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): February 1, 2017
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 Street, 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 February 1, 2017, CEVA, Inc. (the Company) announced its financial results for the quarter and year ended December 31, 2016. A copy of the press release, dated February 1, 2017, 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 and years ended December 31, 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 the referenced periods.
Non-GAAP net income and diluted earnings per share for the fourth quarter of 2016 excluded: (a) equity-based compensation expense, net of taxes, and (b) the impact of the amortization of acquired intangibles, net of taxes. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2015 excluded: (a) equity-based compensation expense, net of taxes, and (b) the impact of the amortization of acquired intangibles, net of taxes.
Non-GAAP net income and diluted earnings per share for 2016 excluded (a) equity-based compensation expense, net of taxes, and (b) the impact of the amortization of acquired intangibles, net of taxes. Non-GAAP net income and diluted earnings per share for 2015 excluded (a) equity-based compensation expense, net of taxes, (b) the impact of the amortization of acquired intangibles, net of taxes, and (c) costs associated with the acquisition of RivieraWaves.
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 December 31, 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 February 1, 2017. |
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: February 1, 2017 | By: | /s/ Yaniv Arieli | ||||
Yaniv Arieli | ||||||
Chief Financial Officer |
Exhibit 99.1
CEVA, Inc. Announces Fourth Quarter and Year End 2016 Financial Results
| All time-high quarterly revenues of $21.2 million, up 32% year-over-year |
| All time-high quarterly royalty revenue of $12.9 million, up 60% year-over-year |
| Annual revenue growth of 22% year-over-year |
| Annual GAAP EPS growth of 103%, non-GAAP EPS growth of 75% year-over-year |
MOUNTAIN VIEW, Calif. February 1, 2017 CEVA, Inc. (NASDAQ: CEVA), the leading licensor of signal processing IP for smarter, connected devices, today announced its financial results for the fourth quarter and year ended December 31, 2016.
Total revenue for the fourth quarter of 2016 was $21.2 million, a 32% increase compared to $16.1 million reported for the fourth quarter of 2015. Fourth quarter 2016 licensing and related revenue was $8.3 million, an increase of 3% when compared to $8.0 million reported for the same quarter a year ago. Royalty revenue for the fourth quarter of 2016 was $12.9 million, an increase of 60% when compared to $8.0 million reported for the fourth quarter of 2015.
Gideon Wertheizer, Chief Executive Officer of CEVA, stated: CEVA had a strong fourth quarter, posting record revenues for the fourth quarter in succession. Licensing strength was underpinned by eight agreements for our imaging and vision technologies, further entrenching CEVA as a de-facto industry standard for intelligent vision processing. In royalties, we achieved record revenue and shipments driven by smartphones and Bluetooth-enabled devices.
Mr. Wertheizer continued: 2016 was an extraordinary year for CEVA where we exceeded our financial and strategic goals and delivered all-time high revenues. A record forty-nine licensing agreements were concluded, forty-five of which were for non-handset baseband and seventeen were with first-time customers. Our 2016 results illustrate that we have successfully transformed CEVA into a vertically integrated, one-stop IP house for wireless broadband and IoT-related technologies. Our unique portfolio of LTE-Advanced and 5G baseband, Bluetooth, Wi-Fi, imaging, vision and voice platforms continue to set new milestones in innovation and customer traction. As we look ahead, we are extremely well positioned to leverage our strengths to further expand our customer base and market share across the mobile, consumer and automotive industries and grow our licensing business and future royalty streams.
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U.S. GAAP net income for the fourth quarter of 2016 increased 126% to $5.2 million, compared to $2.3 million reported for the same period in 2015. U.S. GAAP diluted earnings per share for the fourth quarter of 2016 increased 118% to $0.24 from $0.11 a year ago.
Non-GAAP net income and diluted earnings per share for the fourth quarter of 2016 were $7.0 million and $0.32, respectively, representing a 98% and 88% increase, respectively, over the $3.6 million and $0.17 reported for the fourth quarter of 2015. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2016 excluded: (a) equity-based compensation expense, net of taxes, of $1.5 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 fourth quarter of 2015 excluded: (a) equity-based compensation expense, net of taxes, of $1.2 million, and (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.2 million associated with the acquisition of RivieraWaves.
During the quarter, CEVA completed fifteen license agreements. Nine of the agreements were for CEVA DSP cores, platforms and software and six were for CEVA connectivity IPs. Fourteen of the licensing agreements completed during the quarter were for non-handset baseband applications and one was for a handset baseband application. Four were with first-time customers for CEVA. Target applications for customer deployment are: imaging and vision processing in smartphones, automotive ADAS, smart surveillance cameras and mirrorless cameras; cellular baseband for smartphones; storage, Bluetooth 5 and Wi-Fi connectivity for various IoT devices. Geographically, four of the deals signed were in the U.S. and eleven were in the APAC region.
Full Year 2016 Review
Total revenue for 2016 was $72.7 million, an increase of 22% compared to $59.5 million reported for 2015. Royalty revenue for 2016 was $40.8 million, representing an increase of 49% compared to $27.4 million reported for 2015. Licensing and related revenue for 2016 was $31.9 million as compared to $32.1 million reported for 2015.
U.S. GAAP net income and diluted net income per share for 2016 were $13.1 million and $0.61, respectively, an increase of 109% and 103%, respectively, compared to $6.3 million and $0.30, respectively reported for 2015.
Non-GAAP net income and diluted earnings per share for 2016 were $20.4 million and $0.93, respectively, also representing an increase of 82% and 75%, respectively, over $11.2 million and $0.53 reported for 2015. Non-GAAP net income and diluted earnings per share for 2016 excluded (a) equity-based compensation expense, net of taxes, of $6.0 million, and (b) the impact of the amortization of acquired intangibles, net of taxes, of $1.2 million associated with the acquisition of RivieraWaves. Non-GAAP net income and diluted earnings per share for 2015 excluded (a) equity-based compensation expense, net of taxes, of $4.0 million, (b) the impact of the amortization of acquired intangibles, net of taxes, of $0.9 million associated with the acquisition of RivieraWaves, and (c) $0.1 million, costs associated with the acquisition of RiveraWaves.
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Yaniv Arieli, Chief Financial Officer of CEVA, stated: We are extremely proud of our financial performance in 2016. We delivered annual revenue growth of 22% and non-GAAP diluted EPS growth of 75% year-over-year. We continued to strengthen our balance sheet in 2016 with our cash balance, marketable securities and bank deposits growing annually by $17 million to reach $156 million at the end of the year, after buyback activity of $3.4 million and the final payments relating to the acquisition of RivieraWaves of $2.2 million. All in all, we are encouraged by a healthy outlook on the back of a robust licensing environment and new production ramps from our non-handset baseband customers.
CEVA Conference Call
On February 1, 2017 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/984/19106. 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: 10098567) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on February 08, 2017. 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 Market Intelligence, Investor & Public Relations +1.650.417.7976 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, advanced imaging, computer vision and deep learning 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 (low energy and dual mode), 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 CEVAs imaging and vision technologies being a de-facto industry standard for intelligent vision processing; CEVA is transforming into an one-stop IP house for wireless broadband and IoT-related technologies; CEVA being well positioned to expand its customer base and market share across the mobile, consumer and automotive industries and grow its licensing business and future royalty streams; and a healthy outlook for CEVA for continued licensing and royalty growth due to a robust licensing environment and new production ramp-ups by non-baseband customers. 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 4G, 5G and LTE networks, the maturation of the IoT market, 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
Quarter ended December 31, |
Year ended December 31, |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
Unaudited | Unaudited | Unaudited | Audited | |||||||||||||
Revenues: |
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Licensing and related revenues |
$ | 8,298 | $ | 8,027 | $ | 31,874 | $ | 32,135 | ||||||||
Royalties |
12,898 | 8,044 | 40,779 | 27,364 | ||||||||||||
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Total revenues |
21,196 | 16,071 | 72,653 | 59,499 | ||||||||||||
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Cost of revenues |
1,633 | 1,408 | 6,086 | 5,424 | ||||||||||||
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Gross profit |
19,563 | 14,663 | 66,567 | 54,075 | ||||||||||||
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Operating expenses: |
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Research and development, net |
7,767 | 6,938 | 30,838 | 28,113 | ||||||||||||
Sales and marketing |
3,077 | 2,810 | 11,540 | 10,168 | ||||||||||||
General and administrative |
2,281 | 2,363 | 8,567 | 8,184 | ||||||||||||
Amortization of intangible assets |
309 | 324 | 1,236 | 1,298 | ||||||||||||
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Total operating expenses |
13,434 | 12,435 | 52,181 | 47,763 | ||||||||||||
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Operating income |
6,129 | 2,228 | 14,386 | 6,312 | ||||||||||||
Financial income, net |
422 | 426 | 2,039 | 1,069 | ||||||||||||
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Income before taxes on income |
6,551 | 2,654 | 16,425 | 7,381 | ||||||||||||
Taxes on income |
1,350 | 350 | 3,325 | 1,114 | ||||||||||||
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Net income |
$ | 5,201 | $ | 2,304 | $ | 13,100 | $ | 6,267 | ||||||||
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Basic net income per share |
$ | 0.24 | $ | 0.11 | $ | 0.63 | $ | 0.31 | ||||||||
Diluted net income per share |
$ | 0.24 | $ | 0.11 | $ | 0.61 | $ | 0.30 | ||||||||
Weighted-average shares used to compute net income per share (in thousands): |
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Basic |
21,239 | 20,491 | 20,850 | 20,480 | ||||||||||||
Diluted |
22,068 | 21,203 | 21,565 | 20,989 | ||||||||||||
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Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(U.S. Dollars in thousands, except per share amounts)
Quarter ended December 31 |
Year ended December 31 |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
Unaudited | ||||||||||||||||
GAAP net income |
$ | 5,201 | $ | 2,304 | $ | 13,100 | $ | 6,267 | ||||||||
Equity-based compensation expense included in cost of revenue |
67 | 44 | 246 | 155 | ||||||||||||
Equity-based compensation expense included in research and development expenses |
698 | 515 | 2,860 | 1,838 | ||||||||||||
Equity-based compensation expense included in sales and marketing expenses |
241 | 173 | 922 | 568 | ||||||||||||
Equity-based compensation expense included in general and administrative expenses |
582 | 488 | 2,208 | 1,454 | ||||||||||||
Income tax expense (benefit) related to equity-based compensation expenses |
(54 | ) | (31 | ) | (202 | ) | 52 | |||||||||
Costs associated with the RivieraWaves acquisition |
147 | |||||||||||||||
Amortization of intangible assets related to RivieraWaves transaction, net of taxes |
309 | 216 | 1,236 | 861 | ||||||||||||
Income tax benefit related to RivieraWaves acquisition |
| (151 | ) | | (151 | ) | ||||||||||
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Non-GAAP net income |
$ | 7,044 | $ | 3,558 | $ | 20,370 | $ | 11,191 | ||||||||
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GAAP weighted-average number of Common Stock used in computation of diluted net income per share (in thousands) |
22,068 | 21,203 | 21,565 | 20,989 | ||||||||||||
Weighted-average number of shares related to outstanding stock-based awards (in thousands) |
247 | 206 | 327 | 211 | ||||||||||||
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Weighted-average number of Common Stock used in computation of diluted earnings per share, excluding the above (in thousands) |
22,315 | 21,409 | 21,892 | 21,200 | ||||||||||||
GAAP diluted net income per share |
$ | 0.24 | $ | 0.11 | $ | 0.61 | $ | 0.30 | ||||||||
Equity-based compensation expense, net of taxes |
$ | 0.07 | $ | 0.06 | $ | 0.27 | $ | 0.19 | ||||||||
Costs associated with the RivieraWaves acquisition |
| | | $ | 0.01 | |||||||||||
Amortization of intangible assets related to RivieraWaves transaction, net of taxes |
$ | 0.01 | $ | 0.01 | $ | 0.05 | $ | 0.04 | ||||||||
Income taxes related to RivieraWaves acquisition |
| ($ | 0.01 | ) | | ($ | 0.01 | ) | ||||||||
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Non-GAAP diluted net income per share |
$ | 0.32 | $ | 0.17 | $ | 0. 93 | $ | 0.53 | ||||||||
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6
CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
December 31, 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 |
$ | 18,401 | $ | 18,909 | ||||
Marketable securities and short term bank deposits |
108,115 | 79,033 | ||||||
Trade receivables, net |
15,044 | 4,068 | ||||||
Prepaid expenses and other current assets |
4,564 | 4,017 | ||||||
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Total current assets |
146,124 | 106,027 | ||||||
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Long-term assets: |
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Long term bank deposits |
29,977 | 41,334 | ||||||
Severance pay fund |
7,941 | 7,297 | ||||||
Deferred tax assets |
2,252 | 1,628 | ||||||
Property and equipment, net |
4,805 | 3,731 | ||||||
Goodwill |
46,612 | 46,612 | ||||||
Intangible assets, net |
2,978 | 4,214 | ||||||
Investments in other company |
1,806 | 1,806 | ||||||
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Total assets |
$ | 242,495 | $ | 212,649 | ||||
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
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Trade payables |
$ | 571 | $ | 693 | ||||
Deferred revenues |
6,258 | 2,763 | ||||||
Accrued expenses and other payables |
15,766 | 15,527 | ||||||
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Total current liabilities |
22,595 | 18,983 | ||||||
Long-term liabilities: |
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Accrued severance pay |
8,349 | 7,571 | ||||||
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Total liabilities |
30,944 | 26,554 | ||||||
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Stockholders equity: |
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Common stock: |
21 | 21 | ||||||
Additional paid in-capital |
212,103 | 208,744 | ||||||
Treasury stock |
(39,507 | ) | (51,798 | ) | ||||
Accumulated other comprehensive loss |
(497 | ) | (419 | ) | ||||
Retained earnings |
39,431 | 29,547 | ||||||
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Total stockholders equity |
211,551 | 186,095 | ||||||
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Total liabilities and stockholders equity |
$ | 242,495 | $ | 212,649 | ||||
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(*) Derived from audited financial statements
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