Data I/O (US:DAIO)2019-02-23 05:41Financial Data and Key Metrics Changes - For the full year 2018, revenues were $29.2 million, down 14% from $34.1 million in 2017, with net income of $1.6 million, marking the fifth consecutive year of profitability [7][28][36] - Gross margins for 2018 were 59.4%, an increase from 58.9% in 2017, while Q4 2018 gross margin was 58.2%, slightly down from 58.5% in Q4 2017 [30][34] - Operating income for Q4 2018 was $744,000, up from $404,000 in Q3 2018 but down from $1.2 million in Q4 2017 [33] Business Line Data and Key Metrics Changes - Automotive bookings represented 60% of total orders, with a total of 240 PSV family automated programming systems sold by the end of 2018 [8][9] - Capital equipment sales accounted for 65% of total revenues in 2018, while adapters and consumables made up 24% [28][63] Market Data and Key Metrics Changes - International sales constituted approximately 92% of total net sales in Q4 2018, with Europe being the strongest territory [27] - The automotive electronics industry is projected to grow at a compounded annual growth rate of 10% to 15% for semiconductor content in cars, and 30% to 40% for flash memory [11][12] Company Strategy and Development Direction - The company aims to maintain industry leadership in automotive electronics and expand its presence in the IoT security market through the SentriX platform [15][16] - A multi-year strategy is in place to capitalize on the shift from eMMC to UFS interfaces in automotive applications, enhancing customer retention [13][14] Management's Comments on Operating Environment and Future Outlook - The management expects 2019 to resemble 2018, with single-digit bookings growth anticipated, influenced by macroeconomic factors such as tariffs and trade tensions [25][42] - The company is optimistic about the automotive sector's growth and the potential for increased semiconductor content per vehicle [23][24] Other Important Information - The company had cash of $18.3 million at the end of Q4 2018, down from $18.9 million at the end of Q3 2018, reflecting part of a $2 million share repurchase program [40][41] - Days sales outstanding were 43 days at the end of 2018, indicating effective receivables collection [41] Q&A Session Summary Question: Will 2019 be a growth year compared to 2018? - Management indicated that double-digit bookings growth is possible, but it depends on various factors including tariffs and economic conditions [46][47] Question: What is the primary pushback from customers regarding SentriX? - Management noted that there is no significant pushback; rather, customers appreciate the flexibility of SentriX, and the challenge lies in getting new products to market [48][49] Question: Where do you see possible acceleration of revenues? - Management highlighted long-term growth in automotive electronics and the potential for the SentriX platform to drive revenue through a new recurring revenue model [52][56]