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: April, 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: April 27, 1999
CONTACT: Karen Elliott, Spectrum - Investor Communications,
604-421-5422
Email: [email protected]
SPECTRUM SIGNAL PROCESSING INC. ANNOUNCES
1999 FIRST QUARTER RESULTS
Company adjusts prior quarters' results related to acquisition
BURNABY, B.C., CANADA - APRIL 27, 1999 - Spectrum Signal Processing Inc.
(NASDAQ: SSPI / TSE:SSY), a world leader in high performance digital signal
processing (DSP) systems, announced its first quarter 1999 results today.
Sales for the first quarter ended March 31, 1999 totalled US$ 5,638,000 an
increase of 7% compared to sales of US$ 5,276,000 for the first quarter of 1998.
Earnings before interest, taxes, depreciation, amortization and one-time charges
("EBITDA" or Cash Earnings), amounted to US$315,000 for the first quarter of
1999 or US$0.03 per share, compared to a loss of US$ 13,000 or US$ 0.00 per
share for the first quarter of 1998.
Net loss for the first quarter of 1999 was US$ 156,000 or US$ (0.02) per share,
compared to a revised net loss of the comparable quarter in 1998 of US$
2,284,000 or US$ (0.24). The revision arises from new guidance recently
provided by the Securities and Exchange Commission and is explained later in
this press release.
"We're pleased to see some modest year-over-year revenue growth, and a reduction
in our overall operating costs despite the acquisition of Alex Computer Systems'
assets in early 1998," said Barry Jinks, Spectrum's President and CEO.
"Although conditions in the industrial electronics sector remain challenging,
Spectrum is aggressively laying the foundations for future growth. We're
confident our strategy will pay off when the market recovers."
- more -
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In the first quarter of 1999, Spectrum recorded 10 design-ins, and 3
design-wins. Customers chose Spectrum's products for a wide range of
applications including digital radio, radar and sonar, noise cancellation
technology, and machine vision.
The 1999 first quarter net loss includes amortization of goodwill of US$ 181,000
which was increased as a result of an adjustment in 1998 operating results.
Although the Company had reported its quarterly and annual results for 1998 in
accordance with established accounting practice, it is adjusting its 1998
financial statements largely in response to new guidance recently provided by
the Securities and Exchange Commission to the accounting profession related to
the valuation of in-process research and development (IPR&D) in purchase
transactions. During the first quarter of 1998, the Company recorded a charge
of US$ 6,168,000 for IPR&D related to the purchase of the net assets of Alex
Computer Systems. Based upon adjustments to the valuation using the new SEC
valuation guidelines, the Company has adjusted its first quarter 1998 financial
statements and reduced its IPR&D charge by US$ 3,528,000, with a corresponding
increase in intangible assets. The Company has adjusted its results for the
second, third and fourth quarter for 1998 by an additional US$ 159,000, US$
158,000 and US$ 128,000 respectively, for additional amortization. None of the
adjustments related to Alex intangibles impact the Company's net operation cash
flow.
While the Company now feels its statements are in-line with the new SEC policy
on IPR&D, the SEC is still in the process of completing a final review of the
Company's 1998 financial statements. It is uncertain when that final review
will be completed or whether the results of that review will further affect
Spectrum's 1998 results. If the SEC reduces the one-time charge for acquired
IPR&D, this would effectively increase Spectrum's 1998 results (or reduce the
Company's losses), while increasing the amount of goodwill capitalized and
increasing amortization expenses in 1998 and in future years.
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 #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 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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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 March 31,
1999 1998
-------- --------
(Unaudited)
(Restated)
<S> <C> <C>
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,638 $ 5,276
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,165 1,950
------------------------------------------------------------------- -------- --------
Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,473 3,326
Expenses
Administrative. . . . . . . . . . . . . . . . . . . . . . . . . 926 774
Sales and marketing . . . . . . . . . . . . . . . . . . . . . . 1,456 1,716
Amortization *. . . . . . . . . . . . . . . . . . . . . . . . . 359 171
Research and development. . . . . . . . . . . . . . . . . . . . 832 841
Acquired in-process research and development charge * . . . . . - 2,640
3,573 6,142
-------- --------
Earnings (loss) from operations . . . . . . . . . . . . . . . . . . (100) (2,816)
Other
Interest and bank charges . . . . . . . . . . . . . . . . . . . (45) (14)
Other income. . . . . . . . . . . . . . . . . . . . . . . . . . 56 (8)
------------------------------------------------------------------- -------- --------
Earnings (loss) before income taxes . . . . . . . . . . . . . . . . (89) (2,838)
Income taxes (recovery) . . . . . . . . . . . . . . . . . . . . . . 67 (554)
------------------------------------------------------------------- -------- --------
Net earnings (loss) for the period. . . . . . . . . . . . . . . . . $ (156) $(2,284)
------------------------------------------------------------------- -------- --------
* Currently subject to review by the SEC
Earnings (loss) per share
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.02) $ (0.24)
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.02) $ (0.24)
Earnings (loss) before interest, taxes, depreciation, amortization
and one-time charges (EBITDA) per share
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.03 $ (0.00)
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.03 $ (0.00)
Weighted average shares outstanding (000's)
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,036 9,356
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,036 9,356
</TABLE>
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<TABLE>
<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, UNAUDITED)
YEAR ENDED, QUARTER ENDED
----------- ----------
December 31, December 31, September 30,
1998 1998 1998
------------- ----------- ------------- ----------- -------------
(Restated) (Previously (Restated) (Previously (Restated)
reported) reported)
<S> <C> <C> <C> <C> <C>
Sales. . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,000 $ 26,000 $ 6,503 $ 6,503 $ 7,077
Cost of sales. . . . . . . . . . . . . . . . . . . . . . 10,607 10,607 2,305 2,305 3,169
-------------------------------------------------------- ------------- ----------- ------------- ----------- -------------
15,393 15,393 4,198 4,198 3,908
Expenses
Administrative . . . . . . . . . . . . . . . . . . . . 3,417 3,417 1,021 1,021 760
Sales and marketing. . . . . . . . . . . . . . . . . . 7,204 7,204 1,709 1,709 1,771
Amortization * . . . . . . . . . . . . . . . . . . . . 1,299 854 386 258 339
Research and development . . . . . . . . . . . . . . . 4,374 4,374 1,008 1,008 1,329
Acquired in-process research and development charge *. 2,640 6,168 - - -
18,934 22,017 4,124 3,996 4,199
------------- ----------- ------------- ----------- -------------
Earnings (loss) from operations. . . . . . . . . . . . . (3,541) (6,624) 74 202 (291)
Interest and bank charges. . . . . . . . . . . . . . . (149) (149) (29) (29) (62)
Other income . . . . . . . . . . . . . . . . . . . . . (7) (7) (24) (24) 16
-------------------------------------------------------- ------------- ----------- ------------- ----------- -------------
Earnings (loss) before income taxes. . . . . . . . . . . (3,697) (6,780) 21 149 (337)
Income taxes (recovery). . . . . . . . . . . . . . . . . (789) (789) 140 140 (190)
-------------------------------------------------------- ------------- ----------- ------------- ----------- -------------
Net earnings (loss) for the period . . . . . . . . . . . $ (2,908) $ (5,991) $ (119) $ 9 $ (147)
-------------------------------------------------------- ------------- ----------- ------------- ----------- -------------
* Currently subject to review by the SEC
Earnings (loss) per share
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.29) $ (0.61) $ (0.01) $ 0.00 $ (0.01)
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . $ (0.29) $ (0.61) $ (0.01) $ 0.00 $ (0.01)
Weighted average shares outstanding (000's)
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . 9,860 9,860 10,036 10,036 10,028
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . 9,860 9,860 10,036 10,036 10,028
QUARTER ENDED,
---------------------------------------------------------------------
September 30, June 30, March 31,
1998 1998
----------- --------- ----------- --------- -----------
(Previously (Restated) (Previously (Restated) (Previously
reported) reported) reported)
<S> <C> <C> <C> <C> <C>
Sales. . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,077 $ 7,144 $ 7,144 $ 5,276 $ 5,276
Cost of sales. . . . . . . . . . . . . . . . . . . . . . 3,169 3,183 3,183 1,950 1,950
-------------------------------------------------------- ----------- ------------- ----------- ------------- --------
3,908 3,961 3,961 3,326 3,326
Expenses
Administrative . . . . . . . . . . . . . . . . . . . . 760 862 862 774 774
Sales and marketing. . . . . . . . . . . . . . . . . . 1,771 2,008 2,008 1,716 1,716
Amortization * . . . . . . . . . . . . . . . . . . . . 181 403 244 171 171
Research and development . . . . . . . . . . . . . . . 1,329 1,196 1,196 841 841
Acquired in-process research and development charge *. - - - 2,640 6,168
4,041 4,469 4,310 6,142 9,670
----------- ------------- ----------- ------------- --------
Earnings (loss) from operations. . . . . . . . . . . . . (133) (508) (349) (2,816) (6,344)
Interest and bank charges. . . . . . . . . . . . . . . (62) (44) (44) (14) (14)
Other income . . . . . . . . . . . . . . . . . . . . . 16 9 9 (8) (8)
-------------------------------------------------------- ----------- ------------- ----------- ------------- --------
Earnings (loss) before income taxes. . . . . . . . . . . (179) (543) (384) (2,838) (6,366)
Income taxes (recovery). . . . . . . . . . . . . . . . . (190) (185) (185) (554) (554)
-------------------------------------------------------- ----------- ------------- ----------- ------------- --------
Net earnings (loss) for the period . . . . . . . . . . . $ 11 $ (358) $ (199) $ (2,284) $(5,812)
-------------------------------------------------------- ----------- ------------- ----------- ------------- --------
* Currently subject to review by the SEC
Earnings (loss) per share
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ (0.04) $ (0.02) $ (0.24) $ (0.62)
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ (0.04) $ (0.02) $ (0.24) $ (0.62)
Weighted average shares outstanding (000's)
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . 10,028 9,687 9,687 9,356 9,356
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . 10,028 9,687 9,687 9,356 9,356
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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.
------------------------------------
(Registrant)
/s/Martin C. McConnell
VP Finance & Chief Financial Officer
April 27, 1999 and Secretary
Date: -------------------- By: ----------------------------------
(Signature)
