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DSP Group Sets The Record Straight Again In Response To Starboard's Latest Letter

Stocks in this article: DSPG

Starboard's Latest Letter Clearly Demonstrates a Lack of Understanding of Our Business; Do Not Let Starboard Distract You From the Facts

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SAN JOSE, Calif., May 29, 2013 (GLOBE NEWSWIRE) -- DSP Group ®, Inc. (Nasdaq:DSPG), a leading global provider of wireless chipset solutions for converged communications, said today that Starboard's latest letter is another clear example of the activist hedge fund's use of misinformation to confuse and deceive stockholders. What's more, Starboard's letter demonstrates a clear lack of understanding of our business.

Do Not Let Starboard Distract You from the Facts

The facts are clear — don't be distracted by Starboard's misleading statements:

  • DSP Group's stock is one of the top performing stocks in our industry over the last 12 months and year-to-date  
  • DSP Group has completed six consecutive quarters of operational improvements measured across all key metrics, including a return to GAAP operating profitability  
  • DSP Group has a clear, concise growth strategy and is on track to meet its strategic goals  
  • DSP Group Board nominees are diverse and have significant strategic, operational, financial and public board experience in our areas of focus and in the places where the Company operates

Do Not Confuse Our System-on-Chip ("SoC") Peer Group and the Competitors Listed in Our Filings

It is astonishing that Starboard, which is seeking majority representation on our Board, does not understand the difference between our "fabless" System-on-Chip ("SoC") peers and the competitors listed in our SEC filings.  Potential competitors listed in our filings may have a product or a line of business that compete with one of our own. That does not, however, mean that a comparison of their R&D spending to DSP Group's is meaningful. 

DSP Group is indeed one of the several publicly traded fabless SoC providers. Like DSP Group, a typical fabless SoC company spends a significant share, if not a majority, of its R&D expenditure on software development. Non-SoC vendors, on the other hand, tend to have an R&D expenditure profile that is heavily skewed towards hardware.  The vast majority of the competitors listed in our annual and quarterly filings do not fit the fabless SoC definition, as they spend the vast majority of their R&D expenditure on hardware.  The seven SoC peers we listed in our presentation, including Broadcom and Marvell, are a true peer group of fabless SoC companies that spend the majority of their R&D on software, as we do.

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