Data I/O Corporation · NASDAQ:DAIO
Data I/O — Investor Presentation (January 2021)
34 slides from Data I/O's investor presentation, January 2021
Slide 1: Bringing Devices to Life
Bringing Devices to Life Nasdaq: DAIO Anthony Ambrose January 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 − Tools for global collaboration • Continuing to serve our customers as an essential supplier − Remote
Slide 4: At a Glance
At a Glance What We Do Silicon Device Founded NASDAQ: ISO 9001:2015 Global Service Programming Equipment in 1972 DAIO Certifications & Support Security Deployment as-a- Service Solutions We deliver the most secure and efficient systems to deploy firmware, data and secrets into IoT and automotive dev
Slide 5: Company Snapshot
Company Snapshot Recent Achievements and Trends Company Snapshot (1)(2) • COVID-19 impact will result in operating losses for 2020. Reduced NASDAQ: DAIO spending with cash preservation goal for 2020 • Strong momentum in Automotive and IoT devices Headquarters: Redmond, WA − 8 of top 9 and 16 of top
Slide 6: 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 7: Serving Customers Globally in Growing Markets
Serving Customers Globally in Growing Markets • The largest programming company in the market, 2x larger than nearest competitors 2019 Annual Orders by End Markets • Trusted supplier to 8 out of the top 9 automotive Automotive electronics suppliers 26% • Providing mission critical medical applicatio
Slide 8: How Data I/O Markets Grow
How Data I/O Markets Grow Market Forces Programming Impact IoT and Automotive Growth • More Semiconductor Content Unit Growth • 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 9: 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 “gold standard” for advanced programming Service Excellence Award equipment, IP management and security for World-Class Device Programming solutions R
Slide 10: Market Outlook
Bringin g De vices to Life Market Outlook
Slide 11: 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. CONFIDENTIAL 11
Slide 12: Automotive Electronics Growth Areas
Automotive Electronics Growth Areas Infotainment ADAS/Autonomous Driving Electrification Connectivity Security CONFIDENTIAL 12
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 Attributes Easy to Use Robust Security • Low upfront cost • Preconfigured security use cases • Pre-manufacturing assembly security deployment • No minimum order • Intuitive collaboration tool quantities • Authenticates parts • Low or high-volume prod
Slide 15: Security Deployment-as-a-Service
Security Deployment-as-a-Service Security Deployment Hardware Shipping & Ship to Factory Software Load & Test in 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 the
Slide 19: Investment Merits: Positioned for Long-Term Growth
Investment Merits: Positioned for Long-Term Growth End Market Strong Global Brand Expansion in with Industry Leading Automotive and Products Internet of Things Strong Strong Balance Financially Sound & Balance SheetSheet and and Seasoned Operating Leverage Operating Leverage Positioned For Growth Ma
Slide 20: Financial Overview
Bringin g De vices to Life Financial Overview
Slide 21: Financial Overview
Financial Overview Third Quarter 2020 Highlights • Net sales of $5.9 million; bookings of $5.6 million • Gross margin as a percentage of sales of 55.1% • Net loss of ($707,000) or ($0.09) per share • Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA)*, excluding equity
Slide 22: Balance Sheet and Capital Structure Overview
Balance Sheet and Capital Structure Overview Balance Sheet Highlights Balance Sheet Strategy At September 30, 2020: • Important to maintain strong balance sheet • $13.0 million in cash and cash equivalents in a cyclical industry, with about 60% of • No debt revenues from capital equipment sales • $1
Slide 23: Growing Recurring Revenue Mix
Growing Recurring Revenue Mix Capital Equipment Adapters Software, SentriX, Service • Approx. 58% of 2019 and 2020 sales • Off-line and in-line programming systems • Automated systems cost $68K-$677K • Manual systems cost $10K-$52K • Usually last 5-7 years • Approx. 25% of 2020 sales • Approx. 17% o
Slide 24: Operating Leverage Poised for Upcycle
Operating Leverage Poised for Upcycle Last Upcycle: 2014-2017/2018 • PSV programming systems launched • Revenue increased 56% • Gross margin peaked at over 62% Last Upcycle: 2014-2017 Current Downcycle: 2017-2020 • • Net Income increased 390% Cash increased 97% Revenue Net Income Cash AEBITDA* • AEB
Slide 25: Thank You!
Thank You! For more information, please go to https://www.dataio.com/Company/Investor-Relations/Data-I-O-Profile NASDAQ: DAIO CONFIDENTIAL 25
Slide 26: Backup Financial Reconciliation
26 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 – 3Q20
Adjusted EBITDA Reconciliation – 3Q20 NON-GAAP FINANCIAL MEASURE RECONCILIATION Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 (in thousands) Net Income (loss) ($707) ($844) ($2,318) ($691) Interest (income) (4) (25) (13) (47) Taxes 340 55 442 52 Depreciation an
Slide 29: Income Statement – 3Q20
Income Statement – 3Q20 CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (UNAUDITED) Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Net Sales $5,947 $3,808 $15,387 $15,700 Cost of goods sold 2,670 1,806 6,887 6,430 Gross margin 3,27
Slide 30: Balance Sheet – 3Q20
Balance Sheet – 3Q20 CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (UNAUDITED) September 30, December 31, 2020 2019 ASSETS CURRENT ASSETS: Cash and cash equivalents $12,982 $13,936 Trade accounts receivable, net of allowance for doubtful accounts of $101 and $80, respectively 4,1
Slide 31: Adjusted EBITDA Reconciliation – 2019
Adjusted EBITDA Reconciliation – 2019 NON-GAAP FINANCIAL MEASURE RECONCILIATION Three Months Ended Twelve Months Ended December 31, December 31, 2019 2018 2019 2018 (in thousands) Net Income(loss) ($496) $648 ($1,187) $1,606 Interest (income) (6) (11) (53) (37) Taxes (21) 24 31 291 Depreciation and
Slide 32: Adjusted EBITDA Reconciliation – 2014-1H2020
Adjusted EBITDA Reconciliation – 2014-1H2020 NON-GAAP FINANCIAL MEASURE RECONCILIATION Six Months Twelve Months Ended June 30 Ended December 31, (in thousands) 1H2020 2019 2018 2017 2016 2015 2014 Net Income (loss) ($1,611) ($1,187) $1,606 $5,449 $1,656 $927 $1,099 Interest (income) expense ($9) ($5
Slide 33: Income Statement – 2019
Income Statement – 2019 CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (UNAUDITED) Three Months Ended Twelve Months Ended December 31, December 31, 2019 2018 2019 2018 Net Sales $5,868 $7,857 $21,568 $29,224 Cost of goods sold 2,588 3,284 9,018 11,868 Gross margin 3,2
Slide 34: Balance Sheet – 2019
Balance Sheet – 2019 CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (UNAUDITED) December 31, December 31, 2019 2018 ASSETS CURRENT ASSETS: Cash and cash equivalents $13,936 $18,343 Trade accounts receivable, net of allowance for doubtful accounts of $80 and $75, respectively 4,099