Data I/O Reports Fourth Quarter and Year 2013 Results

Data I/O Reports Fourth Quarter and Year 2013 Results 
REDMOND, WA -- (Marketwired) -- 02/27/14 --  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 fourth quarter and year ended December 31, 2013. 
Summary 


 
--  Net sales of $18.7 million in 2013, up 9.6% compared to $17.1 million
    in 2012. Net sales of $3.3 million in Q4 2013, down 10.8% compared to
    $3.7 million in Q4 2012.
--  Net loss of $1.6 million in Q4 2013, compared to a net loss of $3.4
    million in Q4 2012.
--  Bookings of $3.7 million in Q4 2013, up from $3.5 million in Q4 2012.
    Backlog of $1.9 million at December 31, 2013, up from $0.9 million at
    December 31, 2012. The PSV7000 automated programming system began
    shipping.
--  Cash was $10.4 million at December 31, 2013, up $132,000 during the
    fourth quarter.

  
"Q4 was a weak close to an otherwise improved year," stated Anthony
Ambrose, President and CEO. "As we commented last quarter, bookings
decelerated during the third quarter and continued to be weak until
December. We are seeing a stronger start in the first two months of
2014, compared to the same period in the fourth quarter of 2013, with
orders for automated handlers leading the increase." 
"We are on track with our multi-year plan announced last year," said
Ambrose. "Our strategy is to deliver new and exciting products and
control our costs as the means to recapture market share and grow a
profitable company. Operating expenses (excluding restructuring and
impairment) were down about $2M from 2012. The actions we took in
2013 will continue to pay off in 2014. We have lowered our breakeven
in 2014 to approximately $4.7M/quarter of revenue, with a normal
product mix, down from $5.25M in the second half of 2013. We have
announced and shipped our newest automated programming solution, the
PSV7000. We were pleased with the European launch at the
Productronica trade show in November, where the PSV7000 won a best of
show award and we met with many qualified global buyers across
multiple markets. We will ramp up the PSV7000 production and continue
to bring new features and products to market in 2014." 
Financial Results
 Net sales in the fourth quarter of 2013 were $3.3
million down 10.8% compared with $3.7 million in the fourth quarter
of 2012. Net loss in the fourth quarter of 2013 was $1.6 million, or
$0.21 per share, compared with net loss of $3.4 million or $0.43 per
share, in the fourth quarter of 2012. For the fourth quarter of 2013,
gross margin as a percentage of sales was 44.3%, compared to 49.0% in
the fourth quarter of 2012. Bookings in the fourth quarter of 2013
were $3.7 million, up 5.4% compared to $3.5 million in the fourth
quarter of 2012. Backlog at the end of 2013 was $1.9 million compared
to $0.9 at the end of 2012.  
Net sales in 2013 were $18.7 million up 9.6% compared with $17.1
million in 2012. Net loss in 2013 was $2.6 million, or $0.33 per
share, compared with net loss of $6.4 million or $0.80 per share, in
2012. For 2013, gross margin as a percentage of sales was 50.8%,
compared to 50.6% in 2012. Bookings in 2013 were $19.5 million, up
14.5% compared to $17.1 million in 2012. 
Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA") was a loss of $1.5 million in the fourth quarter of 2013
compared to an EBITDA loss of $768,000 in the fourth quarter of 2012.
For the year 2013, EBITDA was a loss of $2.1 million compared to an
EBITDA loss of $3.4 million in the year 2012. 
Operating expenses, excluding the restructure and impairment charges,
in the fourth quarter were $2.6 million, and compared to the fourth
quarter of 2012 were down $289,000, primarily due to restructuring
actions, less amortization, and cost control actions. For the year
2013, operating expenses, excluding the restructure and impairment
charges, were $11 million, and compared to 2012 were down $2 million,
primarily due to restructuring actions, no CEO separation and search
charges, less amortization, and cost control actions. Equity
compensation expense (a non-cash item) in the fourth quarter and year
ended December 31, 2013 was $116,000 and $423,000, respectively.  
Conference Call Information
 A conference call discussing the fourth
quarter and year ended December 31, 2013 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) 288-0329,
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 (320) 365-3844, access
code: 319547. 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
 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 restructure actions breakeven point,
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 the 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. 
Non-GAAP financial measures, such as EBITDA, should not be considered
a substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP. We believe that this non-GAAP
financial measure provides meaningful supplemental information
regarding the Company's results and facilitates the comparison of
results. 


 
                                                                            
                                  Three Months Ended    Year Ended December 
EBITDA Reconciliation                December 31,               31,         
                                 --------------------  -------------------- 
                                    2013       2012       2013       2012   
                                 ---------  ---------  ---------  --------- 
(in thousands)                                                              
Net Income (loss)                $  (1,638) $  (3,366) $  (2,576) $  (6,429)
  Interest income                      (68)       (54)      (160)      (291)
  Taxes                                 (2)        (6)        (8)      (327)
  Depreciation and amortization        172      2,658        647      3,619 
                                 ---------  ---------  ---------  --------- 
EBITDA earnings (loss)           $  (1,536) $    (768) $  (2,097) $  (3,428)
                                 =========  =========  =========  ========= 

 
- Summary Financial Data Attached - 


 
                                                                            
                            DATA I/O CORPORATION                            
                    CONSOLIDATED STATEMENTS OF OPERATION                    
                  (in thousands, except per share amounts)                  
                                (UNAUDITED)                                 
                                                                            
                                  Three Months Ended    Twelve Months Ended 
                                        Dec 31,               Dec 31,       
                                 --------------------  -------------------- 
                                    2013       2012       2013       2012   
                                 ---------  ---------  ---------  --------- 
                                                                            
Net Sales                        $   3,330  $   3,735  $  18,717  $  17,085 
Cost of goods sold                   1,856      1,906      9,207      8,447 
                                 ---------  ---------  ---------  --------- 
  Gross margin                       1,474      1,829      9,510      8,638 
Operating expenses:                                                         
  Research and development           1,155      1,316      4,586      5,564 
  Selling, general and                                                      
   administrative                    1,421      1,549      6,378      7,450 
  Impairment charge                     31      2,358         31      2,358 
  Provision for business                                                    
   restructuring                       540         (7)     1,183        207 
                                 ---------  ---------  ---------  --------- 
    Total operating expenses         3,147      5,216     12,178     15,579 
                                 ---------  ---------  ---------  --------- 
    Operating income (loss)         (1,673)    (3,387)    (2,668)    (6,941)
Non-operating income (expense):                                             
  Interest income                       67         53        160        291 
  Foreign currency transaction                                              
   gain (loss)                         (34)       (38)       (76)      (106)
                                 ---------  ---------  ---------  --------- 
  Total non-operating income                                                
   (expense)                            33         15         84        185 
                                 ---------  ---------  ---------  --------- 
Income (loss) before income                                                 
 taxes                              (1,640)    (3,372)    (2,584)    (6,756)
Income tax (expense) benefit             2          6          8        327 
                                 ---------  ---------  ---------  --------- 
Net income (loss)                $  (1,638) $  (3,366) $  (2,576) $  (6,429)
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
  Basic earnings (loss) per                                                 
   share                         $   (0.21) $   (0.43) $   (0.33) $   (0.80)
  Diluted earnings (loss) per                                               
   share                         $   (0.21) $   (0.43) $   (0.33) $   (0.80)
  Weighted-average basic shares      7,783      7,742      7,767      7,995 
  Weighted-average diluted                                                  
   shares                            7,783      7,742      7,767      7,995 
                                                                            
                                                                            
                                                                            
                            DATA I/O CORPORATION                            
                        CONSOLIDATED BALANCE SHEETS                         
                     (in thousands, except share data)                      
                                (UNAUDITED)                                 
                                                                            
                                                 December 31,  December 31, 
                                                     2013          2012     
                                                 ------------  ------------ 
                                                                            
ASSETS                                                                      
CURRENT ASSETS:                                                             
  Cash and cash equivalents                      $     10,426  $     10,528 
  Trade accounts receivable, net of allowance                               
   for doubtful accounts of $87 and $89,                                    
   respectively                                         1,980         2,648 
  Inventories                                           3,770         4,033 
  Other current assets                                    395           486 
                                                 ------------  ------------ 
    TOTAL CURRENT ASSETS                               16,571        17,695 
                                                                            
Property, plant and equipment - net                       843         1,006 
Intangible software technology - net                        -            35 
Other assets                                               88            86 
                                                 ------------  ------------ 
    TOTAL ASSETS                                 $     17,502  $     18,822 
                                                 ============  ============ 
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
CURRENT LIABILITIES:                                                        
  Accounts payable                               $        720  $        850 
  Accrued compensation                                  1,107         1,183 
  Deferred revenue                                      1,170         1,238 
  Other accrued liabilities                               597           539 
  Accrued costs of business restructuring                 723            25 
  Income taxes payable                                     10            23 
                                                 ------------  ------------ 
    TOTAL CURRENT LIABILITIES                           4,327         3,858 
                                                                            
Long-term other payables                                  313           219 
                                                                            
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, 7,786,053 shares as of                                    
     December 31, 2013 and 7,741,686 shares as                              
     of December 31, 2012                              18,343        17,928 
Accumulated earnings (deficit)                         (7,042)       (4,466)
Accumulated other comprehensive income                  1,561         1,283 
                                                 ------------  ------------ 
    TOTAL STOCKHOLDERS' EQUITY                         12,862        14,745 
                                                 ------------  ------------ 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $     17,502  $     18,822 
                                                 ============  ============ 

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