Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), which excludes equity compensation, was $831,000 in the fourth quarter of 2022, compared to Adjusted EBITDA of $117,000 in the fourth quarter of 2021. For the full year, Adjusted EBITDA was $1,265,000 in 2022, compared to $1,451,000 in 2021.

Data I/O’s balance sheet remained strong with cash at the end of the fourth quarter of 2022 of $11.5 million, up from $11.0 million at September 30, 2022 and down from $14.2 million at December 31, 2021. The increase in cash from September 30, 2022 primarily reflects operating profitability during the quarter. As is customary in the first quarter of each year, the Company expects a net use of cash for the payment of annual public company costs and satisfaction of year-end compensation. Data I/O had net working capital of $17.6 million at December 31, 2022, up from $16.5 million at September 30, 2022 and down from $18.5 million at the end of the 2021. The Company continues to have no debt.

Financial Outlook for 2023

Based on improved visibility and ongoing strength in its primary end markets, the Company is providing its financial outlook for 2023. Data I/O expects double-digit bookings growth in 2023, consistent with the long-term double-digit semiconductor growth rate in the automotive electronics industry. Gross margins are expected to be in the mid-to-high 50% range for the year. Operating expenses for 2023 are expected to be consistent with 2022, except for variability in incentive compensation, sales commissions, and currency.

Data I/O also announced today that after over 30 years with the company its Chief Operating and Financial Officer, Joel Hatlen, intends to retire in the second half of 2023. A succession plan is being implemented to ensure a smooth transition.

Conference Call Information

A conference call discussing financial results for the fourth quarter ended December 31, 2022 will follow this release today at 2 p.m. Pacific Time/5 p.m. Eastern Time. To listen to the conference call, please dial 412-317-5788. A replay will be made available approximately one hour after the conclusion of the call. To access the replay, please dial 412-317-0088, access code 3804255. The conference call will also be simultaneously webcast over the Internet; visit the Webcasts and Presentations section of the Data I/O Corporation website at www.dataio.com to access the call from the site. This webcast will be recorded and available for replay on the Data I/O Corporation website approximately one hour after the conclusion of the conference call.

About Data I/O Corporation

Since 1972, Data I/O has developed innovative solutions to enable the design and manufacture of electronic products for automotive, Internet-of-Things, medical, wireless, consumer electronics, industrial controls and other electronics devices. Today, our customers use Data I/O’s data programming solutions and security deployment platform to secure the global electronics supply chain and protect IoT device intellectual property from point of inception to deployment in the field. OEMs of any size can program and securely provision devices from early samples all the way to high volume production prior to shipping semiconductor devices to a manufacturing line. Data I/O enables customers to reliably, securely, and cost-effectively bring innovative new products to life. These solutions are backed by a portfolio of patents and a global network of Data I/O support and service professionals, ensuring success for our customers. See: dataio.com/Company/Patents.

Learn more at dataio.com.

Forward Looking Statement and Non-GAAP financial measures

Statements in this news release concerning economic outlook, expected revenue, expected margins, expected savings, expected results, orders, deliveries, backlog and financial positions, semiconductor chip shortages, supply chain expectations, as well as any other statement that may be construed as a prediction of future performance or events are forward-looking statements which involve known and unknown risks, uncertainties and other factors which may cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statement disclaimers also apply to the global COVID-19 pandemic, including the expected effects on the Company’s business from Shanghai’s COVID-19 lockdowns, the duration and scope, impact on the demand for the Company’s products, and the pace of recovery for the COVID-19 pandemic to subside, and the Russian invasion of Ukraine including any related international trade restrictions. These factors include uncertainties as to the ability to record revenues based upon the timing of product deliveries, shipping availability, installations and acceptance, accrual of expenses, coronavirus related business interruptions, changes in economic conditions, part shortages and other risks including those described in the Company's filings on Forms 10-K and 10-Q with the Securities and Exchange Commission (SEC), press releases and other communications.

Non-GAAP financial measures, such as EBITDA and Adjusted EBITDA, excluding equity compensation, should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s results and facilitate the comparison of results.

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