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Share Name | Share Symbol | Market | Type |
---|---|---|---|
DSP Group Inc | NASDAQ:DSPG | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 21.98 | 21.99 | 22.00 | 0 | 01:00:00 |
Growth Initiatives Account for 58% of Revenues; VoIP Revenues Reach a Record $12.1 Million;GAAP and Non GAAP Gross Margins of 50.0% and 50.3%, Respectively, Exceeding Guidance
Third Quarter Financial Highlights:
Management Comments:
Commenting on the results, Ofer Elyakim, CEO of DSP Group, stated, “We are pleased with our third quarter results that were better than our guidance, and especially with our growth initiatives comprising 58% of revenues and increasing 18% year-over-year, thereby driving GAAP and non-GAAP gross margin expansion to 50.0% and 50.3%, respectively. We are also confident that we are well positioned for 2019 as a result of solid momentum and recent design wins in our growth initiatives. For instance, in our SmartVoice segment, we recently secured wins with six of the world’s leading brands in consumer electronics, including a tier 1 Chinese smartphone OEM.”
Mr. Elyakim added, “While these and other design wins set us up well for 2019, we do expect a decline in the fourth quarter, which will negatively impact our full year 2018 results, mainly due to weaker quarterly demand for cordless that we attribute primarily to a supply chain correction, as well as timing of orders for SmartHome and Office/VoIP products. We believe the anticipated decline in the fourth quarter is temporary as our existing design wins, pipeline and customer demand continue to strengthen across our growth initiatives and position us well for future growth. Additionally, we expect these initiatives to be important revenue contributors next year and to account for over two thirds of our total sales.”
Mr. Elyakim added further, “As separately announced today, we are delighted to welcome Eric Stauffer as DSP Group’s new Chief Revenue Officer in charge of global sales, and based in Silicon Valley. Eric joins DSP Group at an exciting time and we look forward to his contributions to the leadership and growth of our company.”
Third Quarter Financial Highlights:
Third Quarter GAAP Results:
Revenues for the third quarter of 2018 were $32.6 million, a decrease of 5% from revenues of $34.3 million for the third quarter of 2017. Net income and diluted earnings per share for the third quarter of 2018 were $0.4 million and $0.02, respectively. Net income and diluted earnings per share for the third quarter of 2017 were $0.6 million and $0.02, respectively.
Third Quarter Non-GAAP Results:Non-GAAP net income and diluted earnings per share for the third quarter of 2018 were $2.6 million and $0.11, respectively, as compared to non-GAAP net income and diluted earnings per share of $2.3 million and $0.10, respectively, for the third quarter of 2017. Non-GAAP net income and diluted earnings per share for the third quarter of 2018 excluded the impact of amortization of acquired intangible assets in the amount of $425,000 associated with previous acquisitions and equity-based compensation expenses of $1.8 million. Non-GAAP net income and diluted earnings per share for the third quarter of 2017 excluded the impact of amortization of acquired intangible assets of $425,000 associated with previous acquisitions, equity-based compensation expenses of $1.4 million, and changes in deferred taxes in the amount of $157,000 related to intangible assets acquired in previous acquisitions and equity-based compensation expenses.
Earnings Conference Call Details DSP Group will discuss its first quarter financial results, along with its outlook and guidance for the fourth quarter of 2018, 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 +1 800 458 4121 (domestic US) or +1 929 477 0324 (international) approximately 10 minutes prior to the starting time. The password is 8368261. 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/m6/p/sg9ez874
A replay of the conference call will be available for a week following the call. To listen to the session, please dial +1 719 457 0820 (domestic US) or +44 20 7660 0134 (international) and enter the company access code: 8368261#.
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 quarter ended September 30, 2018 to the same period in 2017 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 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 that (i) the company is well positioned for 2019 due to solid momentum and recent design win in its growth initiatives, (ii) there will be a decline in the fourth quarter, which will negatively impact the company’s full year 2018 results and the company’s rationale for such decline, including the temporary nature of some of the factors, (iii) confidence that the company’s design wins, pipeline and customer demand in the growth initiatives will continue to strengthen and position the company well for future growth, and (iv) the expectation that the growth initiatives to be important revenue contributors and will account for over 2/3 of the total revenues in 2019. The results from these statements may not actually arise as a result of various factors, including the market penetration of new products such as products with Voice User Interface; unexpected delays in the commercial launch of new products; 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 2017, 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 leading global provider of wireless chipset solutions for converged communications. Delivering semiconductor system solutions with software and hardware reference designs, DSP Group enables OEMs/ODMs, consumer electronics (CE) manufacturers and service providers to cost-effectively develop new revenue-generating products with fast time to market. At the forefront of semiconductor innovation and operational excellence for over two decades, DSP Group provides a broad portfolio of wireless chipsets integrating DECT/CAT-iq, ULE, Wi-Fi, PSTN, HDClear™, video and VoIP technologies. DSP Group enables converged voice, audio, video and data connectivity across diverse mobile, consumer and enterprise products – from mobile devices, connected multimedia screens, and home automation & security to cordless phones, VoIP systems, and home gateways. Leveraging industry-leading experience and expertise, DSP Group partners with CE manufacturers and service providers to shape the future of converged communications at home, office and on the go. For more information, visit www.dspg.com.
Contact:Daniel Amir Corporate Vice President, Business Development, Strategy and Investor RelationsWork: 1-415-726-5900, Daniel.amir@dspg.com
DSP GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts)
Three Months EndedSeptember 30 | Nine Months EndedSeptember 30 | |||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
Revenues | $ | 32,619 | $ | 34,277 | $ | 91,381 | $ | 93,511 | ||||||
Cost of revenues | 16,315 | 18,270 | 46,311 | 50,760 | ||||||||||
Gross profit | 16,304 | 16,007 | 45,070 | 42,751 | ||||||||||
Operating expenses: | ||||||||||||||
Research and development, net | 9,614 | 9,214 | 27,503 | 27,565 | ||||||||||
Sales and marketing | 3,640 | 3,635 | 11,468 | 10,640 | ||||||||||
General and administrative | 2,362 | 2,483 | 7,612 | 7,342 | ||||||||||
Amortization of intangible assets | 425 | 425 | 1,276 | 1,275 | ||||||||||
Total operating expenses | 16,041 | 15,757 | 47,859 | 46,822 | ||||||||||
Operating income (loss) | 263 | 250 | (2,789 | ) | (4,071 | ) | ||||||||
Financial income, net | 492 | 382 | 1,291 | 1,216 | ||||||||||
Income (loss) before taxes on income | 755 | 632 | (1,498 | ) | (2,855 | ) | ||||||||
Income tax expenses | 350 | 54 | 139 | 19 | ||||||||||
Net Income (loss) | $ | 405 | $ | 578 | $ | (1,637 | ) | $ | (2,874 | ) | ||||
Net earnings (loss) per share: | ||||||||||||||
Basic | $ | 0.02 | $ | 0.03 | $ | (0.07 | ) | $ | (0.13 | ) | ||||
Diluted | $ | 0.02 | $ | 0.02 | $ | (0.07 | ) | $ | (0.13 | ) | ||||
Weighted average number of shares used in per share computations of earnings (loss) per share: | ||||||||||||||
Basic | 22,449 | 22,276 | 22,603 | 22,186 | ||||||||||
Diluted | 23,338 | 23,243 | 22,603 | 22,186 |
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, | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
Unaudited | Unaudited | Unaudited | Unaudited | ||||||||||
GAAP net income (loss) | $ | 405 | $ | 578 | $ | (1,637 | ) | $ | (2,874 | ) | |||
Equity-based compensation expense included in cost of revenues | 114 | 84 | 320 | 275 | |||||||||
Equity-based compensation expense included in research and development, net | 781 | 576 | 2,134 | 1,815 | |||||||||
Equity-based compensation expense included in sales and marketing | 283 | 273 | 954 | 870 | |||||||||
Equity-based compensation expense included in general and administrative | 574 | 505 | 1,703 | 1,566 | |||||||||
Amortization of intangible assets | 425 | 425 | 1,276 | 1,275 | |||||||||
Changes of deferred taxes related to intangible assets and equity-based compensation expense | 39 | (157 | ) | (342 | ) | (319 | ) | ||||||
Non-GAAP net income | $ | 2,621 | $ | 2,284 | $ | 4,408 | $ | 2,608 | |||||
Weighted-average number of common stock used in computation of GAAP diluted net earnings (loss) per share (in thousands) | 23,338 | 23,243 | 22,603 | 22,186 | |||||||||
Weighted-average number of shares related to outstanding options, stock appreciation rights and restricted share units (in thousands) | 420 | 392 | 1,355 | 1,404 | |||||||||
Weighted-average number of common stock used in computation of non-GAAP diluted net earnings per share (in thousands) | 23,758 | 23,635 | 23,958 | 23,590 | |||||||||
GAAP diluted net income (loss) per share | $ | 0.02 | $ | 0.02 | $ | (0.07 | ) | $ | ( 0.13 | ) | |||
Equity-based compensation expense | 0.07 | 0.06 | 0.21 | 0.19 | |||||||||
Amortization of intangible assets | 0.02 | 0.02 | 0.05 | 0.06 | |||||||||
Changes of deferred taxes related to intangible assets and equity-based compensation expense | - | - | (0.01 | ) | (0.01 | ) | |||||||
Non-GAAP diluted net earnings per share | $ | 0.11 | $ | 0.10 | $ | 0.18 | $ | 0.11 |
DSP GROUP, INC.CONSOLIDATED BALANCE SHEETS (In thousands)
September 30, | December 31, | |||||||
2018 | 2017 | |||||||
(Unaudited) | (Audited) | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalentsRestricted deposits | $ | 11,359503 | $ | 21,324524 | ||||
Marketable securities and short term deposits | 34,410 | 24,697 | ||||||
Trade receivables, net | 21,448 | 13,416 | ||||||
Inventories | 8,247 | 9,422 | ||||||
Other accounts receivable and prepaid expenses | 2,843 | 3,167 | ||||||
Total current assets | 78,810 | 72,550 | ||||||
Property and equipment, net | 2,854 | 3,184 | ||||||
Long term marketable securities and deposits | 73,398 | 82,669 | ||||||
Severance pay fund | 14,755 | 15,190 | ||||||
Deferred income taxes | 855 | 1,043 | ||||||
Intangible assets, net | 7,746 | 9,022 | ||||||
Long term prepaid expenses and lease deposits | 1,642 | 1,541 | ||||||
98,396 | 109,465 | |||||||
Total assets | $ | 180,060 | $ | 185,199 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Trade payables | $ | 9,393 | $ | 8,660 | ||||
Other current liabilities | 12,342 | 12,819 | ||||||
Total current liabilities | 21,735 | 21,479 | ||||||
Accrued severance pay | 14,944 | 15,463 | ||||||
Accrued pensions | 868 | 883 | ||||||
Deferred income taxes | 146 | 424 | ||||||
Total long term liabilities | 15,958 | 16,770 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 22 | 22 | ||||||
Additional paid-in capital | 377,162 | 372,041 | ||||||
Accumulated other comprehensive loss | (2,658 | ) | (1,874 | ) | ||||
Less – Cost of treasury stock | (121,286 | ) | (118,397 | ) | ||||
Accumulated deficit | (110,873 | ) | (104,842 | ) | ||||
Total stockholders’ equity | 142,367 | 146,950 | ||||||
Total liabilities and stockholders’ equity | $ | 180,060 | $ | 185,199 |
1 Year DSP Chart |
1 Month DSP Chart |
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