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Data I/O Corp. Reports Operating Results (10-K)

March 28, 2012 | About:

Data I/O Corp. (NASDAQ:DAIO) filed Annual Report for the period ended 2011-12-31.

Data I/o has a market cap of $36.7 million; its shares were traded at around $3.77 with a P/E ratio of 36.3 and P/S ratio of 1.4.

Highlight of Business Operations:

We market our products throughout the U.S. using a variety of sales channels, including our own field sales management personnel, independent sales representatives and a direct telesales organization. Our U.S. independent sales representatives obtain orders on an agency basis, with shipments made directly to the customer by Data I/O. Net sales in the United States for 2011, 2010 and 2009 were $2,724,000, $3,145,000 and $2,268,000, respectively.

During 2011, 2010 and 2009, we made expenditures for research and development of $5,470,000 $4,159,000 and $4,128,000, respectively, representing 20.5%, 15.8% and 22.3% of net sales, respectively. Research and development costs are expensed as incurred.

Revenues increased 1% to $26.7 million for the year ended December 31, 2011, from $26.4 million for 2010. The year started with stronger revenue growth, especially in Asia, but declined beginning in September of 2011 through the end the year resulting in 2011 revenue being flat overall. The fourth quarter of 2011 decline in revenue compared to the fourth quarter of 2010 was in all regions. Europe was believed to be impacted by the current European economic uncertainty and did not have a typical year end spending bulge. The Americas had less wireless business and wireless software development projects, as well as a continued decline of business in Mexico. Asia revenues grew 19% for 2011 overall, but the fourth quarter 5% decline was attributed to excess inventories and capacity in the supply chain causing reductions in capital spending. We believe the weak demand trend is continuing in the first quarter of 2012.

International sales as a percent of total sales increased by 2 percentage points for the year ended December 31, 2011 to 89.8% compared to the same period in 2010. By geographic region, sales in Asia increased 19%, while sales in Europe and the Americas declined 1% and 18% respectively, compared to 2010. The backlog at December 31, 2011 was $800,000 compared to $1.6 million at December 31, 2010. Deferred revenue at December 31, 2011 was $1.5 million compared to $1.6 million at December 31, 2010.

Gross margin as a percentage of sales was 57.1% for the year ended December 31, 2011, compared with 58.1% in 2010. The change in gross margin percentage was primarily due to higher service expense of $285,000, product mix-related higher materials cost of $184,000, and increased factory variances of $148,000, offset in part by lower engineering costs associated with software development contracts compared to 2010.

Read the The complete Report

About the author:

Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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