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8-K - FORM 8-K - CEVA INC | c95042e8vk.htm |
Exhibit 99.1
CEVA, Inc. Announces Fourth Quarter and Year End 2009 Financial Results
| Multiple design wins for LTE, including a new CEVA-XC licensee |
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| Market share expansion in handsets to 27% |
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| Record quarterly and annual royalty revenue of $4.8 million and $16.2 million |
SAN JOSE, Calif. January 28, 2010 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 fourth
quarter and year ended December 31, 2009.
Fourth Quarter 2009
Total revenue for the fourth quarter of 2009 was $10.2 million, an increase of 2% compared to $10
million reported for the fourth quarter of 2008. Fourth quarter 2009 licensing revenue was $4.7
million, an increase of 2% when compared to $4.6 million reported for the fourth quarter of 2008.
Royalty revenue for the fourth quarter of 2009 was a record $4.8 million, an increase of 13%
compared to $4.3 million reported for the fourth quarter of 2008. Revenue from services for the
fourth quarter of 2009 was $0.7 million, down 41% from $1.1 million reported for the fourth quarter
of 2008.
U.S. GAAP net income for the fourth quarter of 2009 was $2.9 million, an increase of 203% over $1.0
million reported for the same period in 2008. U.S. GAAP diluted earnings per share for the fourth
quarter of 2009 was $0.14, an increase of 180% compared to $0.05 for the fourth quarter of 2008.
Non-GAAP net income and diluted earnings per share for the fourth quarter of 2009 was $2.4 million
and $0.11, respectively, representing an increase of 53% and 38%, respectively, over the $1.6
million and $0.08 reported for the fourth quarter of 2008. Non-GAAP net income and diluted earnings
per share for the fourth quarter of 2009 exclude an aggregate equity-based compensation expense of
$0.7 million, a pre-tax capital gain of $1.8 million related to the divestment of the Companys
equity interest in GloNav Inc. and its related tax expense of $0.6 million. Non-GAAP net income and
diluted earnings per share for the fourth quarter of 2008 excluded equity-based compensation
expense of $0.8 million, a pre-tax capital gain of $0.9 million related to the divestment of the
Companys equity interest GloNav Inc., its related tax expense of $0.1 million, a loss of $0.1
million related to disposal of fixed assets and an reorganization
expense of $0.6 million related
to certain cost reduction measures taken to reduce ongoing expenses associated with the Companys
SATA/SAS activities.
Gideon Wertheizer, Chief Executive Officer of CEVA, stated, Our strong fourth quarter results were
driven by strategic licensing agreements for next generation wireless products and the continued
expansion of our DSPs in the wireless handset space. Our value proposition with a diversity of
product offerings and strong customer relationships led to our worldwide DSP market share in
handsets to increase to a record high of 27%, based on worldwide quarterly shipments in the third
quarter of 2009.
Mr. Wertheizer continued, Our licensing agreements for the fourth quarter of 2009 included three
design wins for long term evolution (LTE), the next generation wireless standard for mobile
Internet. Notably, one of the LTE agreements was with a first tier original equipment manufacturer
(OEM) who will use CEVAs technologies across its product lines for the first time. Needless to
say, we are excited about the long-term prospects of this relationship. Another LTE agreement was
for our newest CEVA-XC DSP core adopted by a leading company in the fourth generation cellular
space. Overall, despite the challenging environment in 2009, we managed to significantly increase
our profitability and execute on our long term business and technology goals. We believe CEVA is
well positioned to exploit the stabilized and improving business environment in 2010 as DSPs become
the critical technology for the digital era.
During the fourth quarter of 2009, the Company concluded nine new license agreements. Six
agreements were for CEVA DSP cores, platforms and software, two agreements were for CEVA Serial
Attached SCSI (SAS) technology and one agreement was for phase-locked loops (PLL) technology.
Target applications for customer deployment are LTE and 3G data cards and handsets, wireless
machine-to-machine applications, broadband residential gateways, solid-state drives (SSDs) and
SAS-based storage equipment. Geographically, three of the agreements signed were in the U.S., five
were in Europe and one in Asia.
Full Year 2009 Review
Total revenue for 2009 was $38.5 million, a decrease of 5% compared to $40.4 million reported for
2008. Royalty revenue for 2009 was a record high of $16.2 million, representing an increase of 13%
compared to $14.3 million reported for 2008. Licensing revenue for 2009 was $18.8 million, a
decrease of 14% compared to $21.7 million reported a year ago. A total of 34 new licensing
agreements were signed in 2009, compared to 30 agreements in 2008. Shipped units by licensees
increased 9% to a record 334 million in 2009, compared to 307 million units in 2008.
US GAAP net income and diluted earnings per share for 2009 was $8.3 million and $0.41, a slight
decrease of 3% and 2%, respectively, compared to $8.6 million and $0.42 reported in 2008.
Non-GAAP net income and diluted earnings per share for 2009 was $8.7 million and $0.42,
representing an increase of 29% and 31%, respectively, over the $6.7 million and $0.32 reported for
2008. Non-GAAP
net income and diluted earnings per share for 2009 excludes an aggregate equity-based compensation
expense of $2.9 million, a pre-tax capital gain of $3.7 million related to the divestment of the
Companys equity interest in GloNav Inc. and the related tax expense of $1.1 million. Non-GAAP net
income and diluted earnings per share for 2008 excluded equity-based compensation expenses of $2.9
million, a pre-tax capital gain of $12.1 million related to the divestment of the Companys equity
interest in GloNav Inc., and its related tax expense of $3.1 million, an expense of $3.5 million
associated with the exit of the Dublin long-term lease during the first quarter of 2008, and a
restructuring expense of $0.6 million associated with the companys SATA/SAS activities in the
fourth quarter of 2008.
Yaniv Arieli, Chief Financial Officer of CEVA, stated, During the fourth quarter of 2009, CEVA was
able to generate record high royalty revenue. This continued royalty revenue progress is clearly
reflected in the Companys record full year 2009 financials with total royalty revenue up 13%
year-over-year, combined with significant profitability and net income per share improvements.
Despite a slight revenue decrease in 2009, non-GAAP net income and diluted EPS for the full year
grew by 29% and 31%, respectively. We also managed to generate positive cash flow of $16 million
during 2009, thereby strengthening our balance sheet considerably. As of December 31, 2009, CEVAs
cash balances and marketable securities were $100.6 million.
CEVA Conference Call
On January 28, 2010, 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 fourth quarter and year ended
December 31, 2009.
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) |
The conference call will also be available live via the Internet at the following link:
http://www.videonewswire.com/event.asp?id=65003. Please go to the website 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: 49615290) for US domestic callers and +44-800-917-2646 (passcode:
49615290) for international callers from two hours after the end of the call until 11:59 p.m.
(Eastern Time) on February 4, 2010. The replay will also be available at CEVAs web site
www.ceva-dsp.com.
For More Information Contact:
Yaniv Arieli, CFO
|
Richard Kingston | |
CEVA, Inc.
|
CEVA, Inc. | |
Tel: +1.408.514.2941
|
Tel: +1.408.514.2976 | |
Email: yaniv.arieli@ceva-dsp.com
|
Email: richard.kingston@ceva-dsp.com |
About CEVA, Inc.
Headquartered in San Jose, Calif., CEVA is the leading licensor of silicon intellectual property
(SIP) DSP Cores and platform solutions for the mobile handset, portable and consumer electronics
markets. CEVAs IP portfolio includes comprehensive technologies for cellular baseband (2G / 3G /
4G), multimedia, HD audio, voice over packet (VoP), Bluetooth, Serial Attached SCSI (SAS) and
Serial ATA (SATA). In 2009, CEVAs IP was shipped in over 330 million devices, including handsets
from all top five handset OEMs Nokia, Samsung, LG, Motorola and Sony Ericsson. Today, more than
one in every four handsets shipped worldwide is powered by a CEVA DSP core. For more information,
visit www.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. Wertheizers statements about the long-term
prospects with OEM customers and the company being well positioned to exploit the market recovery
in 2010, and Mr. Arielis statements about the progress in royalty revenues. 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;
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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS U.S. GAAP
U.S. dollars in thousands, except per share data
Quarter ended | Year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Unaudited | Unaudited | Unaudited | Audited | |||||||||||||
Revenues: |
||||||||||||||||
Licensing |
$ | 4,705 | $ | 4,613 | $ | 18,764 | $ | 21,701 | ||||||||
Royalties |
4,822 | 4,282 | 16,225 | 14,349 | ||||||||||||
Other revenues |
658 | 1,114 | 3,478 | 4,315 | ||||||||||||
Total revenues |
10,185 | 10,009 | 38,467 | 40,365 | ||||||||||||
Cost of revenues |
906 | 1,125 | 4117 | 4,668 | ||||||||||||
Gross profit |
9,279 | 8,884 | 34,350 | 35,697 | ||||||||||||
Operating expenses: |
||||||||||||||||
Research and development, net |
4,429 | 5,039 | 16,561 | 20,172 | ||||||||||||
Sales and marketing |
1,818 | 1,687 | 6,732 | 7,088 | ||||||||||||
General and administrative |
1,532 | 1,646 | 6,087 | 6,637 | ||||||||||||
Amortization of intangible assets |
| | | 53 | ||||||||||||
Reorganization expense |
| 584 | | 4,121 | ||||||||||||
Total operating expenses |
7,779 | 8,956 | 29,380 | 38,071 | ||||||||||||
Operating income (loss) |
1,500 | (72 | ) | 4,970 | (2,374 | ) | ||||||||||
Interest and other income, net |
2,358 | 1,514 | 5,760 | 14,740 | ||||||||||||
Income before taxes on income |
3,858 | 1,442 | 10,730 | 12,366 | ||||||||||||
Taxes on income |
948 | 482 | 2,384 | 3,801 | ||||||||||||
Net income |
$ | 2,910 | $ | 960 | $ | 8,346 | $ | 8,565 | ||||||||
Basic earnings per share |
$ | 0.14 | $ | 0.05 | $ | 0.42 | $ | 0.43 | ||||||||
Diluted earnings per share |
$ | 0.14 | $ | 0.05 | $ | 0.41 | $ | 0.42 | ||||||||
Weighted-average number of Common
Stock used in computation of
earnings per share (in thousands): |
||||||||||||||||
Basic |
20,101 | 19,647 | 19,717 | 20,009 | ||||||||||||
Diluted |
21,375 | 19,977 | 20,411 | 20,575 | ||||||||||||
Unaudited Reconciliation of GAAP to Non GAAP Financial Measures
(U.S. Dollars in thousands, except per share amounts)
(U.S. Dollars in thousands, except per share amounts)
Quarter ended | Year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Unaudited | Unaudited | Unaudited | Audited | |||||||||||||
GAAP net income |
2,910 | 960 | 8,346 | 8,565 | ||||||||||||
Equity-based compensation expense
included in cost of revenue |
25 | 29 | 115 | 112 | ||||||||||||
Equity-based compensation expense
included in research and
development expenses |
184 | 283 | 873 | 1,088 | ||||||||||||
Equity-based compensation expense
included in sales and marketing
expenses |
148 | 151 | 590 | 531 | ||||||||||||
Equity-based compensation expense
included in general and
administrative expenses |
353 | 375 | 1,342 | 1,191 | ||||||||||||
Reorganization expense |
| 584 | (3) | | 4,121 | (3) | ||||||||||
Other income |
(1,811 | )(1) | (760 | )(4) | (3,712 | )(2) | (12,007 | )(5) | ||||||||
Taxes on income |
572 | (1) | (61 | )(4) | 1,115 | (2) | 3,116 | (5) | ||||||||
Non-GAAP net income |
2,381 | 1,561 | 8,669 | 6,717 | ||||||||||||
GAAP weighted-average number of
Common Stock used in computation
of diluted earnings per share (in
thousands) |
21,375 | 19,977 | 20,411 | 20,575 | ||||||||||||
Weighted-average number of shares
related to outstanding options |
105 | 5 | 52 | 128 | ||||||||||||
Weighted-average number of Common
Stock used in computation of
diluted earnings per share,
excluding equity-based
compensation expense;
reorganization expense, net;
capital gains associated with
CEVAs equity divestment of GloNav
Inc., net; and disposal of an
investment (in thousands) |
21,480 | 19,982 | 20,463 | 20,703 | ||||||||||||
GAAP diluted earnings per share |
$ | 0.14 | $ | 0.05 | $ | 0.41 | $ | 0.41 | ||||||||
Equity-based compensation expense |
$ | 0.03 | $ | 0.04 | $ | 0.14 | $ | 0.14 | ||||||||
Reorganization expense |
| $ | 0.03 | (3) | | $ | 0.20 | (3) | ||||||||
Other income |
($0.08 | )(1) | ($0.04 | )(4) | ($0.18 | )(2) | ($0.58 | )(5) | ||||||||
Taxes on income |
$ | 0.02 | (1) | $ | 0.00 | (4) | $ | 0.05 | (2) | $ | 0.15 | (5) | ||||
Non GAAP diluted earnings per share |
$ | 0.11 | $ | 0.08 | $ | 0.42 | $ | 0.32 | ||||||||
(1) | Results for the three months ended December 31, 2009 included a capital gain of $1.8
million reported in interest and other income, net, and the applicable tax expense of $0.6
million reported in taxes on income, related to the equity divestment of GloNav Inc. to NXP
Semiconductors. |
|
(2) | Results for the year ended December 31, 2009 included a capital gain of $3.7 million
reported in interest and other income, net, and the applicable tax expense of $1.1 million
reported in taxes on income, related to the equity divestment of GloNav Inc. to NXP
Semiconductors. |
(3) | Results for the three months ended December 31, 2008 included a reorganization expense of
$0.6 million related to cost cutting measures associated with SATA activities. Results for
the year ended December 31, 2008 included
a reorganization expense of $3.5 million related to
the termination of the long-term Harcourt lease in Dublin, Ireland and $0.6 million related
to SATA activities. |
|
(4) | Results for the three months ended December 31, 2008 included a capital gain of $0.9
million reported in interest and other income, net, and the applicable tax expense of $0.06
million reported in taxes on income, related to the equity divestment of GloNav Inc. to NXP
Semiconductors and a loss of $0.14 million reported in interest and other income, net,
related to disposal of fixed assets. |
|
(5) | Results for the year ended December 31, 2008 included a capital gain of $12.12 million
reported in interest and other income, net, and the applicable tax expense of $3.1 million
reported in taxes on income, related to the equity divestment of GloNav Inc. to NXP
Semiconductors and a gain of $0.03 million reported in interest and other income, net,
related to the disposal of an investment and a loss of $0.14 million reported in interest and
other income, net, related to disposal of fixed assets. |
CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
December 31, | December 31, | |||||||
2009 | 2008 | |||||||
Unaudited | Audited | |||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 12,104 | $ | 13,328 | ||||
Marketable securities and bank deposits |
88,494 | 71,301 | ||||||
Trade receivables, net |
5,995 | 5,390 | ||||||
Deferred tax assets |
912 | 1,085 | ||||||
Prepaid expenses and other accounts receivables |
5,345 | 4,921 | ||||||
Total current assets |
112,850 | 96,025 | ||||||
Long-term investments: |
||||||||
Severance pay fund |
4,455 | 3,441 | ||||||
Deferred tax assets |
309 | 351 | ||||||
Property and equipment, net |
1,148 | 1,271 | ||||||
Goodwill |
36,498 | 36,498 | ||||||
Total assets |
$ | 155,260 | $ | 137,586 | ||||
Current liabilities: |
||||||||
Trade payables |
$ | 530 | $ | 615 | ||||
Deferred revenues |
432 | 1,034 | ||||||
Taxes payable |
46 | 44 | ||||||
Accrued expenses and other payables |
9,689 | 10,446 | ||||||
Deferred tax liabilities |
984 | | ||||||
Total current liabilities |
11,681 | 12,139 | ||||||
Accrued severance pay |
4,483 | 3,788 | ||||||
Total liabilities |
16,164 | 15,927 | ||||||
Stockholders equity: |
||||||||
Common Stock: |
20 | 20 | ||||||
Additional paid in-capital |
158,325 | 153,712 | ||||||
Treasury Stock |
| (5,077 | ) | |||||
Other comprehensive income (loss) |
251 | (24 | ) | |||||
Accumulated deficit |
(19,500 | ) | (26,972 | ) | ||||
Total stockholders equity |
139,096 | 121,659 | ||||||
Total liabilities and stockholders equity |
$ | 155,260 | $ | 137,586 | ||||