10/22/2003 - Spectrum Signal Processing Inc. (NASDAQ: SSPI / TSX: SSY) a leading provider of high performance wireless signal processing and packet-voice solutions, announced its financial results for the third quarter ended September 30, 2003. Spectrum reports all results in U.S. dollars and in accordance with U.S. GAAP.
For the quarter ended September 30, 2003, Spectrum recorded sales of $5.1 million, up 25% from the prior quarter and up 8% from sales of $4.7 million in the third quarter of 2002. Wireless product sales were $4.8 million for the third quarter of 2003 and reflect stronger flexCommTM new product and legacy sales compared to the second quarter. Packet-voice product sales were $333,000 for the third quarter of 2003, a decrease of $1.5 million over the second quarter as a result of variations in demand caused by early stage product deployment at UTStarcom.
Spectrum’s gross margin was 56% in the third quarter of 2003, compared to 42% in the prior quarter and 57% in the third quarter of 2002. Gross margins for wireless products were 57% in the third quarter compared to 42% in the second quarter of 2003. Gross margins for packet-voice products were 50% in the third quarter, compared to 42% in the prior quarter.
Operating expenses for the third quarter of 2003, inclusive of amortization, were $4.3 million, up $88,000 from the prior quarter primarily due to a non-cash capital asset write-down. Operating expenses for the third quarter of 2003 were $690,000 higher than the same quarter in the previous year as a result of foreign exchange impact caused by the rising Canadian dollar, the non-cash capital asset write-down and the conclusion of the Company’s Technology Partnerships Canada contribution agreement in September 2002.
Spectrum recorded a loss of $1.4 million, or a loss of $0.10 per share, for the quarter ended September 30, 2003, compared to a loss of $2.5 million or $0.17 per share, in the prior quarter, and a loss of $892,000 or $0.06 per share for the third quarter of 2002.
Spectrum’s net cash position at September 30, 2003 stood at $491,000, down from $2.6 million at June 30, 2003. Spectrum expects to have sufficient funds to meet its operating requirements for the foreseeable future.
“While packet-voice product revenues continue to fluctuate given the early deployment phase of aXsTM products at UTStarcom, we experienced a very active third quarter with our wireless products. Many new customer and program announcements were announced, including Thales Underwater Systems, Advanced CounterMeasure Systems and Cubic Defense Applications. A major achievement for Spectrum was the selection of the SDR-3000 software defined radio platform by the Joint Tactical Radio System test and certification element, (JTeL) for use by the U.S. Department of Defense for independent verification and validation of JTRS waveforms,” stated Pascal Spothelfer, Spectrum’s President and CEO.
“Our margins for the third quarter recovered from the prior quarter, and we continue to manage our expense base tightly including hedging against the rising Canadian dollar,” added Mr. Spothelfer. “As announced in July, our strategic alternatives process is underway, and we will comment on the process when the appropriate level of certainty has been reached.”
Spectrum will conduct a conference call and live audio web cast on October 20, 2003 at 4:30 pm Eastern / 1:30 pm Pacific time. The call can be accessed by dialing 1.800.273.9672, or by accessing the audio web cast from Spectrum’s web site at www.spectrumsignal.com. A replay of the call will be available from October 20, 2003 to November 20, 2003 and can be accessed by dialing 1.416.695.5800 followed by the access code 1482071 or by visiting www.spectrumsignal.com.
About Spectrum Signal Processing Inc.
Spectrum Signal Processing designs, develops and markets high performance wireless signal processing and packet-voice processing platforms for use in defense and communications infrastructure equipment. Spectrum’s optimized hardware, software and chip technology work together to collect, compress and convert voice and data signals. Leveraging its 17 years of design expertise, Spectrum provides its customers with faster time to market and lower costs by delivering highly flexible, reliable and high-density solutions. Spectrum subsystems are targeted for use in government intelligence, surveillance and communications systems, satellite hubs, cellular base stations, media gateways and next-generation voice and data switches. More information on Spectrum and its aXs and flexComm product lines is available at www.spectrumsignal.com.
TMaXs and flexComm are trademarks of Spectrum Signal Processing Inc.
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