SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8 - K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 12, 1997
Data I/O Corporation
(Exact name of registrant as specified in its charter)
Washington
(State of other jurisdiction of incorporation)
0-10394 91-0864123
(Commission File Number) (IRS Employer Identification No.)
10525 Willows Road N.E., Redmond, WA 98073-9746
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (425) 881-6444
Not Applicable
(Former name or former address, if changed since last report)
Page 1 of 31 Pages
Exhibit Index at Page 8
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 12, 1997, Data I/O Corporation ("Registrant" or "Data I/O"), MINC
Incorporated, a Colorado corporation and MINC Washington Corp., a Colorado
corporation (collectively "MINC"), entered into a master agreement (the "Master
Agreement") pursuant to which MINC acquired from Data I/O certain assets and
license rights for the software products Synario, ABEL and ECS (the "Products").
As part of the transaction, Data I/O transferred to MINC the day to day
operation of most of the former Synario Division ("Division") of Data I/O,
including the sale and distribution of the Products as well as software
development, manufacturing and marketing. MINC has agreed to perform certain
product development and support services under many of the OEM and source code
license agreements previously entered into by the Division. Most Division
employees have been hired by MINC to support these functions.
Data I/O received $100,000 from MINC, and MINC will assume various obligations
to perform or provide software development, maintenance, support and training
services related to the Products. Under the terms of the Master Agreement,
Data I/O retains certain OEM, source code and product licensing rights from
which it will receive income through December 31, 1999, when MINC, subject to
satisfying certain conditions, will obtain title to the Division's Products.
Data I/O estimates that it will receive revenues in the range of $1.5 to $2
million relating to these retained rights, most of which are estimated to occur
during the next twelve months.
As a result of this transaction, Data I/O expects to record charges against
earnings of approximately $1.5 million in the fourth quarter of 1997, primarily
related to certain prepaid costs and intangibles, accrual of severance costs,
and other transaction related costs.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
( a ) Financial statements of businesses acquired.
Not Applicable
( b ) Pro forma financial information
The following unaudited pro forma condensed consolidated financial
statements are filed with this report:
1) Pro Forma Condensed Consolidated Balance Sheet:
As of September 25, 1997..................... PAGE 5
2
2) Pro Forma Condensed Consolidated Statement of Operations:
Year Ended December 26, 1996 ................ PAGE 6
Nine Months Ended September 25, 1997......... PAGE 7
The Pro Forma Condensed Consolidated Balance Sheet of Registrant as of September
25, 1997 reflects the financial position of Registrant after giving effect to
the disposition of the assets and assumes the disposition took place on
September 24, 1997. The Pro Forma Condensed Consolidated Statements of
Operations for the fiscal year ended December 26, 1996, and the nine months
ended September 25, 1997 assume that the disposition occurred on December 26,
1995, and are based on the operations of Registrant for the year ended December
26, 1996 and nine months ended September 25, 1997.
The unaudited pro forma condensed consolidated financial statements have been
prepared by Registrant based upon assumptions deemed proper by it and which give
effect only to the adjustments directly resulting from this disposition. The
unaudited pro forma condensed consolidated financial statements presented herein
are shown for illustrative purposes only and are not necessarily indicative of
the future financial position or future results of operations of Registrant, or
of the financial position or results of operations of Registrant that would have
actually occurred had the transaction been in effect as of the date or for the
period presented. In addition, it should be noted that Registrant's financial
statements will reflect the disposition only from November 12, 1997, the closing
date.
The unaudited pro forma condensed consolidated financial statements should be
read in conjunction with the historical financial statements and related notes
of Registrant.
( c ) EXHIBITS
2.1 Master Agreement, by and between Data I/O Corporation, a Washington
corporation, Minc, Incorporated, a Colorado corporation, and Minc
Washington Corp., a Colorado corporation dated November 12, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Data I/O Corporation
November 28, 1997 By /s/Alan J. Beauchamp
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Alan J. Beauchamp
Vice President - Finance and Administration
Chief Financial Officer
Secretary and Treasurer
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PRO FORMA FINANCIAL INFORMATION
DATA I/O CORPORATION
PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET
AT SEPTEMBER 25, 1997
(UNAUDITED)
(Dollars in thousands) Pro Forma Adjustments
------------------------------------
Historical Synario Other Pro Forma
----------- --------- -------- -----------
ASSETS (a)
Current Assets
Cash and cash equivalents $4,815 $100 (b) $4,915
Short term investments 14,776 14,776
Accounts receivable (net of allowance) 13,013 $1,605 1,605 (c) 13,013
Inventories 8,160 144 8,016
Deferred income taxes 910 910
Other current assets 1,280 574 100 (c) 806
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Total Current Assets 42,954 2,323 1,805 42,436
Property, plant and equipment (net) 3,835 178 150 (c) 3,807
Other assets 2,745 303 25 (c) 2,467
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Total Assets 49,534 $2,804 $1,980 $48,710
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LIABILITIES AND STOCKHOLDER'S
EQUITY
Current Liabilities
Accounts payable $3,221 $156 156 (c) $3,221
Accrued compensation 3,954 191 491 (d) 4,254
Deferred revenue 5,071 791 791 (c) 5,071
Other accrued liabilities 4,505 1,261 1,661 (c) 4,905
Income taxes payable 1,136 1,136
Notes payable 2,121 1,500 1500 (d) 2,121
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Total Current Liabilities 20,008 3,899 4,599 20,708
Long Term Other Payables 546 546
Deferred Gain on Sale of Property 3,166 3,166
Total Stockholders Equity 25,814 (1,095) (2,619) 24,290
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Total Liabilities and Stockholders' Equity $49,534 $2,804 $1,980 $48,710
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(a) To eliminate the assets and liabilities included in or charged off in
connection with the balance sheet associated with the Synario Division as
of September 25, 1997.
(b) To reflect $100,000 cash proceeds.
(c) To reflect retained accounts receivable, prepaid current assets, equipment,
intangibles, accounts payable, deferred revenue, and notes payable retained
by the Company.
(d) To reflect accrued transaction costs, accrued charges and liabilities
retained by the Company.
5
DATA I/O CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 26, 1996
(UNAUDITED)
Pro Forma Adjustments
----------------------------
Historical Synario Other Pro Forma
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(in thousands, except per share data) (a)
Net sales $60,423 $7,819 $52,604
Cost of goods sold 30,526 2,835 $100 (b) 27,791
---------- --------- ---------- ----------
Gross margin 29,897 4,984 ($100) 24,813
Operating expenses:
Research and development 10,944 2,266 100 (b) 8,778
Selling, general and administrative 19,765 3,943 500 (b) 16,322
---------- --------- ---------- ----------
Total operating expenses 30,709 6,209 600 25,100
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Operating income (loss) (812) (1,225) (700) (287)
Non-operating income (expense):
Interest income 199 199
Interest expense (258) (258)
---------- --------- ---------- ----------
Total non-operating income (expense) (59) (59)
---------- --------- ---------- ----------
Income (loss) before taxes (871) (1,225) (700) (346)
Income tax expense 230
---------- --------- ---------- ----------
Net income (loss) ($1,101) ($1,225) ($700) ($346)
---------- --------- ---------- ----------
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Earnings per share:
Net income (loss) ($0.16) ($0.05)
---------- --------- ---------- ----------
---------- --------- ---------- ----------
Weighted average shares outstanding 6,857 6,857
---------- --------- ---------- ----------
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(a) To eliminate the operating profit and loss of Synario Division for the
entire period.
(b) To reflect costs that would not have been eliminated due to the
disposition.
6
DATA I/O CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER. 25, 1997
(UNAUDITED)
Pro Forma Adjustments
----------------------------
Historical Synario Other Pro Forma
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Net sales $46,772 $5,546 $41,226
Cost of goods sold 23,724 2,982 $100 20,842
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Gross margin 23,048 2,564 (100) 20,384
Operating expenses:
Research and development 8,471 2,008 100 6,563
Selling, general and administrative 14,687 2,807 400 12,280
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Total operating expenses 23,158 4,815 500 18,843
---------- --------- ---------- ----------
Operating income (loss) (110) (2,251) (600) 1,541
Non-operating income (expense):
Interest income 438 438
Interest expense (164) (164)
Foreign currency exchange (27) (27)
Gain on sale of property 2,347 2,347
---------- --------- ---------- ----------
Total non-operating income (expense) 2,594 2,594
---------- --------- ---------- ----------
Income (loss) before taxes 2,484 (2,251) (600) 4,135
Income tax expense 74 74
---------- --------- ---------- ----------
Net income (loss) $2,410 ($2,251) ($600) $4061
---------- --------- ---------- ----------
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Earnings per share:
Net income (loss) $0.34 $0.58
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---------- --------- ---------- ----------
Weighted average shares outstanding 7,039 7,039
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(a) To eliminate the operating profit and loss of Synario Division for the
entire period.
(b) To reflect costs that would not have been eliminated due to the
disposition.
7
EXHIBIT INDEX
Data I/O Corporation
Current Report on Form 8 - K
Description of Exhibit Page No.
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2.1 Master Agreement. . . . . . . . . 9
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