Data I/O Corporation reports 70.5% Net Income decline in 2018 and 14.2% Revenue decline
02/21/2019 • About Data I/O Corporation (
$DAIO) • By InTwits
Data I/O Corporation reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 9.2% in 2018, 17.2% in 2017, 8.7% in 2016, 7.0% in 2015, 7.8% in 2014
- Data I/O Corporation has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.9%. At the same time it's a lot of higher than industry average of 3.6%.
- CAPEX is quite volatile: $1m in 2018, $2m in 2017, $2m in 2016, $1m in 2015, $1m in 2014
- The company has business model with low profitability: ROIC is 7.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Data I/O Corporation's Revenue dropped on 14.2%. Annual revenue decline showed slowdown in 18Q4 - revenue decreased on 3.0%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 8.0 pp from 17.2% to 9.2% in 2018.
Gross Margin showed almost no change in 2018. Gross Margin followed a growing trend at 1.7 pp per annum in 2014-2018. SG&A as a % of Revenue increased on 4.4 pp from 23.8% to 28.3% in 2018.
Net Income margin dropped on 10.5 pp from 16.0% to 5.5% in 2018.
Investments (CAPEX, working capital and M&A)
Data I/O Corporation's CAPEX/Revenue was 3.1% in 2018. The company's CAPEX/Revenue decreased slightly on 1.6 pp from 4.7% in 2015 to 3.1% in 2018. It's average level of CAPEX/Revenue for the last three years was 6.2%.
Return on investment
The company operates at low ROIC (7.6%) and ROE (7.1%). ROIC dropped on 18.6 pp from 26.2% to 7.6% in 2018. ROE dropped on 21.5 pp from 28.6% to 7.1% in 2018.
Leverage (Debt)
The company has no debt. Cash decreased slightly on 1.1%.
Valuation and dividends
Data I/O Corporation's trades at EV/EBITDA 11.7x and P/E 31.0x.
Financial and operational results
FY ended 12/31/2018
Data I/O Corporation ($DAIO) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 21.924 | 22.017 | 23.413 | 34.051 | 29.224 | -14.2% |
| Gross Profit | 11.825 | 11.544 | 12.868 | 20.059 | 17.356 | -13.5% |
| SG&A | 5.997 | 5.850 | 6.376 | 8.116 | 8.257 | 1.7% |
| EBITDA | 1.713 | 1.535 | 2.029 | 5.869 | 2.693 | -54.1% |
| Net Income | 1.099 | 0.927 | 1.656 | 5.449 | 1.606 | -70.5% |
Balance Sheet
|
|---|
| Cash | 9.361 | 11.268 | 11.571 | 18.541 | 18.343 | -1.1% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 1.402 | 1.045 | 2.122 | 2.154 | 0.907 | -57.9% |
Ratios
|
|---|
| Revenue growth | 17.1% | 0.4% | 6.3% | 45.4% | -14.2% | |
| EBITDA growth | -303.7% | -10.4% | 32.2% | 189.3% | -54.1% | |
|
|---|
| Gross Margin | 53.9% | 52.4% | 55.0% | 58.9% | 59.4% | 0.5% |
| EBITDA Margin | 7.8% | 7.0% | 8.7% | 17.2% | 9.2% | -8.0% |
| SG&A, % of revenue | 27.4% | 26.6% | 27.2% | 23.8% | 28.3% | 4.4% |
| Net Income Margin | 5.0% | 4.2% | 7.1% | 16.0% | 5.5% | -10.5% |
| CAPEX, % of revenue | 6.4% | 4.7% | 9.1% | 6.3% | 3.1% | -3.2% |
|
|---|
| ROIC | 8.3% | 6.9% | 9.2% | 26.2% | 7.6% | -18.6% |
| ROE | 8.2% | 6.5% | 10.8% | 28.6% | 7.1% | -21.5% |
| Net Debt/EBITDA | -5.5x | -7.3x | -5.7x | -3.2x | -6.8x | -3.7x |
Data I/O Corporation ($DAIO) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 8 | 7 | 7 | 8 | | 5.6% | -21.1% | -31.9% | -3.0% |
| EBITDA | 1 | 1 | 1 | 1 | | -40.7% | -63.5% | -70.3% | -28.1% |
| Net Income | 0 | 0 | 0 | 1 | | -86.7% | -59.7% | -80.2% | -57.8% |
Balance Sheet
|
|---|
| Cash | 17 | 17 | 19 | 18 | | 60.0% | 38.2% | 24.7% | -1.1% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 57.9% | 59.0% | 63.0% | 58.2% | | 0.2% | 2.0% | 1.0% | -0.3% |
| EBITDA Margin | 7.5% | 7.3% | 9.7% | 12.3% | | -5.9% | -8.4% | -12.5% | -4.3% |
| Net Income Margin | 1.7% | 6.7% | 5.2% | 8.2% | | -11.8% | -6.5% | -12.8% | -10.7% |
Peers in Electronic Manufacturing Servi
Below we provide Data I/O Corporation benchmarking against other companies in Electronic Manufacturing Servi industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| RF Industries, Ltd. ($RFIL) | | 41.9% | -7.8% | -24.0% | 118.4% |
| Alpine 4 Technologies Ltd ($ALPP) | | | 35,893.8% | 5.8% | 71.5% |
| Kemet Corporation ($KEM) | | -1.3% | -10.7% | 3.1% | 58.4% |
| SMTC Corporation ($SMTX) | | -3.5% | -23.9% | -17.1% | 55.2% |
| Deswell Industries, Inc. ($DSWL) | | -7.0% | 17.1% | -0.1% | 36.3% |
| |
|---|
| Median (27 companies) | | 2.8% | 1.2% | 1.9% | 9.8% |
|---|
| Data I/O Corporation ($DAIO) | | 0.4% | 6.3% | 45.4% | -14.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Neonode Inc. ($NEON) | 68.2% | 66.0% | 86.9% | 77.1% | 89.2% |
| Andrea Electronics Corp ($ANDR) | 83.8% | 99.1% | 88.5% | 96.2% | 70.4% |
| IPG Photonics Corporation ($IPGP) | 54.1% | 54.6% | 54.9% | 56.6% | 54.8% |
| CTS Corporation ($CTS) | 32.2% | 33.2% | 35.4% | 33.2% | 35.1% |
| RF Industries, Ltd. ($RFIL) | 45.2% | 34.3% | 28.0% | 30.4% | 34.1% |
| |
|---|
| Median (27 companies) | 14.5% | 14.8% | 16.7% | 13.8% | 12.1% |
|---|
| Data I/O Corporation ($DAIO) | 53.9% | 52.4% | 55.0% | 58.9% | 59.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| IPG Photonics Corporation ($IPGP) | 41.5% | 42.4% | 41.8% | 44.7% | 40.9% |
| TE Connectivity Ltd. ($TEL) | 19.7% | 19.3% | 20.9% | 20.4% | 21.4% |
| CTS Corporation ($CTS) | 14.7% | 9.0% | 20.7% | 14.0% | 17.8% |
| Methode Electronics, Inc. ($MEI) | 12.6% | 15.4% | 16.5% | 16.5% | 16.1% |
| RF Industries, Ltd. ($RFIL) | 12.4% | 6.7% | -12.1% | 3.1% | 15.9% |
| |
|---|
| Median (27 companies) | 4.4% | 5.2% | 4.8% | 4.5% | 4.7% |
|---|
| Data I/O Corporation ($DAIO) | 7.8% | 7.0% | 8.7% | 17.2% | 9.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Maxwell Technologies, Inc. ($MXWL) | 3.7% | 2.5% | 4.9% | 6.6% | 11.3% |
| IPG Photonics Corporation ($IPGP) | 11.5% | 7.8% | 12.6% | 9.0% | 11.0% |
| eMagin Corporation ($EMAN) | 5.8% | 4.7% | 6.7% | 6.2% | 8.8% |
| TE Connectivity Ltd. ($TEL) | 5.3% | 4.9% | 5.3% | 5.6% | 6.7% |
| CTS Corporation ($CTS) | 3.2% | 2.5% | 5.2% | 4.3% | 6.1% |
| |
|---|
| Median (27 companies) | 2.5% | 2.4% | 2.8% | 2.7% | 2.4% |
|---|
| Data I/O Corporation ($DAIO) | 6.4% | 4.7% | 9.1% | 6.3% | 3.1% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| RF Industries, Ltd. ($RFIL) | 8.5% | 4.6% | -18.7% | 0.9% | 29.2% |
| IPG Photonics Corporation ($IPGP) | 27.0% | 27.8% | 25.1% | 29.9% | 22.9% |
| Methode Electronics, Inc. ($MEI) | 19.7% | 26.1% | 22.7% | 20.8% | 19.2% |
| TE Connectivity Ltd. ($TEL) | 17.3% | 15.1% | 15.9% | 16.2% | 18.4% |
| Kemet Corporation ($KEM) | -2.8% | 3.8% | 6.2% | 6.9% | 16.9% |
| |
|---|
| Median (29 companies) | 4.4% | 4.9% | 6.2% | 4.2% | 6.4% |
|---|
| Data I/O Corporation ($DAIO) | 8.3% | 6.9% | 9.2% | 26.2% | 7.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpine 4 Technologies Ltd ($ALPP) | | | | 34.1x | 65.7x |
| SigmaTron International, Inc. ($SGMA) | 2.7x | 4.1x | 2.4x | 3.4x | 16.0x |
| SMTC Corporation ($SMTX) | 3.5x | 1.8x | 1.0x | | 11.3x |
| IEC Electronics Corp. ($IEC) | 7.1x | 14.0x | 2.0x | 5.6x | 4.9x |
| Key Tronic Corporation ($KTCC) | 0.2x | 3.4x | 2.6x | 2.5x | 3.9x |
| |
|---|
| Median (22 companies) | 0.2x | -0.2x | 0.6x | 0.5x | 0.5x |
|---|
| Data I/O Corporation ($DAIO) | -5.5x | -7.3x | -5.7x | -3.2x | -6.8x |
