Data I/O announces first quarter sales and earnings and investment in Needham's Electronics.REDMOND, Wash.--(BUSINESS WIRE)--April 25, 1996--Data I/O (Input/Output) The transfer of data between the CPU and a peripheral device. Every transfer is an output from one device and an input to another. See PC input/output. I/O - Input/Output Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : DAIO DAIO Direkt-Anlage in Österreich (Austrian Discount Broker) DAIO Defense Agencies-Indianapolis Operations ) announced today revenues in the first quarter of 1996 declined approximately 3 percent to $15.7 million, compared with $16.2 million in the first quarter of 1995. Net income for the first quarter of 1996 was $62,000, or 1 cent per share, compared with $1,141,000, or 15 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , in the same period of 1995. Orders in the first quarter of 1996 declined approximately 17 percent to $14.9 million, compared with $17.9 million in 1995. Revenues As previously announced, the company believes the decline in orders for the first quarter of 1996 was driven primarily by the slowdown in electronics consumer goods consumer goods Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and manufacturing capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Europe which reduced the demand for the company's programming systems products. In addition, the strengthening U.S. dollar vs. the Japanese Yen “Yen” redirects here. For the other use, see Yen (disambiguation). “JPY” redirects here. For the Australian singer with the same moniker, see John Paul Young. and the German Mark have contributed to the decline in orders. "Although the capital spending slowdown has impacted demand from electronics manufacturers for our Programming Systems Division products, it does not appear to have affected demand in the semiconductor equipment market for Reel-Tech's products or the engineering market for the Synario Division product line," stated William C. Erxleben, president and chief executive officer. "We will continue to monitor the economic situation closely and make adjustments to our business models to attempt to reduce the impact it may have." Partially offsetting the decline in orders and revenues for programming systems products were sales of products of both Reel-Tech Inc., acquired in August 1995, and Data I/O's Synario Design Automation Division. Sales of Synario's line of Windows-based electronic design automation (EDA (1) (Electronic Design Automation) Using the computer to design, lay out, verify and simulate the performance of electronic circuits on a chip or printed circuit board. ) products grew by approximately 14 percent compared with the first quarter of 1995. Reel-Tech's line of semiconductor equipment provided approximately $1.0 million in revenue for the quarter. "We are pleased with the progress to date and the growth potential of the Reel-Tech line," stated Erxleben. "This division continues to win major customer orders with its line of high-volume, low-cost handling and marking equipment for semiconductor manufacturers. We are continuing to invest in increased capacity for this division to meet the existing growth in demand." Gross Margins Gross margin as a percent of sales declined by approximately 6 percentage points to 48.2 percent from 54.5 percent recorded in the first quarter of 1995, due primarily to lower volumes, lower product margins, and increases in inventory reserves. The relatively high fixed component of cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold causes any swing in total volume to have a significant impact on gross margin. The shift in mix of product revenues from software to hardware and from higher-priced and higher-margin non-automated programming systems to lower-priced alternatives has lowered the overall product gross margins. The company has now completed the relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. of the Anaheim manufacturing facility to its Redmond headquarters and expects labor and overhead costs overhead costs see fixed costs. to decline in future quarters due to this consolidation. Operation Expenses Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased slightly in the first quarter of 1996 primarily due to higher spending on research and development for new products slated for introduction late in 1996, and due to the inclusion of expenses for the company's newly acquired Reel-Tech subsidiary. "Although the company intends to control costs tightly, especially if the electronics manufacturing This article presents a typical manufacturing process of an electronic assembly. Component manufacturing Components such as resistors, capacitors and integrated circuits are generally made by specialized contractors. capital spending slowdown continues, we believe that long-term value will benefit from continued investments in product development for all our product lines as well as increased capacity at Reel-Tech," Erxleben noted. Investment in Needham's Electronics Data I/O today announced that it has reached an agreement in principle to purchase a substantial minority interest in Needham's Electronics and to enter into a worldwide distribution agreement for Needham's Electronics' programmer products. Needham's Electronics produces both engineering and manufacturing programmer products priced between $100 and $3,000. Needham's Electronics' products have been primarily distributed in the United States. "We believe Needham's is the preeminent pre·em·i·nent or pre-em·i·nent adj. Superior to or notable above all others; outstanding. See Synonyms at dominant, noted. [Middle English, from Latin prae supplier of low-priced, non-automated programmers in the United states. When completed, these agreements will provide the company with a significant competitive advantage in the very low-priced segment of the non-automated programmer market that our products do not cover well," stated Erxleben. "We will be able to sell Needham's Electronics' products through our distribution channels in the United States and internationally where Needham's previously has had very little distribution outside its factory. This is an exciting opportunity to work with a quality supplier like Needham's with a product line that will complement our non-automated programmers." Completion of the minority investment and creation of the distribution rights are subject to negotiation of definitive agreements and satisfaction of certain conditions, which the company plans to complete during the second quarter of 1996. Share Repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. Program The company previously announced that its board of directors authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of up to 15 percent (approximately 1,140,000 shares) of its outstanding common stock. As of April 19, 1996, the company has repurchased 760,700 shares at a total cost of approximately $5.6 million. The company intends to continue these purchases through open-market purchases open-market purchase The buying of stocks and bonds in the securities markets. For example, in order to satisfy the sinking fund requirement of a bond indenture, the issuer may call securities from investors or make open-market purchases. at prevailing market prices, through block purchases or in privately negotiated transactions. Purchases may commence or be discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: at any time. "With our continuing strong cash position, current cash flows and minimal amount of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , we believe this program will contribute to shareholder value over time," stated Erxleben. "While we remain committed to our long-term strategic development plans, we believe further share repurchase is an effective use of the company's excess cash flow. "In addition, this program minimizes the dilutive effect Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of the sales of stock under the company's employee stock purchase and stock option plans as well as stock used for acquisitions." As of March 28, 1996, the company's cash and cash equivalents totaled approximately $4.3 million and there were approximately 7 million shares of Data I/O common stock outstanding. The company currently has approximately $1.5 million of long-term debt. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements in this news release concerning expectations for growth or expense levels and any other statement which may be construed as a prediction of future performance or events are forward-looking statements which are subject to a number of risks and uncertainties which may cause actual results to differ materially from stated expectations. These risks and uncertainties include economic conditions, changes in market demand, timely development and market acceptance of new products and upgrades to existing products, competitive products and pricing and other risks including those described from time to time in the company's filing with the Securities and Exchange Commission, news releases and other communications. Corporate Home Page The Data I/O World Wide Web "home page" contains product information, news releases and other information about the company. The internet address There are two kinds of addresses that are widely used on the Internet. One is a person's e-mail address, and the other is the address of a Web site, which is known as a URL. Following is an explanation of Internet e-mail addresses only. For more on URLs, see URL and Internet domain name. of the Data I/O home page is http://www.data-io.com. Corporate Information Data I/O Corp. is the world's leading provider of programming and handling equipment for design through manufacturing of programmable integrated circuits Integrated circuits Miniature electronic circuits produced within and upon a single semiconductor crystal, usually silicon. Integrated circuits range in complexity from simple logic circuits and amplifiers, about 1/20 in. (1. (ICs). Data I/O's ProMaster products are fully integrated, automated systems for programming, testing, handling and marking programmable ICs See PLD. in mid to high volumes. In 1995, Data I/O established its Indianapolis Semiconductor Division after acquiring Reel-Tech Inc., a technology leader in the semiconductor component transportation arena. Data I/O's Synario Design Automation Division is a leader in Windows EDA software, providing superior broadline design solutions based on tightly integrated best-of-class point tools. Data I/O, founded in 1972 and headquartered in Redmond, has sales and service offices throughout the United States, Europe and Asia and is publicly traded (NASDAQ:DAIO). -0-
Data I/O Corp.
Comparative Statements of Earnings
(in thousands except per share data)
First Quarter
--------------------------
3/28/96 3/30/95 Percent
Change
--------------------------
Net sales $15,656 $16,208 -3.4% Gross margin 7,551 8,837 -14.6% Gross margin as percent of sales 48.2% 54.5% -6.3% Operating expenses: Research & development 2,465 2,334 5.6% Selling, general and administrative 5,014 5,104 -1.8% Operating income 72 1,399 -94.9% Non-operating (income) expense: Interest, net (9) (37) -75.7% Foreign currency exchange (2) 2 Income before taxes 83 1,434 -94.2% Income tax expense 21 293 -92.8% Net income $ 62 $1,141 -94.6% Earnings per share: Net income $0.01 $0.15 Weighted average common shares outstanding 7,325 7,763
CONDENSED BALANCE SHEET
(in thousands)
Mar. 28 Dec. 28
1996 1995
Cash and cash equivalents $ 4,273 $ 4,496
Accounts receivable, net 11,072 13,115
Inventories 9,311 8,539
Current deferred tax asset and other
assets 1,577 1,869
Land, building and equipment 10,160 10,240
Land held for resale 2,112 2,095
Other long-term assets 4,092 4,422
Total assets $ 42,597 $ 44,776
Current liabilities, excluding
current portion of funded debt $ 14,389 $ 15,897
Total funded debt 1,613 1,617
Long-term deferred income tax 447 216
Other long-term payables 1,130 1,117
Shareholders' equity 25,018 25,929
Total liabilities and shareholders'
equity $ 42,597 $ 44,776
CONTACT: Data I/O Steven M. Gordon, 206/881-6444 Ext. 2224 |
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