DSP Group, Inc. Reports Third Quarter 2016 Results

Third Quarter Revenues Up 10% Year-over-Year

New Product Revenues Increase 70% Year-over-Year to a Record $16.6 Million

LOS ALTOS, Calif., Oct. 31, 2016 (GLOBE NEWSWIRE) -- 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, 2016.

Third Quarter Financial Highlights:
  • GAAP and non-GAAP diluted earnings per share of $0.23 and $0.19, respectively
  • Revenues of $38.8 million, up 10% year-over-year, above the mid-point of guidance
  • GAAP and non-GAAP gross margin of 44.8% and 45.0%, respectively, 340 bps improvement, compared to the third quarter of 2015 on both GAAP and non-GAAP basis
  • GAAP and non-GAAP operating income of $5.3 million and $4.6 million, respectively, reaching 13.7% and 11.9% of revenues, respectively, compared to GAAP and non-GAAP operating income of $0.1 million and $1.6 million, respectively, in the third quarter of 2015
  • GAAP and non-GAAP net income of $5.3 million and $4.5 million, respectively, compared to GAAP and non-GAAP net income of $0.2 million and $1.7 million, respectively, in the third quarter of 2015
  • Generated $1.2 million of cash flow from operations
  • Repurchased approximately 200,000 shares for a total consideration of $2.2 million
  • Cash, deposits and marketable securities of $120.6 million as of September 30, 2016

Management Comments:Commenting on the results, Ofer Elyakim, CEO of DSP Group, stated, "We are very pleased with our third quarter results, in particular our achievement of 10% revenue growth year over year and a solid 340 bps improvement in non-GAAP gross margins to 45% and a 720 bps expansion in non-GAAP operating margins to 11.9%. Moreover, we are similarly delighted that our new products are well received in the marketplace and strongly contributing to our revenue and profit, with Office/VoIP and HDClear posting record results, and new product revenues achieving a record high of $16.6 million, representing an increase of 70% year over year."

Mr. Elyakim added, "Looking forward, we expect to accomplish our 2016 new product goals of reaching $15 million in mobile revenues and growth of approximately 50% in new products, evidencing our successful expansion into new market verticals and diversifying our revenue base with growing revenue streams that enable the company to achieve sustainable growth and higher profitability.  While we project a year-over-year revenue growth to continue in the fourth quarter, we expect that our fourth quarter results will be negatively impacted by weakness in our mobile segment."

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