SOURCE: Data I/O Corporation

Data I/O Corporation

July 21, 2011 16:15 ET

Data I/O Announces Second Quarter Growth and Profit

Revenue up 4% in Second Quarter, With Revenue From Asia up 48%; Orders up 11%; Net Income of $398,000 for Second Quarter

REDMOND, WA--(Marketwire - Jul 21, 2011) - Data I/O Corporation (NASDAQ: DAIO), the leading global provider of advanced programming and IP management solutions used in the manufacturing of flash and flash-based intelligent devices, today announced financial results for the second quarter ended June 30, 2011.

Highlights

  • Second quarter 2011 revenue increased 4 percent to $6.8 million from $6.6 million in the same period last year
  • Second quarter 2011 order bookings increased 11 percent to $7.3 million from $6.5 million in the same period last year and increased 19 percent sequentially from $6.1 million in the first quarter of 2011
  • Revenue from Asia grew 48 percent compared to the second quarter of 2010
  • Second quarter 2011 net income was $398,000, or $0.04 per diluted share
  • $3 million acquisition of software technology was completed during the quarter
  • Cash was $17 million at the end of the second quarter

Financial Results
Revenues for the second quarter of 2011 were $6.8 million, up 4 percent compared with $6.6 million in the second quarter of 2010, but down sequentially from $7 million in the first quarter of 2011. Net income in the second quarter of 2011 was $398,000, or $0.04 per diluted share, compared to net income of $859,000 or $0.09 per diluted share, in the second quarter of 2010. The decrease in net income is attributed primarily to higher development expenses, largely short-term, associated with new products to be released over the coming quarters.

On a regional basis, Asia had strong growth this period, with revenue growth of 48 percent over the second quarter of 2010. Revenue from Europe declined 3 percent compared to the second quarter of 2010. Revenue from the Americas declined 26 percent compared to the second quarter of 2010, particularly due to continued decreased sales in Mexico and lower custom software sales, but on a sequential basis, revenue from the Americas increased 24% over the first quarter of 2011.

"We were pleased to see the sequential recovery of sales from the Americas during the quarter," said Fred Hume, President and CEO. "This growth is primarily attributed to demand from automotive related business."

Second quarter 2011 order bookings increased 11 percent to $7.3 million from $6.5 million in the same period last year and increased 19 percent sequentially from $6.1 million in the first quarter of 2011. Data I/O ended the quarter with a backlog of $1.4 million, compared to $1.4 million at the end of the second quarter of 2010 and $0.9 million at March 31, 2011.

Gross margin as a percentage of sales in the second quarter of 2011 was 58.5 percent, compared with 58.4 percent in the second quarter of 2010 and 59.1 percent in the first quarter of 2011. The decrease compared to the first quarter of 2011 was primarily due to the product mix, increased service labor related costs and engineering contract software costs offset in part by less unfavorable factory variances.

Operating expenses increased by $655,000 in the second quarter of 2011 to $3.5 million compared to $2.8 million in the same period in 2010, but were flat compared to the first quarter of 2011. The $315,000 increase in Research and Development (R&D) expense compared to the second quarter of 2010 was primarily due to the use of outside resources to accelerate our growth initiatives and due to $94,000 less costs absorbed by operations on software contracts. Also included in second quarter 2011 R&D expense was two months amortization expense of $73,000 associated with the software technology acquisition. However, overall R&D expense was actually down $77, 000 sequentially from the first quarter of 2011 primarily due to fewer materials used. Sales, General and Administrative (SG&A) expense increased to $2.2 million in the second quarter of 2011 from $1.9 million in the same period in 2010 due to increased use of outside professional consultants, higher compensation and travel costs, offset by $169,000 of lower incentive compensation. SG&A was sequentially flat compared to the first quarter of 2011.

The Company's cash position at June 30, 2011 was $17.0 million, down $2 million due to cash used in the software technology acquisition on April 29, 2011. Accounts receivable decreased to $5.3 million at June 30, 2011 compared to $5.5 million at March 31, 2011. Inventories increased to $3.9 million at June 30, 2011, from $3.5 million at March 31, 2011 due to materials for new product initiatives and in response to certain supplier's longer lead times. Deferred revenue was $1.4 million at June 30, 2011 compared to $1.6 million at March 31, 2011.

"Roadrunner 3, our first new product incorporating software from our software initiative, is complete and ready to launch on August 1st," said Fred Hume, President and CEO. "We are excited by this new offering and our other new product initiatives.

Conference Call Information
A conference call discussing the second quarter and 2011 financial results will follow this release today at 2 p.m. Pacific time/5 p.m. Eastern time. To listen to the conference call, please dial (651) 291-5254 passcode: DAIO. A taped replay will be made available approximately one hour after the conclusion of the call and will remain available for one week. To access the replay, please dial (320) 365-3844, access code: 210144. The conference call will also be simultaneously web cast over the Internet; visit the News and Events section of the Data I/O Corporation website at http://www.dataio.com to access the call from the site. This web cast will be recorded and available for replay on the Data I/O Corporation website approximately two hours after the conclusion of the conference call.

About Data I/O Corporation
With almost 40 years of expertise in delivering intellectual property to programmable devices, Data I/O offers complete, integrated manufacturing solutions in wireless, automotive, programming center, semiconductor, and industrial control market segments for OEM, ODM, EMS and semiconductor companies. Data I/O is the leader in programming and provides hardware and software solutions for turn-key programming and device testing services, as well as in-system (on-board), in-line (right before use at the SMT line), or in-socket (off-line) programming. These solutions are scalable for small, medium and large volume applications with different device mixes. Data I/O Corporation has headquarters in Redmond, Wash., with sales and services worldwide. For further information, visit the company's website at http://www.dataio.com.

Forward Looking Statement
Statements in this news release concerning future results from operations, financial position, economic conditions, acquisitions, product releases and 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. These factors include uncertainties as to levels of orders, ability to record revenues, release schedules, 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 10K and 10Q with the Securities and Exchange Commission (SEC), press releases and other communications.

DATA I/O CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(UNAUDITED)
Three Months Ended
June 30,
Six Months Ended
June 30,
2011 2010 2011 2010
Net Sales $ 6,849 $ 6,592 $ 13,892 $ 12,843
Cost of goods sold 2,841 2,742 5,720 5,240
Gross margin 4,008 3,850 8,172 7,603
Operating expenses:
Research and development 1,276 960 2,627 1,911
Selling, general and administrative 2,215 1,876 4,388 3,813
Total operating expenses 3,491 2,836 7,015 5,724
Gain on sale of assets - - - 3
Operating income 517 1,014 1,157 1,882
Non-operating income (expense):
Interest income 19 15 32 17
Interest expense (1 ) (3 ) (2 ) (6 )
Foreign currency transaction gain (loss) (32 ) (122 ) (66 ) (178 )
Total non-operating income (loss) (14 ) (110 ) (36 ) (167 )
Income before income taxes 503 904 1,121 1,715
Income tax (expense) benefit (105 ) (45 ) (191 ) (148 )
Net income $ 398 $ 859 $ 930 $ 1,567
Basic earnings per share $ 0.04 $ 0.10 $ 0.10 $ 0.17
Diluted earnings per share $ 0.04 $ 0.09 $ 0.10 $ 0.17
Weighted-average basic shares 9,176 8,984 9,103 8,972
Weighted-average diluted shares 9,343 9,101 9,289 9,091
DATA I/O CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(UNAUDITED)
June 30,
2011
December 31,
2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 16,990 $ 18,942
Trade accounts receivable, net of allowance for doubtful accounts of $135 and $138 5,336 4,975
Inventories 3,926 3,570
Other current assets 475 528
TOTAL CURRENT ASSETS 26,727 28,015
Property, plant and equipment – net 1,270 1,256
Intangible software technology assets-net 3,014 -
Other assets 102 153
TOTAL ASSETS $ 31,113 $ 29,424
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 917 $ 1,234
Accrued compensation 1,155 1,578
Deferred revenue 1,413 1,572
Other accrued liabilities 800 770
Accrued costs of business restructuring - 58
Income taxes payable 87 108
Current portion long-term debt 23 92
TOTAL CURRENT LIABILITIES 4,395 5,412
Long-term other payables 280 47
COMMITMENTS
STOCKHOLDERS' EQUITY
Preferred stock -
Authorized, 5,000,000 shares, including
200,000 shares of Series A Junior Participating
Issued and outstanding, none - -
Common stock, at stated value -
Authorized, 30,000,000 shares
Issued and outstanding, 9,267,907
and 9,027,867 shares
23,388 22,172
Accumulated earnings 1,830 900
Accumulated other comprehensive income 1,220 893
TOTAL STOCKHOLDERS' EQUITY 26,438 23,965
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 31,113 $ 29,424

Contact Information

  • Joel Hatlen
    Vice President and Chief Financial Officer
    Data I/O Corporation
    6464 185th Ave. NE, Suite 101
    Redmond, WA 98052
    (425) 881-6444
    Email Contact

    Hayden IR
    Brett Maas
    Managing Partner
    (646) 536-7331
    Email: Email Contact

    Dave Fore
    Client Manager & Senior Research Analyst
    (206) 450-2151
    Email: Email Contact