Data I/O Corporation · NASDAQ:DAIO
Data I/O — Q4 2015 Earnings Presentation
22 slides from Data I/O's earnings presentation, February 2016
Slide 1: 2015 Fourth Quarter Investor Presentation
Nasdaq: DAIO Anthony Ambrose President and CEO Data I/O Corporation 2015 Fourth Quarter Investor Presentation
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 earning
Slide 3: Who We Are
Who We Are “Data I/O helps enable the digital world by designing, manufacturing, and selling programming systems to global electronic device manufacturers.” 3
Slide 4: Supporting the Digital World
Supporting the Digital World Data I/O’s programming systems are used by the world’s leading manufacturers, programming centers, and contract manufacturers, to program integrated circuits and bring their devices to life. Circuits Need Options for Data I/O Final End User To Be Programming On-Line or O
Slide 5: Company Snapshot
Company Snapshot Recent Achievements and Trends Company Snapshot (1)(2) • 3 consecutive years of revenue growth NASDAQ: DAIO • 2 consecutive years of profitability Headquarters: Redmond, WA • Strong Momentum in Automotive and Internet of Things devices. Established: 1972 – 8 of top 9 Auto electronic
Slide 6: Servicing Customers Globally in Growing Markets
Servicing Customers Globally in Growing Markets • Data I/O delivers cutting edge products and technology 2015 Annual Orders by End Markets to hundreds of customers around the globe • Global footprint with headquarters in Redmond, Washington and offices located in Shanghai, China and 32% 39% Munich,
Slide 7: Diverse Offering of Market Leading Programming Systems
Diverse Offering of Market Leading Programming Systems Industry Leading Products History of Innovation Automated Handlers • Data I/O’s products are viewed as the “gold standard” for advanced programming equipment and IP property management solutions. • Research and Development focused on: Programmin
Slide 8: Razor/Razorblade Model
Razor/Razorblade Model Capital Equipment Consumables • 65%* of 2015 Sales Adapters Software and Maintenance • Off-line and in-line programming systems • Automated systems cost $65,000 to $628,100 • Manual systems cost $675 to • 25%* of 2015 Sales • 9%* of 2015 Sales $32,400 • Usually last 3-24 • Ann
Slide 9: Market Outlook
oe Market Outlook
Slide 10: Growth of Electronic Systems in Automobiles
Growth of Electronic Systems in Automobiles According to The Clemson University Vehicular Electronics Laboratory, a typical automobile on the road today has over 50 computer controlled electronic systems. http://www.cvel.clemson.edu/auto/systems/auto-systems.html 10
Slide 11: Technology Arms Race in Automotive Infotainment
Technology Arms Race in Automotive Infotainment Instrument Clusters are changing dramatically within the automotive industry. Simple instruments have given way to powerful graphical computers with large FLASH memories. The Audi TT has upgraded its legacy dashboard technology to the Audi Virtual Cock
Slide 12: Automotive Infotainment: 2x Unit Growth in 4 years
Automotive Infotainment : 2x Unit Growth in 4 years 12
Slide 13: Advanced Driver Assist Systems (ADAS): The next step towards autonomous vehicles
Advanced Driver Assist Systems (ADAS): The next step towards autonomous vehicles Source: ABI research 13
Slide 14: Internet of Things: New Implementations and New to World Products
Internet of Things: New Implementations and New to World Products Many Products already in use will be re-architected to communicate wirelessly Low Power Processing and Communications will enable new-to-world applications Source: ST MICRO 14
Slide 15: The Internet of Things: 3x Unit Growth Forecast in 5 years
The Internet of Things: 3x Unit Growth Forecast in 5 years IoT Growth Potential For Data I/O 15
Slide 16: How does Data I/O Win?
How does Data I/O Win? 1. More Products will require device Programming Unit Growth 2. Products will increase their Bit Growth code size 3. Products will increase security, with stand alone Added Complexity chips and/or more complex programming Programming Demand = Units x Bits x Complexity 16
Slide 17: Market Growth Forecast
Market Growth Forecast Market Growth Highlights Pre-Programming Served Available Market by Year ($M) • Manual to Automated Conversion continues in Asia, Emerging Markets • Automotive Growth driven by Infotainment/Navigation (Units and Code Size) and ADAS Systems • Internet of Things (IoT) growth dri
Slide 18: Financial Overview
Mo.) Financial Overview
Slide 19: Financial Overview
Financial Overview Annual Sales (in millions) Financial Highlights Fourth Quarter 2015 Highlights Net sales of $5.0 million Net income of $338,000, or $0.04 per diluted share $21.9 $22.0 Adjusted EBITDA, excluding equity compensation, was $539,000 LumenX™ Programmer received 2015 Global Tech
Slide 20: Balance Sheet and Capital Structure Overview
Balance Sheet and Capital Structure Overview Annual Adjusted EBITDA Overview $2.5 At December 31, 2015: $2.0 • $11.3 million in cash and cash $1.5 $1.0 equivalents $0.5 o expect working capital mix will $- revert back to historical levels in $(0.5) 2016. $(1.0) • No debt 2013 2014 2015 EBITDA adjust
Slide 21: Financial Model
Financial Model • Operating leverage produces meaningful incremental profitability • Ongoing cost improvement initiatives to save $1M from 2014 run rate in COGS and overhead by 2017 Annual Revenues 21
Slide 22: Positioned for Long-Term Growth
Positioned for Long-Term Growth Market Expansion in Strong Brand with Automotive and Leading Internet of Things Products Strong Stable Financially & Balance Seasoned Positioned For Management Sheet Growth Significant Global Sales and Operating Infrastructure Leverage 3 consecutive years of revenue g