Quarterly Revenues Increased 24% YoY
SANTA CLARA, Calif., July 19 /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 second quarter ended June 30, 2006.
Second Quarter Results:
Revenues for the second quarter of 2006 were $60,737,000, an increase
of 24% from revenues of $49,047,000 for the second quarter of 2005. Net
income for the second quarter was $7,088,000, a decline of 14% from net
income of $8,248,000 for the second quarter of 2005. Diluted earnings per
share (EPS) for the second quarter of 2006 were $0.23, a decline of 18%
from $0.28 for the second quarter of 2005.
Pro Forma Results:
Pro forma net income and diluted EPS for the second quarter of 2006,
excluding the impact of equity-based compensation expense as required upon
adoption of Statement of Financial Accounting Standards No. 123R, "Share
Based Payment" ("SFAS 123(R)"), were $10,325,000 and $0.34, respectively,
representing an increase of 25% and 21%, respectively, from the second
quarter of 2005.
Share Buyback:
During the second quarter of 2006, DSP Group repurchased 976,000 shares
of its Common Stock at an average price of $25.58 per share, for an
aggregate price of approximately $25.0 million.
After giving effect to the most recent repurchases, approximately 2.0
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.
Eli Ayalon, Chairman and CEO of DSP Group, stated: "The second quarter
of 2006 was another strong quarter for DSP Group. Our revenues increased by
24% as compared to 2005, and the overall financial results of the Company
for the second quarter of 2006 reflect a successful implementation of our
strategy."
The Company believes that the pro forma presentation of net income and
diluted EPS presented in this press release is useful to investors in
comparing results for the quarter ended June 30, 2006 to the same period
during 2005, because results for the second quarter of 2005 did not include
equity-based compensation expenses relating to SFAS 123(R). Further, the
Company believes it is useful to investors to understand how the expenses
associated with the application of SFAS 123(R) 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 & 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,
data and video communication and deployment in residential, SOHO, SME,
enterprise and automotive applications. DSP Group 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 second quarter of 2006 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: 45741883)
-- International Dial-In # 1-617-801-6888 (passcode: 45741883)
For more information, please contact Ofer Elyakim, Director of Investor
Relations & Business Development, DSP Group Inc. at 408-986-4421; or
e-mail: ofere@dsp.co.il.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020715/SFM118LOGO )
DSP GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Product revenues and other $60,737 $49,047 $112,689 $89,210
Cost of product revenues 35,632 25,990 65,987 48,234
and other
Gross profit 25,105 23,057 46,702 40,976
Operating expenses:
Research and development 12,409 10,542 23,310 19,941
Sales and marketing 4,070 3,290 7,876 6,176
General and
administrative 2,895 1,783 5,695 3,648
Total operating expenses 19,374 15,615 36,881 29,765
Operating income 5,731 7,442 9,821 11,211
Other income:
Interest and other 3,351 2,499 6,460 4,771
income, net
Income before provision
for income taxes 9,082 9,941 16,281 15,982
Provision for income taxes 1,994 1,693 3,555 2,727
Net income $7,088 $8,248 $12,726 $13,255
Net earnings per share:
Basic $0.24 $0.29 $0.43 $0.47
Diluted $0.23 $0.28 $0.41 $0.45
Weighted average number
of shares of Common Stock
used in the computation of:
Basic 29,871 28,328 29,674 28,221
Diluted 30,632 29,718 30,708 29,662
DSP GROUP, INC.
CONSOLIDATED PRO FORMA STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Product revenues and other $60,737 $49,047 $112,689 $89,210
Cost of product revenues 35,502 25,990 65,779 48,234
and other
Gross profit 25,235 23,057 46,910 40,976
Operating expenses:
Research and development 10,706 10,542 20,385 19,941
Sales and marketing 3,716 3,290 7,254 6,176
General and administrative 1,724 1,783 3,599 3,648
Total operating expenses 16,146 15,615 31,238 29,765
Operating income 9,089 7,442 15,672 11,211
Other income:
Interest and other 3,351 2,499 6,460 4,771
income, net
Income before provision
for income taxes 12,440 9,941 22,132 15,982
Provision for income taxes 2,115 1,693 3,763 2,727
Net income $10,325 $8,248 $18,369 $13,255
Net earnings per share:
Basic $0.35 $0.29 $0.62 $0.47
Diluted $0.34 $0.28 $0.60 $0.45
Weighted average number
of shares of Common Stock
used in the computation of:
Basic 29,871 28,328 29,674 28,221
Diluted 30,632 29,718 30,708 29,662
The above pro forma consolidated statements of income have been adjusted
to exclude the following to US GAAP reported net income:
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited)(Unaudited)
Reported net income per US
GAAP $7,088 $8,248 $12,726 $13,255
Adjustments:
Equity-based compensation
expense included in cost
of product revenues and other 130 -- 208 --
Equity-based compensation
expense included in
research and development 1,703 -- 2,925 --
Equity-based compensation
expense included in sales
and marketing 354 -- 622 --
Equity-based compensation
expense included in
general and administrative 1,171 -- 2,096 --
Tax benefit resulting from
equity-based compensation (121) -- (208) --
Pro forma net income $10,325 $8,248 $18,369 $13,255
DSP GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2006 2005
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $33,019 $50,460
Marketable securities and cash deposits 134,790 108,928
Trade receivables, net 28,216 16,991
Inventories 19,426 12,686
Other accounts receivable 1,734 1,617
Deferred income taxes 1,434 1,227
Total current assets 218,619 191,909
Property and equipment, net 11,322 11,704
Long term marketable securities 185,016 185,828
Severance pay fund 4,944 4,419
Deferred income taxes 1,638 1,638
Other assets 3,972 4,507
Total assets $425,511 $400,005
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $19,032 $12,753
Other current liabilities 28,457 33,411
Total current liabilities 47,489 46,164
Accrued severance pay 5,170 4,707
Stockholders' equity:
Common Stock 29 29
Additional paid-in capital 209,093 188,539
Accumulated other comprehensive income 347 45
Retained earnings 187,902 179,968
Less -- Cost of treasury stock (24,519) (19,447)
Total stockholders' equity 372,852 349,134
Total liabilities and stockholders' equity $425,511 $400,005
SOURCE DSP Group, Inc.
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Related links:
http://www.dspg.com
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AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Ofer Elyakim, Director of Investor Relations
& Business Development of DSP Group Inc., +1-408-986-4421, or
ofere@dsp.co.il
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