SANTA CLARA, Calif., Jan. 21 /PRNewswire/ -- DSP Group Inc. (Nasdaq: DSPG) today announced results for the fourth quarter and year ending December 31, 2002.
Fourth Quarter Results:
The company announced fourth quarter 2002 revenues of $28,128,000, an increase of 14% from revenues of $24,744,000 for the fourth quarter of 2001. Net income from continuing operations for the fourth quarter of 2002 was $3,626,000 an increase of 22% from $2,970,000 in the fourth quarter of 2001. However, net income for the fourth quarter of 2002 was $3,604,000 a decrease of 11% from net income of $4,043,000 for the fourth quarter of 2001. Diluted earnings per share (EPS) for the fourth quarter of 2002 decreased 13% to $0.13, compared with $0.15, for the fourth quarter of 2001. Net income and diluted EPS for the fourth quarter of 2001 and one month of the fourth quarter of 2002 included the spun off DSP Core licensing activity.
Revenues for the year ended December 31, 2002, were $125,158,000, an increase of 40% over 2001 revenues of $89,430,000. Net income from continuing operations for 2002 was $12,672,000 an increase of 10% compared to $11,561,000 for 2001. Net income for the year 2002 was $15,142,000 compared to $21,916,000 for the year 2001, a decrease of 31%. Diluted EPS for the year 2002 decreased by 32% to $0.54 from $0.79 for the year 2001. Net income and diluted EPS for 2001 and for the first ten months of 2002 included the spun off DSP Core licensing activity.
Results for the fourth quarter of 2002 and for the year ended December 31, 2002 include an unusual loss item for impairment of available for sale marketable securities of $414,000 and $10,229,000 respectively, mainly associated with the decline in value of our holdings in AudioCodes Ltd. shares (Nasdaq: AUDC) in the second quarter of 2002. In addition, we recorded in the first quarter of 2002, an amount of $865,000 as an unusual expense related to the abandoned IPO expenses of the "Ceva" DSP Core licensing business.
The results of operations of the company for the fourth quarter of 2002 and the year December 31, 2002 include a net loss from the discontinued operations of $22,000 and net income from the discontinued operations of $2,470,000 compared to a net income of $1,073,000 and $10,355,000 for the fourth quarter and year ended December 31, 2001.
Proforma net income and EPS for the company excluding the discontinued operations, and the unusual loss and expense items described above, for the fourth quarter of 2002 would have been $3,961,000 and $0.14, respectively. An increase of 33% and 27% of net income and EPS, respectively, compared to the fourth quarter 2001. Proforma net income and EPS for year ended December 31, 2002 would have been $19,930,000 and $0.71 respectively. An increase of 72% and 69% of net income and EPS, respectively compared to 2001.
Eli Ayalon, Chairman & CEO of DSP Group Inc. stated: "We are very proud of our achievements this year, our fourth quarter results conclude a year of success for DSP Group. Despite facing a challenging business environment and severe contraction in the semiconductor industry, we succeeded to significantly grow our revenues and proforma net income.
"A remarkable year over year growth of 40% in our product business and a three years CAGR of 29% (from 1999), are the result of paying close attention to the needs of our customers and our investment policy in R&D that gave birth to a series of new products, which aided our OEM customers to increase their market share and spearheaded our growth."
Mr. Ayalon added: "Despite, and in large part due to, a significant increase of our R&D from approximately $12,000,000 in 1999 to approximately $20,000,000 in 2002, our proforma net income for the semiconductor business also increased. Our management spirit of tight control on expenses, and high productivity of each individual employee allowed us to achieve these results. In 2002 we surpassed our own productivity records with an average revenue per employee of approximately $840,000 (among the highest in our industry), an increase of 41% over 2001.
"We reached a level of average proforma net income per employee (excluding the one time charges described above) of $134,000, an increase of 74% over 2001."
Mr. Ayalon went on saying: "In 2002, we completed the separation of the DSP Core Licensing business from the company.
"DSP Group has now a clear and focused fabless semiconductor model which we intend to develop and enhance through strong cooperation with our customers and suppliers and which will continue to be implemented and executed by the Company's dedicated employees and experienced management team."
Boaz Edan, COO of DSP Group said: "We continue to have a strong demand for our 2.4GHz line of Products. The company plans to launch new products in 2003 (including the DECT (1.9GHz), Bluetooth solutions and DVR's with MP3 applications). These new developments, among others are on schedule. We continue to invest efforts of our marketing and R&D teams to work closely with key customers to define the future generations of products and solutions to be launched in 2004 and 2005."
About DSP Group
DSP Group, Inc. is a semiconductor fabless company that is a leader in the short-range wireless market. By combining its DSP cores technology with advanced RF, communication technology and speech-processing algorithms, DSP Group is a worldwide leader in developing and providing Total Telephony Solutions(TM). These applications include digital 900MHz, 2.4GHz, DECT (1.9GHz), 5.8GHz and Bluetooth for voice and data communication in residential, SOHO, SME, enterprise and automotive applications. DSP Group's advanced RF CMOS and communications technology provides the company with a clear path to a Phone-on-a-Chip(TM) solution. DSP Group also develops and markets embedded, integrated silicon/software solution for Voice-over-Digital- Subscriber Line (VoDSL), Voice-over-Internet-Protocol (VoIP) applications, and other Voice over Packet applications for Integrated Access Device (IAD) and IP Phone. More information about DSP Group is available at www.dspg.com.
|NOTE:||Total Telephony Solutions and Phone-on-a-Chip are trademarks of DSP|
This press release may contains statements that qualify as "forward- looking statements" under the Private Securities Litigation Reform Act of 1995, including statements made by Mr. Edan concerning continued demand for our 2.4GHz line of products and our corporate plans to develop and launch new 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. DSP Group's actual results could differ materially from those described in this press release as a result of various factors, including, the acceptance by customers in the digital voice recorder market of DSP Group's products, DSP Group's ability to differentiate its products from those of its competitors in the same market and the general market demand for products that incorporate DSP Group's technology in the market. These factors and other factors which may effect future operating results or DSP Group's stock price are discussed under "RISK FACTORS" in the Form 10-K for the year ended December 31, 2001 as well as other report, including Form 10-Qs, 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 8:00 a.m. EST today to discuss fourth quarter results 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 website at www.dspg.com or link to: http://www.dspg.com/website/ir/investor_messageb.html .
For more information, please contact Yaniv Arieli, President of US Operations, Investor Relations, DSP Group at (408) 986-4423.
DSP GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME - US GAAP (In thousands, except per share amounts)
Three Months Ended Year Ended December 31, December 31, 2002 2001 2002 2001 Product revenues and other $ 28,128 $ 24,744 $ 125,158 $ 89,430 Cost of product revenues and other 16,213 14,665 74,412 53,122 Gross profit 11,915 10,079 50,746 36,308 Operating expenses: Research and development 4,621 5,807 19,745 21,066 Sales and marketing 2,767 2,325 10,745 9,168 General and administrative 1,523 1,280 5,048 4,907 Aborted spin off expenses and other -- -- 865 -- Total operating expenses 8,911 9,412 36,403 35,141 Operating income 3,004 667 14,343 1,167 Other income : Interest and other income, net 1,886 2,885 9,452 12,522 Equity in earnings of affiliates -- -- -- 105 Minority interest in loss of subsidiary -- -- -- 173 Income after financial and other income 4,890 3,552 23,795 13,967 Impairment of available-for-sale marketable securities (414) -- (*)(10,229) -- Income before provision for income taxes 4,476 3,552 13,566 13,967 Provision for income taxes 850 582 (**)894 2,406 Net income from continuing operations 3,626 2,970 12,672 11,561 Net income (loss) from discontinued operations(***) (22) 1,073 2,470 10,335 $3,604 $4,043 $15,142 $ 21,916 Net income Net earnings per share for continuing operations: Basic $0.13 $0.11 $0.47 $0.43 Diluted $0.13 $0.11 $0.45 $0.42 Net earnings (loss) per share for discontinued operations: Basic $(0.00) $0.04 $0.09 $0.39 Diluted $(0.00) $0.04 $0.09 $0.37 Net earnings per share (combined): Basic $0.13 $0.15 $0.56 $0.82 Diluted $0.13 $0.15 $0.54 $0.79 Weighted average number of shares of Common Stock used in computing of: Basic 27,188 26,834 27,070 26,641 Diluted 28,028 27,818 28,041 27,606
(*) Related to impairment of marketable securities
(**) Including tax credit related to impairment of marketable securities
(***) Related to the DSP Licensing business (Ceva) which was discontinued
following the merger with Parthus DSP GROUP, INC. CONSOLIDATED PRO FORMA STATEMENTS OF INCOME (In thousands, except per share amounts)
Three Months Ended Year Ended December 31, December 31, 2002 2001 2002 2001 Product revenues and other $28,128 $24,744 $125,158 $89,430 Cost of product revenues and other 16,213 14,665 74,412 53,122 Gross profit 11,915 10,079 50,746 36,308 Operating expenses: Research and development 4,621 5,807 19,745 21,066 Sales and marketing 2,767 2,325 10,745 9,168 General and administrative 1,523 1,280 5,048 4,907 Total operating expenses 8,911 9,412 35,538 35,141 Operating income 3,004 667 15,208 1,167 Other income: Interest and other income, net 1,886 2,885 9,452 12,522 Equity in earnings of affiliates -- -- -- 105 Minority interest in loss of subsidiary -- -- -- 173 Income after financial and other income 4,890 3,552 24,660 13,967 Provision for income taxes 929 582 4,730 2,406 Net income from continuing operations 3,961 2,970 19,930 11,561 Net income (loss) from discontinued operations(***) (22) 1,073 2,470 10,355 $3,939 $4,043 $22,400 $21,916 Net income Net earnings per share for continuing operations: Basic $0.15 $0.11 $0.74 $0.43 Diluted $0.14 $0.11 $0.71 $0.42 Net earnings (loss) per share for discontinued operations: Basic $(0.00) $0.04 $0.09 $0.39 Diluted $(0.00) $0.04 $0.09 $0.37 Net earnings per share (combined): Basic $0.15 $0.15 $0.83 $0.82 Diluted $0.14 $0.15 $0.80 $0.79 Weighted average number of shares of Common Stock used in computing of: Basic 27,188 26,834 27,070 26,641 Diluted 28,028 27,818 28,041 27,606 The above pro forma consolidated statements of income have been adjusted to exclude the following items to US GAAP reported net income: Reported net income per US GAAP $3,604 $4,043 $15,142 $21,916 Adjustments: Aborted spin off expenses and other -- -- 865 -- Impairment of available-for-sale marketable securities 414 -- 10,229 -- Tax benefit (79) -- (3,836) -- Pro forma net income $3,939 $4,043 $22,400 $21,916 DSP GROUP, INC. CONSOLIDATED BALANCE SHEETS (In thousands)
December 31, December 31, Assets 2002 2001 Current Assets: Cash and cash equivalents $39,919 $39,146 Marketable securities and short term bank deposits 45,371 70,893 Trade receivable, net 4,873 6,315 Inventories 6,916 2,048 Other accounts receivable 1,352 1,547 Deferred income taxes 1,685 2,098 Assets of discontinued operation, net 4,737 12,197 Total current assets 104,853 134,244 Property and equipment, net 4,690 5,390 Long term marketable securities 150,692 139,752 Other investments 12,031 25,536 Other assets, net 6,190 6,229 Severance pay fund 1,616 1,228 Total Assets $280,072 $312,379 Liabilities and Stockholders' Equity Current liabilities: Trade payable $6,745 $5,123 Other current liabilities 21,552 11,592 Liabilities of discontinued operation -- 7,852 Total current liabilities 28,297 24,567 Long term liabilities: Accrued severance pay 1,686 1,294 Deferred income taxes 2,371 7,541 Total long term liabilities 4,057 8,835 Stockholders' equity: Common stock 27 27 Additional paid-in capital 156,443 155,969 Less cost of treasury stock -- (8,623) Accumulated other comprehensive income 476 2,652 Retained earnings 90,772 128,952 Total stockholders' equity 247,718 278,977 Total liabilities and stockholders' equity $280,072 $312,379
SOURCE DSP Group Inc.
CONTACT: Yaniv Arieli, President of US Operations, Investor Relations of DSP Group, +1-408-986-4423/
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