RELEASE DATE: July 22, 1999
CONTACT: Karen Elliott, Spectrum - Investor Communications,
604-421-5422
Email: Karen_Elliott@spectrumsignal.com
SPECTRUM SIGNAL PROCESSING ANNOUNCES SECOND QUARTER RESULTS AND CHANGES TO
SENIOR MANAGEMENT
Burnaby, B.C., Canada - July 22, 1999 - Spectrum Signal Processing Inc.
(NASDAQ: SSPI / TSE:SSY), a world leader in high performance digital signal
processing (DSP) systems, made two announcements today: improving second
quarter 1999 financial results and that President and Chief Executive
Officer, Barry Jinks, has decided to step down at the end of July to allow a
new CEO to take the company to its next level of development.
Mr. Jinks will remain on the company's Board of Directors which has started
a search for a new President and CEO. In the meantime, the company will be
managed by an executive team led by Martin McConnell, who has been appointed
Acting Chief Operating Officer. He will continue to be the Company's Vice
President Finance and Chief Financial Officer.
The results reported today show sales for the second quarter ended June 30,
1999 totalled US$ 7,801,000 an increase of 9% compared to sales of US$
7,144,000 for the second quarter of 1998. Sales for the six months ended
June 30, 1999 totalled US$13,439,000 compared to US$12,420,000 for the
comparable period in 1998, an increase of 8%.
Earnings before interest, taxes, depreciation, amortization and one-time
charges ("EBITDA" or Cash Earnings), amounted to US$ 891,000 for the second
quarter of 1999 or US$ 0.09 per share, compared to a loss of US$ (96,000) or
US$ (0.01) per share for the second quarter of 1998. EBITDA for the six
months ended June 30, 1999 amounted to US$ 1,206,000 or US$ 0.12 per share,
compared to a loss of US$ (109,000) or US$ (0.01) for the six months ended
June 30, 1998.
Net earnings for the second quarter of 1999 was US$ 333,000 or US$ 0.03 per
share, compared to a restated net loss of the comparable quarter in 1998 of
US$ (358,000) or US$ (0.04). Net earnings for the six months ended June 30,
1999 was US$ 177,000 or US$ 0.02 per share, compared to a restated net loss
of the comparable quarter in 1998 of US$ (2,642,000) or US$ (0.27). The
restatement to the 1998 figures arises from guidance provided by the
Securities and Exchange Commission related to the valuation of in-process
research and development acquired with Alex Computer Systems in 1998. The
adjustments do not impact Spectrum's net operation cash flow.
"During the second quarter of 1999, we set a bookings record of $10.4
million, up 17% from the previous record of $8.9 million, and up 37% from
the second quarter of 1998. Our balance sheet has improved, with
inventories reduced by almost US$ 1.8 million over the first quarter of
1999. The bottom line is now benefiting from operating expense reductions
we announced last November with overall operating expenses down 18% from the
second quarter of 1998. While our strengthening backlog and improved
financial performance reflects the beginning of a recovery in the high-end
DSP systems market and our participation in that recovery, we expect market
conditions to remain challenging for the balance of the year," said Mr.
Jinks.
However, he said Spectrum's recent financial stability meant the Company was
well positioned to take advantage of expected improvements in the market.
"Therefore, after 10 years at Spectrum's helm I have decided that it is a
good time to seek new opportunities to challenge my entrepreneurial skills.
Spectrum has been refining its business strategy in response to market
conditions since the beginning of 1999 and the Company is poised for its
next phase of growth. I am proud of how far we've come, but believe a new
style of management is required at Spectrum to facilitate further progress.
I look forward to my future work with investors, customers and, of course,
our great employees and many friends, as I continue to serve on the Board."
Chair of the Board of Directors, Ken Spencer, said the skills Mr. Jinks
brought to Spectrum were the foundation that allowed the company to become a
world leader in high performance digital signal processing.
"Barry has done a good job building the Company to its present position as a
leader in the DSP systems industry. His dedication to our success is
illustrated by this move to step aside so that a new leader could spearhead
the next stage of the company's evolution. We are pleased Barry has agreed
to remain on the Board where his experience and knowledge will help guide
the company in the years ahead. We are confident that the current senior
executives have the skills to ensure the company's operations are not
disrupted during this transition period."
Spectrum's Board of Directors has implemented a transition process for an
orderly transfer of duties to a new CEO. Until a new CEO is appointed,
Martin McConnell, as Acting Chief Operating Officer will oversee the
transition and the day-to-day operations at the Company. Mr. McConnell will
be supported by the current senior management team. The Board has formed an
Executive Management committee to provide guidance and support to Spectrum's
management team during the transition.
Mr. Jinks joined Spectrum Signal Processing, Inc. in 1989 as Vice President
and was promoted to President in 1991 and CEO in 1992. During his tenure at
Spectrum, the Company has become a truly global competitor and revenues have
risen almost 2000%. The company has been recognized with several awards
including the B.C. Export Award, the Profit 100 Award, and the B.C.
Technology Industries Association's "Company of the Year". In 1997, Mr.
Jinks won Pacific Canada's Entrepreneur of the Year Award for High
Technology.
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 One
Spectrum Court, #200 - 2700 Production Way, 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. |
