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8-K - FORM 8-K - CEVA INCd764730d8k.htm

Exhibit 99.1

 

LOGO

CEVA, Inc. Announces Second Quarter 2014 Financial Results

 

    Continued diversification of customer base with ten out of eleven agreements signed in quarter targeting non-baseband applications

 

    Company bought back $10.1 million in CEVA shares during the quarter

MOUNTAIN VIEW, Calif. – July 31, 2014CEVA, Inc. (NASDAQ: CEVA), the leading licensor of DSP-based IP platforms for vision, audio, communications and connectivity, today announced its financial results for the second quarter ended June 30, 2014.

Total revenue for the second quarter of 2014 was $9.2 million, a decrease of 28% compared to $12.8 million for the second quarter of 2013. Licensing and related revenue for the second quarter of 2014 was $4.4 million, a decrease of 29% compared to $6.1 million reported for the second quarter of 2013. Royalty revenue for the second quarter of 2014 was $4.9 million, a decrease of 27% compared to $6.7 million reported for the second quarter of 2013.

Gideon Wertheizer, Chief Executive Officer, stated: “We continued to execute on our market expansion strategy during the quarter, signing eleven licensing deals in total, ten of which are for non-baseband applications. In addition, a twelfth licensing agreement of approximately $1 million that we originally anticipated executing in the second quarter, executed in July. Looking ahead, we are seeing a good licensing pipeline and improved visibility for the upcoming quarter, which will be reflected in our guidance. In addition, we are expecting sequential royalty revenue growth driven by an increase in baseband shipments.”

U.S. GAAP net loss for the second quarter of 2014 was $1.5 million, as compared to U.S. GAAP net income for the second quarter of 2013 of $2.2 million. U.S. GAAP diluted loss per share for the second quarter of 2014 was $0.07 as compared to U.S. GAAP diluted earnings per share for the second quarter of 2013 of $0.10.

Non-GAAP net loss and diluted loss per share for the second quarter of 2014 was $0.1 million and $0.00, respectively. Non-GAAP net income and diluted earnings per share for the second quarter of 2013 was $3.4 million and $0.15, respectively. Non-GAAP net income and diluted earnings per share for the second quarter of 2014 excluded equity-based compensation expense, net of taxes, of $1.3 million and $0.2


million related to transaction costs, net of taxes, associated with the RivieraWaves acquisition. Non-GAAP net income and diluted earnings per share for the second quarter of 2013 excluded equity-based compensation expense, net of taxes, $1.2 million.

During the second quarter of 2014, the Company concluded 11 new license agreements. Six of the agreements were for CEVA DSP cores and platforms, three for Bluetooth and two for SATA. Target applications include LTE-Advanced baseband, audio, connectivity and SSD drives. Geographically, nine of the agreements signed were in the APAC, including Japan, and two were in the U.S.

Yaniv Arieli, Chief Financial Officer, stated, “Notwithstanding the challenges we experienced in the second quarter of 2014, we are forecasting record high licensing revenue for the third quarter driven by strong demand for our DSPs. Coupled with sequential growth in royalties, total revenue guidance for the third quarter is expected to be in the range of $13.3 million to $14.3 million. Our overall financial position remains strong with our cash balance, marketable securities and bank deposits totaling $139 million at the end of the quarter, before the reduction of approximately $19 million associated with the RivieraWaves acquisition, which we consummated in early July.”

During the second quarter, the company bought back approximately 694,000 shares of CEVA common stock for an aggregate consideration of $10.1 million. In total, there are approximately 300,000 shares that remain available for repurchase under the CEVA, Inc. 10b-18 plan.

CEVA Conference Call

On July 31, 2014, CEVA management will conduct a conference call at 8:30 a.m. Eastern Time, to discuss the operating performance for the second quarter ended June 30, 2014.

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

 

    U.S. Participants: Dial 1-877-870-4263 (Access Code: CEVA)

 

    International Participants: Dial +1-412-317-0790 (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=99935. 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: 10048944) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on August 8, 2014. The replay will also be available at CEVA’s web site www.ceva-dsp.com.


For More Information Contact:

 

Yaniv Arieli    Richard Kingston   
CEVA, Inc.    CEVA, Inc.   
CFO    VP, IR & Corporate Communications   
+1.650.417.7941    +1.650.417.7976   
yaniv.arieli@ceva-dsp.com    richard.kingston@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 statements about a good licensing pipeline, improved visibility for the upcoming quarter and sequential royalty revenue growth, as well as Mr. Arieli’s statements about revenue guidance for the third quarter of 2014. The risks, uncertainties and assumptions include: the ability of the CEVA DSP cores to continue to be strong growth drivers for us; our success in penetrating new markets, including connectivity, and maintaining our market position in existing markets; our ability to successfully integrate the RivieraWaves business and retain its former employees; the ability of DSP products incorporating RivieraWaves’ Wi-Fi and Bluetooth technologies, as well as other new products incorporating our technologies to achieve market acceptance; the speed and extent of the expansion of the 3G and LTE networks; the effect of intense industry competition and consolidation; global chip market trends; 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

CONSOLIDATED STATEMENTS OF OPERATIONS – U.S. GAAP

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

 

     Three months ended      Six months ended  
     June 30,      June 30,  
     2014     2013      2014     2013  
     Unaudited  

Revenues:

    

Licensing and related revenues

   $ 4,355      $ 6,129       $ 12,261      $ 11,163   

Royalties

     4,860        6,684         10,628        13,766   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     9,215        12,813         22,889        24,929   
  

 

 

   

 

 

    

 

 

   

 

 

 

Cost of revenues

     1,370        1,093         2,482        2,668   
  

 

 

   

 

 

    

 

 

   

 

 

 

Gross profit

     7,845        11,720         20,407        22,261   
  

 

 

   

 

 

    

 

 

   

 

 

 

Operating expenses:

    

Research and development, net

     6,051        5,621         12,047        10,660   

Sales and marketing

     2,197        2,540         4,590        4,895   

General and administrative

     1,861        1,744         3,901        3,582   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total operating expenses

     10,109        9,905         20,538        19,137   
  

 

 

   

 

 

    

 

 

   

 

 

 

Operating income (loss)

     (2,264     1,815         (131     3,124   

Financial income, net

     417        707         877        1,436   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income (loss) before taxes on income

     (1,847     2,522         746        4,560   

Income tax expenses (benefit)

     (321     347         287        680   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income (loss)

     (1,526     2,175         459        3,880   
  

 

 

   

 

 

    

 

 

   

 

 

 

Basic net income (loss) per share

   ($ 0.07   $ 0.10       $ 0.02      $ 0.18   

Diluted net income (loss) per share

   ($ 0.07   $ 0.10       $ 0.02      $ 0.17   

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

         

Basic

     20,778        22,087         20,968        22,142   

Diluted

     20,778        22,546         21,368        22,608   
  

 

 

   

 

 

    

 

 

   

 

 

 


Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

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

 

     Three months ended     Six months ended  
     June 30     June 30  
     2014     2013     2014     2013  
     Unaudited  

GAAP net income (loss)

   ($ 1,526   $ 2,175      $ 459      $ 3,880   

Equity-based compensation expense included in cost of revenue

     56        81        114        150   

Equity-based compensation expense included in research and development expenses

     533        409        1,134        855   

Equity-based compensation expense included in sales and marketing expenses

     266        332        568        628   

Equity-based compensation expense included in general and administrative expenses

     493        524        1,045        1031   

Deferred tax related to equity-based compensation expenses

     (69     (135     (204     (252

Acquisition related costs, net of tax (1)

     176        —          176        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

   ($ 71   $ 3,386      $ 3,292      $ 6,292   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

     20,778        22,546        21,368        22,608   

Weighted-average number of shares related to outstanding options (in thousands)

     —          1        —          1   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average number of Common Stock used in computation of diluted net income (loss) per share excluding equity-based compensation expense and transaction costs, net of taxes (in thousands)

     20,778        22,547        21,368        22,609   

GAAP diluted net income (loss) per share

   ($ 0.07   $ 0.10      $ 0.02      $ 0.17   

Equity-based compensation expense, net of taxes

   $ 0.06      $ 0.05      $ 0.12      $ 0.11   

RivieraWaves transaction costs

   $ 0.01        —        $ 0.01        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP diluted net income (loss) per share

   ($ 0.00   $ 0.15      $ 0.15      $ 0.28   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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


CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)

 

     June 30,     December 31,  
     2014     2013 (*)  
     Unaudited        

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 22,893      $ 24,117   

Marketable securities and short term bank deposits

     100,457        110,411   

Trade receivables, net

     5,070        5,629   

Deferred tax assets

     3,584        3,457   

Prepaid expenses and other current assets

     2,672        1,996   
  

 

 

   

 

 

 

Total current assets

     134,676        145,610   
  

 

 

   

 

 

 

Long-term assets:

    

Long term bank deposits

     16,040        17,066   

Severance pay fund

     7,580        7,215   

Deferred tax assets

     997        955   

Property and equipment, net

     1,463        1,616   

Goodwill

     36,498        36,498   

Investment in other companies

     3,367        3,367   
  

 

 

   

 

 

 

Total assets

   $ 200,621      $ 212,327   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities:

    

Trade payables

   $ 894      $ 1,085   

Deferred revenues

     762        623   

Accrued expenses and other payables

     7,894        10,563   

Taxes Payable

     1,911        1,833   

Deferred tax liabilities

     69        73   
  

 

 

   

 

 

 

Total current liabilities

     11,530        14,177   

Accrued severance pay

     7,677        7,255   
  

 

 

   

 

 

 

Total liabilities

     19,207        21,432   
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock:

     20        21   

Additional paid in-capital

     207,276        204,415   

Treasury stock

     (52,770     (41,005

Accumulated other comprehensive loss

     (64     (81

Retained earnings

     26,952        27,545   
  

 

 

   

 

 

 

Total stockholders’ equity

     181,414        190,895   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 200,621      $ 212,327   
  

 

 

   

 

 

 

 

(*) Derived from audited financial statements