CEVA INC - 3rd Quarter Results

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Oct 28, 2009 (PR Newswire Europe via COMTEX) -- CEVA | Quote | Chart | News | PowerRating -- e>CEVA, Inc. Announces Third Quarter 2009 Financial Results - Improved licensing environment and continued market share gains on handsets - Generated all-time record high gross and operating margins of 91% and 17%, respectively SAN JOSE, Calif., Oct. 28 -- CEVA, Inc. (Nasdaq: CEVA); (LSE: CVA), a leading licensor of silicon intellectual property (SIP) platform solutions and DSP cores for the mobile handset, consumer electronics and portable device markets, today announced its financial results for the third quarter ended September 30, 2009. (Logo: http://www.newscom.com/cgi-bin/prnh/20051010/CEVALOGO) Total revenue for the third quarter of 2009 was $9.7 million, a decrease of 5% compared to $10.2 million reported in the third quarter of 2008. Third quarter 2009 licensing revenue was $5.2 million, a decrease of 12% when compared to $6.0 million reported in the third quarter of 2008. Royalty revenue for the third quarter of 2009 was $3.7 million, an increase of 12% compared to $3.3 million reported for the third quarter of 2008. Revenue from services for the third quarter of 2009 was $0.7 million, down 23% from $0.9 million reported for the third quarter of 2008. U.S. GAAP net income for the third quarter of 2009 was $1.8 million, an increase of 25% over $1.4 million reported for the same period in 2008. U.S. GAAP diluted net income per share for the third quarter of 2009 was $0.09 per share, an increase of 29% compared to $0.07 for the third quarter of 2008. Non-GAAP net income and diluted net income per share for the third quarter of 2009, excluding the aggregate equity-based compensation expense of $0.7 million, were both all time record highs of $2.4 million and $0.12 per share, an increase of 34% and 33%, respectively, over the $1.8 million and $0.09 per share reported for the third quarter of 2008. Non-GAAP net income and diluted net income per share for the third quarter of 2008 excluded aggregate equity-based compensation expense of $0.8 million and a capital gain of $0.4 million related to the divestment of the Company's equity interest in GloNav Inc. Gideon Wertheizer, Chief Executive Officer of CEVA, stated, "Our solid third quarter performance reflects a strong demand for our DSPs and technologies and a continued worldwide market share expansion in the handsets market which reached a record high of 23%. We are encouraged by the increasing demand for our newest technologies for the growing markets of LTE, MID, HD multimedia and Passive Optical Networks (PON)." During the third quarter, the Company concluded six new license agreements. Five agreements were for CEVA DSP cores, platforms and software and one agreement was for Bluetooth technology. Target applications for customer deployment are 2G ultra-low cost phones, 3G handsets, Smartphones, mobileTVs, portable multimedia and Passive Optical Networks (PON). Geographically, three of the agreements signed were in Europe and three in Asia. Yaniv Arieli, Chief Financial Officer of CEVA, stated, "Our third quarter results and the positive momentum in our business exceeded our expectations. As a result, our gross and operating margins as well as our non-GAAP net income and EPS reached record highs during the quarter. We also generated positive cash flow of approximately $4.0 million, bringing our cash balances and marketable securities to $91.8 million." CEVA Conference Call On October 28, 2009, CEVA management will conduct a conference call at 8:30 a.m. Eastern Time / 12:30 p.m. London time, to discuss the operating performance for the quarter. The conference call will be available via the following dial in numbers: - US Participants: Dial 1-877-493-9121 (Access Code: CEVA) - UK/Rest of World: Dial +44-800-051-3806 (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=62652. Please go to the website 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: 33933901) for US domestic callers and +44-800-917-2646 (passcode: 33933901) for international callers from two hours after the end of the call until 11:59 p.m. (Eastern Time) on November 4, 2009. The replay will also be available at CEVA's web site www.ceva-dsp.com. About CEVA, Inc. Headquartered in San Jose, Calif., CEVA is a 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 solutions for multimedia, audio, voice over packet (VoP), Bluetooth and Serial ATA (SATA), and a wide range of programmable DSP cores and subsystems with different price/performance metrics serving multiple markets. In 2008, CEVA's IP was shipped in over 300 million devices. 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 the company being encouraged by the increased interest in CEVA's newest DSP technologies for next generation wireless products, and Mr. Arieli's statements about the positive momentum in the Company's business. 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 effect of intense competition within our industry; the effect of the challenging period of growth experienced by industries in which we license our technologies; the possibility that the 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; our ability to continue to improve our royalty revenue in future periods; 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, 2009 2008 2009 2008 Unaudited Unaudited Unaudited Unaudited --------- --------- --------- --------- Revenues: Licensing $5,242 $5,974 $14,059 $17,088 Royalties 3,694 3,296 11,403 10,067 Other revenues 723 936 2,820 3,201 --- --- ----- ----- Total revenues 9,659 10,206 28,282 30,356 ----- ------ ------ ------ Cost of revenues 849 1,105 3,211 3,543 --- ----- ----- ----- Gross profit 8,810 9,101 25,071 26,813 ----- ----- ------ ------ Operating expenses: Research and development, net 4,061 4,778 12,132 15,133 Sales and marketing 1,628 1,822 4,914 5,401 General and administrative 1,525 1,705 4,555 4,991 Amortization of intangible assets - 12 - 53 Reorganization expense - - - 3,537 --- --- --- ----- Total operating expenses 7,214 8,317 21,601 29,115 ----- ----- ------ ------ Operating income (loss) 1,596 784 3,470 (2,302) Interest and other income, net 551 1,003 3,402 13,226 --- ----- ----- ------ Income before taxes on income 2,147 1,787 6,872 10,924 Taxes on income 394 384 1,436 3,319 --- --- ----- ----- Net income 1,753 1,403 5,436 7,605 ===== ===== ===== ===== Basic net income per share $0.09 $0.07 $0.28 $0.38 Diluted net income per share $0.09 $0.07 $0.27 $0.37 Weighted-average number of Common Stock used in computation of net income per share (in thousands): Basic 19,689 20,157 19,588 20,131 Diluted 20,492 20,799 20,087 20,776 ====== ====== ====== ====== 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, 2009 2008 2009 2008 ---- ---- ---- ---- Unaudited Unaudited Unaudited Unaudited --------- --------- --------- --------- GAAP net income 1,753 1,403 5,436 7,605 Equity-based compensation expense included in cost of revenue 21 28 90 83 Equity-based compensation expense included in research and development expenses 197 273 689 805 Equity-based compensation expense included in sales and marketing expenses 138 143 442 380 Equity-based compensation expense included in general and administrative expenses 329 343 989 816 Reorganization expense (1) - - - 3,537 Other income (2)(3)(4) - (358) (1,901) (11,247) Taxes on income(2)(4) - (19) 543 3,177 --- --- --- ----- Non-GAAP net income 2,438 1,813 6,288 5,156 ===== ===== ===== ===== GAAP weighted-average number of Common Stock used in computation of diluted net income per share (in thousands) 20,492 20,799 20,087 20,776 Weighted-average number of shares related to outstanding options 96 169 36 169 -- --- -- --- Weighted-average number of Common Stock used in computation of diluted net income per share, excluding equity-based compensation expense; reorganization expense, net; capital gains associated with the divestment of CEVA's equity investment in GloNav Inc., net; and disposal of an investment, net (in thousands) 20,588 20,968 20,123 20,945 GAAP diluted net income per share $0.09 $0.07 $0.27 $0.37 Equity-based compensation expense $0.03 $0.04 $0.10 $0.10 Reorganization expense - - - $0.17(1) Other income - (0.02)(3) (0.09)(4) (0.54)(2) Taxes on income - $0.00 $0.03(4) $0.15(2) - ----- ------- ------- Non-GAAP diluted net income per share $0.12 $0.09 $0.31 $0.25 ===== ===== ===== ===== (1) Results for the nine months ended September 30, 2008 included a reorganization expense of $3.5 million related to the termination of the long-term Harcourt lease property in Ireland. (2) Results for the nine months ended September 30, 2008 included a capital gain of $11.2 million reported in interest and other income, net, and the applicable tax expense of $3.2 million reported in taxes on income, related to the divestment of CEVA's equity interest in GloNav Inc. to NXP Semiconductors and a gain of $0.02 million reported in interest and other income, net, related to the disposal of an investment. (3) Results for the three months ended September 30, 2008 included a capital gain of $0.4 million reported in interest and other income, net, related to the divestment of CEVA's equity interest in GloNav Inc. (4) Results for the nine months ended September 30, 2009 included a capital gain of $1.9 million reported in interest and other income, net, and the applicable tax expense of $0.5 million reported in taxes on income, related to the divestment of CEVA's equity interest in GloNav Inc. to NXP Semiconductors. CEVA, INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. Dollars in thousands) September 30, December 31, 2009 2008 ---- ---- Unaudited Audited --------- ------- ASSETS Current assets: Cash and cash equivalents $8,657 $13,328 Marketable securities and bank deposits 83,122 71,301 Trade receivables, net 6,364 5,390 Deferred tax assets 1,075 1,085 Prepaid expenses and other accounts receivables 4,675 4,921 ----- ----- Total current assets 103,893 96,025 ------- ------ Long-term investments: Severance pay fund 4,071 3,441 Deferred tax assets 419 351 Property and equipment, net 1,217 1,271 Goodwill 36,498 36,498 ------ ------ Total assets $146,098 $137,586 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Trade payables $560 $615 Deferred revenues 541 1,034 Taxes payable 99 44 Accrued expenses and other payables 8,290 10,446 Deferred tax liabilities 183 - --- --- Total current liabilities 9,673 12,139 Accrued severance pay 4,337 3,788 ----- ----- Total liabilities 14,010 15,927 ------ ------ Stockholders' equity: Common Stock: 20 20 Additional paid in-capital 155,960 153,712 Treasury Stock (2,327) (5,077) Other comprehensive income (loss) 488 (24) Accumulated deficit (22,053) (26,972) ------- ------- Total stockholders' equity 132,088 121,659 ------- ------- Total liabilities and stockholders' equity $146,098 $137,586 ======== ======== SOURCE CEVA, Inc. CONTACT: Yaniv Arieli, CFO, +1-408-514-2941, yaniv.arieli@ceva-dsp.com, or Richard Kingston, +1-408-514-2976, richard.kingston@ceva-dsp.com, both of CEVA, Inc. END

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