DSP Group(R), Inc. Reports Fourth Quarter 2014 Results
Financial Results Highlights for the Fourth Quarter:
-
Non-GAAP diluted EPS of
$0.06 and GAAP diluted EPS of$0.12 , both exceeding guidance -
Revenues of approximately
$37.2 million , an increase of 5% year over year - Non-GAAP gross margins of 39.8%, at the high end of guidance
-
Non-GAAP operating income of
$1.1 million , representing 3% of revenues -
GAAP net income of
$2.7 million -
Generated
$6.6 million of cash from operating activities -
Cash, deposits and marketable securities increased to
$124.9 million
Financial Results Highlights for the Year:
-
Non-GAAP diluted EPS of
$0.31 and GAAP diluted EPS of$0.16 -
Revenues of approximately
$143 million , a decrease of 5% year over year - Non-GAAP gross margins of 40.1%, a 30 basis points improvement vs. 2013
-
Non-GAAP net income of
$7.3 million , reaching 5% of revenues -
GAAP net income of
$3.6 million -
Generated
$10.4 million of cash from operating activities -
Repurchased 1.4 million shares for a total consideration of
$12.5 million
Management Comments:
Commenting on the results,
Products and Market Highlights:
-
2014 Office/VoIP segment revenues of
$14.3 million , an increase of 61% year over year -
Secured a design win with a second Tier 1 IP phone OEM based on
DSP Group's DVF99 SoC -
Panasonic selectedDSP Group's DHX91 ULE SoC to power its new home monitoring and control system -
A leading Tier 1 U.S. based service provider selected
DSP Group's DECT/ULE solution for its home safety and security service -
Sensory andDSP Group introduced a voice-controlled IoT solution for DECT/ULE enabling home control by voice in low power consumption - ProSyst unveiled OSGi framework, enabling service providers to make use of existing OSGi-based gateways for ULE that address the emerging IoT domain
-
A Tier 1 European service provider selected
DSP Group's DCX81 SoC for its two new home gateways -
Media5 andDSP Group launch a complete SIP IP phone solution for developers
Fourth Quarter Results:
Revenues for the fourth quarter of 2014 were
Year End Results:
Revenues for the year ended
Non-GAAP Results:
Non-GAAP net income and diluted EPS for the fourth quarter of 2014 were
Non-GAAP net income and diluted EPS for the year ended
Earnings Conference Call:
Investors may access the conference call by dialing + 1 877 280 2342 (domestic US) or + 1 646 254 3365 (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: 7688229#. 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 and the year 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 expected solid growth from
About
For more information, visit www.dspg.com
DSP GROUP, INC. | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(In thousands, except per share amounts) | ||||
Three Months Ended | Twelve Months Ended | |||
December 31, | December 31, | |||
2014 | 2013 | 2014 | 2013 | |
(Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |
Revenues | $ 37,159 | $ 35,340 | $ 143,036 | $ 151,063 |
Cost of revenues | 22,438 | 21,187 | 85,992 | 91,237 |
Gross profit | 14,721 | 14,153 | 57,044 | 59,826 |
Operating expenses: | ||||
Research and development, net | 9,155 | 8,519 | 33,468 | 35,000 |
Sales and marketing | 2,980 | 2,781 | 11,905 | 11,273 |
General and administrative | 2,600 | 2,766 | 10,541 | 11,812 |
Amortization of intangible assets | 382 | 418 | 1,573 | 1,672 |
Total operating expenses | 15,117 | 14,484 | 57,487 | 59,757 |
Operating income (loss) | (396) | (331) | (443) | 69 |
Financial income, net | 309 | 620 | 1,204 | 2,457 |
Income (loss) before taxes on income | (87) | 289 | 761 | 2,526 |
Income tax benefit | (2,816) | (67) | (2,841) | (150) |
Net income | $ 2,729 | $ 356 | $ 3,602 | $ 2,676 |
Net income per share: | ||||
Basic | $ 0.13 | $ 0.02 | $ 0.16 | $ 0.12 |
Diluted | $ 0.12 | $ 0.02 | $ 0.16 | $ 0.12 |
Weighted average number of shares of common stock used in the computation of: | ||||
Basic net income per share | 21,679 | 22,520 | 21,968 | 22,249 |
Diluted net income per share | 23,331 | 23,454 | 22,954 | 22,906 |
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures | ||||
(In thousands, except per share amounts) | ||||
Three Months Ended | Twelve Months Ended | |||
December 31, | December 31, | |||
2014 | 2013 | 2014 | 2013 | |
Unaudited | Unaudited | Unaudited | Unaudited | |
GAAP net income | $ 2,729 | $ 356 | $ 3,602 | $ 2,676 |
Equity-based compensation expense included in cost of product revenues and other | 63 | 62 | 300 | 253 |
Equity-based compensation expense included in research and development, net | 513 | 461 | 2,381 | 1,873 |
Equity-based compensation expense included in sales and marketing | 140 | 95 | 621 | 478 |
Equity-based compensation expense included in general and administrative | 444 | 408 | 2,057 | 1,555 |
Amortization of intangible assets | 382 | 418 | 1,573 | 1,672 |
Amortization of deferred tax liability related to intangible assets | (49) | (96) | (339) | (385) |
Reversal of income tax contingency reserve that was determined to be no longer needed due to the finalization of tax audit | (858) | -- | (858) | -- |
Elimination of valuation allowance of deferred tax assets and tax advances. | (2,061) | -- | (2,061) | -- |
Proxy contest related expenses | -- | -- | -- | 1,403 |
Non-GAAP net income | $ 1,303 | $ 1,704 | $ 7,276 | $ 9,525 |
Weighted-average number of common stock used in computation of GAAP diluted net income per share (in thousands) | 23,331 | 23,454 | 22,954 | 22,906 |
Weighted-average number of shares related to outstanding options, stock appreciation rights and restricted share units (in thousands) | 248 | 375 | 671 | 399 |
Weighted-average number of common stock used in computation of non-GAAP diluted net income per share (in thousands) | 23,579 | 23,829 | 23,625 | 23,305 |
GAAP diluted net income per share | $ 0.12 | $ 0.02 | $ 0.16 | $ 0.12 |
Equity-based compensation expense | 0.05 | 0.04 | 0.23 | 0.18 |
Amortization of intangible assets | 0.02 | 0.02 | 0.07 | 0.07 |
Amortization of deferred tax liability related to intangible assets | (0.01) | (0.01) | (0.02) | (0.02) |
Reversal of income tax contingency reserve that was determined to be no longer needed due to the finalization of tax audit | (0.03) | -- | (0.04) | -- |
Elimination of valuation allowance of deferred tax assets and tax advances. | (0.09) | -- | (0.09) | -- |
Proxy contest related expenses | -- | -- | -- | 0.06 |
Non-GAAP diluted net income per share | $ 0.06 | $ 0.07 | $ 0.31 | $ 0.41 |
DSP GROUP, INC. | ||
CONSOLIDATED BALANCE SHEETS | ||
(In thousands) | ||
December 31, | December 31, | |
2014 | 2013 | |
(Unaudited) | (Audited) | |
Assets | ||
Current assets: | ||
Cash and cash equivalents | $ 20,544 | $ 23,578 |
Restricted deposits | 623 | 77 |
Marketable securities and short term deposits | 11,508 | 13,895 |
Trade receivables, net | 20,298 | 21,195 |
Inventories | 15,635 | 12,334 |
Other accounts receivable and prepaid expenses | 1,752 | 2,641 |
Deferred income taxes | 924 | 92 |
Total current assets | 71,284 | 73,812 |
Property and equipment, net | 2,843 | 2,837 |
Long term marketable securities | 92,269 | 90,162 |
Severance pay fund | 10,860 | 11,168 |
Intangible assets and goodwill, net | 10,411 | 11,986 |
Investment in other companies | 2,200 | 2,200 |
Long term prepaid expenses and lease deposits | 1,312 | 100 |
117,052 | 115,616 | |
Total assets | $ 191,179 | $ 192,265 |
Liabilities and Stockholders' Equity | ||
Current liabilities: | ||
Trade payables | $ 15,282 | $ 14,149 |
Other current liabilities | 16,411 | 17,362 |
Total current liabilities | 31,693 | 31,511 |
Accrued severance pay | 10,929 | 11,179 |
Accrued pensions | 1,089 | 981 |
Deferred income taxes | 845 | 1,183 |
Total long term liabilities | 12,863 | 13,343 |
Stockholders' equity: | ||
Common stock | 22 | 22 |
Additional paid-in capital | 355,906 | 350,494 |
Accumulated other comprehensive income (loss) | (1,566) | (821) |
Less – Cost of treasury stock | (122,387) | (118,749) |
Accumulated deficit | (85,352) | (83,535) |
Total stockholders' equity | 146,623 | 147,411 |
Total liabilities and stockholders' equity | $ 191,179 | $ 192,265 |