SAN JOSE, Calif., Nov. 5, 2012 (GLOBE NEWSWIRE) -- DSP Group®, Inc. DSPG, a leading global provider of wireless chipset solutions for converged communications, announced today its results for the third quarter ended September 30, 2012.
Third Quarter Results:
Revenues for the third quarter of 2012 were $36,666,000, a decrease of 24% from revenues of $48,373,000 for the third quarter of 2011. Net loss for the third quarter of 2012 was $2,415,000, as compared to net loss of $4,814,000 for the third quarter of 2011. Diluted earnings per share (EPS) for the third quarter of 2012 were a loss of $0.11 per share, as compared to a loss of $0.21 per share for the third quarter of 2011.
Non-GAAP Results:
Non-GAAP net income and diluted EPS for the third quarter of 2012 were $114,000 and $0.01 per share, respectively, as compared to non-GAAP net loss of $846,000 and a loss per share of $0.04 for the third quarter of 2011. Non-GAAP net income and diluted EPS for the third quarter of 2012 excluded the impact of amortization of acquired intangible assets of $592,000 associated with the acquisition of NXP's CIPT business and BoneTone Communications; equity-based compensation expenses of $1,108,000; restructuring expenses of $1,315,000 and a tax benefit of $486,000 resulting from the reversal of income tax contingency reserve that was determined to be no longer needed due to the expiration of applicable statute of limitations. Non-GAAP net loss and EPS for the third quarter of 2011 excluded the impact of amortization of acquired intangible assets of $2,197,000 associated with the acquisition of the CIPT business; equity-based compensation expenses of $1,351,000 and restructuring expenses of $420,000.
Ofer Elyakim, CEO of DSP Group, stated: "Despite our dissatisfaction with the low level of sales recorded in the third quarter, driven by softer market demand for consumer electronics in general and cordless telephony products in particular, we succeeded in offsetting this weakness and ended the quarter with non-GAAP net income, driven by improving gross margins and a more flexible cost structure. Finally, we remain on track to meet our objective of generating positive operating cash flows for 2012."
Presentation on non-GAAP Net Income Calculation
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 September 30, 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 meeting the Company's objective of generating positive operating cash flows in 2012. In addition, the events described in these forward-looking statements may not actually arise as a result of various factors, including the timing and ability of the consumer electronics market to recover and the corresponding recovery of DSP Group's customers; unexpected delays in the commercial launch of new products; the impact of reductions in lead times and inventory levels by DSP Group customers and their customers; slower than expected change in the nature of residential communications domain; DSP Group's inability to develop and produce new products at competitive costs and in a timely manner or failure of such products to achieve broad market acceptance; 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 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. DSPG is a leading global provider of wireless chipset solutions for converged communications. 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, HDClear™, video and VoIP technologies.
DSP Group enables converged voice, audio, video and data connectivity across diverse mobile, consumer and enterprise products – from mobile devices, connected multimedia screens, 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, office and on the go.
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 a.m. ET today to discuss the financial results for the third 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 www.dspg.com or link to: http://www.media-server.com/m/p/6arc34c8
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: 9573540#)
--International Dial-In # +44 203 427 0598 (passcode: 9573540#)
| DSP GROUP, INC. | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (In thousands, except per share amounts) | ||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2012 | 2011 | 2012 | 2011 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Revenues | $ 36,666 | $ 48,373 | $ 124,361 | $ 155,666 |
| Cost of revenues | 22,764 | 30,853 | 77,970 | 99,167 |
| Gross profit | 13,902 | 17,520 | 46,391 | 56,499 |
| Operating expenses: | ||||
| Research and development, net | 9,632 | 12,570 | 33,029 | 40,970 |
| Sales and marketing | 3,502 | 4,179 | 11,297 | 12,357 |
| General and administrative | 2,329 | 3,282 | 8,160 | 9,952 |
| Amortization of intangible assets | 592 | 2,197 | 1,778 | 6,591 |
| Restructuring expenses (income) | 1,315 | 420 | 2,008 | (170) |
| Total operating expenses | 17,370 | 22,648 | 56,272 | 69,700 |
| Operating loss | (3,468) | (5,128) | (9,881) | (13,201) |
| Financial income, net | 666 | 455 | 1,732 | 1,333 |
| Loss before taxes on income |
(2,802) |
(4,673) |
(8,149) |
(11,868) |
| Taxes on income (income tax benefit) | (387) | 141 | (247) | (448) |
| Net loss | $ (2,415) | $ (4,814) | $ (7,902) | $ (11,420) |
|
Net loss per share: |
||||
| Basic and Diluted | $ (0.11) | $ (0.21) | $ (0.36) | $ (0.49) |
| Weighted average number of shares of common stock used in the computation of: | ||||
| Basic and Diluted net loss per share | 21,775 | 23,371 | 22,025 | 23,397 |
| Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures | ||||
| (In thousands, except per share amounts) | ||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2012 | 2011 | 2012 | 2011 | |
| Unaudited | Unaudited | Unaudited | Unaudited | |
| GAAP net loss | ($2,415) | ($4,814) | ($7,902) | ($11,420) |
| Equity-based compensation expense included in cost of revenues and other | 72 | 94 | 277 | 328 |
| Equity-based compensation expense included in Research and Development, net | 538 | 635 | 1,995 | 2,241 |
| Equity-based compensation expense included in Sales and Marketing | 173 | 231 | 641 | 794 |
| Equity-based compensation expense included in General and Administrative | 325 | 391 | 1,139 | 1,700 |
| Amortization of intangible assets | 592 | 2,197 | 1,778 | 6,591 |
| Reversal of an income tax contingency reserve that was determined to be no longer needed due to the expiration of applicable statutes of limitation | (486) | -- | (486) | -- |
| Restructuring expenses (income) | 1,315 | 420 | 2,008 | (170) |
| Non-GAAP net income (loss) | $ 114 | $ (846) | $ (550) | $ 64 |
| GAAP weighted-average number of common stock used in computation of basic and diluted loss per share (in thousands) | 21,775 | 23,371 | 22,025 | 23,397 |
| weighted – average number of shares related to outstanding options and SARS (in thousands) | 38 | -- | -- | -- |
| weighted-average number of common stock used in computation of Non-GAAP diluted net income and loss per share (in thousands) | 21,813 | 23,371 | 22,025 | 23,397 |
| GAAP Diluted net loss per share | ($ 0.11) | ($ 0.21) | ($ 0.36) | ($ 0.49) |
| Equity-based compensation expense | 0.05 | 0.06 | 0.19 | 0.22 |
| Amortization of intangible assets | 0.03 | 0.09 | 0.08 | 0.28 |
| Reversal of an income tax contingency reserve | (0.02) | -- | (0.02) | -- |
| Restructuring expenses (income) | 0.06 | 0.02 | 0.09 | (0.01) |
| Non-GAAP diluted net income (loss) per share | $ 0.01 | $ (0.04) | $ (0.02) | $ 0.00 |
| DSP GROUP, INC. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (In thousands) | ||
|
September 30, 2012 |
December 31, 2011 |
|
| (Unaudited) | (Audited) | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 19,169 | $ 18,109 |
| Restricted deposits | 121 | 128 |
| Marketable securities and short term deposits | 21,037 | 30,626 |
| Trade receivables | 23,182 | 25,643 |
| Inventories | 14,592 | 16,434 |
| Other accounts receivable and prepaid expenses | 4,034 | 5,343 |
| Deferred income taxes | 124 | 89 |
| Total current assets | 82,259 | 96,372 |
| Property and equipment, net | 4,157 | 5,803 |
|
Long term marketable securities and deposits |
71,728 | 69,046 |
| Severance pay fund | 9,837 | 9,974 |
| Intangible assets and goodwill, net | 12,616 | 14,395 |
| Long term prepaid expenses and lease deposits | 288 | 466 |
| 94,469 | 93,881 | |
| Total assets | $ 180,885 | $ 196,056 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Trade payables | $ 12,087 | $ 17,989 |
| Other current liabilities | 15,827 | 18,373 |
| Total current liabilities | 27,914 | 36,362 |
| Accrued severance pay | 10,213 | 10,278 |
| Accrued pensions | 841 | 792 |
| Total long term liabilities | 11,054 | 11,070 |
|
Stockholders' equity: |
||
| Common stock | 22 | 23 |
| Additional paid-in capital | 345,403 | 341,352 |
| Accumulated other comprehensive income (loss) | 922 | (1,756) |
| Less – Cost of treasury stock | (125,175) | (122,236) |
| Accumulated deficit | (79,255) | (68,759) |
| Total stockholders' equity | 141,917 | 148,624 |
| Total liabilities and stockholders' equity | $ 180,885 | $ 196,056 |
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