DSP Technology Inc. Fourth-Quarter Net Before Restructuring Charges Is 25 Cents Per Share on Sales of $7,161,000.FREMONT, Calif.--(BUSINESS WIRE)--March 23, 1999-- Fiscal 1999 Net Before Restructuring Charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. Is 76 Cents Per Share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. vs. 68 Cents Per Share as Sales Increase 15 Percent to $25,396,000 DSP (1) (Digital Signal Processor) A special-purpose CPU used for digital signal processing applications (see definition #2 below). It provides ultra-fast instruction sequences, such as shift and add, and multiply and add, which are commonly used in math-intensive Technology Inc. (Nasdaq:DSPT DSPT Dominican School of Philosophy and Theology (Berkeley, California) DSPT Data Systems Product Team ) Tuesday announced that for the fourth quarter ended Jan. 31, 1999, net income before restructuring charges was $604,000, or 25 cents per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with net income of $609,000, or 24 cents per diluted share in the same quarter last year. Sales increased 15 percent to $7,161,000 compared with $6,234,000 last year. Including restructuring charges associated with moving corporate headquarters and consolidating Transportation Group operations to Ann Arbor Ann Arbor, city (1990 pop. 109,592), seat of Washtenaw co., S Mich., on the Huron River; inc. 1851. It is a research and educational center, with a large number of government and industrial research and development firms, many in high-technology fields such as , Mich., net income for the fourth quarter of fiscal 1999 was $292,000, or 12 cents per diluted share. For the fiscal year ended Jan. 31, 1999, net income before restructuring charges increased 15 percent to $1,893,000, or 76 cents per diluted share, compared with $1,646,000, or 68 cents per diluted share in fiscal 1998. Sales were $25,396,000, an increase of 15 percent compared with sales of $22,038,000 last year. Including restructuring charges, net income was $1,581,000, or 64 cents per diluted share. DSP Technology also announced Tuesday that it has entered into a definitive merger agreement with MTS (1) See Microsoft Transaction Server. (2) (Modular TV System) The stereo channel added to the NTSC standard, which includes the SAP audio channel for special use. 1. MTS - Message Transport System. 2. Systems Corp. (Nasdaq:MTSC MTSC Maintenance Technical Support Center (US Postal Service, Norman, OK) MTSC Michigan Truck Safety Commission MTSC Memory Time Switch CMOS MTSC Mt. ) that involves a tax-free exchange tax-free exchange An exchange of assets between taxpayers in which any gain or loss is not recognized in the period during which the exchange takes place. Rather, taxpayers are required to adjust the basis of assets exchanged. of 2,077,000 shares of MTS common stock for all of DSPT's outstanding common and "net option shares." The merger, intended to be accounted for as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. , is subject to customary closing conditions and is expected to close in the second calendar quarter of 1999. In January 1999, DSPT announced that it would restructure its operations and consolidate Transportation Group manufacturing, sales and service, currently located in three separate leased facilities, into a 57,000-square-foot building in Ann Arbor. Construction of the building is currently expected to be completed by the end of calendar 1999. Backlog at Jan. 31, 1999, was approximately $4,800,000, compared with backlog of $11,500,000 at Jan. 31, 1998, and backlog of $9,100,000 at Oct. 31, 1998. At Jan. 31, 1999, DSPT had working capital of $8,276,000, a current ratio of 2.8 to 1, cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of $1,432,000, no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , and stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. of $12,016,000, or approximately $4.85 per share. DSP Technology is a world leader in the design and manufacture of high-speed, computer automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. , measurement and control instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. and systems. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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, ability to successfully manage the Transportation Group consolidation, 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 that may affect DSPT's performance is provided in DSPT's reports filed with the Securities and Exchange Commission. -0-
DSP TECHNOLOGY INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended Fiscal Year Ended
Jan., 31, Jan. 31,
1999 1998 1999 1998
Net sales $ 7,161 $ 6,234 $25,396 $22,038
Cost of sales 3,366 2,850 11,829 10,227
Gross profit 3,795 3,384 13,567 11,811
Operating expenses:
Research and development 839 526 2,766 2,352
Marketing, general
& administrative 2,071 1,887 8,011 6,916
2,910 2,413 10,777 9,268
Operating income 885 971 2,790 2,543
Interest income 68 69 221 225
Income before income taxes
and Restructuring 953 1,040 3,011 2,768
Income taxes 349 431 1,118 1,122
Net income before
Restructuring costs $ 604 $ 609 $ 1,893 $ 1,646
Restructuring costs 496 -- 496 --
Income taxes on
Restructuring costs 184 -- 184 --
Net restructuring costs 312 -- 312 --
Net income after
Restructuring costs $ 292 $ 609 $ 1,581 $ 1,646
Net income per share
before Restructuring costs
Basic $ 0.27 $ 0.27 $ 0.84 $ 0.74
Diluted $ 0.25 $ 0.24 $ 0.76 $ 0.68
Net income per share
after Restructuring costs
Basic $ 0.13 $ 0.27 $ 0.70 $ 0.74
Diluted $ 0.12 $ 0.24 $ 0.64 $ 0.68
Weighted ave common
shares outstanding
Basic 2,234 2,263 2,253 2,211
Diluted 2,423 2,571 2,479 2,437
SUMMARY BALANCE SHEET (000's)
Jan. 31, Jan. 31,
1999 1998
Cash and cash equivalents $ 1,432 $ 4,701
Accounts receivable 7,122 5,581
Inventories 3,070 2,682
Other current assets 1,142 793
Total current assets 12,766 13,757
Property, plant & equipment, net 2,557 1,341
Other assets 1,763 1,632
Total assets $17,086 $16,730
Current liabilities 4,490 5,584
Deferred income taxes 580 489
Shareholders' equity 12,016 10,657
Total liabilities & shareholders' equity $17,086 $16,730
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