CEVA, Inc. Announces Third Quarter 2014 Financial Results
MOUNTAIN VIEW, Calif., Oct. 30, 2014 /PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of DSP-based IP platforms for vision, audio, communications and connectivity, today announced its financial results for the third quarter ended September 30, 2014.
Total revenue for the third quarter of 2014 was $14.1 million, an increase of 41% compared to $10.0 million for the third quarter of 2013. Licensing and related revenue for the third quarter of 2014 was $8.7 million, an increase of 121% compared to $3.9 million reported for the third quarter of 2013. Royalty revenue for the third quarter of 2014 was $5.4 million, a decrease of 11% compared to $6.1 million reported for the third quarter of 2013.
Gideon Wertheizer, Chief Executive Officer, stated: "Our third quarter results were driven by the strongest licensing quarter in the company's history. We continue to experience a healthy demand for our products from new customers targeting a broad range of end markets. We are encouraged by our customers' progress in LTE and low cost smartphone shipments, both of which delivered quarter-over-quarter and year-over-year unit growth."
U.S. GAAP net income for the third quarter of 2014 was $0.7 million, compared to a net loss of $0.3 million reported for the same period in 2013. U.S. GAAP diluted earnings per share for the third quarter of 2014 were $0.03 compared to diluted loss per share of $0.01 for the third quarter of 2013.
Non-GAAP net income and diluted net income per share for the third quarter of 2014 were $2.4 million and $0.12, respectively, representing an increase of 87% and 100%, respectively, over the $1.3 million and $0.06 reported for the third quarter of 2013. Non-GAAP net income and diluted earnings per share for the third quarter of 2014 exclude: (a) equity-based compensation expense, net of taxes, of $1.0 million, (b) the impact of the amortization of acquired intangibles of $0.3 million associated with the acquisition of RiveraWaves, (c) a loss of approximately $0.4 million from the sale of our minority equity holdings in Antcor, which was sold to u-blox during the quarter, (d) $0.1 million of costs associated with the RivieraWaves acquisition, and (e) income tax benefit related to RivieraWaves acquisition of approximately $0.1 million. Non-GAAP net income and diluted earnings per share for the third quarter of 2013 excluded equity-based compensation expense, net of taxes, of $1.6 million.
During the third quarter of 2014, the Company concluded ten new license agreements. Four of the agreements were for CEVA DSP cores, platforms and software, and six were for CEVA connectivity IPs. Target applications for customer deployment are LTE-Advanced handsets, mobile infrastructure, vision for surveillance equipment and digital cameras, access points and wearables. Geographically, six of the agreements signed were in the APAC, including Japan, three were in the U.S. and one was in Europe.
Yaniv Arieli, Chief Financial Officer, stated, "We continued to demonstrate the strength of our licensing business during the third quarter, which further underpins our strategy to grow and diversify our future royalty streams across multiple new markets. Our overall financial position remains robust with our cash balances, marketable securities and bank deposits totaling $128 million at the end of the quarter, post-acquisition related payments, net of cash acquired, of approximately $12 million for RivieraWaves. In addition, we bought back approximately 300,000 shares of CEVA common stock during the quarter for an aggregate consideration of $4.4 million. From the recent July 2013 plan, we successfully repurchased two million shares of our common stock for an aggregate consideration of $30.6 million. We are pleased to announce that our Board of Directors approved a new repurchase plan for an additional one million shares."
CEVA Conference Call
On October 30, 2014, CEVA management will conduct a conference call at 8:30 a.m. Eastern Time to discuss the company's operating performance for the quarter.
The conference call will be available via the following dial in numbers:
- U.S. Participants: Dial 1-866-364-3869 (Access Code: CEVA)
- International Participants: Dial +1-412-902-4215 (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=100614. 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: 10053519) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on November 14, 2014. The replay will also be available at CEVA's web site 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 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 statement that CEVA is experiencing a healthy demand for its products from new customers targeting a broad range of end markets, as well as Mr. Arieli's statements expressing optimism about CEVA's strategy to grow and diversify its future royalty streams across multiple new markets. 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 ability of products incorporating our technologies to achieve market acceptance, the speed and extent of the expansion of the 3G and LTE networks, as well as the IoT space, 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 | |||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – U.S. GAAP | |||||
U.S. dollars in thousands, except per share data | |||||
Quarter ended | Nine months ended | ||||
September 30, | September 30, | ||||
2014 | 2013 | 2014 | 2013 | ||
Unaudited | Unaudited | Unaudited | Unaudited | ||
Revenues: | |||||
Licensing and related revenues | $ 8,728 | $ 3,945 | $ 20,989 | $ 15,108 | |
Royalties | 5,370 | 6,060 | 15,998 | 19,826 | |
Total revenues | 14,098 | 10,005 | 36,987 | 34,934 | |
Cost of revenues | 1,255 | 1,131 | 3,737 | 3,799 | |
Gross profit | 12,843 | 8,874 | 33,250 | 31,135 | |
Operating expenses: | |||||
Research and development, net | 6,453 | 5,619 | 18,500 | 16,279 | |
Sales and marketing | 2,611 | 2,376 | 7,201 | 7,271 | |
General and administrative | 2,223 | 2,006 | 6,124 | 5,588 | |
Amortization of intangible assets | 326 | - | 326 | - | |
Total operating expenses | 11,613 | 10,001 | 32,151 | 29,138 | |
Operating income (loss) | 1,230 | (1,127) | 1,099 | 1,997 | |
Financial and other income (loss), net | (338) | 617 | 539 | 2,053 | |
Income (loss) before taxes on income | 892 | (510) | 1,638 | 4,050 | |
Income tax expense (benefit) | 236 | (187) | 523 | 493 | |
Net income (loss) | 656 | (323) | 1,115 | 3,557 | |
Basic and diluted net income (loss) per share | $0.03 | ($0.01) | $0.05 | $0.16 | |
Weighted-average number of Common Stock used in computation of net income (loss) per share (in thousands): | |||||
Basic | 20,355 | 22,072 | 20,761 | 22,118 | |
Diluted | 20,667 | 22,072 | 21,132 | 22,601 | |
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures | ||||
(U.S. Dollars in thousands, except per share amounts) | ||||
Quarter ended | Nine months ended | |||
September 30, | September 30, | |||
2014 | 2013 | 2014 | 2013 | |
Unaudited | Unaudited | Unaudited | Unaudited | |
GAAP net income (loss) | 656 | (323) | 1,115 | 3,557 |
Equity-based compensation expense included in cost of revenue | 45 | 73 | 159 | 223 |
Equity-based compensation expense included in research and development expenses | 441 | 634 | 1,575 | 1,489 |
Equity-based compensation expense included in sales and marketing expenses | 185 | 393 | 753 | 1,021 |
Equity-based compensation expense included in general and administrative expenses | 451 | 660 | 1,496 | 1,691 |
Costs associated with the RivieraWaves acquisition (1) | 126 | - | 389 | - |
Amortization of intangible assets related to RivieraWaves transaction | 326 | - | 326 | - |
Loss from realize of investment in other company associated with Antcor | 404 | - | 404 | - |
Income tax benefit related to equity-based compensation expenses | (120) | (159) | (324) | (411) |
Income tax benefit related to RivieraWaves acquisition | (122) | - | (209) | - |
Non-GAAP net income | 2,392 | 1,278 | 5,684 | 7,570 |
(1) Acquisition and related costs pertain to tax and legal services and adjustment to the contingent consideration associated with the RivieraWaves transaction.
| ||||
GAAP weighted-average number of Common Stock used in computation of diluted net income (loss) per share (in thousands) | 20,667 | 22,072 | 21,132 | 22,601 |
Weighted-average number of shares related to outstanding options | - | 569 | - | 18 |
Non-GAAP weighted-average number of Common Stock used in computation of diluted net income per share (in thousands) | 20,667 | 22,641 | 21,132 | 22,619 |
GAAP diluted net income (loss) per share | $0.03 | ($0.01) | $0.05 | $0.16 |
Equity-based compensation expense, net of taxes | $0.05 | $0.07 | $0.18 | $0.17 |
Acquisition related costs | $0.00 | $0.01 | ||
Amortization of intangible assets related to RivieraWaves transaction | $0.02 | $0.02 | ||
Loss from realize of investment in other company associated with Antcor | $0.02 | $0.02 | ||
Income tax benefit related to RivieraWaves acquisition | - | ($0.01) | ||
Non-GAAP diluted net income per share | $0.12 | $0.06 | $0.27 | $0.33 |
CEVA, INC. AND ITS SUBSIDIARIES | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
(U.S. Dollars in thousands) | ||
September 30, | December 31, | |
2014 | 2013 (*) | |
Unaudited | ||
ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $ 14,042 | $ 24,117 |
Marketable securities and short term bank deposits | 97,617 | 110,411 |
Trade receivables, net | 8,289 | 5,629 |
Deferred tax assets | 4,780 | 3,457 |
Prepaid expenses and other current assets | 4,578 | 1,996 |
Total current assets | 129,306 | 145,610 |
Long-term assets: | ||
Long term bank deposits | 16,592 | 17,066 |
Severance pay fund | 7,258 | 7,215 |
Deferred tax assets | 810 | 955 |
Property and equipment, net | 2,171 | 1,616 |
Goodwill | 46,415 | 36,498 |
Investment in other companies | 1,806 | 3,367 |
Other Intangible assets | 6,130 | - |
Total assets | $ 210,488 | $ 212,327 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities: | ||
Trade payables | $ 1,159 | $ 1,085 |
Deferred revenues | 2,315 | 623 |
Accrued expenses and other payables | 15,938 | 10,563 |
Taxes Payable | 2,120 | 1,833 |
Deferred tax liabilities | 553 | 73 |
Total current liabilities | 22,085 | 14,177 |
Long-term liabilities: | ||
Accrued severance pay | 7,351 | 7,255 |
Deferred tax liabilities | 1,597 | - |
Total liabilities | 31,033 | 21,432 |
Stockholders' equity: | ||
Common stock: | 20 | 21 |
Additional paid in-capital | 208,398 | 204,415 |
Treasury stock | (55,824) | (41,005) |
Accumulated other comprehensive loss | (339) | (81) |
Retained earnings | 27,200 | 27,545 |
Total stockholders' equity | 179,455 | 190,895 |
Total liabilities and stockholders' equity | $ 210,488 | $ 212,327 |
(*) Derived from audited financial statements | ||
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SOURCE CEVA, Inc.
