Financial Data and Key Metrics Changes - Cash decreased to $12.3 million as of March 31, 2022, down from $14.2 million at the end of the previous year and $13.6 million at the end of Q1 2021 [21] - Revenue for Q1 2022 was $5 million, a 17% decrease from $6 million in Q1 2021, primarily due to approximately $1 million in potential revenue lost from COVID-19 lockdowns in Shanghai [24][25] - Gross margin for Q1 2022 was 46.4%, down nine points from 55.5% in Q1 2021, attributed to sales volume and mix [29] Business Line Data and Key Metrics Changes - Automotive electronics accounted for approximately 63% of orders in Q1 2022, continuing to be the primary market [9][26] - Consumables increased to 33% of revenue sequentially, up from 30% in 2021 and 27% in 2020 [26] - Software and services revenues rose to 15% of revenue in Q1 2022, up from 12% in the prior year [26] Market Data and Key Metrics Changes - International sales represented approximately 94.2% of revenue in Q1 2022, compared to 95.3% in the same period last year [26] - Bookings for Q1 2022 were $6.2 million, equal to Q4 2021, and up 16% from $5.4 million in Q1 2021 [27][28] Company Strategy and Development Direction - The company is focusing on expanding sales opportunities, particularly in the $25 billion to $30 billion microcontroller industry, emphasizing security provisioning [15] - Acknowledgment of the importance of a resilient supply chain strategy, especially in light of recent geopolitical and pandemic-related challenges [52][56] - Plans to celebrate its 50th anniversary with a series of fireside chats to engage with the investment community [18] Management's Comments on Operating Environment and Future Outlook - Management adjusted short-term growth expectations due to economic challenges, with a resumption of growth contingent upon reopening in China and stabilization of supply chains [19] - Confidence in the company's industry-leading automotive presence and secure programming technology platform to capitalize on future demand [20][34] Other Important Information - The company has been awarded over 20 U.S. and international patents related to SentriX and security [16] - A significant backlog of $4.1 million as of March 31, 2022, compared to $2.9 million at the end of Q4 2021, reflecting stronger bookings and lockdown impacts [31] Q&A Session Summary Question: Has the fallout from the Russian invasion of Ukraine helped your security business? - Management noted increased awareness of cybersecurity threats, particularly for IoT devices, highlighting the need for robust security strategies [36] Question: Can you review some of the cash used in the quarter for annual expenses? - The cash change was primarily due to one-time seasonal payments, including a dividend withholding tax and planned disbursements for annual compensation [37] Question: What are the capital expenditures for the year? - Expected capital expenditures are in the range of $600,000 to $700,000, with about half allocated for sales demo systems [38] Question: How do you think about projected cash flow going forward? - Cash flow is expected to align with adjusted EBITDA, with a strong balance sheet and no debt, allowing for fluctuations based on working capital [40] Question: Can you talk about the opportunities to penetrate new markets via SentriX? - SentriX has applicability in both automotive and industrial IoT markets, with a growing customer base in industrial applications [60] Question: What skills are the new Board members bringing to the company? - New Board members bring experience in manufacturing and software, which is expected to enhance the company's strategic direction [69]
Data I/O (DAIO) - 2022 Q1 - Earnings Call Transcript