CEVA, Inc. Announces First Quarter 2019 Financial Results
MOUNTAIN VIEW, Calif., May 6, 2019 /PRNewswire/ -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of signal processing platforms and artificial intelligence processors for smarter, connected devices, announced today its financial results for the first quarter ended March 31, 2019.
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Total revenue for the first quarter of 2019 was $17.0 million, a 3% decrease compared to $17.6 million reported for the first quarter of 2018. First quarter 2019 licensing and related revenue was $11.0 million, an increase of 9% when compared to $10.1 million reported for the same quarter a year ago. Royalty revenue for the first quarter of 2019 was $6.0 million, a decrease of 20% when compared to $7.5 million reported for the first quarter of 2018.
Gideon Wertheizer, CEO of CEVA, stated: "Our team executed another strong licensing quarter, including multiple strategic agreements signed. We achieved a major design win for our NeuPro AI processor with one of the world's largest automotive OEMs which positions us at the forefront of level 3 and above autonomous driving. We also expanded our 5G footprint, concluding three agreements with key players targeting 5G networking. Our royalty revenue from handsets suffered substantial headwinds due to excess channel inventory. Our royalties from our non-handset baseband customer base continued to expand, delivering 22% year-over-year growth."
Of the eight license agreements completed during the quarter, three were for smart sensing products and five were for connectivity products. All of the licensing agreements signed during the quarter were for non-handset baseband applications and four were with first-time customers of CEVA. Customers' target markets include AI for autonomous cars, 5G for base station RAN, mmWave small cells and cellular V2X, Bluetooth earbuds, smart speakers and a range of IoT devices. Geographically, three of the deals signed were in China, one was in the U.S., one was in Europe and three were in the APAC region, including Japan.
GAAP net loss for the first quarter of 2019 was $2.3 million, as compared to a net loss of $2.2 million reported for the same period in 2018. GAAP diluted loss per share for both first quarters of 2019 and 2018 was ($0.10).
Non-GAAP net income and diluted earnings per share for the first quarter of 2019 were $0.3 million and $0.01, respectively, down from the $0.8 million and $0.04 reported for the first quarter of 2018. Non-GAAP net income and diluted earnings per share for the first quarter of 2019 excluded: (a) equity-based compensation expense, net of taxes, of $2.3 million, (b) the impact of the amortization of acquired intangibles of $0.3 million associated with the acquisition of RivieraWaves and an investment in NB-IoT technologies. Non-GAAP net income and diluted earnings per share for the first quarter of 2018 excluded: (a) equity-based compensation expense, net of taxes, of $2.6 million, and (b) the impact of the amortization of acquired intangibles of $0.4 million associated with the acquisition of RivieraWaves and an investment in NB-IoT technologies.
Yaniv Arieli, Chief Financial Officer of CEVA, stated: "We continue to make prudent R&D investments in strategic growth areas that have enabled us to expand our licensing business. While our royalty business is suffering from weakness in the handset space, we are encouraged by the sustainable year-over-year progress of our non-handset baseband business, particularly in the base station RAN, Bluetooth and IoT markets. Additionally, the company repurchased approximately $2.5 million of its common stock under our existing share repurchase program. At the end of the quarter, our cash balance, marketable securities and bank deposits totaled $171 million, with no debt."
CEVA Conference Call
On May 6, 2019 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/984/30118. 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: 10130212) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on May 13, 2019. The replay will also be available at CEVA's web site www.ceva-dsp.com.
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 our new NeuPro AI processor design win with an automotive OEM positioning the company at the forefront of level 3 and above autonomous driving, and the decrease in royalty revenue being attributable to excess channel inventory, as well as Mr. Arieli's statement on prospects of a sustainable non-handset baseband business, particularly in the base station RAN, Bluetooth and IoT market segments. The risks, uncertainties and assumptions that could cause differing CEVA results include: the ability of the CEVA DSP cores and other technologies to continue to be strong growth drivers for us; our continued 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 autonomous driving and IoT markets, 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.
About CEVA, Inc.
CEVA is the leading licensor of signal processing platforms and artificial intelligence processors 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 cellular IoT (NB-IoT and Cat-M) enabled devices, advanced imaging and computer vision for any camera-enabled device, audio/voice/speech and ultra-low power always-on/sensing applications for multiple IoT markets. For artificial intelligence, we offer a family of AI processors capable of handling the complete gamut of neural network workloads, on-device. For connectivity, we offer the industry's most widely adopted IPs for Bluetooth (low energy and dual mode) and Wi-Fi (Wi-Fi 4 (802.11n), Wi-Fi 5 (802.11ac) and Wi-Fi 6 (802.11ax) up to 4x4). Visit us at www.ceva-dsp.com and follow us on Twitter, YouTube, Facebook, LinkedIn and Instagram.
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,
2019 2018
---
Unaudited
Unaudited
---
Revenues:
Licensing
and
related
revenues $11,011 $10,083
Royalties 5,958 7,486
---
Total
revenues 16,969 17,569
---
Cost of
revenues 2,023 1,972
---
Gross
profit 14,946 15,597
---
Operating expenses:
Research
and
development,
net 12,330 12,016
Sales and
marketing 3,021 3,176
General
and
administrative 2,317 2,954
Amortization
of
intangible
assets 210 359
Total
operating
expenses 17,878 18,505
---
Operating
loss (2,932) (2,908)
Financial
income,
net 800 927
Loss
before
taxes on
income (2,132) (1,981)
Taxes on
income 165 201
---
Net loss $(2,297) $(2,182)
===
Basic and
diluted
net loss
per
share ($0.10) ( $0.10)
===
Weighted-average shares used to compute
net loss per share (in thousands):
Basic 21,917 22,148
===
Diluted 21,917 22,148
===
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
U.S. Dollars in thousands, except per share amounts
Quarter ended
March 31,
2019 2018
---
Unaudited Unaudited
---
GAAP net loss (2,297) (2,182)
Equity-based compensation expense
included in cost of revenues 136 157
Equity-based compensation expense
included in research and development 1,362 1,269
expenses
Equity-based compensation expense
included in sales and marketing 356 454
expenses
Equity-based compensation expense
included in general and administrative 562 891
expenses
Income tax benefit related to equity-
based compensation expenses (137) (129)
Amortization of intangible assets related
to RivieraWaves transaction 289 359
and NB-IoT technologies
Non-GAAP net income $271 $819
===
GAAP weighted-average number of Common
Stock used in computation 21,917 22,148
of diluted net loss per share (in thousands)
Weighted-average number of shares
related to outstanding stock-based 775 968
awards (in thousands)
---
Weighted-average number of Common Stock used in computation 23,116
of diluted earnings per share, excluding the above (in thousands)
22,692
GAAP diluted loss per share ($0.10) ($0.10)
Equity-based compensation expense, net
of taxes $0.10 $0.12
Amortization of intangible assets related to RivieraWaves transaction
and NB-IoT technologies $0.01 $0.02
Non-GAAP diluted earnings per share $0.01 $0.04
===
CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
March 31, December 31,
2019 2018 (*)
Unaudited Unaudited
---
ASSETS
Current assets:
Cash and cash
equivalents $21,469 $22,260
Marketable
securities and
short-term bank
deposits 135,340 123,608
Trade receivables,
net 19,351 26,156
Prepaid expenses
and other current
assets 7,630 5,264
Total current
assets 183,790 177,288
Long-term assets:
Bank deposits 14,510 21,864
Severance pay fund 9,629 9,026
Deferred tax
assets, net 6,186 5,924
Property and
equipment, net 7,265 7,344
Operating lease
right-of-use
assets 9,501 -
Goodwill 46,612 46,612
Intangible assets,
net 2,411 2,700
Other long-term
assets 6,928 6,505
Total assets $286,832 $277,263
===
LIABILITIES AND STOC
KHOLDERS' EQUITY
Current liabilities:
Trade payables $750 $632
Deferred revenues 2,811 3,593
Accrued expenses
and other payables 17,849 17,527
Operating lease
liabilities 1,549 -
Total current
liabilities 22,959 21,752
Long-term liabilities:
Accrued severance
pay 10,349 9,632
Operating lease
liabilities 7,651 -
Other accrued
liabilities 561 -
Total liabilities 41,520 31,384
Stockholders' equity:
Common stock 22 22
Additional paid in-
capital 221,071 223,250
Treasury stock (35,686) (39,132)
Accumulated other
comprehensive loss (427) (1,114)
Retained earnings 60,332 62,853
Total stockholders'
equity 245,312 245,879
Total liabilities
and stockholders'
equity $286,832 $277,263
===
(*) Derived from audited financial statements
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SOURCE CEVA, Inc.
