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CEVA, Inc. Announces Second Quarter 2015 Financial Results

- Total quarterly revenue of $13.4M, up 45% year-over-year

MOUNTAIN VIEW, Calif., July 30, 2015 — (PRNewswire) —  CEVA, Inc. (NASDAQ: CEVA), the leading licensor of DSP and IP platforms for cellular, multimedia and connectivity, today announced its financial results for the second quarter ended June 30, 2015.

CEVA, Inc reports Q2 2015 total revenues of $13.4m, driven by a record fourteen deals signed in the quarter. Non-GAAP earnings per share is 6 cents. For more highlights from the quarter, including LTE and Bluetooth shipment updates, view the infographic.

Total revenue for the second quarter of 2015 was $13.4 million, a 45% increase compared to $9.2 million reported for the second quarter of 2014 and at the top end of the Company's guidance range. Second quarter 2015 licensing and related revenue was $7.7 million, a 76% increase when compared to $4.4 million reported for the same quarter a year ago. Royalty revenue for the second quarter of 2015 was $5.7 million, an increase of 17% when compared to $4.9 million reported for the second quarter of 2014.

Gideon Wertheizer, Chief Executive Officer of CEVA, stated: "Our solid second quarter performance is the result of a continuing strong licensing environment for our products and our customers' progress in LTE shipments. We concluded a record fourteen licensing deals in the quarter, further expanding our addressable markets and customer base. Market demand for connected devices and our high-value IP portfolio for such devices are driving our licensing business. Our growing share in both the 3G and LTE smartphone segments resulted in year-over-year royalty revenue growth for the second consecutive quarter. We anticipate this momentum will accelerate in the coming quarters." 

U.S. GAAP net income for the second quarter of 2015 was $0.2 million, compared to a $1.5 million net loss reported for the same period in 2014. U.S. GAAP diluted earnings per share for the second quarter of 2015 were $0.01, compared to $0.07 net loss per share reported for the second quarter of 2014.

Non-GAAP net income and diluted earnings per share for the second quarter of 2015 were $1.3 million and $0.06, respectively, compared to a non-GAAP net loss and diluted loss per share of $0.1 million and $0.00, respectively, in the second quarter of 2014. Non-GAAP net income and diluted earnings per share for the second quarter of 2015 excluded: (a) equity-based compensation expense of $0.8 million, and (b) the impact of the amortization of acquired intangibles and other costs, net of tax, of $0.3 million associated with the acquisition of RivieraWaves.  Non-GAAP net loss and diluted loss 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.

During the quarter, CEVA completed fourteen new licensing deals. Eight of the deals were for CEVA DSP cores, platforms and software and six of the deals were for CEVA connectivity IPs. Of the fourteen licensing deals signed during the quarter, six are with first time customers for CEVA. Target applications for customer deployment include smartphones, tablets, machine to machine equipment, DSLR cameras, various IoT devices and wearables. Geographically, one deal was signed in the US, four were in Europe and nine were in Asia.

Yaniv Arieli, Chief Financial Officer of CEVA, stated: "LTE smartphones and tablets powered by our DSPs reached a record high eleven million units in the quarter, as our customers continue to execute on their product ramp ups. This is our sixth consecutive quarter of LTE unit growth and we expect this to continue. During the quarter, we repurchased approximately 176,000 shares of our common stock for an aggregate consideration of approximately $3.4 million. At the end of the quarter, our cash balance, marketable securities and bank deposits totaled $126 million."

CEVA Conference Call

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

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

The conference call will also be available live via the Internet at the following link:  https://www.webcaster4.com/Webcast/Page/984/9434. 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: 10068746) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on August 7, 2015. The replay will also be available at CEVA's investor web site investors.ceva-dsp.com.

About CEVA, Inc.

CEVA is the leading licensor of cellular, multimedia and connectivity technologies to semiconductor companies and OEMs serving the mobile, consumer, automotive and IoT markets. Our DSP IP portfolio includes comprehensive platforms for multimode 2G/3G/LTE/LTE-A baseband processing in terminals and infrastructure, computer vision and computational photography for any camera-enabled device, audio/voice/speech and ultra-low power always-on/sensing applications for multiple IoT markets. For connectivity, we offer the industry's most widely adopted IPs for Bluetooth (Smart and Smart Ready), Wi-Fi (802.11 b/g/n/ac up to 4x4) and serial storage (SATA and SAS). One in every three phones sold worldwide is powered by CEVA, from many of the world's leading OEMs including Samsung, Huawei, Xiaomi, Lenovo, HTC, LG, Coolpad, ZTE, Micromax and Meizu. Visit us at www.ceva-dsp.com and follow us on Twitter, YouTube and LinkedIn.

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 that the additional licensing deals executed during the second quarter expands CEVA's addressable markets and customer base and that the royalty revenue growth momentum will accelerate in the coming quarters, as well as Mr. Arieli's statement that LTE unit growth from CEVA's customers will continue.  The risks, uncertainties and assumptions include: the ability of the CEVA DSP cores and other technologies, including connectivity IPs, 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, 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

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,


2015

2014

2015

2014


Unaudited

Revenues:





Licensing and related revenues

$   7,669

$   4,355

$     15,508

$     12,261

Royalties

5,690

4,860

11,685

10,628






Total  revenues

13,359

9,215

27,193

22,889






Cost of revenues

1,550

1,370

2,735

2,482






Gross profit

11,809

7,845

24,458

20,407






Operating expenses:





Research and development, net

7,241

6,051

14,604

12,047

Sales and marketing

2,548

2,197

4,974

4,590

General and administrative

1,666

1,861

3,638

3,901

Amortization of intangible assets

324


649







Total operating expenses

11,779

10,109

23,865

20,538






Operating income (loss)

30

(2,264)

593

(131)

Financial income, net

269

417

242

877






Income (loss) before taxes on income

299

(1,847)

835

746

 Income tax expenses (benefit)

131

(321)

181

287






Net income (loss)

168

(1,526)

654

459






Basic and diluted net income (loss) per share

 

 

$0.01

 

($0.07)

 

 

$0.03

 

 

$0.02

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





Basic

20,564

20,778

20,491

20,968

Diluted

20,984

20,778

20,971

21,368

 

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


2015

2014

2015

2014


Unaudited






GAAP net income (loss)

$168

($1,526)

$654

$459

Equity-based compensation expense included in cost of revenue

42

 

56

 

77

 

114

Equity-based compensation expense included in research and development expenses

 

494

 

533

 

885

 

1,134

Equity-based compensation expense included in sales and marketing expenses

 

165

 

266

 

244

 

568

Equity-based compensation expense included in general and administrative expenses

 

126

 

493

 

470

 

1,045

Deferred tax related to equity-based compensation expenses

-

(69)

-

(204)

Costs associated with the RivieraWaves acquisition, net of taxes

49

176

147

176

Amortization of intangible assets related to RivieraWaves transaction, net of taxes

216

-

428

-

Non-GAAP net income (loss)

$1,260

($71)

$2,905

$3,292







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

20,984

20,778

20,971

21,368

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

259

-

187

-

Weighted-average number of Common Stock used in computation of diluted earnings per share, excluding the above (in thousands )

21,243

20,778

21,158

21,368






GAAP diluted net income (loss) per share

 

$0.01

($0.07)

$0.03

$0.02

Equity-based compensation expense, net of taxes

 

$0.04

$0.06

$0.08

$0.12

Costs associated with the RivieraWaves acquisition , net of taxes

 

-

$0.01

$0.01

$0.01

Amortization of intangible assets related to RivieraWaves transaction, net of taxes

 

$0.01

-

$0.02

-

Non-GAAP diluted net income (loss) per share

 

$0.06

$0.00

$0.14

$0.15



 

CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)



June 30,

December 31,


2015

2014 (*)


Unaudited

Unaudited

ASSETS



Current assets:



Cash and cash equivalents

$        12,084

$        16,166

Marketable securities and short term bank deposits

57,378

85,277

Trade receivables, net

9,390

8,347

Deferred tax assets

1,878

1,868

Prepaid expenses and other current assets

5,325

3,982

Total current assets

86,055

115,640

Long-term assets:



Long term bank deposits

56,764

28,424

Severance pay fund

7,773

7,011

Deferred tax assets

624

399

Property and equipment, net

2,836

2,605

Goodwill

46,612

46,612

Investment in other company

1,806

1,806

Other intangible assets

4,863

5,512

Total assets

$        207,333

$        208,009




LIABILITIES AND STOCKHOLDERS' EQUITY






Current liabilities:



Trade payables

$           918

$           864

Deferred revenues

2,803

1,681

Accrued expenses and other payables

12,625

16,711

Taxes payable

397

739

Deferred tax liabilities

474

464

Total current liabilities

17,217

20,459




Long-term liabilities:



Accrued severance pay

8,050

7,096

Deferred tax liabilities

1,199

1,405




Total liabilities

26,466

28,960




Stockholders' equity:



Common stock:

20

20

Additional paid in-capital

211,102

209,426

Treasury stock

(51,885)

(54,708)

Accumulated other comprehensive loss

(139)

(436)

Retained earnings

21,769

24,747

Total stockholders' equity

180,867

179,049

Total liabilities and stockholders' equity

$    207,333

$    208,009


(*) Derived from audited financial statements

 

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SOURCE CEVA, Inc.

Contact:
CEVA, Inc.
Yaniv Arieli, CEVA, Inc., CFO
Phone: +1.650.417.7941
Email Contact Richard Kingston, CEVA, Inc., VP Market Intelligence, Investor & Public Relations
Phone: +1.650.417.7976
Email Contact
Web: http://www.ceva-dsp.com