CEVA, Inc. Announces Second Quarter 2013 Financial Results -- Key OEMs in mobile markets license CEVA-MM3101 imaging & vision platform

-- Strategic customer extends use of DSP for 3G & LTE basebands

-- Expansion of existing stock repurchase program with additional two million shares

MOUNTAIN VIEW, Calif., July 31, 2013 /PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of silicon intellectual property (SIP) platform solutions and DSP cores for the mobile, digital home and networking markets, today announced its financial results for the second quarter ended June 30, 2013.

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Total revenue for the second quarter of 2013 was $12.8 million, a decrease of 6% compared to $13.6 million for the second quarter of 2012. Licensing and related revenue for the second quarter of 2013 was $6.1 million, an increase of 2% compared to $6.0 million reported for the second quarter of 2012. Royalty revenue for the second quarter of 2013 was $6.7 million, a decrease of 12% compared to $7.6 million reported for the second quarter of 2012.

Gideon Wertheizer, Chief Executive Officer, stated: "Our strong performance in licensing activities for the second quarter was a direct result of our strategy to expand beyond the cellular baseband market. During the quarter, we successfully completed two comprehensive agreements for our CEVA-MM3101 multimedia platforms with key OEMs in the mobile space who are expected to utilize our technology to develop their own proprietary multimedia processing chips. These agreements illustrate our ability to successfully capitalize on emerging technology trends in photography, vision and audio, and build the foundations for our future royalty growth. In addition, we extended our relationship with a key customer in the cellular baseband market, reinforcing our position in the 3G and LTE markets."

U.S. GAAP net income for the second quarter of 2013 was $2.2 million, a decrease of 37% from $3.5 million reported for the same period in 2012. U.S. GAAP diluted earnings per share for the second quarter of 2013 were $0.10, a decrease of 33% compared to $0.15 for the second quarter of 2012.

Non-GAAP net income and diluted earnings per share for the second quarter of 2013 was $3.4 million and $0.15, respectively, representing a decrease of 24% and 21%, respectively, over the $4.4 million and $0.19 reported for the second quarter of 2012. Non-GAAP net income and diluted earnings per share for the second quarter of 2013 and 2012 excluded equity-based compensation expense, net of taxes, of $1.2 million and $1.0 million, respectively.

During the second quarter of 2013, the Company concluded six new license agreements. Four of the agreements were for CEVA DSP cores, platforms and software, one for SATA/SAS technology and one for Bluetooth technology. Target applications for customer deployment are 3G and LTE cellular handsets, imaging, and embedded vision and audio for mobile devices. Geographically, one of the license agreements was in the U.S. and the other five were in Asia, including Japan.

Yaniv Arieli, Chief Financial Officer, stated, "During the second quarter, our royalty revenue from 3G shipments surpassed the 2G royalty revenue for the first time.  This is an important milestone that reflects our strong foothold in the growing adoption of low-cost smartphones in China. During the quarter, we bought back approximately 176,000 shares of our common stock for an aggregate consideration of approximately $2.8 million. Furthermore, the Board of Directors has authorized the expansion of our share repurchase program with an additional two million shares of common stock available for repurchase. In total, there are 2,179,000 shares available for repurchase under our 10b-18 plan program, illustrating our confidence in the long-term growth opportunities for CEVA, the Company's robust fundamentals and considerable earnings leverage. Our financial position remains strong with our cash balance, marketable securities and bank deposits totaling $154 million at the end of the quarter."

CEVA Conference Call
On July 31, 2013, 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, 2013.

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

  • U.S. Participants: Dial 1-800-860-2442 (Access Code: CEVA)
  • International Participants: Dial +1-412-858-4600 (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=94830.  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: 10030920) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on August 7, 2013. The replay will also be available at CEVA's web site www.ceva-dsp.com.

About CEVA, Inc.
CEVA is the world's leading licensor of silicon intellectual property (SIP) DSP cores and platform solutions for the mobile, portable and consumer electronics markets. CEVA's IP portfolio includes comprehensive technologies for cellular baseband (2G / 3G / 4G), multimedia (vision, imaging and HD audio), voice processing, Bluetooth, Serial Attached SCSI (SAS) and Serial ATA (SATA). In 2012, CEVA's IP was shipped in over 1.1 billion devices, powering smartphones from many of the world's leading OEMs, including HTC, Huawei, LG, Nokia, Motorola, Samsung, Sony, TCL and ZTE. Today, more than 40% of handsets shipped worldwide are powered by a CEVA DSP core. 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 the agreements entered into during the second quarter of 2013 illustrating CEVA's ability to successfully capitalize on emerging technology trends in photography, vision and audio, and build the foundations for its' future royalty growth, Forward-looking statements also include  Mr. Arieli's statements about CEVA's stock buyback program reflecting CEVA's confidence in its long-term growth opportunities, robust fundamentals and considerable earnings leverage. 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 effect of intense industry competition and consolidation, global chip market trends, the possibility that 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; 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 INCOME – U.S. GAAP
U.S. dollars in thousands, except per share data





Three months ended

Six months ended


June 30,

June 30,


2013

2012

2013

2012


Unaudited

Revenues:





Licensing and related revenues

$   6,129

$   5,997

$     11,163

$     12,003

Royalties

6,684

7,595

13,766

16,701






Total revenues

12,813

13,592

24,929

28,704






Cost of revenues

1,093

1,011

2,668

1,881






Gross profit

11,720

12,581

22,261

26,823






Operating expenses:





Research and development, net

5,621

5,425

10,660

10,911

Sales and marketing

2,540

2,104

4,895

4,393

General and administrative

1,744

1,849

3,582

3,718






Total operating expenses

9,905

9,378

19,137

19,022






Operating income

1,815

3,203

3,124

7,801

Financial income, net

707

974

1,436

1,922






Income before taxes on income

2,522

4,177

4,560

9,723

 Taxes on income

347

698

680

1,387






Net income

2,175

3,479

3,880

8,336






Basic net income per share

$0.10

$0.15

$0.18

$0.36

Diluted net income per share

$0.10

$0.15

$0.17

$0.35






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





Basic

22,087

22,873

22,142

23,188

Diluted

22,546

23,449

22,608

23,842







 

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


2013

2012

2013

2012


Unaudited






GAAP net income

$2,175

$3,479

$3,880

$8,336

Equity-based compensation expense included in cost of revenue

81

53

150

104

Equity-based compensation expense included in research and development expenses

409

394

855

859

Equity-based compensation expense included in sales and marketing expenses

332

200

628

439

Equity-based compensation expense included in general and administrative expenses

524

430

1031

920

Deferred tax related to equity-based compensation expenses

(135)

(118)

(252)

(242)

Taxes on income (1)

--

--

--

(102)

Non-GAAP net income

$3,386

$4,438

$6,292

$10,314






(1) Results for  the six months ended June 30, 2012 include the utilization of expenses on a previously booked capital gain


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

22,546

 

23,449

 

22,608

 

23,842






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

1

5

1

6






Weighted-average number of Common Stock used in computation of diluted net income per share excluding equity-based compensation expense (in thousands)

22,547

23,454

22,609

23,848











GAAP diluted net income per share

$0.10

$0.15

$0.17

$0.35

Equity-based compensation expense, net of taxes

$0.05

$0.04

$0.11

$0.08

Non-GAAP diluted net income per share

$0.15

$0.19

$0.28

$0.43

 

 

CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS


(U.S. Dollars in thousands)





June 30,

December 31,


2013

2012 (*)


Unaudited


ASSETS



Current assets:



Cash and cash equivalents

$        7,539

$        18,422

Marketable securities and short term bank deposits

118,627

116,572

Trade receivables, net

9,186

6,232

Deferred tax assets

2,565

2,065

Prepaid expenses and other current assets

3,071

2,361

               Total current assets

140,988

145,652

Long-term assets:



Long term bank deposits

28,226

23,050

Severance pay fund

6,615

6,130

Deferred tax assets

1,305

1,178

Property and equipment, net

1,707

1,392

Goodwill

36,498

36,498

Investment in other companies

2,733

2,433

               Total assets

$        218,072

$        216,333




 

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:



Trade payables

$           1,198

$           1,176

Deferred revenues

539

865

Accrued expenses and other payables

2,595

3,462

Accrued payroll and related benefits

6,411

6,978

Income taxes payable, net

2,127

1,626

               Total current liabilities

12,870

14,107




Accrued severance pay

6,722

6,158




               Total liabilities

19,592

20,265




Stockholders' equity:



Common stock:

22

22

Additional paid in-capital

201,159

198,495

Accumulated other comprehensive income (loss)

(367)

360

Treasury stock

(27,737)

(25,694)

Retained earnings

25,403

22,885

               Total stockholders' equity

198,480

196,068

               Total liabilities and stockholders' equity

$    218,072

$    216,333




(*) Derived from audited financial statements






 

SOURCE CEVA, Inc.



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