CEVA, Inc. Announces Second Quarter 2009 Financial Results
SAN JOSE, Calif. July 29 /PRNewswire-FirstCall/ -- CEVA, Inc. (NASDAQ: CEVA); (LSE: CVA), a leading licensor of silicon intellectual property (SIP) platform solutions and DSP cores for the mobile handset, consumer electronics and portable device markets, today announced its financial results for the second quarter ended June 30, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20051010/CEVALOGO)
Total revenue for the second quarter of 2009 was $9.1 million, a decrease of 10% compared to $10.1 million reported for the second quarter of 2008. Second quarter 2009 licensing revenue was $4.3 million, a decrease of 29% from the five year record high of $6.0 million reported for the second quarter of 2008. Royalty revenue for the second quarter of 2009 was $4.0 million, an increase of 30% over $3.0 million reported for the second quarter of 2008. Revenue from services for the second quarter of 2009 was $0.9 million, a decrease of 13% from $1.0 million reported for the second quarter of 2008.
Gideon Wertheizer, Chief Executive Officer of CEVA, stated, "We are pleased with the strong results this quarter. Our worldwide market share in the handset space reached a record high of 18% in the second quarter from 12% market share in the first quarter of 2009, driven primarily by the expansion in emerging markets. Also, we are encouraged by the increased interest in our newest DSP technologies for next generation wireless products. Nonetheless, while the global economic environment seems to show signs of recovery, companies are maintaining a cautious outlook on new technology investments."
During the second quarter of 2009, the Company recorded a pre-tax capital gain of $1.9 million from the equity divestment of GloNav Inc. to NXP Semiconductors. Including this pre-tax capital gain, U.S. GAAP net income for the second quarter of 2009 was $2.3 million, an increase of 235% over $691,000 reported for the same period of last year. U.S. GAAP diluted net income per share for the second quarter of 2009 was $0.12 per share, an increase of 300% compared to $0.03 for the second quarter of 2008.
Non-GAAP net income and diluted net income per share for the second quarter of 2009, excluding an equity-based compensation expense of approximately $0.7 million and $1.9 million of pre-tax capital gain, was $1.7 million or $0.08 per share, an increase of 13% and 14%, respectively, over the $1.5 million or $0.07 per share reported for the second quarter of 2008.
During the quarter, the Company concluded ten new license agreements. Eight agreements were for CEVA DSP cores and platforms and one each were for CEVA SATA and PLL technologies. Target applications for customer deployment are 4G handsets, 3G & 4G femtocells, Passive Optical Networks and Media Phones. Geographically, four of the ten deals signed were in Europe, four were in the Asia Pacific region, including Japan, and two were in the U.S.
Yaniv Arieli, Chief Financial Officer of CEVA, stated, "Notwithstanding the challenging conditions during the second quarter, CEVA achieved strong financial performance: U.S. GAAP operating margins increased significantly from less than 1% to 8% and non-GAAP operating margins doubled to 16%, both as compared to the same period in 2008. We continued to strengthen the Company's already substantial cash position during the quarter, generating positive cash flow of approximately $2.7 million. As of June 30, 2009, CEVA's cash balances and marketable securities were $87.7 million."
CEVA Conference Call
On July 29, 2009, 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 quarter.
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)
For those who cannot access the live broadcast, a replay will be available by dialing 1-800-642-1687 (passcode: 18612633) for US domestic callers and +44-800-917-2646 (passcode: 18612633) for international callers from two hours after the end of the call until 11:59 p.m. (Eastern Time) on August 5, 2009. The replay will also be available at CEVA's web site ceva-dsp.com.
About CEVA, Inc.
Headquartered in San Jose, Calif., CEVA is a leading licensor of silicon intellectual property (SIP) DSP Cores and platform solutions for the mobile handset, portable and consumer electronics markets. CEVA's IP portfolio includes comprehensive solutions for multimedia, audio, voice over packet (VoP), Bluetooth and Serial ATA (SATA), and a wide range of programmable DSP cores and subsystems with different price/performance metrics serving multiple markets. In 2008, CEVA's IP was shipped in over 300 million devices. For more information, visit 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. Wertheizer's statements about the company being encouraged by the increased interest in CEVA's newest DSP technologies for next generation wireless products. 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
Quarter ended Six months ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Unaudited Unaudited Unaudited Unaudited
--------- --------- --------- ---------
Revenues:
Licensing $4,273 $6,026 $8,817 $11,114
Royalties 3,950 3,038 7,709 6,771
Other revenues 887 1,019 2,097 2,265
--- ----- ----- -----
Total revenues 9,110 10,083 18,623 20,150
----- ------ ------ ------
Cost of revenues 1,152 1,268 2,362 2,438
----- ----- ----- -----
Gross profit 7,958 8,815 16,261 17,712
----- ----- ------ ------
Operating expenses:
Research and
development, net 3,996 5,235 8,071 10,355
Sales and marketing 1,650 1,806 3,286 3,579
General and
administrative 1,558 1,696 3,030 3,286
Amortization of
intangible assets - 20 - 41
Reorganization
expense - - - 3,537
--- --- --- -----
Total operating
expenses 7,204 8,757 14,387 20,798
----- ----- ------ ------
Operating income
(loss) 754 58 1,874 (3,086)
Interest and other
income, net 2,375 546 2,851 12,223
----- --- ----- ------
Income before taxes
on income 3,129 604 4,725 9,137
Taxes on income
(benefit) 814 (87) 1,042 2,935
--- --- ----- -----
Net income 2,315 691 3,683 6,202
===== === ===== =====
Basic net income per
share
$0.12 $0.03 $0.19 $0.31
Diluted net income
per share $0.12 $0.03 $0.19 $0.30
Weighted-average
number of Common
Stock used in
computation of net
income per share (in
thousands):
Basic 19,515 20,140 19,536 20,118
Diluted 20,014 20,804 19,884 20,764
====== ====== ====== ======
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(U.S. Dollars in thousands, except per share amounts)
Quarter ended Six months ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Unaudited Unaudited Unaudited Unaudited
--------- --------- --------- ---------
GAAP net income 2,315 691 3,683 6,202
Equity-based
compensation expense
included in cost of
revenue 34 27 69 55
Equity-based
compensation expense
included in research
and development
expenses 230 265 492 532
Equity-based
compensation expense
included in sales and
marketing expenses 142 142 304 237
Equity-based
compensation expense
included in general
and administrative
expenses 311 285 660 473
Reorganization expense - - - 3,537(1)
Other income (1,901)(2) (24)(4) (1901)(2) 10,889)(3)(4)
Taxes on income 543(2) 91 543(2) 3,196(3)
----- --- ----- -------
Non-GAAP net income 1,674 1,477 3,850 3,343
===== ===== ===== =====
GAAP weighted-average
number of Common
Stock used in
computation of
diluted net income
per share (in
thousands) 20,014 20,804 19,884 20,764
Weighted-average
number of shares
related to
outstanding options - 169 - 169
--- --- --- ---
Weighted-average
number of Common
Stock used in
computation of
diluted net income
per share, excluding
equity-based
compensation expense;
reorganization
expense, net; capital
gains associated with
the divestment CEVA's
equity investment in
GloNav Inc, net; and
disposal of an
investment (in
thousands) 20,014 20,973 19,884 20,933
GAAP diluted net
income per share $0.12 $0.03 $0.19 $0.30
Equity-based
compensation expense $0.04 $0.04 $0.08 $0.06
Reorganization expense - - - $0.17(1)
Other income $(0.1)(2) $0.00(4) $(0.1)(2) $(0.52)(3)(4)
Taxes on income $0.02(2) $0.00 $0.02(2) $0.15(3)
------- ----- ------- -------
Non-GAAP diluted net
income per share $0.08 $0.07 $0.19 $0.16
===== ===== ===== =====
(1) Results for the six months ended June 30, 2008 included a
reorganization expense of $3.5 million related to the termination of
the long-term Harcourt lease property in Ireland.
(2) Results for the second quarter and six months ended June 30, 2009
included a capital gain of $1.9 million reported in interest and
other income, net, and the applicable tax expense of $0.5 million
reported in taxes on income, related to the divestment of CEVA's
equity interest in GloNav Inc. to NXP Semiconductors.
(3) Results for the six months ended June 30, 2008 included a capital
gain of $10.9 million reported in interest and other income, net,
and the applicable tax expense of $3.2 million reported in taxes on
income, related to the divestment of CEVA's equity interest in
GloNav Inc. to NXP Semiconductors.
(4) Results for the second quarter and six months ended June 30, 2008
included a gain of $0.02 million reported in interest and other
income, net, related to the disposal of an investment.
CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
June 30, December 31,
2009 2008
---- ----
Unaudited Audited
--------- -------
ASSETS
Current assets:
Cash and cash equivalents $8,215 $13,328
Marketable securities and bank deposits 79,528 71,301
Trade receivables, net 5,544 5,390
Deferred tax assets 945 1,085
Prepaid expenses and other accounts receivables 5,127 4,921
----- -----
Total current assets 99,359 96,025
------ ------
Long-term investments:
Severance pay fund 3,690 3,441
Deferred tax assets 475 351
Property and equipment, net 1,187 1,271
Goodwill 36,498 36,498
------ ------
Total assets $141,209 $137,586
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables $614 $615
Deferred revenues 734 1,034
Taxes payable 389 44
Accrued expenses and other payables 8,186 10,446
----- ------
Total current liabilities 9,923 12,139
Accrued severance pay 4,031 3,788
Total liabilities 13,954 15,927
------ ------
Stockholders' equity:
Common Stock: 20 20
Additional paid in-capital 155,238 153,712
Treasury Stock (4,902) (5,077)
Other comprehensive income (loss) 397 (24)
Accumulated deficit (23,498) (26,972)
------- -------
Total stockholders' equity 127,255 121,659
------- -------
Total liabilities and stockholders' equity $141,209 $137,586
======== ========
SOURCE CEVA, Inc.
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SOURCE: CEVA, Inc.
Web site: https://www.ceva-ip.com/
