SANTA CLARA, Calif., Apr 26 /PRNewswire-FirstCall/ -- 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 first quarter ended March 31, 2007.
First Quarter Results:
Revenues for the first quarter of 2007 were $49,288,000, a decrease of 5% from revenues of $51,952,000 for the first quarter of 2006. Net income for the first quarter was $1,364,000, a decrease of 76% from net income of $5,638,000 for the first quarter of 2006. Diluted earnings per share (EPS) for the first quarter of 2007 were $0.05, a decrease of 72% from $0.18 for the first quarter of 2006. Pro forma net income for the first quarter of 2007, which excludes equity-based compensation expenses, was $5.3 million or $0.19 per share on a diluted basis.
Eli Ayalon, Chairman and CEO of DSP Group, stated: "We continue to face pressure on ASPs, which caused our revenues to decline as compared to the first quarter of 2006. Nevertheless, sales of our CoIP (Cordless over IP) products, which we consider to be a future growth driver for the company, increased significantly in the quarter and exceeded our combined revenues for all three quarters of CoIP sales in 2006. Moreover, we also succeeded in achieving two design wins during the quarter, with two new customers for CoIP products. Our cash and marketable securities increased by $6.4 million during the quarter. The overall financial results of the Company for the first quarter of 2007 reflected solid execution in a challenging environment."
About DSP Group
DSP Group, Inc. is a fabless semiconductor company, offering advanced chip-set solutions for a variety of applications. DSP Group is a worldwide leader in the short-range wireless communication market, enabling home networking convergence for voice, video & data. By combining its in-house technologies of Digital Signal Processors (DSPs), portfolio of wireless communication protocols, including DECT, Bluetooth and Wi-Fi, most advanced Radio Frequency CMOS and SiGe, as well as VoIP ICs, DSP Group is a worldwide leader and a one-stop-shop for a wide range of applications. These applications include ISM band digital 900MHz, 2.4GHz and 5.8GHz telephony, European DECT (1.9GHz) telephony, Bluetooth systems for voice, data and video communication and deployment in residential, SOHO, SME, enterprise and automotive applications. DSP Group ICs provide solutions for MP3 players, VoIP Phones, Gateways, and Integrated Access Devices and are widely used in Digital Voice Recorders. More information about DSP Group is available at www.dspg.com.
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 2007 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:
-- US Dial-In # 1-888-286-8010 (passcode: 74863061)
-- International Dial-In # 1-617-801-6888 (passcode: 74863061)
For more information, please contact Ofer Elyakim, Director of Investor
Relations and Business Development, DSP Group Inc. at (408) 986-4421; or
e-mail: ofere@dsp.co.il.
DSP GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended
March 31,
2007 2006
Unaudited Unaudited
Product revenues and other $49,288 $51,952
Cost of product revenues 30,001 30,355
and other
Gross profit 19,287 21,597
Operating expenses:
Research and development 12,757 10,901
Sales and marketing 4,197 3,806
General and administrative 3,596 2,800
Total operating expenses 20,550 17,507
Operating income/(loss) 4,090
(1,263)
Other income :
Interest and other 3,652 3,109
income, net
Income before provision for
income taxes 2,389 7,199
Provision for income taxes 1,025 1,561
Net income $1,364 $5,638
Net earnings per share:
Basic $0.05 $0.19
Diluted $0.05 $0.18
Weighted average number of
shares of Common stock used
in the computation of:
Basic 28,455 29,477
Diluted 28,691 30,784
Unaudited Reconciliation of GAAP to Pro Forma Non-GAAP
Financial Measures
(In thousands, except per share amounts)
Three Months Ended
March 31,
2007 2006
Unaudited Unaudited
GAAP net income $1,364 $5,638
Equity-based compensation 166 78
expense included in cost of
product revenues and other
Equity-based compensation 2,088 1,222
expense included in R&D
Equity-based compensation 1,900 1,193
expense included in SG&A
Tax benefit resulting from (185) (87)
equity-based compensation
Pro Forma net income $5,333 $8,044
Pro Forma diluted earnings $0.19 $0.26
per share
DSP GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2007 2006
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $35,168 $37,344
Marketable securities and cash 134,059 132,170
deposits
Trade receivables, net 26,069 21,489
Inventories 12,648 14,366
Other accounts receivable 5,199 4,049
Deferred income taxes 1,503 1,516
Total current assets 214,646 210,934
Property and equipment, net 13,779 12,644
Long term marketable securities 186,066 179,368
Severance pay fund 5,905 5,689
Deferred income taxes 2,562 1,987
Other assets 3,097 3,366
Total assets $426,055 $413,988
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $20,177 $12,205
Other current liabilities 27,381 28,969
Total current liabilities 47,558 41,174
Accrued severance pay 6,246 6,065
Stockholders' equity:
Common stock 28 28
Additional paid-in capital 220,194 216,041
Accumulated other 22 28
comprehensive income
Retained earnings 194,379 195,198
Less - Cost of treasury stock (42,372) (44,546)
Total stockholders' equity 372,251 366,749
Total liabilities and $426,055 $413,988
stockholders' equity
SOURCE DSP Group, Inc.
04/26/2007
CONTACT: Ofer Elyakim, Director of Investor Relations and Business
Development of DSP Group Inc., +1-408-986-4421, or ofere@dsp.co.il
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