Financial Results Highlights:
-
Non-GAAP and GAAP diluted EPS of
$0.10 and$0.03 , respectively, both exceeding guidance -
Revenues of approximately
$37.2 million up 3% year over year, above mid-point of guidance - Non GAAP gross margins of 41.1%, at the high end of guidance
-
Non-GAAP operating income of
$2.4 million , at 6% of revenues, vs. non-GAAP operating income of$2.6 million in the second quarter of 2014 -
GAAP net income of
$0.7 million , compared to$1.1 million in the second quarter of 2014 -
Generated
$7.9 million of cash flows from operations -
Repurchased 453,000 shares for a total consideration of
$5.2 million -
Cash, deposits and marketable securities of
$120.1 million as of the end of the quarter
Management Comments:
Commenting on the results,
Mr. Elyakim added, "While we expect a slowdown in revenues for the third quarter of the year due to softening demand for DECT products and a delay in mobile revenues, we are still well positioned to achieve our objective of returning to revenue growth for the full year. More importantly, the successful market adoption of our new initiatives continues to increase our confidence in the long term growth in both revenues and profits."
Products and Market Highlights:
- New product contribution grew to 28% of revenues vs. 20% in the second quarter of 2014
-
Office/VoIP segment quarterly revenues of
$5.2 million increased by 37% year over year -
DECT/CAT-iq HGWs revenues of
$4.2 million increased by 49% year over year - Launched DBMD4, a new Always-On voice enhancement product, featuring ultra-low power consumption and best in class performance for mobile and wearable devices
- Excelocity and SGW offer ATA and multiport VoIP gateway based on our DVF99 SoC
- Introduced a DHAN ULE Module based on DHX91, enabling faster TTM and lower development costs
2015 Second Quarter Results
GAAP Results:
Revenues for the second quarter of 2015 were
Non-GAAP Results:
Non-GAAP net income and diluted earnings per share for the second quarter of 2015 were
Non-GAAP net income and earnings per share for the second quarter of 2014 excluded the impact of amortization of acquired intangible assets in the amount of
Earnings Conference Call Details:
Investors may access the conference call by dialing 1877 280 2342 (domestic US) or + 1718 354 1158 (international) approximately 10 minutes prior to the starting time. The password is
A replay of the conference call will be available for a week following the call. To listen to the session, please dial +1 347 366 9565 (domestic US) or + 44 20 3427 0598 (international) and enter the company access code: 9737039#. For more information, please contact
Presentation on Non-GAAP Net Income Calculation
The Company believes that the non-GAAP presentation of net income and diluted EPS presented in this press release is useful to investors in comparing results for the quarter ended
Forward Looking Statements
This press release contains statements that qualify as "forward-looking statements" under the Private Securities Litigation Reform Act of 1995, including Mr. Elyakim's statement he expects a slowdown in revenues for the third quarter of the year due to softening demand for DECT products and a delay in mobile revenues, and that
About
At the forefront of semiconductor innovation and operational excellence for over two decades,
| DSP GROUP, INC. | ||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||
| (In thousands, except per share amounts) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Revenues | $ 37,247 | $ 36,276 | $ 75,282 | $ 69,162 |
| Cost of revenues | 22,012 | 21,495 | 44,512 | 41,367 |
| Gross profit | 15,235 | 14,781 | 30,770 | 27,795 |
| Operating expenses: | ||||
| Research and development, net | 8,855 | 8,025 | 17,971 | 16,230 |
| Sales and marketing | 2,974 | 2,947 | 6,037 | 6,033 |
| General and administrative | 2,460 | 2,644 | 4,981 | 5,361 |
| Amortization of intangible assets | 321 | 397 | 642 | 794 |
| Total operating expenses | 14,610 | 14,013 | 29,631 | 28,418 |
| Operating income (loss) | 625 | 768 | 1,139 | (623) |
| Financial income, net | 291 | 297 | 626 | 709 |
| Income before taxes on income | 916 | 1,065 | 1,765 | 86 |
| Taxes on income (income tax benefit) | 186 | (23) | 262 | (14) |
| Net income | $ 730 | $ 1,088 | $ 1,503 | $ 100 |
| Net earnings per share: | ||||
| Basic | $ 0.03 | $ 0.05 | $ 0.07 | $ 0.00 |
| Diluted | $ 0.03 | $ 0.05 | $ 0.06 | $ 0.00 |
| Weighted average number of shares used in per share computations of net income per share: | ||||
| Basic | 22,064 | 21,983 | 22,115 | 22,180 |
| Diluted | 23,717 | 23,035 | 23,801 | 22,706 |
| Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures | ||||
| (In thousands, except per share amounts) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Unaudited | Unaudited | Unaudited | Unaudited | |
| GAAP net income | $ 730 | $ 1,088 | $ 1,503 | $ 100 |
| Equity-based compensation expense included in cost of revenues | 83 | 84 | 153 | 166 |
| Equity-based compensation expense included in research and development, net | 613 | 657 | 1,151 | 1,301 |
| Equity-based compensation expense included in sales and marketing | 178 | 169 | 330 | 331 |
| Equity-based compensation expense included in general and administrative | 537 | 551 | 1,030 | 1,106 |
| Amortization of intangible assets | 321 | 397 | 642 | 794 |
| Amortization of deferred tax liability related to intangible assets | (85) | (97) | (170) | (194) |
| Non-GAAP net income | $ 2,377 | $ 2,849 | $ 4,639 | $ 3,604 |
| Weighted-average number of common stock used in computation of GAAP diluted net income per share (in thousands) | 23,717 | 23,035 | 23,801 | 22,706 |
| Weighted-average number of shares related to outstanding options, stock appreciation rights and restricted share units (in thousands) | 406 | 455 | 379 | 1,044 |
| Weighted-average number of common stock used in computation of non-GAAP diluted net income per share (in thousands) | 24,123 | 23,490 | 24,180 | 23,750 |
| GAAP diluted net income per share | $ 0.03 | $ 0.05 | $ 0.06 | $ 0.00 |
| Equity-based compensation expense | 0.07 | 0.06 | 0.11 | 0.12 |
| Amortization of intangible assets | 0.01 | 0.02 | 0.03 | 0.04 |
| Amortization of deferred tax liability related to intangible assets | (0.01) | (0.01) | (0.01) | (0.01) |
| Non-GAAP diluted net income per share | $ 0.10 | $ 0.12 | $ 0.19 | $ 0.15 |
| DSP GROUP, INC. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (In thousands) | ||
| June 30, | December 31, | |
| 2015 | 2014 | |
| (Unaudited) | (Audited) | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 15,731 | $ 20,544 |
| Restricted deposits | 170 | 623 |
| Marketable securities and short term deposits | 11,974 | 11,508 |
| Trade receivables, net | 22,674 | 20,298 |
| Inventories | 14,067 | 15,635 |
| Other accounts receivable and prepaid expenses | 4,065 | 1,902 |
| Deferred income taxes | 780 | 775 |
| Total current assets | 69,461 | 71,285 |
| Property and equipment, net | 3,446 | 2,843 |
| Long term marketable securities and deposits | 92,206 | 92,269 |
| Severance pay fund | 11,545 | 10,860 |
| Deferred income taxes | 125 | 149 |
| Intangible assets, net | 9,769 | 10,411 |
| Investment in other companies | 2,200 | 2,200 |
| Long term prepaid expenses and lease deposits | 1,233 | 1,162 |
| 117,078 | 117,051 | |
| Total assets | $ 189,985 | $ 191,179 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Trade payables | $ 15,250 | $ 15,282 |
| Other current liabilities | 14,363 | 16,411 |
| Total current liabilities | 29,613 | 31,693 |
| Accrued severance pay | 11,610 | 10,929 |
| Accrued pensions | 1,005 | 1,089 |
| Deferred income taxes | 675 | 845 |
| Total long term liabilities | 13,290 | 12,863 |
| Stockholders' equity: | ||
| Common stock | 22 | 22 |
| Additional paid-in capital | 358,596 | 355,906 |
| Accumulated other comprehensive income loss | (930) | (1,566) |
| Less – Cost of treasury stock | (121,929) | (122,387) |
| Accumulated deficit | (88,677) | (85,352) |
| Total stockholders' equity | 147,082 | 146,623 |
| Total liabilities and stockholders' equity | $ 189,985 | $ 191,179 |
