Data I/o Corporation · NASDAQ:DAIO
Data I/o — Investor Presentation (April 2021)
31 slides from Data I/o's investor presentation, April 2021
Slide 1: Bringing Devices to Life
Bringing Devices to Life Data io Nasdaq: DAIO Anthony Ambrose April 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: Immediate Term — COVID-19
Immediate Term — COVID-19 * Protecting our team and facilities — Quick transition of global work from home for 85% of employees — Strict policies for the health and safety of our essential workers a4 — Tools for global collaboration AWVae a. lem t ° Continuing to serve our customers as an } 1, Js F
Slide 4: Data I/O at a Glance
Data I/O at a Glance 6 i$ | [ca] 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 int
Slide 5: Company Snapshot
Company Snapshot Recent Achievements and Trends COVID-19 impact will result in operating losses for 2020/2021. Executing on reduced spending and cash preservation Strong momentum in Automotive and loT devices — 8of top 9 and 16 of top 20 Automotive Electronics companies are customers — ~60% of reven
Slide 6: Semi Supplier, OEM, Programming Center, Final Assembly
Semi Supplier OEM Programming Center Final Assembly Post Production
Slide 7: 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 AUTOMOTIVE @ BOSCH ALPS/LPINE [4 ‘@nfinenfal® Panasonic ADAv
Slide 8: How Data I/O Markets Grow
How Data I/O Markets Grow V Market Forces loT and Automotive Growth * More Semiconductor Content * Devices Get Smaller * Move Towards Automation Products will increase their code size as customers want more features Products will be more secure, creating new opportunities V Programming Impact Unit G
Slide 9: Market Leading Technology
Market Leading Technology 4 A Industry Leading Products History of Innovation Automated Handlers Data I/O's products are viewed as the “gold standard” for advanced programming equipment, IP management and security solutions Research and Development focused on: * — Security Deployment Platform techno
Slide 10: Market Outlook
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Slide 11: Automotive Recovery
Automotive Recovery Driven by Electronics Content Growth ...while Automotive units may take years to rebound from recent declines... Global Automotive Sales [Million Units] _—an ca os L$PPP PP KES Source: Gartner (March 2020, December 2019) Dataio CONFIDENTIAL IC content per vehicle estimated to inc
Slide 12: Automotive Electronics Growth Areas
Automotive Electronics Growth Areas 9. ry \eoaies Infotainment Electrification Security Data io CONFIDENTIAL o—~ e Connectivity ra ADAS/Autonomous Driving
Slide 13: IoT Market Drivers - Multi-Year Secular Growth
loT Market Drivers - Multi-Year Secular Growth The loT is forecast to be bigger than the mobile Coreng Growth riers over Tne, 190-20 internet and desktop markets av“ wert i Mobie “oO 19,000 “We believe nearly every single industry will 2 bana “Oo pas ote eventually migrate to an loT model yielding 5
Slide 14: IoT Device Security in Mass Production
loT Device Security in Mass Production At, ¥ Commercial Benefits Easy to Use Low upfront cost Preconfigured security use cases No minimum order quantities Intuitive collaboration tool Per part as-a-Service model Low or high-volume production Offer a premium value-added and Optional services, e.g. au
Slide 15: Security Deployment as-a-Service
Security Deployment as-a-Service eSeeureFaciiy —ShBto Factory Horde software Load &Test Shipping SentrixX Security Deployment as- a-Service = Per part fee, no MOQ OEM Software Development = Reduced attack surface Traditional Security Deployment a= = Large upfront & operating expense = Increased atta
Slide 16: New Partnerships for Growth
New Partnerships for Growth Sentrix . _ Deployments ANNGVU AVNET @EBVElektionik AVNETsiuics 4 Gecypress — Cinfineon maxing. AO\MicrocHie Silicon Partners N@ RENESAS Technology Partners arm = Odigicert @ GlobalSign GSA Where Leaders Meet Data io CONFIDENTIAL
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 Smart Card MCUs Total Market: >20 Billion Units Source: ABI Research Dataio CONFIDENTIAL
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 in automotive and Internet of Things Strong balance sheet and operating leverage Qs _ Growthin A” security deployment Dataio NASDAQ: DAIO Cycle Trending Favorably in 2021 CONFIDENTIAL Strong global brand with industry-leading pr
Slide 20: Financial Overview
Financial Overview a1] 01 sadiAaqg HbulBulg :
Slide 21: Financial Overview
Financial Overview Fourth Quarter Highlights * Net sales of $4.9 million; bookings of $6.0 million * Gross margin as a percentage of sales of 47.0%; Adjusted gross margin* of 52.9% * Net loss of ($1.6) million or ($0.20) earnings per share * Adjusted EBITDA* of ($194,000) * Cash & Equivalents of $14
Slide 22: Balance Sheet and Capital Structure Overview
Balance Sheet and Capital Structure Overview Balance Sheet Highlights Balance Sheet Strategy At December 31, 2020: * Important to maintain strong balance sheet in a * $14.2 million in cash and cash equivalents cyclical industry, with about 60% of revenues from * Nodebt capital equipment sales * $18.
Slide 23: Growing Recurring Revenue Mix
Growing Recurring Revenue Mix Capital Equipment + 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 * — Installed base drives recurring consumables sales A
Slide 24: Revenue, Net Income, Cash, Adjusted EBITDA
• • • • • • Revenue Net Income Cash AEBITDA* Revenue Net Income Cash AEBITDA* $M $M $40 $40 • • $30 $30 • • • • $20 $20 • • $10 6.7 $10 6.7 4 2 1.8 2.8 • 0.826 -0.366 • $0 $0 • • 2014 2015 2016 2017 2017 2018 2019 2020 ($10) *Adjusted EBITDA is a non-GAAP measure; reconciliation to GAAP provided.
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 Dataio
Slide 26: Appendix: Management Team & Backup Financial Reconciliation
Management Team & Backup Financial Reconciliation a1] 01 sadiAaqg HbulBulg :
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: Three Months Ended December 31 Reconciliation
Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019 (in thousands) Net Income (loss) ($1,646) ($496) ($3,964) ($1,187) Interest (income) (1) (6) (14) (53) Taxes (55) (21) 387 31 Depreciation and amortization 194 196 815 868 EBITDA ($1,508) ($327) ($2,776) ($341) Equi
Slide 29: Net Income to Adjusted EBITDA 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) ($159) Taxes $387 $31 $291 ($288) $36 ($5) $7 Depreciation and amortization $815 $868
Slide 30: Consolidated Statements of Operations
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (UNAUDITED) Three Months Ended Twelve Months Ended December 31, December 31, 2020 2019 2020 2019 Net Sales $4,941 $5,868 $20,328 $21,568 Cost of goods sold 2,619 2,588 9,506 9,018 Gross margin 2,322 3,280 10,822 12,550 Op
Slide 31: Consolidated Balance Sheets
CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (UNAUDITED) December 31, December 31, 2020 2019 ASSETS CURRENT ASSETS: Cash and cash equivalents $14,167 $13,936 Trade accounts receivable, net of allowance for doubtful accounts of $66 and $80, respectively 2,494 4,099 Inventories 5,