage while expanding market penetration [62]. - The company has implemented initiatives to reduce exposure to currency volatility and control costs while balancing spending with anticipated revenue levels [92]. - The company has no significant capital expenditure plans currently but will continue to manage expenditures to support business development [91]. Market and Sales Insights - Automotive electronics represented 49% of orders in the first quarter, followed by 37% for programming centers and 14% for IoT [79]. - The Americas region is expected to absorb capacity expansion in 2024, following significant growth over the past two years [60]. - Interest income increased by 128.6% to $80,000 in Q1 2024, driven by higher interest rates and invested balances compared to $35,000 in Q1 2023 [85]. - The company had $1.8 million in deferred revenue as of March 31, 2024, compared to $2.0 million a year earlier [78]. - The company maintains a valuation allowance of $8.9 million as of March 31, 2024, due to uncertainties related to loss history and economic outlook [88].