F O R . I M M E D I A T E . R E L E A S E
RELEASE DATE: April 27, 1999
CONTACT: Karen Elliott, Spectrum - Investor Communications,
604-421-5422
Email: Karen_Elliott@spectrumsignal.com
SPECTRUM SIGNAL PROCESSING INC. ANNOUNCES
1999 FIRST QUARTER RESULTS
Company adjusts prior quarters' results related to acquisition
Burnaby, B.C., Canada - April 27, 1999 - Spectrum Signal Processing Inc.
(NASDAQ: SSPI / TSE:SSY), a world leader in high performance digital signal
processing (DSP) systems, announced its first quarter 1999 results today.
Sales for the first quarter ended March 31, 1999 totalled US$ 5,638,000 an
increase of 7% compared to sales of US$ 5,276,000 for the first quarter of
1998.
Earnings before interest, taxes, depreciation, amortization and one-time
charges ("EBITDA" or Cash Earnings), amounted to US$315,000 for the first
quarter of 1999 or US$0.03 per share, compared to a loss of US$ 13,000 or
US$ 0.00 per share for the first quarter of 1998.
Net loss for the first quarter of 1999 was US$ 156,000 or US$ (0.02) per
share, compared to a revised net loss of the comparable quarter in 1998 of
US$ 2,284,000 or US$ (0.24). The revision arises from new guidance recently
provided by the Securities and Exchange Commission and is explained later in
this press release.
"We're pleased to see some modest year-over-year revenue growth, and a
reduction in our overall operating costs despite the acquisition of Alex
Computer Systems' assets in early 1998," said Barry Jinks, Spectrum's
President and CEO. "Although conditions in the industrial electronics
sector remain challenging, Spectrum is aggressively laying the foundations
for future growth. We're confident our strategy will pay off when the
market recovers."
In the first quarter of 1999, Spectrum recorded 10 design-ins, and 3
design-wins. Customers chose Spectrum's products for a wide range of
applications including digital radio, radar and sonar, noise cancellation
technology, and machine vision.
The 1999 first quarter net loss includes amortization of goodwill of US$
181,000 which was increased as a result of an adjustment in 1998 operating
results. Although the Company had reported its quarterly and annual results
for 1998 in accordance with established accounting practice, it is adjusting
its 1998 financial statements largely in response to new guidance recently
provided by the Securities and Exchange Commission to the accounting
profession related to the valuation of in-process research and development
(IPR&D) in purchase transactions. During the first quarter of 1998, the
Company recorded a charge of US$ 6,168,000 for IPR&D related to the purchase
of the net assets of Alex Computer Systems. Based upon adjustments to the
valuation using the new SEC valuation guidelines, the Company has adjusted
its first quarter 1998 financial statements and reduced its IPR&D charge by
US$ 3,528,000, with a corresponding increase in intangible assets. The
Company has adjusted its results for the second, third and fourth quarter
for 1998 by an additional US$ 159,000, US$ 158,000 and US$ 128,000
respectively, for additional amortization. None of the adjustments related
to Alex intangibles impact the Company's net operation cash flow.
While the Company now feels its statements are in-line with the new SEC
policy on IPR&D, the SEC is still in the process of completing a final
review of the Company's 1998 financial statements. It is uncertain when
that final review will be completed or whether the results of that review
will further affect Spectrum's 1998 results. If the SEC reduces the
one-time charge for acquired IPR&D, this would effectively increase
Spectrum's 1998 results (or reduce the Company's losses), while increasing
the amount of goodwill capitalized and increasing amortization expenses in
1998 and in future years.
Spectrum Signal Processing is a world leader in DSP system solutions, and
offers DSP software, off-the-shelf hardware, custom ASIC design and complete
custom systems. The company is ISO9001 quality certified, and can be found
on the web at spectrumsignal.com. Spectrum is located at #100 -
8525 Baxter Place, Burnaby, B.C., Canada. ph (604) 421-5422; fax (604)
421-1764.
Any statements made by the company that are not historical facts are
forward-looking statements that are pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve risks and uncertainties, including the timely development
and acceptance of new products, the impact of competitive products and
pricing, changing market conditions and the other risks detailed in the
company's prospectus and from time to time in other filings. Actual results
may differ materially from those projected. These forward-looking
statements represent the company's judgment as of the date of this release.
The company may or may not update these forward-looking statements in the
future.
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