Financial Results Highlights:
-
GAAP diluted EPS of
$0.02 and non-GAAP diluted EPS of$0.08 , both exceeding guidance - Realized third consecutive quarter of positive GAAP net income
-
Third quarter revenues of approximately
$35.4 million above mid-point of guidance - Gross margins of 39% at high end of guidance
-
Non-GAAP net income increased to
$1.8 million , reaching 5% of revenues -
Net cash and cash equivalents increased by
$5.3 million to approximately$125 million
Management Comments:
Commenting on the results,
Mr. Elyakim added, "We remain firmly on track to meet our stated objective of generating positive operating cash flow for 2013, and continue to successfully execute on our business goals of building a solid foundation for growth and diversifying into new market verticals. We have achieved increasing recognition and acceptance for our new products and technologies as evidenced by successful progression of HDClear into advanced stages of evaluation across several market segments, design wins in VoIP, and field trials and initial revenue generation with ULE."
Products and Market Highlights:
-
Deutsche Telekom andDSP Group to trial ULE inDeutsche Telekom's Speedport home gateway targeting smart home services -
DSP Group's DVF99 chipset selected by Swissvoice for its home automation over the top gateway -
China's leading SIP phone vendor, Yealink, launched three new lines of IP phones based onDSP Group's VoIP ICs -
DSP Group's chipsets powerAustralia iiNET's innovative Budii™ Home Gateway, Home Smartphone and Tablet -
A new U.S. CAT-iq 2.0 certification program opens up a new and exciting market opportunity for
DSP Group in the US
Third Quarter Results:
GAAP Results:
Net income for the third quarter of 2013 was
Non-GAAP Results:
Non-GAAP net income and diluted EPS for the third quarter of 2013 were
Earnings Conference Call:
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 +44 203 427 0598 (international) and enter the company access code: 1625252#
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 statements about the Company's anticipation of meeting its objective of generating positive operating cash flows for 2013, building a solid foundation for growth and diversifying into new market verticals and achieving market recognition and acceptance for its new products and technologies. In addition, the events described in these forward-looking statements may not actually arise as a result of various factors, including the timing and ability of the consumer electronics market to recover and the corresponding recovery of
About
| DSP GROUP, INC. | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (In thousands, except per share amounts) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Revenues | $ 35,381 | $ 36,666 | $ 115,723 | $ 124,361 |
| Cost of revenues | 21,576 | 22,764 | 70,050 | 77,970 |
| Gross profit | 13,805 | 13,902 | 45,673 | 46,391 |
| Operating expenses: | ||||
| Research and development, net | 8,147 | 9,632 | 26,481 | 33,029 |
| Sales and marketing | 2,767 | 3,502 | 8,492 | 11,297 |
| General and administrative | 2,576 | 2,329 | 9,046 | 8,160 |
| Amortization of intangible assets | 418 | 592 | 1,254 | 1,778 |
| Restructuring expenses | -- | 1,315 | -- | 2,008 |
| Total operating expenses | 13,908 | 17,370 | 45,273 | 56,272 |
| Operating income (loss) | (103) | (3,468) | 400 | (9,881) |
| Financial income, net | 512 | 666 | 1,837 | 1,732 |
| Income (loss) before taxes on income | 409 | (2,802) | 2,237 | (8,149) |
| Taxes on income (income tax benefit) | 11 | (387) | (83) | (247) |
| Net income (loss) | $ 398 | $ (2,415) | $ 2,320 | $ (7,902) |
|
Net income (loss) per share: |
||||
| Basic | $ 0.02 | $ (0.11) | $ 0.10 | $ (0.36) |
| Diluted | $ 0.02 | $ (0.11) | $ 0.10 | $ (0.36) |
| Weighted average number of shares of common stock used in the computation of: | ||||
| Basic net income (loss) per share | 22,522 | 21,775 | 22,159 | 22,025 |
| Diluted net income (loss) per share | 23,048 | 21,775 | 22,723 | 22,025 |
| Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures | ||||
| (In thousands, except per share amounts) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2013 | 2012 | 2013 | 2012 | |
| Unaudited | Unaudited | Unaudited | Unaudited | |
| GAAP net income (loss) | $398 | ($2,415) | $2,320 | ($7,902) |
| Equity-based compensation expense included in cost of revenues | 65 | 72 | 191 | 277 |
| Equity-based compensation expense included in research and development, net | 474 | 538 | 1,412 | 1,995 |
| Equity-based compensation expense included in sales and marketing | 115 | 173 | 383 | 641 |
| Equity-based compensation expense included in general and administrative | 391 | 325 | 1,147 | 1,139 |
| Amortization of intangible assets | 418 | 592 | 1,254 | 1,778 |
| Amortization of deferred tax liability related to intangible assets | (96) | -- | (289) | -- |
| Proxy contest related expenses | -- | -- | 1,403 | -- |
| Reversal of an income tax contingency reserve that was determined to be no longer needed due to the expiration of applicable statute of limitations | -- | (486) | -- | (486) |
| Restructuring expenses | -- | 1,315 | -- | 2,008 |
| Non-GAAP net income (loss) | $ 1,765 | $ 114 | $ 7,821 | $ (550) |
| Weighted-average number of common stock used in computation of GAAP diluted net income (loss) per share (in thousands) | 23,048 | 21,775 | 22,723 | 22,025 |
| Weighted-average number of shares related to outstanding options, stock appreciation rights and restricted share units (in thousands) | 425 | 38 | 408 | -- |
| Weighted-average number of common stock used in computation of non-GAAP diluted net income (loss) per share (in thousands) | 23,473 | 21,813 | 23,131 | 22,025 |
| GAAP diluted net income (loss) per share | $ 0.02 | ($ 0.11) | $ 0.10 | ($ 0.36) |
| Equity-based compensation expense | 0.05 | 0.05 | 0.14 | 0.19 |
| Amortization of intangible assets | 0.02 | 0.03 | 0.05 | 0.08 |
| Amortization of deferred tax liability related to intangible assets | (0.01) | -- | (0.01) | -- |
| Proxy contest related expenses | -- | -- | 0.06 | -- |
| Reversal of an income tax contingency reserve | -- | (0.02) | -- | (0.02) |
| Restructuring expenses | -- | 0.06 | -- | 0.09 |
| Non-GAAP diluted net income (loss) per share | $ 0.08 | $ 0.01 | $ 0.34 | $ (0.02) |
| DSP GROUP, INC. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (In thousands) | ||
| September 30, | December 31, | |
| 2013 | 2012 | |
| (Unaudited) | (Audited) | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 17,271 | $ 21,684 |
| Restricted deposits | 76 | 121 |
| Marketable securities and short term deposits | 16,668 | 20,201 |
| Trade receivables | 22,658 | 20,403 |
| Inventories | 13,133 | 12,916 |
| Other accounts receivable and prepaid expenses | 3,932 | 3,656 |
| Deferred income taxes | 92 | 101 |
| Total current assets | 73,830 | 79,082 |
| Property and equipment, net | 3,029 | 3,706 |
| Long term marketable securities and deposits | 91,131 | 78,333 |
| Severance pay fund | 10,802 | 10,197 |
| Intangible assets and goodwill, net | 12,404 | 13,656 |
| Long term prepaid expenses and lease deposits | 152 | 208 |
| 114,489 | 102,394 | |
| Total assets | $ 191,348 | $ 185,182 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Trade payables | $ 13,136 | $ 14,027 |
| Other current liabilities | 15,231 | 15,953 |
| Total current liabilities | 28,367 | 29,980 |
| Accrued severance pay | 11,111 | 10,436 |
| Accrued pensions | 1,012 | 970 |
| Deferred income taxes | 1,280 | 1,569 |
| Total long term liabilities | 13,403 | 12,975 |
| Stockholders' equity: | ||
| Common stock | 23 | 22 |
| Additional paid-in capital | 349,468 | 346,335 |
| Accumulated other comprehensive income (loss) | (626) | 988 |
| Less – Cost of treasury stock | (117,042) | (125,724) |
| Accumulated deficit | (82,245) | (79,394) |
| Total stockholders' equity | 149,578 | 142,227 |
| Total liabilities and stockholders' equity | $ 191,348 | $ 185,182 |
CONTACT:Christopher Basta , Director of Investor Relations, Office: 1-408-240-6844, Cell: 1-631-796-5644, Email: chris.basta@dspg.com
