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 21, 2006
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 6 Pages
Item 2.02 Results of Operation and Financial Condition
A copy of a press release made on February 21, 2006 follows:
Joel Hatlen Deb Stapleton/Christina Carrabino
VP, Finance and Chief Financial Officer Stapleton Communications Inc.
Data I/O Corporation (650) 470-0200
(425) 881-6444 deb@stapleton.com
christina@stapleton.com
DATA I/O ANNOUNCES FOURTH QUARTER 2005 FINANCIAL RESULTS
Redmond, Wash., February 21, 2006 - Data I/O Corporation (NASDAQ: DAIO), the
leading provider of manual and automated device programming systems, today
announced financial results for the fourth quarter ended Dec. 31, 2005.
Revenues for the fourth quarter of 2005 were $8.4 million, compared with $6.6
million in the third quarter of 2005. Order bookings were $7.6 million, compared
with $ 7.8 million in the third quarter of 2005. Gross margins in the fourth
quarter of 2005 were 52.5 percent, compared with 57.0 percent in the prior
quarter. The lower gross margin percentage for the fourth quarter was due to the
product sales mix, the effect of reducing the level of inventories on overhead
and unfavorable manufacturing and inventory variances during the quarter.
In accordance with U.S. generally accepted accounting principles (GAAP), net
income in the fourth quarter of 2005 was $363,000, or $0.04 per share, compared
with net income of $127,000, or $0.02 per share, in the third quarter of 2005.
The company remains debt-free.
Fiscal Year 2005 Results
For the year ended Dec. 31, 2005, Data I/O reported revenues of $28.3 million, a
4.0 percent increase from revenues of $27.3 million in 2004. Net income for 2005
was $582,000 or $0.07 per share, compared with a net loss of $92,000 or a net
loss of $0.01 per share for 2004. Gross margins in 2005 were 56.8 percent,
compared with 53.4 percent in the prior year.
"During the fourth quarter, we signed a distribution agreement with Toyo
Corporation of Japan, a leading supplier of powerful manufacturing solutions and
support," said Fred Hume, president and CEO. "We believe that Toyo will enable
us to strengthen our sales not only in Japan but also with Japanese companies
that are located in China. Expanding our business in Japan and China is one of
our major goals in 2006 and we are excited about the compelling market
opportunities in this region.
"We strengthened our marketing and sales organization during the fourth quarter
with the appointments of Harald Weigelt as vice president, worldwide sales and
services, Zel Liu as the China sales director and Megan Miller as director of
marketing. These individuals bring to Data I/O many years of solid experience in
sales and marketing that will be benefit us as we continue to develop new
products and drive our sales efforts," said Hume.
First Quarter 2006 Guidance
Data I/O currently expects that revenues in the first quarter of 2006 will be
similar to the level of order bookings it had in the fourth quarter of 2005.
Gross margins are expected to increase based on a more typical order mix and the
non-recurrence of the unfavorable overhead effect of inventory reductions and
certain variances.
Conference Call Information
A conference call discussing the fourth quarter and 2005 financial results will
follow this release today at 2:00 p.m. Pacific time/5:00 p.m. Eastern time. To
listen to the conference call, please dial (773) 681-5826, 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 (203) 369-3872. 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
12/31/2005 12/31/2004 Change 12/31/2005 12/31/2004 Change
--------------- -------------- ------------ ------------ ------------- -----------
Net sales $8,356 $5,815 43.7% $28,321 $27,310 3.7%
Gross margin 4,388 3,129 40.2% 16,091 14,584 10.3%
Gross margin as percent of sales 52.5% 53.8% -1.3% 56.8% 53.4% 3.4%
Operating expenses:
Research & development 1,381 1,415 -2.4% 5,286 5,057 4.5%
Selling, general and administrative 2,663 2,336 14.0% 10,085 9,036 11.6%
Provision for business restructure 23 60 96 562
--------------- -------------- -------------- ------------
Operating income (loss) 321 (682) 624 (71)
Non-operating income (expense):
Interest, net 31 30 96 59
Foreign currency exchange 25 (49) (18) (94)
--------------- -------------- -------------- ------------
Income/(loss) from operations before taxes 377 (701) 702 (106)
Income tax expense (benefit) 14 (117) 120 (14)
--------------- -------------- -------------- ------------
Net income/(loss) $363 ($584) $582 ($92)
=============== ============== ============== ============
Diluted earnings/(loss) per share $0.04 ($0.07) $0.07 ($0.01)
Diluted weighted average shares
outstanding 8,625 8,061 8,532 8,029
CONDENSED BALANCE SHEET
(in thousands)
12/31/2005 12/31/2004
------------ ------------
Cash and cash equivalents $4,362 $5,534
Short-term investments 800 1,037
Accounts receivable, net 6,828 4,489
Inventories 3,529 4,139
Other current assets 329 652
Land, building and equipment 2,274 1,970
Other long-term assets 15 26
------------ ------------
Total assets $18,137 $17,847
============ ============
Current liabilities $5,466 $5,601
Deferred gain on sale of property 388 776
Shareholders' equity 12,283 11,470
------------ ------------
Total liabilities and shareholders'equity $18,137 $17,847
============ ============
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 23, 2006 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