SAN JOSE, Calif., Oct. 27, 2009 (GLOBE NEWSWIRE) -- DSP Group, Inc.(TM) (Nasdaq:DSPG), a leading global provider of wireless chipset solutions for converged communications at home announced today its results for the third quarter ended September 30, 2009.
Third Quarter Results:
Revenues for the third quarter of 2009 were $65,532,000, a decrease of 25% from revenues of $87,368,000 for the third quarter of 2008. Net income for the third quarter of 2009 was $6,803,000, as compared to net loss of $3,030,000 for the third quarter of 2008. Diluted earnings per share (EPS) for the third quarter of 2009 were $0.29, as compared to a loss of $0.11 per share for the third quarter of 2008.
Non-GAAP Results:
Non-GAAP net income and diluted EPS for the third quarter of 2009 were $4,336,000 and $0.18 per share, respectively; a decrease of 41% from the non-GAAP net income of $7,367,000 and a decrease of 33% from the non-GAAP diluted EPS of $0.27 per share for the third quarter of 2008. Non-GAAP net income and diluted EPS for the third quarter of 2009 excluded the impact of amortization of acquired intangible assets of $3,072,000 associated with the acquisition of the Cordless and VoIP Terminals business of NXP B.V.; equity-based compensation expenses of $2,637,000; gains from realization of previously impaired available-for-sale securities of $531,000; and a tax benefit of $7,645,000 resulting from the reversal of income tax contingency reserve that was determined to be no longer needed due to the expiration of applicable limitation statutes. Non-GAAP net income and diluted EPS for the third quarter of 2008 excluded the impact of amortization of acquired intangible assets of $5,702,000 associated with the acquisition of the Cordless and VoIP Terminals business of NXP B.V.; equity-based compensation expenses of $3,205,000; restructuring expenses of $1,870,000 associated with our cost cutting measures at various operating sites; an unrealized loss related to certain available-for-sale marketable securities of $671,000; and the aggregate tax benefits associated with such expenses of $1,051,000.
Ofer Elyakim, CEO of DSP Group, stated: "Our financial results for the third quarter were at the higher end of our forecast and reflect solid execution in what remains a challenging environment in which our customers' visibility remains limited."
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 September 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 connected 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
Earnings conference call
DSP Group has scheduled a conference call for 8:30 a.m. EDT today to discuss the financial results for the third 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-eventDetails&EventId=2432395.
If you cannot join the call, please listen to the replay, which will be available for approximately one week after the call on DSP Group's Web site or by calling the following numbers:
--U.S. Dial-In # 1-888-286-8010 (passcode: 31071002)
--International Dial-In # 1-617-801-6888 (passcode: 31071002)
DSP GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
--------- --------- --------- ---------
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Product revenues and other $ 65,532 $ 87,368 $ 157,466 $ 234,250
Cost of product revenues
and other 40,807 54,503 100,251 148,462
--------- --------- --------- ---------
Gross profit 24,725 32,865 57,215 85,788
Operating expenses:
Research and development 15,221 17,908 42,590 56,825
Sales and marketing 4,666 5,483 13,466 17,124
General and administrative 3,655 4,539 11,395 13,336
Amortization of intangible
assets 3,072 5,702 9,177 17,200
Restructuring costs -- 1,870 -- 1,870
--------- --------- --------- ---------
Total operating expenses 26,614 35,502 76,628 106,355
--------- --------- --------- ---------
Operating loss (1,889) (2,637) (19,413) (20,567)
Other income:
Interest and other income
(loss), net 1,113 (185) 2,297 1,948
--------- --------- --------- ---------
Loss before provision for
income taxes (776) (2,822) (17,116) (18,619)
Provision for income taxes
(income tax benefit) (7,579) 208 (11,551) (630)
--------- --------- --------- ---------
Net income (loss) $ 6,803 $ (3,030) $ (5,565) $ (17,989)
========= ========= ========= =========
Net earnings (loss)
per share:
Basic $ 0.30 $ (0.11) (0.23) (0.62)
Diluted $ 0.29 $ (0.11) (0.23) (0.62)
Weighted average number of
shares of common stock
used in the computation
of:
Basic 22,901 27,728 23,906 28,885
Diluted 23,662 27,728 23,906 28,885
DSP GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (NON-GAAP)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
--------- --------- --------- ---------
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Product revenues and other $ 65,532 $ 87,368 $ 157,466 $ 234,250
Cost of product revenues
and other 40,596 54,295 99,637 147,750
--------- --------- --------- ---------
Gross profit 24,936 33,073 57,829 86,500
Operating expenses:
Research and development 14,093 16,267 38,484 51,201
Sales and marketing 4,213 5,127 12,087 15,832
General and administrative 2,810 3,539 9,011 10,215
--------- --------- --------- ---------
Total operating expenses 21,116 24,933 59,582 77,248
--------- --------- --------- ---------
Operating income (loss) 3,820 8,140 (1,753) 9,252
Other income:
Interest and other
income, net 582 486 1,766 2,619
--------- --------- --------- ---------
Income before provision for
income taxes 4,402 8,626 13 11,871
Provision for income taxes
(income tax benefit) 66 1,259 (417) 2,042
--------- --------- --------- ---------
Net income $ 4,336 $ 7,367 $ 430 $ 9,829
========= ========= ========= =========
Net earnings per share:
Basic $ 0.19 $ 0.27 $ 0.02 $ 0.34
Diluted $ 0.18 $ 0.27 $ 0.02 $ 0.34
Weighted average number of
shares of common stock
used in the
computation of:
Basic 22,901 27,728 23,906 28,885
Diluted 23,662 27,740 24,215 28,957
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
--------- --------- --------- ---------
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
GAAP net income (loss) $ 6,803 $ (3,030) $ (5,565) $ (17,989)
========= ========= ========= =========
Equity-based compensation
expense included in cost
of product revenues 211 208 614 712
Equity-based compensation
expense included in R&D 1,128 1,641 4,105 5,624
Equity-based compensation
expense included in SG&A 1,298 1,356 3,763 4,413
Amortization of intangible
assets related to NXP
transaction 3,072 5,702 9,177 17,200
Restructuring costs -- 1,870 -- 1,870
Unrealized loss(realized
gain) related to certain
available-for-sale
marketable securities (531) 671 (531) 671
Reversal of income tax
contingency reserve (7,645) -- (7,645) --
Tax benefit resulting from
settlement agreement
with tax authorities -- -- (3,488) --
Tax benefit resulting from
the above mentioned
items -- (1,051) -- (2,672)
Non-GAAP net income $ 4,336 $ 7,367 $ 430 $ 9,829
========= ========= ========= =========
Non-GAAP diluted earnings
per share $ 0.18 $ 0.27 $ 0.02 $ 0.34
DSP GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2009 2008
------------- -------------
(Unaudited) (Audited)
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 37,976 $ 68,886
Restricted deposits 115 115
Marketable securities and cash deposits 17,308 12,449
Trade receivables, net 35,920 39,603
Inventories 13,000 14,098
Other accounts receivable 14,484 17,367
Deferred income taxes 243 306
------------- -------------
Total current assets 119,046 152,824
Property and equipment, net 10,883 14,822
Long term marketable securities and
cash deposits 58,436 40,051
Severance pay fund 8,743 7,286
Deferred income taxes 16 212
Other intangible assets 23,568 32,728
Other assets 1,475 1,331
------------- -------------
Total assets $ 222,167 $ 249,254
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 21,941 $ 20,136
Other current liabilities 22,630 40,329
------------- -------------
Total current liabilities 44,571 60,465
Accrued severance pay 10,188 8,008
Accrued pensions 1,744 1,675
Deferred tax liability -- 24
Other long term liabilities -- 455
------------- -------------
Total long term liabilities 11,932 10,162
Stockholders' equity:
Common stock 23 27
Additional paid-in capital 322,971 314,484
Accumulated other comprehensive income
2,094 51
Less - Cost of treasury stock (123,359) (107,749)
Retained loss (36,065) (28,186)
------------- -------------
Total stockholders' equity 165,664 178,627
------------- -------------
Total liabilities and
stockholders' equity $ 222,167 $ 249,254
============= =============