Data I/O Reports 2015 Second Quarter Financial Results
REDMOND, WA -- (Marketwired) -- 07/30/15 -- 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 second quarter ended June 30, 2015.
2015 Second-Quarter Highlights (on a year-over-year basis unless noted):
- Net sales of $5.0 million
- Net income of $100,000, or $0.01 per diluted share
- Adjusted EBITDA, excluding equity compensation, was $345,000
- Bookings of $5.1 million
- PSV5000 automated programming system announced and multiple PSV5000's sold and delivered
- Strong year-to-date growth to automotive customers
- Profitable for the fifth consecutive quarter
"Sales to automotive customers remain strong and now represent approximately half of our total 2015 year-to-date sales, up significantly from 2014 as the PSV7000 continues to win in the automotive market," said Anthony Ambrose, President and CEO. "In addition to the success of our PSV7000, our other new products are winning in the marketplace, and during the quarter we sold and delivered multiple PSV5000's. We further lowered our cost of doing business during the second quarter of 2015 as we successfully negotiated a lease for a new headquarters facility that will save the company $1.5 million of cash over the life of the lease."
"We remain focused on developing technologies that drive growth and significantly reduce the total cost of programming," continued Mr. Ambrose. "In this regard, Data I/O's Chief Technology Officer, Rajeev Gulati, will be discussing a breakthrough in programming architecture at the FLASH Memory Summit in San Jose California August 11 to 13. We are optimistic this technology will have a significant impact to customers in the automotive and wireless markets."
Financial Results Net sales in the second quarter of 2015 were $5.0 million, compared to $5.6 million in the second quarter of 2014. The 11.4% year-over-year decrease in second quarter sales was primarily a result of unfavorable foreign currency translation during the quarter of approximately $300,000 related to the U.S. Dollar compared to the Euro, as well as lower product and consumable sales. Net sales for the first-half of 2015 were $10.9 million, compared to $10.4 million for the same period last year. Unfavorable foreign currency translation of the U.S. Dollar compared to the Euro negatively impacted 2015 year-to-date sales by approximately $700,000.
For the second quarter of 2015, gross margin as a percentage of sales was 54.9%, compared to 54.0% in the second quarter of 2014. The gross margin increase was primarily due to lower labor costs and overhead variances, offset by the impact of foreign currency exchange rates. For the first half of 2015, gross margin was 51.4% compared to 53.0% in the same period last year.
Net income in the second quarter of 2015 was $100,000, or $0.01 per diluted share, compared with net income of $447,000, or $0.06 per diluted share, in the second quarter of 2014. Year-to-date net income was $149,000, or $0.02 per diluted share, compared to a net income of $104,000, or $0.01 per diluted share for the same period last year.
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") was $197,000 in the second quarter of 2015, compared to $562,000 in the second quarter of 2014. Adjusted EBITDA excluding equity compensation was $345,000 in the second quarter of 2015, compared to $687,000 in the second quarter of 2014. Year-to-date, EBITDA was $372,000, compared to $384,000 for the same period last year. Adjusted EBITDA excluding equity compensation was $610,000, compared to $608,000 for the same period last year.
Bookings in the second quarter of 2015 were $5.1 million, compared to $6.3 million in the second quarter of 2014, and $5.2 million in the first quarter of 2015. Backlog at June 30, 2015 was $1.9 million, compared to $1.7 million at March 31, 2015, and $2.7 million at June 30, 2014. Deferred revenue was $1.0 million at June 30, 2015, compared to $2.1 million at June 30, 2014, and $1.0 million at March 31, 2015.
Mr. Ambrose continued, "We are encouraged by our leading position in the marketplace as our PSV product line continues to be well received by new and existing customers. As a result, our market share is increasing as we sell more products to existing customers, and displace competitive programming systems and other forms of programming technology. File sizes are increasing significantly, especially for automotive applications, and Data I/O's products are uniquely positioned to program large and complex data files. Our balance sheet at June 30, 2015 remained strong with $9.1 million of cash and no debt."
Conference Call Information A conference call discussing the second quarter ended June 30, 2015 financial results will follow this release today at 2 p.m. PT /5 p.m. ET. To listen to the conference call, please dial (888) 423-3268, 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 (800) 475-6701, access code: 364760. The conference call will also be simultaneously webcast 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 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 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 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, installations and acceptance, 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 and adjusted EBITDA excluding equity compensation, should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding the Company's results and facilitate the comparison of results.
DATA I/O CORPORATION
CONSOLIDATED STATEMENTS OF OPERATION
(in thousands, except per share amounts)
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2015 2014 2015 2014
-------- --------- ------- -------
Net Sales $ 4,958 $ 5,599 $10,860 $10,418
Cost of goods sold 2,236 2,577 5,280 4,901
-------- --------- ------- -------
Gross margin 2,722 3,022 5,580 5,517
Operating expenses:
Research and development 1,243 1,173 2,341 2,323
Selling, general and administrative 1,415 1,456 2,953 3,144
Provision for business restructuring - - - 13
-------- --------- ------- -------
Total operating expenses 2,658 2,629 5,294 5,480
-------- --------- ------- -------
Operating income 64 393 286 37
Non-operating income (expense):
Interest income 27 53 58 72
Foreign currency transaction gain
(loss) 7 8 (188) 27
-------- --------- ------- -------
Total non-operating income (expense) 34 61 (130) 99
-------- --------- ------- -------
Income before income taxes 98 454 156 136
Income tax (expense) benefit 2 (7) (7) (32)
-------- --------- ------- -------
Net income $ 100 $ 447 $ 149 $ 104
======== ========= ======= =======
Basic earnings per share $ 0.01 $ 0.06 $ 0.02 $ 0.01
Diluted earnings per share $ 0.01 $ 0.06 $ 0.02 $ 0.01
Weighted-average basic shares 7,894 7,814 7,879 7,801
Weighted-average diluted shares 8,078 7,899 8,062 7,892
DATA I/O CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(UNAUDITED)
June 30, December 31,
2015 2014
--------- ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 9,145 $ 9,361
Trade accounts receivable, net of allowance for
doubtful accounts of $90 and $93, respectively 3,467 4,109
Inventories 4,116 4,445
Other current assets 403 426
--------- ------------
TOTAL CURRENT ASSETS 17,131 18,341
Property, plant and equipment - net 1,003 926
Other assets 64 65
--------- ------------
TOTAL ASSETS $ 18,198 $ 19,332
========= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 990 $ 968
Accrued compensation 1,195 1,756
Deferred revenue 1,022 1,801
Other accrued liabilities 702 640
Accrued costs of business restructuring 103 113
--------- ------------
TOTAL CURRENT LIABILITIES 4,012 5,278
Long-term other payables 115 183
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, 7,929,260 shares as of June 30,
2015 and 7,861,141 shares as of December 31,
2014 18,867 18,704
Accumulated earnings (deficit) (5,794) (5,943)
Accumulated other comprehensive income 998 1,110
--------- ------------
TOTAL STOCKHOLDERS' EQUITY 14,071 13,871
--------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,198 $ 19,332
========= ============
NON-GAAP FINANCIAL MEASURE RECONCILIATION
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2015 2014 2015 2014
-------- -------- -------- --------
(in thousands)
Net Income $ 100 $ 447 $ 149 $ 104
Interest (income) expense (27) (53) (58) (72)
Taxes (2) 7 7 32
Depreciation and amortization 126 161 274 320
-------- -------- -------- --------
EBITDA earnings $ 197 $ 562 $ 372 $ 384
Equity compensation 148 125 238 211
Restructure charge - - - 13
-------- -------- -------- --------
Adjusted EBITDA earnings, excluding
equity compensation and restructure
charge $ 345 $ 687 $ 610 $ 608
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Joel Hatlen Vice President and Chief Financial Officer Data I/O Corporation 6464 185th Ave. NE, Suite 101 Redmond, WA 98052 (425) 881-6444 SM Berger & Company, Inc. Andrew Berger Managing Director (216) 464-6400
Source: Data I/O Corporation