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 (Date of earliest event reported): February 16, 2005
Data I/O Corporation
(Exact name of registrant as specified in its charter)
Washington
(State of other jurisdiction of incorporation)
0-10394 91-0864123
(Commission File Number) (IRS Employer Identification No.)
10525 Willows Road N.E., Redmond, WA 98052
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (425) 881-6444
Not Applicable
(Former name or former address, if changed since last report)
Page 1 of 5 Pages
Item 2.02 Results of Operations and Financial Condition
A copy of a press release made on February 16, 2005 follows:
Data I/O Corporation
10525 Willows Road N.E.
Redmond, WA 98052
Tel: (425) 881-6444
Fax:(425) 881-6856
For information please contact:
Joel Hatlen Deborah Stapleton
VP, Finance and Chief Financial Officer Stapleton Communications
Data I/O (650) 470-0200
(425) 881-6444 deb@stapleton.com
DATA I/O ANNOUNCES FOURTH QUARTER AND 2004 FINANCIAL RESULTS
Redmond, Wash., Feb. 16, 2005 - Data I/O Corporation (NASDAQ: DAIO), the leading
provider of manual and automated device programming systems, today announced
financial results for the fourth quarter and year ended Dec. 31, 2004.
Revenues were $5.8 million for the fourth quarter of 2004, compared with $6.6
million reported in the fourth quarter of 2003. Fourth quarter gross margins
were 53.8 percent, compared with 54.8 percent in the fourth quarter of 2003.
In accordance with U.S. generally accepted accounting principles (GAAP), net
loss for the fourth quarter of 2004 was $584,000 or a net loss of $0.07 per
share, compared with net income of $337,000 or $0.04 per share in the fourth
quarter of 2003. The quarterly income comparison reflects the lower sales volume
for the fourth quarter, a decline in gross margin percentage, increased
investment in development projects, investment in establishing our China
operations and a restructuring charge of $60,000 in the fourth quarter of 2004.
Total cash and short-term investments were $6.6 million at Dec. 31, 2004. The
company remains debt-free.
Fiscal Year 2004 Results
For the year ended Dec. 31, 2004, Data I/O reported revenues of $27.3 million, a
10.6 percent increase from revenues of $24.7 million in 2003. The net loss for
2004 was $92,000 or $0.01 per share, compared with net income of $1.3 million or
$0.16 per share for 2003. The annual income comparison reflects the lower gross
margin percentage, increased investment in development projects, investment in
establishing our China operations, higher commissions and selling expenses,
increased marketing costs associated with our ImageWriter in-system programming
initiative and restructuring charges of $562,000. Gross margins in 2004 were
53.4 percent, compared with 55.4 percent in the prior year.
Data I/O announced on Feb. 14, 2005 that it will amend previously issued
financial statements for the fiscal year ended Dec. 31, 2003 and prior periods,
due to a cumulative overstatement of demonstration inventory equipment
accumulated depreciation and a corresponding overstatement of depreciation
(international selling) expense of approximately $112,000. For the year ending
Dec. 31, 2003, Data I/O will amend its financial statements due to a $65,000
overstatement of depreciation (international selling) expense. No adjustment was
required for the years ended Dec. 31, 2002 and 2001 other than to reflect a
$47,000 increase in retained earnings related to the cumulative effect of this
error from the periods prior to 2001. These adjustments have been reflected in
the 2003 comparison data included here.
"As we mentioned in our Dec. 22, 2004 news release, the fourth quarter financial
results reflect the seasonality of our customers' businesses as some of our
customers delayed shipments until the first quarter of 2005," said Fred Hume,
president and CEO. "Our disappointments in these delays were compounded by the
fact that a major shipment to China was also delayed in customs for over two
weeks. Had we been able to recognize that shipment we would have been toward the
higher end of the guidance provided in the news release. The positive side is
that January revenues provide a good start for the first quarter, and we remain
confident that 2005 will be a good year for Data I/O."
"During the fourth quarter, we introduced products that will serve expanded
worldwide markets. We began shipment of the ImageWriter, Data I/O's solution for
in-system programming. This product was launched first in Europe, where there is
an established market for programmable microcontrollers used in automotive
applications. We continue to see in-system programming as an important growth
area for Data I/O.
"We also launched the newest version of our RoadRunner product to support the
Panasonic CM402 placement machine. This machine is used by Samsung as well as
other Asian handset manufacturers," said Hume.
"Also in the fourth quarter, we introduced the PS-588, our newest solution for
automated programming that provides a much higher level of throughput for high
volume programming than previously available at a lower cost per part. We expect
to begin shipment of this product during the second quarter of 2005," said Hume.
First Quarter 2005 Guidance
Data I/O currently expects that revenues in the first quarter of 2005 will be
approximately $7 million. Gross margins are expected to be approximately 54
percent.
Conference Call Information
A conference call discussing the fourth quarter and 2004 financial results will
follow this release today at 8:00 a.m. Pacific time/11:00 a.m. Eastern time. To
listen to the call, please dial (212) 287-1616, passcode: Data I/O. 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, dial (203)
369-1061. The conference call will also be simultaneously webcast over the
Internet; visit the Investor Relations section of the Data I/O Corporation
website at http://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
Celebrating more than 30 years of innovative leadership in the device
programming industry, Data I/O Corporation (NASDAQ: DAIO), provides manual and
automated device programming systems that specifically address the requirements
of engineering and manufacturing customers. FlashCORE(TM), Sprint and UniSite
families provide a wide range of device support and versatility to address a
user's many different programming needs. Data I/O Corporation has headquarters
in Redmond, WA, with sales and services offices worldwide. For further
information, visit the company's website at http://www.dataio.com.
Forward Looking Statement
Statements in this news release concerning future revenues, future margins,
future results from operations, financial position, economic conditions, 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
based upon the timing of product deliveries and installations, 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.
- Summary Financial Data Attached -
DATA I/O CORPORATION
COMPARATIVE STATEMENTS OF EARNINGS
(in thousands except per share data)
Fourth Quarter Twelve Months Ended
------------------------------------------- ----------------------------------------
Percent Percent
12/31/04 12/31/03 Change 12/31/04 12/31/03 Change
--------------- -------------- ------------ -------------- ------------ ------------
Net sales $5,815 $6,595 -11.8% $27,310 $24,687 10.6%
Gross margin 3,129 3,615 -13.4% 14,583 13,679 6.6%
Gross margin as percent of sales 53.8% 54.8% 53.4% 55.4%
Operating expenses:
Research & development 1,414 1,105 28.0% 5,056 4,639 9.0%
Selling, general and administrative 2,337 2,166 7.9% 9,036 7,715 17.1%
Provision for business restructure 60 (14) 562 (39)
--------------- -------------- -------------- ------------
Operating income (loss) (682) 358 (71) 1,364
Non-operating income (expense):
Interest, net 30 31 59 89
Foreign currency exchange (49) (10) (94) (114)
--------------- -------------- -------------- ------------
Income/(loss) from operations before taxes (701) 379 (106) 1,339
Income tax expense (benefit) (117) 42 (14) 33
--------------- -------------- -------------- ------------
Net income/(loss) ($584) $337 ($92) $1,306
=============== ============== ============== ============
Diluted earnings/(loss) per share ($0.07) $0.04 ($0.01) $0.16
Diluted weighted average shares
outstanding 8,061 8,391 8,029 8,117
CONDENSED BALANCE SHEET
(in thousands)
12/31/04 12/31/03
------------ ------------
Cash and cash equivalents $5,534 $4,380
Short-term investments 1,037 2,354
Accounts receivable, net 4,489 5,054
Inventories 4,139 4,607
Other current assets 652 431
Land, building and equipment 1,970 1,263
Other long-term assets 25 11
------------ ------------
Total assets $17,846 $18,100
============ ============
Current liabilities $5,600 $5,794
Total funded debt 0 0
Deferred gain on sale of property 776 1,106
Shareholders' equity 11,470 11,200
------------ ------------
Total liabilities and shareholders' equity $17,846 $18,100
============ ============
SIGNATURES
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
February 18, 2005 By /s/Frederick R. Hume
Frederick R. Hume
President
Chief Executive Officer
By /s/Joel S. Hatlen
Joel S. Hatlen
Vice President - Finance
Chief Financial Officer
Secretary and Treasurer