Data I/O Reports Third Quarter 2012 Results

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Oct29

Written by:higginj
10/29/2012 9:43 AM

Data I/O Reports Third Quarter 2012 Results

Redmond, WA, Monday October 29, 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 third quarter ended September 30, 2012.

Financial Results
Revenues for the third quarter of 2012 were $4.3 million, down 39 percent compared with $7.1 million in the third quarter of 2011. Revenues were down from the $5.4 million in the second quarter of 2012. Net loss in the third quarter of 2012 was ($1.3) million, or ($0.17) per share, compared with net income of $130,000 or $0.01 per diluted share, in the third quarter of 2011.

Orders for the third quarter of 2012 were $4.1 million, down 42% compared with $7.1 million in the third quarter of 2011. On a regional basis, orders were down in Asia 53%, Europe 39% and the Americas 34% compared to the third quarter of 2011. Data I/O ended the quarter with a backlog of $1.0 million, compared to $1.3 million at the end of the third quarter of 2011 and $1.1 million at the end of the second quarter of 2012.

The Company believes the decline in orders and revenue relates primarily to a continuing trend of 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, revenue declined in Asia 57%, Europe 40% and the Americas 17% compared to the third quarter of 2011.

Gross margin as a percentage of sales in the third quarter of 2012 was 44.7%, compared with 55.9% in the third quarter of 2011. The decrease compared to the third quarter of 2011 was primarily due to the decreased sales volume in relation to relatively fixed production costs and an inventory excess and obsolescence charge of $164,000.

Operating expenses decreased by $284,000 in the third quarter of 2012 compared to the same period in 2011. Research and Development decreased by $53,000 in the third quarter of 2012 compared to the same period in 2011 due to less project contractors and materials. Selling, General and Administrative expenses costs declined $445,000 primarily attributable to lower professional fees, lower incentive compensation, and lower sales commissions related to sales volume. Included in the third quarter of 2012 operating expense was $214,000 of restructuring charges, primarily related to severance. The restructuring actions taken are expected to lower quarterly operating costs by approximately $300,000.

The Company's cash position increased slightly during the third quarter to $11.2 million. The change in cash was primarily attributable to decreasing accounts receivable by $596,000 to $3 million and inventories by $567,000 to $4.1 million at September 30, 2012, offsetting the loss for the quarter. The Company remains debt free and has 7.7 million shares outstanding at September 30, 2012.

"As announced on October 25th, we are pleased to welcome Anthony Ambrose to Data I/O as Fred Hume's successor," stated Doug Brown, Chairman of the Board of Directors. "We are excited by the strategic skills, electronics systems experience and operational capabilities he brings to the Company. We want to express our thanks to Fred Hume for his service to Data I/O."

"I am excited and honored to be joining Data I/O," said Anthony Ambrose. "Data I/O is a worldwide leader in device programming systems and I look forward to applying all of my experience to grow the business."

Conference Call Information
A conference call discussing the third quarter and 2012 financial results and introducing Anthony Ambrose 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) 332-0802 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: 267798. 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
Statements in this news release concerning expected revenue, expected margins, expected income or loss, orders and financial positions, cash position, share repurchases, new products, restructure actions 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 described in the Company's filings on Forms 10K and 10Q with the Securities and Exchange Commission (SEC), press releases and other communications.