DSP Group®, Inc. (NASDAQ: DSPG), a leading global provider of
wireless chipset solutions for converged communications, announced
today its results for the third quarter ended September 30, 2021.
Third Quarter Financial Highlights (and Comparison to
Third Quarter of 2020): Revenue breakdown (USD in
millions)
|
Q3 2021 |
|
Q3 2020 |
|
vs. Q3 2020 |
IoAT Revenues: |
|
|
|
|
|
SmartVoice |
$5.96 |
|
$7.20 |
|
down
17% |
SmartHome |
$6.86 |
|
$3.69 |
|
up
86% |
Unified Communications |
$14.42 |
|
$2.59 |
|
up 458% |
Total IoAT Revenues |
$27.24 |
|
$13.48 |
|
up 102% |
Cordless Revenues |
$10.52 |
|
$12.54 |
|
down 16% |
Total Revenues |
$37.76 |
|
$26.02 |
|
up 45% |
|
|
|
|
|
|
- GAAP and
non-GAAP gross margin of 55.3% and 55.7%, respectively, a 460 and
420 basis point increase compared to the third quarter of 2020,
respectively.
- GAAP zero loss
per share and non-GAAP diluted earnings per share of $0.16,
compared to GAAP loss per share of $0.08 and non-GAAP diluted
earnings per share of $0.05 for the third quarter of 2020.
- GAAP operating
income of $0.3 million and non-GAAP operating income of $4.5
million, compared to GAAP operating loss of $2.3 million and
non-GAAP operating income of $1.0 million for the third quarter of
2020.
- GAAP net loss
of less than $0.1 million and non-GAAP net income of $4.1 million,
compared to GAAP net loss of $1.9 million and non-GAAP net income
of $1.3 million for the third quarter of 2020.
- Generated $4.4
million of cash from operations, compared to $2.9 million of cash
used in operations in the third quarter of 2020.
- Cash, deposits
and marketable securities of approximately $133.4 million as of
September 30, 2021.
Management Comments:Commenting
on the results, Ofer Elyakim, CEO of DSP Group, stated: “We are
delighted that we have been able to execute a successful business
transformation of DSP Group as evidenced by the substantially
improved results on multiple fronts and culminating in the proposed
acquisition by Synaptics. We believe this proposed combination will
provide a great result for our stockholders who have supported us
through this journey.”
Third Quarter Non-GAAP
Results:Non-GAAP net income and diluted earnings per share
for the third quarter of 2021 were $4.1 million and $0.16,
respectively, as compared to non-GAAP net income and diluted
earnings per share of $1.3 million and $0.05, respectively, for the
third quarter of 2020. Non-GAAP net income and diluted earnings per
share for the third quarter of 2021 excluded the impact of
amortization of acquired intangible assets in the amount of $0.3
million associated with previous acquisitions, equity-based
compensation expenses of $2.7 million, $1.1 million of transaction
costs related to the anticipated acquisition by Synaptics
Incorporation, amortization of employee retention expenses related
to the SoundChip acquisition of $0.03 million, non-cash expenses
from exchange rate differences resulting from the lease accounting
standard (ASC 842) in the amount of $0.04 million, and income
resulting from changes in deferred taxes in the amount of $0.03
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 third 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 $2.4 million,
non-cash expenses from exchange rate differences resulting from ASC
842 in the amount of $0.1 million, transaction expenses related to
the acquisition of SoundChip in amount of $0.25 million,
amortization of employees retention expenses related to the
acquisition of SoundChip in amount of $0.25 million and income
resulting from changes in deferred taxes in the amount of $0.2
million related to intangible assets acquired in current and
previous acquisitions and equity-based compensation expenses.
Proposed acquisition of DSP Group by
Synaptics As announced on August 30, 2021, DSP Group
entered into an agreement and plan of merger with Synaptics
Incorporated ("Synaptics") and a wholly-owned subsidiary of
Synaptics. Under the terms of the merger agreement, Synaptics will
acquire all outstanding shares of DSP Group common stock for a per
share price of $22.00 in cash. DSP Group’s Board of Directors
unanimously approved the transaction and DSP Group filed definitive
proxy materials with the Securities and Exchange Commission on
October 25, 2021. The definitive proxy materials were mailed to DSP
Group’s stockholders of record as of October 18, 2021 for a special
meeting of stockholders to vote on the merger and other matters.
The virtual special meeting is scheduled for Monday, November 29,
2021 at 1:00 p.m. Pacific Time. The consummation of the merger is
subject to approval by the stockholders of DSP Group and the
satisfaction of other conditions set forth in the merger agreement.
Subject to the satisfaction of the closing conditions to the
merger, we currently expect to complete the transaction by year
end.
In light of the pending transaction, DSP Group
will not host an earnings conference call and will not provide
guidance relating to its expected financial results for future
periods.
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.
Additional Information and Where to Find It
In connection with the merger transaction, DSP Group filed
definitive proxy materials with the SEC on October 25, 2021 and
mailed such materials and a proxy card to each stockholder of
record as of October 18, 2021. STOCKHOLDERS OF DSP GROUP ARE URGED
TO READ THESE MATERIALS, INCLUDING ANY AMENDMENTS OR SUPPLEMENTS
THERETO, AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE
TRANSACTION THAT DSP GROUP HAS FILED OR WILL FILE WITH THE SEC WHEN
THEY BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION
ABOUT DSP GROUP AND THE TRANSACTION. The definitive proxy statement
and other relevant materials for DSP Group stockholders in
connection with the transaction, and any other documents filed by
DSP Group with the SEC, may be obtained free of charge at the SEC's
website (http://www.sec.gov) or at DSP Group's website
(http://www.dspg.com) or by writing to DSP Group at 2055 Gateway
Place, San Jose, California 95110, attention Investor
Relations.
Participants in the Solicitation
DSP Group and certain of its directors and executive officers
and other members of management and employees may be deemed to be
participants in the solicitation of proxies from DSP Group’s
stockholders with respect to the transaction. Information about DSP
Group’s directors and executive officers and their ownership of DSP
Group's common stock, as well as their direct and indirect
interests in the transaction, are set forth in DSP Group’s
definitive proxy materials filed with the SEC on October 25, 2021,
and subsequent changes made by such persons on Statements of
Changes in Ownership on Form 4 filed with the SEC.
Legal Notice Regarding Forward-Looking
Statements
This release contains forward-looking statements that are
subject to the safe harbors created under the Securities Act of
1933, as amended, and the Securities Exchange Act of 1934, as
amended. Forward-looking statements give our current expectations
and projections relating to our financial condition, results of
operations, plans, objectives, future performance and business,
including the expected timetable for completing the transaction,
and can be identified by the fact that they do not relate strictly
to historical or current facts. Such forward-looking statements may
include words such as "expect," "anticipate," "intend," "believe,"
"estimate," "plan," “target,” “strategy,” “continue,” “may,”
“will,” “should,” variations of such words, or other words and
terms of similar meaning. All forward-looking statements reflect
our best judgment and are based on several factors relating to our
operations and business environment, all of which are difficult to
predict and many of which are beyond our control. Such factors
include, but are not limited to, the possibility that various
conditions to the consummation of the proposed transaction between
Synaptics and DSP Group will not be satisfied or waived, and the
adverse impact associated with the announcement or pendency of the
proposed transaction on the business relationships, operating
results and employees of DSP Group, and other risks as identified
from time to time in the SEC reports of DSP Group. Forward-looking
statements are based on information available to DSP Group on the
date hereof, and DSP Group expressly disclaims any obligation to
publicly release any updates or any changes in expectations, or any
change in events, conditions, or circumstances on which any
forward-looking statement is based. Actual results and the timing
of certain events could differ materially from the forward-looking
statements.
Contact:Claus StetterVice
President of Marketing & Communications DSP Group Inc.+1 +(650)
521 4082claus.stetter@dspg.com
|
DSP GROUP, INC. CONSOLIDATED STATEMENTS OF
INCOME (In thousands, except per share amounts) |
|
|
|
|
|
|
Three Months Ended September 30 |
|
Nine Months Ended September 30 |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
37,756 |
|
|
$ |
26,020 |
|
|
$ |
106,210 |
|
|
$ |
82,595 |
|
Cost of revenues |
|
|
16,868 |
|
|
|
12,814 |
|
|
|
49,210 |
|
|
|
40,747 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
20,888 |
|
|
|
13,206 |
|
|
|
57,000 |
|
|
|
41,848 |
|
Operating expenses: |
|
|
|
|
|
Research and development, net |
|
|
10,933 |
|
|
|
8,122 |
|
|
|
32,043 |
|
|
|
26,931 |
|
Sales and marketing |
|
|
5,292 |
|
|
|
4,117 |
|
|
|
15,820 |
|
|
|
13,563 |
|
General and administrative |
|
|
4,012 |
|
|
|
2,864 |
|
|
|
9,826 |
|
|
|
7,839 |
|
Amortization of intangible assets |
|
|
349 |
|
|
|
427 |
|
|
|
1,197 |
|
|
|
636 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
20,586 |
|
|
|
15,530 |
|
|
|
58,886 |
|
|
|
48,969 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
302 |
|
|
|
(2,324 |
) |
|
|
(1,886 |
) |
|
|
(7,121 |
) |
|
|
|
|
|
|
Financial income, net |
|
|
216 |
|
|
|
343 |
|
|
|
951 |
|
|
|
1,535 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before taxes on
income |
|
|
518 |
|
|
|
(1,981 |
) |
|
|
(935 |
) |
|
|
(5,586 |
) |
Income tax expenses
(benefit) |
|
|
548 |
|
|
|
(90 |
) |
|
|
837 |
|
|
|
(152 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(30 |
) |
|
$ |
(1,891 |
) |
|
$ |
(1,772 |
) |
|
$ |
(5,434 |
) |
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.00 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.23 |
) |
Weighted average number of shares
used in per share computations of loss per share: |
|
|
|
|
|
Basic and diluted |
|
|
24,141 |
|
|
|
23,562 |
24,134 |
|
|
|
23,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Reconciliation of GAAP to Non-GAAP Financial
Measures (In thousands, except per share amounts) |
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
Unaudited |
|
Unaudited |
|
Unaudited |
|
Unaudited |
GAAP net income
(loss) |
|
$ |
(30 |
) |
|
$ |
(1,891 |
) |
|
$ |
(1,772 |
) |
|
$ |
(5,434 |
) |
Equity-based compensation expense
included in cost of revenues |
|
|
157 |
|
|
|
142 |
|
|
|
503 |
|
|
|
391 |
|
Equity-based compensation expense
included in research and development, net |
|
|
1,161 |
|
|
|
946 |
|
|
|
3,608 |
|
|
|
2,523 |
|
Equity-based compensation expense
included in sales and marketing |
|
|
646 |
|
|
|
646 |
|
|
|
2,017 |
|
|
|
1,821 |
|
Equity-based compensation expense
included in general and administrative |
|
|
713 |
|
|
|
699 |
|
|
|
2,084 |
|
|
|
1,811 |
|
Amortization of employee’s
retention expenses related to the acquisition of SoundChip included
in cost of revenues |
|
|
- |
|
|
|
67 |
|
|
|
134 |
|
|
|
67 |
|
Amortization of employee’s
retention expenses related to the acquisition of SoundChip included
in sales and marketing |
|
|
- |
|
|
|
149 |
|
|
|
298 |
|
|
|
149 |
|
Amortization of employee’s
retention expenses related to the acquisition of SoundChip included
in research and development, net |
|
|
34 |
|
|
|
34 |
|
|
|
102 |
|
|
|
34 |
|
Transaction expenses related to
the acquisition of SoundChip |
|
|
- |
|
|
|
249 |
|
|
|
- |
|
|
|
249 |
|
Transaction expenses related to
the anticipated acquisition by Synaptics |
|
|
1,096 |
|
|
|
- |
|
|
|
1,096 |
|
|
|
- |
|
Amortization of intangible
assets |
|
|
349 |
|
|
|
427 |
|
|
|
1,197 |
|
|
|
636 |
|
Non-cash expenses (income) from
exchange rates differences resulting from lease accounting standard
(ASC 842) |
|
|
44 |
|
|
|
90 |
|
|
|
(227 |
) |
|
|
(71 |
) |
Income from changes of deferred
taxes related to intangible assets and equity-based compensation
expense |
|
|
(34 |
) |
|
|
(232 |
) |
|
|
(432 |
) |
|
|
(249 |
) |
Non-GAAP net
income |
|
$ |
4,136 |
|
|
$ |
1,326 |
|
|
$ |
8,608 |
|
|
$ |
1,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common stock used in computation of GAAP
diluted net loss per share (in thousands) |
|
|
24,141 |
|
|
|
23,562 |
|
|
|
24,134 |
|
|
|
23,399 |
|
|
|
|
|
|
|
Weighted-average number of shares related to outstanding options,
stock appreciation rights and restricted share units (in
thousands) |
|
|
1,494 |
|
|
|
1,565 |
|
|
|
1,505 |
|
|
|
1,616 |
|
|
|
|
|
|
|
Weighted-average number of common stock used in computation of
non-GAAP diluted net earnings per share (in thousands) |
|
|
25,635 |
|
|
|
25,127 |
|
|
|
25,639 |
|
|
|
25,015 |
|
|
|
|
|
|
|
GAAP diluted net loss per
share |
|
$ |
(0.00 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.23 |
) |
Equity-based compensation expense |
|
|
0.11 |
|
|
|
0.09 |
|
|
|
0.32 |
|
|
|
0.27 |
|
Amortization of intangible assets |
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.05 |
|
|
|
0.03 |
|
Transaction expenses related to the acquisition of SoundChip |
|
|
- |
|
|
|
0.01 |
|
|
|
- |
|
|
|
0.01 |
|
Amortization of employee’s retention expenses related to the
acquisition of SoundChip |
|
|
- |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.01 |
|
Non-cash expenses from Exchange rates differences resulting from
lease accounting standard (ASC 842) |
|
|
- |
|
|
|
0.01 |
|
|
|
(0.01 |
) |
|
|
- |
|
Transaction expenses related to the anticipated acquisition by
Synaptics |
|
|
0.04 |
|
|
|
- |
|
|
|
0.04 |
|
|
|
- |
|
Income from changes of deferred taxes related to intangible assets
and equity-based compensation expense |
|
|
- |
|
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
Non-GAAP diluted net earnings per share |
|
$ |
0.16 |
|
|
$ |
0.05 |
|
|
$ |
0.34 |
|
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DSP GROUP, INC.CONSOLIDATED BALANCE
SHEETS (In thousands) |
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
2021 |
|
2020 |
|
|
(Unaudited) |
|
(Audited) |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
|
$ |
20,422 |
|
|
$ |
16,936 |
|
Restricted deposits |
|
|
579 |
|
|
|
548 |
|
Marketable securities and short-term deposits |
|
|
52,945 |
|
|
|
50,615 |
|
Trade receivables, net |
|
|
18,019 |
|
|
|
11,003 |
|
Inventories |
|
|
7,009 |
|
|
|
9,061 |
|
Other accounts receivable and prepaid expenses |
|
|
3,359 |
|
|
|
3,460 |
|
Total current assets |
|
|
102,333 |
|
|
|
91,623 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
6,252 |
|
|
|
6,574 |
|
|
|
|
|
|
|
|
|
|
Long term marketable securities and deposits |
|
|
59,434 |
|
|
|
60,454 |
|
Severance pay fund |
|
|
15,655 |
|
|
|
16,285 |
|
Operating leases– right of use assets |
|
|
10,315 |
|
|
|
11,102 |
|
Deferred income taxes |
|
|
6,012 |
|
|
|
6,893 |
|
Intangible assets, net |
|
|
19,303 |
|
|
|
20,654 |
|
Long term prepaid expenses and lease deposits |
|
|
2,498 |
|
|
|
2,888 |
|
Total long-term
assets |
|
|
113,217 |
|
|
|
118,276 |
|
Total
assets |
|
$ |
221,802 |
|
|
|
216,473 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
Current liabilities: |
|
|
|
Trade payables |
|
$ |
11,259 |
|
|
$ |
10,708 |
|
Operating lease liability |
|
|
3,020 |
|
|
|
2,974 |
|
Other current liabilities |
|
|
19,063 |
|
|
|
15,724 |
|
Total current liabilities |
|
|
33,342 |
|
|
|
29,406 |
|
|
|
|
|
Accrued severance pay |
|
|
16,164 |
|
|
|
16,647 |
|
Operating lease liability |
|
|
9,003 |
|
|
|
10,075 |
|
Accrued pensions |
|
|
1,016 |
|
|
|
1,089 |
|
Deferred income taxes |
|
|
898 |
|
|
|
1,073 |
|
Other long-term liabilities |
|
|
1,945 |
|
|
|
1,945 |
|
Total long term
liabilities |
|
|
29,026 |
|
|
|
30,829 |
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
|
|
|
Common stock |
|
|
24 |
|
|
|
24 |
|
Additional paid-in capital |
|
|
404,806 |
|
|
|
396,335 |
|
Accumulated other comprehensive
loss |
|
|
(1,071 |
) |
|
|
(637 |
) |
Less – Cost of treasury
stock |
|
|
(105,727 |
) |
|
|
(108,509 |
) |
Accumulated deficit |
|
|
(138,598 |
) |
|
|
(130,975 |
) |
Total stockholders’ equity |
|
|
159,434 |
|
|
|
156,238 |
|
Total liabilities and
stockholders’ equity |
|
$ |
221,802 |
|
|
$ |
216,473 |
|
DSP (NASDAQ:DSPG)
Historical Stock Chart
From Jun 2024 to Jul 2024
DSP (NASDAQ:DSPG)
Historical Stock Chart
From Jul 2023 to Jul 2024