Data I/o Corporation · NASDAQ:DAIO
Data I/o — Investor Presentation (August 2021)
31 slides from Data I/o's investor presentation, August 2021
Slide 1: Bringing Devices to Life
Bringing Devices to Life Nasdaq: DAIO Anthony Ambrose August 2021
Slide 2: Safe Harbor
Safe Harbor The matters that we discuss today will include forward-looking statements that involve risks factors that could cause Data I/O Corporation’s results to differ materially from management’s current expectations. We encourage you to review the Safe Harbor statement contained in the earnings
Slide 3: Data I/O at a Glance
Data I/O at a Glance Founded NASDAQ: ISO 9001:2015 Global Service in 1972 DAIO Certifications & Support What We Do • Silicon Device Programming Equipment • Security Deployment as-a-Service Solutions We deliver the most secure and efficient systems to deploy firmware, data and secrets into IoT and au
Slide 4: Company Snapshot
Company Snapshot Recent Achievements and Trends Company Snapshot (1)(2) • Very strong growth in 2021. Surge in demand continued through first half of year with NASDAQ: DAIO booking at highest level in nearly 4 years. We are seeing strong demand globally. Headquarters: Redmond, WA • Strong momentum i
Slide 5: Supporting the Secure Digital World
Supporting the Secure Digital World Data I/O’s programming systems are used by the world’s leading manufacturers, programming centers, and contract manufacturers, to securely program integrated circuits and bring their devices to life. Semi Supplier OEM Programming Center Final Assembly Post Product
Slide 6: Serving Customers Globally in Growing Markets
Serving Customers Globally in Growing Markets • The largest programming company in the world, 2-3 times larger than the next programming company • Trusted supplier to 8 out of the top 9 and 16 of the top 20 automotive electronics suppliers • Providing mission critical medical applications for Class
Slide 7: How Data I/O Markets Grow
How Data I/O Markets Grow Market Forces Programming Impact IoT and Automotive Growth Unit Growth • More Semiconductor Content • Devices Get Smaller • Move Towards Automation Products will increase their code size as Bit Growth customers want more features Products will be more secure, creating Added
Slide 8: Market Leading Technology
Market Leading Technology Industry Leading Products History of Innovation 35 Industry Awards Automated Handlers Data I/O’s products are viewed as the Service Excellence Award “gold standard” for advanced for World-Class Device programming equipment, IP Programming management and security solutions R
Slide 9: Market Outlook
Bringin g De vices to Life Market Outlook
Slide 10: Automotive Recovery Driven by Electronics Content Growth
Automotive Recovery Driven by Electronics Content Growth IC content per vehicle estimated to increase 55% …while Automotive units may take years to from $450 in 2018 to $700 by 2022 according to rebound from recent declines…. Gartner, driven by Growth in EV and Hybrid Vehicles. “We expect the market
Slide 11: Automotive Electronics Growth Areas
Automotive Electronics Growth Areas Infotainment Electrification ADAS/Autonomous Driving Security Connectivity CONFIDENTIAL 11
Slide 12: Storage Demands in Future Automotive System
Storage Demands in Future Automotive System Along with the development of IVI, ADAS and autonomous driving, demands for storage devices will dramatically increase. Autonomous car needs over 1.5TB storage device in vehicle in 2025. Distributed Architecture (2020) Centralized Architecture (2025) DC SS
Slide 13: IoT Market Drivers - Multi-Year Secular Growth
IoT Market Drivers - Multi-Year Secular Growth The IoT is forecast to be bigger than the mobile internet and desktop markets “We believe nearly every single industry will eventually migrate to an IoT model yielding 50 billion connected devices by 2020.” Needham & Company Security Issues are top of m
Slide 14: IoT Device Security in Mass Production
IoT Device Security in Mass Production Commercial Benefits Easy to Use Robust Security Low upfront cost Preconfigured security use cases Pre-manufacturing assembly security deployment No minimum order quantities Intuitive collaboration tool Authenticates parts Per part as-a-Service model Low or high
Slide 15: Security Deployment as-a-Service
Security Deployment as-a-Service Security Deployment in Hardware Shipping & Ship to Factory Software Load & Test Secure Facility Assembly Distribution SentriX Security Deployment as- a-Service Per part fee, no MOQ OEM Software Development Reduced attack surface Traditional Security Deployment
Slide 16: New Partnerships for Growth
New Partnerships for Growth SentriX Deployments Silicon Partners Technology Partners CONFIDENTIAL 16
Slide 17: Billions of Security Enabled Devices
Billions of Security Enabled Devices 2023 Security Market: “Secure” MCUs with 3-4 Billion Units Embedded Secure Elements Standalone Secure Elements AICs, ESEs, TPMs “Traditional” MCUs Smart Card MCUs Total Market: >20 Billion Units Source: ABI Research CONFIDENTIAL 17
Slide 18: Our Opportunity with SentriX
Our Opportunity with SentriX • The Internet of Things is a huge growth market, with security of supply chain and protection of firmware top of mind • Data I/O and SentriX Partners provide a scalable, easy to develop and deploy service for customers of all sizes. Initial applications are the ‘tip of
Slide 19: Investment Merits: Positioned for Long-Term Growth
Investment Merits: Positioned for Long-Term Growth End market expansion Strong global brand in automotive and with industry-leading Internet of Things products Strong balance sheet and operating leverage NASDAQ: DAIO Experienced management Growth in Global sales, support security deployment and infr
Slide 20: Financial Overview
Bringin g De vices to Life Financial Overview
Slide 21: Financial Overview: Second Quarter Highlights
Financial Overview Second Quarter Highlights • Net sales of $6.7 million; bookings of $8.9 million • Strong quarter-end backlog of $5.0 million • Gross margin as a percentage of sales of 57.0% • Net loss of ($29,000) or ($0.00) earnings per share • Adjusted EBITDA* of $597,000 • Cash & Equivalents o
Slide 22: Balance Sheet and Capital Structure Overview
Balance Sheet and Capital Structure Overview Balance Sheet Highlights Balance Sheet Strategy At June 30, 2021: • Important to maintain strong balance sheet in a • $13.0 million in cash and cash equivalents cyclical industry, with about 60% of revenues from • No debt capital equipment sales • $18.2 m
Slide 23: Growing Recurring Revenue Mix
Growing Recurring Revenue Mix Capital Equipment Adapters Software, SentriX, Service • Approx. 56% of 2020 sales • Off-line and in-line programming systems • Automated systems cost $68K-$677K • Manual systems cost $10K-$52K • Usually last 5-7 years • Adapters fit to these products • Approx. 28% of 20
Slide 24: Operating Leverage Poised for Upcycle
Operating Leverage Poised for Upcycle Prior Upcycle: 2014-2017/2018 • PSV programming systems launched • Revenue increased 56% • Gross margin peaked at over 62% Prior Upcycle: 2014-2017 Prior Downcycle: 2017-2020 • • Net Income increased 390% Cash increased 97% • AEBITDA margin from 9.1% to 19.6% Re
Slide 25: Thank You!
Thank You! Nasdaq: DAIO For more information, please go to https://www.dataio.com/Company/Investor-Relations/Data-I-O-Profile NASDAQ: DAIO CONFIDENTIAL 25
Slide 26: Appendix
26 Management Team & Backup Financial Reconciliation Bringin g De vices to Life Appendix
Slide 27: An Experienced Team of Technology Leaders
An Experienced Team of Technology Leaders Anthony Ambrose - President and CEO Anthony Ambrose joined Data I/O in October 2012 as President, CEO and a Board Member. With a passion for product development and new technology, he led product divisions and global engineering teams at Intel and Radisys fo
Slide 28: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation NON-GAAP FINANCIAL MEASURE RECONCILIATION Three Months Ended Twelve Months Ended Three Months Ended Six Months Ended December 31, December 31, June 30, June 30, 2020 2019 2020 2019 2021 2020 2021 2020 (in thousands) (in thousands) Net Income (loss) ($1,646) ($496) ($3,
Slide 29: Adjusted EBITDA Reconciliation – 2014-2020
Adjusted EBITDA Reconciliation – 2014-2020 NON-GAAP FINANCIAL MEASURE RECONCILIATION Twelve Months Ended December 31, (in thousands) 2020 2019 2018 2017 2016 2015 2014 Net Income (loss) ($3,964) ($1,187) $1,606 $5,449 $1,656 $927 $1,099 Interest (income) expense ($14) ($53) ($37) ($29) ($44) ($105)
Slide 30: Income Statement
Income Statement CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (UNAUDITED) Three Months Ended Twelve Months Ended Three Months Ended Six Months Ended December 31, December 31, June 30, June 30, 2020 2019 2020 2019 2021 2020 2021 2020 Net Sales $4,941 $5,868 $20,328 $
Slide 31: Balance Sheet
Balance Sheet CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (UNAUDITED) June 30, December 31, 2021 2020 ASSETS CURRENT ASSETS: Cash and cash equivalents $13,013 $14,167 Trade accounts receivable, net of allowance for doubtful accounts of $83 and $66, respectively 4,502 2,494 Inve