Exhibit 99.1
CEVA, Inc. Announces Third Quarter 2011 Financial Results
| • | First license agreement for CEVA-MM3000 video & imaging platform for smartphones and smart TVs |
| • | Quarterly volume of CEVA-powered units shipped increase for eleventh quarter in succession, reaching 250 million |
| • | Record high profitability — gross margin expand to 95%, operating margins reach 32% and 41% on a US GAAP and non-GAAP basis, respectively |
MOUNTAIN VIEW, Calif. — October 27, 2011—CEVA, Inc. (NASDAQ: CEVA); (LSE: CVA), the leading licensor of silicon intellectual property (SIP) platform solutions and DSP cores for the mobile handset, portable and consumer electronics markets, today announced its financial results for the third quarter ended September 30, 2011.
Total revenue for the third quarter of 2011 was $14.8 million, an increase of 39% compared to $10.7 million reported for the third quarter of 2010. Third quarter 2011 licensing revenue was $5.2 million, representing an increase of 17% when compared to $4.5 million reported for the same quarter a year ago. Royalty revenue for the third quarter 2011 was $8.8 million, an increase of 67% compared to $5.2 million reported for the third quarter of 2010. Revenue from services for the third quarter of 2011 was $0.9 million, a decrease of 12% compared to $1 million reported for the third quarter of 2010.
Gideon Wertheizer, Chief Executive Officer of CEVA, stated, “CEVA’s strong third quarter performance reflects the continued strength of our cellular baseband presence, as shipment volumes of CEVA-powered products increased for the eleventh consecutive quarter, reaching 250 million units during the quarter. We continue to see considerable interest in our diverse technology portfolio from both existing and new customers, as evidenced by strategic licensing agreements with a high volume semiconductor vendorfor our new CEVA-MM3000 platform to be used for smartphones and smart-TVs and with a tier on handset and tablet OEM for our audio platform.”
Of the eight new license agreements concluded during the third quarter of 2011, six agreements were for CEVA DSP cores, platforms and software, one agreement was for CEVA SATA/SAS product lines and one agreement was for CEVA Bluetooth technology. Target applications for customer deployment are 4G baseband processors, video, imaging and audio in application processors, power line communications (PLC), connectivity and solid state drives (SSDs). Geographically, two of the agreements signed were in the U.S. and six were in Asia Pacific, including Japan.
U.S. GAAP net income for the third quarter of 2011 was $4.9 million, an increase of 65% over $3.0 million reported for the same period in 2010. U.S. GAAP diluted earnings per share for the third quarter of 2011 were $0.20, an increase of 54% compared to $0.13 for the third quarter of 2010.
Non-GAAP net income and diluted earnings per share for the third quarter of 2011 were $6.3 million and $0.26 respectively, representing an increase of 107% and 86%, respectively, over the $3.0 million and $0.14 reported for the third quarter of 2010. Non-GAAP net income and diluted earnings per share for the third quarter of 2011 and 2010 excluded an aggregate equity-based compensation expense, net of taxes, of $1.4 million and $0.5 million, respectively.
Yaniv Arieli, Chief Financial Officer of CEVA, stated, “Our third quarter financial performance achieved a number of significant milestones and maintained the momentum generated during the first half of the year. We produced record high gross margins, operating margins, non-GAAP net income and earnings per share through a combination of solid licensing pipeline, reflecting our excellent product portfolio, continued strength in our royalty business and a company-wide commitment to conservative financial management. At the end of the third quarter, our cash balance, marketable securities and bank deposits totaled approximately $156 million.”
CEVA Conference Call
On October 27, 2011, CEVA management will conduct a conference call at 8:30 a.m. Eastern Time / 1:30 p.m. London time, to discuss the operating performance for the third quarter ended September 30, 2011.
The conference call will be available via the following dial in numbers:
| • | U.S. Participants: Dial 1-800-860-2442 (Access Code: CEVA or 10005147) |
| • | International Participants: Dial +1-412-858-4600 (Access Code: CEVA or 10005147) |
The conference call will also be available live via the Internet at the following link: http://www.videonewswire.com/event.asp?id=82668. 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 (passcode: 10005147) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on November 03, 2011. The replay will also be available at CEVA’s web site www.ceva-dsp.com.
For More Information Contact:
| Yaniv Arieli | Richard Kingston | |
| CEVA, Inc. | CEVA, Inc. | |
| CFO | Director of Marketing & Investor Relations | |
| +1.650.417.7941 | +1.650.417.7976 | |
| yaniv.arieli@ceva-dsp.com | richard.kingston@ceva-dsp.com |
About CEVA, Inc.
CEVA is the world’s leading licensor of silicon intellectual property (SIP) DSP cores and platform solutions for the mobile handset, portable and consumer electronics markets. CEVA’s IP portfolio includes comprehensive technologies for cellular baseband (2G / 3G / 4G), multimedia, HD video and audio, voice over packet (VoP), Bluetooth, Serial Attached SCSI (SAS) and Serial ATA (SATA). In 2010, CEVA’s IP was shipped in over 600 million devices, powering handsets from 7 out of the top 8 handset OEMs, including Nokia, Samsung, LG, Motorola, Sony Ericsson and ZTE. Today, more than one in every three handsets shipped worldwide is powered by a CEVA DSP core. For more information, visit www.ceva-dsp.com. Follow CEVA on twitter at www.twitter.com/cevadsp.
CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — U.S. GAAP
U.S. dollars in thousands, except per share data
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, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||
| Revenues: | ||||||||||||||||
| Licensing | $ | 5,225 | $ | 4,459 | $ | 15,528 | $ | 13,774 | ||||||||
| Royalties | 8,766 | 5,238 | 26,244 | 15,372 | ||||||||||||
| Other revenues | 856 | 978 | 2,515 | 2,739 | ||||||||||||
| Total revenues | 14,847 | 10,675 | 44,287 | 31,885 | ||||||||||||
| Cost of revenues | 811 | 1,001 | 2,635 | 2,578 | ||||||||||||
| Gross profit | 14,036 | 9,674 | 41,652 | 29,307 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development, net | 5,158 | 4,129 | 15,813 | 13,243 | ||||||||||||
| Sales and marketing | 2,099 | 1,664 | 6,650 | 5,248 | ||||||||||||
| General and administrative | 2,057 | 1,593 | 5,553 | 4,709 | ||||||||||||
| Total operating expenses | 9,314 | 7,386 | 28,016 | 23,200 | ||||||||||||
| Operating income | 4,722 | 2,288 | 13,636 | 6,107 | ||||||||||||
| Interest and other income, net | 784 | 493 | 2,046 | 1,591 | ||||||||||||
| Income before income tax | 5,506 | 2,781 | 15,682 | 7,698 | ||||||||||||
| Income tax expense (income) | 571 | (208 | ) | 1,973 | 527 | |||||||||||
| Net income | 4,935 | 2,989 | 13,709 | 7,171 | ||||||||||||
| Basic net income per share | $ | 0.21 | $ | 0.14 | $ | 0.59 | $ | 0.34 | ||||||||
| Diluted net income per share | $ | 0.20 | $ | 0.13 | $ | 0.57 | $ | 0.32 | ||||||||
| Weighted-average number of Common Stock used in computation of net income per share (in thousands): | ||||||||||||||||
| Basic | 23,390 | 21,244 | 23,065 | 20,989 | ||||||||||||
| Diluted | 24,253 | 22,356 | 24,105 | 22,114 | ||||||||||||
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(U.S. Dollars in thousands, except per share amounts)
(U.S. Dollars in thousands, except per share amounts)
| Quarter ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||
GAAP net income | 4,935 | 2,989 | 13,709 | 7,171 | ||||||||||||
| Equity-based compensation expense included in cost of revenue | 61 | 23 | 171 | 56 | ||||||||||||
| Equity-based compensation expense included in research and development expenses | 510 | 183 | 1,372 | 489 | ||||||||||||
| Equity-based compensation expense included in sales and marketing expenses | 291 | 92 | 747 | 300 | ||||||||||||
| Equity-based compensation expense included in general and administrative expenses | 553 | 239 | 1,250 | 816 | ||||||||||||
| Income tax expense (income) | (99 | )(2) | (500 | )(1) | (98 | )(2) | (500 | )(1) | ||||||||
Non-GAAP net income | 6,251 | 3,026 | 17,151 | 8,332 | ||||||||||||
| GAAP weighted-average number of Common Stock used in computation of diluted net income per share (in thousands) | 24,253 | 22,356 | 24,105 | 22,114 | ||||||||||||
| Weighted-average number of shares related to outstanding options | 11 | 41 | 19 | 64 | ||||||||||||
| Weighted-average number of Common Stock used in computation of diluted net income per share, excluding equity-based compensation expense and tax income (in thousands) | 24,264 | 22,397 | 24,124 | 22,178 | ||||||||||||
GAAP diluted net income per share | $ | 0.20 | $ | 0.13 | $ | 0.57 | $ | 0.32 | ||||||||
| Equity-based compensation expense | $ | 0.06 | $ | 0.03 | $ | 0.14 | $ | 0.08 | ||||||||
| Income tax expense (income) | — | $ | (0.02 | )(1) | — | $ | (0.02 | )(1) | ||||||||
Non-GAAP diluted net income per share | $ | 0.26 | $ | 0.14 | $ | 0.71 | $ | 0.38 | ||||||||
| (1) | Results for the three months and the nine months ended September 30, 2010 included $0.5 million of tax income associated with adjustments related to international cost allocations, as well as tax planning strategies to utilize certain deferred tax assets. | |
| (2) | Results for the three months and the nine months ended September 30, 2011 included $0.1 million of tax income related to equity-based compensation expenses. |
CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. Dollars in Thousands
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. Dollars in Thousands
| September 30, | December 31, | |||||||
| 2011 | 2010 | |||||||
| Unaudited | Audited | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 22,695 | $ | 17,098 | ||||
| Marketable securities and short term bank deposits | 114,537 | 98,681 | ||||||
| Trade receivables, net | 4,485 | 5,906 | ||||||
| Deferred tax assets | 1,973 | 1,288 | ||||||
| Prepaid expenses and other accounts receivables | 4,508 | 4,609 | ||||||
| Total current assets | 148,198 | 127,582 | ||||||
| Long-term investments: | ||||||||
| Long-term bank deposits | 18,369 | 15,173 | ||||||
| Severance pay fund | 5,525 | 5,433 | ||||||
| Deferred tax assets | 893 | 574 | ||||||
| Property and equipment, net | 1,192 | 1,348 | ||||||
| Goodwill | 36,498 | 36,498 | ||||||
| Total assets | $ | 210,675 | $ | 186,608 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Trade payables | $ | 562 | $ | 616 | ||||
| Deferred revenues | 1,450 | 616 | ||||||
| Accrued expenses and other payables | 9,353 | 10,521 | ||||||
| Deferred tax liabilities | 136 | 901 | ||||||
| Total current liabilities | 11,501 | 12,654 | ||||||
| Accrued severance pay | 5,782 | 5,486 | ||||||
| Total liabilities | 17,283 | 18,140 | ||||||
| Stockholders’ equity: | ||||||||
| Common Stock | 23 | 23 | ||||||
| Additional paid in-capital | 189,256 | 176,838 | ||||||
| Accumulated other comprehensive income (loss) | (886 | ) | 317 | |||||
| Accumulated income (deficit) | 4,999 | (8,710 | ) | |||||
| Total stockholders’ equity | 193,392 | 168,468 | ||||||
| Total liabilities and stockholders’ equity | $ | 210,675 | $ | 186,608 | ||||