CEVA, Inc. Announces Third Quarter 2014 Financial Results

MOUNTAIN VIEW, Calif., Oct. 30, 2014 /PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of DSP-based IP platforms for vision, audio, communications and connectivity, today announced its financial results for the third quarter ended September 30, 2014.

CEVA, Inc reports Q3 2014 total revenues of $14.1m, including record licensing revenues of $8.7m. Non-GAAP earnings per share of 12 cents. For more highlights from the quarter, view the infographic.

Total revenue for the third quarter of 2014 was $14.1 million, an increase of 41% compared to $10.0 million for the third quarter of 2013. Licensing and related revenue for the third quarter of 2014 was $8.7 million, an increase of 121% compared to $3.9 million reported for the third quarter of 2013. Royalty revenue for the third quarter of 2014 was $5.4 million, a decrease of 11% compared to $6.1 million reported for the third quarter of 2013.

Gideon Wertheizer, Chief Executive Officer, stated: "Our third quarter results were driven by the strongest licensing quarter in the company's history. We continue to experience a healthy demand for our products from new customers targeting a broad range of end markets. We are encouraged by our customers' progress in LTE and low cost smartphone shipments, both of which delivered quarter-over-quarter and year-over-year unit growth."

U.S. GAAP net income for the third quarter of 2014 was $0.7 million, compared to a net loss of $0.3 million reported for the same period in 2013. U.S. GAAP diluted earnings per share for the third quarter of 2014 were $0.03 compared to diluted loss per share of $0.01 for the third quarter of 2013.

Non-GAAP net income and diluted net income per share for the third quarter of 2014 were $2.4 million and $0.12, respectively, representing an increase of 87% and 100%, respectively, over the $1.3 million and $0.06 reported for the third quarter of 2013. Non-GAAP net income and diluted earnings per share for the third quarter of 2014 exclude: (a) equity-based compensation expense, net of taxes, of $1.0 million, (b) the impact of the amortization of acquired intangibles of $0.3 million associated with the acquisition of RiveraWaves, (c) a loss of approximately $0.4 million from the sale of our minority equity holdings in Antcor, which was sold to u-blox during the quarter, (d) $0.1 million of costs associated with the RivieraWaves acquisition, and (e) income tax benefit related to RivieraWaves acquisition of approximately $0.1 million. Non-GAAP net income and diluted earnings per share for the third quarter of 2013 excluded equity-based compensation expense, net of taxes, of $1.6 million.

During the third quarter of 2014, the Company concluded ten new license agreements. Four of the agreements were for CEVA DSP cores, platforms and software, and six were for CEVA connectivity IPs. Target applications for customer deployment are LTE-Advanced handsets, mobile infrastructure, vision for surveillance equipment and digital cameras, access points and wearables. Geographically, six of the agreements signed were in the APAC, including Japan, three were in the U.S. and one was in Europe.

Yaniv Arieli, Chief Financial Officer, stated, "We continued to demonstrate the strength of our  licensing business during the third quarter, which further underpins our strategy to grow and diversify our future royalty streams across multiple new markets. Our overall financial position remains robust with our cash balances, marketable securities and bank deposits totaling $128 million at the end of the quarter, post-acquisition related payments, net of cash acquired, of approximately $12 million for RivieraWaves. In addition, we bought back approximately 300,000 shares of CEVA common stock during the quarter for an aggregate consideration of $4.4 million.  From the recent July 2013 plan, we successfully repurchased two million shares of our common stock for an aggregate consideration of $30.6 million. We are pleased to announce that our Board of Directors approved a new repurchase plan for an additional one million shares."

CEVA Conference Call
On October 30, 2014, CEVA management will conduct a conference call at 8:30 a.m. Eastern Time to discuss the company's operating performance for the quarter.

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

  • U.S. Participants: Dial 1-866-364-3869 (Access Code: CEVA)
  • International Participants: Dial +1-412-902-4215 (Access Code: CEVA)

The conference call will also be available live via the Internet at the following link:  http://www.videonewswire.com/event.asp?id=100614.  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 +1-877-344-7529 or +1-412-317-0088 (access code: 10053519) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on November 14, 2014. The replay will also be available at CEVA's web site www.ceva-dsp.com.

About CEVA, Inc.
CEVA is the world's leading licensor of DSP-based IP platforms for vision, audio, communications and connectivity. CEVA's IP portfolio includes comprehensive technologies for computer vision and computational photography, advanced audio and voice processing, wireless baseband (2G, 3G & 4G LTE/LTE-A), connectivity (Wi-Fi & Bluetooth) and serial storage (SATA & SAS). In 2013, CEVA's IP was shipped in more than one billion devices, including 40% of handsets shipped worldwide, powering smartphones from many of the world's leading OEMs such as Coolpad, HTC, Huawei, Lenovo, LG, Nokia, Samsung, TCL, Xiaomi and ZTE. For more information, visit www.ceva-dsp.com. Follow CEVA on twitter at www.twitter.com/cevadsp.

Forward Looking Statement
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.  Forward-looking statements include Mr. Wertheizer's statement that CEVA is experiencing a healthy demand for its products from new customers targeting a broad range of end markets, as well as Mr. Arieli's statements expressing optimism about CEVA's strategy to grow and diversify its future royalty streams across multiple new markets.  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 ability of products incorporating our technologies to achieve market acceptance, the speed and extent of the expansion of the 3G and LTE networks, as well as the IoT space, the effect of intense industry competition and consolidation, global chip market trends, the possibility that markets for CEVA's 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; 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,

 

2014

2013

2014

2013

 

Unaudited

Unaudited

Unaudited

Unaudited

Revenues:

       

Licensing and related revenues

$   8,728

$   3,945

$   20,989

$   15,108

Royalties

5,370

6,060

15,998

19,826

         

Total revenues

14,098

10,005

36,987

34,934

         

Cost of revenues

1,255

1,131

3,737

3,799

         

Gross profit

12,843

8,874

33,250

31,135

         

Operating expenses:

       

Research and development, net

6,453

5,619

18,500

16,279

Sales and marketing

2,611

2,376

7,201

7,271

General and administrative

2,223

2,006

6,124

5,588

Amortization of intangible assets

326

-

326

-

         

Total operating expenses

11,613

10,001

32,151

29,138

         

Operating income (loss)

1,230

(1,127)

1,099

1,997

Financial and other  income (loss), net

(338)

617

539

2,053

         

Income (loss) before taxes on income

892

(510)

1,638

4,050

Income tax expense (benefit)

236

(187)

523

493

         

Net income (loss)

656

(323)

1,115

3,557

         

Basic and diluted net income (loss) per share

$0.03

($0.01)

$0.05

$0.16

Weighted-average number of Common Stock used in computation of net income (loss)  per share (in thousands):

       

Basic

20,355

22,072

20,761

22,118

Diluted

20,667

22,072

21,132

22,601

           

 

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,

 

2014

2013

2014

2013

 

Unaudited

Unaudited

Unaudited

Unaudited

GAAP net income (loss)

656

(323)

1,115

3,557

Equity-based compensation expense included in cost of revenue

45

73

159

223

Equity-based compensation expense included in research and development expenses

441

634

1,575

1,489

Equity-based compensation expense included in sales and marketing expenses

185

393

753

1,021

Equity-based compensation expense included in general and administrative expenses

451

660

1,496

1,691

Costs associated with the RivieraWaves acquisition (1)

126

-

389

-

Amortization of intangible assets related to RivieraWaves transaction

326

-

326

-

Loss from realize of investment in other company associated with Antcor

404

-

404

-

Income tax benefit related to equity-based compensation expenses

(120)

(159)

(324)

(411)

Income tax benefit related to RivieraWaves acquisition

(122)

-

(209)

-

Non-GAAP net income

2,392

1,278

5,684

7,570

 

(1)  Acquisition and related costs pertain to tax and legal services and adjustment to the contingent consideration associated with the RivieraWaves transaction.

 

 

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

20,667

22,072

21,132

22,601

 

Weighted-average number of shares related to outstanding options

-

569

-

18

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

20,667

22,641

21,132

22,619

         
         

GAAP diluted net income (loss) per share

$0.03

($0.01)

$0.05

$0.16

Equity-based compensation expense, net of taxes

$0.05

$0.07

$0.18

$0.17

Acquisition related costs

$0.00

 

$0.01

 

Amortization of intangible assets related to RivieraWaves transaction

$0.02

 

$0.02

 

Loss from realize of investment in other company associated with Antcor

$0.02

 

$0.02

 

Income tax benefit related to RivieraWaves acquisition

-

 

($0.01)

 

Non-GAAP diluted net income per share

$0.12

$0.06

$0.27

$0.33

 

CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)

 
 

September 30,

December 31,

 

2014

2013 (*)

 

Unaudited

 

ASSETS

   

Current assets:

   

Cash and cash equivalents

$        14,042

$        24,117

Marketable securities and short term bank deposits

97,617

110,411

Trade receivables, net

8,289

5,629

Deferred tax assets

4,780

3,457

Prepaid expenses and other current assets

4,578

1,996

Total current assets

129,306

145,610

Long-term assets:

   

Long term bank deposits

16,592

17,066

Severance pay fund

7,258

7,215

Deferred tax assets

810

955

Property and equipment, net

2,171

1,616

Goodwill

46,415

36,498

Investment in other companies

1,806

3,367

Other Intangible assets

6,130

-

Total assets

$        210,488

$        212,327

     

LIABILITIES AND STOCKHOLDERS' EQUITY

   
     

Current liabilities:

   

Trade payables

$           1,159

$           1,085

Deferred revenues

2,315

623

Accrued expenses and other payables

15,938

10,563

Taxes Payable

2,120

1,833

Deferred tax liabilities

553

73

Total current liabilities

22,085

14,177

     

Long-term liabilities:

   

Accrued severance pay

7,351

7,255

Deferred tax liabilities

1,597

-

     

Total liabilities

31,033

21,432

     

Stockholders' equity:

   

Common stock:

20

21

Additional paid in-capital

208,398

204,415

Treasury stock

(55,824)

(41,005)

Accumulated other comprehensive loss

(339)

(81)

Retained earnings

27,200

27,545

Total stockholders' equity

179,455

190,895

Total liabilities and stockholders' equity

$    210,488

$    212,327

 

(*) Derived from audited financial statements

 

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SOURCE CEVA, Inc.