Record high revenues for the third quarter of 2001 were $34,955,000, compared with revenues of $28,988,000 for the third quarter of 2000 and revenues of $26,358,000 for the second quarter of 2001, an increase of 21% year over year, and an increase of 33% sequentially. Net income for the third quarter of 2001 was $6,854,000 and EPS was $0.25 (diluted), compared with net income of $8,428,000 and EPS $0.29 (diluted) for the third quarter of 2000.
Eli Ayalon, Chairman and CEO of DSP Group, stated, "During these challenging economic times, we are pleased to announce better than expected third quarter results. The significant increase of our product sales reflect the success of our new 900 MHz Narrow Band design launched in the second quarter of this year. We are also pleased to announce that we have licensed this quarter our TeakLite DSP Core to an American corporation for the development of a cellular 3G product. In this period of unprecedented worldwide economic uncertainty we see continued strength in the quality of our DSP core licenses pipeline, but a more protracted sales cycles of the licenses to prospective clients.
"We have also launched this quarter a new Licensable Intellectual Property (IP) Solution for the emerging digital still camera market. This solution incorporates our Teak DSP Core, along with application software and a development system."
Mr. Ayalon added: "We would also like to announce that the U.S. Internal Revenue Service has recently granted us the tax free ruling for the contemplated transaction regarding the spin-off of our licensing business. The company will consider the timing of the implementation of the spin-off in the context of its overall business strategy and improving market conditions."
Moshe Zelnik, VP Finance and CFO of DSP Group stated: "During the third quarter of 2001, the Company has repurchased 40,000 shares of its common stock, at an average price of $20.30 per share, for an aggregate price of approximately $812,000. We believe that this repurchase is a good use of our capital, given our strong cash position. This repurchase was authorized under a repurchase program established by DSP Group in March 1999, of which 1,082,000 shares represent the balance of shares available for repurchase under the plan."
About DSP Group, Inc.
DSP Group, Inc. is a global leader in the development and marketing of high-performance, cost-effective, licensable digital signal processing cores. The Company's family of DSP cores provides solutions for low-power, cost-driven applications, such as cellular, broadband communication, VoIP, multimedia, advanced telecommunication systems, disk drive controllers and many other types of embedded control applications. By combining its DSP core technologies with its proprietary, advanced speech-processing algorithms -- DSP Group also delivers a wide range of enabling, application specific ICs for full-featured integrated telephony products and applications, including 900 MHz and 2.4 GHz wireless technologies. DSP Group, Inc., maintains an international presence with offices located around the globe.
Statements contained in this release, including those concerning the future growth of the Company's business and the demand for the Company's core technologies may constitute forward-looking statements. These statements involve certain risks and uncertainties such as a slowdown in the U.S. consumer market, where most of the products, including the Company's ICs are sold; acceptance of the Company's new products by existing customers and potential customers; and the Company's ability to develop and produce its new products at competitive costs. All forward-looking statements are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. These factors and other factors which may effect future operating results or our stock price are discussed under "RISK FACTORS" in our report on form 10-Q for the quarter ended June 30, 2001, which has been filed with the Securities and Exchange Commission and is also available on our Web site (www.dspg.com) under Investor Relations.
Earnings conference call
DSP Group has scheduled a conference call for 5:00 p.m. EDT today to discuss third quarter results and invites you to listen to a the live broadcast over the Internet. The broadcast can be accessed by all interested parties through the Investor Relations section of DSP Group's website at www.dspg.com or through www.ccbn.com.
Additional information is available on the World Wide Web at www.dspg.com. This press release is also available through the Company's News on Call fax service, which can be reached at 800-758-5804, company code 112025.
For more information, please contact Yaniv Arieli at 408-986-4423 DSP GROUP, INC. TRENDED CONSOLIDATED FINANCIAL STATEMENTS STATEMENTS OF INCOME (In thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2001 2000 2001 2000 Revenues: Product sales $26,945 $21,925 $63,838 $60,469 Licensing, royalties and other 8,010 7,063 21,649 17,619 Total revenues 34,955 28,988 85,487 78,088 Cost of revenues: Product sales 17,283 12,623 38,242 34,825 Licensing, royalties and other 361 292 1,166 824 Total cost of revenues 17,644 12,915 39,408 35,649 Gross profit 17,311 16,073 46,079 42,439 Operating expenses: Research and development, net 6,564 5,553 19,238 15,035 Sales and marketing 3,065 3,189 8,827 9,098 General and administrative 2,200 1,761 5,790 4,647 Unusual items -- -- -- 14,154 Total operating expenses 11,829 10,503 33,855 42,934 Operating income (loss) 5,482 5,570 12,224 (495) Other income (expense): Interest and other income 3,200 3,823 10,147 9,824 Interest and other expenses (53) (51) (158) (131) Equity in income of affiliate -- 724 105 1,864 Minority interest in losses of subsidiary -- 205 173 253 Capital gains from realization of Investments -- -- -- 57,593 Income before provision for income taxes 8,629 10,271 22,491 68,908 Provision for income taxes 1,775 1,843 4,618 27,816 Net income $6,854 $8,428 $17,873 $41,092 Net earnings per share: Basic $0.26 $0.31 $0.67 $1.55 Diluted $0.25 $0.29 $0.65 $1.42 Shares used in per share computations: Basic 26,732 26,932 26,576 26,576 Diluted 27,790 28,927 27,539 28,916 DSP GROUP, INC. TRENDED CONSOLIDATED FINANCIAL STATEMENTS BALANCE SHEETS (In thousands) September 30, December 31, Assets 2001 2000 Current Assets: Cash and cash equivalents, marketable securities and short term deposits $239,933 $223,201 Trade receivable, net 16,747 16,932 Inventories 3,489 2,815 Deferred income taxes 4,554 4,554 Other accounts receivable and prepaid Expenses 2,471 1,445 Total current assets 267,194 248,947 Property and equipment, net 7,363 6,451 Other investments, net of accumulated amortization 9,875 21,000 Other assets, net of accumulated Amortization 6,636 4,259 Severance pay fund 2,207 2,150 Total Assets $293,275 $282,807 Liabilities and Stockholders' Equity Current liabilities: Trade payable $6,339 $8,092 Other current liabilities 19,569 19,934 Total current liabilities 25,908 28,026 Long term liabilities: Accrued severance pay 2,303 2,147 Deferred income taxes 1,462 5,559 Minority interest -- 910 Total long term liabilities 3,765 8,616 Stockholders' equity: Common stock 27 27 Additional paid-in capital 155,438 151,787 Other comprehensive income (7,197) -- Retained earnings 126,392 114,291 Less cost of treasury stock (11,058) (19,940) Total stockholders' equity 263,602 246,165 Total liabilities and stockholders' equity $293,275 $282,807 MAKE YOUR OPINION COUNT - Click Here http://tbutton.prnewswire.com/prn/11690X46759142SOURCE DSP Group, Inc.
CONTACT: Yaniv Arieli, Director of Investor Relations of DSP Group, +1-408-986-4423 URL: http://www.ccbn.com http://www.dspg.com http://www.prnewswire.com
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