DSP Group, Inc. Reports Fourth Quarter 2012 Results

DSP Group, Inc. Reports Fourth Quarter 2012 Results

SAN JOSE, Calif., Jan. 30, 2013 (GLOBE NEWSWIRE) -- DSP Group^®, Inc.
(Nasdaq:DSPG), a leading global provider of wireless chipset solutions for
converged communications, announced today its results for the fourth quarter
ended December 31, 2012.

Fourth Quarter Results:

Revenues for the fourth quarter of 2012 were $38,428,000, an increase of 1%
from revenues of $38,195,000 for the fourth quarter of 2011. Net loss for the
fourth quarter of 2012 was $139,000, as compared to net loss of $4,823,000 for
the fourth quarter of 2011. Loss per share for the fourth quarter of 2012 was
$0.01, as compared to a loss per share of $0.21 for the fourth quarter of
2011.

Year End Results:

Revenues for the year ended December 31, 2012 were $162,790,000, a decrease of
16% over 2011 revenues of $193,861,000. Net loss for 2012 was $8,042,000,
compared to a net loss of $16,242,000 for 2011. Loss per share for 2012 was
$0.37, compared to a loss per share of $0.70 for 2011.

Non-GAAP Results:

Non-GAAP net income and diluted EPS for the fourth quarter of 2012 were
$1,324,000 and $0.06, respectively, as compared to non-GAAP net loss and loss
per share of $4,264,000 and $0.19, respectively, for the fourth quarter of
2011. Non-GAAP net income and diluted EPS for the fourth quarter of 2012
excluded the impact of amortization of acquired intangible assets of $531,000
associated with the acquisitions of NXP's CIPT business and BoneTone and
equity-based compensation expenses of $932,000. Non-GAAP net loss and loss per
share for the fourth quarter of 2011 excluded the impact of amortization of
acquired intangible assets of $1,381,000 associated with the acquisition of
NXP's CIPT business; equity-based compensation expenses of $1,156,000; other
income from remeasurement of our initial investment in an affiliated company
of $1,343,000; and a tax benefit of $635,000 resulting from the reversal of an
income tax contingency reserve that was determined to be no longer needed due
to the expiration of applicable statute of limitations.

Non-GAAP net income and diluted EPS for the year ended December 31, 2012 were
$775,000 and $0.04, respectively, as compared to non-GAAP net loss and loss
per share of $4,200,000 and $0.18, respectively, for the year ended December
31, 2011. Non-GAAP net income and diluted EPS for the year ended December 31,
2012 excluded the impact of amortization of acquired intangible assets of
$2,310,000 associated with the CIPT and BoneTone acquisitions; equity-based
compensation expenses of $4,985,000; restructuring expenses of $2,008,000
associated with the reorganization of our operations; 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 loss per share for the year
ended December 31, 2011 excluded the impact of amortization of acquired
intangible assets of $7,972,000 associated with the CIPT acquisition;
equity-based compensation expenses of $6,218,000; restructuring income of
$170,000 associated with the reorganization of our operations; other income
from remeasurement of our initial investment in an affiliated company of
$1,343,000; and a tax benefit of $635,000 resulting from the reversal of an
income tax contingency reserve that was determined to be no longer needed due
to the expiration of applicable statute of limitations.

Ofer Elyakim, CEO of DSP Group, stated: "Our financial results for the fourth
quarter exceeded our guidance on all fronts and demonstrated a return to
operating profitability and solid execution in a challenging macro-economic
environment and continued uncertainty in our core DECT market. We ended the
quarter with revenues of $38.4 million, exceeding the higher end of our
guidance range and slightly above our positive earnings pre-announcement," Mr.
Elyakim continued, "We successfully delivered on our objective of generating
positive cash flows from operations for 2012, and generated $10 million
dollars in cash from operations and approximately $2 million in EBITDA ."

Presentation on non-GAAP Net Income Calculation

The Company believes that the non-GAAP presentation of net income and diluted
EPS, as well as net loss and loss per share, presented in this press release
is useful to investors in comparing results for the quarter and year ended
December 31, 2012 to the same periods 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 a return to operating profitability.
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 and DECT markets 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; DSPG Group's ability to control operating costs; 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. (Nasdaq: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 8:30am ET today to discuss the
financial results for the fourth quarter and full year 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 (investor
message board) of DSP Group's Web site at www.dspg.com or link to:
http://www.media-server.com/m/p/bkhpyz33

If you cannot join the call, you may 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: 7291734#)

--International Dial-In # +44 203 427 0598 (passcode: 7291734#)


DSP GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
                                                      
                               Three Months Ended      Twelve Months Ended
                               December 31,            December 31,
                               2012        2011        2012        2011
                               (Unaudited) (Unaudited) (Unaudited) (Audited)
                                                                
Revenues                        $ 38,428    $ 38,195    $ 162,790   $ 193,861
Cost of revenues                23,690      24,567      101,660     123,734
                                                                
Gross profit                    14,738      13,628      61,130      70,127
Operating expenses:                                              
Research and development, net   9,510       12,275      42,539      53,244
Sales and marketing             2,940       4,140       14,237      16,497
General and administrative      2,477       2,968       10,638      12,920
Amortization of intangible      531         1,381       2,310       7,972
assets
Restructuring expenses (income) --          --          2,008       (170)
                                                                
Total operating expenses        15,458      20,764      71,732      90,463
                                                                
Operating loss                  (720)       (7,136)     (10,602)    (20,336)
                                                                
Financial income, net           656         551         2,388       1,885
Other income                    --          1,343       --          1,343
                                                                
Loss before taxes on income     (64)        (5,242)     (8,214)     (17,108)
Taxes on income (income tax     75          (419)       (172)       (866)
benefit)
                                                                
Net loss                        $ (139)     $ (4,823)   $ (8,042)   $ (16,242)
                                                                
Net loss per share:
Basic and Diluted               $ (0.01)    $ (0.21)    $ (0.37)    $ (0.70)
                                                                
Weighted average number of
shares of common stock used in                                   
the computation of net loss per
share:
Basic                           21,723      22,796      21,950      23,247
Diluted                         21,723      22,796      21,950      23,247
                                                             


Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
                                                       
                                    Three Months Ended  Twelve Months Ended
                                    December 31,        December 31,
                                    2012      2011      2012       2011
                                    Unaudited Unaudited Unaudited  Unaudited
GAAP net income (loss)               ($139)   ($4,823) ($8,042)  ($16,242)
Equity-based compensation expense
included in cost of product revenues 53        75        331        402
and other
Equity-based compensation expense
included in research and             431       525       2,426      2,766
development, net
Equity-based compensation expense    137       193       778        987
included in sales and marketing
Equity-based compensation expense
included in general and              311       363       1,450      2,063
administrative
Amortization of intangible assets    531       1,381     2,310      7,972
Reversal of income tax contingency
reserve that was determined to be no
longer needed due to the expiration  --        (635)     (486)      (635)
of applicable statute of limitations
included in tax
Restructuring expenses (income)      --        --        2,008      (170)
Other income from remeasurement of   --        (1,343)   --         (1,343)
investment in affiliated company
Non-GAAP net income (loss)           $ 1,324  $ (4,264) $ 775     $ (4,200)
                                                                
GAAP weighted-average number of
common stock used in computation of  21,723    22,796    21,950     23,247
basic and diluted loss per share (in
thousands)
Weighted-average number of shares
related to outstanding options and   21        --        50         --
stock appreciation rights (in
thousands)
                                                                
Weighted-average number of common
stock used in computation of         21,744    22,796    22,000     23,247
non-GAAP diluted net income per
share (in thousands)
                                                                
GAAP Diluted net loss per share      $ (0.01) $ (0.21)  $ (0.37)  $ (0.70)
Equity-based compensation expense    0.04      0.05      0.23       0.27
Amortization of intangible assets    0.03      0.06      0.11       0.35
Reversal of income tax contingency
reserve that was determined to be no
longer needed due to the expiration  --        (0.03)    (0.02)     (0.03)
of applicable statute of limitations
included in tax
Restructuring expenses (income)      --        --        0.09       (0.01)
Other income from remeasurement of   --        (0.06)    --         (0.06)
investment in affiliated company
Non-GAAP diluted net income (loss)   $ 0.06   $ (0.19)  $ 0.04    $ (0.18)
per share
                                                              


DSP GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
                                                          
                                              December 31, December 31,
                                              2012        2011
                                              (Unaudited) (Audited)
Assets                                                  
Current assets:                                            
Cash and cash equivalents                      $21,684      $18,109
Restricted deposits                            121          128
Marketable securities and short term deposits  20,201       30,626
Trade receivables, net                         20,403       25,643
Inventories                                    12,916       16,434
Other accounts receivable and prepaid expenses 3,656        5,343
Deferred income taxes                          101        89
Total current assets                           79,082       96,372
                                                          
Property and equipment, net                    3,706        5,803
                                                          
Long term marketable securities                78,333       69,046
Severance pay fund                             10,197       9,974
Goodwill and other Intangible assets, net      12,087       14,395
Long term prepaid expenses and lease deposits  208         466
                                              100,825      93,881
Total assets                                   $ 183,613    $ 196,056
                                                          
Liabilities and Stockholders' Equity                       
Current liabilities:                                       
Trade payables                                 $ 14,027     $ 17,989
Other current liabilities                      15,953       18,373
Total current liabilities                      29,980       36,362
                                                          
Accrued severance pay                         10,436       10,278
Accrued pensions                              970        792
Total long term liabilities                   11,406       11,070
                                                          
Stockholders' equity:                                      
Common stock                                   22           23
Additional paid-in capital                     346,335      341,352
Accumulated other comprehensive income (loss)  988          (1,756)
Less – Cost of treasury stock                  (125,724)   (122,236)
Accumulated deficit                            (79,394)    (68,759)
Total stockholders' equity                     142,227      148,624
Total liabilities and stockholders' equity     $ 183,613    $ 196,056

CONTACT: Orly Garini-Dil
         DSP Group, Inc.
         Tel: +1-408-240-6822
         orly.garini@dspg.com
         www.dspg.com

DSP Group
 
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