CEVA, Inc. Announces Second Quarter 2011 Financial Results

MOUNTAIN VIEW, Calif., July 26, 2011 /PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA); (LSE: CVA), the leading licensor of silicon intellectual property (SIP) platform solutions and DSP cores for the mobile handset, portable and consumer electronics markets, today announced its financial results for the second quarter ended June 30, 2011.

(Logo:  http://photos.prnewswire.com/prnh/20051010/CEVALOGO)

Total revenue for the second quarter of 2011 was $14.4 million, an increase of 36% compared to $10.6 million reported for the second quarter of 2010. Second quarter 2011 licensing revenue was $5.2 million, representing an increase of 13% when compared to $4.6 million reported for the same quarter a year ago. Royalty revenue for the second quarter 2011 was $8.3 million, an increase of 60% compared to $5.2 million reported for the second quarter of 2010. Revenue from services for both the second quarters of 2011 and 2010 was $0.9 million.

Gideon Wertheizer, Chief Executive Officer of CEVA, stated, "The second quarter demonstrated strong financial and business achievements. We are particularly pleased with the dynamics of our licensing business, where we concluded strategic CEVA-XC agreements with partners in the LTE handset and smart grid markets. We also experienced higher sequential shipment volumes of CEVA-powered products, resulting from continued expansion in the lucrative 3G smartphone and TD-SCDMA market segments. Overall, we continue to make exceptional progress in both the licensing and market deployment of our technology, reaffirming the key trends that drive growth and profitability for our company."

Of the eight new license agreements concluded during the second quarter of 2011, seven agreements were for CEVA DSP cores, platforms and software, and one agreement was for CEVA SATA/SAS product lines. Target applications for customer deployment are 4G and 3G baseband processors for handsets, infrastructure, smart grid, portable game consoles and SSD drives. Geographically, four of the agreements signed were in the U.S. and four were in Asia.

U.S. GAAP net income for the second quarter of 2011 was $4.1 million, an increase of 94% over $2.1 million reported for the same period in 2010. U.S. GAAP diluted earnings per share for the second quarter of 2011 were $0.17, an increase of 70% compared to $0.10 for the second quarter of 2010.

Non-GAAP net income and diluted earnings per share for the second quarter of 2011 were $5.4 million and $0.22 respectively, representing an increase of 102% and 83%, respectively, over the $2.7 million and $0.12 reported for the second quarter of 2010. Non-GAAP net income and diluted earnings per share for the second quarter of 2011 and 2010 excluded an aggregate equity-based compensation expense, net of taxes, of $1.2 million and $0.5 million, respectively.

Yaniv Arieli, Chief Financial Officer of CEVA, stated, "We continued to demonstrate considerable progress during the second quarter, delivering significant year-over-year growth in every aspect of our business. Total revenue increase was driven by exceptional year-over-year royalty revenue growth and progress in our licensing business. As a result, our operating income and net income approximately doubled compared to the second quarter of 2010.  Finally, we continued to strengthen our balance sheet with the addition of approximately $9 million in positive cash flow. At the end of the quarter, our cash balance, marketable securities and bank deposits totaled approximately $153 million."

CEVA Conference Call

On July 26, 2011, CEVA management will conduct a conference call at 8:30 a.m. Eastern Time / 1:30 p.m. London time, to discuss the operating performance for the second quarter ended June 30, 2011.

The conference call will be available via the following dial in numbers:

  • US Participants: Dial 1-877-493-9121 (Access Code: CEVA or 81159859)
  • UK/Rest of World: Dial +44-800-051-3806 (Access Code: CEVA or 81159859)

Please go to the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software. For those who cannot access the live broadcast, a replay will be available by dialing 1-800-642-1687       (passcode: 81159859) for US domestic callers and +44-800-917-2646 (passcode: 81159859) for international callers from two hours after the end of the call until 11:59 p.m. (Eastern Time) on August 02, 2011. The replay will also be available at CEVA's web site ceva-dsp.com.

About CEVA, Inc.

CEVA is the world's leading licensor of silicon intellectual property (SIP) DSP cores and platform solutions for the mobile handset, portable and consumer electronics markets. CEVA's IP portfolio includes comprehensive technologies for cellular baseband (2G / 3G / 4G), multimedia, HD video and audio, voice over packet (VoP), Bluetooth, Serial Attached SCSI (SAS) and Serial ATA (SATA). In 2010, CEVA's IP was shipped in over 600 million devices, powering handsets from 7 out of the top 8 handset OEMs, including Nokia, Samsung, LG, Motorola, Sony Ericsson and ZTE. Today, more than one in every three handsets shipped worldwide is powered by a CEVA DSP core. For more information, visit ceva-dsp.com. Follow CEVA on twitter at www.twitter.com/cevadsp.

CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – U.S. GAAP

U.S. dollars in thousands, except per share data

 

Quarter ended

Six months ended

June 30,

June 30,

2011

2010

2011

2010

Unaudited

Unaudited

Unaudited

Unaudited

Revenues:

Licensing

$  5,195

$  4,593

$  10,303

$  9,315

Royalties

8,272

5,154

17,478

10,134

Other revenues

921

862

1,659

1,761

Total revenues

14,388

10,609

29,440

21,210

Cost of revenues

876

863

1,824

1,577

Gross profit

13,512

9,746

27,616

19,633

Operating expenses:

Research and development, net

5,405

4,505

10,655

9,114

Sales and marketing

2,327

1,776

4,551

3,584

General and administrative

1,742

1,570

3,496

3,116

Total operating expenses

9,474

7,851

18,702

15,814

Operating income

4,038

1,895

8,914

3,819

Interest and other income, net

717

541

1,262

1,098

Income before taxes on income

4,755

2,436

10,176

4,917

Taxes on income

632

313

11,402

735

Net income

4,123

2,123

8,774

4,182

Basic net income per share

$0.18

$0.10

$0.38

$0.20

Diluted net income per share

$0.17

$0.10

$0.37

$0.19

Weighted-average number of Common Stock used in computation of net income

per share (in thousands):

Basic

23,107

21,061

22,900

20,859

Diluted

24,165

22,069

24,028

21,991

Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(U.S. Dollars in thousands, except per share amounts)

 

Quarter ended

Six months ended

June 30,

June 30,

2011

2010

2011

2010

Unaudited

Unaudited

Unaudited

Unaudited

GAAP net income

4,123

2,123

8,774

4,182

Equity-based compensation expense included in cost of revenue

61

15

110

33

Equity-based compensation expense included in research and development expenses

484

139

862

306

Equity-based compensation expense included in sales and marketing expenses

255

96

456

208

Equity-based compensation expense included in general and administrative expenses

371

290

697

577

Deferred tax related to equity-based compensation expenses

85

-

1

-

Non-GAAP net income

5,379

2,663

10,900

5,306

GAAP weighted-average number of Common Stock used in computation of diluted net income per share (in thousands)

24,165

22,069

24,028

21,991

Weighted-average number of shares related to outstanding options

15

57

23

75

Weighted-average number of Common Stock used in computation of diluted net income per share excluding equity-based compensation expense (in thousands)

24,180

22,126

24,051

22,066

GAAP diluted net income per share

$0.17

$0.10

$0.37

$0.19

Equity-based compensation expense

$0.05

$0.02

$0.08

$0.05

Non-GAAP diluted net income per share

$0.22

$0.12

$0.45

$0.24

CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. Dollars in Thousands

 

June 30,

December 31,

2011

2010

Unaudited

Audited

ASSETS

Current assets:

Cash and cash equivalents

$  14,379

$  17,098

Marketable securities and short term bank deposits

123,112

98,681

Trade receivables, net

3,622

5,906

Deferred tax assets

2,355

1,288

Prepaid expenses and other accounts  receivables

5,186

4,609

Total current assets

148,654

127,582

Long-term investments:

Long term bank deposits

15,277

15,173

Severance pay fund

5,858

5,433

Deferred tax assets

839

574

Property and equipment, net

1,308

1,348

Goodwill

36,498

36,498

Total assets

$  208,434

$  186,608

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Trade payables

$  850

$  616

Deferred revenues

3,646

616

Accrued expenses and other payables

9,535

10,521

Deferred tax liabilities

597

901

Total current liabilities

14,628

12,654

Accrued severance pay

5,902

5,486

Total liabilities

20,530

18,140

Stockholders' equity:

Common Stock

23

23

Additional paid in-capital

187,378

176,838

Accumulated other comprehensive income

439

317

Accumulated income (deficit)

64

(8,710)

Total stockholders' equity

187,904

168,468

Total liabilities and stockholders' equity

$  208,434

$  186,608

SOURCE CEVA, Inc.