View Filing Data

Print Document View Excel Document

Document And Entity Information - shares	3 Months Ended
Document And Entity Information - shares	Mar. 31, 2019	May 02, 2019
Document Information [Line Items]
Entity Registrant Name	DSP GROUP INC /DE/
Entity Central Index Key	0000915778
Trading Symbol	dspg
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding (in shares)		22,714,916
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
CURRENT ASSETS:
Cash and cash equivalents	$ 11,390	$ 12,146
Restricted deposit	1,078	493
Marketable securities and short-term deposits	31,141	35,713
Trade receivables	15,636	13,475
Other accounts receivable and prepaid expenses	3,872	3,670
Inventories	9,278	9,819
TOTAL CURRENT ASSETS	72,395	75,316
PROPERTY AND EQUIPMENT, NET	5,105	2,748
NON-CURRENT ASSETS:
Long-term marketable securities	76,473	75,538
Operating leases	11,972
Long-term prepaid expenses and lease deposits	1,306	1,229
Deferred income taxes	4,090	3,580
Severance pay fund	14,800	14,158
Intangible assets, net	974	1,078
Goodwill	6,243	6,243
TOTAL NON-CURRENT ASSETS	115,858	101,826
TOTAL ASSETS	193,358	179,890
CURRENT LIABILITIES:
Trade payables	8,176	9,579
Accrued compensation and benefits	7,112	8,255
Income tax accruals and payables	1,606	1,404
Operating lease liability	1,885
Accrued expenses and other accounts payable	2,787	3,461
TOTAL CURRENT LIABILITIES	21,566	22,699
NON-CURRENT LIABILITIES:
Deferred income taxes	142	151
Accrued severance pay	15,028	14,348
Total long-term lease liabilities	10,394
Accrued pensions	815	827
TOTAL NON-CURRENT LIABILITIES	26,379	15,326
STOCKHOLDERS’ EQUITY:
Common stock, $ 0.001 par value - Authorized shares: 50,000,000 shares at March 31, 2019 and December 31, 2018; Issued and outstanding shares: 22,700,800 and 22,265,971 shares at March 31, 2019 and December 31, 2018, respectively	23	22
Additional paid-in capital	380,777	378,855
Treasury stock at cost	(117,968)	(122,325)
Accumulated other comprehensive loss	(1,525)	(2,324)
Accumulated deficit	(115,894)	(112,363)
TOTAL STOCKHOLDERS’ EQUITY	145,413	141,865
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 193,358	$ 179,890

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	22,700,800	22,265,971
Common stock, shares outstanding (in shares)	22,700,800	22,265,971

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
shares in Thousands, $ in Thousands

3 Months Ended

Mar. 31, 2019

Mar. 31, 2018

Revenues

$ 28,276

$ 28,111

Cost of revenues (1)

^[1]

13,820

14,397

Gross profit

14,456

13,714

Operating expenses:

Research and development, net (2)

^[2]

8,922

8,998

Sales and marketing (3)

^[3]

4,483

4,068

General and administrative (4)

^[4]

2,555

2,581

Amortization of intangible assets

104

425

Total operating expenses

16,064

16,072

Operating loss

(1,608)

(2,358)

Financial income, net

313

396

Loss before taxes on income

(1,295)

(1,962)

Income tax benefit

229

209

Net loss

$ (1,066)

$ (1,753)

Net loss per share:

Basic (in dollars per share)

$ (0.05)

$ (0.08)

Diluted (in dollars per share)

$ (0.05)

$ (0.08)

Weighted average number of shares used in per share computations of net earnings

Basic (in shares)

22,542

22,678

Diluted (in shares)

22,542

22,678

[1]	Includes equity-based compensation expense in the amount of $115 and $98 for the three months ended March 31, 2019 and 2018, respectively.
[2]	Includes equity-based compensation expense in the amount of $750 and $652 for the three months ended March 31, 2019 and 2018, respectively.
[3]	Includes equity-based compensation expense in the amount of $402 and $406 for the three months ended March 31, 2019 and 2018, respectively.
[4]	Includes equity-based compensation expense in the amount of $638 and $543 for the three months ended March 31, 2019 and 2018, respectively.

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net loss	$ (1,066)	$ (1,753)
Available-for-sale securities:
Changes in unrealized gains (losses)	751	(662)
Reclassification adjustments for (gains) losses included in net loss	47	(2)
Net change	798	(664)
Cash flow hedges:
Changes in unrealized gains (losses)	105
Reclassification adjustments for (gains) losses included in net loss	(83)
Net change	22
Change in unrealized components of defined benefit plans:
Amortization of actuarial loss and prior service benefit	4	5
Net change	4	5
Foreign currency translation adjustments, net	(25)	16
Net current period other comprehensive income (loss)	799	(643)
Net comprehensive loss	$ (267)	$ (2,396)

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net loss	$ (1,066)	$ (1,753)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation	330	429
Equity-based compensation expenses related to employees’ stock options, SARs and RSUs	1,905	1,699
Realized losses (gains) from sale of marketable securities, net	47	(2)
Capital loss from sale and disposal of property and equipment	10
Amortization of intangible assets	104	425
Exchange rates differences resulting from the new lease accounting standard (ASC 2016-02)	307
Accrued interest and amortization of premium on marketable securities and deposits	50	221
Change in operating assets and liabilities:
Deferred income tax assets and liabilities, net	(522)	(82)
Trade receivables, net	(2,171)	(2,472)
Other accounts receivable and prepaid expenses	(58)	(2)
Inventories	534	997
Long-term prepaid expenses and lease deposits	(77)	(54)
Trade payables	(2,298)	(1,012)
Accrued compensation and benefits	(164)	(968)
Income tax accruals	202	(175)
Accrued expenses and other accounts payable	(666)	(574)
Accrued severance pay, net	39	(61)
Accrued pensions	8	10
Net cash used in operating activities	(3,486)	(3,374)
Cash flows from investing activities:
Purchase of marketable securities	(9,931)	(3,277)
Proceeds from maturity of marketable securities	8,545	1,855
Proceeds from sales of marketable securities	4,150	500
Proceeds from redemption of short-term deposits	1,572
Purchases of property and equipment	(1,944)	(250)
Other investing activities		(104)
Proceeds from sale of property and equipment	9
Net cash provided by (used in) investing activities	2,401	(1,276)
Cash flows from financing activities:
Issuance of common stock and treasury stock upon exercise of stock options	938	155
Purchase of treasury stock		(1,210)
Net cash provided by (used in) financing activities	938	(1,055)
Decrease in cash and cash equivalents	(147)	(5,704)
Cash and cash equivalents at the beginning of the year	12,639	21,848
Cash (erosion) due to exchange rate differences	(24)	18
Cash and cash equivalents at the end of the year	$ 12,468	$ 16,162

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands

Common Stock [Member]

Additional Paid-in Capital [Member]

Treasury Stock [Member]

Retained Earnings [Member]

AOCI Attributable to Parent [Member]

Total

Balance (in shares) at Dec. 31, 2017

22,433

Balance at Dec. 31, 2017

$ 22

$ 372,041

$ (118,397)

$ (104,842)

$ (1,874)

$ 146,950

Net loss

(1,753)

Change in accumulated other comprehensive income

(643)

Purchase of treasury stock (in shares)

(102)

Purchase of treasury stock

^[1]

(1,255)

Issuance of treasury stock upon purchase of common stock under employee stock purchase plan (in shares)

119

Issuance of treasury stock upon purchase of common stock under employee stock purchase plan

^[1]

1,169

(166)

1,003

Issuance of treasury stock upon exercise of stock options, stock appreciation rights and vesting of restricted stock units by employees and directors (in shares)

279

Issuance of treasury stock upon exercise of stock options, stock appreciation rights and vesting of restricted stock units by employees and directors

$ 1

2,752

(2,598)

155

Equity-based compensation

1,699

Balance (in shares) at Mar. 31, 2018

22,729

Balance at Mar. 31, 2018

$ 23

373,740

(115,731)

(109,265)

(2,517)

146,250

Cumulative effect adjustment on retained earnings **)

^[2]

Balance (in shares) at Dec. 31, 2018

22,266

Balance at Dec. 31, 2018

$ 22

378,855

(122,325)

(112,363)

(2,324)

141,865

Net loss

(1,066)

Change in accumulated other comprehensive income

799

$ 799

Purchase of treasury stock (in shares)

Issuance of treasury stock upon purchase of common stock under employee stock purchase plan (in shares)

102

Issuance of treasury stock upon purchase of common stock under employee stock purchase plan

^[1]

1,023

(51)

$ 972

Issuance of treasury stock upon exercise of stock options, stock appreciation rights and vesting of restricted stock units by employees and directors (in shares)

333

Issuance of treasury stock upon exercise of stock options, stock appreciation rights and vesting of restricted stock units by employees and directors

$ 1

3,334

(2,414)

938

Equity-based compensation

1,905

Balance (in shares) at Mar. 31, 2019

22,701

Balance at Mar. 31, 2019

$ 23

$ 380,777

$ (117,968)

$ (115,894)

$ (1,525)

$ 145,413

[1]	Represents an amount lower than $1.
[2]	Resulting from adoption of ASC 606.

Note A - Basis of Presentation and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2019
Notes to Financial Statements
Significant Accounting Policies [Text Block]	NOTE A—BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States for interim financial information and with the instructions to Form 10 -Q and Article 10 of Regulation S- X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Annual Report on Form 10 -K of DSP Group, Inc. (the “Company”) for the year ended December 31, 2018. The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2018, contained in the Company’s Annual Report on Form 10 -K filed with the Securities and Exchange Commission on March 11, 2019, have been applied consistently in these unaudited interim condensed consolidated financial statements, except as noted below: Recent ly Issued and A dopted A ccounting P ronouncements On January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016 - 02, Leases (“Topic 842” ), as amended, which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (“ROU”) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. The Company adopted the new guidance using the modified retrospective transition approach by applying the new standard to all leases existing on the date of initial application and not restating comparative periods. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases. For information regarding the impact of Topic 842 adoption, see Significant Accounting Policies - Leases and Note B- Operating Leases . Recently I ssued A ccounting P ronouncements Not Y et E ffective In June 2016, the FASB issued ASU 2016 - 13, “Financial Instruments - Credit Losses (Topic 326 ): Measurement of Credit Losses on Financial Instruments (“ASU 2016 - 13” ). ASU 2016 - 13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. ASU 2016 - 13 also applies to employee benefit plan accounting, with an effective date of the first quarter of fiscal 2022. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated balance sheets, statements of operations and cash flows. In August 2018, the FASB issued ASU 2018 - 13, “Fair Value Measurement (Topic 820 ) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018 - 13” ), which is designed to improve the effectiveness of disclosures by removing, modifying and adding disclosures related to fair value measurements. ASU No. 2018 - 13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. ASU 2018 - 13 allows for early adoption in any interim period after issuance of the update. The adoption of ASU 2018 - 13 is not expected to have a significant impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018 - 15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350 - 40 ): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract” (“ASU 2018 - 15” ). ASU 2018 - 15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The implementation costs incurred in a hosting arrangement that is a service contract should be presented as a prepaid asset on the balance sheet and expensed over the term of the hosting arrangement to the same line item in the statement of income as the costs related to the hosting fees. ASU 2018 - 15 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted, including adoption in any interim period. ASU 2018 - 15 should be applied either retrospectively or prospectively to all implementation costs incurred after adoption. The Company is currently evaluating the impact that the standard will have on the consolidated financial statements and do not expect the adoption to have a material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018 - 14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715 - 20 ): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans” (“ASU 2018 - 14” ), which improves disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. ASU 2018 - 14 is effective for fiscal years ending after December 15, 2020, for public business entities. Early adoption is permitted for all entities. Entities are to apply this standard on a retrospective basis for all periods presented. The Company is currently evaluating the impact that ASU 2018 - 14 will have on the Company’s consolidated financial statements and related disclosures. Significant Accounting Policies- Leases Effective as of January 1, 2019, the Company adopted Topic 842, which requires the recognition of lease assets and lease liabilities by lessees for leases classified as operating leases. The Company has adopted Topic 842 using the modified retrospective transition approach by applying the new standard to all leases existing on the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s historical accounting under Topic 840. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward the historical lease classification, the Company’s assessment on whether a contract was or contains a lease, and initial direct costs for any leases that existed prior to January 1, 2019. The Company also elected to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term. As a result of the adoption of Topic 842 on January 1, 2019, the Company recorded both operating lease ROU assets of $12.5 million and operating lease liabilities of $12.5 million. The adoption did not impact the Company’s beginning retained earnings (accumulated deficit), or its prior year condensed consolidated statements of income and statements of cash flows. The Company determines if an arrangement is a lease at inception. The Company assessment is based on: ( 1 ) whether the contract includes an identified asset, ( 2 ) whether the Company obtains substantially all of the economic benefits from the use of the asset throughout the period of use, and ( 3 ) whether the Company has the right to direct how and for what purpose the identified asset is used throughout the period of use. Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset, the present value of the lease payments equals or exceeds substantially all of the fair value of the asset, or the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of lease term. A lease is classified as an operating lease if it does not meet any one of these criteria. Since all of the Company’s lease contracts do not meet any one of the criteria above, the Company concluded that all of its lease contracts should be classified as operation leases. ROU assets and liabilities are recognized on the commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company's leases do not provide an implicit rate, the Company used the assistance of a third party valuation firm to determine the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. All ROU assets are reviewed for impairment. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Use of Estimates The preparation of the interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the interim condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Note B - Operating Leases

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

NOTE B— Operating Leases

The Company has entered into various non-cancelable operating lease agreements for certain of its offices and car leases. The Company's leases have original lease periods expiring between

2019

and

2030.

Many leases include

one

or more options to renew. The Company does

not

assume renewals in the determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement date. The Company's lease agreements do

not

contain any material residual value guarantees or material restrictive covenants.

Total operating lease cost during the

three

months ended

March 31, 2019

was

$742

The same amount represented the total Cash paid for amounts included in the measurement of operating lease liabilities during the

three

months ended

March 31, 2019.

Other information about lease amounts recognized in the Company’s consolidated financial statements is summarized as follows:

	March 31, 2019

Weighted-average remaining lease term – operating leases (in years)		8.26
Weighted-average discount rate – operating leases		4.96	%

As of

March 31, 2019,

the Company’s lease liabilities were as follows:

	Operating Leases

Gross lease liabilities	$	15,434

Less: imputed interest		(3,155	)

Present value of lease liabilities		12,279
Less: current portion of lease liabilities		(1,885	)
Total long-term lease liabilities	$	10,394

Note C - Inventories

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Inventory Disclosure [Text Block]

NOTE c—INVENTORIES

Inventories are stated at the lower of cost or market value. The Company periodically evaluates the quantities on hand relative to current and historical selling prices, and historical and projected sales volume. Based on these evaluations, provisions are made in each period to write inventory down to its net realizable value. Inventories are composed of the following:

	March 31, 201 9		December 31, 201 8
	(Unaudited)		(Audited)

Work-in-process	$	4,849	$	4,993
Finished goods		4,429		4,826

	$	9,278	$	9,819

For the

three

months ended

March

31,

2019,

the Company recorded

$93

of income due to the utilization of inventory that was written off in the past.

Inventory write-off amounted to

$49

for the

three

months ended

March 31, 2018.

Note D - Net Loss Per Share

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE d—NET LOSS PER SHARE

Basic net loss per share are computed based on the weighted average number of shares of common stock outstanding during the period. For the same periods, diluted net loss per share further include the effect of dilutive stock options, stock appreciation rights and restricted share units outstanding during the period, all in accordance with FASB ASC

No.

260

“Earnings per Share.” The following table sets forth the computation of basic and diluted net loss per share:

	Three months ended March 31,
	201 9			2018
	(Unaudited)

Net loss	$	(1,066	)	$	(1,753	)
Loss per share:
Basic	$	(0.05	)	$	(0.08	)
Diluted	$	(0.05	)	$	(0.08	)
Weighted average number of shares of common stock outstanding during the period used to compute basic net loss per share (in thousands)		22,542			22,678
Incremental shares attributable to exercise of outstanding options, stock appreciation rights and restricted stock units (assuming proceeds would be used to purchase treasury stock) (in thousands)		-			-
Weighted average number of shares of common stock used to compute diluted net loss per share (in thousands)		22,542			22,678

Note E - Marketable Securities and Time Deposits

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE e — MARKETABLE SECURITIES and time deposits

The Company accounts for investments in marketable securities in accordance with FASB ASC

No.320

“Investments in Debt and Equity Securities.” Management determines the appropriate classification of its investments in government and corporate marketable debt securities at the time of purchase and reevaluates such determinations at each balance sheet date.

The Company classifies marketable securities as available-for-sale. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of taxes, reported in other comprehensive income (loss). The amortized cost of marketable securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and interest are included in financial income, net. Interest and dividends on securities are included in financial income, net. The following is a summary of available-for-sale securities at

March 31, 2019

and

December

31,

2018:

	Amortized cost				Unrealized losses, net						Fair value
	March 31, 201 9		December 31, 201 8		March 31, 201 9			December 31, 201 8			March 31, 201 9		December 31, 201 8
	(Unaudited)		(Audited)		(Unaudited)			(Audited)			(Unaudited)		(Audited)

Short-term deposits		6,887	$	8,349		-			-		$	6,887	$	8,349
Long-term deposits		5,159		5,130		-			-			5,159		5,130
U.S. GSE securities		17,501		21,550		(140	)		(253	)		17,361		21,297
Corporate obligations		78,902		77,857		(695	)		(1,382	)		78,207		76,475

	$	108,449	$	112,885	$	(835	)	$	(1,635	)	$	107,614	$	111,251

The amortized cost of marketable debt securities and term deposits at

March

31,

2019,

by contractual maturities, is shown below (unaudited):

			Unrealized gains (losses)
	Amortized cost		Gains		Losses			Fair value

Due in one year or less	$	24,286	$	8	$	(40	)	$	24,254
Due after one year to five years		72,117		58		(861	)		71,314

	$	96,403	$	66	$	(901	)	$	95,568

The actual maturity dates

may

differ from the contractual maturities because debtors

may

have the right to call or prepay obligations without penalties.

Management believes that as of

March 31, 2019,

the unrealized losses in the Company’s investments in all types of marketable securities were temporary and

impairment loss was realized in the Company’s condensed consolidated statement of income.

The unrealized losses related to corporate obligations were primarily due to changes in interest rates. Because the Company does

not

intend to sell the investments and it is

not

more likely than

not

that the Company will be required to sell the investments before recovery of their amortized cost bases, which

may

be maturity, the Company does

not

consider those investments to be other-than-temporarily impaired at

March 31, 2019.

The total fair value of marketable securities with outstanding unrealized losses as of

March 31, 2019

amounted to

$74,836,

while the unrealized losses for these marketable securities amounted to

$901.Of

the

$901

unrealized losses outstanding as of

March 31, 2019,

a portion of which in the amount of

$835

relate to marketable securities that were in a loss position for more than

months and the remaining portion in the amount of

$66

relate to marketable securities that were in a loss position for less than

months.

Proceeds from maturity of available-for-sale marketable securities during the

three

months ended

March 31, 2019

and

2018

were

$8,545

and

$1,855,

respectively. Proceeds from sales of available-for-sale marketable securities during the

three

months ended

March 31, 2019

and

2018

were

$4,150

and

$500,

respectively. Net realized losses from the sale of available-for-sale securities for the

three

months ended

March 31, 2019

were

$47

compared to net realized gains for the

three

months ended

March 31, 2018

$2.

The Company determines realized gains or losses on the sale of marketable securities based on a specific identification method.

Marketable securities are periodically reviewed for impairment. If management concludes that any marketable security is impaired, management determines whether such impairment is other-than-temporary. Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value and the potential recovery period, and the Company’s intent to sell, or whether it is more likely than

not

that the Company will be required to sell the marketable security before recovery of cost basis. If any impairment is considered other-than-temporary, the marketable security is written down to its fair value through a corresponding charge to financial income, net.

Note F - Taxes on Income	3 Months Ended
Note F - Taxes on Income	Mar. 31, 2019
Notes to Financial Statements
Income Tax Disclosure [Text Block]	NOTE f—TAXES ON Income The effective tax rate used in computing the provision for income taxes is based on projected fiscal year income before taxes, including estimated income by tax jurisdiction. The total amount of net unrecognized tax benefits was $2,283 and $2,040 at March 31, 2019 and December 31, 2018, respectively. The Company accrues interest and penalties, relating to unrecognized tax benefits, in its provision for income taxes. At March 31, 2019 and December 31, 2018, the Company had accrued interest and penalties relating to unrecognized tax benefits of $135 and $115, respectively. The Company intends to permanently reinvest earnings of its foreign operations and its current operating plans do not demonstrate a need to repatriate foreign earnings to fund the Company’s U.S. operations. However, if these funds were needed for the Company’s operations in the United States, the Company would be required to accrue and pay taxes in several countries to repatriate these funds. The determination of the amount of additional taxes related to the repatriation of these earnings is not practicable, as it may vary based on various factors such as the location of the cash and the effect of regulation in the various jurisdictions from which the cash would be repatriated.

Note G - Significant Customers

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Significant Customers Disclosure [Text Block]

NOTE g—SIGNIFICANT CUSTOMERS

The Company sells its products primarily through distributors and directly to original equipment manufacturers (OEMs) and original design manufacturers (ODMs) who incorporate the Company’s products into consumer products. The Company’s future performance will depend, in part, on the continued success of its distributors in marketing and selling its products. The loss of the Company’s distributors and the Company’s inability to obtain satisfactory replacements in a timely manner

may

harm the Company’s sales and results of operations. In addition, the Company expects that a limited number of customers, varying in identity from period-to-period, will account for a substantial portion of its revenues in any period. The loss of, or reduced demand for products from, any of the Company’s major customers could have a material adverse effect on the Company’s business, financial condition and results of operations.

The following table represents the Company’s sales, as a percentage of the Company’s total revenues, for the

three

months ended

March 31, 2019

and

2018,

of the Company’s significant customers (unaudited):

	Three months ended March 31,
Major customers/ distributors	201 9	2018
Ascend Technology Inc. ¹ ³	27%	26%

VTech Holdings Ltd.	21%	25%

Nexty Electronics Corporation (previously named Tomen Electronics Corporation)¹ ²	10%	11%

¹ Distributor.

² Nexty Electronics sells the Company’s products to a limited number of customers; however,

none

of those customers accounted for more than

10%

of the Company’s total revenues for the

three

months periods ended

March 31, 2019

and

2018.

³ Ascend Technology sells the Company’s products to a limited number of customers. One of those customers, Cisco Systems, Inc., accounted for

10%

and

of the Company’s total revenues for the

three

months periods ended

March 31, 2019

and

2018.

Note H - Derivative Instruments

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

NOTE h—DERIVATIVE INSTRUMENTS

The Company accounts for derivative instruments in accordance with FASB. ASC

No.

815

“Derivatives and Hedging” (“ASC

815”

). Due to the Company’s global operations, it is exposed to foreign currency exchange rate fluctuations in the normal course of its business. The Company’s treasury policy allows it to offset the risks associated with the effects of certain foreign currency exposures through the purchase of foreign exchange forward contracts and put options (collectively, “hedging contracts”). The policy, however, prohibits the Company from speculating on hedging contracts for profit.

To protect against the increase in value of forecasted foreign currency cash flows resulting from salary and lease payments of its Israeli facilities denominated in the Israeli currency, the New Israeli Shekels (“NIS”), during the year, the Company instituted a foreign currency cash flow hedging program. The Company hedges portions of the anticipated payroll and lease payments denominated in NIS for a period of

one

twelve

months with hedging contracts. Accordingly, when the dollar strengthens against the foreign currencies, the decline in present value of future foreign currency expenses is offset by losses in the fair value of the hedging contracts. Conversely, when the dollar weakens, the increase in the present value of future foreign currency cash flows is offset by gains in the fair value of the hedging contracts. These hedging contracts are designated as cash flow hedges, as defined by ASC

815

and are all effective hedges of these expenses.

In accordance with ASC

815,

for derivative instruments that are designated and qualify as a cash flow hedge (i.e. hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Any gain or loss on a derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item is recognized in current earnings during the period of change.

As of

March 31, 2019,

the Company had

outstanding option contracts and had foreign exchange forward contracts in the amount of

$600.

These hedging contracts do

not

contain any credit-risk-related contingency features. See Note L for information on the fair value of hedging contracts.

The fair value of derivative assets and derivative liabilities were

$19

and

$0,

respectively, at

March 31, 2019.

The Company recorded a net amount of

$19

in other accounts receivable and prepaid expenses in the condensed consolidated balance sheet at

March 31, 2019.

The amount recorded as income in research and development expenses, sales and marketing expenses and general and administrative expenses in the condensed consolidated statements of income for the

three

months ended

March 31, 2019

that resulted from the above referenced hedging transactions was

$65,

and

$11,

respectively.

The fair value of the outstanding derivative instruments at

March 31, 2019

and

December

31,

2018

is summarized below (unaudited):

		Fair V alue of Derivative I nstruments
Derivative Assets (Liabilities)	Balance Sheet Location	March 3 1 , 201 9		December 31, 201 8
		Unaudited		Audited

Foreign exchange forward and option contracts	Other accounts receivable and prepaid expenses (other accounts payable)	$	19	$	(3	)

The effect of derivative instruments in cash flow hedging transactions on income and other comprehensive income (“OCI”) for the

three

months ended

March 31, 2019

and

2018

is summarized below:

	Gains ( L osses) on Derivatives Recognized in OCI
	for the three months ended March 31,
	Unaudited
	201 9		201 8

Foreign exchange forward and option contracts	$	105	$	-

	Gains (losses) reclassified from OCI into income
		for the three months ended March 31,
		Unaudited
	Location	201 9		201 8

Foreign exchange forward and option contracts	Operating expenses	$	83	$	-

Note I - Contingencies	3 Months Ended
Note I - Contingencies	Mar. 31, 2019
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	NOTE i—CONTINGENCIES From time to time, the Company may become involved in litigation relating to claims arising from its ordinary course of business. In addition, as is typical in the semiconductor industry, the Company has been and may from time to time be notified of claims that the Company may be infringing patents or intellectual property rights owned by third parties. The Company currently believes that there are no claims or actions pending or threatened against it, the ultimate disposition of which would have a material adverse effect on the Company.

Note J - Equity-based Compensation

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

NOTE j—EQUITY-BASED COMPENSATION

Grants for the

three

months ended

March 31, 2019

and

March 31, 2018:

The weighted average estimated fair value of employee restricted stock units (“RSUs”) granted during the

three

months ended

March 31, 2019

and

2018

was

$11.61

and

$11.27

per share, respectively (using the weighted average pre vest cancellation rate of

3.25%

and

3.70%

for the

three

months ended

March 31, 2019

and

2018,

respectively, on an annual basis).

The weighted-average estimated fair value of employee stock options and stock appreciation rights (“SARs”) granted during the

three

months ended

March 31, 2019

and

2018

was

$3.41

and

$4.75

per stock option and SARs, respectively, using the binomial model with the following weighted-average assumptions (annualized percentages) (unaudited):

	Three months ended March 31,
	201 9	2018
Volatility	32.29%	46.24%
Risk-free interest rate	2.16%	2.40%
Dividend yield	0%	0%
Pre-vest cancellation rate	4.63%	2.29%
Post-vest cancellation rate	2.28%	3.40%
Suboptimal exercise factor	1.229	1.61

The expected life of employee stock options and SARs is impacted by all of the underlying assumptions used in the Company’s model. The binomial model assumes that employees’ exercise behavior is a function of the remaining contractual life of the stock option or SAR and the extent to which the stock option or SAR is in-the-money (

i.e.

, the average stock price during the period is above the exercise price of the stock option or SAR). The binomial model estimates the probability of exercise as a function of these

two

variables based on the history of exercises and cancellations on past award grants made by the Company. The expected life for stock options and SARs granted during the

three

months ended

March

31,

2019

and

2018

derived from the binomial model was

4.92

and

6.27

years, respectively.

Employee stock benefit plans

As of

March 31, 2019,

the Company had

two

equity incentive plans from which the Company

may

grant future equity awards and

one

expired equity incentive plans from which

future equity awards

may

be granted but had outstanding equity awards granted prior to expiration. The Company also had

one

employee stock purchase plan. As of

March 31, 2019,

approximately

377,000

shares of common stock remain available for grant under the Company’s employee stock purchase plan and

198,000

shares of common stock remain available for grant under the Company’s equity incentive plans.

The table below presents a summary of information relating to the Company’s stock option, RSU and SAR grants pursuant to its equity incentive plans (unaudited):

	Number of Options/SARs/ RSUs			Weighted average exercise price		Weighted average remaining contractual term (years) (3)		Aggregate value (*)
	in thousands							in thousands
Outstanding at December 31, 2018		1,831		$	4.59
Options granted		10			12.61
RSUs granted		630			-
Options / SARs / RSUs cancelled/forfeited/expired		(38	)		1.98
Options / SARs exercised and RSUs vested		(341	)	$	3.05
Outstanding at March 31, 2019 (1)		2,092		$	3.55		4.60	$	22,013
Exercisable at March 31, 2019 (2)		632		$	9.61		4.45	$	2,818

(*) Calculation of aggregate intrinsic value is based on the share price of the Company’s common stock on

March 31, 2019 (

$14.07

per share).

(

) Due to the ceiling imposed on the SAR grants, the outstanding amount above can be exercised for a maximum of approximately

2,008,000

shares of the Company’s common stock as of

March 31, 2019.

SAR grants made on or after

January 1, 2012

are convertible for a maximum number of shares of the Company’s common stock equal to

50%

of the SARs subject to the grant.

(

) Due to the ceiling imposed on the SAR grants, the exercisable amount above can be exercised for a maximum of approximately

595,000

shares of the Company’s common stock as of

March 31, 2019.

(

) Calculation of weighted average remaining contractual term does

not

include RSUs that were granted, which have indefinite contractual term.

Additional information about stock options, SARs and RSUs outstanding and exercisable at

March 31, 2019

with exercise prices above

$14.07

per share (the closing price of the Company’s common stock on

March 31, 2019)

is as follows (unaudited):

	Exercisable				Unexercisable				Total
Exercise prices	Number of o ptions/ SARs / RSUs (in thousands)		Weighted average exercise price		Number of o ptions/ SARs / RSUs (in thousands)		Weighted average exercise price		Number of o ptions/ SARs / RSUs (in thousands)		Weighted average exercise price

Less than $14.07		632	$	9.61		1,460	$	0.92		2,092	$	3.55
Above $14.07		-	$	-		-	$	-		-	$	-
Total		632	$	9.61		1,460	$	0.92		2,092	$	3.55

The Company’s aggregate equity-based compensation expense for the

three

months ended

March 31, 2019

and

2018

totaled

$1,905

and

$1,699,

respectively.

As of

March 31, 2019,

there was

$10,769

of total unrecognized equity-based compensation expense related to unvested equity-based compensation awards granted under the Company’s equity incentive plans. This amount is expected to be recognized during the period from

2019

through

2023.

Note K - Pension Liability

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE k—Pension Liability

The information in this note represents the net periodic pension and post-retirement benefit costs and related components in accordance with FASB ASC

No.

715

“Employers’ Disclosures about Pensions and Other Post-Retirement Benefits.” The components of net pension and post-retirement periodic benefit cost (income) for the

three

months ended

March 31, 2019

and

2018

are as follows (unaudited):

	March 31,
	201 9		201 8
Components of net periodic benefit cost:
Service cost and amortization of loss	$	5	$	6
Interest cost		4		4

Net periodic benefit cost	$	9	$	10

The net pension liability as of

March 31, 2019

amounted to

$815.

Note L - Fair Value Measurements

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block]

NOTE l—FAIR VALUE MEASUREMENTS

Assets and liabilities measured at fair value on a recurring basis:

The Company measures its cash equivalents, short-term deposits, marketable securities and foreign currency derivative contracts at fair value. Cash equivalents, short-term deposits and marketable securities are classified within Level

or Level

value hierarchies as they are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Foreign currency derivative contracts are classified within Level

value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments.

The following table provides information by value level for assets and liabilities that are measured at fair value on a recurring basis as of

March 31, 2019 (

unaudited):

	Balance as of		Fair value measurements
	March 31, 201 9		Level 1		Level 2		Level 3
Description
Assets :
Cash equivalents :
Money market mutual funds	$	612	$	612		-		-

Short-term marketable securities:
Corporate debt securities	$	22,866		-	$	22,866		-
U.S. GSE securities	$	1,388			$	1,388

Long-term marketable securities:
U.S. GSE securities	$	15,973		-	$	15,973		-
Corporate debt securities	$	55,341		-	$	55,341		-

Derivative a ssets	$	19		-	$	19		-

The following table provides information by value level for assets and liabilities that are measured at fair value on a recurring basis as of

December

31,

2018.

	Balance as of		Fair value measurements
Description	December 31, 201 8		Level 1		Level 2		Level 3

Assets

Cash equivalents
Money market mutual funds	$	773	$	773		-		-

Short-term marketable securities
U.S. GSE securities	$	1,785		-	$	1,785		-
Corporate debt securities	$	25,579		-	$	25,579		-

Long-term marketable securities
U.S. GSE securities	$	19,512		-	$	19,512		-
Corporate debt securities	$	50,896		-	$	50,896		-

Derivative liabilities	$	3		-	$	3		-

In addition to the assets and liabilities described above, the Company’s financial instruments also include cash and cash equivalents, restricted and short-term deposits, trade receivables, other accounts receivable, trade payables, accrued expenses and other payables. The fair value of these financial instruments was

not

materially different from their carrying values at

March 31, 2019

due to the short-term maturity of these instruments.

Note M - Stockholders' Equity	3 Months Ended
Note M - Stockholders' Equity	Mar. 31, 2019
Notes to Financial Statements
Stockholders' Equity Note Disclosure [Text Block]	NOTE m—STOCKHOLDERS’ EQUITY During the first three months of 2019, the Company did not repurchase any shares of common stock. As of March 31, 2019, 794,913 shares of common stock, calculated based on the share price of our common stock at the inception of the board authorization, remained authorized for repurchase under the Company's board-authorized share repurchase program. Repurchases of common stock are accounted for as treasury stock, and result in a reduction of stockholders’ equity. The Company reissues treasury shares pursuant to its stock purchase plan, upon exercise of options and upon vesting of restricted stock units. Reissuance of treasury shares is accounted for in accordance with ASC No. 505 - 30 whereby gains are credited to additional paid-in capital and losses are charged to additional paid-in capital to the extent that previous net gains are included therein; otherwise losses are charged to retained earnings (accumulated deficit). During the first three months of 2019, the Company issued approximately 795,000 shares of common stock out of treasury stock to employees who exercised their stock options, SARs or vested RSUs, or purchased shares from the Company’s 1993 Employee Stock Purchase Plan.

Note N - Segment Information

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE

—

SEGMENT INFORMATION

Description of segments:

The Company operates under

three

reportable segments.

The Company's segment information has been prepared in accordance with ASC

280,

“Segment Reporting.” Operating segments are defined as components of an enterprise engaging in business activities about which separate financial information is available that is evaluated regularly by the Company's chief operating decision-maker (“CODM”) in deciding how to allocate resources and assess performance. The Company's CODM is its Chief Executive Officer, who evaluates the Company's performance and allocates resources based on segment revenues and operating income.

The Company's operating segments are as follows: Home, Unified Communications and SmartVoice. The classification of the Company’s business segments is based on a number of factors that management uses to evaluate, view and run its business operations, which include, but are

not

limited to, customer base, homogeneity of products and technology. Prior to fiscal year

2019,

the Unified Communications segment was titled the Office segment.

A description of the types of products provided by each business segment is as follows:

Home - Wireless chipset solutions for converged communication at home. Such solutions include integrated circuits targeted for cordless phones sold in retail or supplied by telecommunication service providers, home gateway devices supplied by telecommunication service providers which integrate the DECT/CAT-iq functionality, integrated circuits addressing home automation applications, as well as fixed-mobile convergence solutions. During

2017,

the Company consolidated its home gateway and home automation products into a new product line called SmartHome. In this segment, (i) revenues from cordless telephony products exceeded

10%

of the Company’s total revenues and amounted to

37%

and

50%

of the Company’s total revenues for the

first

three

months of

2019

and

2018,

respectively, and (ii) revenues from smart home products amounted to

15%

of the Company’s total revenues for both the

first

three

months of

2019

and

2018.

Unified Communications - Comprehensive solution for Unified Communications products, including office solutions that offer businesses of all sizes low-cost VoIP terminals with converged voice and data applications. Revenues from the Company’s Unified Communications products represented

33%

and

30%

of its total revenues for the

first

three

months of

2019

and

2018,

respectively.

revenues derived from other products in the Unified Communications segment exceeded

10%

of the Company’s total revenues for both the

first

three

months of

2019

and

2018.

SmartVoice - Products for the SmartVoice market that provides voice activation and recognition, voice enhancement, always-on and far-end noise elimination targeted for mobile phone, mobile headsets and other devices that incorporate the Company’s noise suppression and voice quality enhancement HDClear technology. Revenues from the Company’s HDClear products represented

15%

and

of the Company’s total revenues for the

first

three

months of

2019

and

2018,

respectively.

revenues derived from other products in the SmartVoice segment exceeded

10%

of the Company’s total consolidated revenues for both the

first

three

months of

2019

and

2018.

Segment data:

The Company derives the results of its business segments directly from its internal management reporting system and by using certain allocation methods. The accounting policies the Company uses to derive business segment results are substantially the same as those the Company uses for consolidation of its financial statements. The CODM measures the performance of each business segment based on several metrics, including earnings from operations. The CODM uses these results, in part, to evaluate the performance of, and to assign resources to, each of the business segments. The Company does

not

allocate to its business segments certain operating expenses, which it manages separately at the corporate level. These unallocated costs include primarily amortization of purchased intangible assets, equity-based compensation expenses, and certain corporate governance costs.

Selected operating results information for each business segment was as follows for the

three

months ended

March

31,

2019

and

2018

(unaudited):

	Revenues				Income (loss) from operations
	Three months ended March 31,
	2019		2018		2019			2018

Home	$	14,730	$	18,181	$	4,071		$	3,807
Unified Communications		9,409		8,353		2,855			2,152
SmartVoice		4,137		1,577		(6,063	)		(5,674	)

Total	$	28,276	$	28,111	$	863		$	285

The reconciliation of segment operating results information to the Company’s consolidated financial information was as follows (unaudited):

	Three months ended March 31,
	2019			2018

Loss from operations	$	863		$	285
Unallocated corporate, general and administrative expenses		(462	)		(519	)
Equity-based compensation expenses		(1,905	)		(1,699	)
Intangible assets amortization expenses		(104	)		(425	)
Financial income, net		313			396

Total consolidated loss before taxes	$	(1,295	)	$	(1,962	)

Note O - Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

NOTE

—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the changes in accumulated balances of other comprehensive income for the

three

months ended

March 31, 2019 (

unaudited):

	Unrealized gains (losses) on available- for-sale marketable securities			Unrealized gains (losses) on cash flow hedges			Unrealized gains (losses) on components of defined benefit plans			Unrealized losses on foreign currency translation			Total

Beginning balance	$	(1,633	)	$	(3	)	$	(361	)	$	(327	)	$	(2,324	)
Other comprehensive income (loss) before reclassifications		751			105			-			(25	)		831
Losses (gains) reclassified from accumulated other comprehensive income (loss)		47			(83	)		4			-			(32	)

Net current period other comprehensive income (loss)		798			22			4			(25	)		799

Ending balance	$	(835	)	$	19		$	(357	)	$	(352	)	$	(1,525	)

The following table provides details about reclassifications out of accumulated other comprehensive income for the

three

months ended

March 31, 2019 (

unaudited):

Details about accumulated other comprehensive income (loss) components	Losses (gains) r eclassified from accumulated other comprehensive income (loss)			Affected line item in the statement of income

Losses on available-for-sale marketable securities	$	47		Financial income, net
		-		Provision for income taxes
		47		Total, net of income taxes
Gains on cash flow hedges
		(65	)	Research and development
		(7	)	Sales and marketing
		(11	)	General and administrative
		(83	)	Total, before income taxes
		-		Provision for income taxes

		-		Total, net of income taxes

Losses on components of defined benefit plans		3		Research and development
		1		Sales and marketing

		4		Total, before income taxes

		-		Provision for income taxes

		4		Total, net of income taxes

Total reclassifications for the period	$	(32	)	Total, net of income taxes

Note P - Government Grants	3 Months Ended
Note P - Government Grants	Mar. 31, 2019
Notes to Financial Statements
Government Grants [Text Block]	NOTE P — GOVERNMENT GRANTS Government grants received by the Company’s Israeli subsidiary relating to categories of operating expenditures are credited to the consolidated statements of income during the period during which the expenditure to which they relate is charged. Royalty and non-royalty-bearing grants from the Israeli Innovation Authority (“IIA”) for funding certain approved research and development projects are recognized at the time when the Company’s Israeli subsidiary is entitled to such grants, on the basis of the related costs incurred, and are included as a deduction from research and development expenses, net. The Company recorded grants in the amount of $0.4 and $0.5 million for the three months ended March 31, 2019 and 2018, respectively. The Company’s Israeli subsidiary is obligated to pay royalties amounting to 5% of the sales of certain products, the development of which benefited from grants received from the IIA in previous years. The obligation to pay these royalties is contingent on actual sales of such products. Grants received from the IIA may become repayable if certain criteria under the grants are not met. In addition, the grants may be required to be repaid with a multiple of up to six times the initial grant amount in case the technology that was developed using these grants are transferred, directly or indirectly, to a third party.

Significant Accounting Policies (Policies)	3 Months Ended
Significant Accounting Policies (Policies)	Mar. 31, 2019
Accounting Policies [Abstract]
New Accounting Pronouncements, Policy [Policy Text Block]	Recent ly Issued and A dopted A ccounting P ronouncements On January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016 - 02, Leases (“Topic 842” ), as amended, which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (“ROU”) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. The Company adopted the new guidance using the modified retrospective transition approach by applying the new standard to all leases existing on the date of initial application and not restating comparative periods. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases. For information regarding the impact of Topic 842 adoption, see Significant Accounting Policies - Leases and Note B- Operating Leases . Recently I ssued A ccounting P ronouncements Not Y et E ffective In June 2016, the FASB issued ASU 2016 - 13, “Financial Instruments - Credit Losses (Topic 326 ): Measurement of Credit Losses on Financial Instruments (“ASU 2016 - 13” ). ASU 2016 - 13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. ASU 2016 - 13 also applies to employee benefit plan accounting, with an effective date of the first quarter of fiscal 2022. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated balance sheets, statements of operations and cash flows. In August 2018, the FASB issued ASU 2018 - 13, “Fair Value Measurement (Topic 820 ) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018 - 13” ), which is designed to improve the effectiveness of disclosures by removing, modifying and adding disclosures related to fair value measurements. ASU No. 2018 - 13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. ASU 2018 - 13 allows for early adoption in any interim period after issuance of the update. The adoption of ASU 2018 - 13 is not expected to have a significant impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018 - 15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350 - 40 ): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract” (“ASU 2018 - 15” ). ASU 2018 - 15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The implementation costs incurred in a hosting arrangement that is a service contract should be presented as a prepaid asset on the balance sheet and expensed over the term of the hosting arrangement to the same line item in the statement of income as the costs related to the hosting fees. ASU 2018 - 15 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted, including adoption in any interim period. ASU 2018 - 15 should be applied either retrospectively or prospectively to all implementation costs incurred after adoption. The Company is currently evaluating the impact that the standard will have on the consolidated financial statements and do not expect the adoption to have a material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018 - 14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715 - 20 ): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans” (“ASU 2018 - 14” ), which improves disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. ASU 2018 - 14 is effective for fiscal years ending after December 15, 2020, for public business entities. Early adoption is permitted for all entities. Entities are to apply this standard on a retrospective basis for all periods presented. The Company is currently evaluating the impact that ASU 2018 - 14 will have on the Company’s consolidated financial statements and related disclosures.
Lessee, Leases [Policy Text Block]	Significant Accounting Policies- Leases Effective as of January 1, 2019, the Company adopted Topic 842, which requires the recognition of lease assets and lease liabilities by lessees for leases classified as operating leases. The Company has adopted Topic 842 using the modified retrospective transition approach by applying the new standard to all leases existing on the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s historical accounting under Topic 840. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward the historical lease classification, the Company’s assessment on whether a contract was or contains a lease, and initial direct costs for any leases that existed prior to January 1, 2019. The Company also elected to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term. As a result of the adoption of Topic 842 on January 1, 2019, the Company recorded both operating lease ROU assets of $12.5 million and operating lease liabilities of $12.5 million. The adoption did not impact the Company’s beginning retained earnings (accumulated deficit), or its prior year condensed consolidated statements of income and statements of cash flows. The Company determines if an arrangement is a lease at inception. The Company assessment is based on: ( 1 ) whether the contract includes an identified asset, ( 2 ) whether the Company obtains substantially all of the economic benefits from the use of the asset throughout the period of use, and ( 3 ) whether the Company has the right to direct how and for what purpose the identified asset is used throughout the period of use. Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset, the present value of the lease payments equals or exceeds substantially all of the fair value of the asset, or the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of lease term. A lease is classified as an operating lease if it does not meet any one of these criteria. Since all of the Company’s lease contracts do not meet any one of the criteria above, the Company concluded that all of its lease contracts should be classified as operation leases. ROU assets and liabilities are recognized on the commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company's leases do not provide an implicit rate, the Company used the assistance of a third party valuation firm to determine the incremental borrowing rate in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. All ROU assets are reviewed for impairment. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.
Use of Estimates, Policy [Policy Text Block]	Use of Estimates The preparation of the interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the interim condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Note B - Operating Leases (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Lease, Cost [Table Text Block]

	March 31, 2019

Weighted-average remaining lease term – operating leases (in years)		8.26
Weighted-average discount rate – operating leases		4.96	%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

	Operating Leases

Gross lease liabilities	$	15,434

Less: imputed interest		(3,155	)

Present value of lease liabilities		12,279
Less: current portion of lease liabilities		(1,885	)
Total long-term lease liabilities	$	10,394

Note C - Inventories (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	March 31, 201 9		December 31, 201 8
	(Unaudited)		(Audited)

Work-in-process	$	4,849	$	4,993
Finished goods		4,429		4,826

	$	9,278	$	9,819

Note D - Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three months ended March 31,
	201 9			2018
	(Unaudited)

Net loss	$	(1,066	)	$	(1,753	)
Loss per share:
Basic	$	(0.05	)	$	(0.08	)
Diluted	$	(0.05	)	$	(0.08	)
Weighted average number of shares of common stock outstanding during the period used to compute basic net loss per share (in thousands)		22,542			22,678
Incremental shares attributable to exercise of outstanding options, stock appreciation rights and restricted stock units (assuming proceeds would be used to purchase treasury stock) (in thousands)		-			-
Weighted average number of shares of common stock used to compute diluted net loss per share (in thousands)		22,542			22,678

Note E - Marketable Securities and Time Deposits (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Available-for-sale Securities [Table Text Block]

	Amortized cost				Unrealized losses, net						Fair value
	March 31, 201 9		December 31, 201 8		March 31, 201 9			December 31, 201 8			March 31, 201 9		December 31, 201 8
	(Unaudited)		(Audited)		(Unaudited)			(Audited)			(Unaudited)		(Audited)

Short-term deposits		6,887	$	8,349		-			-		$	6,887	$	8,349
Long-term deposits		5,159		5,130		-			-			5,159		5,130
U.S. GSE securities		17,501		21,550		(140	)		(253	)		17,361		21,297
Corporate obligations		78,902		77,857		(695	)		(1,382	)		78,207