Data I/o Corp. has a market cap of $43.1 million; its shares were traded at around $4.8 with a P/E ratio of 22.8 and P/S ratio of 2.3. DAIO is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:We took restructuring actions in 2008 totaling $542,000, primarily severance-related, and additional actions in 2009 totaling $203,000 to flatten and streamline the organization, as well as reducing cost, by decreasing the size of our Board and abandoning a portion of our building space. At June 30, 2010, $108,000 remains accrued, with $8,000 included in long-term other payables, and are scheduled to be fully paid out during 2010 and 2011.
Revenue increased to $6.6 million for the second quarter of 2010, an increase of $2.7 million or 69.2% compared to the second quarter of 2009 and $340,000 or 5.4% compared to the first quarter of 2010. We experienced increased sales in all geographies and in nearly all of our major product lines from the second quarter of 2009. Our FlashPAK sales benefited from growth in demand from Asia and our PS Family benefited from the growth in demand from Europe, with each of these product lines increasing over 300%. Revenues also continued to benefit from the introduction of our new FlashCORE III technology into our major product lines, as
customers sought a better solution to cope with the increasing use of very high-density Flash memory. The backlog of orders totaled $1.4 million at the end of the second quarter of 2010, an increase compared to the backlog of $1.3 million at June 30, 2009 and $1.1 million at the end of the first quarter of 2010.
Research and development (R&D) spending for the second quarter of 2010 decreased by approximately $48,000 compared to the second quarter of 2009 and $130,000 for the six months ended June 30, 2010 compared to the six months ended June 30, 2009. R&D as a percentage of net sales also decreased, primarily due to the increase in sales during 2010. New products include enhancements to FlashCORE III, our new programming architecture, and the new versions of ProLINE RoadRunner for Siemens and MyData placement machines.
Income tax expense recorded for the second quarter and first six months of 2010 and 2009 resulted from foreign and state taxes. The effective tax rate differed from the statutory tax rate primarily due to the effect of valuation allowances and state taxes. Data I/O has a valuation allowance of $9,135,000 as of June 30, 2010. Our deferred tax assets and valuation allowance are reduced by approximately $82,000 associated with the requirements of accounting for uncertain tax positions and related valuation allowance as of June 30, 2010.
During the third quarter of 2006, the Company entered into a five-year capital lease agreement in the amount of $591,145. The lease was used to fund new equipment and installation associated with our move to the new facility in July of 2006. Amounts shown exclude current portion of long-term debt in the amounts of $136,000 and $132,000 for the periods ending June 30, 2010 and December 31, 2009, respectively. See Note 9, Long-Term Debt.
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