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Data I/O Corp. (DAIO) filed Quarterly Report for the period ended 2011-03-31.
Data I/o Corp. has a market cap of $55.1 million; its shares were traded at around $6.1 with a P/E ratio of 19.6 and P/S ratio of 2.1.
This is the annual revenues and earnings per share of DAIO over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of DAIO.
Highlight of Business Operations:
Revenue increased to $7.0 million for the first quarter of 2011, an increase of 12.7% compared to $6.3 million in the first quarter of 2010 and up sequentially compared to $6.9 million for the fourth quarter of 2010. International sales represented 92.5% of total sales for the first quarter 2011. Compared to the first quarter of 2010, we experienced a revenue increase of 101% in Asia and 6% in Europe, while revenue in the Americas decreased by 33%. The Americas’ revenue declined primarily due to lower custom software sales and lower sales in Mexico. We attribute the lower sales in Mexico primarily to the effect of violence that has taken place there.
Orders increased 3% in the first quarter of 2011 compared to the same period in 2010, with Asia up 88%, Europe up 17%, and the Americas down 47%. The variation in sales percentages versus order percentages relates to the change in backlog and deferred revenues. Backlog at the end of the quarter was $.9 million, down from $1.6 million at the start of the quarter, and from $1.1 million at the end of the first quarter of 2010. Deferred revenue at both the start and end of the quarter was $1.6 million. Our FlashPAK product line and adapter sales benefited from the increased demand in Asia. Programming center related business resulted in good PS Family sales.
Research and development (“R&D”) spending for the first quarter of 2011 increased by approximately $402,000 compared to the first quarter of 2010, primarily due to the increased use of outside resources of $205,000 and materials of $126,000 to accelerate our growth initiatives. We expect higher spending to continue for the next quarter as we continue to accelerate our growth initiatives, including spending related to our recent software technology purchase in April 2011.
Our cash and cash equivalents increased by approximately $82,000 during the first quarter of 2011, primarily due to earnings offset by cash used to pay year end 2010 incentive compensation and 401(k) matching accrued expenses. Accounts receivable increased to $5.5 million from $5.0 million, due to the sales shipments taking place relatively late in the quarter. Inventories decreased to $3.5 million at the end of the first quarter compared to $3.6 million at December 31, 2010.
As a result of our significant product development, customer support, international expansion and selling and marketing efforts, we have required substantial working capital to fund our operations. Over the last few years, we restructured our operations to lower our costs and operating expenditures in some geographic regions, while investing in other regions, and to lower the level of revenue required for our net income breakeven point, to preserve our cash position and to focus on profitable operations. We believe that we have sufficient working capital available under our operating plan to fund our operations and capital requirements through at least the next one-year period. Our working capital may be used to fund growth initiatives including acquisitions which could reduce our liquidity, such as the software technology purchase that used $2 million in cash and $1 million in unregistered stock on April 29, 2011. Any substantial inability to achieve our current business plan could have a material adverse impact on our financial position, liquidity, or results of operations and may require us to reduce expenditures and/or seek additional financing.
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. As of March 31, 2011 and December 31, 2010, there is no long-term debt line item, and the current portion of long-term debt is $57,000 and $92,000, respectively. See Note 9, “Long-Term Debt.”
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