SAN JOSE, Calif. - July 20, 2005 - CEVA, Inc. (NASDAQ: CEVA;
LSE: CVA), the leading licensor of digital signal processor (DSP) cores,
multimedia, GPS and storage platforms to the semiconductor industry, today
announced financial results for the second quarter ended June 30, 2005.
Total revenue for the second quarter of 2005 was $9.5 million, a slight
decrease of 1% as compared to $9.6 million reported for the second quarter
of 2004. Second quarter of 2005 licensing revenue was $6.6 million, a
decrease of 5% from the second quarter of 2004.
Second quarter of 2005 royalty revenue was $1.6 million, an increase of
30% as compared to $1.3 million for the second quarter of 2004. Revenue
from services was $1.3 million for the second quarter of 2005 as compared
to $1.4 million for the second quarter of 2004.
Net loss for the second quarter of 2005 was $2.2 million, as compared
to net income of $0.5 million for the second quarter of 2004. Net loss per
share for the second quarter of 2005 was $0.12, as compared to net income
of $0.03 per share for the second quarter of 2004. Results for the second
quarter of 2005 included a reorganization and severance charge of $1.7
million associated with the previously announced plans to reduce the
Company's operating expenses, primarily those related to general and
administrative functions, and a one-time impairment charge of $0.5 million
principally arising from our decision to cease the CEVA Bluetooth
technology line. This $0.5 million was comprised of the remaining
intangibles attributed to the Bluetooth technology of $0.4 million and a
$0.1 million charge related to the impairment of other redundant assets.
Pro forma net loss and pro forma net loss per share for the second
quarter of 2005, excluding the effect of the reorganization and severance
charges and the impairment of assets charges described above would have
been $49,000 and $0.003, respectively.
The Company believes that this pro forma presentation of results and
net loss per share is useful to investors in comparing the results for the
second quarter of 2005 to the same quarter of 2004, because it excludes
items that management does not consider meaningful for purposes of
analyzing the Company's operating results and making budget-planning
decisions. Specifically, the Company's management believes the exclusion
of the reorganization and impairment charges is useful to investors
because such charges may not be indicative of the Company's core operating
results when comparing the second quarters of 2004 and 2005.
In the second quarter of 2005, five new license agreements were
completed, one less than reported for the second quarter last year. Of the
five agreements signed in the quarter, three agreements were for
multimedia platforms and related software, one agreement was for Serial
ATA and one agreement was for a prepaid royalty DSP core. The customer's
target applications for these technologies are Smartphones, consumer
multimedia and networking devices.
Gideon Wertheizer, CEO of CEVA stated: "During the last few weeks we
have concluded our strategic plans with two main objectives:
- The continued focus on the development of highly integrated DSP
based platforms composed of hardware and software for three main
markets: Multimedia for mobile phones and consumer products, GPS for
mobile phones and automotive and Serial ATA (SATA) for consumer
electronics and servers.
- Increased efficiency in the day-to-day operations of the company. In
this respect we identified cost savings of approximately $2 million for
2005 relative to the company's previous 2005 operating expense guidance
of $36 million to $37 million."
Mr. Wertheizer continued: "The licensing activities in this quarter
indicate a clear shift in customer preference away from the traditional
approach of licensing standalone DSPs, and towards licensing highly
integrated application platforms incorporating all the necessary hardware
and software for their target applications. Our customers perceive this
'one-stop-shop' approach as having higher value in terms of
time-to-market, lower complexity and related research and development
To further enrich CEVA's multimedia product offering, we recently
unveiled CEVA-Audio, a fully programmable, low-power, low-cost digital
audio platform targeting high-volume consumer products such as portable
MP3 players and cell phones. CEVA-Audio also lowers development costs and
reduces time-to-market for customers developing audio applications, both
crucial factors for success in these high-volume, rapidly evolving
Finally, as part of our ongoing strategy to re-focus the business, the
Company has decided to cease development of our Bluetooth product line.
Bluetooth has become a commodity item and differentiation between
competing solutions is minimal. In addition, the short-range wireless
market is migrating towards more powerful standards such as WiFi and Ultra
WideBand where Bluetooth will not be needed. CEVA will continue to support
its existing Bluetooth customers throughout their deployment process."
CEVA Conference Call
On July 20, 2005, CEVA's management will conduct a conference call at
10:30a.m. EST / 15.30p.m. London time, to discuss the financial results
for the quarter. To participate in the conference call, US domestic
callers can dial 1-800-322-0079 and international callers can dial
+44-800-917-4860. The conference call will also be available live via the
Internet by accessing the CEVA web site at ceva-dsp.com.
For those who cannot access the live broadcast, a replay will be
available by dialing 1-877-519-4471 (passcode: 6235275) for US domestic
callers and +44-800-917-2646 (passcode: 7591655) for international callers
from two hours after the end of the call until 11:59 p.m. (ET) on August
3, 2005. The replay will also be available at CEVA's web site
Condensed Consolidated Statements Of Income &
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Income & Condensed
Consolidated Balance Sheets are available for download here
About CEVA, Inc.
Headquartered in San Jose, Calif., CEVA is the leading licensor of digital signal processor (DSP) cores, multimedia, GPS and storage platforms to the semiconductor industry. CEVA licenses a family of programmable DSP cores, associated SoC system platforms and a portfolio of application platforms including multimedia, audio, Voice over Packet (VoP), GPS location, Bluetooth, Serial Attached SCSI and Serial ATA (SATA). In 2005 CEVA's IP was shipped in over 115 million devices. CEVA was created through the merger of the DSP licensing division of DSP Group and Parthus Technologies. For more information, visit ceva-dsp.com.
A PDF copy of this press release is also available here
This press release contains forward-looking statements
concerning cost savings and 2005 operating expense guidance that involve
risks and uncertainties, as well as assumptions that if they ever
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. . The risks, uncertainties and assumptions
include our ability to effectively implement measures to reduce our
operating costs on a timely basis; intense competition within our
industry; the industries in which we license our technology have
experienced a challenging period of growth; that the market for the sale
of our technology may not develop as expected, especially in the case of
newly introduced or planned to be introduced technologies; our ability to
timely and successfully develop and introduce new technologies; that we
rely on revenue derived from a limited number of licensees; and other
risks relating to our business that are described from time to time in the
Company's Securities and Exchange Commission reports, including but not
limited to the Annual Report on Form 10-K for the fiscal year ended
December 31, 2004, and reports filed after the Form 10-K. CEVA assumes no
obligation to update any forward-looking statements or information, which
speak as of their respective dates.