The Company's presentation challenges the claims made by
Starboard Has Already Appointed Two Directors to the Company's Board:
Starboard's proxy fight is about seeking to gain a majority on the Company's board of directors. Starboard has already appointed two directors to the
Starboard rejected this settlement proposal—a proposal that, based on our review of prior Starboard settlement agreements, offered them a better deal than they have ever received in other negotiated resolutions. Their rejection of this offer is proof that they want more.
Starboard Misrepresents the Facts, So We're Correcting the Record:
The Company's stock performance year-to-date and for the trailing twelve months is significantly better than the performance of the NASDAQ Composite Index and the Philadelphia Semiconductor Index for the same periods. Since the Company independently undertook to restructure its cost structure in
July 2011, DSP Group'sstock has outperformed these indexes and its relevant peer group (including Broadcom, PMC Sierra, Vitesse Semiconductor, Mindspeedand Sigma Designs). Starboard's claims about the performance of our stock are misleading and ignore the stock's performance when compared to relevant benchmark indexes and our peer group.
DSP Grouphas completed six consecutive quarters of operational improvements, measured across all key metrics. The Company returned to GAAP profitability in the first quarter of 2013 and returned to non-GAAP profitability for the year ended December 31, 2012. Starboard's claims that the Company's operating performance has been "abysmal" are entirely false and ignore our recent operating success.
Contrary to what Starboard asserts,
DSP Groupinvests significantly less than its peers in R&D as a percentage of revenues, and the Company's R&D efforts have been productive, with the launch of three new products in key growth markets since the beginning of 2013. Starboard's claims that the Company overspends on R&D are simply incorrect when compared to the relevant set of peers. In addition, it is misleading of Starboard to include the Company's acquisition of a DECT operating division of NXP Semiconductors(including employees, sales, offices and other infrastructure), as part of DSP Group'shistorical R&D expenditure. Without this investment, the Company would not have achieved a 70% market share in the cordless phone segment as the US market has transitioned to DECT in the last 5 years.
DSP Groupis committed to the highest standards of corporate governance and transparency, especially when it comes to transactions with CEVA, which spun off from the Company in 2002. None of the board members were involved in negotiating this transaction that was totally immaterial in its size. Moreover, the questions raised by Starboard in respect to getting back to the licensing business just proves their complete ignorance in respect to our business and to the core competencies of the company, and contradicts their own claim that the Company spends too much on R&D, a typical R&D expense of an IP licensing company is 35% to 45% of revenues.
- The Board has included Starboard's current designees—Tom Lacey and Kenneth Traub—in all deliberations of the full Board. Contrary to Starboard's claims, they have been neither "excluded" nor "isolated" from the Board's decision-making process. In fact, they have voted alongside all other Board members in all business decisions made by the Board. Moreover, the Board has a policy of inviting all directors, and not merely committee members, to observe all committee meetings. Both of Starboard's current Board designees have attended committee meetings and Starboard's claims that Messrs. Lacey and Traub were not permitted to observe meetings are false.
As set out in the Company's presentation in greater detail,
Important Additional Information
The Company has filed with the
For more information, visit www.dspg.com.
CONTACT: Investor Relations
Christopher BastaDirector of Investor Relations, DSP GroupWork: 1-408-240-6844 Cell: 1-631-796-5644 firstname.lastname@example.org Daniel H. Burch, CEO MacKenzie Partners, Inc.Work: 1-212-929-5748 Cell: 1-516-429-2722 email@example.com Paul R. Schulman, EVP MacKenzie Partners, Inc.Work: 1- 212.929.5364 Cell: 1- 203.856.6080 firstname.lastname@example.org Media Relations Mike Sitrickand Jeff Lloyd Sitrick And CompanyWork: 1-310- 788-2850 Jeff_Lloyd@sitrick.com Mike_Sitrick@sitrick.com