<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO.1
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2000
------------------
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ___________
Commission File Number 0-23006
-------
DSP GROUP, INC.
---------------
(Exact name of registrant as specified in its charter)
DELAWARE 94-2683643
-------- ----------
(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
3120 SCOTT BOULEVARD, SANTA CLARA, CALIFORNIA 95054
-------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (408) 986-4300
--------------
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
As of October 31, 2000 there were 27,087,435 shares of Common Stock ($.001 par
value per share) outstanding.
Explanatory Note
This Amendment No.1 on Form 10-Q/A to the Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2000 is being filed to
restate (1) the references to the number of shares authorized to be
repurchased in Registrant's share repurchase program described in (a) Note I
in the Notes to Condensed Consolidate Financial Statements contained in Part
I, Item 1 and (b) Part II, Item 5, in each case in order to give effect to a
two-for-one stock split (effected in March 2000) and (2) the references to
our number of employees in Part I, Item 2 -- "Risks of Operating in Israel".
Part I, Items 1 and 2 and Part II, Item 5 are amended to read as follows and
no other changes are being made to the Form 10-Q.
<PAGE>
INDEX
DSP GROUP, INC.
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
--------------------------------
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets--September 30, 2000
and December 31, 1999................................................3
Condensed consolidated statements of income--Three and nine
months ended September 30, 2000 and 1999................................4
Condensed consolidated statements of cash flows--Nine
months ended September 30, 2000 and 1999.............................5
Condensed consolidated statements of Stockholders' Equity --
Three and nine months ended September 30, 2000 and 1999..............6
Notes to condensed consolidated financial statements--
September 30, 2000...................................................7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...........................................11
Item 3. Quantitative and Qualitative Disclosures About Market Risk..................19
PART II. OTHER INFORMATION
---------------------------------------------
Item 1. Legal Proceedings........................................................19
Item 2. Changes in Securities....................................................19
Item 3. Defaults upon Senior Securities..........................................19
Item 4. Submission of Matters to a Vote of Security Holders......................19
Item 5. Other Information........................................................19
Item 6. Exhibits and Reports on Form 8-K..........................................19
SIGNATURES............................................................................20
</TABLE>
<PAGE>
PART 1. FINANCIAL INFORMATION
------------------------------
ITEM 1. FINANCIAL STATEMENTS
DSP GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
--------- ----------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 45,617 $ 20,778
Marketable securities and cash deposits 190,510 140,593
Trade receivables, net 15,284 10,435
Inventories 2,718 3,283
Deferred income taxes 1,802 1,707
Other accounts receivable and prepaid expenses 5,132 1,362
-------- ----------
TOTAL CURRENT ASSETS 261,063 178,158
Property and equipment, at cost: 17,624 16,230
Less accumulated depreciation and amortization (12,380) (9,282)
-------- ----------
5,244 6,948
Other investments, net of accumulated amortization 15,452 18,433
Other assets, net of accumulated amortization 3,986 1,250
Severance pay fund 1,719 1,390
-------- ----------
TOTAL ASSETS $287,464 $206,179
======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $6,940 $6,079
Other current liabilities 15,707 8,332
-------- ----------
TOTAL CURRENT LIABILITIES 22,647 14,411
LONG TERM LIABILITIES
Accrued severance pay 1,967 1,431
Deferred income taxes 6,380 6,380
Minority interest 1,184 --
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Common Stock 27 12
Additional paid-in capital 149,285 119,163
Unrealized gain on marketable equity security 100 --
Retained earnings 105,874 64,782
-------- ----------
TOTAL STOCKHOLDERS' EQUITY 255,286 183,957
-------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $287,464 $206,179
======== ==========
</TABLE>
Note: The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date. See notes to condensed consolidated financial
statements.
Page 3
<PAGE>
DSP GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
2000 1999 2000 1999
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
REVENUES:
Product sales $ 21,925 $18,279 $ 60,469 $ 37,474
Licensing, royalties and other 7,063 5,017 17,619 12,986
---------- ----------- ---------- ------------
TOTAL REVENUES 28,988 23,296 78,088 50,460
COST OF REVENUES:
Cost of product sales 12,623 10,646 34,825 21,545
Cost of licensing, royalties and other 292 20 824 106
---------- ----------- ---------- ------------
TOTAL COST OF REVENUES 12,915 10,666 35,649 21,651
---------- ----------- ---------- ------------
GROSS PROFIT 16,073 12,630 42,439 28,809
OPERATING EXPENSES:
Research and development 5,553 3,900 15,035 11,002
Sales and marketing 3,189 2,391 9,098 6,508
General and administrative 1,761 1,257 4,647 3,813
Unusual items -- -- 14,154 --
---------- ----------- ---------- ------------
TOTAL OPERATING EXPENSES 10,503 7,548 42,934 21,323
---------- ----------- ---------- ------------
OPERATING INCOME (LOSS) 5,570 5,082 (495) 7,486
OTHER INCOME (EXPENSE):
Interest and other income 3,823 1,527 9,824 3,794
Interest expense and other (51) (65) (131) (162)
Equity in income of affiliates 724 669 1,864 1,686
Minority interest in loss of subsidiary 205 -- 353 --
Minority gain in subsidiary's stock issue -- -- (100) --
Capital gain from realization of investments -- -- 57,593 11,780
---------- ----------- ---------- ------------
INCOME BEFORE PROVISION FOR INCOME TAXES 10,271 7,213 68,908 24,584
Provision for income taxes 1,843 1,443 27,816 3,923
---------- ----------- ---------- ------------
NET INCOME $8,428 $5,770 $ 41,092 $ 20,661
========== =========== ========== ============
NET EARNINGS PER SHARE:
Basic $ 0.31 $0.24 $ 1.55 $ 0.90
Diluted $ 0.29 $0.22 $ 1.42 $ 0.85
SHARES USED IN PER SHARE COMPUTATIONS:
Basic 26,932 24,080 26,576 22,922
Diluted 28,927 26,368 28,916 24,292
</TABLE>
See notes to condensed consolidated financial statements.
Page 4
<PAGE>
DSP GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
-------------------------
2000 1999
---------- ----------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 22,119 $ 7,158
INVESTING ACTIVITIES
Purchase of marketable securities and cash deposits (117,792) (60,894)
Maturity of marketable securities
and cash deposits 67,330 37,711
Purchases of equipment (1,412) (4,302)
Proceeds from sale of investment - net 39,623 3,224
Investment in subsidiary (485) (1,241)
Cash acquired in acquisition of
consolidated subsidiary 106 --
---------- ----------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (12,630) (25,502)
---------- ----------
FINANCIAL ACTIVITIES
Sale of Common Stock for cash upon
exercise of options and employee
stock purchase plan 15,240 11,743
Purchase of treasury stock -- (2,710)
Issue of Common Stock to investor -- 34,425
Issuance of shares to minority shareholders in
consolidated subsidiaries 110 --
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 15,350 43,458
---------- ----------
INCREASE IN CASH AND CASH EQUIVALENTS $24,839 $ 25,114
========== ==========
Non-cash investing and financing information:
Liabilities assumed in connection with asset acquisitions $ -- $ 590
========== ==========
Capitalized software acquisition in exchange
for license sale $ -- $ 2,000
========== ==========
Unrealized gain on marketable equity security $ 100 $ --
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
Page 5
<PAGE>
DSP GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
ADDITIONAL RETAINED OTHER TOTAL
COMMON STOCK PAID-IN EARNINGS TREASURY COMPREHENSIVE STOCKHOLDERS'
SHARES AMOUNT CAPITAL (ACCUMULATED STOCK AT INCOME EQUITY
THREE MONTHS ENDED EARNINGS COST
SEPTEMBER 30, 2000 (DEFICIT)
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at June 30, 2000 26,794 $ 27 $ 144,845 $ 97,446 $ -- $ -- $ 242,318
Net income -- -- -- 8,428 -- -- 8,428
Unrealized gain on
marketable equity security -- -- -- -- -- 100 100
Comprehensive income -- -- -- -- -- 8,528
Exercise of Common Stock 247
Options by employees -- 4,084 -- -- -- 4,084
Sale of Common Stock under
Employee stock purchase 27 -- 356 -- -- 356
plan
----------------------------------------------------------------------------------------
Balance at September 30, 2000 27,068 $ 27 $ 149,285 $ 105,874 $ -- $ 100 $ 255,286
----------------------------------------------------------------------------------------
THREE MONTHS ENDED
SEPTEMBER 30, 1999
----------------------------------------------------------------------------------------
Balance at June 30, 1999 11,640 $ 12 $ 110,249 $ 26,517 $ (12,567) $ -- $ 124,211
Net income -- -- -- 5,770 -- -- 5,770
Comprehensive income -- -- -- -- -- -- 5,770
Sale of Common Stock under
employee stock purchase 12 -- 7 (7) 200 200
plan --
Issue of treasury stock upon
exercise of stock options 586 -- 1,318 (1,184) 9,499 -- 9,633
Purchase of treasury stock -- -- -- -- -- -- --
----------------------------------------------------------------------------------------
Balance at September 30, 1999 12,238 $ 12 $ 111,574 $ 31,096 $ (2,868) $ -- $ 139,814
----------------------------------------------------------------------------------------
NINE MONTHS ENDED
SEPTEMBER 30, 2000
----------------------------------------------------------------------------------------
Balance at December 31, 1999 12,671 $ 12 $ 119,163 $ 64,782 $ -- $ -- $ 183,957
Net income -- -- -- 41,092 -- -- 41,092
Unrealized gain on
marketable equity security -- -- -- -- -- 100 100
Comprehensive income -- -- -- -- -- -- 41,192
Issue of Common Stock, upon
purchase of subsidiary 261 -- 14,897 -- -- -- 14,897
Exercise of Common Stock 14,587
Options by employees 1,025 1 14,586 -- -- --
Sale of Common Stock under 653
Employee stock purchase plan 42 1 652 -- -- --
Stock split adjustment 13,069 13 (13) -- -- -- --
----------------------------------------------------------------------------------------
Balance at September 30, 2000 27,068 $ 27 $ 149,285 $ 105,874 $ -- $ 100 $ 255,286
----------------------------------------------------------------------------------------
NINE MONTHS ENDED
SEPTEMBER 30, 1999
----------------------------------------------------------------------------------------
Balance at December 31, 1998 9,406 $ 9 $75,610 $ 12,129 $(12,053) $ -- $ 75,695
Net income -- -- -- 20,661 -- -- 20,661
Comprehensive income -- -- -- -- -- -- 20,661
Sale of Common Stock, net of
issuance cost 2,300 3 34,425 -- -- -- 34,428
Exercise of Common Stock
options by employees 22 -- (50) (61) 372 -- 261
Sale of Common Stock under
employee stock purchase 18 -- -- (107) 290 -- 183
plan
Issue of treasury stock upon
exercise of stock options 692 -- 1,589 (1,526) 11,233 -- 11,296
Purchase of Treasury stock (200) -- -- -- (2,710) -- (2,710)
-----------------------------------------------------------------------------------------
Balance at September 30, 1999 12,238 $ 12 $111,574 $ 31,096 $(2,868) $ -- $ 139,814
-----------------------------------------------------------------------------------------
</TABLE>
Page 6
<PAGE>
DSP GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three and nine months ended
September 30, 2000, are not necessarily indicative of the results that may be
expected for the year ended December 31, 2000. For further information,
reference is made to the consolidated financial statements and footnotes thereto
included in our Annual Report on Form 10-K for the year ended December 31, 1999.
NOTE B - INVENTORIES
Inventories are stated at the lower of cost or market value. Cost is determined
using the average cost method. The Company periodically evaluates the quantities
on hand relative to current and historical selling prices and historical and
projected sales volume. Based on these evaluations, provisions are made in each
period to write inventory down to its net realizable value. Inventories are
composed of the following (in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
---------------------------------------
<S> <C> <C>
Work-in-process $ 119 $ 169
Finished goods 2,599 3,114
---------------------------------------
$2,718 $3,283
=======================================
</TABLE>
NOTE C - NET EARNINGS PER SHARE
Basic net income per share is computed based on the weighted average number of
shares of common stock outstanding during the period. For the same periods,
diluted net income per share further includes the effect of dilutive stock
options outstanding during the year, all in accordance with the Financial
Accounting Standards Board issued Statement No. 128, "Earnings per Share" ("SFAS
128"). The following table sets forth the computation of basic and diluted net
income per share (in thousands except per share amounts):
Page 7
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30,
2000 1999 2000 1999
------------- ------------ ------------- ----------------
<S> <C> <C> <C> <C>
Numerator:
Net Income $ 8,428 $ 5,770 $ 41,092 $ 20,661
Denominator:
Weighted average number of shares of common 26,932 24,080 26,576 22,922
stock outstanding during the period used to
compute basic earning per share..............
Incremental shares attributable to exercise 1,995 2,288 2,340 1,340
of outstanding options (assuming proceeds
would be used to purchase treasury stock)....
------------- ------------ ------------- ----------------
Weighted average number of shares of common 28,927 26,368 28,916 24,292
stock used to compute diluted earnings per
share........................................
============= ============ ============= ================
Basic net earnings per share................. $0.31 $0.24 $1.55 $0.90
============= ============ ============= ================
Diluted net earnings per share............... $0.29 $0.22 $1.42 $0.85
============= ============ ============= ================
</TABLE>
NOTE D - INVESTMENTS
The following is a summary of the held to maturity securities and cash deposits
(in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
-------- ---------
<S> <C> <C>
Obligations of states and
political obligations $ 91,014 $ 96,312
Corporate obligations 99,496 30,440
Cash deposits 36,318 21,961
-------- ---------
$226,828 $148,713
======== =========
Amounts included in marketable
Securities and cash deposits $190,510 $140,593
Amounts included in cash and cash equivalents 36,318 8,120
--------- ---------
$226,828 $148,713
======== =========
</TABLE>
At September 30, 2000 and at December 31, 1999, the carrying amount of
securities approximated their fair market value and the amount of unrealized
gain or loss was not significant. Gross realized gains or losses for the three
and nine months ended September 30,
Page 8
<PAGE>
2000 and 1999, were not significant. The amortized cost of held to maturity
securities at September 30, 2000, by contractual maturities, is shown below (in
thousands):
<TABLE>
<CAPTION>
Amortized Cost
--------------
<S> <C>
Due in one year or less $111,847
Due after one year to two years 114,981
--------------
$226,828
==============
</TABLE>
NOTE E - INCOME TAXES
The effective tax rate used in computing the provision for income taxes is based
on projected fiscal year income before taxes, including estimated income by tax
jurisdiction. The difference between the effective tax rate and the statutory
rate is due primarily to foreign tax holiday and tax exempt income in Israel.
NOTE F - SIGNIFICANT CUSTOMERS
Product sales to one distributor accounted for 55% and 53% of total revenues
for the three months ended September 30, 2000 and 1999, respectively.
Additionally, product sales to one distributor accounted for 50% and 45% of
total revenues for the nine months ended September 30, 2000 and 1999,
respectively. The loss of one or more major distributors or customers could
have a material adverse effect on our business, financial condition and
results of operations.
NOTE G - OTHER INVESTMENTS
Other investments are comprised of:
AudioCodes, Ltd.: AudioCodes, Ltd. ("AudioCodes") is an Israeli corporation
primarily engaged in design, research, development, manufacturing and marketing
of hardware and software products that enable simultaneous transmission of voice
and data over networks such as the Internet, ATM and Frame Relay.
In January 2000, we sold 600,000 shares (pre-split 1:2) of AudioCodes for
approximately $43.8 million and recorded in the first quarter of 2000, an
additional capital gain in the amount of $40.0 million. In June 2000, we sold an
additional 250,000 shares (pre-split 1:2) of AudioCodes for approximately $19.2
million and recorded in the second quarter of 2000, an additional capital gain
in the amount of $17.6 million. We currently own approximately 2.1 million
(pre-split 1:2) of AudioCodes shares, which represents approximately 10% of the
outstanding shares. The condensed consolidated statements of income for the
three months ended September 30, 2000 and 1999 include equity gains of $724,000
and $669,000, respectively, in our investment in AudioCodes.
VoicePump, Inc.: VoicePump, Inc. ("VoicePump") is an US corporation primarily
engaged in the design, research, development and marketing of software
applications for Voice Over DSL (VoDSL) and Voice Over Internet Protocol (VoIP).
In March 2000, we acquired (1) approximately 1,960,250 shares of Common Stock of
VoicePump from certain shareholders in exchange for approximately 261,000 shares
of our Common Stock and a nominal amount of cash (to pay for fractional shares)
and (2) approximately 1,027,397 shares of VoicePump
Page 9
<PAGE>
Common Stock directly from VoicePump together with warrants to purchase up to
1,027,397 shares of VoicePump Common Stock at an exercise price of $4.866 per
share within two years (of the issuance of the warrant) and up to 1,027,397
additional shares at an exercise price of $4.866 per share within three years
(of the issuance of the warrant) for $5,000,000. The shares acquired from
VoicePump and its shareholders (not including the shares issuable upon exercise
of the warrants) represent approximately 73% of the outstanding shares of
VoicePump. In the second quarter of 2000 our investment in VoicePump was diluted
due to exercise of warrants by a VoicePump shareholder to approximately 71% of
the outstanding shares of VoicePump. The condensed consolidated statements of
income for the three months ended September 30, 2000 include losses in our
equity investment in VoicePump of approximately $736,000 and include the
minority interest in those losses in the amount of $205,000. Our operation
expenses include unusual items in the amount of $11.9 million related to the
acquired in-process research and development which was written off in the first
quarter of 2000.
Tomen Corporation: In September 2000, we invested approximately $485,000
(49.9 million Yen) in shares of our Japanese distributor's parent company,
Tomen Corporation, as part of a long strategic relationship. Tomen
Corporation's shares are traded on the Japanese stock exchange, and are
recorded and accounted for in other assets on our balance sheets as
marketable equity securities. The condensed consolidated balance sheets as of
September 30, 2000 include unrealized gain on marketable equity securities of
$100,000 in our investment in Tomen Corporation.
NOTE H- STOCK DIVIDEND
On January 24, 2000, our Board of Directors declared a stock dividend whereby
each holder of record of Common Stock on February 16, 2000 received one
additional share of common stock for each share then owned. The stock dividend
was paid on March 1, 2000.
NOTE I- SUBSEQUENT EVENT- REPURCHASE OF DSP GROUP COMMON
STOCK
In March 1999, our Board of Directors authorized a new plan to repurchase up
to an additional 2,000,000 shares of our Common Stock from time to time on
the open-market or in privately negotiated transactions, increasing the total
shares authorized to be repurchased to 4,000,000 shares. In October and
November, 2000, we repurchased 460,000 shares of our Common Stock at an
average purchase price of $24.74 per share. The accumulated number of shares
of Common Stock we have repurchased is 2,488,000 shares.
NOTE J- IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1999, the Financial Accounting Standards Board issued No. 133 ("SFAS
133"), "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
No. 133"). This statement establishes accounting and reporting standards
requiring that every derivative instrument (including certain derivative
instruments embedded in other contracts) be recorded in the balance sheet as
either an asset or liability measured at its fair value. The statement also
requires that changes in the derivative's fair value be recognized currently
in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the income statement, and
requires that a company must formally document, designate, and assess the
effectiveness of transactions that receive hedge accounting. The FASB has
issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133". The
Statement defers for one year the effective date of SFAS No. 133. The rule
will apply to all fiscal quarters of all fiscal years beginning after June
15, 2000. The Company does not expect the impact of this new statement on the
Company's consolidated balance sheets or results of operations to be material.
NOTE K- CONTINGENCIES
We are involved in certain claims arising in the normal course of business,
including claims that it may be infringing patent rights owned by third parties.
We are unable to foresee the extent to which these matters will be pursued by
the claimants or to predict with certainty the eventual outcome. However, we
believe that the ultimate resolution of these matters will not have a material
adverse effect on our financial position, results of operations or cash flow.
Page 10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
TOTAL REVENUES. Our total revenues increased significantly to $29.0 million
in the third quarter of 2000 from $23.9 million in the third quarter of 1999.
Total revenues in the first nine months of 2000 increased to $78.1 million
from $50.5 million in the same period in 1999. The increases in both of the
three and nine months ended September 30, 2000 compared to the same periods
in 1999 were due to our increased revenues from product sales as well as
license sales. Product sales increased primarily due to the strong demand of
our D16K and DL16K. Our licensing and royalty revenues increased to $7.1
million in the third quarter of 2000 compared to $5.0 million in the same
period of 1999 primarily due to three new licensees, of which two are: the
Atmel Corporation and Legerity Inc. Royalty revenues increased in the first
nine months ended September 30, 2000 as compared to the same period in 1999.
Export sales, primarily consisting of Integrated Digital Telephony (IDT)
speech processors shipped to manufacturers in Europe and Asia, including
Japan, as well as license fees on DSP core designs, represented 83% of our
total revenues for the three months ended September 30, 2000 and 94% of our
total revenues for the three months ended September 30, 1999. Additionally,
these sales represented 87% of our total revenues for the nine months ended
September 30, 2000 and 45% of our total revenues for the nine months ended
September 30, 1999. All export sales are denominated in U.S. dollars.
Revenues from a distributor, Tomen Electronics, accounted for 55% and 53% of
our total revenues for the three months ended September 30, 2000 and 1999,
respectively. Additionaly, Tomen Electronics accounted for 50% and 45% of our
total revenues for the nine months ended September 30, 2000 and 1999,
respectively.
GROSS PROFIT. Gross profit as a percentage of total revenues increased
slightly to 55% in the third quarter of 2000 from 54% in the third quarter of
1999. Product gross profit as a percentage of product sales was 42% in both
the third quarter of 2000 and 1999. The Company managed to off-set the
continued decline in average selling prices with a decrease in manufacturing
costs, partially due to technological improvements.
RESEARCH AND DEVELOPMENT EXPENSES. Our research and development expenses
increased to $5.6 million in the third quarter of 2000 from $3.9 million in the
third quarter of 1999. In the first three quarters of 2000, research and
development expenses increased to $15.0 million from $11.0 million in the first
three quarters of 1999, primarily due to increased research and development
personnel to enforce our new research and development projects in connection
with our line of products the D16K and DL16K series. The expense increase was
also attributed to increased personnel associated due to our VoicePump
acquisition. Our research and development expenses as a percentage of total
revenues were 19% in the three months ended September 30, 2000 and 17% in the
three months ended September 1999.
SALES AND MARKETING EXPENSES. Our sales and marketing expenses increased to $3.2
million from $2.4 million in the third quarter of 2000 as compared to the same
quarter in 1999. In the nine months ended September 30, 2000 sales and marketing
expenses were $9.1 million compared with $6.5 million in the same period ended
September 30, 1999. Sales and marketing expenses increased in the third quarter
of 2000 compared to the third quarter of 1999 due to higher commissions on
higher sales. Our sales and marketing expenses as a
Page 11
<PAGE>
percentage of total revenues was 11% in the three months ended September 30,
2000 and 10% in the three months ended September 30, 1999.
GENERAL AND ADMINISTRATIVE EXPENSES. Our general and administrative expenses
were $1.8 million in the three months ended September 30, 2000 and $1.3 million
in the three months ended September 30, 1999. Additionally, in the first nine
months of 2000 general and administrative expenses were $4.6 million compared to
$3.8 million in the comparable period in 1999. These expenses in the third
quarter of 2000 as a percentage of total revenues increased to 6%, compared to
5% in the third quarter of 1999.
UNUSUAL ITEMS. In the first quarter of 2000 we recorded two unusual expense
items amounting to approximately $14.2 million. A write off amount of $11.9
million was recorded relating to the acquired in-process research and
development in connection with the acquisition of approximately 73% of the
outstanding shares of Voicepump, Inc. An expense of $2.2 million was recorded
reflecting the accelerated amortization of acquired assets and intangibles
related to the 1999 acquisition of 900 MHz RF and baseband technology from
Applied Micro Devices, Inc.
OTHER INCOME (EXPENSE). Interest and other income and interest expenses, net for
the nine months ended September 30, 2000 increased to $9.7 compared to $3.6
million for the nine months ended September 30, 1999. The increase was primarily
the result of higher levels of cash, cash equivalents, marketable securities and
cash deposits in 2000 as compared with 1999, as well as higher yields.
EQUITY IN INCOME (LOSS) OF EQUITY METHOD INVESTEES, NET. Equity in income (loss)
of equity method investees, net was a $724,000 gain for the three months ended
September 30, 2000 as compared to a $669,000 gain in the comparable period ended
September 30, 1999. In the first nine months of 2000 equity in income (loss) of
equity method investees, net was $1.9 million gain, as compared with a $1.7
million gain in the same period in 1999. In the three months ended September 30,
2000 we recorded VoicePump's losses in results of operations in our statements
of income of approximately $711,000 and included the minority interest in those
losses in the amount of $205,000.
CAPITAL GAIN. In January 2000, we sold 600,000 shares (pre-split 1:2) of
AudioCodes for approximately $43.8 million and recorded in the first quarter of
2000, a capital gain in the amount of $40.0 million. In June 2000 we sold an
addition 250,000 shares of AudioCodes for approximately $19.2 million and
recorded in the second quarter of 2000, an additional capital gain in the amount
of $17.6 million. We currently own approximately 2.1 million (pre-split 1:2) of
AudioCodes shares, which represents approximately 10% of the outstanding shares.
PROVISION FOR INCOME TAXES. In 2000 and 1999, we benefited for federal and state
tax purposes from foreign tax holiday and tax exempt income in Israel.
LIQUIDITY AND CAPITAL RESOURCES
OPERATING ACTIVITIES. During the nine months ended September 30, 2000, we
generated $22.1 million of cash and cash equivalents from our operating
activities as compared to $7.2 million during the nine months ended September
30, 1999. This increase is mainly due to a significant increase in net income
during the nine months ended September 30, 2000 as compared to the previous
period as well as to the increase in the non-cash effect of amortization of
in-process research and development costs. These increases were offset mainly by
the recognition of
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capital gain on the sales of the Audiocodes' shares, in the first nine months of
2000 compared with the same period in 1999.
INVESTING ACTIVITIES. We invest excess cash in short-term cash deposits and
marketable securities of varying maturity, depending on our projected cash needs
for operations, capital expenditures and other business purposes. In the first
nine months of 2000, we purchased $117.8 million of investments classified as
short-term cash deposits and marketable securities. In the same period, $67.3
million of investments classified as marketable securities matured. Our capital
equipment purchases in the first nine months of 2000, primarily research and
development software and computers, totaled $1.4 million.
In September 2000, we invested approximately $485,000 (49.9 million Yen) in
shares of Tomen Corporation, the parent company of our Japanese distributor,
Tomen Electronics, as part of a long strategic relationship. Tomen's shares
are traded on the Japanese stock exchange, and are recorded and accounted for
in other assets on our balance sheets as marketable equity securities. The
condensed consolidated balance sheets as of September 30, 2000 include
unrealized gain on marketable equity securities of $100,000 in our investment
in Tomen Corporation.
FINANCING ACTIVITIES. During the nine months ended September 30, 2000, we
received $15.2 million upon the exercise of employee stock options and
through purchases pursuant to the employee stock purchase plan. In October
and November, 2000, we repurchased 460,000 shares of our Common Stock at an
average purchase price of $24.74 per share, for an aggregate purchase price
of approximately $11.4 million.
At September 30, 2000, our principal source of liquidity consisted of cash and
cash equivalents deposits totaling $45.6 million and marketable securities and
short-term cash deposits of $190.5 million. Our working capital at September 30,
2000 was $238.4 million.
We believe that our current cash, cash equivalent, cash deposits and marketable
securities will be sufficient to meet our cash requirements through at least the
next twelve months. In addition, as part of our business strategy, we
occasionally evaluate potential acquisitions of businesses, products and
technologies. Accordingly, a portion of our available cash may be used at any
time for the acquisition of complementary products or businesses. Such potential
transactions may require substantial capital resources, which may require us to
seek additional debt or equity financing. There can be no assurance that we will
consummate any such transactions. See "Factors Affecting Future Operating
Results--There are Risks Associated with our Acquisition Strategy" for more
detailed information.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
INTEREST RATE RISK. It is our policy not to enter into derivative financial
instruments. We do not currently have any significant foreign currency exposure
since we do not transact business in foreign currencies. Due to this, we did not
have significant overall currency exposure at November 1, 2000.
FOREIGN CURRENCY RATE RISK. As nearly all of our sales and expenses are
denominated in U.S. Dollars, we have experienced only insignificant foreign
exchange gains and losses to date, and do not expect to incur significant gains
and losses in 2000. We did not engage in foreign currency hedging activities
during the three months ended September 30, 2000.
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EUROPEAN MONETARY UNION
Within Europe, the European Economic and Monetary Union (the "EMU") introduced a
new currency, the euro, on January 1, 1999. During 2002, all EMU countries are
expected to be operating with the euro as their single currency. Uncertainty
exists as to the effect the euro currency will have on the marketplace.
Additionally, all of the final rules and regulations have not yet been defined
and finalized by the European Commission with regard to the euro currency. We
are assessing the effect the euro formation will have on DSP Group's internal
systems and the sale of DSP Group products. We expect to take appropriate
actions based on the results of such assessment. We believe that the cost
related to this issue will not be material to us and will not have a substantial
effect on our financial condition and results of operations.
FACTORS AFFECTING FUTURE OPERATING RESULTS
THIS FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS CONCERNING OUR FUTURE
PRODUCTS, EXPENSES, REVENUE, LIQUIDITY AND CASH NEEDS AS WELL AS OUR PLANS AND
STRATEGIES. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON CURRENT EXPECTATIONS
AND WE ASSUME NO OBLIGATION TO UPDATE THIS INFORMATION. NUMEROUS FACTORS COULD
CAUSE OUR ACTUAL RESULTS TO DIFFER SIGNIFICANTLY FROM THE RESULTS DESCRIBED IN
THESE FORWARD-LOOKING STATEMENTS, INCLUDING THE FOLLOWING RISK FACTORS.
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY. Our quarterly
results of operations may vary significantly in the future for a variety of
reasons, including the following:
- fluctuations in volume and timing of product orders;
- timing of recognition of license fees;
- level of per unit royalties;
- changes in demand for our products due to seasonal customer buying
patterns and other factors;
- timing of new product introductions by us or our customers, licensees
or competitors;
- changes in the mix of products sold by us;
- fluctuations in the level of sales by original equipment manufacturers
(OEMs) and other vendors of products incorporating our products; and
- general economic conditions, including the changing economic
conditions in Asia.
Each of the above factors is difficult to forecast and thus could harm
our business, financial condition and results of operations. Through 2000, we
expect that revenues from our DSP core designs and TrueSpeech algorithms will be
derived primarily from license fees rather than per unit royalties. The
uncertain timing of these license fees has caused, and may continue to cause,
quarterly fluctuations in our operating results. Our per unit royalties from
licenses are dependent upon the success of our OEM licensees in introducing
products utilizing our technology and the success of those OEM products in the
marketplace. Per unit royalties from TrueSpeech licensees have not been
significant to date.
OUR AVERAGE SELLING PRICES CONTINUE TO DECLINE. We have experienced a decrease
in the average selling prices of our IDT processors, but have to date been able
to offset this decrease on an annual basis through manufacturing cost reductions
and the introduction of new products
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with higher performance. However, we cannot guarantee that our on-going efforts
will be successful or that they will keep pace with the anticipated, continuing
decline in average selling prices.
WE DEPEND ON THE IDT MARKET WHICH IS HIGHLY COMPETITIVE. Sales of IDT products
comprise a substantial portion of our product sales. Any adverse change in the
digital IDT market or in our ability to compete and maintain our position in
that market would harm our business, financial condition and results of
operations. The IDT market and the markets for our products in general are
extremely competitive and we expect that competition will only increase. Our
existing and potential competitors in each of our markets include large and
emerging domestic and foreign companies, many of which have significantly
greater financial, technical, manufacturing, marketing, sale and distribution
resources and management expertise than we do. It is possible that we may one
day be unable to respond to increased price competition for IDT processors or
other products through the introduction of new products or reductions of
manufacturing costs. This inability would have a material adverse effect on our
business, financial condition and results of operations. Likewise, any
significant delays by us in developing, manufacturing or shipping new or
enhanced products also would have a material adverse effect on our business,
financial condition and results of operations. The 900 Mhz Digital Spread
Spectrum RF and Base Band technology acquired in 1999 from AMD gave us a "cheap
entry ticket" to this market. This technology is not state of the art and the
company has noticed a trend of decreasing sales for the product models which are
based on this technology. The company may not succeed in its development of new
RF and Base Band models and those which are going to be developed may not be
accepted by the market. Despite the recent success of development and sales of
our DSP Cores, the market needs extensive R&D efforts in new technologies not
currently owned by the company, and we may not succeed in developing such
technologies in due time, which could affect our competitive position.
WE DEPEND ON INDEPENDENT FOUNDRIES TO MANUFACTURE OUR INTEGRATED CIRCUIT
PRODUCTS. All of our integrated circuit products are manufactured by independent
foundries. While these foundries have been able to adequately meet the demands
of our increasing business, we are and will continue to be dependent upon these
foundries to achieve acceptable manufacturing yields, quality levels and costs,
and to allocate to us a sufficient portion of foundry capacity to meet our needs
in a timely manner. To meet our increased wafer requirements, we have added
additional independent foundries to manufacture our processors. Our revenues
could be harmed should any of these foundries fail to meet our request for
products due to a shortage of production capacity, process difficulties, low
yield rates or financial instability. For example, foundries in Taiwan produce a
significant portion of our wafer supply. As a result, earthquakes, aftershocks
or other natural disasters in Asia, could preclude us from obtaining an adequate
supply of wafers to fill customer orders and could harm our business, financial
condition, and results of operations.
WE MAY NEED TO INCREASE OUR RESEARCH AND DEVELOPMENT EFFORTS TO REMAIN
COMPETITIVE. The DSP Cores market is experiencing extensive efforts by some of
our competitors to use new technologies to manipulate the chip design
programming to increase the parallel processing of the chip. One such technology
used is VeryLong Instruction Word (VLIW), which some of our competitors possess
elements of, but which we do not possess at the present time. If such technology
continues to improve the programming processing of these chips, then we may need
to further our research and development to obtain such technology to remain
competitive in the market.
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WE DEPEND ON INTERNATIONAL OPERATION. We are dependent on sales to customers
outside the United States. We expect that international sales will continue to
account for a significant portion of our net product and license sales for the
foreseeable future. As a result, the occurrence of any negative international
political, economic or geographic events could result in significant revenue
shortfalls. These shortfalls could cause our business, financial condition and
results of operations to be harmed. Some of the risks of doing business
internationally include:
- unexpected changes in regulatory requirements;
- fluctuations in the exchange rate for the U.S. dollar;
- imposition of tariffs and other barriers and restrictions;
- burdens of complying with a variety of foreign laws;
- political and economic instability; and
- changes in diplomatic and trade relationships.
RISKS OF OPERATING IN ISRAEL.
Our principal research and development facilities are located in the State of
Israel and, as a result, at September 30, 2000, 131 of our 174 employees were
located in Israel, including 89 out of 104 of our research and development
personnel. In addition, although DSP Group is incorporated in Delaware, a
majority of our directors and executive officers are residents of Israel.
Although substantially all of our sales currently are being made to customers
outside Israel, we are nonetheless directly influenced by the political,
economic and military conditions affecting Israel. Any major hostilities
involving Israel, or the interruption or curtailment of trade between Israel
and its present trading partners, could significantly harm our business,
operating results and financial condition.
Israel's economy has been subject to numerous destabilizing factors, including a
period of rampant inflation in the early to mid-1980's, low foreign exchange
reserves, fluctuations in world commodity prices, military conflicts and civil
unrest. In addition, Israel and companies doing business with Israel have been
the subject of an economic boycott by the Arab countries since Israel's
establishment. These restrictive laws and policies may have an adverse impact on
our operating results, financial condition or expansion of our business.
Since the establishment of the State of Israel in 1948, a state of hostility has
existed, varying in degree and intensity, between Israel and the Arab countries.
Although Israel has entered into various agreements with certain Arab countries
and the Palestinian Authority, and various declarations have been signed in
connection with efforts to resolve some of the economic and political problems
in the Middle East, we cannot predict whether or in what manner these problems
will be resolved. Our results of operations may be negatively affected by the
obligation of key personnel to perform military service. In addition, certain of
our officers and employees are currently obligated to perform annual reserve
duty in the Israel Defense Forces and are subject to being called for active
military duty at any time. Although we have operated effectively under these
requirements since our inception, we cannot predict the effect of these
obligations on the Company in the future. Our operations could be disrupted by
the absence, for a significant period, of one or more of our officers or key
employees due to military service.
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Moreover, many of our expenses in Israel are paid in Israeli currency which
subjects us to the risks of foreign currency fluctuations and to economic
pressures resulting from Israel's general rate of inflation. While substantially
all of our sales and expenses are denominated in United States dollars, a
portion of our expenses are denominated in Israeli shekels. Our primary expenses
paid in Israeli currency are employee salaries and lease payments on our Israeli
facilities. As a result, an increase in the value of Israeli currency in
comparison to the United States dollar could increase the cost of technology
development, research and development expenses and general and administrative
expenses. We cannot provide assurance that currency fluctuations, changes in the
rate of inflation in Israel or any of the other factors mentioned above will not
have a material adverse effect on our business, financial condition and results
of operations.
ANY FUTURE PROFITABILITY MAY BE DIMINISHED IF TAX BENEFITS FROM THE STATE OF
ISRAEL ARE REDUCED OR WITHHELD. The Company receives certain tax benefits in
Israel, particularly as a result of the "Approved Enterprise" status of the
Company's facilities and programs. To be eligible for tax benefits, the Company
must meet certain conditions, relating principally to adherence to the
investment program filed with the Investment Center of the Israeli Ministry of
Industry and Trade and to periodic reporting obligations. The Company believes
that it will be able to meet such conditions. Should the Company fail to meet
such conditions in the future, however, it would be subject to corporate tax in
Israel at the standard rate of 36%, and could be required to refund tax benefits
already received. There can be no assurance that such grants and tax benefits
will be continued in the future at their current levels or otherwise. The
termination or reduction of certain programs and tax benefits (particularly
benefits available to the Company as a result of the Approved Enterprise status
of the Company's facilities and programs) or a requirement to refund tax
benefits already received may have a material adverse effect on the Company's
business, operating results and financial condition.
PROPOSED TAX REFORM. On May 4, 2000, a committee chaired by the Director General
of the Israeli Ministry of Finance, Avi Ben-Bassat, issued a report recommending
a sweeping reform in the Israeli system of taxation. The proposed reform would
significantly alter the taxation of individuals, and would also affect corporate
taxation. In particular, the proposed reform would reduce, but not eliminate,
the tax benefits available to approved enterprises such as ours. The proposed
reform would also impose a capital gains tax on individuals on the sale of
shares, unless the selling shareholder is entitled to benefits under a tax
treaty. The Israeli cabinet has approved the recommendations in principle, but
implementation of the reform requires legislation by Israel's Knesset. The
Company cannot be certain whether the proposed reform will be adopted, when it
will be adopted or what form any reform will ultimately take.
WE DEPEND ON OEMS AND THEIR SUPPLIERS TO OBTAIN REQUIRED COMPLEMENTARY
COMPONENTS. Some of the raw materials, components and subassemblies included in
the products manufactured by our OEM customers, which also incorporate our
products, are obtained from a limited group of suppliers. Supply disruptions,
shortages or termination of any of these sources could have an adverse effect on
our business and results of operations due to the delay or discontinuance of
orders for our products by customers until those necessary components are
available.
WE DEPEND UPON THE ADOPTION OF INDUSTRY STANDARDS BASED ON TRUESPEECH. Our
prospects are partially dependent upon the establishment of industry standards
for digital speech compression based on TrueSpeech algorithms in the computer
telephony and Voice over IP markets. The development of industry standards
utilizing TrueSpeech algorithms would create an opportunity for us to develop
and market speech co-processors that provide TrueSpeech solutions and enhance
the performance and functionality of products incorporating these co-processors.
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In February 1995, the ITU established G.723.1, which is predominately composed
of a TrueSpeech algorithm, as the standard speech compression technology for use
in video conferencing over public telephone lines. In March 1997, the
International Multimedia Teleconferencing Consortium, a nonprofit industry
group, recommended the use of G.723.1 as the default audio coder for all voice
transmissions over the Internet or for IP applications for H.323 conferencing
products.
THERE ARE RISKS ASSOCIATED WITH OUR ACQUISITION STRATEGY. DSP Group has pursued,
and will continue to pursue, growth opportunities through internal development
and acquisition of complementary businesses, products and technologies. We are
unable to predict whether or when any prospective acquisition will be completed.
The process of integrating an acquired business may be prolonged due to
unforeseen difficulties and may require a disproportionate amount of our
resources and management's attention. We cannot provide assurance that we will
be able to successfully identify suitable acquisition candidates, complete
acquisitions, integrate acquired businesses into our operations, or expand into
new markets. Once integrated, acquisitions may not achieve comparable levels of
revenues, profitability or productivity as the existing business of DSP Group or
otherwise perform as expected. The occurrence of any of these events could harm
our business, financial condition or results of operations. Future acquisitions
may require substantial capital resources, which may require us to seek
additional debt or equity financing.
PROTECTION OF OUR INTELLECTUAL PROPERTY IS LIMITED; RISKS OF INFRINGEMENT OF
RIGHTS OF OTHERS. As is typical in the semiconductor industry, we have been and
may from time to time be notified of claims that we may be infringing patents or
intellectual property rights owned by third parties. For example, AT&T has
asserted that G.723.1, which is primarily composed of a TrueSpeech algorithm,
includes certain elements covered by patents held by AT&T and has requested that
video conferencing manufacturers license the technology from AT&T. Other
organizations including Lucent Microelectronics, NTT and VoiceCraft have raised
public claims that they also have patents related to the G.723.1 technology. If
it appears necessary or desirable, we may try to obtain licenses for those
patents or intellectual property rights that we are allegedly infringing.
Although holders of these types of intellectual property rights commonly offer
these licenses, we cannot assure you that licenses will be offered or that terms
of any offered licenses will be acceptable to us. Our failure to obtain a
license for key intellectual property rights from a third party for technology
used by us could cause us to incur substantial liabilities and to suspend the
manufacturing of products utilizing the technology. We believe that the ultimate
resolution of these matters will not harm our financial position, results of
operations, or cash flows.
OUR STOCK PRICE MAY BE VOLATILE. Announcements of developments related to our
business, announcements by competitors, quarterly fluctuations in our financial
results, changes in the general conditions of the highly dynamic industry in
which we compete or the national economies in which we do business and other
factors could cause the price of our common stock to fluctuate, perhaps
substantially. In addition, in recent years the stock market has experienced
extreme price fluctuations, which have often been unrelated to the operating
performance of affected companies. These factors and fluctuations could have a
material adverse effect on the market price of our common stock.
YEAR 2000 ISSUE. The "Year 2000 issue" refers to the use by many computer
hardware and software systems of only two digits to represent the calendar year.
As a result, these systems and programs may not process dates beyond 1999, which
may cause errors in information or systems failures. The Company believes it has
taken all reasonable and prudent steps to protect its assets and operations from
the impact of the Year 2000 Issue. To date there have been no known adverse
effects on any of the Company's operations or offices. While the change in date
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has occurred, it is not possible to conclude that all aspects of the Year 2000
Issue that may affect the Company have been fully resolved. The Company believes
that exposure to business disruption remains, but does not expect it would have
a material impact on the Company's results of operations, liquidity and
financial condition.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations--Quantitative and Qualitative Disclosures About Market Risk."
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
In March 1999, the Board of Directors of the Company authorized a
new plan to repurchase up to an additional 2,000,000 shares of our Common
Stock from time to time on the open-market or in privately negotiated
transactions, increasing the total shares authorized to be repurchased to
4,000,000 shares. In October and November, 2000, we repurchased 460,000
shares of our Common Stock at an average purchase price of $24.74 per share
for a total purchase price of approximately $11.4 million. The accumulated
number of shares of Common Stock we have repurchased is 2,488,000 shares.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule (included in Registrant's
Form 10-Q filed with the Commission on November 14,
2000.
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
three months ended September 30, 2000.
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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.
DSP GROUP, INC.
(Registrant)
By /s/ MOSHE ZELNIK
--------------------------------------------
Moshe Zelnik, Vice President of Finance, Chief Financial Officer
and Secretary (Principal Financial Officer and Principal Accounting Officer)
Date: November 16, 2000
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