Financial Data and Key Metrics Changes - Net sales in Q4 2019 were $5.9 million, down from $7.9 million in Q4 2018, but up from $3.8 million in Q3 2019 [14] - For the full year 2019, sales were $21.6 million compared to $29.2 million in 2018 [14] - The net loss in Q4 2019 was $496,000 or $0.06 per share, compared to net income of $648,000 or $0.08 per diluted share in Q4 2018 [19] - The GAAP net loss for 2019 was $1.2 million or $0.14 per diluted share, compared to net income of $1.6 million or $0.19 per diluted share in 2018 [19] - Gross margin for Q4 2019 was 55.9%, down from 58.2% in Q4 2018, primarily impacted by fixed costs and tariffs [16] Business Line Data and Key Metrics Changes - Capital equipment sales represented 64% of revenues in Q4 2019, down from 65% in Q4 2018, while adapters and consumables accounted for 22% of revenues, down from 24% [15] - For the full year 2019, capital equipment sales were 58% of revenues, compared to 65% in 2018 [15] Market Data and Key Metrics Changes - International sales represented approximately 94% of total net sales in Q4 2019, up from 92% in Q4 2018 [15] - Backlog at December 31, 2019, was $2.9 million, up from $1.7 million at September 30, 2019 [20] Company Strategy and Development Direction - The company plans to invest for the long term to retain and extend its leadership position in programming, particularly in automotive electronics and security for IoT [8] - The strategy for SentriX includes expanding presence and simplifying operations in 2020, with a focus on market development and R&D initiatives [12][18] Management's Comments on Operating Environment and Future Outlook - Management noted that the coronavirus has impacted supply chain and demand creation, particularly in Asia, but they believe their multi-source supply chain will minimize short-term disruptions [9][11] - There are indications that the market may be bottoming out in China, with some customers seeing increased activity [11] - The company remains optimistic about long-term growth despite short-term challenges, maintaining a strong balance sheet and no debt [30] Other Important Information - The company had $13.9 million in cash at the end of 2019 and repurchased 302,000 shares during the year [21] - Days sales outstanding (DSO) were below the 60-day target range but increased slightly from the previous quarter due to higher revenues [22] Q&A Session Summary Question: Can you comment on the linearity of orders in Q4 and what you're seeing in the first couple of months of Q1? - Management indicated that order strength continued throughout Q4 and some backlog rolled into Q1, but there are concerns about demand in China due to the coronavirus [24] Question: Will there be orders in the Internet of Things category during 2020? - Management confirmed plans for a more public presence in IoT and noted traction with SentriX, with ongoing negotiations for additional systems [26] Question: How do you see the coronavirus changing market demand for your products? - Management acknowledged short-term disruptions but emphasized that Data I/O is well-prepared to navigate challenges due to its strong balance sheet and debt-free status [30]
Data I/O (DAIO) - 2019 Q4 - Earnings Call Transcript