SAN JOSE, Calif., July 23, 2009 (GLOBE NEWSWIRE) -- DSP Group, Inc. (Nasdaq:DSPG), a worldwide leader in developing and providing chip-set solutions for residential wireless connectivity, announced today its results for the second quarter ended June 30, 2009.
Second Quarter Results:
Revenues for the second quarter of 2009 were $52,020,000, a decline of 30% from revenues of $74,152,000 for the second quarter of 2008. Net loss for the second quarter of 2009 was $1,677,000, as compared to net loss of $7,355,000 for the second quarter of 2008. Earnings per share (EPS) for the second quarter of 2009 were a loss of $0.07 per share, as compared to a loss of $0.26 per share for the second quarter of 2008.
Non-GAAP Results:
Non-GAAP net income and diluted EPS for the second quarter of 2009 were $718,000 and $0.03 per share, respectively, a decrease of 30% from the non-GAAP net income of $1,019,000 and a decrease of 25% from the non-GAAP diluted EPS of $0.04 per share for the second quarter of 2008. Non-GAAP net income and diluted EPS for the second quarter of 2009 excluded the impact of amortization of acquired intangible assets of $3,058,000 associated with the acquisition of NXP's CIPT business; equity-based compensation expenses of $2,825,000; and a tax benefit of $3,488,000 resulting from a partial reversal of tax reserves. Non-GAAP net income and diluted EPS for the second quarter of 2008 excluded the impact of amortization of acquired intangible assets of $5,716,000 associated with the acquisition of NXP's CIPT business; equity-based compensation expenses of $3,585,000; and the aggregate tax benefits associated with such expenses of $927,000.
Eli Ayalon, Chairman and CEO of DSP Group, stated: "We exceeded our financial objectives for the second quarter of 2009, resumed non-GAAP operating profit during the second quarter, a quarter earlier than previously projected, and continued to generate positive cash flow from operations. We also secured a new design win for our XpandR platform for a system combining advanced DECT telephony with content streaming over Wi-Fi. We are cautiously optimistic and anticipate further improvements in our business for the third quarter of 2009."
The Company believes that the non-GAAP presentation of net income and diluted EPS presented in this press release is useful to investors in comparing results for the quarter ended June 30, 2009 to the same period in 2008 because the exclusion of the above noted expenses may provide a more meaningful analysis of the Company's core operating results. Further, the Company believes it is useful to investors to understand how the expenses associated with equity-based compensations expenses are reflected on its statements of income.
About DSP Group
DSP Group, Inc. (Nasdaq:DSPG) is a leading global provider of wireless chipset solutions for converged communications at home. Delivering system solutions that combine semiconductors and software with reference designs, DSP Group enables consumer electronics (CE) manufacturers to cost-effectively develop new revenue-generating applications with fast time to market. At the forefront of semiconductor innovation and operational excellence for over two decades, and with a dominant share of the wireless home telephony market, DSP Group provides a broad portfolio of wireless chipsets integrating DECT, Wi-Fi, PSTN and VoIP technologies with state-of-the-art application processors. Enabling converged voice, audio, video and data connectivity across diverse consumer products -- from cordless and VoIP phones to home gateways and broadband multimedia screens -- DSP Group proactively partners with CE manufacturers to shape the future of converged communications at home. For more information, visit www.dspg.com.
The DSP Group, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6171
Forward-Looking Statements
This press release may contain statements that qualify as "forward-looking statements" under the Private Securities Litigation Reform Act of 1995, including Mr. Ayalon's statement of cautious optimism and anticipation of further improvements in DSP Group's business for the third quarter of 2009. These forward-looking statements are based on current expectations and DSP Group assumes no obligation to update this information. In addition, the events described in these forward-looking statements may not actually arise as a result of various factors, including the timing and ability of the market to recover and the corresponding recovery of DSP Group's customers; fluctuations in gross margins associated with the sale of existing products; the impact of reductions in lead times and inventory levels by DSP Group customers and their customers; the success of the implemented restructuring efforts; slower than expected change in the nature of residential communications domain; unexpected delays in the introduction of new products; especially the new generation of multimedia products; DSP Group's inability to develop and produce new products at competitive costs and in a timely manner or failure of such products to achieve broad market acceptance; and general market demand for products that incorporate DSP Group's technology in the market. These factors and other factors which may affect future operating results or DSP Group's stock price are discussed under "RISK FACTORS" in the Form 10-K for fiscal 2008 as well as other reports DSP Group has filed with the Securities and Exchange Commission and which are available on DSP Group's Web site (www.dspg.com) under Investor Relations.
Earnings conference call
DSP Group has scheduled a conference call for 8:30 a.m. EDT today to discuss the financial results for the second quarter of 2009 and invites you to listen to a live broadcast over the Internet. The broadcast can be accessed by all interested parties through the Investor Relations section (investor message board) of DSP Group's Web site at www.dspg.com or link to: http://ir.dspg.com./phoenix.zhtml?c=101665&p=irol-calendar.
If you cannot join the call, please listen to the replay, which will be available for approximately two weeks after the call on DSP Group's Web site or by calling the following numbers:
--U.S. Dial-In # 1-888-286-8010 (passcode: 47169011)
--International Dial-In # 1-617-801-6888 (passcode: 47169011)
DSP GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Product revenues and other $ 52,020 $ 74,152 $ 91,934 $ 146,881
Cost of product revenues
and other 32,940 48,183 59,444 93,959
--------- --------- --------- ---------
Gross profit 19,080 25,969 32,490 52,922
Operating expenses:
Research and development 13,632 18,890 27,368 38,916
Sales and marketing 4,284 5,621 8,801 11,642
General and
administrative 3,926 4,547 7,740 8,798
Amortization of
intangible assets 3,058 5,716 6,105 11,498
--------- --------- --------- ---------
Total operating expenses 24,900 34,774 50,014 70,854
--------- --------- --------- ---------
Operating loss (5,820) (8,805) (17,524) (17,932)
Other income :
Interest and other
income, net 582 898 1,184 2,132
--------- --------- --------- ---------
Loss before provision for
income taxes (5,238) (7,907) (16,340) (15,800)
Income tax benefit (3,561) (552) (3,972) (838)
--------- --------- --------- ---------
Net Loss ($1,677) ($7,355) ($12,368) ($14,962)
========= ========= ========= =========
Net loss per share:
Basic ($ 0.07) ($ 0.26) ($ 0.51) ($ 0.51)
Diluted ($ 0.07) ($ 0.26) ($ 0.51) ($ 0.51)
Weighted average number of
shares of common stock
used in the computation
of:
Basic 22,734 28,352 24,408 29,463
Diluted 22,734 28,352 24,408 29,463
DSP GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (NON-GAAP)
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Product revenues and other $ 52,020 $ 74,152 $ 91,934 $ 146,881
Cost of product revenues
and other 32,745 47,936 59,041 93,455
--------- --------- --------- ---------
Gross profit 19,275 26,216 32,893 53,426
Operating expenses:
Research and development 12,229 16,998 24,391 34,933
Sales and marketing 3,816 5,192 7,875 10,706
General and
administrative 3,167 3,530 6,201 6,676
--------- --------- --------- ---------
Total operating expenses 19,212 25,720 38,467 52,315
--------- --------- --------- ---------
Operating income (loss) 63 496 (5,574) 1,111
Other income :
Interest and other
income, net 582 898 1,184 2,132
--------- --------- --------- ---------
Income (loss) before
provision for
income taxes 645 1,394 (4,390) 3,243
Provision for income taxes
(income tax benefit) (73) 375 (484) 784
--------- --------- --------- ---------
Net income (loss) $ 718 $ 1,019 $ (3,906) $ 2,459
========= ========= ========= =========
Net earnings (loss) per
share:
Basic $ 0.03 $ 0.04 $ (0.16) $ 0.08
Diluted $ 0.03 $ 0.04 $ (0.16) $ 0.08
Weighted average number of
shares of common stock
used in the computation
of:
Basic 22,734 28,352 24,408 29,463
Diluted 22,901 28,373 24,408 29,565
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Unaudited Unaudited Unaudited Unaudited
GAAP net loss ($1,677) ($7,355) ($12,368) ($14,962)
Equity-based compensation
expense included in cost
of product revenues and
other 195 247 403 504
Equity-based compensation
expense included in R&D 1,403 1,892 2,978 3,983
Equity-based compensation
expense included in SG&A 1,227 1,446 2,465 3,058
Amortization of intangible
assets related to NXP
transaction 3,058 5,716 6,104 11,498
Tax benefit resulting from
equity-based compensation
and amortization of
intangible assets -- (927) -- (1,622)
Tax benefit resulting from
a partial reversal of tax
reserves (3,488) -- (3,488) --
Non-GAAP net income (loss) $ 718 $ 1,019 $ (3,906) $ 2,459
======== ======== ======== ========
Non-GAAP diluted earnings
(loss) per share $ 0.03 $ 0.04 $ (0.16) $ 0.08
DSP GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2009 2008
---- ----
(Unaudited) (Audited)
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 46,230 $ 68,886
Restricted deposits 115 115
Marketable securities and short term
deposits 24,653 12,449
Trade receivables, net 31,597 39,603
Inventories 12,571 14,098
Other accounts receivable and prepaid
expenses 13,394 17,367
Deferred income taxes 202 306
----------- -----------
Total current assets 128,762 152,824
Property and equipment, net 12,133 14,822
Long term marketable securities 39,858 40,051
Severance pay fund 7,875 7,286
Deferred income taxes 20 212
Other intangible assets 26,588 32,728
Long-term prepaid expenses and lease
deposits 1,688 1,331
----------- -----------
Total assets $ 216,924 $ 249,254
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 19,577 $ 20,136
Other current liabilities 31,796 40,329
----------- -----------
Total current liabilities 51,373 60,465
Accrued severance pay 9,433 8,008
Accrued pensions 1,624 1,675
Deferred tax liability -- 24
Other long term liabilities -- 455
----------- -----------
Total long term liabilities 11,057 10,162
Stockholders' equity:
Common stock 23 27
Additional paid-in capital 320,334 314,484
Accumulated other comprehensive income 1,325 51
Less - Cost of treasury stock (125,142) (107,749)
Accumulated deficit (42,046) (28,186)
----------- -----------
Total stockholders' equity 154,494 178,627
----------- -----------
Total liabilities and stockholders' equity $ 216,924 $ 249,254
=========== ===========