DSP Technology Reports Record Third- Quarter Net Income
18 November 1998
DSP Technology Reports Record Third- Quarter Net Income of $0.24 Per Share On Record Sales; Nine Months Net Income Increases 24% On 15% Increase In Sales
FREMONT, Calif.--Nov. 18, 1998--DSP Technology Inc. Wednesday announced that for the quarter ended Oct. 31, 1998, net income increased by 13% to a third-quarter record $586,000, or $0.24 per diluted share, compared with $517,000, or $0.21 per diluted share, last year.
Sales for the quarter were a record $6,924,000, an increase of 18% compared with $5,892,000 in the same quarter last year.
For the nine months ended Oct. 31, 1998, net income increased by 24% to $1,289,000, or $0.52 per diluted share, compared with $1,037,000, or $0.43 per share, last year. Net sales for the nine-month period increased by 15% to $18,235,000 from $15,804,000. Backlog was $9.1 million, compared with backlog of $9.7 million at July 31, 1998 and backlog of $13.2 million at Oct. 31, 1997.
"With RedLine products well established in the automotive industry, we have focused our sales and marketing efforts on industrial manufacturers and a broad range of transportation industry equipment suppliers. In addition, we recently launched DSP's Motorsports program, which is targeted at engine builders and suppliers to the automotive racing industry. Our expanded sales and marketing effort is reflected in higher marketing, general and administrative expenses. This is an investment which we believe will benefit the company's future sales growth," said F. Gil Troutman, chief executive officer of DSP Technology.
Troutman noted that during the third quarter, DSPT received three important contracts, together valued at approximately $3 million for RedLine ADAPT and ACAP products. The first contract, from the world's largest automotive manufacturer, was for ADAPT products valued at $1.8 million. The second contract, an order for approximately $600,000, also for RedLine ADAPT dynamometer control systems, was received from a consortium that is developing and testing "hybrid" vehicles. Troutman explained that "hybrid" vehicles combine gas and electric engines to reduce emissions and meet new regulatory requirements. The third contract was received by DSPT's United Kingdom subsidiary, which will install and commission seven RedLine ACAP combustion analysis systems for engine development applications at the Rover Group.
At Oct. 31, 1998, DSPT had working capital of $8,003,000, a current ratio of 2.4 to 1, cash and marketable securities of $1,040,000, no long-term debt, and stockholders' equity of $11,561,000, or approximately $4.50 per share.
DSP Technology is a world leader in the design and manufacture of high speed, computer-automated, measurement and control instrumentation and systems.
This news release contains forward-looking statements concerning expected future sales and earnings for DSPT. All forward-looking statements are subject to risk, and actual results could differ materially from those projected in the forward-looking statements as a result of many factors. These factors include the mix of products sold, competition, timing of receipt of system orders, ability to successfully manage system integration projects, availability of components, recruitment and retention of key technical personnel and economic conditions. Further information concerning factors which may affect DSPT's performance is provided in DSPT's reports filed with the Securities and Exchange Commission.
DSP TECHNOLOGY INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
($ in thousands, except per-share amounts)
Three Months ended Nine Months Ended
Oct. 31, Oct. 31,
1998 1997 1998 1997
Net sales $ 6,924 $ 5,892 $ 18,235 $ 15,804
Cost of sales 3,157 2,640 8,463 7,377
Gross profit 3,767 3,252 9,722 8,427
Operating expenses:
Research and
development 737 718 1,927 1,826
Marketing, general
and administrative 2,148 1,719 5,940 5,029
2,855 2,437 7,867 6,855
Operating income 882 815 1,905 1,572
Interest income 47 47 153 156
Income before
income taxes 929 862 2,058 1,728
Income taxes 343 345 769 691
Net Income $ 586 $ 517 $ 1,289 $ 1,037
Net income
per share:
Basic $ 0.26 $ 0.23 $ 0.57 $ 0.47
Diluted $ 0.24 $ 0.21 $ 0.52 $ 0.43
Weighted average
common shares
outstanding:
Basic 2,239 2,216 2,259 2,194
Diluted 2,417 2,519 2,497 2,392
-0-
SUMMARY BALANCE SHEET
($ in thousands)
Oct. 31, Jan. 31,
1998 1998
(unaudited) (audited)
Cash and cash equivalents $ 1,047 $ 4,701
Accounts Receivable 7,807 5,581
Inventories 3,949 2,682
Other current assets 931 793
Total current assets 13,727 13,757
Property Plant & Equipment, net $ 2,298 $ 1,341
Other Assets 1,721 1,632
Total Assets 17,746 16,730
Current Liabilities $ 5,724 $ 5,584
Deferred income taxes 461 489
Shareholders' equity 11,561 10,657
Total Liabilities &
Shareholders' Equity $ 17,746 $ 16,730