DSP Group®, Inc. (NASDAQ: DSPG), a leading global provider of
wireless chipset solutions for converged communications, announced
today its results for the fourth quarter and full year ended
December 31, 2020.
Fourth Quarter
2020 Financial Highlights
(and Comparison to
Fourth Quarter 2019):
- Total revenues of $31.9 million, a 9% increase:º Revenues
from IoAT (Internet of Audio Things) businesses of $18.1 million
accounted for 57% of total revenues, a decrease of 8%.
º Unified Communications segment revenues of $8.2
million, a decrease of 17%. º SmartVoice
segment revenues of $5.0 million, an increase of 2%.
º SmartHome segment revenues of $4.8 million, an
increase of 3%.º Cordless revenues of $13.8 million, an
increase of 42%.
- GAAP and non-GAAP gross margin of 51.3% and 51.9%,
respectively, an increase of 40 and 70 basis points,
respectively.
- GAAP loss per share of $0.06 and non-GAAP diluted earnings per
share of $0.12, compared to zero GAAP diluted loss per share and
non-GAAP diluted earnings per share of $0.06 for the fourth quarter
of 2019.
- GAAP operating loss of $1.0 million and non-GAAP operating
income of $2.9 million, compared to GAAP operating loss of $1.2
million and non-GAAP operating income of $0.7 million for the
fourth quarter of 2019.
- GAAP net loss of $1.4 million and non-GAAP net income of $2.9
million, compared to GAAP net loss of $0.1 million and non-GAAP net
income of $1.6 million for the fourth quarter of 2019.
- Generated $8.6 million of cash from operations, compared to
$10.8 million of cash generated from operations in the fourth
quarter of 2019.
- Cash, deposits and marketable securities of approximately
$128.6 million as of December 31, 2020.
Full Year 2020
Financial Highlights (and
Comparison to Full Year
2019):
- Total revenues of $114.5 million, vs. $117.6 million in 2019, a
3% decrease.º Revenues from IoAT businesses of $68.1
million, a year-over-year decrease of 8% when compared to
2019. º Unified Communications segment
revenues of $31.2 million, a year-over-year decrease of 18%.
º SmartVoice segment revenues of $20.2 million, a
year-over-year increase of 4%. º SmartHome
revenues of $16.8 million, a year-over-year increase of
3%.º Cordless revenues of $46.3 million, a
year-over-year increase of 6%.
- GAAP and non-GAAP gross margin of 50.8% and 51.4%,
respectively, an increase of 20 and 40 basis points, as compared to
2019 gross margin of 50.6% on GAAP and 51.0% on non-GAAP
basis.
- GAAP operating loss of $8.1 million and non-GAAP operating
income of $3.4 million, compared to GAAP operating loss of $4.4
million and non-GAAP operating income of $3.6 million in 2019.
- GAAP net loss of $6.8 million and non-GAAP net income of $4.8
million, compared to GAAP net loss of $1.2 million and non-GAAP net
income of $7.0 million in 2019.
- GAAP loss per share of $0.29 and non-GAAP diluted earnings per
share of $0.19, compared to GAAP loss per share of $0.05 and
non-GAAP earning per share of $0.29 in 2019.
- Generated $14.6 million of cash from operating activities,
compared to $10.5 million in 2019.
Management Comments:Commenting
on the results, Ofer Elyakim, CEO of DSP Group, stated: “We are
very pleased with our fourth quarter financial results, and
particularly with our diversified voice centric product portfolio
that drove a strong finish to a volatile year. Fourth quarter
revenues of $31.9 million exceeded our guidance range and grew by
9% year over year and 23% sequentially. These results were further
propelled by digitally transformed work-live-study routines as
evidenced by the accelerating demand for work from home products,
including remote collaboration tools, cordless phones, voice AI and
IoT devices.”
Mr. Elyakim continued, “Looking ahead, we are
excited about the momentum surrounding our business and the pivotal
role that our innovative technologies are playing in the newly
emerging voice-centric marketplace. While industry-wide supply
chain constraints are placing limitations on product deliveries, we
are experiencing solid end-market demand across our different
businesses and expect first quarter revenues to grow both
sequentially and year-over-year. Moreover, the transformation to a
voice-centric world positions us well for sustainable growth. Our
dedicated focus and R&D investments in voice communications,
Edge AI and IoT are paying off and have created a deep and
diversified technology offering, which is evidenced by the
following accomplishments: positioning ULE as a prime connectivity
in the home security market, establishing SmartVoice franchise as
the market leading solution in key consumer categories and
proliferating our voice and video technologies in the evolving
collaboration market.”
Fourth Quarter Business
Highlights:
- Continued to grow and strengthen
our SmartVoice franchise with design wins and product launches for
voice user interfaces (VUIs) with leading consumer electronics
OEMs, thereby driving dynamic growth in a burgeoning market:
- Major U.S. retail brand and Lenovo
launched new tablet models based on our SmartVoice solution.
- A leading U.S. platform company
launched its second-generation smart wearable product leveraging
our SmartVoice edge AI SoC
- TaoTronics launched a new TWS
headset based on our SmartVoice solution for its differentiated
edge AI capabilities.
- Grew and diversified our SmartHome
ecosystem with leading global IoT vendors that recognize ULE’s
unmatched characteristics for wireless indoor IoT, including
superior range, interference-free spectrum and native support for
two-way voice:
- A leading European service provider
chose our DECT/ULE for its next generation professional smart
security offering.
- A leading U.S. brand selected our
DECT/ULE for its elderly care system that includes hub, pendant and
additional assisted voice-enabled devices.
- Atlinks selected our DECT/ULE
solution for its wireless Hi-Fi audio streaming product.
- Solidified our leadership position
and expanded our market share in the Unified Communications market,
as demonstrated by the following business wins:
- A Tier 1 UC OEM selected our
high-end DVFxx solution to drive its next generation personal video
collaboration system.
- A leading U.S. video collaboration
vendor brand selected our SmartVoice voice communication engine for
a hybrid collaboration endpoint.
- Yealink announced its new Microsoft
Teams wireless DECT headset based on our industry leading
solution.
Fourth Quarter and Year End GAAP
Results:Revenues for the fourth quarter
of 2020 were $31.9 million, an increase of 9% from revenues of
$29.3 million for the fourth quarter of 2019. Net loss and loss per
share for the fourth quarter of 2020 were $1.4 million and $0.06,
respectively. Net loss and loss per share for the fourth quarter of
2019 were $0.1 million and $0.00, respectively.
Revenues for the year ended December 31, 2020
were $114.5 million, a decrease of 3% from 2019 revenues of $117.6
million. Net loss for 2020 was $6.8 million, compared to a net loss
of $1.2 million for 2019. Loss per share for 2020 was $0.29,
compared to loss per share of $0.05 for 2019.
Fourth Quarter and
Year-End
Non-GAAP Results:Non-GAAP net income and diluted earnings
per share for the fourth quarter of 2020 were $2.9 million and
$0.12, respectively, as compared to non-GAAP net income and diluted
earnings per share of $1.6 million and $0.06, respectively, for the
fourth quarter of 2019. Non-GAAP net income and diluted earnings
per share for the fourth quarter of 2020 excluded the impact of
amortization of acquired intangible assets in the amount of $0.4
million associated with previous acquisitions, equity-based
compensation expenses of $3.2 million, non-cash expenses from
exchange rate differences resulting from lease accounting standard
(ASC 842) in the amount of $0.7 million, amortization of employees
retention expenses related to the acquisition of SoundChip in the
amount of $0.25 million and income resulting from 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 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 expenses from
exchange rate differences resulting from ASC 842 in the amount of
$0.1 million, and income resulting from 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 year ended December 31, 2020 were $4.8 million and
$0.19, respectively, as compared to non-GAAP net income and diluted
earnings per share of $7.0 million and $0.29, respectively, for the
year ended December 31, 2019.
Non-GAAP net income and diluted earnings per
share for the year ended December 31, 2020 excluded the impact of
amortization of acquired intangible assets of $1.1 million
associated with current and previous acquisitions; equity-based
compensation expenses of $9.7 million, non-cash exchange rate
differences resulting from ASC 842 in the amount of $0.6 million,
transaction expenses related to the acquisition of SoundChip in the
amount of $0.25 million, amortization of employees retention
expenses related to the acquisition of SoundChip in the amount of
$0.5 million and changes in deferred taxes related to intangible
assets acquired in current and previous acquisitions and
equity-based compensation expenses in the amount of $0.5
million.
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 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.
Earnings Conference Call DetailsDSP Group will
discuss its fourth quarter financial results, along with its
outlook and guidance for the first quarter of 2021, 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.
Investors may access the conference call by
dialing +16467413167 (domestic US) or +44 (0) 2071 928338
(international) approximately 10 minutes prior to the starting
time. The password is 4996754.
The broadcast via the Internet can be accessed
by 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/4wohuk4f
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 (0) 3333009785,
internationally, and enter the company access code: 4996754#
Presentation of Non-GAAP Net Income and
EPSThe Company believes that the non-GAAP presentation of
net income (loss) and diluted earnings (loss) per share presented
in this press release is useful to investors in comparing results
for the fourth quarter and ended December 31, 2020 and 2019 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 and amortization of employees’ retention expenses
related to the acquisition are reflected in its statements of
income
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: (i) the optimism
about the company’s momentum for its business and the pivotal role
that its technologies are playing in the newly emerging
voice-centric marketplace, (ii) the improving end market demand
across the company’s different businesses, (iii) expectation of
first quarter revenues to grow both sequentially and
year-over-year, (iv) belief that the transformation to a
voice-centric world positions the company well for sustainable
growth, and (v) dedicated focus and R&D investments in voice
communications, Edge AI and IoT are paying off and have created a
deep and diversified technology offering. The results from these
statements may not actually arise as a result of various factors,
including the scope and duration of the pandemic; the extent and
length of the remote work environment and other restrictions
associated with the pandemic and the impact on the demand for
consumer electronics; SmartVoice and unified communications
products and the global economy; the impact of industry-wide supply
chain constraints; market penetration of DSP Group’s Unified
Communications, ULE, VUI, 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 2019, 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 Group DSP 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. DSP Group, an expert in voice processing,
invests heavily in innovation for the smart future and designs
leading-edge semiconductor technology that is enabling our
customers to develop a new wave of products that bring enhanced
user experiences through innovation. For more information, visit
www.dspg.com.
Contact:Shiri Weiss, IR &
Communications, Shiri.Weiss@dspg.com
An infographic PDF accompanying this announcement is
available
at http://ml.globenewswire.com/Resource/Download/59086ff8-cee7-4473-b8b5-275e03584a5a
|
DSP GROUP, INC. |
CONSOLIDATED STATEMENTS OF INCOME |
(In thousands, except per share amounts) |
|
|
Three Months Ended December 31 |
Twelve Months Ended December 31 |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Audited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ 31,885 |
|
|
$ 29,261 |
|
|
$ 114,480 |
|
|
$ 117,613 |
|
Cost of revenues |
15,543 |
|
|
14,369 |
|
|
56,290 |
|
|
58,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
16,342 |
|
|
14,892 |
|
|
58,190 |
|
|
59,547 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Research and development, net |
8,580 |
|
|
8,827 |
|
|
35,511 |
|
|
35,552 |
|
Sales and marketing |
4,642 |
|
|
4,485 |
|
|
18,205 |
|
|
17,665 |
|
General and administrative |
3,671 |
|
|
2,701 |
|
|
11,510 |
|
|
10,318 |
|
Amortization of intangible assets |
430 |
|
|
104 |
|
|
1,065 |
|
|
416 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
17,323 |
|
|
16,117 |
|
|
66,291 |
|
|
63,951 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
(981 |
) |
|
(1,225 |
) |
|
(8,101 |
) |
|
(4,404 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Financial income (expenses), net |
(304 |
) |
|
525 |
|
|
1,231 |
|
|
1,654 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before taxes on income |
(1,285 |
) |
|
(700 |
) |
|
(6,870 |
) |
|
(2,750 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Taxes on income(tax
benefit) |
72 |
|
|
(613 |
) |
|
(80 |
) |
|
(1,560 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ (1,357 |
) |
|
$(87 |
) |
|
$ (6,790 |
) |
|
$ (1,190 |
) |
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
$ (0.06 |
) |
|
$ (0.00 |
) |
|
$ (0.29 |
) |
|
$ (0.05 |
) |
Weighted average number of shares
used in per share computations of loss per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
23,661 |
|
|
23,054 |
|
|
23,466 |
|
|
22,827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
Unaudited |
|
|
Unaudited |
|
|
Unaudited |
|
|
Unaudited |
|
GAAP net loss |
$ (1,357 |
) |
|
$ (87 |
) |
|
$ (6,790 |
) |
|
$ (1,190 |
) |
Equity-based compensation expense
included in cost of revenues |
133 |
|
|
102 |
|
|
524 |
|
|
448 |
|
Equity-based compensation expense
included in research and development, net |
925 |
|
|
640 |
|
|
3,448 |
|
|
2,842 |
|
Equity-based compensation expense
included in sales and marketing |
605 |
|
|
440 |
|
|
2,426 |
|
|
1,758 |
|
Equity-based compensation expense
included in general and administrative |
1,504 |
|
|
611 |
|
|
3,315 |
|
|
2,583 |
|
Amortization of employee’s
retention expenses related to the acquisition of SoundChip included
in cost of revenues |
67 |
|
|
- |
|
|
134 |
|
|
- |
|
Amortization of employee’s
retention expenses related to the acquisition of SoundChip included
in sales and marketing |
149 |
|
|
- |
|
|
298 |
|
|
- |
|
Amortization of employee’s
retention expenses related to the acquisition of SoundChip included
in research and development, net |
34 |
|
|
- |
|
|
68 |
|
|
- |
|
Transaction expenses related to
the acquisition of SoundChip |
- |
|
|
- |
|
|
249 |
|
|
- |
|
Amortization of intangible
assets |
430 |
|
|
104 |
|
|
1,065 |
|
|
416 |
|
Non-cash expenses from exchange
rates differences resulting from lease accounting standard (ASC
842) |
678 |
|
|
62 |
|
|
607 |
|
|
785 |
|
Income from changes of deferred
taxes related to intangible assets and equity-based compensation
expense |
(277 |
) |
|
(297 |
) |
|
(526 |
) |
|
(618 |
) |
Non-GAAP net
income |
$ 2,891 |
|
|
$ 1,575 |
|
|
$ 4,818 |
|
|
$ 7,024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common stock used in computation of GAAP
diluted net loss per share (in thousands) |
23,661 |
|
|
23,054 |
|
|
23,466 |
|
|
22,827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares related to outstanding options,
stock appreciation rights and restricted share units (in
thousands) |
1,459 |
|
|
1,342 |
|
|
1,542 |
|
|
1,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common stock used in computation of
non-GAAP diluted net earnings per share (in thousands) |
25,120 |
|
|
24,396 |
|
|
25,008 |
|
|
24,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net loss per
share |
$ (0.06 |
) |
|
$ (0.00 |
) |
|
$ (0.29 |
) |
|
$ (0.05 |
) |
Equity-based compensation expense |
0.13 |
|
|
0.07 |
|
|
0.40 |
|
|
0.31 |
|
Amortization of intangible assets |
0.02 |
|
|
0.00 |
|
|
0.04 |
|
|
0.02 |
|
Transaction expenses related to the acquisition of SoundChip |
- |
|
|
- |
|
|
0.01 |
|
|
- |
|
Amortization of employee’s retention expenses related to the
acquisition of SoundChip |
0.01 |
|
|
- |
|
|
0.02 |
|
|
- |
|
Non-cash expenses from Exchange rates differences resulting from
lease accounting standard (ASC 842) |
0.03 |
|
|
0.00 |
|
|
0.03 |
|
|
0.03 |
|
Income from changes of deferred taxes related to intangible assets
and equity-based compensation expense |
(0.01 |
) |
|
(0.01 |
) |
|
(0.02 |
) |
|
(0.02 |
) |
Non-GAAP diluted net earnings per share |
$ 0.12 |
|
$ 0.06 |
|
$ 0.19 |
|
$ 0.29 |
|
|
|
|
|
|
|
|
|
|
DSP GROUP, INC. |
CONSOLIDATED BALANCE SHEETS |
(In thousands) |
|
|
December 31, |
|
|
December 31, |
|
|
2020 |
|
|
2019 |
|
|
(Unaudited) |
|
|
(Audited) |
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ 16,936 |
|
|
$ 28,737 |
|
Restricted deposits |
548 |
|
|
518 |
|
Marketable securities and short-term deposits |
50,411 |
|
|
39,141 |
|
Trade receivables, net |
11,003 |
|
|
15,382 |
|
Inventories |
9,061 |
|
|
7,464 |
|
Other accounts receivable and prepaid expenses |
3,460 |
|
|
3,551 |
|
Total current assets |
91,419 |
|
|
94,793 |
|
|
|
|
|
|
|
Property and equipment, net |
6,574 |
|
|
6,805 |
|
|
|
|
|
|
|
Long term marketable securities and deposits |
60,658 |
|
|
62,884 |
|
Severance pay fund |
16,285 |
|
|
15,800 |
|
Operating leases– right of use assets |
11,157 |
|
|
11,655 |
|
Deferred income taxes |
6,893 |
|
|
6,377 |
|
Intangible assets, net |
20,654 |
|
|
6,904 |
|
Long term prepaid expenses |
2,888 |
|
|
707 |
|
Total long-term
assets |
118,535 |
|
|
104,327 |
|
|
|
|
|
|
|
Total
assets |
$ 216,528 |
|
|
$ 205,925 |
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Trade payables |
$ 10,708 |
|
|
$ 8,511 |
|
Operating lease liability |
3,004 |
|
|
2,569 |
|
Other current liabilities |
15,724 |
|
|
14,159 |
|
Total current liabilities |
29,436 |
|
|
25,239 |
|
|
|
|
|
|
|
Accrued severance pay |
16,647 |
|
|
16,074 |
|
Operating lease liability |
10,100 |
|
|
10,436 |
|
Accrued pensions |
1,089 |
|
|
963 |
|
Deferred income taxes |
1,073 |
|
|
119 |
|
Other long-term liabilities |
1,945 |
|
|
- |
|
Total long-term
liabilities |
30,854 |
|
|
27,592 |
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
|
Common stock |
24 |
|
|
23 |
|
Additional paid-in capital |
396,335 |
|
|
386,534 |
|
Accumulated other comprehensive loss |
(637 |
) |
|
(889 |
) |
Less – Cost of treasury stock |
(108,509 |
) |
|
(113,862 |
) |
Accumulated deficit |
(130,975 |
) |
|
(118,712 |
) |
Total stockholders’ equity |
156,238 |
|
|
153,094 |
|
Total liabilities and
stockholders’ equity |
$ 216,528 |
|
|
$ 205,925 |
|
|
|
|
|
|
|
DSP (NASDAQ:DSPG)
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From Mar 2024 to Apr 2024
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