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): August 3, 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 St. Suite 210, Mountain View, CA	94040
(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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Security Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On August 3, 2017, CEVA, Inc. (the “Company”) announced its financial results for the quarter ended June 30, 2017. A copy of the press release, dated August 3, 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 ended June 30, 2017 and 2016 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 respective quarters that excluded (i) equity-based compensation expenses, net of taxes, and (ii) the impact of the amortization of acquired intangibles associated with the Company’s acquisition of RivieraWaves SAS.

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, 2017 and 2016 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 August 3, 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: August 3, 2017	By:	/s/ Yaniv Arieli
		Yaniv Arieli
		Chief Financial Officer

EX-99.1

Exhibit 99.1

CEVA, Inc. Announces Second Quarter 2017 Financial Results

• Total revenue of $20.6 million, up 20% year-over-year

• All-time high quarterly licensing revenue of $10.4 million, up 38% year-over-year

• GAAP and non-GAAP fully diluted EPS growth of 31% and 33% year-over-year

• Thirteen agreements signed, including second portfolio license agreement

MOUNTAIN VIEW, Calif. – August 03, 2017 – 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, 2017.

Total revenue for the second quarter of 2017 was $20.6 million, a 20% increase compared to $17.1 million reported for the second quarter of 2016. Second quarter 2017 licensing and related revenue was $10.4 million, an increase of 38% when compared to $7.5 million reported for the same quarter a year ago. Royalty revenue for the second quarter of 2017 was $10.2 million, an increase of 6% when compared to $9.6 million reported for the second quarter of 2016.

Gideon Wertheizer, Chief Executive Officer of CEVA, stated: “We are pleased to have delivered strong financial results that exceeded the high end of our guidance range. Our licensing business is thriving, with key industry players committing to our IP portfolio and roadmap. On royalties, we are encouraged by the consistent growth in shipments of our non-baseband products, including the initial shipments of CEVA-powered vision processors in smartphones and cellular processors in base stations. Overall, the strong demand for our technologies reaffirms the unique value of our broad product portfolio for the ‘smart and connected’ world.”

GAAP net income for the second quarter of 2017 increased 44% to $3.9 million, compared to $2.7 million reported for the same period in 2016. GAAP diluted earnings per share for the second quarter of 2017 increased 31% to $0.17 from $0.13 a year ago. GAAP net income and diluted earnings per share for the second quarter of 2017 included a tax benefit of approximately $1.8 million as a result of a conclusion of a tax audit.

Non-GAAP net income and diluted earnings per share for the second quarter of 2017 were $6.3 million and $0.28, respectively, representing a 38% and 33% increase, respectively, over the $4.6 million and $0.21 reported for the second quarter of 2016. Non-GAAP net income and diluted earnings per share for the second quarter of 2017 excluded: (a) equity-based compensation expense,

net of taxes, of $2.1 million, and (b) the impact of the amortization of acquired intangibles of $0.3 million associated with the acquisition of RivieraWaves. 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 of $0.3 million associated with the acquisition of RivieraWaves.

During the quarter, CEVA completed thirteen license agreements. Seven of the agreements were for CEVA DSP cores, platforms and software, five were for CEVA connectivity IPs and one was a portfolio license agreement. Eleven of the licensing agreements signed during the quarter were for non-handset baseband applications and one was for a handset baseband application. Four were with first-time customers of CEVA. Customers’ target markets for the licenses include smartphones, automotive ADAS, drones, surveillance cameras, wearables, industrial IoT and a variety of Bluetooth and Wi-Fi connected consumer and medical products. Geographically, six of the deals signed were in China, three were in the U.S., one was in Europe and three were in the APAC region.

Yaniv Arieli, Chief Financial Officer of CEVA, stated: “Our licensing business continues to go from strength to strength, resulting in both all-time record high licensing revenue for the second quarter and backlog for the third quarter, as well as a stellar sales pipeline. Notably, we signed a multi-year portfolio agreement with a major customer, further adding to our backlog. We also managed to further strengthen our balance sheet during the quarter, with our cash balance, marketable securities and bank deposits totaling $170 million, with no debt.”

CEVA Conference Call

On August 03, 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 1-844-435-0316 (Access Code: CEVA)

• International Participants: Dial +1-412-317-6365 (Access Code: CEVA)

The conference call will also be available live via webcast at the following link: https://www.webcaster4.com/Webcast/Page/984/21746. 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: 10110214) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on August 10, 2017. The replay will also be available at CEVA’s web site www.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 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 industry’s 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 Mr. Wertheizer’s statements about the Company’s licensing business thriving and the Company being encouraged by the consistent growth in shipments of its non-baseband products, as well as the unique value of the Company’s broad product portfolio. Forward looking statements also include Mr. Arieli’s statement about backlog for the third quarter and stellar sales pipeline. 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, including in non-baseband markets, and maintaining our market position in existing markets; our ability to diversify the company’s royalty streams, 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 CEVA’s 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

CONDENSED 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,
	2017			2016		2017			2016
	Unaudited
Revenues:
Licensing and related revenues	$	10,337		$	7,470	$	19,872		$	16,120
Royalties		10,238			9,633		21,990			17,491
Total revenues		20,575			17,103		41,862			33,611
Cost of revenues		1,608			1,403		3,304			3,031
Gross profit		18,967			15,700		38,558			30,580
Operating expenses:
Research and development, net		10,509			7,811		20,382			15,725
Sales and marketing		3,427			2,855		6,365			5,700
General and administrative		2,552			2,078		4,677			4,068
Amortization of intangible assets		309			309		618			618
Total operating expenses		16,797			13,053		32,042			26,111
Operating income		2,170			2,647		6,516			4,469
Financial income, net		755			561		1,326			1,002
Income before taxes on income		2,925			3,208		7,842			5,471
Income taxes expense (benefit)		(983	)		497		(173	)		960
Net income		3,908			2,711		8,015			4,511
Basic net income per share	$	0.18		$	0.13	$	0.37		$	0.22
Diluted net income per share	$	0.17		$	0.13	$	0.36		$	0.21
Weighted-average number of Common Stock used in computation of net income per share (in thousands):
Basic		21,712			20,604		21,556			20,562
Diluted		22,563			21,371		22,376			21,149

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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
	2017			2016			2017			2016
	Unaudited
GAAP net income	$	3,908		$	2,711		$	8,015		$	4,511
Equity-based compensation expense included in cost of revenue		114			54			205			114
Equity-based compensation expense included in research and development expenses		972			775			1,843			1,421
Equity-based compensation expense included in sales and marketing expenses		370			255			659			502
Equity-based compensation expense included in general and administrative expenses		722			525			1,420			1,046
Income tax benefit related to equity-based compensation expenses		(69	)		(53	)		(184	)		(97	)
Amortization of intangible assets related to RivieraWaves transaction		309			309			618			618
Non-GAAP net income	$	6,326		$	4,576		$	12,576		$	8,115
GAAP weighted-average number of Common Stock used in computation of diluted net income per share (in thousands)		22,563			21,371			22,376			21,149
Weighted-average number of shares related to outstanding stock-based awards (in thousands)		269			344			315			397
Weighted-average number of Common Stock used in computation of diluted earnings per share, excluding the above (in thousands )		22,832			21,715			22,691			21,546
GAAP diluted net income per share	$	0.17		$	0.13		$	0.36		$	0.21
Equity-based compensation expense, net of taxes	$	0.10		$	0.07		$	0.16		$	0.14
Amortization of intangible assets related to RivieraWaves transaction	$	0.01		$	0.01		$	0.03		$	0.03
Non-GAAP diluted net income per share	$	0.28		$	0.21		$	0.55		$	0.38

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CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)

	June 30, 2017		December 31, 2016 (*)
	Unaudited		Unaudited
ASSETS
Current assets:
Cash and cash equivalents	$	17,103	$	18,401
Marketable securities and short term bank deposits		102,897		108,115
Trade receivables, net		10,389		15,044
Prepaid expenses and other current assets		4,819		3,152
Total current assets		135,208		144,712
Long-term assets:
Bank deposits		50,196		29,977
Severance pay fund		8,956		7,941
Deferred tax assets		2,701		2,252
Property and equipment, net		6,157		4,805
Goodwill		46,612		46,612
Intangible assets, net		2,360		2,978
Other long term assets		4,093		3,218
Total assets	$	256,283	$	242,495

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade payables	$	290		$	571
Deferred revenues		3,388			6,258
Accrued expenses and other payables		13,502			15,766
Total current liabilities		17,180			22,595
Long-term liabilities:
Accrued severance pay		9,450			8,349
Total liabilities		26,630			30,944
Stockholders’ equity:
Common stock:		22			21
Additional paid in-capital		213,504			212,103
Treasury stock		(29,060	)		(39,507	)
Accumulated other comprehensive loss		(278	)		(497	)
Retained earnings		45,465			39,431
Total stockholders’ equity		229,653			211,551
Total liabilities and stockholders’ equity	$	256,283		$	242,495

(*) Derived from audited financial statements

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