SOURCE: Data I/O Corporation

Data I/O Corporation

February 26, 2015 16:05 ET

Data I/O Reports 2014 Fourth Quarter Results

Return to Full-Year Profitability on 17% Revenue Growth and New Product Momentum

REDMOND, WA--(Marketwired - Feb 26, 2015) -  Data I/O Corporation (NASDAQ: DAIO), the leading global provider of advanced programming and IP management solutions for flash, flash-memory based intelligent devices and microcontrollers, today announced financial results for the quarter and year ended December 31, 2014.

2014 Fourth-Quarter Highlights (on a year-over-year basis unless noted):

  • Net sales of $5.3 million, up 59%
  • Net income of $349,000, or $0.04 per diluted share compared to a net loss of $1.6 million, or $0.21 per share
  • Adjusted EBITDA excluding equity compensation was $528,000
  • Bookings of $5.4 million
  • Five customer wins for PSV7000 in the automotive market during the quarter
  • First customer win for PSV3000 to an industrial customer in China

2014 Full-Year Highlights (on a year-over-year basis unless noted):

  • Net sales of $21.9 million, up 17%
  • Net income of $1.1 million, or $0.14 per diluted share compared to a net loss of $2.6 million, or $0.33 per share
  • Adjusted EBITDA excluding equity compensation was $1.9 million
  • Significant growth in automotive market

"I am pleased to report a return to full-year profitability in 2014. The positive momentum we experienced throughout 2014 continued in the fourth quarter, driven by strong demand for our PSV7000 programming system," stated Anthony Ambrose, President and CEO. "The PSV7000 has exceeded our expectations since we launched the system in September 2013 and has helped us secure eight of the top nine automotive electronics companies as customers. The PSV7000 is uniquely positioned for the automotive industry as the system combines high throughput, fast changeover and extreme flexibility, which allows manufacturers to use one PSV7000 to program what previously required multiple systems to produce. We expect continued strength in the automotive market throughout 2015 as manufacturers continue to develop increasingly sophisticated infotainment and instrument cluster applications."

Net sales in the 2014 fourth quarter were $5.3 million, compared with $3.3 million in the 2013 fourth quarter. The 59% increase in fourth quarter sales was primarily a result of higher shipments of the company's PSV7000 Automated Programming System. For 2014, net sales were $21.9 million, an increase of 17% from $18.7 million last year. 

For the 2014 fourth quarter, gross margin as a percentage of sales, was 55.1%, compared to 44.3% for the 2013 fourth quarter. The significant improvement in gross margin was primarily a result of increased factory utilization, due to higher product shipments, and a more profitable mix of products. For 2014, gross margin as a percentage of sales was 53.9%, compared to 50.8% for 2013.

Net income in the 2014 fourth quarter was $349,000, or $0.04 per diluted share, compared with a net loss of $1.6 million, or $0.21 per share, in the 2013 fourth quarter. Net income for 2014 was $1.1 million, or $0.14 per diluted share, compared with a net loss of $2.6 million, or $0.33 per share, for 2013. 

Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") was $429,000 in the 2014 fourth quarter, compared to a loss of $1.5 million in the 2013 fourth quarter. Adjusted EBITDA excluding equity compensation (a non-cash item) and restructure charge was $528,000 in the 2014 fourth quarter, compared to a loss of $0.9 million in the 2013 fourth quarter. For 2014, EBITDA was $1.5 million, compared to a loss of $2.1 million for 2013. Adjusted EBITDA excluding equity compensation and restructure charge was $2.0 million for 2014, compared to a loss of $0.5 million for 2013.

Bookings in the 2014 fourth quarter were $5.4 million, up 44% compared to $3.7 million in the 2013 fourth quarter, and $5.4 million in the 2014 third quarter. Backlog at December 31, 2014 was $1.9 million, compared to $1.9 million at December 31, 2013, and $2.0 million at September 30, 2014. Deferred revenue was $1.8 million at December 31, 2014, compared to $1.2 million at December 31, 2013, and $1.8 million at September 30, 2014. 

Mr. Ambrose continued: "With the success of the PSV7000, as well as the recent launch and initial customer of the PSV3000, I am encouraged by the market's acceptance of the PSV family of products. The PSV3000 opens new markets and customers, which Data I/O has not traditionally served. The market size for the PSV3000 is approximately $10 million and with the initial order of a PSV3000, we are increasingly optimistic we will grow our market share within this segment. Our plan for 2015 is to build on the positive sales momentum we experienced in 2014, while continuing to proactively manage our cost structure and maintain a strong balance sheet. We ended 2014 with $9.4 million of cash on our balance sheet and excellent liquidity, which provides us with the flexibility to invest in growth producing initiatives. Product development continues to be an important area of focus for the company as we create compelling products for a variety of different programming requirements that lower the total cost of programming for our customers." 

Conference Call Information
A conference call discussing the financial results for the fourth quarter ended December 31, 2014 will follow this release today at 2:00 pm PT/5:00 pm ET. To listen to the conference call, please dial (800) 230-1766, passcode: DAIO. A 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 (800) 475-6701, access code: 353846. The conference call will also be simultaneously webcast over the Internet; visit the News and Events 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 two hours 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, wireless, consumer electronics, industrial controls, medical, and military/aerospace markets. Today, our customers manufacture tens of millions of products each year using Data I/O programming solutions to reliably, securely, and cost-effectively deliver their Intellectual Property into programmable devices. Data I/O provides programming solutions for devices in any package, whether programmed in a socket or on a circuit board. Our expertise in programmable integrated circuits, global supply chain processes, and IP management and protection helps bring innovative new products to life. These solutions are backed by a global network of Data I/O support and service providers, assuring success for our customers.

Forward Looking Statement and Non-GAAP financial measures
Statements in this news release concerning economic outlook, expected revenue, expected margins, expected results, orders, deliveries, backlog and financial positions, 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. These factors include uncertainties as to the ability to record revenues based upon the timing of product deliveries, installations and acceptance, accrual of expenses, changes in economic conditions and other risks including those described in the Company's filings on Forms 10K and 10Q 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 and restructure charge, 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.

--Financial Results Follow--

   
   
DATA I/O CORPORATION  
CONSOLIDATED STATEMENTS OF OPERATION  
(in thousands, except per share amounts)  
(UNAUDITED)  
                         
    Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
    2014     2013     2014     2013  
                                 
Net Sales   $ 5,293     $ 3,330     $ 21,924     $ 18,717  
Cost of goods sold     2,376       1,856       10,099       9,207  
  Gross margin     2,917       1,474       11,825       9,510  
Operating expenses:                                
  Research and development     1,169       1,155       4,708       4,586  
  Selling, general and administrative     1,409       1,421       5,997       6,378  
  Impairment charge     -       31       -       31  
  Provision for business restructuring     -       540       13       1,183  
    Total operating expenses     2,578       3,147       10,718       12,178  
    Operating income (loss)     339       (1,673 )     1,107       (2,668 )
Non-operating income (expense):                                
  Interest income     37       67       159       160  
  Foreign currency transaction gain (loss)     (47 )     (34 )     (160 )     (76 )
  Total non-operating income (expense)     (10 )     33       (1 )     84  
Income (loss) before income taxes     329       (1,640 )     1,106       (2,584 )
Income tax (expense) benefit     20       2       (7 )     8  
Net income (loss)   $ 349     $ (1,638 )   $ 1,099     $ (2,576 )
                                 
                                 
  Basic earnings (loss) per share   $ 0.04     $ (0.21 )   $ 0.14     $ (0.33 )
  Diluted earnings (loss) per share   $ 0.04     $ (0.21 )   $ 0.14     $ (0.33 )
  Weighted-average basic shares     7,858       7,783       7,826       7,767  
  Weighted-average diluted shares     8,028       7,783       7,948       7,767  
                                   
                                   
                                   
DATA I/O CORPORATION  
CONSOLIDATED BALANCE SHEETS  
(in thousands, except share data)  
(UNAUDITED)  
             
    December 31,
2014
    December 31,
2013
 
                 
ASSETS                
CURRENT ASSETS:                
  Cash and cash equivalents   $ 9,361     $ 10,426  
  Trade accounts receivable, net of allowance for doubtful accounts of $93 and $87, respectively     4,109       1,980  
  Inventories     4,445       3,770  
  Other current assets     426       395  
    TOTAL CURRENT ASSETS     18,341       16,571  
                 
Property, plant and equipment - net     926       843  
Other assets     65       88  
    TOTAL ASSETS   $ 19,332     $ 17,502  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
CURRENT LIABILITIES:                
  Accounts payable   $ 968     $ 720  
  Accrued compensation     1,756       1,107  
  Deferred revenue     1,801       1,170  
  Other accrued liabilities     641       597  
  Accrued costs of business restructuring     113       723  
  Income taxes payable     (1 )     10  
    TOTAL CURRENT LIABILITIES     5,278       4,327  
                 
Long-term other payables     183       313  
                 
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, 7,861,141 shares as of December 31, 2014 and 7,786,053 shares as of December 31, 2013     18,704       18,343  
Accumulated earnings (deficit)     (5,943 )     (7,042 )
Accumulated other comprehensive income     1,110       1,561  
    TOTAL STOCKHOLDERS' EQUITY     13,871       12,862  
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 19,332     $ 17,502  
                 
                 
                 
NON-GAAP FINANCIAL MEASURE RECONCILIATION  
                         
    Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
    2014     2013     2014     2013  
(in thousands)                                
                                 
Net Income (loss)   $ 349     $ (1,638 )   $ 1,099     $ (2,576 )
  Interest (income) expense     (37 )     (67 )     (159 )     (160 )
  Taxes     (20 )     (2 )     7       (8 )
  Depreciation and amortization, including impairment charge     137       171       593       647  
EBITDA earnings (loss)   $ 429     $ (1,536 )   $ 1,540     $ (2,097 )
  Equity compensation     99       116       400       423  
  Restructure charge     -       540       13       1,183  
Adjusted EBITDA earnings (loss), excluding equity compensation and restructure charges   $ 528     $ (880 )   $ 1,953     $ (491 )
                                 

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

    SM Berger & Company, Inc.
    Andrew Berger
    Managing Director
    (216) 464-6400