CEVA, Inc. Announces Record Fourth Quarter and Year End 2010 Financial Results

MOUNTAIN VIEW, Calif., Jan. 31, 2011 /PRNewswire/ -- CEVA, Inc. (Nasdaq: CEVA); (LSE: CVA), the leading licensor of silicon intellectual property (SIP) platform solutions and DSP cores for the mobile handset, portable and consumer electronics markets, today announced its financial results for the fourth quarter and year ended December 31, 2010.

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Fourth Quarter 2010

Total revenue for the fourth quarter of 2010 was $13.0 million, which represents an increase of 28% compared to $10.2 million reported for the fourth quarter of 2009. Fourth quarter 2010 licensing revenue was $4.6 million, a 2% decrease when compared to $4.7 million reported for the fourth quarter of 2009. Royalty revenue for the fourth quarter of 2010 was a record $7.5 million, an increase of 55% compared to $4.8 million reported for the fourth quarter of 2009. Revenue from services for the fourth quarter of 2010 was $0.9 million, an increase of 38% compared to $0.7 million reported for the fourth quarter of 2009.

U.S. GAAP net income for the fourth quarter of 2010 was $4.2 million, an increase of 45% over $2.9 million reported for the same period in 2009. U.S. GAAP diluted earnings per share for the fourth quarter of 2010 were $0.18, an increase of 29% compared to $0.14 for the fourth quarter of 2009.

Non-GAAP net income and diluted earnings per share for the fourth quarter of 2010 was $4.3 million and $0.19, respectively, representing an increase of 82% and 73%, respectively, over the $2.4 million and $0.11 reported for the fourth quarter of 2009. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2010 exclude an aggregate equity-based compensation expense of $0.5 million. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2009 excluded an aggregate equity-based compensation expense of $0.7 million, a pre-tax capital gain of $1.8 million related to the divestment of the Company's equity interest in GloNav Inc. and its related tax expense of $0.6 million.

Gideon Wertheizer, Chief Executive Officer of CEVA, stated, "The fourth quarter of 2010 was the strongest quarter in CEVA's history, resulting in record high revenues, royalties, operating margins, and earnings. Underpinning this performance, we experienced exceptional growth in the shipment of cellular baseband processors powered by CEVA DSPs across all handset and mobile broadband device market segments, including , feature phones, high-end smartphones, tablets, data cards, and machine-to-machine equipment. This growth is indicative of the wireless industry momentum behind our licensable DSPs, whereby our customers continue to take market share from industry incumbents that rely on in-house developed DSP technology."

Mr. Wertheizer continued, "Overall, 2010 was an outstanding year for CEVA. We continued to increase and strengthen our strategic customer base with leading wireless semiconductor manufacturers and OEMs that will leverage our advanced DSP technologies for future mass deployment of 4G devices. Shipments of CEVA-powered chipsets increased 84% year over year to more than 600 million units, and we reached a historic milestone in becoming the world's number one DSP architecture deployed in cellular baseband processors. Looking ahead to 2011, we are extremely well positioned to continue our growth trends with tier-one handset OEMs and further expanding in two underpenetrated, significant market segments: the mobile broadband devices market, such as data cards, tablets and machine-to-machine devices, and handsets targeted at the emerging economies."

During the fourth quarter of 2010, the Company concluded five new license agreements. Four agreements were for CEVA DSP cores, platforms, and software, and one agreement was for CEVA Bluetooth technology. Target applications for customer deployment are 4G and 3G baseband processors for handsets, femtocells and low-power medical devices. Geographically, three of the agreements signed were in the U.S. and two were in Asia.

Full Year 2010 Review

Total revenue for 2010 was $44.9 million, an increase of 17% compared to $38.5 million reported for 2009. Royalty revenue for 2010 was a record high $22.9 million, representing an increase of 41% compared to $16.2 million reported for 2009. Licensing revenue for 2010 was $18.4 million, a decrease of 2% compared to $18.8 million reported for 2009.

U.S. GAAP net income and diluted earnings per share for 2010 was $11.4 million and $0.51, respectively, an increase of 36% and 24%, respectively, compared to $8.3 million and $0.41 reported for 2009.

Non-GAAP net income and diluted earnings per share for 2010 was $12.7 million and $0.56, respectively, representing an increase of 46% and 33%, respectively, over the $8.7 million and $0.42 reported for 2009.  Non-GAAP net income and diluted earnings per share for 2010 exclude an aggregate equity-based compensation expense of $2.1 million. Non-GAAP net income and diluted earnings per share for 2009 excluded an aggregate equity-based compensation expense of $2.9 million, a pre-tax capital gain of $3.7 million related to the divestment of the Company's equity interest in GloNav Inc. and the related tax expense of $1.1 million.

Yaniv Arieli, Chief Financial Officer of CEVA, stated, "Our fourth quarter earnings demonstrate consistent execution of our strategy for growth and profitability.  We achieved substantial progress both in terms of profitability and market traction for our technologies. Our success is clearly reflected in all-time record high royalty revenues for the fourth quarter and fiscal 2010. We also reached record high non-GAAP net income and diluted EPS, both on a quarterly and on an annual basis, and generated significant positive cash flow of approximately $14 million during the fourth quarter. We ended the year with a very strong balance sheet, which included cash balances and marketable securities of approximately $131 million."

CEVA Conference Call

On January 31, 2011, 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 fourth quarter and year ended December 31, 2010.

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

• US Participants: Dial 1-877-493-9121 (Access Code: CEVA or 35655172)
• UK/Rest of World: Dial +44-800-051-3806 (Access Code: CEVA or 35655172)

The conference call will also be available live via the Internet at the following link:  http://www.videonewswire.com/event.asp?id=75584. 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 1-800-642-1687 (passcode: 35655172) for US domestic callers and +44-800-917-2646 (passcode: 35655172) for international callers from two hours after the end of the call until 11:59 p.m. (Eastern Time) on February 7, 2011. 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) platform solutions and DSP cores for the mobile handset, portable and consumer electronics markets. CEVA's IP portfolio includes comprehensive technologies for cellular baseband (2G / 3G / 4G), multimedia, HD video and audio, voice over packet (VoP), Bluetooth, Serial Attached SCSI (SAS) and Serial ATA (SATA). In 2010, CEVA's IP was shipped in over 600 million devices, powering handsets from 7 out of the top 8 handset OEMs, including Nokia, Samsung, LG, Motorola, Sony Ericsson and ZTE. Today, more than one in every three handsets shipped worldwide is powered by a CEVA DSP core. For more information, visit www.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 CEVA's ability to leverage the industry shift towards the use of third-party DSP cores and CEVA being well positioned to take advantage of the growth of the mobile broadband devices and ultra-low handsets markets.  The risks, uncertainties and assumptions include: the ability of the CEVA DSP cores and other technologies to continue to be strong growth drivers; the ability of products incorporating CEVA's technologies to achieve market acceptance; CEVA's success in penetrating new markets and maintaining its market position in existing markets; the effect of intense industry competition and consolidation; the possibility that the markets for CEVA's technologies may not develop as expected; CEVA's ability to timely and successfully develop and introduce new technologies; and general market conditions and other risks relating to CEVA's business, including, but not limited to, those that are described from time to time in its SEC filings. CEVA assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

SOURCE CEVA, Inc.