TIDMCVA
CEVA, Inc. Announces Third Quarter 2011 Financial Results
-First license agreement for CEVA-MM3000 video & imaging platform for
smartphones and smart TVs
-Quarterly volume of CEVA-powered units shipped increase for eleventh
quarter in succession, reaching 250 million
-Record high profitability - gross margins expand to 95%, operating
margins reach 32% and 41% on a US GAAP and non-GAAP basis, respectively
MOUNTAIN VIEW, Calif., Oct. 27, 2011 -- 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 third
quarter ended September 30, 2011.
Total revenue for the third quarter of 2011 was $14.8 million, an
increase of 39% compared to $10.7 million reported for the third quarter of
2010. Third quarter 2011 licensing revenue was $5.2 million, representing an
increase of 17% when compared to $4.5 million reported for the same quarter
a year ago. Royalty revenue for the third quarter 2011 was $8.8 million, an
increase of 67% compared to $5.2 million reported for the third quarter of
2010. Revenue from services for the third quarter of 2011 was $0.9 million,
a decrease of 12% compared to $1 million reported for the third quarter of
2010.
Gideon Wertheizer, Chief Executive Officer of CEVA, stated, "CEVA's
strong third quarter performance reflects the continued strength of our
cellular baseband presence, as shipment volumes of CEVA-powered products
increased for the eleventh consecutive quarter, reaching 250 million units
during the quarter. We continue to see considerable interest in our diverse
technology portfolio from both existing and new customers, as evidenced by
strategic licensing agreements with a high volume semiconductor vendor for
our new CEVA-MM3000 platform to be used for smartphones and smart TVs and
with a tier one handset and tablet OEM for our audio platform."
Of the eight new license agreements concluded during the third quarter
of 2011, six agreements were for CEVA DSP cores, platforms and software, one
agreement was for CEVA SATA/SAS product lines and one agreement was for CEVA
Bluetooth technology. Target applications for customer deployment are 4G
baseband processors, video, imaging and audio in application processors,
power line communications (PLC), connectivity and solid state drives (SSDs).
Geographically, two of the agreements signed were in the U.S. and six were
in Asia Pacific, including Japan.
U.S. GAAP net income for the third quarter of 2011 was $4.9 million, an
increase of 65% over $3.0 million reported for the same period in 2010. U.S.
GAAP diluted earnings per share for the third quarter of 2011 were $0.20, an
increase of 54% compared to $0.13 for the third quarter of 2010.
Non-GAAP net income and diluted earnings per share for the third quarter
of 2011 were $6.3 million and $0.26 respectively, representing an increase
of 107% and 86%, respectively, over the $3.0 million and $0.14 reported for
the third quarter of 2010. Non-GAAP net income and diluted earnings per
share for the third quarter of 2011 and 2010 excluded an aggregate
equity-based compensation expense, net of taxes, of $1.4 million and $0.5
million, respectively.
Yaniv Arieli, Chief Financial Officer of CEVA, stated, "Our third
quarter financial performance achieved a number of significant milestones
and maintained the momentum generated during the first half of the year. We
produced record high gross margins, operating margins, non-GAAP net income
and earnings per share through a combination of solid licensing pipeline,
reflecting our excellent product portfolio, continued strength in our
royalty business and a company-wide commitment to conservative financial
management. At the end of the third quarter, our cash balance, marketable
securities and bank deposits totaled approximately $156 million."
CEVA Conference Call
On October 27, 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 third quarter ended September 30, 2011.
The conference call will be available via the following dial in numbers:
- U.S. Participants: Dial 1-800-860-2442 (Access Code: CEVA or
10005147)
- International Participants: Dial +1-412-858-4600 (Access Code:
CEVA or 10005147)
The conference call will also be available live via the Internet at the
following link: http://www.videonewswire.com/event.asp?id=82668. 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 (passcode: 10005147) from one hour after the end of the call
until 9:00 a.m. (Eastern Time) on November 03, 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) DSP cores and platform solutions 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. Follow CEVA on twitter at
www.twitter.com/cevadsp.
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,
2011 2010 2011 2010
--- --- --- ---
Unaudited Unaudited Unaudited Unaudited
--------- --------- --------- ---------
Revenues:
Licensing $5,225 $4,459 $15,528 $13,774
Royalties 8,766 5,238 26,244 15,372
Other revenues 856 978 2,515 2,739
-- -- ---- ----
Total revenues 14,847 10,675 44,287 31,885
----- ----- ----- -----
Cost of revenues 811 1,001 2,635 2,578
-- ---- ---- ----
Gross profit 14,036 9,674 41,652 29,307
----- ---- ----- -----
Operating expenses:
Research and
development, net 5,158 4,129 15,813 13,243
Sales and marketing 2,099 1,664 6,650 5,248
General and
administrative 2,057 1,593 5,553 4,709
----- ----- ----- -----
Total operating
expenses 9,314 7,386 28,016 23,200
----- ----- ------ ------
Operating income 4,722 2,288 13,636 6,107
Interest and other
income, net 784 493 2,046 1,591
--- --- ----- -----
Income before income
tax 5,506 2,781 15,682 7,698
Income tax expense
(income) 571 (208) 1,973 527
--- ---- ----- ---
Net income 4,935 2,989 13,709 7,171
==== ==== ===== ====
Basic net income per
share $0.21 $0.14 $0.59 $0.34
Diluted net income
per share $0.20 $0.13 $0.57 $0.32
Weighted-average
number of Common
Stock used in
computation of net
income
per share (in
thousands):
Basic 23,390 21,244 23,065 20,989
Diluted 24,253 22,356 24,105 22,114
====== ====== ====== ======
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,
2011 2010 2011 2010
---- ---- ---- ----
Unaudited Unaudited Unaudited Unaudited
--------- --------- --------- ---------
GAAP net income 4,935 2,989 13,709 7,171
Equity-based
compensation
expense included in
cost of revenue 61 23 171 56
Equity-based
compensation
expense included in
research and
development
expenses 510 183 1,372 489
Equity-based
compensation
expense included in
sales and marketing
expenses 291 92 747 300
Equity-based
compensation
expense included in
general and
administrative
expenses 553 239 1,250 816
Income tax expense
(income) (99)(2) (500)(1) (98)(2) (500)(1)
------ ------- ------ -------
Non-GAAP net income 6,251 3,026 17,151 8,332
===== ===== ====== =====
GAAP weighted-
average number of
Common Stock used
in computation of
diluted net income
per share (in
thousands) 24,253 22,356 24,105 22,114
Weighted-average
number of shares
related to
outstanding options 11 41 19 64
--- --- --- ---
Weighted-average
number of Common
Stock used in
computation of
diluted net income
per share,
excluding equity-
based compensation
expense and tax
income (in
thousands) 24,264 22,397 24,124 22,178
GAAP diluted net
income per share $0.20 $0.13 $0.57 $0.32
Equity-based
compensation
expense $0.06 $0.03 $0.14 $0.08
Income tax expense
(income) - $(0.02)(1) - $(0.02)(1)
--- --------- --- ---------
Non-GAAP diluted
net income per
share $0.26 $0.14 $0.71 $0.38
===== ===== ===== =====
(1) Results for the three months and the nine months ended
September 30, 2010 included $0.5 million of tax income
associated with adjustments related to international cost
allocations, as well as tax planning strategies to utilize
certain deferred tax assets.
(2) Results for the three months and the nine months ended
September 30, 2011 included $0.1 million of tax income
related to equity-based compensation expenses.
CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. Dollars in Thousands
September December
30, 31,
2011 2010
--- ---
Unaudited Audited
--------- -------
ASSETS
Current assets:
Cash and cash equivalents $22,695 $17,098
Marketable securities and short term bank
deposits 114,537 98,681
Trade receivables, net 4,485 5,906
Deferred tax assets 1,973 1,288
Prepaid expenses and other accounts
receivables 4,508 4,609
----- -----
Total current assets 148,198 127,582
------ ------
Long-term investments: 18,369 15,173
Long-term bank deposits
Severance pay fund 5,525 5,433
Deferred tax assets 893 574
Property and equipment, net 1,192 1,348
Goodwill 36,498 36,498
----- -----
Total assets $210,675 $186,608
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables $562 $616
Deferred revenues 1,450 616
Accrued expenses and other payables 9,353 10,521
Deferred tax liabilities 136 901
-- --
Total current liabilities 11,501 12,654
Accrued severance pay 5,782 5,486
Total liabilities 17,283 18,140
----- -----
Stockholders' equity:
Common Stock 23 23
Additional paid in-capital 189,256 176,838
Accumulated other comprehensive income
(loss) (886) 317
Accumulated income (deficit) 4,999 (8,710)
---- ------
Total stockholders' equity 193,392 168,468
------ ------
Total liabilities and stockholders' equity $210,675 $186,608
======== ========
SOURCE CEVA, Inc.
CONTACT: Yaniv Arieli, CEVA, Inc., CFO, +1-650-417-7941,
yaniv.arieli@ceva-dsp.com, or Richard Kingston, CEVA, Inc., Director of
Marketing & Investor Relations, +1-650-417-7976,
richard.kingston@ceva-dsp.com
END
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