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): July 27, 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.)
6464 185th Ave. 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 July 27, 2006 follows:
Data I/O Corporation
6464 185TH Ave. N.E., Suite 101
Redmond, WA 98052
Tel:(425) 881-6444
Fax:(425) 881-6856
For information please contact:
Joel Hatlen Deb Stapleton
VP, Finance and Chief Financial Officer Stapleton Communications Inc.
Data I/O Corporation (650) 470-0200
(425) 881-6444 deb@stapleton.com
DATA I/O ANNOUNCES SECOND QUARTER 2006 FINANCIAL RESULTS
Redmond, Wash., July 27, 2006 - Data I/O Corporation (NASDAQ: DAIO), the leading
provider of manual and automated device programming systems, today announced
financial results for the second quarter ended June 30, 2006.
Revenues for the second quarter of 2006 were $7.2 million, up 12 percent over
the $6.4 million reported in the first quarter of 2006 and up 8 percent from the
$6.6 million recorded in the second quarter of 2005. Order bookings were $7.3
million, compared with $7.1 million in the first quarter of 2006 and $6.6
million in the second quarter of 2005. For the first half of 2006, orders were
$14.4 million, up 14 percent from the $12.6 million recorded in the first half
of 2005. Backlog increased $200,000 to $2.1 million at the end of the second
quarter. Gross margins in the second quarter of 2006 were 52.3 percent, compared
with 53.2 percent in the prior quarter. The lower gross margin percentage is
primarily due to a less favorable product mix shift, lower average selling
prices, and labor and overhead variances.
In accordance with U.S. generally accepted accounting principles (GAAP), net
loss in the second quarter of 2006 was $398,000 or a net loss of $0.05 per
share, compared with a net loss of $512,000, or a net loss of $0.06 per share in
the first quarter of 2006. In the second quarter of 2005, the company reported
net income of $53,000 or $0.01 per share.
Research and development expenses were up substantially due to materials and
patent related costs for the newly launched FLX-500. The net loss per share in
the second quarter of 2006 includes $0.01 that resulted from the impact of
expensing options under FAS 123(R). The company has cash and investments of $3.7
million at June 30, 2006.
"We were very pleased to see the momentum in new orders driven by new products
and by new applications for our FlashCore line. Orders for the new FLX-500 were
$600,000 in the second quarter, exceeding our expectations for the first quarter
of introduction. We expect revenue to build as we begin to ship units to
customers in the third quarter. We also expect R&D expenditures to moderate now
that the ImageWriter and FLX-500 are in production." said Fred Hume, president
and CEO.
Conference Call Information
A conference call discussing the second quarter 2006 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) 369-1646. 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, margins, 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. The
accuracy and completeness of forward-looking statements should not be unduly
relied upon. Data I/O is under no duty to update any of these forward-looking
statements.
- Summary Financial Data Attached -
DATA I/O CORPORATION
COMPARATIVE STATEMENTS OF EARNINGS
(in thousands except per share data)
Second Quarter Six Months Ended
----------------------------------------- -------------------------------------
Percent Percent
6/30/2006 6/30/2005 Change 6/30/2006 6/30/2005 Change
----------------------------------------- -------------------------------------
Net sales $7,163 $6,642 7.8% $13,575 $13,379 1.5%
Gross margin 3,743 3,933 -4.8% 7,154 7,947 -10.0%
Gross margin as percent of sales 52.3% 59.2% 52.7% 59.4%
Operating expenses:
Research & development 1,513 1,350 12.1% 2,819 2,687 4.9%
Selling, general and administrative 2,626 2,378 10.4% 5,266 5,010 5.1%
Provision for business restructure 0 55 0 55
--------- --------- --------- ---------
Operating income (loss) (396) 150 (931) 195
Non-operating income (expense): 24 8 77 8
--------- --------- --------- ---------
Income (loss) from operations before taxes (372) 158 (854) 203
Income tax expense (benefit) 26 105 55 111
--------- --------- --------- ---------
Net income (loss) ($398) $53 ($909) $92
========= ========= ========= =========
Total diluted earnings (loss) per share ($0.05) $0.01 ($0.11) $0.01
Diluted weighted average shares
outstanding 8,415 8,486 8,401 8,518
CONDENSED BALANCE SHEET
(in thousands)
6/30/2006 12/31/2005
------------ ------------
Cash and cash equivalents $3,660 $4,362
Short-term investments 0 800
Accounts receivable, net 6,298 6,828
Inventories 4,805 3,529
Other current assets 549 329
Land, building and equipment 2,363 2,274
Other long-term assets 80 15
------------ ------------
Total assets $17,755 $18,137
============ ============
Current liabilities $5,855 $5,854
Shareholders' equity 11,900 12,283
------------ ------------
Total liabilities and shareholders' equity $17,755 $18,137
============ ============
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
July 31, 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