SAN JOSE, Calif., April 28, 2010 (GLOBE NEWSWIRE) -- DSP Group, Inc. (Nasdaq:DSPG), a leading global provider of wireless chipset solutions for converged communications at home, announced today its results for the first quarter ended March 31, 2010.
First Quarter Results:
Revenues for the first quarter of 2010 were $56,109,000, an increase of 41% from revenues of $39,914,000 for the first quarter of 2009. Net loss for the first quarter of 2010 was $184,000, as compared to a net loss of $10,691,000 for the first quarter of 2009. Loss per share for the first quarter of 2010 was $0.01, as compared to a loss per share of $0.41 for the first quarter of 2009.
Non-GAAP Results:
Non-GAAP net income and diluted earnings per share (EPS) for the first quarter of 2010 were $2,657,000 and $0.11, respectively, as compared to non-GAAP net loss of $4,623,000 and non-GAAP loss per share of $0.18 for the first quarter of 2009. Non-GAAP net income and diluted EPS for the first quarter of 2010 excluded the impact of amortization of acquired intangible assets in the amount of $2,498,000, associated with the acquisition of the Cordless and VoIP Terminals business of NXP B.V., equity-based compensation expenses of $2,843,000 and income from the reversal of a reserve that was determined to be no longer needed due to the expiration of applicable limitation statutes in the amount of $2,500,000, recorded in the cost of goods sold.
Non-GAAP net loss and loss per share for the first quarter of 2009 excluded the impact of amortization of acquired intangible assets of $3,047,000, associated with the acquisition of the Cordless and VoIP Terminals business of NXP B.V. and equity-based compensation expenses of $3,021,000.
Ofer Elyakim, CEO of DSP Group, stated, "We continue to improve our financial performance, and feel optimistic about our business outlook. Our first quarter financial results exceeded the higher end of our guidance range as better than expected revenues and lower non-GAAP operating expenses contributed to higher non-GAAP operating income. On the product side, we passed another milestone event by commencing commercial shipments of our XpandR multimedia platform, and anticipate the launch of additional XpandR-based products this year by leading consumer electronic brands."
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 March 31, 2010 to the same period in 2009 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 compensation expenses are reflected on its statements of income.
Forward Looking Statements
This press release contains statements that qualify as "forward-looking statements" under the Private Securities Litigation Reform Act of 1995, including Mr. Elyakim's statements about the company's optimism on its business outlook and its expectation that additional XpandR based products by leading consumer electronics brands will be launched in the market this year. 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; unexpected delays in the introduction of new products; especially the new generation of multimedia products; 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; slower than expected change in the nature of residential communications domain; 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 2009 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.
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 first quarter of 2010 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 http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=101665&eventID=2790115">http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=101665&eventID=2790115
If you cannot join the call, please listen to the replay, which will be available for 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: 36696030)
--International Dial-In # 1-617-801-6888 (passcode: 36696030)
| DSP GROUP, INC. | ||
| CONSOLIDATED STATEMENTS OF INCOME | ||
| (In thousands, except per share amounts) | ||
|
Three Months Ended March 31, |
||
| 2010 | 2009 | |
| Unaudited | Unaudited | |
| Product revenues and other | $ 56,109 | $ 39,914 |
| Cost of product revenues and other | 32,521 | 26,504 |
| Gross profit | 23,588 | 13,410 |
| Operating expenses: | ||
| Research and development | 13,491 | 13,738 |
| Sales and marketing | 4,444 | 4,516 |
| General and administrative | 3,762 | 3,814 |
| Amortization of intangible assets | 2,498 | 3,047 |
| Total operating expenses | 24,195 | 25,115 |
| Operating loss | (607) | (11,705) |
| Other income : | ||
| Interest and other income, net | 425 | 603 |
| Loss before provision for income taxes | (182) | (11,102) |
| Provision for income taxes (income tax benefit) | 2 | (411) |
| Net loss | $ (184) | $ (10,691) |
|
Net loss per share: |
||
| Basic | $ (0.01) | $ (0.41) |
| Diluted | $ (0.01) | $ (0.41) |
|
Weighted average number of shares of common stock used in the computation of: |
||
| Basic | 23,107 | 26,083 |
| Diluted | 23,107 | 26,083 |
| DSP GROUP, INC. | ||
| CONSOLIDATED STATEMENTS OF INCOME (NON-GAAP) | ||
| (In thousands, except per share amounts) | ||
|
Three Months Ended March 31, |
||
| 2010 | 2009 | |
| Unaudited | Unaudited | |
| Product revenues and other | $ 56,109 | $ 39,914 |
| Cost of product revenues and other | 34,819 | 26,296 |
| Gross profit | 21,290 | 13,618 |
| Operating expenses: | ||
| Research and development | 12,108 | 12,163 |
| Sales and marketing | 4,002 | 4,058 |
| General and administrative | 2,946 | 3,034 |
| Total operating expenses | 19,056 | 19,255 |
| Operating income (loss) | 2,234 | (5,637) |
| Other income: | ||
| Interest and other income, net | 425 | 603 |
|
Income (loss) before provision for income taxes |
2,659 |
(5,034) |
| Provision for income taxes (income tax benefit) | 2 | (411) |
| Net income (loss) | $ 2,657 | $ (4,623) |
|
Net earnings (loss) per share: |
||
| Basic | $ 0.11 | $ (0.18) |
| Diluted | $ 0.11 | $ (0.18) |
|
Weighted average number of shares of common stock used in the computation of: |
||
| Basic | 23,107 | 26,083 |
| Diluted | 23,698 | 26,083 |
| Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures | ||
| (In thousands, except per share amounts) | ||
|
Three Months Ended March 31, |
||
| 2010 | 2009 | |
| (Unaudited) | (Unaudited) | |
| GAAP net loss | $ (184) | $ (10,691) |
| Equity-based compensation expense | 202 | 208 |
| Included in cost of product revenues | ||
| Equity-based compensation expense | 1,383 | 1,575 |
| Included in R&D | ||
| Equity-based compensation expense | 1,258 | 1,238 |
| Included in SG&A | ||
| Amortization of intangible assets related | 2,498 | 3,047 |
| to NXP transaction | ||
| Reversal of a reserve that was determined to | (2,500) | 0 |
| be no longer needed due to the | ||
| expiration of applicable limitation | ||
| statutes included in costs of goods sold | ||
| Non-GAAP net income (loss) | $ 2,657 | $ (4,623) |
| Non-GAAP basic earnings (loss) per share | $ 0.11 | $ (0.18) |
| Non-GAAP diluted earnings (loss) per share | $ 0.11 | $ (0.18) |
| DSP GROUP, INC. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (In thousands) | ||
|
March 31, 2010 |
December 31, 2009 |
|
| (Unaudited) | (Audited) | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 38,367 | $ 37,986 |
| Restricted deposits | 120 | 120 |
| Marketable securities and short term deposits | 23,540 | 19,567 |
| Trade receivables, net | 33,855 | 28,352 |
| Inventories | 11,855 | 12,427 |
| Other accounts receivable and prepaid expenses | 12,688 | 12,162 |
| Deferred income taxes | 138 | 178 |
| Total current assets | 120,563 | 110,792 |
| Property and equipment, net | 9,678 | 10,090 |
| Long term marketable securities and deposits | 57,274 | 65,392 |
| Severance pay fund | 9,882 | 9,521 |
| Deferred income taxes | 8 | 15 |
| Intangible assets, net | 17,922 | 20,473 |
| Investment in other companies | 2,200 | 2,200 |
| Long term prepaid expenses and lease deposits | 1,302 | 1,286 |
| 88,588 | 98,887 | |
| Total assets | $ 218,829 | $ 219,769 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Trade payables | $ 18,903 | $ 18,309 |
| Other current liabilities | 18,915 | 24,470 |
| Total current liabilities | 37,818 | 42,779 |
| Accrued severance pay | 10,950 | 10,572 |
| Accrued pensions | 911 | 929 |
| Total long term liabilities | 11,861 | 11,501 |
| Stockholders' equity: | ||
| Common stock | 23 | 23 |
| Additional paid-in capital | 328,423 | 325,579 |
| Accumulated other comprehensive income | 2,084 | 2,174 |
| Less – Cost of treasury stock | (120,871) | (123,350) |
| Accumulated deficit | (40,509) | (38,937) |
| Total stockholders' equity | 169,150 | 165,489 |
| Total liabilities and stockholders' equity | $ 218,829 | $ 219,769 |