CEVA, Inc. Announces Third Quarter 2009 Financial Results

 

 

 

 

SAN JOSE, Calif., Oct. 28 /PRNewswire-FirstCall/ -- CEVA, Inc. (NASDAQ: CEVA); (LSE: CVA), a leading licensor of silicon intellectual property (SIP) platform solutions and DSP cores for the mobile handset, consumer electronics and portable device markets, today announced its financial results for the third quarter ended September 30, 2009.

 

(Logo: http://www.newscom.com/cgi-bin/prnh/20051010/CEVALOGO)

 

Total revenue for the third quarter of 2009 was $9.7 million, a decrease of 5% compared to $10.2 million reported in the third quarter of 2008. Third quarter 2009 licensing revenue was $5.2 million, a decrease of 12% when compared to $6.0 million reported in the third quarter of 2008. Royalty revenue for the third quarter of 2009 was $3.7 million, an increase of 12% compared to $3.3 million reported for the third quarter of 2008. Revenue from services for the third quarter of 2009 was $0.7 million, down 23% from $0.9 million reported for the third quarter of 2008.

 

U.S. GAAP net income for the third quarter of 2009 was $1.8 million, an increase of 25% over $1.4 million reported for the same period in 2008. U.S. GAAP diluted net income per share for the third quarter of 2009 was $0.09 per share, an increase of 29% compared to $0.07 for the third quarter of 2008. Non-GAAP net income and diluted net income per share for the third quarter of 2009, excluding the aggregate equity-based compensation expense of $0.7 million, were both all time record highs of $2.4 million and $0.12 per share, an increase of 34% and 33%, respectively, over the $1.8 million and $0.09 per share reported for the third quarter of 2008. Non-GAAP net income and diluted net income per share for the third quarter of 2008 excluded aggregate equity-based compensation expense of $0.8 million and a capital gain of $0.4 million related to the divestment of the Company's equity interest in GloNav Inc.

 

Gideon Wertheizer, Chief Executive Officer of CEVA, stated, "Our solid third quarter performance reflects a strong demand for our DSPs and technologies and a continued worldwide market share expansion in the handsets market which reached a record high of 23%. We are encouraged by the increasing demand for our newest technologies for the growing markets of LTE, MID, HD multimedia and Passive Optical Networks (PON)."

 

During the third quarter, the Company concluded six new license agreements. Five agreements were for CEVA DSP cores, platforms and software and one agreement was for Bluetooth technology. Target applications for customer deployment are 2G ultra-low cost phones, 3G handsets, Smartphones, mobileTVs, portable multimedia and Passive Optical Networks (PON). Geographically, three of the agreements signed were in Europe and three in Asia.

 

Yaniv Arieli, Chief Financial Officer of CEVA, stated, "Our third quarter results and the positive momentum in our business exceeded our expectations. As a result, our gross and operating margins as well as our non-GAAP net income and EPS reached record highs during the quarter. We also generated positive cash flow of approximately $4.0 million, bringing our cash balances and marketable securities to $91.8 million."

 

CEVA Conference Call

On October 28, 2009, CEVA management will conduct a conference call at 8:30 a.m. Eastern Time / 12:30 p.m. London time, to discuss the operating performance for the quarter.

 

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

 

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

 

For those who cannot access the live broadcast, a replay will be available by dialing 1-800-642-1687 (passcode: 33933901) for US domestic callers and +44-800-917-2646 (passcode: 33933901) for international callers from two hours after the end of the call until 11:59 p.m. (Eastern Time) on November 4, 2009. The replay will also be available at CEVA's web site ceva-dsp.com.

 

 

About CEVA, Inc.

Headquartered in San Jose, Calif., CEVA is a 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 solutions for multimedia, audio, voice over packet (VoP), Bluetooth and Serial ATA (SATA), and a wide range of programmable DSP cores and subsystems with different price/performance metrics serving multiple markets. In 2008, CEVA's IP was shipped in over 300 million devices. For more information, visit ceva-dsp.com.

 

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they materialize or prove incorrect, could cause the results of CEVA to differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including Mr. Wertheizer's statements about the company being encouraged by the increased interest in CEVA's newest DSP technologies for next generation wireless products, and Mr. Arieli's statements about the positive momentum in the Company's business. The risks, uncertainties and assumptions include: the ability of the CEVA DSP cores and other technologies to continue to be strong growth drivers for us; our success in penetrating new markets and maintaining our market position in existing markets; the effect of intense competition within our industry; the effect of the challenging period of growth experienced by industries in which we license our technologies; the possibility that the markets for our technologies may not develop as expected or that products incorporating our technologies do not achieve market acceptance; our ability to timely and successfully develop and introduce new technologies; our ability to continue to improve our royalty revenue in future periods; and general market conditions and other risks relating to our business, including, but not limited to, those that are described from time to time in our SEC filings. CEVA assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

 

 

                           CEVA, INC. AND ITS SUBSIDIARIES
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - U.S. GAAP
                   U.S. dollars in thousands, except per share data

                                      Quarter ended      Nine months ended
                                      September 30,         September 30,
                                     2009       2008      2009       2008
                                 Unaudited  Unaudited  Unaudited   Unaudited
                                 ---------  ---------  ---------   ---------
     Revenues:
      Licensing                      $5,242    $5,974   $14,059    $17,088
      Royalties                       3,694     3,296    11,403     10,067
      Other revenues                    723       936     2,820      3,201
                                        ---       ---     -----      -----

     Total revenues                   9,659    10,206    28,282     30,356
                                      -----    ------    ------     ------

     Cost of revenues                   849     1,105     3,211      3,543
                                        ---     -----     -----      -----

     Gross profit                     8,810     9,101    25,071     26,813
                                      -----     -----    ------     ------

     Operating expenses:
      Research and development, net   4,061     4,778    12,132     15,133
      Sales and marketing             1,628     1,822     4,914      5,401
      General and administrative      1,525     1,705     4,555      4,991
      Amortization of intangible
       assets                             -        12         -         53
      Reorganization expense              -         -         -      3,537
                                        ---       ---       ---      -----

     Total operating expenses         7,214     8,317    21,601     29,115
                                      -----     -----    ------     ------

     Operating income (loss)          1,596       784     3,470     (2,302)
     Interest and other income, net     551     1,003     3,402     13,226
                                        ---     -----     -----     ------

     Income before taxes on income    2,147     1,787     6,872     10,924
     Taxes on income                    394       384     1,436      3,319
                                        ---       ---     -----      -----

     Net income                       1,753     1,403     5,436      7,605
                                      =====     =====     =====      =====

    Basic net income per share        $0.09     $0.07     $0.28      $0.38
    Diluted net income per share      $0.09     $0.07     $0.27      $0.37
     Weighted-average number of
      Common Stock used in
      computation of net income
      per share (in thousands):
      Basic                          19,689    20,157    19,588     20,131
      Diluted                        20,492    20,799    20,087     20,776
                                     ======    ======    ======     ======


        Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
              (U.S. Dollars in thousands, except per share amounts)

                                Quarter ended          Nine months ended
                                September 30,            September 30,
                              2009         2008        2009         2008
                              ----         ----        ----         ----
                          Unaudited     Unaudited    Unaudited    Unaudited
                          ---------     ---------    ---------    ---------
    GAAP net income          1,753        1,403       5,436        7,605
      Equity-based
       compensation
       expense included
       in cost of revenue       21           28          90           83
      Equity-based
       compensation
       expense included
       in research and
       development expenses    197          273         689          805
      Equity-based
       compensation
       expense included
       in sales and
       marketing expenses      138          143         442          380
      Equity-based
       compensation
       expense included
       in general and
       administrative
       expenses                329          343         989          816
      Reorganization
       expense (1)               -            -           -        3,537
      Other income
       (2)(3)(4)                 -         (358)     (1,901)     (11,247)
      Taxes on income(2)(4)      -          (19)        543        3,177
                               ---          ---         ---        -----
      Non-GAAP net income    2,438        1,813       6,288        5,156
                             =====        =====       =====        =====

      GAAP weighted-average
       number of Common
       Stock used in
       computation of
       diluted net
       income per share
       (in thousands)       20,492       20,799      20,087       20,776
      Weighted-average
       number of shares
       related to
       outstanding options      96          169          36          169
                                --          ---          --          ---
      Weighted-average
       number of Common
       Stock used in
       computation of
       diluted net
       income per
       share, excluding
       equity-based
       compensation
       expense;
       reorganization
       expense, net;
       capital gains
       associated with
       the divestment
       of CEVA's equity
       investment in
       GloNav Inc.,
       net; and disposal
       of an investment,
       net (in thousands)   20,588       20,968      20,123       20,945


      GAAP diluted net
       income per share      $0.09        $0.07       $0.27        $0.37
      Equity-based
       compensation
       expense               $0.03        $0.04       $0.10        $0.10
      Reorganization
       expense                   -            -           -        $0.17(1)
      Other income               -        (0.02)(3)   (0.09)(4)    (0.54)(2)
      Taxes on income            -        $0.00       $0.03(4)     $0.15(2)
                                 -        -----       -------      -------
      Non-GAAP diluted
       net income per
       share                 $0.12        $0.09       $0.31        $0.25
                             =====        =====       =====        =====

    (1) Results for the nine months ended September 30, 2008 included a
        reorganization expense of $3.5 million related to the termination of
        the long-term Harcourt lease property in Ireland.
    (2) Results for the nine months ended September 30, 2008 included a
        capital gain of $11.2 million reported in interest and other income,
        net, and the applicable tax expense of $3.2 million reported in taxes
        on income, related to the divestment of CEVA's equity interest in
        GloNav Inc. to NXP Semiconductors and a gain of $0.02 million reported
        in interest and other income, net, related to the disposal of an
        investment.
    (3) Results for the three months ended September 30, 2008 included a
        capital gain of $0.4 million reported in interest and other income,
        net, related to the divestment of CEVA's equity interest in GloNav
        Inc.
    (4) Results for the nine months ended September 30, 2009 included a
        capital gain of $1.9 million reported in interest and other income,
        net, and the applicable tax expense of $0.5 million reported in taxes
        on income, related to the divestment of CEVA's equity interest in
        GloNav Inc. to NXP Semiconductors.



                         CEVA, INC. AND ITS SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (U.S. Dollars in thousands)

                                               September 30,  December 31,
                                                     2009        2008
                                                     ----        ----
                                                  Unaudited    Audited
                                                  ---------    -------
       ASSETS
     Current assets:
      Cash and cash equivalents                    $8,657     $13,328
      Marketable securities and bank deposits      83,122      71,301
      Trade receivables, net                        6,364       5,390
       Deferred tax assets                          1,075       1,085
       Prepaid expenses and other accounts
        receivables                                 4,675       4,921
                                                    -----       -----
           Total current assets                   103,893      96,025
                                                  -------      ------
     Long-term investments:
      Severance pay fund                            4,071       3,441
     Deferred tax assets                              419         351
     Property and equipment, net                    1,217       1,271
     Goodwill                                      36,498      36,498
                                                   ------      ------
           Total assets                          $146,098    $137,586
                                                 ========    ========


    LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
      Trade payables                                 $560        $615
      Deferred revenues                               541       1,034
      Taxes payable                                    99          44
       Accrued expenses and other payables          8,290      10,446
       Deferred tax liabilities                       183           -
                                                      ---         ---
           Total current liabilities                9,673      12,139

      Accrued severance pay                         4,337       3,788
                                                    -----       -----
           Total liabilities                       14,010      15,927
                                                   ------      ------

     Stockholders' equity:
     Common Stock:                                     20          20
     Additional paid in-capital                   155,960     153,712
     Treasury Stock                                (2,327)     (5,077)
     Other comprehensive income (loss)                488         (24)
     Accumulated deficit                          (22,053)    (26,972)
                                                  -------     -------
           Total stockholders' equity             132,088     121,659
                                                  -------     -------
           Total liabilities and
            stockholders' equity                 $146,098    $137,586
                                                 ========    ========



 

 

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SOURCE: CEVA, Inc.

Web site: https://www.ceva-ip.com/