DSP Group, Inc. Reports First Quarter 2008 Earnings
SAN JOSE, Calif., May 2 /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, 2008.
First Quarter Results:
Revenues for the first quarter of 2008 were $72,729,000, an increase of 48% from revenues of $49,288,000 for the first quarter of 2007. Net loss for the first quarter was $7,608,000 compared to net income of $1,364,000 for the first quarter of 2007. Earnings per share (EPS) for the first quarter of 2008 were a loss of $0.25 compared to earnings of $0.05 for the first quarter of 2007.
Non-GAAP Results:
Non-GAAP net income and diluted EPS for the first quarter of 2008 were $1,441,000 and $0.05 per share on a diluted basis, respectively; a decrease of 73% from the non-GAAP net income of $5,333,000 and a decrease of 74% from non- GAAP diluted EPS of $0.19 per share for the first quarter of 2007. Non-GAAP net income and diluted EPS for the first quarter of 2008 excluded the impact of amortization of acquired intangible assets of $5,782 ,000, associated with the acquisition of the Cordless and VoIP Terminals business of NXP B.V.; equity-based compensation expenses of $3,961,000; and the aggregate tax benefits associated with such expenses of $694,000.
Eli Ayalon, Chairman and CEO of DSP Group, stated: "We expect our traditional cordless market to remain challenging throughout the year as a result of continuing pricing and volume pressures. We expect these pressures to lessen with the ramp-up of our new generation of multimedia products." Ayalon also stated: "During the first quarter of 2008, we repurchased approximately 2,171,000 shares of our Common Stock at an average price of $11.91 per share, for an aggregate price of approximately $25.9 million."
After giving effect to the most recent repurchases, approximately 2,000,000 shares of the Company's Common Stock remain authorized for repurchase under the current repurchase program approved by the Company's board of directors.
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 http://www.dspg.com.
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 that the traditional cordless market is to remain challenging throughout the year and that the continuing pricing and volume pressures will be lessened following a ramp-up of the new generation of multimedia products. 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 risk that the cost savings and other synergies from the acquisition of the CIPT business may not be fully realized or may take longer to realize than expected; DSP Group's inability to develop and produce new products at competitive costs and in a timely manner; failure of new products, especially the new generation of multimedia products, to achieve broad market acceptance; and fluctuations in gross margins associated with the sale of existing products.. 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 2007 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 (http://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 first quarter of 2008 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://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: 33088619)
--International Dial-In # 1-617-801-6888 (passcode: 33088619)
For more information, please contact Ofer Elyakim, Vice President of
Business Development, DSP Group Inc. at (408) 240-6839; 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,
2008 2007
Unaudited Unaudited
Product revenues and other $72,729 $49,288
Cost of product revenues and other 45,776 30,001
Gross profit 26,953 19,287
Operating expenses:
Research and development 20,028 12,757
Sales and marketing 6,021 4,197
General and administrative 4,250 3,596
Amortization of intangible assets 5,782 -
Total operating expenses 36,081 20,550
Operating loss (9,128) (1,263)
Other income:
Interest and other income, net 1,234 3,652
Income (loss) before provision for income taxes (7,894) 2,389
Provision for income taxes income tax benefit) (286) 1,025
Net income (loss) $(7,608) $1,364
Net earnings (loss) per share:
Basic $(0.25) $0.05
Diluted $(0.25) $0.05
Weighted average number of shares of Common stock
used in the computation of:
Basic 30,574 28,455
Diluted 30,757 28,691
DSP GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (NON-GAAP)
(In thousands, except per share amounts)
Three Months Ended
March 31,
2008 2007
Unaudited Unaudited
Product revenues and other $72,729 $49,288
Cost of product revenues and other 45,519 29,835
Gross profit 27,210 19,453
Operating expenses:
Research and development 17,937 10,669
Sales and marketing 5,514 3,757
General and administrative 3,144 2,136
Total operating expenses 26,595 16,562
Operating income 615 2,891
Other income :
Interest and other income, net 1,234 3,652
Income before provision for income taxes 1,849 6,543
Provision for income taxes 408 1,210
Net income $1,441 $5,333
Net earnings per share:
Basic $0.05 $0.19
Diluted $0.05 $0.19
Weighted average number of shares of Common stock
used in the computation of:
Basic 30,574 28,455
Diluted 30,757 28,691
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
Three Months Ended
March 31,
2008 2007
Unaudited Unaudited
GAAP net (loss) income $(7,608) $1,364
Equity-based compensation expense
Included in cost of product revenues 257 166
Equity-based compensation expense
Included in R&D 2,091 2,088
Equity-based compensation expense
Included in SG&A 1,613 1,900
Amortization of intangible assets related to NXP
transaction 5,782 -
Tax benefit resulting from equity-based
compensation and amortization of acquired
intangible assets (694) (185)
Non-GAAP net income $1,441 $5,333
Non-GAAP basic earnings per share $0.05 $0.19
Non-GAAP diluted earnings per share $0.05 $0.19
DSP GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2008 2007
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $69,554 $69,586
Restricted deposits 3,428 -
Marketable securities and cash deposits 30,832 63,682
Trade receivables, net 44,668 51,636
Inventories 17,652 16,361
Other accounts receivable 10,868 8,173
Deferred income taxes 5,529 4,011
Total current assets 182,531 213,449
Property and equipment, net 18,329 14,270
Long term marketable securities 35,084 34,469
Severance pay fund 7,379 6,883
Deferred income taxes 4,997 5,109
Goodwill and other intangible assets 233,233 237,969
Other assets 1,892 694
Total assets $ 483,445 $512,843
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $28,053 $29,064
Other current liabilities 45,565 48,125
Total current liabilities 73,618 77,189
Accrued severance pay 7,839 7,303
Accrued pensions 2,003 1,758
Deferred tax liability 803 372
Other long term liabilities 1,556 1,364
Total long term liabilities 12,201 10,797
Stockholders' equity:
Common stock 29 31
Additional paid-in capital 304,505 300,542
Accumulated other comprehensive income 2,446 1,025
Retained earnings 178,666 187,063
Less - Cost of treasury stock (88,020) (63,804)
Total stockholders' equity 397,626 424,857
Total liabilities and stockholders' equity $483,445 $512,843
SOURCE DSP Group, Inc.
05/02/2008
CONTACT: Ofer Elyakim, Vice President of Business Development of DSP
Group Inc., +1-408-240-6839, ofere@dsp.co.il