Data I/O announces increased revenues and profitability.REDMOND, Wash.--(BUSINESS WIRE)--Feb. 21, 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 increased revenues and improved profitability for the fourth quarter of 1995. Revenues in the fourth quarter of 1995 increased approximately 18 percent to $18.0 million compared with $15.3 million in the fourth quarter of 1994. Earnings for the fourth quarter of 1995 were 28 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. compared with 20 cents per share in the same period of 1994 -- an increase of 40 percent. Earnings in the fourth quarter of 1995 were positively affected by the reversal of previously accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of approximately $350,000 after income tax or 5 cents per share. The company's effective tax rate for the fourth quarter of 1995 was approximately 10 percent compared with a zero percent effective tax rate in the fourth quarter of 1994. The lower than normal tax rates in 1995 and 1994 are due to utilization of certain tax benefits associated with operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. incurred in 1993. Pre-tax earnings in the fourth quarter of 1995 were $2.4 million compared with $1.5 million in 1994 -- an increase in excess of 58 percent. REVENUES As previously announced the improvement in revenues for the fourth quarter of 1995 was driven by the addition of approximately $625,000 of sales from the August 1995 acquisition of Reel-Tech, a 70 percent increase in sales of the company's ProMaster line of automated programming and handling systems, and a 16 percent increase in sales of the Synario Design Automation Division's line of 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. (electronic design automation) software. The increase in sales of the ProMaster line was primarily due to increases in production capacity allowing the company to reduce lead times and order backlog. New orders in the fourth quarter of 1995 for ProMaster systems were approximately equal to those generated in the fourth quarter of 1994. Offsetting these revenue gains were declines in sales of the company's older EDA software products, ABEL Abel, son of Adam and Eve, in the Bible Abel, in the Bible, son of Adam and Eve, a shepherd, killed by his older brother, Cain; in the Gospel of St. Matthew, mentioned as the first martyr. and FutureNet, while sales for the company's non-automated programmer product lines were approximately equal to those in the fourth quarter of 1994. GROSS MARGINS Gross margin as a percent of sales declined by approximately four percentage points from levels recorded in 1994 due primarily to lower product margins and increases in labor and overhead spending. The shift in mix of product revenues from software to hardware and from higher-priced and higher-margin programmers to lower-priced alternatives has lowered the overall product gross margins. In addition, the gross margin on the ProMaster 9500 was below that of other ProMaster systems due to high material and labor costs. The company expects these costs to decline in future periods due to the acquisition of Reel-Tech and anticipated improvements in efficiency in building and servicing this system. Lastly, labor and overhead expenses increased to support 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 manufacturing of the ProMaster product line to the Redmond factory. This increase is temporary in nature due to the duplication duplication /du·pli·ca·tion/ (doo-pli-ka´shun) 1. the act or process of doubling, or the state of being doubled. 2. of personnel for training and transition purposes as well as travel and other costs associated with relocating these functions. 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. Operating expenses increased slightly in the fourth quarter of 1995 in actual dollars primarily due to higher sales commissions based on the higher revenue levels and expanded advertising and promotional programs. 1995 YEAR-END RESULTS Revenues for the fiscal year 1995 increased by approximately 7.4 percent to $66.0 million compared with $61.5 million in 1994. Earnings for 1995, excluding a non-recurring charge related to the third quarter acquisition of Reel-Tech, were 69 cents per share compared with 37 cents per share in 1994 -- an increase in excess of 87 percent. Including the non-recurring Reel-Tech charge, reported earnings for the year were 60 cents per share. The primary contributor to both higher revenues and improved profitability continued to be the increased demand for Data I/O's ProMaster automated programming and handling systems, which are used in manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. to program, handle and mark high volumes 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). In 1995, revenues for such systems were up 35 percent over the prior year and accounted for approximately 30 percent of total revenues, compared with 24 percent in 1994. "We continue to be optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the prospects for higher revenue growth for fiscal 1996 driven by growth of automated programming and handling systems, semiconductor equipment and EDA software for the Windows environment (1) (upper case "W") Refers to computers running under a Microsoft Windows operating system. (2) (lower case "w") Also called a "windowing environment," it refers to any software that provides multiple windows on screen such as Windows, Mac, Motif and X Window. ," stated Bill Erxleben, president and chief executive officer. "Although we believe that year-to-year revenue growth will accelerate, growth might be delayed or reduced if the recent slowdown in 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 U.S. continues. "Also, quarterly revenues may not reflect the annual revenue trend due to shipment fluctuations resulting from long lead times and sales cycles for our high-end manufacturing products." REEL-TECH ACQUISITION As noted above, fourth quarter revenues from Reel-Tech, acquired in the third quarter of 1995, were approximately $625,000. "Our Reel-Tech division is experiencing strong demand for their products and is in the process of expanding its personnel, space and systems to meet this demand. In the fourth quarter, we made progress in expanding the infrastructure at Reel-Tech to better equip e·quip tr.v. e·quipped, e·quip·ping, e·quips 1. a. To supply with necessities such as tools or provisions. b. it to pursue the opportunities in the semiconductor equipment market. We are very excited about this opportunity and believe that with good execution it will provide significant revenue growth for the company over the next five years," continues Erxleben. 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 7.5 percent (approximately 570,000 shares) of its outstanding common stock. As of Feb. 21, 1996, the company has repurchased 570,000 shares at a total cost of approximately $4.2 million. The board of directors today authorized the extension of the share repurchase program. This extension authorizes the repurchase of up to an additional 8 percent (approximately 570,000 shares) of its outstanding common stock. These purchases may be executed through 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 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 future acquisitions." As of Dec. 28, 1995, the company's cash and cash equivalents totaled approximately $4.5 million and there were approximately 7.0 million shares of Data I/O common stock outstanding. The company currently has approximately $1.5 million of long-term debt. RELOCATION OF PROMASTER PRODUCT LINE As previously announced, the company is in the process of relocating the manufacturing of its ProMaster product line to its Redmond headquarters from plants in Anaheim, Calif., and Indianapolis. This relocation has continued on schedule and is expected to be completed by the end of the first quarter of 1996. In the process of relocating this product line, the company has been able to increase production and reduce lead times to customers. The company is not presently expecting any material impacts to revenues in the first quarter due to the completion of this relocation. 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. Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risk and uncertainties including the timely development and market acceptance of new products and upgrades to existing products, the impact of competitive products and pricing, economic conditions, and the other risks detailed from time to time in the company's SEC reports. These factors could cause actual results to differ materially from those described in the forward-looking statements. 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. CORPORATION INFORMATION Data I/O Corp. is the world's leading provider of programming and handling equipment for design through manufacturing of programmable integrated circuits (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, founded in 1972 and with headquarters in Redmond, Wash., has sales and service offices throughout 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. , Europe and Asia and is publicly traded (NASDAQ:DAIO). -0-
DATA I/O CORP.
Comparative Statements of Earnings
(In thousands, except per-share data)
Fourth Quarter Twelve Months Ended
12/28/95 12/29/94 Pct. 12/28/95 12/29/94 Pct.
Change Change
Net sales $ 18,049 $ 15,324 17.8 % $ 66,031 $ 61,478 7.4 % Gross margin 9,808 8,925 9.9 35,433 33,094 7.1 Gross margin as a percent of sales 54.3% 58.2% -3.9% 53.7% 53.8% -0.1 % Operating expenses: Research & development 2,320 2,342 -0.9 9,069 9,227 -1.7 Selling, general and admin- istrative 5,470 5,022 8.9 20,411 20,032 1.9 In-process research and development 825 Reversal of provision for business restructure (400) (400) Operating income 2,418 1,561 54.9 5,528 3,835 44.1 Non-operating (income) expense: Interest, net (10) 14 (125) 129 Foreign currency exchange (7) 10 0 5 Income before taxes 2,435 1,537 58.4 5,653 3,701 52.7 Income tax expense 248 (4) 892 975 -8.5 Net income $ 2,187 $ 1,541 41.9 $ 4,761 $ 2,726 74.7 Earnings per share: Net income 28 cents 20 cents 60 cents 37 cents Weighted average common shares outstanding 7,780 7,589 7,879 7,420
CONDENSED BALANCE SHEET
-----------------------
(In thousands)
Dec 28, 1995 Dec 29, 1994
Cash and cash equivalents $ 4,496 $ 7,279 Accounts receivable, net 13,115 10,145 Inventories 8,539 6,937 Current deferred tax asset and other assets 1,869 2,489 Land, building and equipment 10,240 10,737 Land held for resale 2,095 2,006 Other long-term assets 4,422 3,894 TOTAL ASSETS 44,776 43,487 Current liabilities, excluding current portion of funded debt 15,897 16,372 Total funded debt 1,617 1,940 Long-term deferred income tax 216 471 Other long-term payables 1,117 361 Shareholders' equity 25,929 24,343 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 44,776 43,487 CONTACT: Data I/O, Redmond, Wash. Steven M. Gordon, 206/881-6444, ext. 2224 |
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