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): August 3, 2016
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.) | |
1174 Castro St. Suite 210, Mountain View, CA | 94040 | |
(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 August 3, 2016, CEVA, Inc. (the Company) announced its financial results for the quarter ended June 30, 2016. A copy of the press release, dated August 3, 2016, 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, 2016 and 2015 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 for (a) the quarter ended June 30, 2016 that excluded (i) equity-based compensation expenses, net of taxes, and (ii) the impact of the amortization of acquired intangibles, net of taxes, associated with the Companys acquisition of RivieraWaves SAS (the RivieraWaves Acquisition), and (b) the quarter ended June 30, 2015 that excluded (x) equity-based compensation expenses, net of taxes, and (y) the impact of the amortization of acquired intangibles and other costs, net of taxes, associated with the RivieraWaves 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, 2016 and 2015 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 August 3, 2016. |
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: | August 3, 2016 | By: | /s/ Yaniv Arieli | |||||
Yaniv Arieli | ||||||||
Chief Financial Officer |
Exhibit 99.1
CEVA, Inc. Announces Second Quarter 2016 Financial Results
| All time-high revenues of $17.1 million, up 28% year-over-year |
| Royalty revenue of $9.6 million, up 69% year-over-year |
| Quarterly record of 56 million CEVA-powered LTE devices shipped |
| GAAP and non-GAAP fully diluted EPS growth of 1200% and 250% year-over-year |
MOUNTAIN VIEW, Calif. Aug 3, 2016 CEVA, Inc. (NASDAQ: CEVA), the leading licensor of signal processing IP for smarter, connected devices, today announced its financial results for the second quarter ended June 30, 2016.
Total revenue for the second quarter of 2016 was $17.1 million, a 28% increase compared to $13.4 million reported for the second quarter of 2015. Second quarter 2016 licensing and related revenue was $7.5 million, a decrease of 3% when compared to $7.7 million reported for the same quarter a year ago. Royalty revenue for the second quarter of 2016 was $9.6 million, an increase of 69% when compared to $5.7 million reported for the second quarter of 2015.
Gideon Wertheizer, Chief Executive Officer of CEVA, stated: We are very pleased with our performance for the quarter. We delivered record revenue for the second quarter in succession as royalties derived from LTE smartphones powered by our DSPs grew considerably. We continue to experience a healthy licensing environment and a stronger-than-normal sales pipeline as we capitalize on the accelerated industry transition towards ubiquitous connectivity and machine learning.
U.S. GAAP net income for the second quarter of 2016 was $2.7 million, compared to $0.2 million reported for the same period in 2015. U.S. GAAP diluted earnings per share for the second quarter of 2016 were $0.13, an increase of 1200% compared to $0.01 reported for the second quarter of 2015.
Non-GAAP net income and diluted earnings per share for the second quarter of 2016 were $4.6 million and $0.21, respectively, representing a 263% and 250% increase, respectively over the $1.3 million and $0.06 reported for the second quarter of 2015. Non-GAAP net income and diluted earnings per share for the second quarter of 2016 excluded: (a) equity-based compensation expense, net of taxes, of $1.6 million, and (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.3 million associated with the acquisition of RivieraWaves. Non-GAAP net income and diluted earnings per share for the second quarter of 2015 excluded: (a) equity-based compensation expense, net of taxes, of $0.8 million, and (b) the impact of the amortization of acquired intangibles and other costs, net of taxes, of $0.3 million associated with the acquisition of RivieraWaves.
During the quarter, CEVA completed ten license agreements. Four of the agreements were for CEVA DSP cores, platforms and software and six of the agreements were for CEVA connectivity IPs. All ten of the licensing agreements signed during the quarter were for non-handset baseband applications and three were with first-time customers for CEVA. Target applications for customer deployment are vision processing for a virtual reality product, 5G base stations, voice processors, Bluetooth low energy and Bluetooth 5 connectivity for various IoT devices and storage drives. Geographically, four of the deals signed were in the U.S., four were in the APAC region and two were in Europe.
Yaniv Arieli, Chief Financial Officer of CEVA, stated: With a record fifty-six million CEVA-powered LTE chips shipped in the quarter, we were able to more than offset the traditional seasonal weakness of the second quarter and deliver a 23% sequential increase in royalty revenues, which contributed to overall profitability. At the end of the quarter, our cash balance, marketable securities and bank deposits totaled $138 million.
CEVA Conference Call
On Aug 3, 2016 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/984/16067. 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: 10089128) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on August 10, 2016. The replay will also be available at CEVAs investor web site investors.ceva-dsp.com.
For More Information Contact:
Yaniv Arieli | Richard Kingston | |
CEVA, Inc. | CEVA, Inc. | |
CFO. | VP Market Intelligence, Investor & Public Relations | |
+1.650.417.7941 | +1.650.417.7976 | |
yaniv.arieli@ceva-dsp.com | richard.kingston@ceva-dsp.com |
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About CEVA, Inc.
CEVA is the leading licensor of signal processing IP for a smarter, connected world. We partner with semiconductor companies and OEMs worldwide to create power-efficient, intelligent and connected devices for a range of end markets, including mobile, consumer, automotive, industrial and IoT. Our ultra-low-power IPs for vision, audio, communications and connectivity include comprehensive DSP-based platforms for LTE/LTE-A/5G baseband processing in handsets, infrastructure and machine-to-machine devices, 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 a/b/g/n/ac up to 4x4) and serial storage (SATA and SAS). 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 CEVA continues to experience a healthy licensing environment and a stronger-than-normal sales pipeline as it capitalizes on the accelerated industry transition towards ubiquitous connectivity and machine learning. 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 INCOME U.S. GAAP
U.S. dollars in thousands, except per share data
Three months ended June 30, |
Six months ended June 30, |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
Unaudited | ||||||||||||||||
Revenues: |
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Licensing and related revenues |
$ | 7,470 | $ | 7,669 | $ | 16,120 | $ | 15,508 | ||||||||
Royalties |
9,633 | 5,690 | 17,491 | 11,685 | ||||||||||||
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Total revenues |
17,103 | 13,359 | 33,611 | 27,193 | ||||||||||||
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Cost of revenues |
1,403 | 1,550 | 3,031 | 2,735 | ||||||||||||
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Gross profit |
15,700 | 11,809 | 30,580 | 24,458 | ||||||||||||
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Operating expenses: |
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Research and development, net |
7,811 | 7,241 | 15,725 | 14,604 | ||||||||||||
Sales and marketing |
2,855 | 2,548 | 5,700 | 4,974 | ||||||||||||
General and administrative |
2,078 | 1,666 | 4,068 | 3,638 | ||||||||||||
Amortization of intangible assets |
309 | 324 | 618 | 649 | ||||||||||||
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Total operating expenses |
13,053 | 11,779 | 26,111 | 23,865 | ||||||||||||
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Operating income |
2,647 | 30 | 4,469 | 593 | ||||||||||||
Financial income, net |
561 | 269 | 1,002 | 242 | ||||||||||||
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Income before taxes on income |
3,208 | 299 | 5,471 | 835 | ||||||||||||
Income tax expenses |
497 | 131 | 960 | 181 | ||||||||||||
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Net income |
2,711 | 168 | 4,511 | 654 | ||||||||||||
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Basic net income per share |
$ | 0.13 | $ | 0.01 | $ | 0.22 | $ | 0.03 | ||||||||
Diluted net income per share |
$ | 0.13 | $ | 0.01 | $ | 0.21 | $ | 0.03 | ||||||||
Weighted-average number of Common Stock used in computation of net income per share (in thousands): |
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Basic |
20,604 | 20,564 | 20,562 | 20,491 | ||||||||||||
Diluted |
21,371 | 20,984 | 21,149 | 20,971 | ||||||||||||
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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 June 30 |
Six months ended June 30 |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
Unaudited | ||||||||||||||||
GAAP net income |
$ | 2,711 | $ | 168 | $ | 4,511 | $ | 654 | ||||||||
Equity-based compensation expense included in cost of revenue |
54 | 42 | 114 | 77 | ||||||||||||
Equity-based compensation expense included in research and development expenses |
775 | 494 | 1,421 | 885 | ||||||||||||
Equity-based compensation expense included in sales and marketing expenses |
255 | 165 | 502 | 244 | ||||||||||||
Equity-based compensation expense included in general and administrative expenses |
525 | 126 | 1,046 | 470 | ||||||||||||
Income tax benefit related to equity-based compensation expenses |
(53 | ) | | (97 | ) | | ||||||||||
Costs associated with the RivieraWaves acquisition, net of taxes |
49 | 147 | ||||||||||||||
Amortization of intangible assets related to RivieraWaves transaction, net of taxes |
309 | 216 | 618 | 428 | ||||||||||||
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Non-GAAP net income |
$ | 4,576 | $ | 1,260 | $ | 8,115 | $ | 2,905 | ||||||||
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GAAP weighted-average number of Common Stock used in computation of diluted net income per share (in thousands) |
21,371 | 20,984 | 21,149 | 20,971 | ||||||||||||
Weighted-average number of shares related to outstanding stock-based awards (in thousands) |
344 | 259 | 397 | 187 | ||||||||||||
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Weighted-average number of Common Stock used in computation of diluted earnings per share, excluding the above (in thousands) |
21,715 | 21,243 | 21,546 | 21,158 | ||||||||||||
GAAP diluted net income per share |
$ | 0.13 | $ | 0.01 | $ | 0.21 | $ | 0.03 | ||||||||
Equity-based compensation expense, net of taxes |
$ | 0.07 | $ | 0.04 | $ | 0.14 | $ | 0.08 | ||||||||
Costs associated with the RivieraWaves acquisition, net of taxes |
| | $ | 0.01 | ||||||||||||
Amortization of intangible assets related to RivieraWaves transaction, net of taxes |
$ | 0.01 | $ | 0.01 | $ | 0.03 | $ | 0.02 | ||||||||
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Non-GAAP diluted net income per share |
$ | 0.21 | $ | 0.06 | $ | 0.38 | $ | 0.14 | ||||||||
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CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
June 30, 2016 |
December 31, 2015 (*) |
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Unaudited | Unaudited | |||||||
ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | 18,664 | $ | 18,909 | ||||
Marketable securities and short term bank deposits |
103,853 | 79,033 | ||||||
Trade receivables, net |
10,775 | 4,068 | ||||||
Prepaid expenses and other current assets |
3,826 | 4,017 | ||||||
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Total current assets |
137,118 | 106,027 | ||||||
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Long-term assets: |
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Long term bank deposits |
15,099 | 41,334 | ||||||
Severance pay fund |
7,720 | 7,297 | ||||||
Deferred tax assets |
1,884 | 1,628 | ||||||
Property and equipment, net |
4,105 | 3,731 | ||||||
Goodwill |
46,612 | 46,612 | ||||||
Intangible assets, net |
3,596 | 4,214 | ||||||
Other long-term assets |
3,972 | 1,806 | ||||||
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Total assets |
$ | 220,106 | $ | 212,649 | ||||
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
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Trade payables |
$ | 1,249 | $ | 693 | ||||
Deferred revenues |
2,113 | 2,763 | ||||||
Accrued expenses and other payables |
14,466 | 15,527 | ||||||
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Total current liabilities |
17,828 | 18,983 | ||||||
Long-term liabilities: |
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Accrued severance pay |
8,201 | 7,571 | ||||||
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Total liabilities |
26,029 | 26,554 | ||||||
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Stockholders equity: |
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Common stock: |
21 | 21 | ||||||
Additional paid in-capital |
209,334 | 208,744 | ||||||
Treasury stock |
(47,463 | ) | (51,798 | ) | ||||
Accumulated other comprehensive loss |
(6 | ) | (419 | ) | ||||
Retained earnings |
32,191 | 29,547 | ||||||
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Total stockholders equity |
194,077 | 186,095 | ||||||
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Total liabilities and stockholders equity |
$ | 220,106 | $ | 212,649 | ||||
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(*) | Derived from audited financial statements |
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