7/16/2003 - Spectrum Signal Processing Inc. (NASDAQ: SSPI / TSX: SSY), a leading provider of high performance solutions for wireless signal and packet-voice processing, announced that it has retained the services of CIBC World Markets to assist the company in pursuing strategic alternatives. The company has also revised its guidance for 2003.
Mr. Pascal Spothelfer, Spectrum’s President and Chief Executive Officer, stated, “Over the last three years Spectrum has built two distinct businesses, which today offer best-of-class technologies and products for their respective markets. While the status quo remains an alternative, Spectrum’s available resources limit the company’s ability to fully exploit its leadership position in both its target markets. We have reached the point where growing these two pure play businesses via operating cash flows and periodic small-scale financings may not be the best strategy for Spectrum and its shareholders. Accordingly, Spectrum’s Board of Directors has accepted management’s recommendation to pursue strategic alternatives with the ultimate goal of maximizing shareholder value.”
Spectrum’s business is structured into two distinct product lines targeted at defense wireless applications and commercial packet-voice applications:
“We are very excited about the prospects for both the Wireless Systems Group and the Network Solutions Group over the next few years,” added Mr. Spothelfer. “It is prudent and in the best interests of our shareholders, customers and employees to consider alternatives that will allow both of the groups to reach their full potential.”
CIBC World Markets has been engaged to lead the initiative on Spectrum’s behalf and advise the Board and management.
Q2 Preliminary Results and Revised 2003 Guidance
Spectrum also pre-released preliminary results for the second quarter of 2003 (all figures in US$). Revenues are expected to range between $4.0 million and $4.2 million, and gross margins are expected to range between 41% and 43% generating an expected loss between $2.4 million and $2.6 million for the quarter. At June 30, 2003, Spectrum closed the quarter with a cash position of approximately $2.6 million. For the second half of 2003, the company expects revenues to range between $13 million and $17 million, yielding projected annual revenues between $23 million and $27 million. Gross margins are expected to range from 52% to 55% with Spectrum expecting to generate a net loss on the year.
“Second quarter sales of our aXs packet-voice products reached a record at almost $2 million, an increase of 400% over the prior quarter. However, defense related sales in the quarter have come in much lower than anticipated due to order delays and low legacy product revenues for the quarter. Despite the weak quarter, the company has sufficient funds available to meet its operating requirements for the foreseeable future,” stated Mr. Brent Flichel, Spectrum’s Chief Financial Officer. “While we expect a revenue recovery in the second half of the year, we do not anticipate making up for the entire shortfall of the second quarter. Therefore we have revised our guidance for the year.”
Spectrum will announce its financial results for the second quarter on July 21, 2003.
To access the conference call:
About Spectrum Signal Processing Inc.
Spectrum Signal Processing designs, develops and markets high performance wireless signal processing and packet-voice processing subsystems for use in communications infrastructure equipment. Spectrum’s optimized hardware, software and chip technology work together to collect, compress and convert voice and data signals. Leveraging its 16 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 communications systems, satellite hubs, cellular base stations, media gateways and next-generation voice and data switches. More information on Spectrum and its flexComm and aXsTM product lines is available at www.spectrumsignal.com.
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