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| DSP Group, Inc. Reports Fourth Quarter 2007 Earnings |
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SAN JOSE, Calif., Jan. 30 /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 fourth quarter ended December 31, 2007. Fourth Quarter Results: Revenues for the fourth quarter of 2007 were $85,198,000, an increase of 111% from revenues of $40,383,000 for the fourth quarter of 2006. Net loss for the fourth quarter was $1,586,000 as compared to net income of $1,600,000 for the fourth quarter of 2006. Earnings per share (EPS) for the fourth quarter of 2007 were a loss of $0.05 per share, as compared to earnings of $0.06 per share for the fourth quarter of 2006. Year End Results: Revenues for the year ended December 31, 2007 were $ 248,788,000, an increase of 15% over 2006 revenues of $ 216,948,000. Net loss for 2007 was $4,753,000 compares to net income of $22,379,000 for 2006. Diluted EPS for 2007 was a loss of $0.16 per share, compared to income of $0.74 per share in 2006. Non-GAAP Results: Non-GAAP net income and diluted EPS for the fourth quarter of 2007, excluding the impact of amortization of acquired intangible assets of $8,244,000, associated with the acquisition of the Cordless and VoIP Terminals business of NXP B.V.; equity-based compensation expenses of $3,281,000; and the tax benefits associated with such expenses, were $9,111,000 and $0.29 per share on a diluted basis, representing an increase of 92% from the non-GAAP net income of $4,740,000 and an increase of 81% from non-GAAP diluted EPS of $0.16 per share for the fourth quarter of 2006. Pro forma net income and diluted EPS for the year ended December 31, 2007, excluding the impact of an in-process R&D expense of $10,120,000, amortization of acquired intangible assets of $11,948,000, equity-based compensation expenses of $ 14,022,000; and the tax benefits associated with such expenses, were $29,230,000 and $0.99, respectively, representing a decrease of 14% and 12%, respectively, from the year ended December 31, 2006. Share Buyback: During the fourth quarter of 2007, DSP Group repurchased 1,196,665 shares of its Common Stock at an average price of $15.02 per share, for an aggregate price of approximately $18 million. For the full year ended December 31, 2007, DSP Group repurchased 1,617,844 shares of its Common Stock at an average price of $15.88 per share, for an aggregate price of approximately $26 million. The Company announced that in light of the Company's strong cash position and its focus on shareholder value, its Board of Directors has authorized management to repurchase an additional 2.9 million shares of the Company's common stock in open-market and privately negotiated transactions. After giving effect to the most recent repurchases and the additional share repurchase authorization, approximately 5.0 million shares of the Company's Common Stock remain authorized for repurchase under the current repurchase program approved by the Company's Board of Directors. DSP Group may enter into a plan that is compliant with Rule 10b5-1 of the United States Securities Exchange Act of 1934 that is designed to facilitate these purchases. Under the repurchase program, share purchases may be made from time to time depending on market conditions, share price, trading volume and other factors, and such purchases will be made in accordance with the requirements of the Securities and Exchange Commission. Eli Ayalon, Chairman and CEO of DSP Group, stated: "During the fourth quarter, we demonstrated the positive financial impact the acquisition had on our financial results, our revenues more than doubled as compared to the fourth quarter of 2006, and we significantly improved our non-GAAP operating margins in the fourth quarter to 10.5%." The Company believes that the non-GAAP presentation of net income and diluted EPS presented in this press release is useful to investors in comparing results for the quarter ended December 31, 2007 to the same period during 2006, because results for the fourth quarter of 2006 did not include the amortization of acquired intangibles and other acquisition-related assets and the in-process R&D expense. Further, the Company believes it is useful to investors to understand how the expenses associated with equity-based compensations expenses are reflected on its statements of income. 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 and 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, video and data communication and deployment in residential, SOHO, SME, enterprise and automotive applications. DSP Group's 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. Earnings conference call DSP Group has scheduled a conference call for 8:30 a.m. EDT today to discuss the financial results for the fourth 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 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: 76314490)
-- International Dial-In # 1-617-801-6888 (passcode: 76314490)
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 Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
(Unaudited) (Unaudited) (Unaudited) (Audited)
Product revenues and
other $ 85,198 $ 40,383 $ 248,788 $ 216,948
Cost of product
revenues and other 49,641 24,883 148,075 128,559
Gross profit 35,557 15,500 100,713 88,389
Operating expenses:
Research and
development 19,394 11,972 58,488 47,525
Sales and marketing 6,073 4,074 19,060 16,306
General and
administrative 4,418 2,671 14,614 11,137
In-process R&D - - 10,120 -
Amortization of
intangible assets 8,275 - 11,332 -
Total operating
expenses 38,160 18,717 113,614 74,968
Operating income (loss) (2,603) (3,217) (12,901) 13,421
Other income :
Interest and other
income, net 1,394 3,366 10,541 13,198
Income (loss) before
provision for income
taxes (1,209) 149 (2,360) 26,619
Provision for income
taxes (benefit) 377 (1,451) 2,393 4,240
Net income (loss) $ (1,586) $ 1,600 $ (4,753) $ 22,379
Net earnings (loss)
per share:
Basic $ (0.05) $ 0.06 $ (0.16) $ 0.76
Diluted $ (0.05) $ 0.06 $ (0.16) $ 0.74
Weighted average
number of shares
of Common stock used
in the computation
of:
Basic 31,832 28,746 29,495 29,343
Diluted 31,876 29,031 29,646 30,049
DSP GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (NON-GAAP)
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
(Unaudited) (Unaudited) (Unaudited) (Audited)
Product revenues
and other $ 85,198 $ 40,383 $ 248,788 $ 216,948
Cost of product
revenues and other 49,484 24,756 146,796 128,098
Gross profit 35,714 15,627 101,992 88,850
Operating expenses:
Research and
development 17,718 10,197 51,345 41,172
Sales and marketing 5,673 3,720 17,444 14,987
General and
administrative 3,401 1,631 10,014 7,146
Total operating
expenses 26,792 15,548 78,803 63,305
Operating income 8,922 79 23,189 25,545
Other income:
Interest and other
income, net 1,394 3,366 11,538 13,198
Income before provision
for income taxes 10,316 3,445 34,727 38,743
Provision for income
taxes (benefit) 1,205 (1,295) 5,497 4,730
Net income $ 9,111 $ 4,740 $ 29,230 $ 34,013
Net earnings per share:
Basic $ 0.29 $ 0.16 $ 0.99 $ 1.16
Diluted $ 0.29 $ 0.16 $ 0.99 $ 1.13
Weighted average
number of shares
of Common stock used
in the computation of:
Basic 31,832 28,746 29,495 29,343
Diluted 31,876 29,031 29,646 30,049
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
(Unaudited) (Unaudited) (Unaudited) (Audited)
GAAP net (loss)
income $ (1,586) $ 1,600 $ (4,753) $ 22,379
Equity-based
compensation expense
Included in cost of
product revenues 188 127 663 461
Amortization of
adjustment of
inventories to market
values Included in
cost of product
revenues (31) - 616 -
Equity-based compensation
expense Included in
R&D 1,676 1,775 7,143 6,353
Equity-based compensation
expense Included in
SG&A 1,417 1,394 6,216 5,310
Loss related to certain
marketable securities - - 996 -
In-process R&D - - 10,120 -
Amortization of
intangible assets
related to NXP
transaction 8,275 - 11,332 -
Tax benefit resulting
from equity-based
compensation, loss
related to certain
marketable securities,
in-process R&D and
amortization of
intangibles and
other acquisition
-related assets (828) (156) (3,103) (490)
Non-GAAP net income $ 9,111 $ 4,740 $ 29,230 $ 34,013
Non-GAAP basic
earnings per share $ 0.29 $ 0.16 $ 0.99 $ 1.16
Non-GAAP diluted
earnings per share $ 0.29 $ 0.16 $ 0.99 $ 1.13
DSP GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2007 2006
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 69,586 $ 37,344
Marketable securities and cash deposits 63,682 132,170
Trade receivables, net 51,636 21,489
Inventories 16,361 14,366
Other accounts receivable 7,582 4,049
Deferred income taxes 4,011 1,516
Total current assets 212,858 210,934
Property and equipment, net 14,270 12,644
Long term marketable securities 34,469 179,368
Severance pay fund 6,883 5,689
Deferred income taxes 5,109 1,987
Goodwill and other intangible assets 237,969 2,694
Other assets 694 672
Total assets $ 512,252 $ 413,988
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 30,428 $ 12,205
Other current liabilities 47,906 28,969
Total current liabilities 78,334 41,174
Accrued severance pay 7,303 6,065
Accrued pensions 1,758 -
Stockholders' equity:
Common stock 31 28
Additional paid-in capital 300,542 216,041
Accumulated other comprehensive income (loss) 1,025 28
Retained earnings 187,063 195,198
Less - Cost of treasury stock (63,804) (44,546)
Total stockholders' equity 424,857 366,749
Total liabilities and stockholders' equity $ 512,252 $ 413,988
SOURCE DSP Group, Inc. |
