Record Quarterly Contribution from New Products of
Second Quarter GAAP EPS of
Second Quarter Financial Highlights:
- GAAP and non-GAAP diluted earnings per share of
$0.05 and$0.11 , respectively - Revenues of approximately
$36.2 million , above the mid-point of guidance - Non-GAAP gross margin of 44.2%, compared to non-GAAP gross margin of 41.1% in the second quarter of 2015
- Non-GAAP operating income of
$2.5 million , compared to non-GAAP operating income of$2.4 million in the second quarter of 2015 - Non-GAAP net income of
$2.6 million , compared to non-GAAP net income of$2.4 million in the second quarter of 2015 - Generated
$9.0 million of cash flow from operations, compared to$7.9 million in the second quarter of 2015 - Repurchased 132,000 shares for a total consideration of
$1.3 million - Cash, deposits and marketable securities of
$122.7 million as ofJune 30, 2016
Management Comments:
Commenting on the results,
Mr. Elyakim added, “In the third quarter of 2016, we expect sequential revenue growth, led by the continued success of our new product initiatives and sequential improvement in the cordless segment. Our growth and long-term value propositions are now driven by our proven new product initiatives. We are achieving market leadership in Office/VoIP, and HDClear is rapidly gaining recognition as a key technology for voice activation and voice user interface across a range of IoT, audio and mobile devices.”
Second Quarter Product and Market Highlights:
- Record new product revenues of
$15.9 million , a year-over-year increase of 55% - Office/VoIP segment revenues of
$7.4 million , a year-over-year increase of 42% - Mobile/HDClear segment revenues of
$4.6 million , 13% of total revenues - IoT revenues of
$1.3 million , a year-over-year increase of 42% - Home gateway revenues of
$2.6 million , in line with guidance - Secured HDClear design win with a leading OEM for a non-smartphone application
Orange selected our DECT/CAT-iq products for its recently-launched home gateway- Ball-b selected our ULE SoC for its smart city rodent control metropolitan system
- Smarte selected our ULE SoCs to power its new smart home product line
Second Quarter GAAP Results:
Revenues for the second quarter of 2016 were
Second Quarter Non-GAAP Results:
Non-GAAP net income and diluted earnings per share for the second quarter of 2016 were
Earnings Conference Call Details:
Investors may access the conference call by dialing + 1877 280 2342 (domestic US) or +1646 254 3388 (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(0)20 3427 0598 (international) and enter the company access code: 479321#
Presentation on Non-GAAP Net Income Calculation
The Company believes that the non-GAAP presentation of net income and diluted earnings per share 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 statements regarding sequential revenue growth in the third quarter of 2016 led by new product initiatives, sequential improvement in the cordless segment in the third quarter of 2016, as well as achieving market leadership in office VoIP and HDClear gaining recognition. The results from these statements may not actually arise as a result of various factors, including the market penetration of new products such as HDClear and in the Office segment; unexpected delays in the commercial launch of new products; seasonality and inventory adjustments in the cordless segment;
About
| DSP GROUP, INC. | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Revenues | $ | 36,164 | $ | 37,247 | $ | 63,823 | $ | 75,282 | ||||||||
| Cost of revenues | 20,279 | 22,012 | 36,221 | 44,512 | ||||||||||||
| Gross profit | 15,885 | 15,235 | 27,602 | 30,770 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development, net | 9,036 | 8,855 | 17,925 | 17,971 | ||||||||||||
| Sales and marketing | 3,323 | 2,974 | 6,715 | 6,037 | ||||||||||||
| General and administrative | 2,275 | 2,460 | 4,558 | 4,981 | ||||||||||||
| Amortization of intangible assets | 321 | 321 | 642 | 642 | ||||||||||||
| Total operating expenses | 14,955 | 14,610 | 29,840 | 29,631 | ||||||||||||
| Operating income (loss) | 930 | 625 | (2,238 | ) | 1,139 | |||||||||||
| Financial income, net | 273 | 291 | 565 | 626 | ||||||||||||
| Income (loss) before taxes on income | 1,203 | 916 | (1,673 | ) | 1,765 | |||||||||||
| Taxes on income | 123 | 186 | 160 | 262 | ||||||||||||
| Net income (loss) | $ | 1,080 | $ | 730 | $ | (1,833 | ) | $ | 1,503 | |||||||
| Net earnings (loss) per share: | ||||||||||||||||
| Basic | $ | 0.05 | $ | 0.03 | $ | (0.08 | ) | $ | 0.07 | |||||||
| Diluted | $ | 0.05 | $ | 0.03 | $ | (0.08 | ) | $ | 0.06 | |||||||
| Weighted average number of shares used in per share computations of net earnings (loss) per share: | ||||||||||||||||
| Basic | 21,739 | 22,064 | 21,725 | 22,115 | ||||||||||||
| Diluted | 22,845 | 23,717 | 21,725 | 23,801 | ||||||||||||
| 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, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||
| GAAP net income | $ | 1,080 | $ | 730 | $ | (1,833 | ) | $ | 1,503 | |||||||
| Equity-based compensation expense included in cost of revenues | 83 | 83 | 144 | 153 | ||||||||||||
| Equity-based compensation expense included in research and development, net | 521 | 613 | 947 | 1,151 | ||||||||||||
| Equity-based compensation expense included in sales and marketing | 194 | 178 | 325 | 330 | ||||||||||||
| Equity-based compensation expense included in general and administrative | 461 | 537 | 828 | 1,030 | ||||||||||||
| Amortization of intangible assets | 321 | 321 | 642 | 642 | ||||||||||||
| Amortization of deferred tax liability related to intangible assets | (80 | ) | (85 | ) | (160 | ) | (170 | ) | ||||||||
| Non-GAAP net income | $ | 2,580 | $ | 2,377 | $ | 893 | $ | 4,639 | ||||||||
| Weighted-average number of common stock used in computation of GAAP diluted net earnings per share (in thousands) | 22,845 | 23,717 | 21,725 | 23,801 | ||||||||||||
| Weighted-average number of shares related to outstanding options, stock appreciation rights and restricted share units (in thousands) | 509 | 406 | 1,444 | 379 | ||||||||||||
| Weighted-average number of common stock used in computation of non-GAAP diluted net earnings per share (in thousands) | 23,354 | 24,123 | 23,169 | 24,180 | ||||||||||||
| GAAP diluted net earnings (loss) per share | $ | 0.05 | $ | 0.03 | $ | ( 0.08 | ) | $ | 0.06 | |||||||
| Equity-based compensation expense | 0.06 | 0.07 | 0.10 | 0.11 | ||||||||||||
| Amortization of intangible assets | 0.01 | 0.01 | 0.03 | 0.03 | ||||||||||||
| Amortization of deferred tax liability related to intangible assets | (0.01 | ) | (0.01 | ) | (0.01 | ) | (0.01 | ) | ||||||||
| Non-GAAP diluted net earnings per share | $ | 0.11 | $ | 0.10 | $ | 0.04 | $ | 0.19 | ||||||||
| DSP GROUP, INC. | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (In thousands) | ||||||||||
| June 30, | December 31, | |||||||||
| 2016 | 2015 | |||||||||
| (Unaudited) | (Audited) | |||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents |
$ |
17,808 |
$ |
13,704 |
||||||
| Restricted deposits | 168 | 168 | ||||||||
| Marketable securities and short term deposits | 22,784 | 18,070 | ||||||||
| Trade receivables, net | 17,136 | 19,211 | ||||||||
| Inventories | 12,850 | 11,453 | ||||||||
| Other accounts receivable and prepaid expenses | 2,364 | 3,319 | ||||||||
| Total current assets |
73,110 | 65,925 | ||||||||
| Property and equipment, net | 3,956 | 3,764 | ||||||||
| Long term marketable securities and deposits | 81,962 | 89,714 | ||||||||
| Severance pay fund | 11,795 | 11,578 | ||||||||
| Deferred income taxes | 1,001 | 1,311 | ||||||||
| Intangible assets, net | 8,485 | 9,127 | ||||||||
| Investment in other companies | 1,800 | 1,800 | ||||||||
| Long term prepaid expenses and lease deposits | 1,240 | 743 | ||||||||
| 106,283 | 114,273 | |||||||||
| Total assets |
$ | 183,349 | $ | 183,962 | ||||||
| Liabilities and Stockholders’ Equity | ||||||||||
| Current liabilities: | ||||||||||
| Trade payables | $ | 12,910 | $ | 13,103 | ||||||
| Other current liabilities | 15,058 | 14,470 | ||||||||
| Total current liabilities | 27,968 | 27,573 | ||||||||
| Accrued severance pay | 11,948 | 11,703 | ||||||||
| Accrued pensions | 727 | 892 | ||||||||
| Deferred income taxes | 316 | 476 | ||||||||
| Total long term liabilities | 12,991 | 13,071 | ||||||||
| Stockholders’ equity: | ||||||||||
| Common stock | 22 | 22 | ||||||||
| Additional paid-in capital | 363,267 | 361,023 | ||||||||
| Accumulated other comprehensive loss | (474 | ) | (1,267 | ) | ||||||
| Less – Cost of treasury stock | (123,749 | ) | (125,697 | ) | ||||||
| Accumulated deficit | (96,676 | ) | (90,763 | ) | ||||||
| Total stockholders’ equity | 142,390 | 143,318 | ||||||||
| Total liabilities and stockholders’ equity | $ | 183,349 | $ | 183,962 | ||||||
Contact:DSP Group Inc. Daniel Amir Corporate Vice President, Business Development, Strategy and Investor Relations Work: 1-415-726-5900 Daniel.amir@dspg.comThe Piacente Group | Investor RelationsDon Markley , 1-212-481-2050 dspg@thepiacentegroup.com