UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report: August 1, 2012

(Date of earliest event reported)

 

Data I/O Corporation

(Exact name of registrant as specified in its charter)

 

 

Commission File Number: 0-10394

_____________________________________

 

Washington

91-0864123

(State or other jurisdiction of incorporation)

(IRS Employer Identification No.)

 

6464 185th Ave. N.E., Suite 101

Redmond, WA 98052

(Address of principal executive offices, including zip code)

 

 (425) 881-6444

(Registrant’s telephone number, including area code)

 

 Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 

 

 

 

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Items reported in this filing:

Item 2.02 Results of Operation and Financial Condition

Item 9.01 Financial Statements and Exhibits


 

 

Item 2.02 Results of Operation and Financial Condition

 

A press release announcing second quarter of 2012 results was made on  August 1, 2012 and a copy of the release is being furnished as Exhibit 99.1 in this current report.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)                 Exhibits

 

Exhibit No.

Description

 

      99.1

Press Release: Data I/O Reports Second Quarter 2012 Results

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

Data I/O Corporation

 

 

 

 

August 6, 2012

By:  /s/ Joel S. Hatlen           

Joel S. Hatlen
Vice President
Chief Financial Officer

 


 


 

 

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EXHIBIT INDEX

 

Exhibit No.

Description

 

      99.1

Press Release: Data I/O Reports Second Quarter 2012 Results

 

 

 

 

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Exhibit 99.1

 

Joel Hatlen

 

Vice President and Chief Financial Officer

 

Data I/O Corporation

 

6464 185th Ave. NE, Suite 101

 

Redmond, WA 98052

 

(425) 881-6444

 

investorrelations@dataio.com

 

 

Data I/O Reports Second Quarter 2012 Results

Redmond, WA, Wednesday August 1, 2012 – Data I/O Corporation (NASDAQ: DAIO), the leading provider of e-MMC, Flash and Microcontroller device programming and IP management solutions used in wireless, consumer electronics and automotive electronics,  today announced financial results for the second quarter ended June 30, 2012.

Highlights

·         Revenue of $5.4 million and a loss of $57,000 for the quarter

·         Backlog of $1.1 million at end of quarter

·         Added a new director, Brian Crowley, CEO of Bsquare Corporation

·         Revenue increased $1.7 million over first quarter 2012

 

Financial Results

Revenues for the second quarter of 2012 were $5.4 million, down 22 percent compared with $6.8 million in the second quarter of 2011.  Revenues were up from the $3.7 million in the first quarter of 2012.  Operating loss for the second quarter was $482,000. We received tax and interest refunds from German tax authorities of $425,000. Net loss in the second quarter of 2012 was $57,000, or ($0.01) per share, compared with net income of $398,000 or $0.04 per diluted share, in the second quarter of 2011. 

The Company believes the decline in orders and revenue relates primarily to reduced capital spending resulting from a downturn in Asia-based electronics manufacturing and economic uncertainty related to the European sovereign debt situation.  On a regional basis, Asia had the largest revenue decline dropping 59%, while Europe declined 4% and the Americas increased 13% compared to revenues in the second quarter of 2011.  Data I/O ended the second quarter with a backlog of $1.1 million, compared to

 

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$1.4 million at the end of the second quarter of 2011 and $1.6 million at the end of the previous quarter on March 31, 2012. 

Orders for the second quarter of 2012 were $5.2 million compared with $7.3 million in the second quarter of 2011.  On a regional basis, orders in Asia and Europe were down 63% and 21% compared to the second quarter of 2011; however, orders from the Americas were up 19% compared to the second quarter of 2011.

“We were pleased with the performance of our new channels in South America,” stated Fred Hume, President and CEO.  “Compared to the first quarter of 2012, orders increased by almost $1 million, with Americas up $662,000 and Europe up $529,000, but Asia having a further decline of $244,000.  We were pleased to see programming center orders for automated equipment as those orders represent a return of capacity related demand.”  

Gross margin as a percentage of sales in the second quarter of 2012 was 54.9%, compared with 58.5% in the second quarter of 2011.  The decrease compared to the second quarter of 2011 was primarily due to the decreased sales volume in relation to fixed manufacturing costs offset in part by favorable variances.  Gross margin improved by 2 percentage points compared to 52.8% in the first quarter of 2012, primarily due to the sales volume increase.

Operating expenses decreased by $68,000 in the second quarter of 2012 compared to the same period in 2011.  Research and Development increased by $152,000 in the second quarter of 2012 compared to the same period in 2011 due to costs related to the Azido initiative, less engineering  charged to operations, and higher patent related costs, offset in part by a reduction in consultants and contractors expenses.  Selling, General and Administrative expenses declined $219,000 primarily attributable to lower professional fees, lower incentive compensation, offset by higher sales commissions related to sales channel mix.

Income taxes for the quarter reflect a tax refund of $318,000 that was received from Germany as the Company prevailed in issues from the late 1990’s related to an acquisition.  These refunds resulted in associated interest income of $107,000.

The Company’s cash position at June 30, 2012 decreased during the second quarter to $11 million.  The use of cash was primarily attributable to funding a $1.7 million increase in accounts receivable to $3.6 million at June 30, 2012.  Inventories were at $4.6 million at June 30, 2012, up from $4.5 million at March 31, 2012.  Deferred revenue was $1.4 million at June 30, 2012, compared $1.2 million at March 31, 2012.  This increase was primarily due to a PS system shipped, but not yet recognizable as revenue.  The Company remains debt free.  As of June 30, 2012, the Company had 7.7 million shares outstanding.

 

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“As previously announced, we were pleased to add Brian Crowley, CEO of Bsquare Corporation to the Board of Directors,” said Fred Hume.  “His extensive executive management experience and knowledge of the software industry and the device programming market including alternative methods to socketed programming makes him a valuable addition to our Board.”

Conference Call Information

A conference call discussing the second quarter and 2012 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 (612) 234-9960 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: 255212.  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

Celebrating 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 – Safe Harbor

 

Statements in this news release concerning expected revenue, expected margins, expected income or loss, orders and financial positions, cash position, share repurchases, new products 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 ability to record revenues based upon the timing of product deliveries and installations, accrual of expenses, changes in economic conditions and other risks including those

 

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described in the Company's filings on Forms 10K and 10Q with the Securities and Exchange Commission (SEC), press releases and other communications.

        Summary Financial Data Attached   –

 

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,

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

Net Sales

$ 5,360 

 

$ 6,849 

 

$ 9,039  

 

$ 13,892 

Cost of goods sold

    2,419 

 

2,841 

 

4,157  

 

5,720 

Gross margin

    2,941 

 

4,008 

 

4,882  

 

8,172 

Operating expenses:

 

 

 

 

 

 

 

Research and development

    1,427 

 

1,276 

 

2,819 

 

2,627 

Selling, general and administrative

    1,996 

 

2,215 

 

4,245 

 

4,388 

Total operating expenses

    3,423 

 

3,491 

 

7,064 

 

7,015  

Operating income (loss)

      (482)

 

517 

 

(2,182)

 

1,157 

Non-operating income (expense):

 

 

 

 

 

 

 

Interest income

      174 

 

19 

 

207

 

32 

Interest expense

      -

 

(1)

 

-

 

(2)

Foreign currency transaction gain (loss)

(45)

 

(32)

 

(36)

 

(66)

Total non-operating income (loss)

129 

 

(14)

 

171 

 

(36)

Income (loss) before income taxes

(353)

 

503 

 

(2,011)

 

1,121

Income tax (expense) benefit

296 

 

(105)

 

276 

 

(191)

Net income (loss)

$ (57)

 

$ 398 

 

$ (1,735)

 

$ 930 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share

$ (0.01)

 

$ 0.04

 

$ (0.21)

 

$ 0.10

Diluted earnings (loss) per share

$ (0.01)

 

$ 0.04

 

$ (0.21)

 

$ 0.10

Weighted-average basic shares

7,734

 

9,176

 

8,250

 

9,103

Weighted-average diluted shares

7,734

 

9,343

 

8,250

 

9,289

 

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DATA I/O CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

 

 

 

 

Unaudited June 30,
2012

 

December 31,
2011

 

 

 

 

ASSETS

 

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$ 11,031

 

$ 18,120

Trade accounts receivable, net of allowance for
                doubtful accounts of $89 and $115

3,639

 

4,351

Inventories

4,635

 

3,964

Other current assets

397

 

543

TOTAL CURRENT ASSETS

19,702

 

26,978

 

 

 

 

Property, plant and equipment – net

1,255

 

1,489

Intangible software technology-net

2,572

 

2,793

Other assets

84

 

85

TOTAL ASSETS

$ 23,613

 

$ 31,345

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable

$ 946

 

$ 1,122

Accrued compensation

1,317

 

1,255

Deferred revenue

1,413

 

1,464

Other accrued liabilities

698

 

710

Income taxes payable

63

 

72

TOTAL CURRENT LIABILITIES

4,437

 

4,623

 

 

 

 

Long-term other payables

242

 

253

 

 

 

 

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, 7,738,114
                       and 9,207,730 shares

17,674

 

23,414

Accumulated earnings

228

 

1,963

Accumulated other comprehensive income

1,032

 

1,092

TOTAL STOCKHOLDERS’ EQUITY

18,934

 

26,469

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 23,613

 

$ 31,345

 

 

 

 

 

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