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): October 30, 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
(Registrants 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 October 30, 2014, CEVA, Inc. (the Company) announced its financial results for the quarter ended September 30, 2014. A copy of the press release, dated October 30, 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 September 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 September 30, 2014 and 2013, equity-based compensation expenses for the respective periods, net of related tax, and (ii) for the quarter ended September 30, 2014, (a) the impact of the amortization of acquired intangibles associated with the acquisition of RiveraWaves SAS (the Acquisition), (b) a loss from the sale of the Companys minority equity holdings in a private company, (c) transaction expenses associated with the Acquisition, and (d) income tax benefit related to the 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 September 30, 2014 and 2013 because the exclusion of such expenses may provide a more meaningful analysis of the Companys 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 Companys operations that, when viewed with its GAAP results and the accompanying reconciliation, offer a more complete understanding of factors and trends affecting the Companys business. The reconciliation of financial measures should not be viewed as a substitute for the Companys reported GAAP results.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
99.1 | Press Release of CEVA, Inc., dated October 30, 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: | October 30, 2014 | By: | /s/ Yaniv Arieli | |||||||
Yaniv Arieli | ||||||||||
Chief Financial Officer |
Exhibit 99.1
CEVA, Inc. Announces Third Quarter 2014 Financial Results
| Revenues up 41% year-over-year to $14.1M |
| Record licensing and related revenues of $8.7 million, up 121% year-over-year |
| Ten licensing agreements signed, including seven first-time customers |
| Company initiates a new one million share buyback program |
MOUNTAIN VIEW, Calif. October 30, 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 third quarter ended September 30, 2014.
Total revenue for the third quarter of 2014 was $14.1 million, an increase of 41% compared to $10.0 million for the third quarter of 2013. Licensing and related revenue for the third quarter of 2014 was $8.7 million, an increase of 121% compared to $3.9 million reported for the third quarter of 2013. Royalty revenue for the third quarter of 2014 was $5.4 million, a decrease of 11% compared to $6.1 million reported for the third quarter of 2013.
Gideon Wertheizer, Chief Executive Officer, stated: Our third quarter results were driven by the strongest licensing quarter in the companys history. We continue to experience a healthy demand for our products from new customers targeting a broad range of end markets. We are encouraged by our customers progress in LTE and low cost smartphone shipments, both of which delivered quarter-over-quarter and year-over-year unit growth.
U.S. GAAP net income for the third quarter of 2014 was $0.7 million, compared to a net loss of $0.3 million reported for the same period in 2013. U.S. GAAP diluted earnings per share for the third quarter of 2014 were $0.03 compared to diluted loss per share of $0.01 for the third quarter of 2013.
Non-GAAP net income and diluted net income per share for the third quarter of 2014 were $2.4 million and $0.12, respectively, representing an increase of 87% and 100%, respectively, over the $1.3 million and $0.06 reported for the third quarter of 2013. Non-GAAP net income and diluted earnings per share for the third quarter of 2014 exclude: (a) equity-based compensation expense, net of taxes, of $1.0 million, (b) the impact of the amortization of acquired intangibles of $0.3 million associated with the acquisition of RiveraWaves, (c) a loss of approximately $0.4 million from the sale of our minority equity holdings in Antcor, which was sold to u-blox during the quarter, (d) $0.1 million of costs associated with the RivieraWaves acquisition, and (e) income tax benefit related to RivieraWaves acquisition of approximately $0.1 million. Non-GAAP net income and diluted earnings per share for the third quarter of 2013 excluded equity-based compensation expense, net of taxes, of $1.6 million.
During the third quarter of 2014, the Company concluded ten new license agreements. Four of the agreements were for CEVA DSP cores, platforms and software, and six were for CEVA connectivity IPs. Target applications for customer deployment are LTE-Advanced handsets, mobile infrastructure, vision for surveillance equipment and digital cameras, access points and wearables. Geographically, six of the agreements signed were in the APAC, including Japan, three were in the U.S. and one was in Europe.
Yaniv Arieli, Chief Financial Officer, stated, We continued to demonstrate the strength of our licensing business during the third quarter, which further underpins our strategy to grow and diversify our future royalty streams across multiple new markets. Our overall financial position remains robust with our cash balances, marketable securities and bank deposits totaling $128 million at the end of the quarter, post acquisition-related payments, net of cash acquired, of approximately $12 million for RivieraWaves. In addition, we bought back approximately 300,000 shares of CEVA common stock during the quarter for an aggregate consideration of $4.4 million. From the recent July 2013 plan, we successfully repurchased two million shares of our common stock for an aggregate consideration of $30.6 million. We are pleased to announce that our Board of Directors approved a new repurchase plan for an additional one million shares.
CEVA Conference Call
On October 30, 2014, CEVA management will conduct a conference call at 8:30 a.m. Eastern Time to discuss the companys operating performance for the quarter.
The conference call will be available via the following dial in numbers:
| U.S. Participants: Dial 1-866-364-3869 (Access Code: CEVA) |
| International Participants: Dial +1-412-902-4215 (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=100614. 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: 10053519) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on November 14, 2014. The replay will also be available at CEVAs web site www.ceva-dsp.com.
For More Information Contact:
Yaniv Arieli CEVA, Inc. CFO +1.650.417.7941 yaniv.arieli@ceva-dsp.com |
Richard Kingston CEVA, Inc. VP, Investor Relations & Corporate Communications +1.650.417.7976 richard.kingston@ceva-dsp.com |
About CEVA, Inc.
CEVA is the worlds leading licensor of DSP-based IP platforms for vision, audio, communications and connectivity. CEVAs 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, CEVAs IP was shipped in more than one billion devices, including 40% of handsets shipped worldwide, powering smartphones from many of the worlds 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. Wertheizers statement that CEVA is experiencing a healthy demand for its products from new customers targeting a broad range of end markets, as well as Mr. Arielis statements expressing optimism about CEVAs strategy to grow and diversify its future royalty streams across multiple new markets. 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 speed and extent of the expansion of the 3G and LTE networks, as well as the IoT space, the effect of intense industry competition and consolidation, global chip market trends, the possibility that markets for CEVAs 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
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, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||
Revenues: |
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Licensing and related revenues |
$ | 8,728 | $ | 3,945 | $ | 20,989 | $ | 15,108 | ||||||||
Royalties |
5,370 | 6,060 | 15,998 | 19,826 | ||||||||||||
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Total revenues |
14,098 | 10,005 | 36,987 | 34,934 | ||||||||||||
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Cost of revenues |
1,255 | 1,131 | 3,737 | 3,799 | ||||||||||||
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Gross profit |
12,843 | 8,874 | 33,250 | 31,135 | ||||||||||||
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Operating expenses: |
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Research and development, net |
6,453 | 5,619 | 18,500 | 16,279 | ||||||||||||
Sales and marketing |
2,611 | 2,376 | 7,201 | 7,271 | ||||||||||||
General and administrative |
2,223 | 2,006 | 6,124 | 5,588 | ||||||||||||
Amortization of intangible assets |
326 | | 326 | | ||||||||||||
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Total operating expenses |
11,613 | 10,001 | 32,151 | 29,138 | ||||||||||||
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Operating income (loss) |
1,230 | (1,127 | ) | 1,099 | 1,997 | |||||||||||
Financial and other income (loss), net |
(338 | ) | 617 | 539 | 2,053 | |||||||||||
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Income (loss) before taxes on income |
892 | (510 | ) | 1,638 | 4,050 | |||||||||||
Income tax expense (benefit) |
236 | (187 | ) | 523 | 493 | |||||||||||
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Net income (loss) |
656 | (323 | ) | 1,115 | 3,557 | |||||||||||
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Basic and diluted net income (loss) per share |
$ | 0.03 | ($ | 0.01 | ) | $ | 0.05 | $ | 0.16 | |||||||
Weighted-average number of Common Stock used in computation of net income (loss) per share (in thousands): |
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Basic |
20,355 | 22,072 | 20,761 | 22,118 | ||||||||||||
Diluted |
20,667 | 22,072 | 21,132 | 22,601 | ||||||||||||
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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, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||
GAAP net income (loss) |
656 | (323 | ) | 1,115 | 3,557 | |||||||||||
Equity-based compensation expense included in cost of revenue |
45 | 73 | 159 | 223 | ||||||||||||
Equity-based compensation expense included in research and development expenses |
441 | 634 | 1,575 | 1,489 | ||||||||||||
Equity-based compensation expense included in sales and marketing expenses |
185 | 393 | 753 | 1,021 | ||||||||||||
Equity-based compensation expense included in general and administrative expenses |
451 | 660 | 1,496 | 1,691 | ||||||||||||
Costs associated with the RivieraWaves acquisition (1) |
48 | | 311 | | ||||||||||||
Amortization of intangible assets related to RivieraWaves transaction |
326 | | 326 | | ||||||||||||
Loss from realize of investment in other company associated with Antcor |
404 | | 404 | | ||||||||||||
Income tax benefit related to equity-based compensation expenses |
(120 | ) | (159 | ) | (324 | ) | (411 | ) | ||||||||
Income tax benefit related to RivieraWaves acquisition |
(122 | ) | | (209 | ) | | ||||||||||
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Non-GAAP net income |
2,392 | 1,278 | 5,684 | 7,570 | ||||||||||||
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(1) | Acquisition and related costs pertain to tax and legal services and adjustment to the contingent consideration associated with the RivieraWaves transaction. |
GAAP weighted-average number of Common Stock used in computation of diluted net income (loss) per share (in thousands) |
20,667 | 22,072 | 21,132 | 22,601 | ||||||||||||
Weighted-average number of shares related to outstanding options |
| 569 | | 18 | ||||||||||||
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Non-GAAP weighted-average number of Common Stock used in computation of diluted net income per share (in thousands) |
20,667 | 22,641 | 21,132 | 22,619 | ||||||||||||
GAAP diluted net income (loss) per share |
$ | 0.03 | ($ | 0.01 | ) | $ | 0.05 | $ | 0.16 | |||||||
Equity-based compensation expense, net of taxes |
$ | 0.05 | $ | 0.07 | $ | 0.18 | $ | 0.17 | ||||||||
Acquisition related costs |
$ | 0.00 | $ | 0.01 | ||||||||||||
Amortization of intangible assets related to RivieraWaves transaction |
$ | 0.02 | $ | 0.02 | ||||||||||||
Loss from realize of investment in other company associated with Antcor |
$ | 0.02 | $ | 0.02 | ||||||||||||
Income tax benefit related to RivieraWaves acquisition |
| ($ | 0.01 | ) | ||||||||||||
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Non-GAAP diluted net income per share |
$ | 0.12 | $ | 0.06 | $ | 0.27 | $ | 0.33 | ||||||||
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CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
September 30, | December 31, | |||||||
2014 | 2013 (*) | |||||||
Unaudited | ||||||||
ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | 14,042 | $ | 24,117 | ||||
Marketable securities and short term bank deposits |
97,617 | 110,411 | ||||||
Trade receivables, net |
8,289 | 5,629 | ||||||
Deferred tax assets |
4,780 | 3,457 | ||||||
Prepaid expenses and other current assets |
4,578 | 1,996 | ||||||
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Total current assets |
129,306 | 145,610 | ||||||
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Long-term assets: |
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Long term bank deposits |
16,592 | 17,066 | ||||||
Severance pay fund |
7,258 | 7,215 | ||||||
Deferred tax assets |
810 | 955 | ||||||
Property and equipment, net |
2,171 | 1,616 | ||||||
Goodwill |
46,415 | 36,498 | ||||||
Investment in other companies |
1,806 | 3,367 | ||||||
Other Intangible assets |
6,130 | | ||||||
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Total assets |
$ | 210,488 | $ | 212,327 | ||||
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LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
Current liabilities: |
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Trade payables |
$ | 1,159 | $ | 1,085 | ||||
Deferred revenues |
2,315 | 623 | ||||||
Accrued expenses and other payables |
15,938 | 10,563 | ||||||
Taxes Payable |
2,120 | 1,833 | ||||||
Deferred tax liabilities |
553 | 73 | ||||||
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Total current liabilities |
22,085 | 14,177 | ||||||
Long-term liabilities: |
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Accrued severance pay |
7,351 | 7,255 | ||||||
Deferred tax liabilities |
1,597 | | ||||||
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Total liabilities |
31,033 | 21,432 | ||||||
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Stockholders equity: |
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Common stock: |
20 | 21 | ||||||
Additional paid in-capital |
208,398 | 204,415 | ||||||
Treasury stock |
(55,824 | ) | (41,005 | ) | ||||
Accumulated other comprehensive loss |
(339 | ) | (81 | ) | ||||
Retained earnings |
27,200 | 27,545 | ||||||
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Total stockholders equity |
179,455 | 190,895 | ||||||
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Total liabilities and stockholders equity |
$ | 210,488 | $ | 212,327 | ||||
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(*) | Derived from audited financial statements |
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