DSP Group®, Inc. (NASDAQ: DSPG), a leading global provider of voice
and wireless chipset solutions for converged communications,
announced today its results for the fourth quarter and full year
ended December 31, 2019.
Fourth Quarter Financial
Highlights:
- Total revenues of $29.3 million, a year-over-year increase of
12%:º Revenues from growth initiatives of $19.6 million
accounted for 67% of total revenues, a year-over-year increase of
26%. º Unified Communications segment revenues of
$10.0 million, a year-over-year increase of 17%
º SmartVoice segment revenues of $4.9 million, a
year-over-year increase of 21% º SmartHome segment
revenues of $4.7 million, a year-over-year increase of
63%º Cordless revenues of $9.7 million, a year-over-year
decrease of 8%.
- GAAP and non-GAAP gross margin of 50.9% and 51.2%,
respectively, a 340 and 330 basis point improvement, respectively,
compared to the fourth quarter of 2018.
- GAAP loss per share of $0.00 and non-GAAP diluted earnings per
share of $0.06, compared to GAAP loss per share of $0.01 and
non-GAAP diluted earnings per share of $0.04, for the fourth
quarter of 2018.
- GAAP operating loss of $1.2 million and non-GAAP operating
income of $0.7 million, compared to GAAP and non-GAAP operating
loss of $2.9 million and $0.7 million, respectively, for the fourth
quarter of 2018.
- GAAP and non-GAAP tax benefit of $0.6 million and $0.3 million,
respectively, compared to GAAP and non-GAAP tax benefit of $2.0
million and $1.2 million, respectively, for the fourth quarter of
2018.
- GAAP net loss of $0.1 million and non-GAAP net income of $1.6
million, compared to GAAP net loss of $0.3 million and non-GAAP net
income of $1.0 million, for the fourth quarter of 2018.
- Generated $10.8 million of cash from operations compared to
$6.7 million in the fourth quarter of 2018.
- Cash, deposits and marketable securities of approximately
$131.3 million as of December 31, 2019.
Full Year 2019 Financial
Highlights:
- Total revenues of approximately $117.6 million, vs. $117.4
million in 2018.º Revenues from growth initiatives of
$73.8 million, a year-over-year increase of 15% when compared to
2018. º Unified Communications segment revenues of
$38.1 million, a year-over-year decrease of 2%
º SmartVoice segment revenues of $19.3 million, a
year-over-year increase of 78% º SmartHome
revenues of $16.3 million, a year-over-year increase of
12%º Cordless revenues of $43.9 million, a
year-over-year decrease of 18%.
- GAAP and non-GAAP gross margin of 50.6% and 51.0%,
respectively, a 170 bps improvement, as compared to 2018 gross
margin of 48.9% on GAAP and 49.3% on non-GAAP basis.
- GAAP operating loss of $4.4 million and non-GAAP operating
income of $3.6 million, compared to GAAP operating loss of $5.6
million and non-GAAP operating income of $2.9 million in 2018.
- GAAP and non-GAAP tax benefit of $1.6 million and $0.9 million,
respectively, compared to GAAP and non-GAAP tax benefit of $1.9
million and $0.7 million, respectively, in 2018.
- GAAP net loss of $1.2 million and non-GAAP net income of $7.0
million, compared to GAAP net loss of $2.0 million and non-GAAP net
income of $5.4 million in 2018.
- GAAP loss per share of $0.05 and non-GAAP diluted earnings per
share of $0.29, compared to GAAP loss per share of $0.09 and
non-GAAP earning per share of $0.23 in 2018.
- Generated $10.5 million of cash from operating activities,
compared to $8.7 million in 2018.
Management Comments: Commenting
on the results, Ofer Elyakim, CEO of DSP Group, stated: “2019 marks
the year in which DSP Group succeeded in positioning itself as a
leading Voice AI and IoT technology company, while maintaining
solid engineering and financial discipline, with fourth quarter
revenues from growth initiatives reaching a record $19.6 million,
representing two thirds of our business, propelling GAAP and
non-GAAP gross margins to 50.9% and 51.2%, respectively, and
generating $10.8 million of cash flows from operations.”
Mr. Elyakim continued, “Looking ahead to the
first quarter, we project revenues to grow on a year over year
basis. We see a bright future for DSP Group and are well positioned
in several bourgeoning markets as demonstrated by the solid
momentum across all growth initiatives, including a record number
of new products launches by Tier 1 brands incorporating our
SmartVoice technology, including Facebook, Leviton and Lenovo. In
addition, we are excited that ADT selected our ULE technology for
its new wireless security system, which is a milestone event for
our SmartHome franchise and paves the path for a successful entry
into the U.S. market. Finally, we are pleased with the commencement
of mass volume shipments of a flagship product in our Unified
Communications segment. We are confident that our growth
initiatives will continue their upward trajectory and become the
key driver of our business going forward.”
Fourth Quarter Business
Highlights:
- Continued to grow and strengthen our SmartVoice franchise with
design wins and product launches for voice user interfaces, or
VUIs, with leading consumer electronics OEMs, thereby driving
dynamic growth in a burgeoning market:º Facebook
launched its innovative Portal TV integrating our high-performance
advanced audio and machine learning SoC.º Oppo, a
leading mobile OEM, launched its new K5 smartphone incorporating
our SmartVoice technology for its handsfree Breeno smart
assistant.º Leviton launched its Decora dimmer with AVS
support leveraging our SmartVoice solution.º Nortek
selected our SmartVoice With HDClearTM for its Numera Libris 2
mobile personal emergency response system, or mPERS.
- Grew and diversified our SmartHome ecosystem with leading
global IoT vendors, building on the continued support from major
European and American service providers and OEMs that recognize
ULE’s unmatched characteristics for wireless indoor connectivity.
These characteristics include superior range, interference-free
spectrum and native support for two-way voice. Design wins
include:º ADT launched its BLUE by ADT wireless security
system, leveraging our ULE and SmartVoice
solutions.º Golden Mark selected our ULE technology for
its new suite of wireless smart home devices.º Ooma
launched a smart security keypad based on our ULE technology.
- Solidified our leadership position in the Unified
Communications market despite the near-term market softness. We are
well positioned to resume growth in this product line in 2020.
Design wins include:º A Tier 1 OEM and two ODMs launched
new lines of IP phones with dual-color-displays.º A Tier
1 OEM launched a new series of IP phones for the UCAAS market to
complement its on-premise portfolio.
Fourth Quarter and Year End GAAP
Results:Revenues for the fourth quarter of 2019 were $29.3
million, an increase of 12% from revenues of $26.1 million for the
fourth quarter of 2018. Net loss and loss per share for the fourth
quarter of 2019 were $0.1 million and $0.00, respectively. Net loss
and loss per share for the fourth quarter of 2018 were $0.3 million
and $0.01, respectively.
Revenues for the year ended December 31, 2019
were $117.6 million, an increase of 0.1% from 2018 revenues of
$117.4 million. Net loss for 2019 was $1.2 million, compared to a
net loss of $2.0 million for 2018. Loss per share for 2019 was
$0.05, compared to loss per share of $0.09 for 2018.
Fourth Quarter and year end Non-GAAP
Results:Non-GAAP net income and diluted earnings per share
for the fourth quarter of 2019 were $1.6 million and $0.06,
respectively, as compared to non-GAAP net income and diluted
earnings per share of $1.0 million and $0.04, respectively, for the
fourth quarter of 2018. Non-GAAP net income and diluted earnings
per share for the fourth quarter of 2019 excluded the impact of
amortization of acquired intangible assets in the amount of $0.1
million associated with previous acquisitions, equity-based
compensation expenses of $1.8 million, non-cash exchange rate
differences resulting from the new lease accounting standard (ASC
842) in the amount of $0.1 million and changes in deferred taxes in
the amount of $0.3 million related to intangible assets acquired in
previous acquisitions and equity-based compensation expenses.
Non-GAAP net income and diluted earnings per share for the fourth
quarter of 2018 excluded the impact of amortization of acquired
intangible assets in the amount of $0.4 million associated with
previous acquisitions and equity-based compensation expenses of
$1.7 million and changes in deferred taxes in the amount of $0.8
million related to intangible assets acquired in previous
acquisitions and equity-based compensation expenses.
Non-GAAP net income and diluted earnings per
share for the year ended December 31, 2019 were $7.0 million and
$0.29, respectively, as compared to non-GAAP net income and diluted
earnings per share of $5.4 million and $0.23, respectively, for the
year ended December 31, 2018.
Non-GAAP net income and diluted earnings per
share for the year ended December 31, 2019 excluded the impact of
amortization of acquired intangible assets of $0.4 million
associated with previous acquisitions; equity-based compensation
expenses of $7.6 million, non-cash exchange rate differences
resulting from the new lease accounting standard (ASC 842) in the
amount of $0.8 million, and changes in deferred taxes related to
intangible assets acquired in previous acquisitions and
equity-based compensation expenses in the amount of $0.6
million.
Non-GAAP net income and diluted earnings per
share for the year ended December 31, 2018 excluded the impact of
amortization of acquired intangible assets of $1.7 million
associated with previous acquisitions; equity-based compensation
expenses of $6.8 million and changes in deferred taxes related to
intangible assets acquired in previous acquisitions and
equity-based compensation expenses in the amount of $1.1
million.
Earnings Conference Call
DetailsDSP Group will discuss its fourth quarter financial
results, along with its outlook and guidance for the first quarter
of 2020, on its conference call at 8:30 a.m. ET today, and invites
you to listen via our conference call or a live broadcast over the
Internet.
+1 866 966 1396 (domestic US) or +1 631 510 7495
(international) approximately 10 minutes prior to the starting
time. The password is 8182479.
The broadcast via the Internet can be accessed
by all interested parties through the Investor Relations section of
DSP Group’s website at www.dspg.com or link to:
https://edge.media-server.com/mmc/p/97rkdk6u
A replay of the conference call will be
available for a week following the call. To listen to the session,
please dial +1 917 677 7532, domestically or +44 33 3300 9785,
internationally and enter the company access code: 8182479.
Presentation of Non-GAAP Net Income and
EPSThe 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 fourth
quarter and full year ended December 31, 2019 to the same periods
in 2018 because the exclusion of the above noted expenses may
provide a more meaningful analysis of the Company’s core operating
results. Further, the Company believes it is useful to investors to
understand how the expenses associated with equity-based
compensation are reflected in its statements of income
Forward Looking StatementsThis
press release contains statements that qualify as “forward-looking
statements” under the Private Securities Litigation Reform Act of
1995, including Mr. Elyakim’s statements that year-over-year
revenue growth is projected, revenues from growth initiatives are
on an upward trajectory and will become the key driver of DSP
Group’s business going forward, DSP Group is well positioned in
several bourgeoning markets, the ADT design win may pave the path
for ULE entry in the U.S. market, and Unified Communications
franchise will resume revenue growth in 2020. The results from
these statements may not actually arise as a result of various
factors, including the market penetration of DSP Group’s unified
communications, ULE, voice user interface, SmartVoice and SmartHome
products; unexpected delays in the commercial launch of new
products; unexpected inventory adjustments, the speed of decline in
the cordless market; DSP Group’s ability to manage costs; DSP
Group’s ability to develop and produce new products at competitive
costs and in a timely manner and the ability of such products to
achieve broad market acceptance; and general market demand for
products that incorporate DSP Group’s technology in the market.
These factors and other factors which may affect future operating
results or DSP Group’s stock price are discussed under “RISK
FACTORS” in the Form 10-K for fiscal 2018, as well as other reports
DSP Group has filed with the Securities and Exchange Commission and
which are available on DSP Group’s website (www.dspg.com) under
Investor Relations. DSP Group assumes no obligation to update any
forward-looking statements or information, which speak as of their
respective dates.
About DSP GroupDSP Group®, Inc.
(NASDAQ: DSPG) is a global leader in wireless chipsets for a wide
range of smart-enabled devices. The company was founded in 1987 on
the principles of experience, insight and continuous advancement
which enable the company to consistently deliver next-generation
solutions in the areas of voice, audio, video and data
connectivity. Experts in voice processing, DSP Group invests
heavily in innovation for the smart future, the result is
leading-edge semiconductor technology that is enabling our
customers to develop a new wave of products that bring enhanced
user experiences through innovation, like conversation technology.
From mobile phones to VoIP and virtual assistants using cloud-based
voice services, DSP Group is the answer to the growing demand for
the ever-expanding collection of voice controlled smart devices.
For more information, visit www.dspg.com.
Contact:Tali Chen, Chief
Marketing Officer, Tali.Chen@dspg.com
FOURTH QUARTER 2019 AND FULL YEAR
RESULTS - INFOGRAPHIC
|
|
|
DSP GROUP, INC.CONSOLIDATED STATEMENTS OF
INCOME(In thousands, except per share amounts) |
|
|
|
|
Three Months EndedDecember 31 |
|
Twelve Months EndedDecember 31 |
|
|
2019 |
|
2018 |
|
2019 |
2018 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
(Audited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
29,261 |
|
|
$ |
26,057 |
|
|
$ |
117,613 |
|
|
$ |
117,438 |
|
|
Cost of revenues |
|
14,369 |
|
|
|
13,681 |
|
|
|
58,066 |
|
|
|
59,991 |
|
|
Gross profit |
|
14,892 |
|
|
|
12,376 |
|
|
|
59,547 |
|
|
|
57,447 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net |
|
8,827 |
|
|
|
8,606 |
|
|
|
35,552 |
|
|
|
36,109 |
|
|
Sales and marketing |
|
4,485 |
|
|
|
3,854 |
|
|
|
17,665 |
|
|
|
15,323 |
|
|
General and administrative |
|
2,701 |
|
|
|
2,343 |
|
|
|
10,318 |
|
|
|
9,955 |
|
|
Amortization of intangible assets |
|
104 |
|
|
|
425 |
|
|
|
416 |
|
|
|
1,700 |
|
|
Total operating expenses |
|
16,117 |
|
|
|
15,228 |
|
|
|
63,951 |
|
|
|
63,087 |
|
|
Operating loss |
|
(1,225 |
) |
|
|
(2,852 |
) |
|
|
(4,404 |
) |
|
|
(5,640 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income, net |
|
525 |
|
|
|
524 |
|
|
|
1,654 |
|
|
|
1,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before taxes on income |
|
(700 |
) |
|
|
(2,328 |
) |
|
|
(2,750 |
) |
|
|
(3,825 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit |
|
(613 |
) |
|
|
(2,007 |
) |
|
|
(1,560 |
) |
|
|
(1,868 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(87 |
) |
|
$ |
(321 |
) |
|
$ |
(1,190 |
) |
|
$ |
(1,957 |
) |
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.00 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.09 |
) |
|
Diluted |
$ |
(0.00 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.09 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in per share computations of
loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
23,054 |
|
|
|
22,240 |
|
|
|
22,827 |
|
|
|
22,512 |
|
|
Diluted |
|
23,054 |
|
|
|
22,240 |
|
|
|
22,827 |
|
|
|
22,512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Reconciliation of GAAP to Non-GAAP Financial
Measures(In thousands, except per share amounts) |
|
|
|
|
Three Months EndedDecember 31, |
|
Twelve Months EndedDecember 31, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net Loss |
$ |
(87 |
) |
|
$ |
(321 |
) |
|
$ |
(1,190 |
) |
|
$ |
(1,957 |
) |
|
Equity-based compensation expense included in cost of revenues |
|
102 |
|
|
|
108 |
|
|
|
448 |
|
|
|
428 |
|
|
Equity-based compensation expense included in research and
development, net |
|
640 |
|
|
|
739 |
|
|
|
2,842 |
|
|
|
2,873 |
|
|
Equity-based compensation expense included in sales and
marketing |
|
440 |
|
|
|
294 |
|
|
|
1,758 |
|
|
|
1,248 |
|
|
Equity-based compensation expense included in general and
administrative |
|
611 |
|
|
|
552 |
|
|
|
2,583 |
|
|
|
2,255 |
|
|
Amortization of intangible assets |
|
104 |
|
|
|
425 |
|
|
|
416 |
|
|
|
1,700 |
|
|
Non-cash Exchange rates differences resulting from the new lease
accounting standard (ASC 842) |
|
62 |
|
|
|
- |
|
|
|
785 |
|
|
|
- |
|
|
Changes of deferred taxes related to intangible assets and
equity-based compensation expense |
|
(297 |
) |
|
|
(790 |
) |
|
|
(618 |
) |
|
|
(1,131 |
) |
|
Non-GAAP net income |
$ |
1,575 |
|
|
$ |
1,007 |
|
|
$ |
7,024 |
|
|
$ |
5,416 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common stock used in computation of GAAP
diluted net loss per share (in thousands) |
|
23,054 |
|
|
|
22,240 |
|
|
|
22,827 |
|
|
|
22,512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares related to outstanding options,
stock appreciation rights and restricted share units (in
thousands) |
|
1,342 |
|
|
|
1,203 |
|
|
|
1,420 |
|
|
|
1,317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common stock used in computation of
non-GAAP diluted net earnings per share (in thousands) |
|
24,396 |
|
|
|
23,443 |
|
|
|
24,247 |
|
|
|
23,829 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net loss per share |
$ |
(0.00 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.09 |
) |
|
Equity-based compensation expense |
|
0.07 |
|
|
|
0.07 |
|
|
|
0.31 |
|
|
|
0.29 |
|
|
Amortization of intangible assets |
|
0.00 |
|
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.07 |
|
|
Non-cash Exchange rates differences resulting from the new lease
accounting standard (ASC 842) |
|
0.00 |
|
|
|
- |
|
|
|
0.03 |
|
|
|
- |
|
|
Changes of deferred taxes related to intangible assets and
equity-based compensation expense |
|
(0.01 |
) |
|
|
(0.04 |
) |
|
|
(0.02 |
) |
|
|
(0.04 |
) |
|
Non-GAAP diluted net earnings per share |
$ |
0.06 |
|
|
$ |
0.04 |
|
|
$ |
0.29 |
|
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DSP GROUP, INC.CONSOLIDATED BALANCE
SHEETS (In thousands) |
|
|
|
|
December 31, |
|
December 31, |
|
|
2019 |
|
2018 |
|
|
(Unaudited) |
|
(Audited) |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
28,737 |
|
|
$ |
12,146 |
|
|
Restricted deposits |
|
518 |
|
|
|
493 |
|
|
Marketable securities and short term deposits |
|
39,141 |
|
|
|
35,713 |
|
|
Trade receivables, net |
|
15,382 |
|
|
|
13,475 |
|
|
Inventories |
|
7,464 |
|
|
|
9,819 |
|
|
Other accounts receivable and prepaid expenses |
|
3,635 |
|
|
|
3,670 |
|
|
Total current assets |
|
94,877 |
|
|
|
75,316 |
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
6,805 |
|
|
|
2,748 |
|
|
|
|
|
|
|
|
|
|
|
Long term marketable securities and deposits |
|
62,884 |
|
|
|
75,538 |
|
|
Severance pay fund |
|
15,800 |
|
|
|
14,158 |
|
|
Operating leases |
|
11,949 |
|
|
|
- |
|
|
Deferred income taxes |
|
6,377 |
|
|
|
3,580 |
|
|
Intangible assets, net |
|
6,904 |
|
|
|
7,321 |
|
|
Long term prepaid expenses and lease deposits |
|
707 |
|
|
|
1,229 |
|
|
Total long term assets |
|
104,621 |
|
|
|
101,826 |
|
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
206,303 |
|
|
$ |
179,890 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Trade payables |
$ |
8,511 |
|
|
$ |
9,579 |
|
|
Lease liability |
|
2,574 |
|
|
|
- |
|
|
Other current liabilities |
|
14,808 |
|
|
|
13,120 |
|
|
Total current liabilities |
|
25,893 |
|
|
|
22,699 |
|
|
|
|
|
|
|
|
|
|
|
Accrued severance pay |
|
16,074 |
|
|
|
14,348 |
|
|
Lease liability |
|
10,160 |
|
|
|
- |
|
|
Accrued pensions |
|
963 |
|
|
|
827 |
|
|
Deferred income taxes |
|
119 |
|
|
|
151 |
|
|
Total long term liabilities |
|
27,316 |
|
|
|
15,326 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock |
|
23 |
|
|
|
22 |
|
|
Additional paid-in capital |
|
386,534 |
|
|
|
378,855 |
|
|
Accumulated other comprehensive loss |
|
(889 |
) |
|
|
(2,324 |
) |
|
Less – Cost of treasury stock |
|
(113,862 |
) |
|
|
(122,325 |
) |
|
Accumulated deficit |
|
(118,712 |
) |
|
|
(112,363 |
) |
|
Total stockholders’ equity |
|
153,094 |
|
|
|
141,865 |
|
|
Total liabilities and stockholders’ equity |
$ |
206,303 |
|
|
$ |
179,890 |
|
|
|
|
|
|
|
|
|
|
DSP (NASDAQ:DSPG)
Historical Stock Chart
From Mar 2024 to Apr 2024
DSP (NASDAQ:DSPG)
Historical Stock Chart
From Apr 2023 to Apr 2024
