SANTA CLARA, Calif., Oct. 22 /PRNewswire-FirstCall/ --
DSP Group, Inc. (Nasdaq: DSPG) today announced results for the third quarter
of 2002, ending September 30, 2002.
Record high revenues for our semiconductor business for the third quarter
of 2002 were $44,005,000, compared with revenues of $27,143,000 for the third
quarter of 2001, an increase of 62%. Net income for the third quarter of 2002
was $8,772,000 and EPS was $0.32 (diluted), compared with net income of
$6,854,000 and EPS $0.25 (diluted) for the third quarter of 2001.
The discontinued operations, the DSP Core Licensing business, had revenues
of $4,852,000 and net income of $981,000 for the third quarter of 2002.
Boaz Edan, COO of DSP Group said: "The successful launch of our 2.4 GHz
line of products in the first half of 2002 is reflected in our substantial
growth in revenues in the third quarter of 2002 compared with the third
quarter of 2001. The 2.4 GHz line of products is driving our sales growth and
significantly increasing our market share".
Eli Ayalon, Chairman & CEO of DSP Group stated: "In what may possibly be
the most challenging downturn ever faced by the technology sector in general
and semiconductor industry in particular, remarkably we have reached all time
records in Revenues, Operating profit and Net Profit (excluding one time
capital gains). The cash position of the company increased this quarter by
$13,152,000.
Mr. Ayalon went on saying: "These results show that following the spin
off of our DSP Core Licensing business, we will be left with a strong fabless
semiconductor company, having an exceptional level of annual revenues per
employee, expected to exceed $800,000 in 2002. Our employees and managers
continue to show leadership in these tough times by achieving these excellent
results."
In connection with the closing of the deal with Parthus Technologies plc,
Moshe Zelnik, CFO of DSP Group stated: "The High Court of Ireland approved
the scheme of arrangement that allows the combination of Parthus and Ceva into
one Company. We are currently, together with Parthus, completing the process
of registering the combination under the U.S. and U.K. Securities Laws, and
expect that the transaction will close and trading of the common stock of
ParthusCeva on NASDAQ and the London Stock Exchange will commence immediately
following completion of the registration process.
About DSP Group, Inc.
DSP Group, Inc. is a semiconductor fabless company that is a leader in the
wireless residential market. By combining its DSP Core technology with
advanced RF, communication technology and speech-processing algorithms, DSP
Group is a worldwide leader in developing and providing Total Telephony
Solutions(TM). These applications include digital 900MHz, 2.4GHz, DECT and
Bluetooth for residential and automotive applications. DSP Group's advanced RF
CMOS and communications technology provides the company with a clear path to a
Phone-on-a-Chip(TM) solution. DSP Group also develops and markets embedded,
integrated silicon/software solution for Voice-over-Digital-Subscriber Line
(VoDSL), voice-over-Internet-Protocol (VoIP) applications, and other voice
over packet applications for Integrated Access Device (IAD) and IP Phone.
This press release contains statements that qualify as "forward-looking
statements" under the Private Securities Litigation Reform Act of 1995,
including statements concerning the success of our 2.4GHz line of products and
the completion of the spin-off of our DSP Core Licensing Business. These
forward-looking statements are based on current expectations and the Company
assumes no obligation to update this information. In addition, the events
anticipated in these forward-looking statements, including the proposed
combination with Parthus, may not actually arise. The Company's actual results
could differ materially from those described in this press release if for any
reason the spin-off of our DSP Cores licensing business does not occur. Other
factors which may effect future operating results or our stock price are
discussed under "RISK FACTORS" in our reports on form 10-K for the year ended
December 31, 2001 and form 10-Q for the quarter and six months ended
June 30, 2002, both of which have been filed with the Securities and Exchange
Commission and are available on our Web site (http://www.dspg.com
<http://www.dspg.com>) under Investor Relations.
Earnings conference call
DSP Group has scheduled a conference call for 8:30 a.m. EDT today to
discuss third quarter 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
website at http://www.dspg.com or through PRnewswire's web site at
http://www.firstcallevents.com/service/ajwz365625949gf12.html.
For more information, please contact Yaniv Arieli, Investor Relations, DSP
Group at 408-986-4423.
DSP GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME - US GAAP
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
Product revenues and other $44,005 $27,143 $97,029 $64,687
Cost of product
revenues and other 26,433 17,300 58,199 38,458
Gross profit 17,572 9,843 38,830 26,229
Operating expenses:
Research and development 5,245 5,273 15,124 15,259
Sales and marketing 3,501 2,411 7,978 6,844
General and administrative 1,608 1,391 3,524 3,627
Aborted spin off
expenses and other -- -- 865 --
Total operating expenses 10,354 9,075 27,491 25,730
Operating income 7,218 768 11,339 499
Other income:
Interest and
other income, net 2,416 3,022 7,566 9,637
Equity in earnings
of affiliates -- -- -- 105
Minority interest
in loss of subsidiary -- -- -- 173
Income after
financial and other income 9,634 3,790 18,905 10,414
Impairment of available-for-sale
marketable securities -- -- (*)(9,815) --
Income before provision
for income taxes 9,634 3,790 9,090 10,414
Provision for income taxes 1,843 96 (**)44 1,825
Net income from
continuing operations 7,791 3,694 9,046 8,589
Net income from
discontinued operations (***) 981 3,160 2,492 9,284
Net income $8,772 $6,854 $11,538 $17,873
Net earnings per share
for continuing operations:
Basic $0.29 $0.14 $0.34 $0.32
Diluted $0.29 $0.14 $0.32 $0.31
Net earnings per share
for discontinued operations:
Basic $0.03 $0.12 $0.09 $0.35
Diluted $0.03 $0.11 $0.09 $0.34
Net earnings per share (combined):
Basic $0.32 $0.26 $0.43 $0.67
Diluted $0.32 $0.25 $0.41 $0.65
Weighted average number of
shares of Common Stock
used in computing of:
Basic 27,104 26,732 27,030 26,576
Diluted 27,707 27,790 27,848 27,539
(*) Related to impairment of AudioCodes Ltd. Stock
(**) Including tax credit related to impairment of AudioCodes Ltd.
(***) Related to the DSP Licensing activities which are planned to be
discontinued following the merger with Parthus
DSP GROUP, INC.
CONSOLIDATED PRO FORMA STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
Product revenues and other $44,005 $27,143 $97,029 $64,687
Cost of product
revenues and other 26,433 17,300 58,199 38,459
Gross profit 17,572 9,843 38,830 26,228
Operating expenses:
Research and development 5,245 5,273 15,124 15,259
Sales and marketing 3,501 2,411 7,978 6,844
General and administrative 1,608 1,391 3,524 3,627
Total operating expenses 10,354 9,075 26,626 25,730
Operating income 7,218 768 12,204 499
Other income :
Interest and
other income, net 2,416 3,022 7,566 9,637
Equity in earnings
of affiliates -- -- -- 105
Minority interest
in loss of subsidiary -- -- -- 173
Income after financial
and other income 9,634 3,790 19,770 10,414
Provision for income taxes 1,843 96 3,800 1,825
Net income from continuing
Operations 7,791 3,694 15,970 8,589
Net income from
discontinued operations 981 3,160 2,491 9,284
Net income $8,772 $6,854 $18,461 $17,873
Net earnings per share
for continuing operations:
Basic $0.29 $0.14 $0.59 $0.32
Diluted $0.29 $0.14 $0.57 $0.31
Net earnings per share
for discontinued operations:
Basic $0.03 $0.12 $0.09 $0.35
Diluted $0.03 $0.11 $0.09 $0.34
Net earnings per share (combined):
Basic $0.32 $0.26 $0.68 $0.67
Diluted $0.32 $0.25 $0.66 $0.65
Weighted average number
of shares of Common Stock
used in computing of:
Basic 27,104 26,732 27,030 26,576
Diluted 27,707 27,790 27,848 27,539
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
Adjustments: $8,772 $6,854 $11,538 $17,873
Aborted spin off
expenses and other -- -- 865 --
Impairment of
available-for-sale
marketable securities
(AudioCodes Ltd.) -- -- 9,815 --
Tax benefit -- -- (3,757) --
Pro forma net income $8,772 $6,854 $18,461 $17,873
DSP GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
Assets 2002 2001
Current Assets:
Cash and cash equivalents $21,361 $39,146
Cash designated to combination 40,759 --
Marketable securities
and short term bank deposits 46,903 70,893
Trade receivable, net 7,558 6,315
Inventories 9,347 2,048
Deferred income taxes 2,098 2,098
Other accounts receivable and prepaid
Expenses 1,149 1,547
Assets of discontinued operation 15,322 12,197
Total current assets 144,497 134,244
Property and equipment, net 4,572 5,390
Long term marketable securities 158,026 139,752
Other investments 8,627 25,536
Other assets, net 6,114 6,229
Severance pay fund 1,302 1,228
Total Assets $323,138 $312,379
Liabilities and Stockholders' Equity
Current liabilities:
Trade payable $7,225 $5,123
Other current liabilities 19,308 11,592
Liabilities of discontinued operation 5,454 7,852
Total current liabilities 31,987 24,567
Long term liabilities:
Accrued severance pay 1,365 1,294
Deferred income taxes 1,200 7,541
Total long term liabilities 2,565 8,835
Stockholders' equity:
Common stock 27 27
Additional paid-in capital 155,969 155,969
Less cost of treasury stock (2,744) (8,623)
Accumulated other comprehensive income (loss) (2,057) 2,652
Retained earnings 137,391 128,952
Total stockholders' equity 288,586 278,977
Total liabilities and stockholders' equity $323,138 $312,379
SOURCE DSP Group, Inc.
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CONTACT:
Yaniv Arieli, Investor Relations of DSP
Group, +1-408-986-4423
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