8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): July 31, 2014

CEVA, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

000-49842	77-0556376
(Commission File Number)	(I.R.S. Employer Identification No.)
1943 Landings Drive, Mountain View, CA	94043
(Address of Principal Executive Offices)	(Zip Code)

650/417-7900

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On July 31, 2014, CEVA, Inc. (the “Company”) announced its financial results for the quarter ended June 30, 2014. A copy of the press release, dated July 31, 2014, is attached and filed herewith as Exhibit 99.1. This information, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference to such filing.

In addition to the disclosure of financial results for the quarters ended June 30, 2014 and 2013 in accordance with generally accepted accounting principles in the United States (“GAAP”), the press release also included non-GAAP net income and diluted earnings per share (EPS) figures that excluded (i) for the quarters ended June 30, 2014 and 2013, equity-based compensation expenses for the respective periods and (ii) for the quarter ended June 30, 2014, transaction expenses, net of taxes, associated with an acquisition.

The Company believes that the reconciliation of financial measures in the press release is useful to investors in analyzing the results for the quarters and years ended June 30, 2014 and 2013 because the exclusion of such expenses may provide a more meaningful analysis of the Company’s core operating results and comparison of quarterly results. Further, the Company believes it is useful for investors to understand how the expenses associated with the application of FASB ASC No. 718 are reflected on its statements of income. The reconciliation of financial measures should be reviewed in addition to and in conjunction with results presented in accordance with GAAP, and are intended to provide additional insight into the Company’s operations that, when viewed with its GAAP results and the accompanying reconciliation, offer a more complete understanding of factors and trends affecting the Company’s business. The reconciliation of financial measures should not be viewed as a substitute for the Company’s reported GAAP results.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.

99.1 Press Release of CEVA, Inc., dated July 31, 2014.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CEVA, INC.
Date: July 31, 2014	By:	/s/ Yaniv Arieli
		Yaniv Arieli
		Chief Financial Officer

EX-99.1

Exhibit 99.1

CEVA, Inc. Announces Second Quarter 2014 Financial Results

• Continued diversification of customer base with ten out of eleven agreements signed in quarter targeting non-baseband applications

• Company bought back $10.1 million in CEVA shares during the quarter

MOUNTAIN VIEW, Calif. – July 31, 2014 – CEVA, Inc. (NASDAQ: CEVA), the leading licensor of DSP-based IP platforms for vision, audio, communications and connectivity, today announced its financial results for the second quarter ended June 30, 2014.

Total revenue for the second quarter of 2014 was $9.2 million, a decrease of 28% compared to $12.8 million for the second quarter of 2013. Licensing and related revenue for the second quarter of 2014 was $4.4 million, a decrease of 29% compared to $6.1 million reported for the second quarter of 2013. Royalty revenue for the second quarter of 2014 was $4.9 million, a decrease of 27% compared to $6.7 million reported for the second quarter of 2013.

Gideon Wertheizer, Chief Executive Officer, stated: “We continued to execute on our market expansion strategy during the quarter, signing eleven licensing deals in total, ten of which are for non-baseband applications. In addition, a twelfth licensing agreement of approximately $1 million that we originally anticipated executing in the second quarter, executed in July. Looking ahead, we are seeing a good licensing pipeline and improved visibility for the upcoming quarter, which will be reflected in our guidance. In addition, we are expecting sequential royalty revenue growth driven by an increase in baseband shipments.”

U.S. GAAP net loss for the second quarter of 2014 was $1.5 million, as compared to U.S. GAAP net income for the second quarter of 2013 of $2.2 million. U.S. GAAP diluted loss per share for the second quarter of 2014 was $0.07 as compared to U.S. GAAP diluted earnings per share for the second quarter of 2013 of $0.10.

Non-GAAP net loss and diluted loss per share for the second quarter of 2014 was $0.1 million and $0.00, respectively. Non-GAAP net income and diluted earnings per share for the second quarter of 2013 was $3.4 million and $0.15, respectively. Non-GAAP net income and diluted earnings per share for the second quarter of 2014 excluded equity-based compensation expense, net of taxes, of $1.3 million and $0.2

million related to transaction costs, net of taxes, associated with the RivieraWaves acquisition. Non-GAAP net income and diluted earnings per share for the second quarter of 2013 excluded equity-based compensation expense, net of taxes, $1.2 million.

During the second quarter of 2014, the Company concluded 11 new license agreements. Six of the agreements were for CEVA DSP cores and platforms, three for Bluetooth and two for SATA. Target applications include LTE-Advanced baseband, audio, connectivity and SSD drives. Geographically, nine of the agreements signed were in the APAC, including Japan, and two were in the U.S.

Yaniv Arieli, Chief Financial Officer, stated, “Notwithstanding the challenges we experienced in the second quarter of 2014, we are forecasting record high licensing revenue for the third quarter driven by strong demand for our DSPs. Coupled with sequential growth in royalties, total revenue guidance for the third quarter is expected to be in the range of $13.3 million to $14.3 million. Our overall financial position remains strong with our cash balance, marketable securities and bank deposits totaling $139 million at the end of the quarter, before the reduction of approximately $19 million associated with the RivieraWaves acquisition, which we consummated in early July.”

During the second quarter, the company bought back approximately 694,000 shares of CEVA common stock for an aggregate consideration of $10.1 million. In total, there are approximately 300,000 shares that remain available for repurchase under the CEVA, Inc. 10b-18 plan.

CEVA Conference Call

On July 31, 2014, 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, 2014.

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

• U.S. Participants: Dial 1-877-870-4263 (Access Code: CEVA)

• International Participants: Dial +1-412-317-0790 (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=99935. 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: 10048944) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on August 8, 2014. The replay will also be available at CEVA’s web site www.ceva-dsp.com.

For More Information Contact:

Yaniv Arieli	Richard Kingston
CEVA, Inc.	CEVA, Inc.
CFO	VP, IR & Corporate Communications
+1.650.417.7941	+1.650.417.7976
yaniv.arieli@ceva-dsp.com	richard.kingston@ceva-dsp.com

About CEVA, Inc.

CEVA is the world’s leading licensor of DSP-based IP platforms for vision, audio, communications and connectivity. CEVA’s IP portfolio includes comprehensive technologies for computer vision and computational photography, advanced audio and voice processing, wireless baseband (2G, 3G & 4G LTE/LTE-A), connectivity (Wi-Fi & Bluetooth) and serial storage (SATA & SAS). In 2013, CEVA’s IP was shipped in more than one billion devices, including 40% of handsets shipped worldwide, powering smartphones from many of the world’s leading OEMs such as Coolpad, HTC, Huawei, Lenovo, LG, Nokia, Samsung, TCL, Xiaomi and ZTE. 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 a good licensing pipeline, improved visibility for the upcoming quarter and sequential royalty revenue growth, as well as Mr. Arieli’s statements about revenue guidance for the third quarter of 2014. The risks, uncertainties and assumptions include: the ability of the CEVA DSP cores to continue to be strong growth drivers for us; our success in penetrating new markets, including connectivity, and maintaining our market position in existing markets; our ability to successfully integrate the RivieraWaves business and retain its former employees; the ability of DSP products incorporating RivieraWaves’ Wi-Fi and Bluetooth technologies, as well as other new products incorporating our technologies to achieve market acceptance; the speed and extent of the expansion of the 3G and LTE networks; the effect of intense industry competition and consolidation; global chip market trends; 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 OPERATIONS – U.S. GAAP

U.S. dollars in thousands, except per share data

	Three months ended					Six months ended
	June 30,					June 30,
	2014			2013		2014			2013
	Unaudited
Revenues:
Licensing and related revenues	$	4,355		$	6,129	$	12,261		$	11,163
Royalties		4,860			6,684		10,628			13,766
Total revenues		9,215			12,813		22,889			24,929
Cost of revenues		1,370			1,093		2,482			2,668
Gross profit		7,845			11,720		20,407			22,261
Operating expenses:
Research and development, net		6,051			5,621		12,047			10,660
Sales and marketing		2,197			2,540		4,590			4,895
General and administrative		1,861			1,744		3,901			3,582
Total operating expenses		10,109			9,905		20,538			19,137
Operating income (loss)		(2,264	)		1,815		(131	)		3,124
Financial income, net		417			707		877			1,436
Income (loss) before taxes on income		(1,847	)		2,522		746			4,560
Income tax expenses (benefit)		(321	)		347		287			680
Net income (loss)		(1,526	)		2,175		459			3,880
Basic net income (loss) per share	($	0.07	)	$	0.10	$	0.02		$	0.18
Diluted net income (loss) per share	($	0.07	)	$	0.10	$	0.02		$	0.17
Weighted-average number of Common Stock used in computation of net income (loss) per share (in thousands):
Basic		20,778			22,087		20,968			22,142
Diluted		20,778			22,546		21,368			22,608

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
	2014			2013			2014			2013
	Unaudited
GAAP net income (loss)	($	1,526	)	$	2,175		$	459		$	3,880
Equity-based compensation expense included in cost of revenue		56			81			114			150
Equity-based compensation expense included in research and development expenses		533			409			1,134			855
Equity-based compensation expense included in sales and marketing expenses		266			332			568			628
Equity-based compensation expense included in general and administrative expenses		493			524			1,045			1031
Deferred tax related to equity-based compensation expenses		(69	)		(135	)		(204	)		(252	)
Acquisition related costs, net of tax (1)		176			—			176			—
Non-GAAP net income (loss)	($	71	)	$	3,386		$	3,292		$	6,292
GAAP weighted-average number of Common Stock used in computation of diluted net income (loss) per share (in thousands)		20,778			22,546			21,368			22,608
Weighted-average number of shares related to outstanding options (in thousands)		—			1			—			1
Weighted-average number of Common Stock used in computation of diluted net income (loss) per share excluding equity-based compensation expense and transaction costs, net of taxes (in thousands)		20,778			22,547			21,368			22,609
GAAP diluted net income (loss) per share	($	0.07	)	$	0.10		$	0.02		$	0.17
Equity-based compensation expense, net of taxes	$	0.06		$	0.05		$	0.12		$	0.11
RivieraWaves transaction costs	$	0.01			—		$	0.01			—
Non-GAAP diluted net income (loss) per share	($	0.00	)	$	0.15		$	0.15		$	0.28

(1) Acquisition related costs pertain to tax and legal services associated with the RivieraWaves transaction.

CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)

	June 30,			December 31,
	2014			2013 (*)
	Unaudited
ASSETS
Current assets:
Cash and cash equivalents	$	22,893		$	24,117
Marketable securities and short term bank deposits		100,457			110,411
Trade receivables, net		5,070			5,629
Deferred tax assets		3,584			3,457
Prepaid expenses and other current assets		2,672			1,996
Total current assets		134,676			145,610
Long-term assets:
Long term bank deposits		16,040			17,066
Severance pay fund		7,580			7,215
Deferred tax assets		997			955
Property and equipment, net		1,463			1,616
Goodwill		36,498			36,498
Investment in other companies		3,367			3,367
Total assets	$	200,621		$	212,327
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade payables	$	894		$	1,085
Deferred revenues		762			623
Accrued expenses and other payables		7,894			10,563
Taxes Payable		1,911			1,833
Deferred tax liabilities		69			73
Total current liabilities		11,530			14,177
Accrued severance pay		7,677			7,255
Total liabilities		19,207			21,432
Stockholders’ equity:
Common stock:		20			21
Additional paid in-capital		207,276			204,415
Treasury stock		(52,770	)		(41,005	)
Accumulated other comprehensive loss		(64	)		(81	)
Retained earnings		26,952			27,545
Total stockholders’ equity		181,414			190,895
Total liabilities and stockholders’ equity	$	200,621		$	212,327

(*) Derived from audited financial statements