Data I/O Corporation

Good afternoon and welcome to Data.io Corporation's third quarter of 2020 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please call the conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is recorded. I would now like to turn the conference over to Mr. Jordan Darrow. Please go ahead.

Thank you and welcome to the Data.io Corporation third quarter 2020 financial results conference call. With me today are Anthony Ambrose, President and CEO of Data.io Corporation, and Joel Hatland, Chief Operating Officer and Chief Financial Officer of Data.io. Before we begin, I'd like to remind you that statements made in this conference call concerning COVID-19, future revenues, results from operations, financial position, markets, economic conditions, estimated impact of tax reform, product releases, new industry partnerships, and any other statements 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. These factors include uncertainties as to the impact from the COVID-19 pandemic, along with continued reopening and recovery efforts within the supply chain and among our customer base, levels of orders, ability to record revenues based on the timing of product deliveries and installations, market acceptance of new products, changes in economic conditions and market demand, pricing and other activities by competitors, and other risks, including those described from time to time in the company's filings on Forms 10-K and 10-Q with its Securities and Exchange Commissions. press releases, and other communications. The accuracy and completeness of forward-looking statements should not be unduly relied upon. DataIO is under no duty to update any of these forward-looking statements. And now I would like to turn over the call to Anthony Ambrose, President and CEO of DataIO.

Well, thank you very much, Jordan. I'll begin my formal remarks in a moment, including our 2020 Q3 performance, recent developments, and I'll turn it over to Joel. But once again, I'd like to express our appreciation for the health of our staff, our customers, our partners, and their families, and are grateful for the sacrifices made by healthcare professionals and first responders around the world. The global team here at DataIO has been truly remarkable, and I personally must commend each and every one of them for a job well done. Before we go into quarterly details, I'd first like to welcome our newest board member, Sally Washlow. Sally joined the board of directors effective October 28th of this year. As a consultant and former CEO for Cedar Electronics, she brings experience to the board as an operating leader in the security and automotive electronics markets. From 2015 to 2017, she was the chief executive officer of Cedar Electronics Corporation, the supplier of radar detectors, GPS systems, dash cameras, and other electronic products, and led the integration of the Cobra and Escort electronics businesses. She currently serves on the board of directors of CoStar Technologies, which is an OTC market company. And she'll serve on the Nominating and Governance Committee as well as the Compensation Committee here at DataIO. Sally replaces JD Delafield, who resigned. We'd like to thank JD for his service on the board and wish him well in his future endeavors. Now on to third quarter results. We reported very strong growth sequentially from the second quarter in revenues and bookings. And year-over-year sales increased 56% from last year and 26% sequentially from Q2. Our turnaround in financial performance in third quarter is bolstered by what appears to be a bottoming out of our primary addressable market in automotive electronics in the second quarter. We're seeing the earliest and most significant resumption in China and parts of Asia in that business. EMEA, Americas, and other regions within Asia still have impediments to a full recovery, including COVID-19, as well as a cyclical downturn. We're keeping a close eye on the so-called second wave in EMEA and other countries, and we're looking forward to see how Q4 unfolds in those regions. DataIO's award-winning support, installed base and automotive, and performance for value were key factors in our ability to capture some key customer wins in the third quarter. Among them was a significant multi-system order for UFS and other programming requirements at a large multinational tier one electronic supplier. We also had good order flow throughout the quarter above our internal forecasts. The end of the third quarter we deployed our 320th PSV family system. Automotive electronics customers represented about 60% of third quarter bookings, up from 50% in the second quarter. It seems that our commitment to leading the industry with consistently investing in technical innovations, particularly during cyclical downturns, is delivering the intended results with these recent wins and early strength in the recovering automotive electronics sector. On the R&D front, most notable was our continuing advancements made for our Centrix platform. You may have heard me talk about simplify and scale for Centrix as our 2020 strategy. Yesterday, as highlighted in a press release, It showcased what we did in Q3 when we released our next generation Centrix system and tools. The next generation Centrix system simplifies end-to-end the provisioning and deployment of robust IoT and automotive security solutions and enables an outsourced as-a-service business model for our customers. Centrix Product Creator is a powerful software suite that enables OEMs to securely, quickly, and easily define the security deployment for their products and securely deliver their product definitions, secrets, and other certificates and keys to Centrix-enabled production facilities remotely. The new Centrix product creator tool supports two deployment models in cooperation with our leading embedded silicon partners, Centrix Go and Centrix Custom. Centrix Go streamlines IoT security deployment and provisioning using pre-configured use cases and a simplified developer experience. Centrix Go supports the most common use cases for creating and managing device identities, secure boot, cloud onboarding, device authentication, and other use cases. Centrix Custom fully supports custom provisioning definitions. Both models enable product security definition collaboration between OEM, silicon suppliers, and programming partners to easily define, provision, and deploy robust IoT device security solutions. At September 30th, our cash position remained strong at about 13 million U.S. dollars, down about 300K from the end of the second quarter, largely due in part to a one-time tax expense of a quarter million dollars paid to China in order to repatriate over $2 million in cash from that country to the U.S. Cash repatriation will provide additional flexibility and should reduce quarterly currency fluctuations. Joel Hatton will go into more detail about that in his remarks. And with that, I'll turn it over to Joel. Go ahead, Joel.