Net Income for the Quarter and Year Increased 65% YoY and 67% YoY,
Respectively
SANTA CLARA, Calif., Jan. 27 /PRNewswire-FirstCall/ -- DSP Group, Inc.
(Nasdaq: DSPG) today announced its results for the quarter and year ended
December 31, 2003.
Fourth Quarter Results:
Revenues for the fourth quarter of 2003 were $38,136,000, an increase of
36% from revenues of $28,128,000 for the fourth quarter of 2002. Net income
for the fourth quarter was $5,961,000, an increase of 65% from net income of
$3,604,000 for the fourth quarter of 2002 (which included net loss of $22,000
related to the discontinued operations of the DSP cores licensing business).
Diluted earnings per share (EPS) for the fourth quarter of 2003 was $0.20, an
increase of 54% from $0.13 for the fourth quarter of 2002.
Year End Results:
Revenues for the year ended December 31, 2003, were $152,875,000, an
increase of 22% over 2002 revenues of $125,158,000. Net income for 2003 was
$25,355,000, an increase of 67% from $15,142,000 for 2002 (which included net
income of $2,470,000 related to the discontinued operations of the DSP cores
licensing business). Diluted EPS for 2003 was $0.86, an increase of 59% from
$0.54 for 2002. Diluted EPS for 2002 included an amount of $0.09 related to
the discontinued operations.
Pro Forma Results:
Results for 2003 included a one-time write-off in the second quarter of
2003 in the amount of $2,727,000 for in-process research and development
related to the Teleman Multimedia Inc. acquisition announced by the company on
May 19, 2003 and a capital gain of $241,000 from the sale of Tower
Semiconductor Ltd. shares. Results for the fourth quarter and year ended
December 31, 2002, included an unusual loss item for impairment of
available-for-sale marketable securities of $414,000 and $10,229,000,
respectively, mainly associated with a decline in value of the company's
holdings in AudioCodes Ltd. shares (Nasdaq: AUDC) in the second quarter of
2002. In addition, the company recorded in the first quarter of 2002, an
amount of $865,000 as an unusual expense related to the abandoned IPO expenses
of the DSP Cores licensing business.
Pro forma net income and diluted EPS for the company for the year ended
December 31, 2003, excluding the unusual loss and expense items described
above, would have been $27,569,000 and $0.93, respectively. The company
achieved an increase of 38% and 31% for pro forma net income and diluted EPS,
excluding the discontinued operations and the unusual loss and expense items,
as compared to $19,930,000 and $0.71, respectively, for the same period in
2002.
The company believes that this pro forma presentation of net income and
diluted EPS is useful to investors in comparing results for the quarter and
year ended December 31, 2003 to the same periods during 2002, because it
excludes items that management does not consider meaningful for purposes of
analyzing the company's operating results and budget-planning decisions.
Eli Ayalon, Chairman and CEO of DSP Group, stated: "We are very satisfied
with our achievements in 2003. We reached record revenue and operating
profitability levels, and increased diluted EPS, as compared to 2002. We are
also pleased with our solid fourth quarter 2003 performance, and the
continuing strong demand for our wireless residential products, resulting in
strong bookings and good visibility into the first quarter of 2004."
Mr. Ayalon further stated: "During 2003 we also completed a strategic move
into the multimedia communication market through the acquisition of Teleman
Multimedia, finalized the development of a new chip set for the European
markets and added new advanced features to our products. We are now well
positioned to face the exciting challenges of the future, and take advantage
of new market opportunities."
Moshe Zelnik, CFO of DSP Group, stated, "Our gross margins for the fourth
quarter of 2003 reached a record level of 49% of revenues, a significant
improvement over previous quarters. Approximately $900,000 or 2% was due to
our ability to use previously scrapped inventory. In addition, it should be
noted that an amount of approximately $700,000 related to the accelerated
depreciation of equipment was included in research and development expenses
recorded in the fourth quarter of 2003."
Mr. Zelnik further stated, "During the fourth quarter of 2003 we
repurchased 100,000 shares of our common stock for a total amount of
$2,310,000 at an average price of $23.1 per share. During the year ended
December 31, 2003, we repurchased 746,000 shares for a total amount of
$16,157,000 at an average price of $21.66 per share. As of December 31, 2003,
our cash position, consisting of cash, cash equivalents and marketable
securities, reached a level of approximately $276.4 million, reflecting
approximately $34.3 million of positive cash flow from operations during the
year 2003."
About DSP Group
DSP Group, Inc. is a fabless semiconductor company that is a worldwide
leader in the short-range wireless market. By combining its DSP core
technology with advanced RF CMOS, communication technology, video technology
and speech-processing algorithms, DSP Group develops and provides a wide
portfolio of short-range communication solutions, which are utilized for
residential, SOHO, SME, enterprise and automotive applications. DSP Group
solutions include digital 900MHz, 2.4GHz, DECT (1.9GHz), 5.8GHz and Bluetooth
for voice, data and video communication as well as solutions for DVRs (Digital
Voice Recorders) and MP3 applications. DSP Group also develops and markets
embedded, integrated silicon/software solutions for
Voice-over-Digital-Subscriber Line (VoDSL) and Voice-over-Internet-Protocol
(VoIP) applications, as well as other Voice-over-Packet applications for
Integrated Access Devices (IAD) and IP phones. 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 statements made by Mr. Ayalon relating to continuing strong demand
for DSP Group's wireless residential products, strong booking for and good
visibility into the first quarter of 2004, and DSP Group being well positioned
to face the exciting challenges of the future and take advantage of new market
opportunities. 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
unexpected delays in the introduction of new products; failure to achieve
broad market acceptance of existing and new products by existing and potential
OEM customers; DSP Group's inability to add new customers and develop and
produce new products at competitive costs and in a timely manner; decline or
fluctuations in gross margins and the effect on revenues and profitability;
and general market demand for products that incorporate DSP Group's technology
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 the year ended December 31, 2002, as well as
other reports, including Form 10-Qs, 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. EST today to
discuss fourth quarter and annual 2003 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 Web site at http://www.dspg.com or link to:
http://phx.corporate-ir.net/phoenix.zhtml?c=101665&p=irol-necalendar .
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: 19616340)
-- International Dial-In # 617-801-6888 (passcode: 19616340)
For more information, please contact Yaniv Arieli, President of US
Operations, Investor Relations, DSP Group at 408-986-4423; or e-mail:
yarieli@dspg.com
DSP GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME -- US GAAP
(In thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
Product revenues and
other $ 38,136 $ 28,128 $ 152,875 $ 125,158
Cost of product revenues
and other 19,451 16,213 83,077 74,412
Gross profit 18,685 11,915 69,798 50,746
Operating expenses:
Research and development 8,197 4,621 25,599 19,745
Sales and marketing 3,361 2,767 11,977 10,745
General and administrative 1,947 1,523 6,953 5,048
In-process research &
development write-off -- -- 2,727 --
Aborted spin off expenses
and other -- -- -- 865
Total operating expenses 13,505 8,911 47,256 36,403
Operating income 5,180 3,004 22,542 14,343
Other income :
Interest and other income,
net 2,002 1,886 7,947 9,452
Capital gains -- -- 241 --
Income after financial and
other income 7,182 4,890 30,730 23,795
Impairment of
available-for-sale
marketable securities -- (414) -- (*)(10,229)
Income before provision for
income taxes 7,182 4,476 30,730 13,566
Provision for income
Taxes 1,221 850 5,375 (**)894
Net income from continuing
operations 5,961 3,626 25,355 12,672
Net income (loss) from
discontinued operations -- (22) -- 2,470
(***)
Net income $5,961 $3,604 $25,355 $15,142
Net earnings per share for
continuing operations:
Basic $ 0.21 $ 0.13 $ 0.91 $ 0.47
Diluted $ 0.20 $ 0.13 $ 0.86 $ 0.45
Net earnings (loss) per share
for discontinued operations:
Basic $ 0.00 $ (0.00) $ 0.00 $ 0.09
Diluted $ 0.00 $ (0.00) $ 0.00 $ 0.09
Net earnings per share
(combined):
Basic $ 0.21 $ 0.13 $ 0.91 $ 0.56
Diluted $ 0.20 $ 0.13 $ 0.86 $ 0.54
Weighted average number of
shares of Common Stock used
in computing of:
Basic 28,615 27,188 27,912 27,070
Diluted 30,344 28,028 29,593 28,041
(*) Related to impairment of marketable securities
(**) Included a tax credit related to impairment of marketable
securities
(***) Related to the DSP cores licensing business (Ceva) which was
discontinued in November 2002 following the combination of Ceva
with Parthus Technologies plc to form ParthusCeva, Inc.
DSP GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME -- PRO FORMA
(In thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
Product revenues and other
$ 38,136 $ 28,128 $ 152,875 $ 125,158
Cost of product revenues and
other 19,451 16,213 83,077 74,412
Gross profit 18,685 11,915 69,798 50,746
Operating expenses:
Research and development 8,197 4,621 25,599 19,745
Sales and marketing 3,361 2,767 11,977 10,745
General and administrative 1,947 1,523 6,953 5,048
Total operating expenses 13,505 8,911 44,529 35,538
Operating income 5,180 3,004 25,269 15,208
Other income:
Interest and other income,
net 2,002 1,886 7,947 9,452
Income after financial and
other income 7,182 4,890 33,216 24,660
Provision for income taxes 1,221 929 5,647 4,730
Net income from continuing
operations 5,961 3,961 27,569 19,930
Net income (loss) from
discontinued operations -- (22) -- 2,470
(***)
Net income $5,961 $3,939 $ 27,569 $22,400
Net earnings per share for
continuing operations:
Basic $ 0.21 $ 0.15 $ 0.99 $ 0.74
Diluted $ 0.20 $ 0.14 $ 0.93 $ 0.71
Net earnings (loss) per share
for discontinued operations:
Basic $ 0.00 $ (0.00) $ 0.00 $ 0.09
Diluted $ 0.00 $ (0.00) $ 0.00 $ 0.09
Net earnings per share
(combined):
Basic $ 0.21 $ 0.15 $ 0.99 $ 0.83
Diluted $ 0.20 $ 0.14 $ 0.93 $ 0.80
Weighted average number of
shares of Common Stock used
in computing of:
Basic 28,615 27,188 27,912 27,070
Diluted 30,344 28,028 29,593 28,041
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 $ 5,961 $ 3,604 $ 25,355 $ 15,142
Adjustments:
Aborted spin off expenses
and other -- -- -- 865
Impairment of
available-for-sale
marketable securities -- 414 -- 10,229
In-process research &
development write-off -- -- 2,727 --
Capital gains -- -- (241) --
Tax benefit -- (79) (272) (3,836)
Pro forma net income $ 5,961 $ 3,939 $ 27,569 $ 22,400
DSP GROUP, INC.
CONSOLIDATED BALANCE SHEETS - US GAAP
(In thousands)
December 31, December 31,
2003 2002
Assets (Audited) (Audited)
Current assets:
Cash and cash equivalents $ 36,812 $ 39,919
Marketable securities 42,490 45,371
Trade receivables, net 15,844 4,873
Inventories 8,466 6,916
Other accounts receivable 1,462 1,352
Deferred income taxes 1,326 1,685
Assets of discontinued operation, net -- 4,737
Total current assets 106,400 104,853
Property and equipment, net 7,108 4,690
Long term marketable securities 197,071 150,692
Investment in equity security of traded
companies 47,138 12,031
Severance pay fund 2,360 1,616
Long term pre-paid expenses and lease deposits 513 386
Goodwill 5,804 5,804
Other intangible assets 911 --
Total Assets $ 367,305 $ 280,072
Liabilities and Stockholders' Equity
Current liabilities:
Trade payable $11,221 $6,745
Other current liabilities 34,556 21,552
Total current liabilities 45,777 28,297
Long term liabilities:
Accrued severance pay 2,555 1,686
Deferred income taxes 14,592 2,371
Total long term liabilities 17,147 4,057
Stockholders' equity:
Common Stock 29 27
Additional paid-in capital 174,700 156,443
Accumulated other comprehensive income 23,045 476
Retained earnings 107,799 90,772
Loss -- Cost of Treasury stock (1,192) --
Total stockholders' equity 304,381 247,718
Total liabilities and stockholders' equity $ 367,305 $ 280,072
SOURCE DSP Group, Inc.
 back to top
Related links:
http://www.dspg.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20020715/SFM118LOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, +1-888-776-6555 or +1-212-782-2840
CONTACT:
Yaniv Arieli, President of US Operations,
Investor Relations of DSP Group, +1-408-986-4423, or
yarieli@dspg.com
|
