SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the Month of: July, 1999
SPECTRUM SIGNAL PROCESSING INC.
(Registrant's Name)
One Spectrum Court, 2700 Production Way, Suite 200
Burnaby, British Columbia, Canada V5A 4X1
(Address of Principal Corporate Offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:
Form 20-F [X] Form 40-F [ ]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g30-2(b): 82------------.
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DSP SYSTEMS WORLDWIDE
SPECTRUM
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F O R . I M M E D I A T E . R E L E A S E
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RELEASE DATE: July 22, 1999
CONTACT: Karen Elliott, Spectrum - Investor Communications,
604-421-5422
Email: [email protected]
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.
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"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.
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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 http://www.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.
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<CAPTION>
SPECTRUM SIGNAL PROCESSING INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(EXPRESSED IN THOUSANDS OF UNITED STATES DOLLARS, EXCEPT PER SHARE AMOUNTS)
(PREPARED IN ACCORDANCE WITH US GAAP)
3 months ended June 30, 6 months ended June 30,
1999 1998 1999 1998
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(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Sales . . . . . . . . . . . . . . . . . . . $ 7,801 $ 7,144 $13,439 $12,420
Earnings (loss) from operations . . . . . . 491 (508) 391 (3,324)
Earnings (loss) before income taxes . . . . 468 (543) 379 (3,381)
Net earnings (loss) . . . . . . . . . . . . 333 (358) 177 (2,642)
Earnings (loss) per share
Basic . . . . . . . . . . . . . . . $ 0.03 $ (0.04) $ 0.02 $ (0.27)
Diluted . . . . . . . . . . . . . . $ 0.03 $ (0.04) $ 0.02 $ (0.27)
EBITDA. . . . . . . . . . . . . . . . . . . 891 (96) 1,206 (109)
EBITDA per share
Basic . . . . . . . . . . . . . . . $ 0.09 $ (0.01) $ 0.12 $ (0.01)
Diluted . . . . . . . . . . . . . . $ 0.09 $ (0.01) $ 0.12 $ (0.01)
Weighted average shares outstanding (000's)
Basic . . . . . . . . . . . . . . . 10,036 10,010 10,036 9,687
Diluted . . . . . . . . . . . . . . 10,036 10,010 10,036 9,687
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SPECTRUM SIGNAL PROCESSING INC.
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(Registrant)
/s/Martin C. McConnell
VP Finance & Chief Financial Officer
July 22, 1999 and Secretary
Date: -------------------- By: ----------------------------------
(Signature)
