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 =========== ===========