Data I/O Corp. (DAIO) filed Quarterly Report for the period ended 2011-09-30.

Data I/o Corp. has a market cap of $35 million; its shares were traded at around $3.78 with a P/E ratio of 21 and P/S ratio of 1.3.

Highlight of Business Operations:

Revenues for the third quarter of 2011 were $7.1 million, an increase of 6.8% compared with $6.6 million in the third quarter of 2010, and $6.8 million in the second quarter of 2011. The increase in sales resulted primarily from PS family solutions and is attributed to automotive and programming center related business. International sales represented 86.8% of total sales for the third quarter. Revenue in the third quarter of 2011 increased in Europe 39% and in the Americas 13% but declined in Asia 17%, compared to the same period in 2010. Sequentially, revenue in the Americas increased 33% over the second quarter of 2011, while Europe declined 3% and Asia declined 10% compared to the second quarter of 2011.

For the first nine months of 2011 revenues were $20.9 million, an increase of 7.7% compared with $19.4 million for the same period in 2010, with the increase in sales related primarily to the same factors as the third quarter.

Gross margin as a percentage of sales in the third quarter of 2011 was 55.9%, compared with 57.9% in the third quarter of 2010 and 58.5% in the second quarter of 2011. This gross margin decrease compared to the third quarter of 2010 was primarily due to the impact of increased direct materials cost as a result of the overall product mix. Higher service personnel costs compared to the third quarter of 2010 were offset by lower contract software development costs and labor and overhead costs.

Gross margin as a percentage of sales in the first nine months of 2011 was 57.9%, compared to 58.8% in the same period in 2010. The gross margin percentage decrease compared to the first nine months of 2010 was primarily due to the same factors described above.

The Company s cash position at September 30, 2011 was $18.4 million, up $1.4 million from the second quarter of 2011. Net accounts receivable decreased to $4.8 million at September 30, 2011 compared to $5.3 million at June 30, 2011 and $5.5 million at September 30, 2010, primarily due to improved collections. Inventories decreased slightly to $3.8 million at September 30, 2011 from $3.9 million at both June 30, 2011 and September 30, 2010. Deferred revenue was $1.4 million at both the beginning and end of the third quarter of 2011.

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