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Spectrum Signal Processing Reports Fourth Quarter and 2004 Year End Results
Monday February 7, 4:10 pm ET
BURNABY, British Columbia--(BUSINESS WIRE)--Feb. 7, 2005--Spectrum Signal Processing Inc. (TSX:SSY - News; NASDAQ:SSPI - News) today announced its financial results for its fourth quarter and fiscal year ended December 31, 2004. Spectrum reports all results in US dollars and in accordance with US GAAP. Fourth quarter financial highlights include:
* Revenue of $4.6 million;
* Gross margins of $2.8 million, or 61% of revenue;
* Net operating expenses of $2.5 million;
* Net earnings of $294,000, or $0.02 per share; and,
* A cash balance of $3.3 million at December 31, 2004.
"2004 was a strong year for Spectrum from both a strategic and a financial perspective," stated Pascal Spothelfer, Spectrum's President and CEO. "We began the year with a commitment to our shareholders, our customers and our staff to return Spectrum to profitability. We delivered on this promise with an unwavering focus on our core defense electronics business. Moreover, we significantly enhanced our position as the leading commercial-off-the-shelf provider of software defined radio solutions for defense and satellite communications applications, as exhibited by our 34 active design-ins at year-end."
FINANCIAL RESULTS
Revenues for the fourth quarter of 2004 were $4.6 million, a decrease of 4% compared to revenues of $4.8 million for the third quarter of 2004 and a decrease of 2% compared to revenues of $4.7 million for the fourth quarter of 2003.
Wireless revenues were $4.2 million for the fourth quarter of 2004, an increase of 11% compared to wireless revenues of $3.8 million for the third quarter of 2004 and $3.8 million for the fourth quarter of 2003. Packet-voice revenues were $0.4 million for the fourth quarter of 2004, a decrease of 60% compared to packet-voice revenues of $1.0 million for the third quarter of 2004 and a decrease of 56% compared to packet-voice revenues of $0.9 million for the fourth quarter of 2003. The Company ceased all new development in its packet-voice product line in January 2004 in light of significant processor roadmap risk and general market uncertainty. As a result, the Company expects revenues from packet-voice products and services to be nominal in 2005.
The company's gross margin for the fourth quarter of 2004 was $2.8 million, or 61% of revenue, compared $2.7 million, or 56% of revenue, for the third quarter of 2004 and $2.9 million, or 62% of revenue, for the fourth quarter of 2003.
Operating expenses for the fourth quarter of 2004 were $2.5 million, compared to $2.4 million for the third quarter of 2004 and $3.9 million for the fourth quarter of 2003. Operating expenses for the fourth quarter of 2004 included a $277,000 expense offset recorded pursuant to the company's research and development funding agreement with Technology Partnerships Canada.
Spectrum recorded net earnings of $294,000 for the fourth quarter of 2004, or $0.02 per share, compared to net earnings of $309,000, or $0.02 per share, for the third quarter of 2004 and a loss of $0.9 million, or $0.06 per share, for the fourth quarter of 2003.
Spectrum's cash position, net of bank indebtedness, at December 31, 2004 stood at $3.3 million, compared to $1.8 million at September 30, 2004.
Spectrum recorded revenues of $17.9 million for fiscal 2004, compared to revenues of $19.6 million for fiscal 2003. Spectrum generated a gross margin of $10.5 million, or 59% of revenue, in fiscal 2004, compared to a gross margin of $11.1 million, or 57% of revenue, in fiscal 2003. The company recorded a net loss of $1.6 million in fiscal 2004, or $0.09 per share, including restructuring-related charges of $2.6 million. Spectrum posted a net loss of $4.8 million, or $0.33 per share, in fiscal 2003.
OPERATIONAL HIGHLIGHTS
During the fourth quarter of 2004, Spectrum announced:
* A contract with the US Space and Naval Warfare Systems Command, which will use Spectrum's flexComm(TM) HCDR-1000 platform to develop an Ultra High Frequency Characterization System;
* A contract with Oak Ridge National Laboratory to jointly develop a suite of multi-purpose software-defined radio frequency identification (RFID) interrogators under three funded programs. The RFID readers will address a variety of military logistics, homeland security and commercial transportation applications;
* A contract with Techno-Sciences, Inc. for the supply of an integrated SATCOM subsystem to be deployed in a satellite-based search and rescue application based The development is being funded by the National Aeronautics and Space Administration Goddard Space Flight Center;
* A contract with a North American-based defense contractor, which will use Spectrum's flexComm SDR-3000 product for its internal development activities targeted at the Joint Tactical Radio System program;
* A contract with an agency of the US Department of Defense, which will use Spectrum's flexComm HCDR-1000 for an undisclosed signals intelligence program;
* A contract with a North American-based defense contractor, which will use Spectrum's flexComm SDR-3000 platform to research software defined radio technologies with the objective of upgrading its current generation of broadly deployed military radios to be software defined and allowing them to interoperate with Joint Tactical Radio System compliant networks;
* The availability of the flexComm TM1-3902 digital intermediate frequency interface module and reference design kit for its industry leading SDR-3000 software defined radio platform. The TM1-3902 is targeted at customers who require their own custom digital IF interface between radio frequency front-ends and Spectrum's Software Communications Architecture-enabled SDR-3000 products;
* The availability of the flexComm SDR-3000 MRDP, a MILCOM Rapid-Prototyping Development Platform. The SDR-3000 MRDP is the industry's first "RF to Ethernet" commercial off-the-shelf, integrated, black-side processing system targeted at Joint Tactical Radio System and other military communications developers; and,
* The availability of the flexComm TM1-3350 transition module, a wideband dual analog-to-digital and dual digital-to-analog converter module. The module is targeted at wide bandwidth applications including military satellite communications, electronic warfare, direction finding and smart antenna applications.
Subsequent to December 31, 2004:
# Spectrum announced the engagement of a banking syndicate for a private placement of approximately Cdn$9 million ($7.5 million) of equity securities on a best efforts basis. The proceeds of the proposed offering are expected to be used for general working capital purposes and for certain growth initiatives that may include company or product line acquisitions.
CONFERENCE CALL INFORMATION
Spectrum will conduct a conference call and live audio webcast on February 7, 2005 at 4:30 pm Eastern / 1:30 pm Pacific time. The call can be accessed via telephone by dialing 1.800.387.6216, or via audio webcast at www.spectrumsignal.com. A replay of the call will be available from February 7, 2005 to March 4, 2005 and can be accessed by dialing 1.416.695.5800 followed by the access code 3135393#, or by visiting www.spectrumsignal.com. |
