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Earnings
#1
Q1 earnings report (ER) coming Thursday (4/25) after the close.

Expectations for this ER? Share price (SP) has seen quite a bit of volatility this past quarter. Investors seem to be split on what to expect.
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#2
(04-23-2019, 10:50 PM)0751Jeff Wrote: Q1 earnings report (ER) coming Thursday (4/25) after the close.

Expectations for this ER? Share price (SP) has seen quite a bit of volatility this past quarter. Investors seem to be split on what to expect.

Don't think it will rock the boat very much, but it will be interesting to see whether we have more data about the SentriX uptake, and the state of the industry in general (whether the programming centers are planning to add capacity again).
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#3
EPS of $0.00??? Wow. Did not see that coming.

Cash down by $3.5M. Backlog treads water. Yet again, only one new Sentrix device deployed. Struggling to find any positives here.
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#4
(04-26-2019, 06:14 AM)0751Jeff Wrote: EPS of $0.00??? Wow. Did not see that coming.

Cash down by $3.5M. Backlog treads water. Yet again, only one new Sentrix device deployed. Struggling to find any positives here.

Yea, this isn't encouraging. World economy is definitely slowing down..
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#5
Can't believe no one is dumping shares yet. Must be waiting for CC?
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#6
(04-26-2019, 06:56 AM)0751Jeff Wrote: Can't believe no one is dumping shares yet. Must be waiting for CC?

I'm inclined to say that as long as they're not burning cash there isn't a compelling reason to sell. However, cash was $14.8M at the end of Q1, that's down considerably from $18.3M at the end of Q4 so this is a little worrying, although a small part of this ($250K or so) is the buyback. So it looks like they went through $3M of cash in the quarter, that's concerning.
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#7
I guess, but what reason is there to buy after this report? There will always be those who want out, and if no one wants in, the price will drop. I'll be shocked if we don't see a drop tomorrow below $5.
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#8
To expand on your numbers:

                                                
.......................2017 Q2...Q3....Q4 2018 Q1...Q2...Q3...Q4 2019 Q1
net sales (m)............9.1...9.6...8.1........7.6...7.2...6.5...7.9........6.1
bookings (m)..........10.1...8.2...7.6........6.2...7.2...7.0...6.5........6.2
backlog (m)..............4.7...4.6...4.0........2.7...1.9...3.1...1.9........2.0
gross margin (%)....56.9 62.1 58.5.......57.9 59.0 63.0 58.2......60.8
adj EBITDA (m)........1.7...2.3...1.4........0.6...1.3...1.0...1.2........0.5
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#9
Adding 2017 Q1:

_____________2017 Q1__Q2___Q3__Q4 2018 Q1__Q2___Q3__Q4 2019 Q1
net sales (m)_______7.2__9.1__9.6__8.1_____7.6__7.2__6.5__7.9_____6.1
bookings (m)_______8.4_10.1__8.2__7.6_____6.2__7.2__7.0__6.5_____6.2
backlog (m)________4.9__4.7__4.6__4.0_____2.7__1.9__3.1__1.9_____2.0
gross margin (%)___57.7 56.9_62.1_58.5_____57.9 59.0 63.0_58.2____60.8
adj EBITDA (m)_____1.2__1.7__2.3__1.4_____0.6__1.3__1.0__1.2_____0.5
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#10
Not a lot to glean from the CC transcript. Lots of talk about opportunities in the IOT market, hoping to see Sentrix realizing profits in 2020, and another "win" with a new client. But I must be getting jaded, because it feels like we've heard this before, on pretty much every other ER in the past year. Disappointing numbers, but Data I/O is tapping into a huge potential market, it takes time for R&D, we're winning new clients with the new technology, and so it goes. I have to wonder, how many old clients is Data I/O losing for these numbers to remain so paltry despite all these wins?

As far as the cash depletion, most of it can be attributed to ramping up inventory in a sort of pre-emptive action to mitigate the impact of tariffs. I guess that makes sense, although I certainly hope they are sure they have the buyers to digest all this inventory. The other big chunk was EOY incentive compensation. Joel Hatlen itemized $2.9M in cash divestitures, but the QOQ decline was 3.5M, so there still seems to be 0.6M unaccounted for, despite statements elsewhere during the call that expenses were reduced and R&D stayed flat.

Anthony states near the start of the call, "We [were] hoping to be a bit stronger on bookings, but we saw some deals push into early Q2 from Q1." First off, beginning the call with a statement like this sums up how disappointing these results are, that Anthony is reduced to finding excuses. But more importantly, should this be taken as a glimmer of hope for Q2? Again, I'm jaded, as similar statements have been made in prior quarters.

No question this ER is a disappointment. The question is, how disappointing? Expectations were already low coming in, so it's not as huge of a miss as it may first appear, but conversely, to miss on both top and bottom lines when expectations were this low is troubling. As far as long-term outlook goes, I don't think this changes a lot. If you believe in the story, you already know to be patient. There are new concerns to monitor in future ER's, though, including cash flow and macroeconomic headwinds. But for now, it's still a hold for long-term investors. If you've been patient this long, there's no reason to panic now.

Short term, how much will this impact SP? That is going to depend on how much of this disappointment is already baked into the 20% decline since early March. I expect to see a retracement into the 4's, but how far remains to be seen.
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