REDMOND, WA--(Marketwired - May 04, 2017) - Data I/O Corporation (NASDAQ: DAIO), the leading global provider of advanced data and security programming and IP management solutions for flash-memory, flash based microcontrollers and other intelligent devices, today announced financial results for the first quarter ended March 31, 2017.

First Quarter 2017 Highlights (on year-over-year basis unless noted)

• Net sales of $7.2 million, a multiyear high for the first quarter
• Total bookings of $8.4 million, a 17-year high for the first quarter
• Gross margin as a percentage of sales of 57.7%, up from 56.3% in 4Q16 and 54.8% in 1Q16
• Net income of $979,000 or $0.12 diluted earnings per share, up from a net loss of ($168,000) or ($0.02) diluted loss per share in 1Q16
• Adjusted EBITDA*, excluding equity compensation, of $1.2 million, up from $44,000 in 1Q16
• Announcement and demonstration of the SentriX™ Managed and Secure Programming technology at Embedded World
• Backlog of $4.9 million at end of quarter, up from $3.2 million at December 31, 2016
• Cash and securities of $10.5 million at end of quarter

*Adjusted EBITDA is a non-GAAP financial measure. A reconciliation is provided in the tables of this press release.

Management Comments
"We experienced strong, across the board growth for equipment and consumable sales from all geographic regions in the first quarter of 2017. Bolstered by the continued interest in our products from the Automotive and IoT sectors, we posted multiyear highs for Q1 results in sales, bookings and profitability," said Anthony Ambrose, President and CEO of Data I/O Corporation. "Revenues of $7.2 million in the first quarter grew by 57% from last year and 13% sequentially from the fourth quarter 2016. Bookings of $8.4 million increased by 42% from the corresponding period of 2016. Following our strong 2016, we are off to an impressive start in 2017.

"The industry is increasingly turning to Data I/O's automated programming platform to support the secular growth in the automotive electronics industry worldwide. Our platforms, programming technology, security and global service provide industry leading capability for automotive electronics customers and their programming center partners. Our operations team has responded to this demand by increasing PSV systems manufacturing capacity 40% since the beginning of 2016, enabling Data I/O to fully capture the automotive growth potential. Data I/O China also achieved ISO9001 certification in the first quarter.

"While we are very pleased with the Company's financial performance in the first quarter, we are even more excited by the progress made in our next generation Managed and Secure Programming (MSP) technology. We recently demonstrated our new SentriX™ Security Programming Technology. Designed to secure supply chains, and maintain firmware integrity over the product lifecycle, SentriX technology securely programs authentication ICs, Secure Elements, and Secure microcontrollers for the automotive electronics and Internet of Things (IoT) markets. It was unveiled at the Embedded World Conference and Exhibition last month in Nuremberg, Germany where we announced partnerships with Renesas, Infineon, EBV and SecureThingz. We continue to invest in SentriX for growth beyond 2017 to support a 4 billion unit secure element/secure microcontroller market. We also announced our ConneX™ software for traceability and factory automation integration."

Financial Results
Net sales in the first quarter of 2017 were $7.2 million, compared with $4.6 million in the first quarter of 2016.

For the 2017 first quarter, gross margin as a percentage of sales was 57.7%, compared to 54.8% in the first quarter of 2016 and 56.3% in the fourth quarter of 2016. The improvement in gross margin as a percentage of sales for the first quarter compared to the prior periods was primarily due to favorable variances, product mix and higher order volume.

Net income in the first quarter of 2017 was $979,000, or $0.12 per diluted share, compared with a net loss of ($168,000), or ($0.02) per diluted share, in the first quarter of 2016. Included in non-operating income for the first quarter of 2017 is $211,000 for gain on sales of non-core Internet domain assets.

Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") was $1.1 million in the first quarter of 2017, compared to ($51,000) in the first quarter of 2016. Adjusted EBITDA, excluding equity compensation, was $1.2 million in the first quarter of 2017, compared to $44,000 in the first quarter of 2016.

Bookings in the first quarter of 2017 reached the highest level for the period in 17 years at $8.4 million, compared to $5.9 million in the first quarter of 2016. Backlog at March 31, 2017 was $4.9 million as compared to $3.2 million at December 31, 2016. Deferred revenue was $1.4 million at March 31, 2017, compared with $1.9 million at December 31, 2016.

Spending in the first quarter was up approximately $660,000 from the same period of 2016. Approximately $240,000 of the increases were SG&A variable costs related to the increased level of business activity. Nearly $420,000 of the increase reflects additional spending on research and development to support new product development for the SentriX platform, the ConneX factory automation software and enhancements to other products. The majority of this was personnel related. The Company continues to invest to support automotive demands in the near term and security opportunities in future years.

The Company's operating leverage continues to produce meaningful incremental profitability with revenue growth, while ongoing cost improvement initiatives are on track for saving $1 million in cost of goods sold and non-headcount expenses from the 2014 baseline by the end of 2017. Data I/O's financial condition remains strong with a cash position of $10.5 million and working capital of $15.5 million at March 31, 2017. The Company continues to have no debt.

Conference Call Information
A conference call discussing the first quarter ended March 31, 2017 financial results will follow this release today at 2 p.m. Pacific time/5 p.m. Eastern Time. To listen to the conference call, please dial (612) 332-0107, passcode: DAIO. A replay will be made available approximately one hour after the conclusion of the call. To access the replay, please dial (320) 365-3844, access code: 422682. The conference call will also be simultaneously webcast over the Internet; visit the News and Events section of the Data I/O Corporation website at http://www.dataio.com to access the call from the site. This webcast will be recorded and available for replay on the Data I/O Corporation website approximately one hour after the conclusion of the conference call.

About Data I/O Corporation

Since 1972 Data I/O has developed innovative solutions to enable the design and manufacture of electronic products for automotive, Internet-of-Things, industrial controls, wireless, consumer electronics, medical and other markets. Today, our customers use Data I/O security provisioning and programming solutions to reliably, securely, and cost-effectively bring innovative new products to life. These solutions are backed by a global network of Data I/O support and service providers, assuring success for our customers.

Learn more at www.dataio.com.

Forward Looking Statement and Non-GAAP financial measures
Statements in this news release concerning economic outlook, expected revenue, expected margins, expected savings, expected results, orders, deliveries, backlog and financial positions, as well as any other statement that may be construed as a prediction of future performance or events are forward-looking statements which involve known and unknown risks, uncertainties and other factors which may cause actual results to differ materially from those expressed or implied by such statements. These factors include uncertainties as to the ability to record revenues based upon the timing of product deliveries, installations and acceptance, accrual of expenses, changes in economic conditions and other risks including those described in the Company's filings on Forms 10K and 10Q with the Securities and Exchange Commission (SEC), press releases and other communications.

Non-GAAP financial measures, such as EBITDA and Adjusted EBITDA excluding equity compensation, should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding the Company's results and facilitate the comparison of results.

- tables follow -