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 30, 2015
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 July 30, 2015, CEVA, Inc. (the Company) announced its financial results for the quarter ended June 30, 2015. A copy of the press release, dated July 30, 2015, 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, 2015 and 2014 in accordance with generally accepted accounting principles in the United States (GAAP), the press release also included non-GAAP net income (loss) and diluted earnings (loss) per share (EPS) figures that excluded (i) equity-based compensation expenses for the respective periods, (ii) for the quarter ended June 30, 2015, transaction expenses, net of taxes, associated with an acquisition and (iii) for the quarter ended June 30, 2014, the impact of the amortization of acquired intangibles and other costs, 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, 2015 and 2014 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 July 30, 2015. |
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 30, 2015 | By: | /s/ Yaniv Arieli | ||
Yaniv Arieli | ||||
Chief Financial Officer |
Exhibit 99.1
CEVA, Inc. Announces Second Quarter 2015 Financial Results
| Total quarterly revenue of $13.4M, up 45% year-over-year |
| Record fourteen deals in the quarter |
| Record eleven million CEVA-powered LTE smartphones and tablets shipped in the quarter |
MOUNTAIN VIEW, Calif. July 30, 2015 CEVA, Inc. (NASDAQ: CEVA), the leading licensor of DSP and IP platforms for cellular, multimedia and connectivity, today announced its financial results for the second quarter ended June 30, 2015.
Total revenue for the second quarter of 2015 was $13.4 million, a 45% increase compared to $9.2 million reported for the second quarter of 2014 and at the top end of the Companys guidance range. Second quarter 2015 licensing and related revenue was $7.7 million, a 76% increase when compared to $4.4 million reported for the same quarter a year ago. Royalty revenue for the second quarter of 2015 was $5.7 million, an increase of 17% when compared to $4.9 million reported for the second quarter of 2014.
Gideon Wertheizer, Chief Executive Officer of CEVA, stated: Our solid second quarter performance is the result of a continuing strong licensing environment for our products and our customers progress in LTE shipments. We concluded a record fourteen licensing deals in the quarter, further expanding our addressable markets and customer base. Market demand for connected devices and our high-value IP portfolio for such devices are driving our licensing business. Our growing share in both the 3G and LTE smartphone segments resulted in year-over-year royalty revenue growth for the second consecutive quarter. We anticipate this momentum will accelerate in the coming quarters.
U.S. GAAP net income for the second quarter of 2015 was $0.2 million, compared to a $1.5 million net loss reported for the same period in 2014. U.S. GAAP diluted earnings per share for the second quarter of 2015 were $0.01, compared to $0.07 net loss per share reported for the second quarter of 2014.
Non-GAAP net income and diluted earnings per share for the second quarter of 2015 were $1.3 million and $0.06, respectively, compared to a non-GAAP net loss and diluted loss per share of $0.1 million and $0.00, respectively, in the second quarter of 2014. Non-GAAP net income and diluted earnings per share for the second quarter of 2015 excluded: (a) equity-based compensation expense of $0.8 million, and (b) the impact of the amortization of acquired intangibles and other costs, net of
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tax, of $0.3 million associated with the acquisition of RivieraWaves. Non-GAAP net loss and diluted loss 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.
During the quarter, CEVA completed fourteen new licensing deals. Eight of the deals were for CEVA DSP cores, platforms and software and six of the deals were for CEVA connectivity IPs. Of the fourteen licensing deals signed during the quarter, six are with first time customers for CEVA. Target applications for customer deployment include smartphones, tablets, machine to machine equipment, DSLR cameras, various IoT devices and wearables. Geographically, one deal was signed in the US, four were in Europe and nine were in Asia.
Yaniv Arieli, Chief Financial Officer of CEVA, stated: LTE smartphones and tablets powered by our DSPs reached a record high eleven million units in the quarter, as our customers continue to execute on their product ramp ups. This is our sixth consecutive quarter of LTE unit growth and we expect this to continue. During the quarter, we repurchased approximately 176,000 shares of our common stock for an aggregate consideration of approximately $3.4 million. At the end of the quarter, our cash balance, marketable securities and bank deposits totaled $126 million.
CEVA Conference Call
On July 30, CEVA management will conduct a conference call at 8:30 a.m. Eastern Time to discuss the 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: https://www.webcaster4.com/Webcast/Page/984/9434. 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: 10068746) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on August 7, 2015. The replay will also be available at CEVAs investor web site investors.ceva-dsp.com.
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For More Information Contact:
Yaniv Arieli CEVA, Inc. CFO +1.650.417.7941 yaniv.arieli@ceva-dsp.com |
Richard Kingston CEVA, Inc. VP Market Intelligence, Investor & Public Relations +1.650.417.7976 richard.kingston@ceva-dsp.com |
About CEVA, Inc.
CEVA is the leading licensor of cellular, multimedia and connectivity technologies to semiconductor companies and OEMs serving the mobile, consumer, automotive and IoT markets. Our DSP IP portfolio includes comprehensive platforms for multimode 2G/3G/LTE/LTE-A baseband processing in terminals and infrastructure, computer vision and computational photography for any camera-enabled device, audio/voice/speech and ultra-low power always-on/sensing applications for multiple IoT markets. For connectivity, we offer the industrys most widely adopted IPs for Bluetooth (Smart and Smart Ready), Wi-Fi (802.11 b/g/n/ac up to 4x4) and serial storage (SATA and SAS). One in every three phones sold worldwide is powered by CEVA, from many of the worlds leading OEMs including Samsung, Huawei, Xiaomi, Lenovo, HTC, LG, Coolpad, ZTE, Micromax and Meizu. Visit us at
www.ceva-dsp.com and follow us on Twitter, YouTube and LinkedIn.
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 statements that the additional licensing deals executed during the second quarter expands CEVAs addressable markets and customer base and that the royalty revenue growth momentum will accelerate in the coming quarters, as well as Mr. Arielis statement that LTE unit growth from CEVAs customers will continue. The risks, uncertainties and assumptions include: the ability of the CEVA DSP cores and other technologies, including connectivity IPs, 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, 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.
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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, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Unaudited | ||||||||||||||||
Revenues: |
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Licensing and related revenues |
$ | 7,669 | $ | 4,355 | $ | 15,508 | $ | 12,261 | ||||||||
Royalties |
5,690 | 4,860 | 11,685 | 10,628 | ||||||||||||
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Total revenues |
13,359 | 9,215 | 27,193 | 22,889 | ||||||||||||
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Cost of revenues |
1,550 | 1,370 | 2,735 | 2,482 | ||||||||||||
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Gross profit |
11,809 | 7,845 | 24,458 | 20,407 | ||||||||||||
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Operating expenses: |
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Research and development, net |
7,241 | 6,051 | 14,604 | 12,047 | ||||||||||||
Sales and marketing |
2,548 | 2,197 | 4,974 | 4,590 | ||||||||||||
General and administrative |
1,666 | 1,861 | 3,638 | 3,901 | ||||||||||||
Amortization of intangible assets |
324 | 649 | ||||||||||||||
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Total operating expenses |
11,779 | 10,109 | 23,865 | 20,538 | ||||||||||||
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Operating income (loss) |
30 | (2,264 | ) | 593 | (131 | ) | ||||||||||
Financial income, net |
269 | 417 | 242 | 877 | ||||||||||||
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Income (loss) before taxes on income |
299 | (1,847 | ) | 835 | 746 | |||||||||||
Income tax expenses (benefit) |
131 | (321 | ) | 181 | 287 | |||||||||||
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Net income (loss) |
168 | (1,526 | ) | 654 | 459 | |||||||||||
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Basic and diluted net income (loss) per share |
$ | 0.01 | ($ | 0.07 | ) | $ | 0.03 | $ | 0.02 | |||||||
Weighted-average number of Common Stock used in computation of net income (loss) per share (in thousands): |
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Basic |
20,564 | 20,778 | 20,491 | 20,968 | ||||||||||||
Diluted |
20,984 | 20,778 | 20,971 | 21,368 | ||||||||||||
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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 | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Unaudited | ||||||||||||||||
GAAP net income (loss) |
$ | 168 | ($ | 1,526 | ) | $ | 654 | $ | 459 | |||||||
Equity-based compensation expense included in cost of revenue |
42 | 56 | 77 | 114 | ||||||||||||
Equity-based compensation expense included in research and development expenses |
494 | 533 | 885 | 1,134 | ||||||||||||
Equity-based compensation expense included in sales and marketing expenses |
165 | 266 | 244 | 568 | ||||||||||||
Equity-based compensation expense included in general and administrative expenses |
126 | 493 | 470 | 1,045 | ||||||||||||
Deferred tax related to equity-based compensation expenses |
| (69 | ) | | (204 | ) | ||||||||||
Costs associated with the RivieraWaves acquisition, net of taxes |
49 | 176 | 147 | 176 | ||||||||||||
Amortization of intangible assets related to RivieraWaves transaction, net of taxes |
216 | | 428 | | ||||||||||||
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Non-GAAP net income (loss) |
$ | 1,260 | ($ | 71 | ) | $ | 2,905 | $ | 3,292 | |||||||
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GAAP weighted-average number of Common Stock used in computation of diluted net income (loss) per share (in thousands) Weighted-average number of shares related to outstanding options (in thousands) |
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20,984 259 |
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20,778 |
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20,971 187 |
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21,368 |
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Weighted-average number of Common Stock used in computation of diluted earnings per share, excluding the above (in thousands ) |
21,243 | 20,778 | 21,158 | 21,368 | ||||||||||||
GAAP diluted net income (loss) per share |
$ | 0.01 | ($ | 0.07 | ) | $ | 0.03 | $ | 0.02 | |||||||
Equity-based compensation expense, net of taxes |
$ | 0.04 | $ | 0.06 | $ | 0.08 | $ | 0.12 | ||||||||
Costs associated with the RivieraWaves acquisition, net of taxes |
| $ | 0.01 | $ | 0.01 | $ | 0.01 | |||||||||
Amortization of intangible assets related to RivieraWaves transaction, net of taxes |
$ | 0.01 | | $ | 0.02 | | ||||||||||
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Non-GAAP diluted net income (loss) per share |
$ | 0.06 | $ | 0.00 | $ | 0.14 | $ | 0.15 | ||||||||
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CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
June 30, | December 31, | |||||||
2015 | 2014 (*) | |||||||
Unaudited | Unaudited | |||||||
ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | 12,084 | $ | 16,166 | ||||
Marketable securities and short term bank deposits |
57,378 | 85,277 | ||||||
Trade receivables, net |
9,390 | 8,347 | ||||||
Deferred tax assets |
1,878 | 1,868 | ||||||
Prepaid expenses and other current assets |
5,325 | 3,982 | ||||||
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Total current assets |
86,055 | 115,640 | ||||||
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Long-term assets: |
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Long term bank deposits |
56,764 | 28,424 | ||||||
Severance pay fund |
7,773 | 7,011 | ||||||
Deferred tax assets |
624 | 399 | ||||||
Property and equipment, net |
2,836 | 2,605 | ||||||
Goodwill |
46,612 | 46,612 | ||||||
Investment in other company |
1,806 | 1,806 | ||||||
Other intangible assets |
4,863 | 5,512 | ||||||
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Total assets |
$ | 207,333 | $ | 208,009 | ||||
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
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Trade payables |
$ | 918 | $ | 864 | ||||
Deferred revenues |
2,803 | 1,681 | ||||||
Accrued expenses and other payables |
12,625 | 16,711 | ||||||
Taxes payable |
397 | 739 | ||||||
Deferred tax liabilities |
474 | 464 | ||||||
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Total current liabilities |
17,217 | 20,459 | ||||||
Long-term liabilities: |
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Accrued severance pay |
8,050 | 7,096 | ||||||
Deferred tax liabilities |
1,199 | 1,405 | ||||||
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Total liabilities |
26,466 | 28,960 | ||||||
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Stockholders equity: |
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Common stock: |
20 | 20 | ||||||
Additional paid in-capital |
211,102 | 209,426 | ||||||
Treasury stock |
(51,885 | ) | (54,708 | ) | ||||
Accumulated other comprehensive loss |
(139 | ) | (436 | ) | ||||
Retained earnings |
21,769 | 24,747 | ||||||
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Total stockholders equity |
180,867 | 179,049 | ||||||
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Total liabilities and stockholders equity |
$ | 207,333 | $ | 208,009 | ||||
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(*) | Derived from audited financial statements |
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