CEVA, Inc. Announces Fourth Quarter and 2015 Financial Results

- Quarterly revenues of $16.1 million, up 16% year-over-year

- Strong adoption of imaging & vision; five agreements for CEVA-XM4 DSP

- Annual revenue growth of 17% year-over-year

- Annual non-GAAP EPS growth of 51% year-over-year

Feb 03, 2016, 07:00 ET from CEVA, Inc.

MOUNTAIN VIEW, Calif., Feb. 3, 2016 /PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of signal processing IP for smarter, connected devices, today announced its financial results for the fourth quarter and year ended December 31, 2015.

Fourth Quarter 2015 
Total revenue for the fourth quarter of 2015 was $16.1 million, an increase of 16% compared to $13.8 million reported for the fourth quarter of 2014. Fourth quarter 2015 licensing and related revenue was $8.0 million, an increase of 9% compared to $7.4 million reported for the fourth quarter of 2014. Royalty revenue for the fourth quarter of 2015 was $8.1 million, an increase of 24% compared to $6.4 million reported for the fourth quarter of 2014.

Gideon Wertheizer, Chief Executive Officer, stated: "We are extremely pleased with our strong finish for the year, as both licensing and royalty revenues delivered year-over-year growth. In licensing, the adoption of our CEVA-XM4 imaging and vision DSP by five licensees during the quarter expands our footprint in the growing use of advanced camera processing in automotives, drones and smartphones. In royalties, our quarterly royalty revenues reached its highest total since 2012, driven by record CEVA-powered smartphone shipments of more than 92 million units."

Mr. Wertheizer continued: "Over the course of 2015, we signed a record forty-seven licensing deals, generating all-time high licensing revenues and exceeding our internal expectations. Of the forty-seven deals signed, forty-three of these were for non-baseband applications, illustrating the continued success of our investment and strategic initiatives to diversify and expand our business. Annual royalty growth of 22% was driven by a significant acceleration of CEVA-powered LTE smartphone shipments in the second half of the year, which enabled us to reach the high end of our LTE shipment target of 60 to 70 million units. Looking ahead, we are entering 2016 with a healthy industry backdrop for royalty growth, a stronger-than-ever licensing pipeline and a compelling product portfolio that is exceptionally well positioned to address the key technology trends driving the mobile, consumer and automotive industries."

U.S. GAAP net income for the fourth quarter of 2015 was $2.3 million, compared to net loss of $1.9 million reported for the same period in 2014. U.S. GAAP diluted net income per share for the fourth quarter of 2015 were $0.11, compared to net loss per share of $0.10 for the fourth quarter of 2014. U.S. GAAP net loss for the fourth quarter of 2014 also included a write off of a deferred tax asset in the U.S. of $3.4 million.

Non-GAAP net income and diluted earnings per share for the fourth quarter of 2015 were $3.6 million and $0.17, respectively, representing an increase of 106% and 113% over the $1.7 million and $0.08 reported for the fourth quarter of 2014, respectively. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2015 excluded: (a) equity-based compensation expense of $1.2 million, and (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.2 million associated with the acquisition of RivieraWaves. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2014 excluded: (a) equity-based compensation expense of $1.0 million, (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.2 million associated with the acquisition of RivieraWaves, (c) $0.1 million of costs associated with the RivieraWaves acquisition, and (d) a write off of a deferred tax asset related to equity-based compensation of $2.2 million.

During the fourth quarter of 2015, the Company concluded thirteen new license agreements. Eight of the agreements were for CEVA DSP cores, platforms and software, and five were for CEVA connectivity IPs. Target applications for licensees include smartphones, drones, surveillance systems, macro base stations, audio devices and the connectivity for Internet of Things (IoT). Geographically, one of the deals signed was in Europe and twelve were in Asia, including Japan.

Full Year 2015 Review
Total revenue for 2015 was $59.5 million, an increase of 17% compared to $50.8 million reported for 2014. Royalty revenue for 2015 was $27.4 million, representing an increase of 22% compared to $22.5 million reported for 2014. Licensing and related revenue for 2015 was $32.1 million, an increase of 13% compared to $28.3 million reported for 2014.

U.S. GAAP net income and diluted net income per share for 2015 were $6.3 million and $0.30, respectively, compared to net loss of $0.8 million and diluted loss per share of $0.04 reported for 2014. U.S. GAAP net loss for 2014 also included (a) a write off of a deferred tax asset in the U.S. of $3.4 million, (b) a loss of $0.4 million from the sale of our minority equity holdings in Antcor in the third quarter, and (c) the impact of the amortization of acquired intangibles, net of taxes, of $0.4 million, associated with the acquisition of RivieraWaves.

Non-GAAP net income and diluted earnings per share for 2015 were $11.2 million and $0.53, respectively, representing an increase of 51% over both the $7.4 million and $0.35 reported for 2014. Non-GAAP net income and diluted earnings per share for 2015 excluded (a) equity-based compensation expense of $4.0 million, and (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.9 million associated with the acquisition of RivieraWaves. Non-GAAP net income and diluted earnings per share for 2014 excluded (a) equity-based compensation expense of $5.0 million, (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.4 million associated with the acquisition of RivieraWaves, (c) a loss of $0.4 million from the sale of our minority equity holdings in Antcor, (d) $0.5 million of costs associated with the RivieraWaves acquisition, and (e) a write off of a deferred tax asset related to equity-based compensation of $1.9 million.

Yaniv Arieli, Chief Financial Officer, stated, "2015 was an outstanding year for CEVA, as we returned to top-line and bottom-line growth for the first time in three years, as well as significantly outperformed the growth rates of the smartphone market and the overall semiconductor industry. We continued to actively execute our share repurchase program throughout the year, buying back approximately 509,000 shares for a total consideration of $10.1 million.  At the end of 2015, CEVA's cash and cash equivalent balances, marketable securities and bank deposits were approximately $139 million."

CEVA Conference Call 
CEVA management will conduct a conference call today, February 3rd 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:

  • 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:  https://www.webcaster4.com/Webcast/Page/984/12568. 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: 10078329) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on February 11, 2016. The replay will also be available at CEVA's web site www.ceva-dsp.com.

About CEVA, Inc. 
CEVA is the leading licensor of signal processing IP for a smarter, connected world. We partner with semiconductor companies and OEMs worldwide to create power-efficient, intelligent and connected devices for a range of end markets, including mobile, consumer, automotive, industrial and IoT. Our ultra-low-power IPs for vision, audio, communications and connectivity include comprehensive DSP-based platforms for LTE/LTE-A/5G baseband processing in handsets, infrastructure and machine-to-machine devices, 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). 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 record licensing deals in 2015 illustrated the continued success of CEVA's investment and strategic initiatives to diversify and expand its business and that CEVA is entering 2016 with a healthy industry backdrop for royalty growth, a stronger-than-ever licensing pipeline and a compelling product portfolio that is exceptionally well positioned to address the key technology trends driving the mobile, consumer and automotive industries.  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, specifically non-baseband markets such as the IoT space, 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 and the increase of our royalty revenues derived from such expansion, 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

Year ended


December 31,

December 31,


2015

2014

2015

2014 (*)


Unaudited

Unaudited

Unaudited

Unaudited

Revenues:





Licensing and related revenues

$   8,027

$   7,359

$     32,135

$     28,348

Royalties

8,044

6,462

27,364

22,460






Total revenues

16,071

13,821

59,499

50,808






Cost of revenues

1,408

1,263

5,424

5,000






Gross profit

14,663

12,558

54,075

45,808






Operating expenses:





Research and development, net

6,938

7,328

28,113

25,828

Sales and marketing

2,810

2,614

10,168

9,815

General and administrative

2,363

1,930

8,184

8,054

Amortization of intangible assets

324

323

1,298

649






Total operating expenses

12,435

12,195

47,763

44,346






Operating income

2,228

363

6,312

1,462

Financial and other  income, net

426

32

1,069

571






Income before taxes on income

2,654

395

7,381

2,033

Taxes on income

350

2,329

1,114

2,852






Net income (loss)

$2,304

($1,934)

$6,267

($819)






Basic net income (loss) per share

$0.11

($0.10)

$0.31

($0.04)

Diluted net income (loss) per share

$0.11

($0.10)

$0.30

($0.04)

Weighted-average shares to compute net income (loss) per share (in thousands):





Basic

20,491

20,209

20,480

20,622

Diluted

21,203

20,209

20,989

20,622








 (*) Derived from audited financial statements

 


Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

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





Quarter ended

Year ended


December 31,

December 31,


2015

2014

2015

2014


Unaudited

Unaudited

Unaudited

Unaudited

GAAP net income

2,304

(1,934)

6,267

(819)

Equity-based compensation expense included in cost of revenue

44

34

155

193

Equity-based compensation expense included in research and development expenses

515

452

1,838

2,027

Equity-based compensation expense included in sales and marketing expenses

173

156

568

909

Equity-based compensation expense included in general and administrative expenses

488

386

1,454

1,882

Income tax related to equity-based compensation expenses

(31)

-

52

-

Costs associated with the RivieraWaves acquisition

-

91

147

480

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

216

210

861

445

Loss from realization of investment in other company associated with Antcor

-

-

-

404

Write off of a tax asset related to equity-based compensation expenses

-

2,214

-

1,890

Income taxes related to RivieraWaves acquisition

(151)

118

(151)

-

Non-GAAP net income

3,558

1,727

11,191

7,411






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

21,203

20,209

20,989

20,622

Weighted-average number of shares related to outstanding options

206

335

211

362

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

21,409

20,544

21,200

20,984






GAAP diluted earnings per share

$0.11

$(0.10)

$0.30

$(0.04)

Equity-based compensation expense, net of taxes

$0.06

$0.05

$0.19

$0. 24

Costs associated with the RivieraWaves acquisition

-

-

$0.01

$0.02

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

$0.01

$0.01

$0.04

$0.02

Loss from realization of investment in other company associated with Antcor

-

-

-

$0.02

Write off of a tax asset related to equity-based compensation expenses

-

0.11

-

$0.09

Income taxes related to RivieraWaves acquisition

$(0.01)

$0.01

$(0.01)

-






Non-GAAP diluted earnings per share

$0.17

$0.08

$0.53

$0.35






 

CEVA, INC. AND ITS SUBSIDIARIES

                       CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)


December 31,

December 31,


2015

2014 (*)


Unaudited

Unaudited 

ASSETS



Current assets:



Cash and cash equivalents

$        18,909

$        16,166

Marketable securities and short term bank deposits

79,033

85,277

Trade receivables, net

4,068

8,347

Prepaid expenses and other current assets

4,017

3,982

Total current assets

106,027

113,772

Long-term assets:



Long term bank deposits

41,334

28,424

Severance pay fund

7,297

7,011

Deferred tax assets

1,628

1,263

Property and equipment, net

3,731

2,605

Goodwill

46,612

46,612

Investment in other company

1,806

1,806

Other intangible assets

4,214

5,512

Total assets

$        212,649

$        207,005

LIABILITIES AND STOCKHOLDERS' EQUITY



Current liabilities:



Trade payables

$           693

$           864

Deferred revenues

2,763

1,681

Accrued expenses and other payables

14,697

16,711

Taxes payable

830

739

Total current liabilities

18,983

19,995




Long-term liabilities:



Accrued severance pay

7,571

7,096

Deferred tax liabilities

-

865




Total liabilities

26,554

27,956




Stockholders' equity:



Common stock:

21

20

Additional paid in-capital

208,744

209,426

Treasury stock

(51,798)

(54,708)

Accumulated other comprehensive loss

(419)

(436)

Retained earnings

29,547

24,747

Total stockholders' equity

186,095

179,049

Total liabilities and stockholders' equity

$    212,649

$    207,005


 (*) Derived from audited financial statements

 

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SOURCE CEVA, Inc.



RELATED LINKS

http://www.ceva-dsp.com