DVOX’s Software Continued To Outpace Speech Devices

Analysts at Wells Fargo Securities maintain their "outperform" rating on DynaVox Inc

, while reducing their estimates for the company. Wells Fargo Securities says, “DVOX's FQ4 2010 results were below consensus. DVOX reported FQ4 revenue of $33.1MM (up 8.7% or 17.2% after adjusting for an extra week in FQ4 2009) vs. consensus of $34.1MM. EPS was $0.16 vs. consensus of $0.17. Management guided to 2010 revenue growth of 14-17% (vs. consensus of 15.6%) and EPS of $0.56-0.62 (vs. consensus of $0.59).” “DVOX's speech generating device product sales grew by 5.5% (or 13.6% after adjusting for selling days) to $26.9MM. DVOX's special education software sales grew by 25.3% (or 35.0% after adjusting for selling days). DVOX has launched several new products which should drive growth in FY 2011 and has more launches coming in FY 2011. In the device business, DVOX has launched its Express 2.0 software and in the software business it has launched BoardMaker Studio. We think that BoardMaker Studio could be a significant driver for the software business since it enables DVOX to begin to sell content that can be used with its software,” the analysts mention. Wells Fargo adds, “Management indicated that macroeconomic issues and austerity measures are hurting its European business and that its sales there declined modestly in FQ4. DVOX's international business is around 14% of its sales with most of this is in Europe.” Wells Fargo has lowered its EPS estimates for FY11 and FY12 from $0.62 to $0.60 and from $0.83 to $0.76, respectively.