Nasdaq: DAIO. Data I/O Corporation March 2019 Investor Presentation

Transcription

1 Nasdaq: DAIO Data I/O Corporation March 2019 Investor Presentation

2 Safe Harbor The matters that we discuss today will include forwardlooking 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 release as well as our most recent SEC filings for a complete description. Additionally, those forward-looking statements are made as of today, and we take no obligation to update them. Data I/O, LumenX, SentriX, ConneX, FLASHCore are trademarks of Data I/O Corporation. All rights Reserved 2

3 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 Production Develop Manufacture: OEMs, Contract Manufacturers, Programming Centers End Users Circuits to be programmed: Flash Memory Microcontrollers Secure Elements In-Line or Offline Data Programming Systems Final Products 3

4 Company Snapshot Recent Achievements and Trends 5 consecutive years of profitability Strong momentum in Automotive and IoT devices o o o 8 of top 9 Auto electronics companies are customers 5-year global supply agreement with Bosch extended by 2.5 years in 3Q18 ~60% of revenue from Automotive Electronics customers Doubling of Served Markets: Puget Sound Business Journal s Fastest Growing Public Technology Companies list 3 consecutive years Industry and technology awards in 2018 & 2017 for LumenX, Universal Flash Storage (UFS), PSV Lines and SentriX Over 240 PSV systems sold Traction for SentriX Managed & Secure Programming Platform Committed to Growing Shareholder Value Focusing programmable core competencies on higher growth, higher margin vertical markets Differentiated market position through technology leadership and global support Approx. 9% of stock held by insiders so that management and Board are aligned with shareholders $2 million buyback approved in 4Q18 NASDAQ: Headquarters: DAIO Established: 1972 Stock Price: $5.90 Market Cap: $50M Diluted Shares: 8.5M 3-Month Avg. Volume: Sales (TTM): Redmond, WA 33,500 shares $29.2M Diluted EPS (TTM): $0.19 Adj. EBITDA (3) (TTM): Cash & Sec. (12/31/18): Company Snapshot (1)(2) $4.0M Debt (12/31/18): $0.0 $18.3M ($2.15/share) (1) Stock price, market cap and volume as of 2/11/19; Source: Yahoo (2) Financials for the TTM period ended 12/31/18 or as noted (3) Adj. EBITDA is a non-gaap financial measure. A reconciliation is provided in this presentation 4

5 Strategic Objectives Long Term Growth Focus Growth strategy focused on Automotive Electronics and expansion into Security Provisioning for the Internet of Things (IoT). Expansion of addressable markets Technology leadership through continued heavy R/D investment in intellectual property portfolio Greater balance between capital equipment sales and recurring revenues Developing new partnerships for Security Provisioning Platform Deploying excess capital and other resources for opportunistic growth; return excess capital to shareholders 5

6 How Data I/O Markets Grow Market Forces IoT and Automotive Growth Devices Get Smaller Move towards Automation Programming Impact Unit Growth Products will increase their code size as customers want more features Bit Growth Products will be more secure, creating new opportunities Added Complexity + Security Requirements Programming Demand = Units x Bits x Security 6

7 Data I/O Sets Blistering Pace for Programming Market Service Excellence Award for World-Class Device Programming NPI Award for New Job Composer Software Application Technology Award, 5 th Industry Award for Universal Flash Storage (UFS) Support on Doubles Programming Performance w/ TurboBoost for Programmers 2x increase in programming performance for emmc devices shown at IPC APEX Expo 2019 Programming Platform Doubles Download Speed & Support Next-Generation Microcontrollers Scripting Interface Upgrade to SentriX Secure Provisioning System DigiCert s Certificate Signing Services via Data I/O s SentriX Secure Provisioning System 7

8 Balance Sheet and Capital Structure Overview Balance Sheet Highlights At December 31, 2018: $18.3 million in cash and cash equivalents No debt $21.1 million of net working capital Total stockholders equity of $23.4 million, or approx. $2.75 per diluted share outstanding EV/Sales at 1.1x EV/Adjusted EBITDA at 8.0x (3) NOLs of approximately $13.0 million Enterprise Value ($K) Market Cap (1) $ 50,150 Plus Total Debt (2) 0 Less Total Cash (2) $ 18,300 Enterprise Value $ 31,850 Diluted Shares Outstanding (2) 8,500,000 Balance Sheet Strategy Important to maintain strong balance sheet in a cyclical industry, with about 65% of revenues from capital equipment sales Financial flexibility allows the company to: o Withstand downturns in semi cycle o Invest in organic and acquisitive growth opportunities for the long term o Develop recurring revenue streams $2 million buyback approved in 4Q18. $536K for purchase of 102,000 shares through 12/31/18 at average price of $5.25 Over $6.5 million returned to shareholders in form of 12, 16 and 18 share repurchases (1) At 2/11/19; Source: Yahoo (2) Weighted average for quarter or at quarter ended 12/31/18 (3) Sales and Adjusted EBITDA based on TTM through 12/31/18 financial results 8

9 Automotive Electronics Evolution 9

10 FLASH Memory Growth in the Connected and Autonomous Vehicle ADAS / Autonomous Car 8 GB to 16GB HD Maps 8 GB to 512 GB Connectivity 4 GB to 16GB Digital Cluster 4 GB to 32 GB Infotainment 64 GB to 512 GB Accident Recording 8 GB to 64 GB Rear-seat Entertainment 16 GB to 64 GB 10

11 SentriX Security Provisioning Platform Secure Programming Center Premise OEM OEM OEM Provisioning with provided tools Certificates, Reports Blank Inventory from Semi Supplier or Distributor Physical security and controlled access Provisioned Devices February 28, 2018: Best of Show with Embedded Award for the SentriX Security Provisioning Platform

12 The Long Term Opportunity Convergence of Microcontroller Programming and Security Provisioning Automotive Electronics Industry 4.0 Internet of Things Technology Stack 12

13 Investment Merits: Positioned for Long-Term Growth End Market Expansion in Automotive and Internet of Things Strong Global Brand with Industry Leading Products Strong Balance Sheet and Operating Leverage Financially Sound & Positioned For Growth NASDAQ: DAIO Seasoned Management Growth in Secure Provisioning 5 Consecutive Years of Profitability Global Sales, Support and Infrastructure 13

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