SANTA CLARA, Calif., May 19 /PRNewswire-FirstCall/ --
DSP Group, Inc. (Nasdaq: DSPG), a worldwide leader in developing and providing
solutions for the residential wireless market, announced today that it has
acquired substantially all of the assets of Teleman Multimedia, Inc.
("Teleman"), headquartered in Alviso, Calif. for $5 million in cash.
Teleman, founded in 1998, has developed an advanced silicon platform for
video compression and decompression designed to interface with image sensors
and panel displays. DSP Group has acquired all the intellectual property of
Teleman, including patents and other research and development in process. In
addition, it has hired Teleman founder, CEO and CTO, John Hong as vice
president for video technologies and other key Teleman engineers in Seoul,
Korea and Alviso, Calif.
"The acquisition of Teleman's video technologies opens the door to a very
interesting array of multimedia applications," said Eli Ayalon, Chairman and
CEO of DSP Group. "We believe that the technology acquired from Teleman
combined with our leading voice, data and communications technologies will
enable us to continue and grow our business in the years to come."
Mr. Ayalon added: "DSP Group plans to build a new team of 40 designers
around the group from Teleman. This team will integrate the Teleman and DSP
Group technologies to create new products to meet the developing market demand
for video features. The first product integrating the Teleman technology has
been defined and has secured one design win. Shipments of this product are
expected to begin in the third quarter of 2004. We expect the sales of the
company in the fourth quarter of 2004 enriched with the new video products, to
show a 30% increase compared to our forecast for the fourth quarter of 2003."
The Teleman silicon platform supports compression standards such as MPEG4,
JPEG and H263, which are used in video conferencing applications. Work is
already in progress to support the new compression standard H264, which
enables improved video quality at low bit rates. The Teleman solution
features a unique architecture, which enables high video performance in
conjunction with small silicon area and low power consumption.
"We are excited about the opportunity to join DSP Group and work in a
company with a remarkably successful track record," said Mr. Hong, "The
compelling business rational for joining forces with DSPG is the shared belief
that our video technology, combined with DSP Group's voice, data and
communication technologies, and DSP Group's impressive customer base, will
lead to new business for the company. I am looking forward to joining the DSP
Group management team and contributing to the company's continued growth."
Moshe Zelnik, CFO of DSP Group, said: "We will pay $5 million in cash
consideration for the assets acquired from Teleman, and we expect additional
expenses related to the deal of approximately $200,000.
A one-time charge of $2.6 million related to in-process research and
development and other expenses will be included in our financial statements
for the second quarter of 2003. An additional amount of $2.6 million related
to the established technology and expenses will be amortized over a period of
four years.
Over all, Diluted EPS is expected to reflect a decrease of $0.11 for 2003;
$0.07 of which is related to the $2.6 million non recurring charges; and $0.04
of which is related to an increase in overall ongoing operating expenses,
representing a slight dilution to our previously anticipated performance.
We expect new products built around the acquired technologies to begin
generating revenues by the third quarter of 2004."
About DSP Group
DSP Group, Inc. is a fabless semiconductor 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 short-range
communication applications that 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 products include
advanced RF CMOS and communications technology. DSP Group also develops and
markets embedded, integrated silicon/software solution 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 Device (IAD) and IP phone. More information about DSP Group
is available at http://www.dspg.com.
This press release may contain statements that qualify as "forward-looking
statements" under the Private Securities Litigation Reform Act of 1995,
including statements about the Teleman acquisition made by Mr. Ayalon relating
to the growth in business, development of new products, the anticipated
shipment schedule for the new products and fourth quarter 2004 revenues, as
well as statements made by Mr. Zelnik relating to the expenses and impact on
EPS projections. 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 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, 2002, 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
(http://www.dspg.com) under Investor Relations.
Management conference call
DSP Group has scheduled a conference call for 10:30 a.m. EDT today to
discuss the Teleman asset acquisition 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://www.dspg.com/ir/investor_messageb.html.
For more information, contact:
Yaniv Arieli
President of US Operations
Investor Relations
DSP Group, Inc.
Tel: +1 408 986 4423
Fax: +1 408 986 4442
e-mail: yarieli@dspg.com
SOURCE DSP Group, Inc.
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Related links:
http://www.dspg.com
http://www.dspg.com/ir/investor_messageb.html
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CONTACT:
Yaniv Arieli, President of US Operations,
Investor Relations of DSP Group, Inc., +1-408-986-4423, Fax -
+1-408-986-4442, yarieli@dspg.com
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