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Spectrum Signal Processing Announces Third Quarter Results
Burnaby, B.C., Canada - October 26, 2000 - Spectrum Signal Processing Inc.
(NASDAQ: SSPI / TSE:SSY), a leader in the development of sophisticated signal
processing systems, today announced its third quarter results for the period
ending September 30, 2000.
Sales for the quarter totaled US$ 7,353,000, up marginally from US$ 7,311,000 in
the previous quarter and up 40% from sales of US$ 5,238,000 for the same period
a year earlier. Earnings before interest, taxes, depreciation and amortization
(EBITDA), or cash earnings, totaled US$ 197,000 or $0.02 per share for the third
quarter of 2000, compared to US$ 59,000 or $0.01 per share for the second
quarter and a loss of US$ 445,000 or $(0.04) per share for the same period in
1999.
Spectrum reported a net loss of US$ 466,000 or $(0.05) per share for the third
quarter of 2000, compared to a net loss of US$ 560,000 or $(0.05) per share for
the second quarter and net loss of US$ 548,000 or $(0.05) per share for the
third quarter of 1999.
"Spectrum continues to make substantial investments in expanding its research
and development initiatives and adding new technical staff in its Wireless
Systems and Network Solutions business units. For the first nine months of this
year, we increased our R&D commitment as a percentage of revenue to over 25%, up
substantially from 14% for the same period last year," said Pascal Spothelfer,
Spectrum's President and CEO. "Spectrum remains on track in this important
transition year as we align our resources to pursue opportunities in the
communications infrastructure market. The investments we are making in 2000 will
position us to pursue this high-growth market much more aggressively in 2001 and
beyond," he added.
For the nine months ended September 30, 2000 Spectrum reported sales of US$
18,825,000, up slightly from sales of US$ 18,677,000 for the same period in
1999. EBITDA for the first nine months of 2000 amounted to a loss of US$
1,115,000 or $ (0.11) as compared to positive US$ 1,057,000 or $0.11 for the
same period in 1999. Spectrum recorded a net loss of US$ 2,781,000 or $(0.27)
during the first nine months of this year, as compared to a net loss of US$
371,000 or $(0.04) in 1999.
"Spectrum made a decision at the beginning of this year to focus primarily on
key strategic milestones, rather than short-term financial results, in order to
ensure that we put the right elements in place to get Spectrum back on a
sustainable, long-term growth path. And while we expect a modest increase in
year-over-year revenue growth, more important to us is the fact that Spectrum is
well positioned financially and poised to expand into markets that will offer
extremely attractive growth opportunities for many years to come," Spothelfer
added.
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About Spectrum Signal Processing
Spectrum Signal Processing is a leader in signal processing computer systems,
designing sophisticated hardware and software solutions for customers in the
wireless and wireline communications infrastructure and sensor systems markets.
Spectrum's website is http://www.spectrumsignal.com and the head office is
located at One Spectrum Court, #200 - 2700 Production Way, Burnaby, B.C.,
Canada. Ph (604) 421-5422; fax (604) 421-1764.
This news release contains forward-looking statements including those related to
Spectrum's strategic plan to expand into the communications infrastructure
market, as well as the Company's financial outlook for the end of the year.
These statements are made 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 and the company may or may not update these
forward-looking statements in the future.
Spectrum Contacts:
Karen Elliott
Investor Relations
Phone: 604-421-5422 ext. 264
Email: [email protected]
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Spectrum Signal Processing, Inc.
Consolidated Statements of Operations and Retained Earnings (Deficit)
(Expressed in thousands of United States dollars, except
per share amounts) Prepared in accordance with United
States generally accepted accounting principles
<TABLE>
<CAPTION>
3 months ended September 30, 9 months ended September 30,
1999 2000 1999 2000
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(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Sales $ 5,238 $ 7,353 $ 18,677 $ 18,825
Cost of sales 2,268 2,939 7,951 7,513
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2,970 4,414 10,726 11,312
Expenses
Administrative 1,150 1,248 2,951 3,641
Sales and marketing 1,610 1,427 4,692 4,341
Research and development 850 1,743 2,595 5,052
Amortization 345 357 1,082 1,070
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3,955 4,775 11,320 14,104
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Loss from operations (985) (361) (594) (2,792)
Other
Interest expense and bank charges (31) (42) (121) (56)
Other income 14 4 92 17
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(17) (38) (29) (39)
Loss before income taxes (1,002) (399) (623) (2,831)
Income tax expense (recovery) (454) 67 (252) (50)
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Net loss (548) (466) (371) (2,781)
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Deficit, beginning of period (1,494) (4,828) (1,671) (2,513)
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Deficit, end of period $ (2,042) $ (5,294) $ (2,042) $ (5,294)
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Loss per share
Basic $ (0.05) $ (0.05) $ (0.04) $ (0.27)
Diluted $ (0.05) $ (0.05) $ (0.04) $ (0.27)
EBITDA (445) 197 1,057 (1,115)
EBITDA per share
Basic $ (0.04) $ 0.02 $ 0.11 $ (0.11)
Diluted $ (0.04) $ 0.02 $ 0.11 $ (0.11)
Weighted average shares (in
thousands)
Basic 10,077 10,306 10,049 10,263
Diluted 10,077 10,306 10,049 10,263
Diluted (EBITDA) 10,077 10,498 10,128 10,263
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Spectrum Signal Processing, Inc.
Consolidated Balance Sheets
(Expressed in thousands of United States dollars,
except share amounts) Prepared in accordance with United
States generally accepted accounting principles
December 31, September 30,
ASSETS 1999 2000
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(Audited) (Unaudited)
Current assets
<S> <C> <C>
Cash and cash equivalents $ 1,422 $ 1,779
Cash held in escrow - 4,977
Accounts receivable 6,461 6,442
Inventories 2,402 3,156
Deferred income taxes - 60
Prepaid expenses 69 155
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10,354 16,569
Property and equipment 2,545 2,864
Other assets 3,669 2,375
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$ 16,568 $ 21,808
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
Bank indebtedness $ - $ 2,847
Accounts payable 3,319 3,404
Accrued liabilities 1,618 1,996
Current portion of long-term debt 73 -
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5,010 8,247
Deferred income taxes 89 -
Stockholders' equity
Share capital
Authorized: 50,000,000 common shares, no par
value
Issued: 10,546,294 (1999 - 10,395,204)
Outstanding: 10,312,994 (1999 - 10,161,904) 16,374 16,905
Warrants 140 -
Special Warrants - 4,639
Additional paid-in capital 76 216
Treasury stock, at cost, 233,300 shares (1999 -
233,300) (1,232) (1,232)
Deficit (2,513) (5,294)
Accumulated other comprehensive income
Cumulative translation adjustments (1,376) (1,673)
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11,469 13,561
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$ 16,568 $ 21,808
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