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CEVA, Inc. Announces First Quarter 2013 Financial Results

May 2, 2013

– Strategic license agreement signed with tier-one player in mobile infrastructure

MOUNTAIN VIEW, Calif., May 2, 2013 /PRNewswire/ — CEVA, Inc. (NASDAQ: CEVA), the leading licensor of silicon intellectual property (SIP) platform solutions and DSP cores for the mobile, portable and consumer electronic markets, today announced its financial results for the first quarter ended March 31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20120808/SF53702LOGO)

Total revenue for the first quarter of 2013 was $12.1 million, a decrease of 20% compared to $15.1 million reported for the first quarter of 2012. First quarter 2013 licensing and related revenue was $5.0 million, representing a decrease of 16% when compared to $6.0 million reported for the same quarter a year ago. Royalty revenue for the first quarter 2013 was $7.1 million, a decrease of 22% compared to $9.1 million reported for the first quarter of 2012.

During the quarter, CEVA concluded eight new license agreements. Five of the agreements were for CEVA DSP cores, platforms and software, including three new licensees for the CEVA-XC4000 DSP family targeting advanced communications. In addition, two agreements were signed for CEVA SATA/SAS product lines and one agreement for CEVA Bluetooth technology. Target applications for customer deployment are mobile infrastructure, advanced Wi-Fi access points, broadband satellite communications, enterprise storage and Bluetooth low energy connectivity. Geographically, one of the agreements signed was in the U.S., two were in Europe and five were in Asia Pacific, including Japan.

Gideon Wertheizer, Chief Executive Officer of CEVA, stated, “We concluded a number of important licensing deals during the quarter, with the highlight being a strategic and comprehensive agreement with a tier-one customer in the mobile infrastructure space, which intends to deploy our CEVA-XC4000 DSP architecture in its next generation products. It is a noteworthy milestone: represents a key new customer win, expansion and diversification of our customer portfolio and a testament to our technology in a market that is known for its high barriers to entry. We are encouraged by the licensing dynamics for our best-of-breed CEVA-XC4000 DSP, of which we signed three agreements during the quarter, all with new customers.”

U.S. GAAP net income for the first quarter of 2013 was $1.7 million, a 65% decrease from $4.9 million reported for the same period in 2012. U.S. GAAP diluted earnings per share for the first quarter of 2013 were $0.08, a decrease of 60% compared to $0.20 for the first quarter of 2012.

Non-GAAP net income and diluted earnings per share for the first quarter of 2013 were $2.9 million and $0.13, respectively, representing a 51% and 46% decrease, respectively, over the $5.9 million and $0.24 reported for the first quarter of 2012. Non-GAAP net income and diluted earnings per share for the first quarter of 2013 and 2012 excluded an aggregate equity-based compensation expense, net of taxes, of $1.2 million and $1 million, respectively.

Yaniv Arieli, Chief Financial Officer of CEVA, stated: “Our licensing and related revenue was slightly below what we forecasted primarily due to recognizing partial revenue in the quarter of an important agreement we signed with a tier-one customer in the mobile infrastructure space. We anticipate recognizing the remaining revenues to be generated from this agreement during future periods. Our royalty revenue was primarily impacted by softness in the consumer electronics space while 3G smartphones powered by our DSPs outpaced the seasonal trend. During the first quarter we repurchased approximately 130,000 shares of our common stock for an aggregate consideration of approximately $2 million. At the end of the quarter, our cash balance, marketable securities and bank deposits totaled $157 million.”

CEVA Conference Call

On May 02, 2013, 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 1-800-860-2442 (Access Code: CEVA)
  • International Participants: Dial +1-412-858-4600 (Access Code: CEVA)

The conference call will also be available live via the Internet at the following link: http://www.videonewswire.com/event.asp?id=93239. 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: 10027202) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on May 10, 2013. The replay will also be available at CEVA’s web site www.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, portable and consumer electronics markets. CEVA’s IP portfolio includes comprehensive technologies for cellular baseband (2G / 3G / 4G), multimedia (vision, imaging and HD audio), voice processing, Bluetooth, Serial Attached SCSI (SAS) and Serial ATA (SATA). In 2012, CEVA’s IP was shipped in more than 1 billion devices, powering smartphones from many of the world’s leading OEMs, including HTC, Huawei, Lenovo, LG, Nokia, Motorola, Samsung, Sony, TCL and ZTE. Today, more than 40% of handsets shipped worldwide are 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
          CONSOLIDATED STATEMENTS OF INCOME - U.S. GAAP
        U.S. dollars in thousands, except per share data
        ================================================

                                                      Quarter ended

                                                        March 31,

                                                      2013          2012
                                                      ----          ----

                                                Unaudited     Unaudited
                                                ---------     ---------

    Revenues:

    Licensing and related revenues                  $5,034        $6,006

    Royalties                                        7,082         9,106
                                                     -----         -----

    Total revenues                                  12,116        15,112
                                                    ------        ------

    Cost of revenues                                 1,575           870
                                                     -----           ---

    Gross profit                                    10,541        14,242
                                                    ------        ------

    Operating expenses:

    Research and development, net                    5,039         5,486

    Sales and marketing                              2,355         2,289

    General and administrative                       1,838         1,869

    Total operating expenses                         9,232         9,644
                                                     -----         -----

    Operating income                                 1,309         4,598

    Financial income, net                              729           948
                                                                     ---

    Income before taxes on income                    2,038         5,546

    Income taxes                                       333           689
                                                       ---           ---

    Net income                                      $1,705        $4,857
                                                    ======        ======

    Basic net income per share                       $0.08         $0.21
                                                     =====         =====

    Diluted net income per share                     $0.08         $0.20
                                                     =====         =====

    Weighted-average shares  used to compute net income per share (in
     thousands):

    Basic                                           22,197        23,507
                                                    ======        ======

    Diluted                                         22,670        24,239
                                                    ======        ======

    Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
    (U.S. Dollars in thousands, except per share data)

                                                Quarter ended

                                                  March 31,

                                                2013         2012
                                                ----         ----

                                          Unaudited    Unaudited
                                          ---------    ---------

    GAAP net income                            1,705        4,857

    Equity-based compensation expense
     included in cost of revenues                 69           51

    Equity-based compensation expense
     included in research and
     development expenses                        446          465

    Equity-based compensation expense
     included in sales and marketing
     expenses                                    296          239

    Equity-based compensation expense
     included in general and
     administrative expenses                     507          490

    Deferred tax related to equity-
     based compensation expenses                (117)        (124)

    Taxes on Income (1)                            -         (102)

    Non-GAAP net income                       $2,906       $5,876
                                              ======       ======

    (1) Results for the three months ended March 31, 2012  include
     the utilization of expenses on a previously booked capital
     gain

    GAAP weighted-average number of
     Common Stock used in computation
     of diluted net income per share
     (in thousands)                           22,670       24,239

    Weighted-average number of shares
     related to outstanding options and
     stock appreciation rights (in
     thousands)                                    1            6
                                                 ---          ---

    Weighted-average number of Common
     Stock used in computation of
     diluted net income per share
     excluding equity-based
     compensation expense (in
     thousands)                               22,671       24,245

    GAAP diluted net income per share          $0.08        $0.20

    Equity-based compensation expense,
     net of taxes                              $0.05        $0.04

    Non  GAAP diluted net income per
     share                                     $0.13        $0.24
                                               =====        =====

                                              CEVA, INC. AND ITS SUBSIDIARIES
                                           CONDENSED CONSOLIDATED BALANCE SHEETS
                                                (U.S. Dollars in thousands)
                                                 ==========================

                                                                    March 31,           December 31,

                                                                                  2013    2012 (*)
                                                                                  ----    -------

                                                          Unaudited
                                                          ---------

    ASSETS

    Current assets:

    Cash and cash equivalents                                                  $10,000               $18,422

    Marketable securities and short term
     bank deposits                                                             123,753               116,572

    Trade receivables, net                                                       7,340                 6,232

    Deferred tax assets                                                          2,294                 2,065

    Prepaid expenses and other current
     assets                                                                      3,670                 2,361
                                                                                 -----                 -----

    Total current assets                                                       147,057               145,652
                                                                               -------               -------

    Long-term assets:

    Long term bank deposits                                                     23,180                23,050

    Severance pay fund                                                           6,606                 6,130

    Deferred tax assets                                                          1,146                 1,178

    Property and equipment, net                                                  1,536                 1,392

    Goodwill                                                                    36,498                36,498

    Investment in other companies                                                2,733                 2,433
                                                                                 -----                 -----

    Total assets                                                              $218,756              $216,333
                                                                              ========              ========

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:

    Trade payables                                                              $1,087                $1,176

    Deferred revenues                                                              483                   865

    Accrued expenses and other payables                                          2,819                 3,462

    Accrued payroll and related benefits                                         8,058                 6,978

    Income taxes payable, net                                                    1,782                 1,626
                                                                                 -----                 -----

    Total current liabilities                                                   14,229                14,107

    Accrued severance pay                                                        6,725                 6,158

    Total liabilities                                                           20,954                20,265
                                                                                ------                ------

    Stockholders' equity:

    Common stock:                                                                   22                    22

    Additional paid in-capital                                                 199,813               198,495

    Accumulated other comprehensive
     income                                                                        247                   360

    Treasury stock                                                             (26,354)              (25,694)

    Retained earnings                                                           24,074                22,885
                                                                                ------                ------

    Total stockholders' equity                                                 197,802               196,068
                                                                               -------               -------

    Total liabilities and stockholders'
     equity                                                                   $218,756              $216,333
                                                                              ========              ========

    (*) Derived from audited financial statements

SOURCE CEVA, Inc.


Source: PR Newswire