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DSP Group, Inc. Reports First Quarter 2012 Results

SAN JOSE, Calif., April 30, 2012 (GLOBE NEWSWIRE) -- DSP Group, Inc. (Nasdaq:DSPG), a leading global provider of wireless chipset solutions for converged communications, announced today its results for the first quarter ended March 31, 2012.

First Quarter Results:

Revenues for the first quarter of 2012 were $43,504,000, a decrease of 11% from revenues of $48,776,000 for the first quarter of 2011. Net loss for the first quarter of 2012 was $3,262,000, as compared to a net loss of $4,564,000 for the first quarter of 2011. Loss per share for the first quarter of 2012 was $0.14, as compared to a loss per share of $0.19 for the first quarter of 2011.

Non-GAAP Results:

Non-GAAP net loss and loss per share for the first quarter of 2012 were $1,183,000 and $0.05, respectively, as compared to non-GAAP net loss of $1,119,000 and non-GAAP loss per share of $0.05 for the first quarter of 2011. Non-GAAP net loss and loss per share for the first quarter of 2012 excluded equity-based compensation expenses of $1,486,000, and the impact of amortization of acquired intangible assets in the amount of $593,000, associated with the acquisitions of NXP's CIPT business and BoneTone Communications.

Non-GAAP net loss and loss per share for the first quarter of 2011 excluded the impact of amortization of acquired intangible assets in the amount of $2,196,000, associated with the acquisition of NXP's CIPT business, equity-based compensation expenses of $1,839,000 and restructuring income of $590,000 associated with the reorganization of our European operations.

Ofer Elyakim, CEO of DSP Group, stated "Our first quarter results were better than previously expected, driven by record VoIP revenues, higher gross margins and lower operating expenses. While we are disappointed with our first quarter's non-GAAP operating loss, we remain focused on meeting our objective to generate positive operating cash flows this year, and shall continue to closely monitor market trends and implement additional cost cutting measures whenever necessary."

Mr. Elyakim also stated, "During the first quarter, we continued our accelerated stock repurchasing activity and repurchased approximately 620,000 shares for approximately $4.0 million at an average price of $6.4 per share."

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 March 31, 2012 to the same period in 2011 because the exclusion of the above noted expenses may provide a more meaningful analysis of the Company's core operating results. 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.

Forward Looking Statements

This press release contains statements that qualify as "forward-looking statements" under the Private Securities Litigation Reform Act of 1995, including Mr. Elyakim's statements about the Company's objective to generate positive operating cash flows this year and implementing any necessary cost cutting measures. 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 impact of reductions in lead times and inventory levels by our customers and their customers; continued uncertainty in consumer demand for traditional cordless telephony products in our major end markets; unexpected delays in commercial launch or mass production of new products incorporating our technologies; the growth of new market verticals; our ability to lower operating expenses; our ability to secure additional design wins and general market demand for products that incorporate DSP Group's technologies in the market. 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 2011 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 (www.dspg.com) under Investor Relations.

About DSP Group

DSP Group, Inc. (Nasdaq:DSPG) is a leading global provider of wireless chipset solutions for converged communications at home and office. Delivering semiconductor system solutions with software and reference designs, DSP Group enables OEMs/ODMs, consumer electronics (CE) manufacturers and service providers to cost-effectively develop new revenue-generating products with fast time to market. At the forefront of semiconductor innovation and operational excellence for over two decades, DSP Group provides a broad portfolio of wireless chipsets integrating DECT/CAT-iq, DECT ULE, Wi-Fi, PSTN, BoneTone™ intelligent voice enhancement and noise elimination, video and VoIP technologies. DSP Group enables converged voice, audio, video and data connectivity across diverse consumer and business products – from connected multimedia screens, mobile devices, and home automation & security to cordless phones, VoIP systems, and home gateways. Leveraging industry-leading experience and expertise, DSP Group partners with CE manufacturers and service providers to shape the future of converged communications at home and office. For more information, visit www.dspg.com.

The DSP Group, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6171

Earnings conference call

DSP Group has scheduled a conference call for 8:30 AM ET today to discuss the financial results for the first quarter of 2012 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 of DSP Group's Web site at: http://www.media-server.com/m/p/5yf83jrt

If you cannot join the call, please listen to the replay, which will be available for one week after the call on DSP Group's Web site or by calling the following numbers:

-- US Dial-In # +1 347 366 9565 (passcode: 6935455)

-- International Dial-In # +44 207 111 1244 (passcode: 6935455)

 
                                                                                                   DSP GROUP, INC.
                                                                               CONSOLIDATED STATEMENTS OF INCOME 
                                                                          (In thousands, except per share amounts)
                                                                                                               
                                                                                                               
                                                                                             Three Months Ended 
                                                                                                       March 31,
                                                                                             2012            2011
                                                                                        Unaudited       Unaudited
                                                                                                               
                                                                        Revenues         $43,504        $48,776
                                                                  Cost of revenues          27,526          31,548
                                                                                                               
                                                                      Gross profit          15,978          17,228
                                                               Operating expenses:                              
                                                          Research and development          11,976          14,190
                                                               Sales and marketing           4,034           4,019
                                                        General and administrative           3,028           3,070
                                                 Amortization of intangible assets             593           2,196
                                                              Restructuring income              --          (590)
                                                                                                               
                                                          Total operating expenses          19,631          22,885
                                                                                                               
                                                                    Operating loss        (3,653)        (5,657)
                                                                    Other income :                              
                                                             Financial income, net             480             469
                                                                                                               
                                                     Loss before taxes on income         (3,173)        (5,188)
                                              Taxes on income (income tax benefit)              89          (624)
                                                                                                               
                                                                          Net loss       $(3,262)      $ (4,564)
                                                                                                               
                                                               Net loss per share:
                                                                            Basic      $ (0.14)      $ (0.19)
                                                                          Diluted      $ (0.14)      $ (0.19)
                                                                                                               
     Weighted average number of shares of common stock used in the computation of:                              
                                                                            Basic          22,550          23,439
                                                                          Diluted          22,550          23,439
 
                                                                                                                                           DSP GROUP, INC.
                                                                                                          CONSOLIDATED STATEMENTS OF OPERATIONS (NON-GAAP)
                                                                                                                  (In thousands, except per share amounts)
                                                                                                                                                       
                                                                                                                                                       
                                                                                           Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
                                                                                                                 (In thousands, except per share amounts)
                                                                                                                                                       
                                                                                                                                       Three Months Ended
                                                                                                                                             December 31,
                                                                                                                                    2012             2011
                                                                                                                               Unaudited        Unaudited
                                                                                                         GAAP net loss       $ (3,262)      $ (4,564)
                                      Equity-based compensation expense included in cost of product revenues and other               110              132
                                                Equity-based compensation expense included in research and development               771              882
                                                     Equity-based compensation expense included in sales and marketing               251              306
                                              Equity-based compensation expense included in general and administrative               354              519
                                                                                     Amortization of intangible assets               593            2,196
                                                                                                    Restructuring income               --            (590)
                                                                                                                                                       
                                                                                                       Non-GAAP net loss      $ (1,183)      $ (1,119)
                                                                                                                                                       
     GAAP weighted-average number of common stock used in computation of basic and diluted loss per share (in thousands)           22,550           23,439
                                                                                                                                                       
                          Weighted-average number of shares related to outstanding options and stock appreciation rights               --               --
                                                                                                                                                       
                    Weighted-average number of common stock used in computation of non-GAAP diluted net loss per share            22,550           23,439
                                                                                                                                                       
                                                                                       GAAP Diluted net loss per share        $ (0.14)       $ (0.19)
                                                                                       Equity-based compensation expense             0.06             0.08
                                                                                     Amortization of intangible assets              0.03             0.09
                                                                                                    Restructuring income               --          (0.03)
                                                                                     Non-GAAP diluted net loss per share       $ (0.05)       $ (0.05)
 
                                                                       DSP GROUP, INC.
                                                         CONSOLIDATED BALANCE SHEETS 
                                                                        (In thousands)
                                                                                   
                                                           March 31,     December 31,
                                                                2012             2011
                                                        (Unaudited)        (Audited)
                                           Assets                                  
                                    Current assets:                                 
                          Cash and cash equivalents        $ 18,683       $ 18,109
                                Restricted deposits               121              128
      Marketable securities and short term deposits            29,413           30,626
                             Trade receivables, net            26,966           25,643
                                        Inventories            16,605           16,434
     Other accounts receivable and prepaid expenses             4,461            5,343
                              Deferred income taxes               117               89
                               Total current assets            96,366           96,372
                                                                                   
                        Property and equipment, net             5,212            5,803
                                                                                   
       Long term marketable securities and deposits            65,751           69,046
                                 Severance pay fund            10,693            9,974
                             Intangible assets, net            13,808           14,395
      Long term prepaid expenses and lease deposits               390              466
                                                              90,642           93,881
                                       Total assets       $ 192,220      $ 196,056
                                                                                   
               Liabilities and Stockholders' Equity                                 
                               Current liabilities:                                 
                                     Trade payables        $ 18,778       $ 17,989
                        Other current liabilities             16,452           18,373
                          Total current liabilities            35,230           36,362
                              Accrued severance pay            11,037           10,278
                                   Accrued pensions               856              792
                        Total long term liabilities            11,893           11,070
                                                                                   
                              Stockholders' equity:                                 
                                       Common stock                22               23
                         Additional paid-in capital           342,838          341,352
           Accumulated other comprehensive income              (76)         (1,756)
                    Less – Cost of treasury stock        (124,315)       (122,236)
                                Accumulated deficit         (73,372)        (68,759)
                         Total stockholders' equity           145,097          148,624
         Total liabilities and stockholders' equity       $ 192,220      $ 196,056
CONTACT: For more information, please contact:
         Victor Halpert
         Director of Business Development and Investor Relations
         Tel: 1 917 602 2965
         Email: victor.halpert@dspg.com

Image: DSP Group

DSP Group, Inc.