DSP Group, Inc. EBITDA dropped on 558% and EBITDA Margin decreased on 2.6 pp from 0.45% to -2.1%
02/04/2021 • About DSP Group, Inc. (
$DSPG) • By InTwits
DSP Group, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- DSP Group, Inc. is a company in decline: 2020 revenue growth was -2.7%, 5 years revenue CAGR was -4.5%
- The company operates at negative EBITDA Margin: -2.1%
- EBITDA Margin is quite volatile: -2.1% in 2020, 0.4% in 2019, -2.0% in 2018, -1.0% in 2017, 5.3% in 2016
- DSP Group, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's a lot of higher than industry average of 3.7%.
- CAPEX is quite volatile: $1m in 2020, $6m in 2019, $1m in 2018, $1m in 2017, $2m in 2016
- The company has unprofitable business model: ROIC is -4.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
DSP Group, Inc.'s Revenue decreased on 2.7%. Annual revenue decline showed slowdown in 20Q4 - revenue increased on 9.0%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.9 pp from -0.50% to 8.4% in 2020.
Gross Margin showed almost no change in 2020. Gross Margin grew at 1.8 pp per annum in the last 5 years. SG&A as a % of Revenue increased on 2.2 pp from 23.8% to 26.0% in 2020. SG&A as a % of Revenue stuck to a growing trend at 2.3 pp per annum in 2016-2020.
Net Income margin decreased on 4.9 pp from -1.0% to -5.9% in 2020.
Investments (CAPEX, working capital and M&A)
DSP Group, Inc.'s CAPEX/Revenue was 0.85% in 2020. CAPEX/Revenue showed almost no change from 2017 to 2020. Average CAPEX/Revenue for the last three years was 2.2%.
Return on investment
The company operates at negative ROIC (-4.5%) and ROE (-4.4%). ROIC decreased on 2.0 pp from -2.5% to -4.5% in 2020. ROE decreased on 3.6 pp from -0.81% to -4.4% in 2020.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.1x and Debt / EBITDA is . Debt increased slightly on 2.0% while cash dropped on 41.1%.
DSP Group, Inc. has no short term refinancing risk: cash is higher than short term debt (531.7%).
Management team
Ofer Elyakim is a the company's CEO. Ofer Elyakim has spent 3 years with the company. Dror Levy is a DSP Group, Inc.'s CFO. Dror Levy has spent 14 years at the company.
Financial and operational results
FY ended 12/31/2020
DSP Group, Inc. ($DSPG) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 137.9 | 124.8 | 117.4 | 117.6 | 114.5 | -2.7% |
| Gross Profit | 60.8 | 57.7 | 57.4 | 59.5 | 58.2 | -2.3% |
| SG&A | 22.9 | 24.1 | 25.3 | 28.0 | 29.7 | 6.2% |
| EBITDA | 7.3 | -1.3 | -2.3 | 0.5 | -2.4 | -557.7% |
| Net Income | 4.8 | -3.0 | -2.0 | -1.2 | -6.8 | |
Balance Sheet
|
|---|
| Cash | 17.8 | 21.3 | 12.1 | 28.7 | 16.9 | -41.1% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 2.6 | 3.2 | 24.0% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 10.4 | 10.1 | -3.5% |
Cash flow
|
|---|
| Capex | 2.1 | 0.8 | 1.2 | 5.6 | 1.0 | -82.7% |
Ratios
|
|---|
| Revenue growth | -4.4% | -9.5% | -5.9% | 0.1% | -2.7% | |
| EBITDA growth | 118.9% | -117.5% | 82.9% | -122.5% | -557.7% | |
|
|---|
| Gross Margin | 44.1% | 46.2% | 48.9% | 50.6% | 50.8% | 0.2% |
| EBITDA Margin | 5.3% | -1.0% | -2.0% | 0.4% | -2.1% | -2.6% |
| SG&A, % of revenue | 16.6% | 19.3% | 21.5% | 23.8% | 26.0% | 2.2% |
| Net Income Margin | 3.5% | -2.4% | -1.7% | -1.0% | -5.9% | -4.9% |
| CAPEX, % of revenue | 1.5% | 0.7% | 1.0% | 4.8% | 0.8% | -3.9% |
|
|---|
| ROIC | 2.9% | -3.2% | -3.9% | -2.5% | -4.5% | -2.0% |
| ROE | 3.3% | -2.1% | -1.4% | -0.8% | -4.4% | -3.6% |
| Net Debt/EBITDA | -2.4x | | | -29.9x | |
DSP Group, Inc. ($DSPG) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 28 | 28 | 26 | 32 | | -0.1% | -2.4% | -16.2% | 9.0% |
| EBITDA | -2 | -0 | -1 | 1 | | - | - | -169.2% | 3,627.8% |
| Net Income | -2 | -1 | -2 | -1 | | - | - | -490.7% | - |
Balance Sheet
|
|---|
| Cash | 35 | 38 | 17 | 17 | | 209.8% | 189.4% | -9.4% | -41.1% |
| Short Term Debt | 2 | 2 | 3 | 3 | | 26.7% | 15.1% | 12.8% | 24.0% |
| Long Term Debt | 10 | 10 | 10 | 10 | | -6.4% | -5.7% | -3.3% | -3.5% |
Ratios
|
|---|
| Gross Margin | 50.9% | 50.3% | 50.8% | 51.3% | | -0.2% | 0.7% | -0.1% | 0.4% |
| EBITDA Margin | -7.9% | -0.6% | -2.7% | 2.1% | | -6.4% | -0.3% | -5.9% | 2.0% |
| Net Income Margin | -8.7% | -3.8% | -7.3% | -4.3% | | -5.0% | -2.0% | -8.8% | -4.0% |
Peers in Semiconductors
Below you can find DSP Group, Inc. benchmarking vs. other companies in Semiconductors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
| Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
| MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
| Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
| Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| |
|---|
| Median (43 companies) | 1.2% | 11.0% | 4.9% | -3.2% | 2.8% |
|---|
| DSP Group, Inc. ($DSPG) | - | -9.5% | -5.9% | 0.1% | -2.7% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
| Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
| Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
| Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
| MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
| |
|---|
| Median (43 companies) | 48.0% | 49.1% | 50.4% | 50.5% | 49.2% |
|---|
| DSP Group, Inc. ($DSPG) | 44.1% | 46.2% | 48.9% | 50.6% | 50.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
| Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
| Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
| Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| |
|---|
| Median (41 companies) | 9.2% | 10.7% | 9.8% | 13.6% | 17.4% |
|---|
| DSP Group, Inc. ($DSPG) | 5.3% | -1.0% | -2.0% | 0.4% | -2.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
| Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| |
|---|
| Median (40 companies) | 3.7% | 4.7% | 4.4% | 3.7% | 4.0% |
|---|
| DSP Group, Inc. ($DSPG) | 1.5% | 0.7% | 1.0% | 4.8% | 0.8% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
| Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
| Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
| QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
| NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
| |
|---|
| Median (45 companies) | 1.4% | 3.2% | 3.0% | 3.8% | 5.5% |
|---|
| DSP Group, Inc. ($DSPG) | 2.9% | -3.2% | -3.9% | -2.5% | -4.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
| Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
| Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
| Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| |
|---|
| Median (32 companies) | 0.4x | 0.4x | 0.3x | 0.5x | 0.3x |
|---|
