4th QUARTER, YEAR END RESULT
businesswire.com
BW1353 FEB 16,1999 6:05 PACIFIC 09:05 EASTERN
( BW)(SPECTRUM-SIGNAL)(SSPIF)(SSY.) Spectrum Signal Processing Inc.
Announces 1998 Fourth Quarter, Year-End Results
Business Editors
BURNABY, BRITISH COLUMBIA--(BUSINESS WIRE)--Feb. 16, 1999-- Spectrum Signal(Nasdaq:SSPIF) (TSE:SSY.) Spectrum Signal Processing Inc. (Nasdaq NMS: SSPIF / TSE:SSY), aworld leader in high-performance digital signal processing (DSP) systems, announced its fourth-quarter and 1998 year-end results today. Sales for the fourth quarter ended December 31, 1998 totalled US$6,503,000, compared to sales of US$7,903,000 for the fourth quarter of 1997. For the 1998 fiscal year, Spectrum's sales totalled US$26,000,000, down 0.8 percent from fiscal 1997 sales of US$26,207,000. Among other factors, the sales decline reflects continued weakness in new orders and the impact of the postponement of US$885,000 of revenues to the first quarter of 1999 from the fourth quarter of 1998.
Net earnings for the fourth quarter of 1998 were US$9,000 or $0.00 per share, compared to net earnings of US$720,000 or $0.08 per share for the fourth quarter of 1997. For 1998 as a whole, Spectrum recorded a net loss of US$292,000 or $(0.03) per share, compared to a net profit of US$1,877,000 or $0.20 per share for 1997.
The above net earnings figures exclude a possible net one-time charge in 1998 of $5.7 million or $0.58 per share, relating to Spectrum's acquisition of in-process research and development (IPR&D) assets from Alex Computer Systems, and in 1997 of US$872,000 or $0.09 per share relating to Spectrum's acquisition of IPR&D assets from 3L Limited. Spectrum and many other software companies are awaiting clarification of recent changes announced by the U.S. Securities and Exchange Commission (SEC) that will determine how such accounting write-offs associated with acquired IPR&D must be treated.
If the SEC permits Spectrum to record the one-time charge in fiscal 1998, the Company's final net loss for the year is expected to total US$5,991,000 or $(0.61) per share, compared to 1997 net earnings
of $1,005,000 or $0.11 per share.
"We're very disappointed that Spectrum's 1998 results failed to meet the expectations of both management and shareholders," said Barry Jinks, Spectrum's President and CEO. "Our results were adversely affected by continued weakness in Asian markets and the transition to a new generation of DSP products. We're working hard to keep our costs down in this tough operating environment, and we're laying the groundwork so we can capitalize when conditions do improve."
For the 1998 fiscal year, Spectrum recorded 41 design-ins, exceeding its 1998 goal of 30. Of the 1998 design-ins, 7 customers have reached the design-win stage and are producing their product in volume quantities.
Operating earnings for the fourth quarter of 1998 totalled US$440,000 before restructuring costs, down from US$1,290,000 for the prior-year period and up from an operating loss of US$133,000 for the
third quarter. For 1998 as a whole, excluding the one time charge in connection with the write off of IPR&D, Spectrum posted an operating loss of US$456,000 compared to an operating profit of US$3,932,000 for 1997.
With respect to the SEC's ruling on the accounting of acquired IPR&D assets, it is uncertain what the final decision will be, when it will be rendered, or how it may or may not affect Spectrum's 1998 results.
If the SEC reduces or disallows such write-offs, this would effectively increase Spectrum's 1998 earnings (or reduce the Company's losses), while increasing the amount of goodwill capitalized and
increasing amortization expenses in 1998 and in future years Regardless of the SEC's decision, however, it is expected to have a negligible impact on Spectrum's operations.
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 atNo. 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 judgement as of the date of this release. The company may or may not update these forward-looking statements in the future.
Spectrum Signal Processing Inc.
Consolidated Statement of Operations
(in thousands of dollars, US, except per share amounts)
Three Months Ended Twelve Months Ended
12/31/98 12/31/97 12/31/98 12/31/97
Sales US$6,503 US$7,903 US$26,000 US$26,207
Earnings before
taxes and
discontinued
operations 149 1,293 (6,780) 3,074
Earnings from
continuing
operations 9 755 (5,991) 1,540
Earnings (loss)
from discontinued
operations -- (35) -- (535)
Net earnings
(loss) US$9 US$720 US$(5,991) US$1,005
Earnings (loss)
per share
from continuing
operations
Basic US$0.00 US$0.08 US$(0.61) US$0.17
Diluted $0.00 $0.08 $(0.61) $0.16
Earnings (loss)
per share from
discontinued
operations
Basic $0.00 $0.00 $0.00 $(0.06)
Diluted $0.00 $(0.01) $0.00 $(0.06)
Earnings (loss)
per share
Basic $0.00 $0.08 $(0.61) $0.11
Diluted $0.00 $0.07 $(0.61) $0.10
Net earnings
(loss) before
acquired in-process
R & D charge $9 $720 $(292) $1,877
Earnings (loss)
per share before
acquired
in-process
R & D charge
Basic $0.00 $0.08 $(0.03) $0.20
Diluted $0.00 $0.07 $(0.03) $0.20
Weighted average
shares
outstanding
(000's)
Basic 10,036 9,252 9,860 9,235
Diluted 10,241 9,625 9,860 9,608
--30--crd/sf*
CONTACT: Spectrum Signal Processing Inc.
Karen Elliott, 604/ 421-5422
Email: Karen_Elliott@spectrumsignal.com
KEYWORD: NEW YORK
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED EARNINGS |
