CEVA, Inc. Announces Fourth Quarter and 2014 Financial Results

MOUNTAIN VIEW, Calif., Feb. 3, 2015 -- CEVA, Inc. (NASDAQ: CEVA), the leading licensor of DSP and IP platforms for cellular, multimedia and connectivity, today announced its financial results for the fourth quarter and year ended December 31, 2014.

Fourth Quarter 2014
Total revenue for the fourth quarter of 2014 was $13.8 million, a decrease of 1% compared to $14.0 million reported for the fourth quarter of 2013. Fourth quarter 2014 licensing and related revenue was $7.4 million, an increase of 1% compared to $7.3 million reported for the fourth quarter of 2013. Royalty revenue for the fourth quarter of 2014 was $6.4 million, a decrease of 4% compared to $6.7 million reported for the fourth quarter of 2013.

Gideon Wertheizer, Chief Executive Officer, stated: "Our strong fourth quarter performance was driven by robust demand for our new vision and connectivity IPs. We also signed a comprehensive agreement for baseband processing with a new semiconductor company associated with a leading Tier 1 OEM. Our royalty revenue continues to progress, showing 20% sequential growth primarily driven by growing LTE and 3G WCDMA smartphone shipments."

Mr. Wertheizer continued: "The vast majority of the 36 license agreements we signed in 2014 were for non-baseband applications, which clearly illustrates the successful execution of our diversification strategy. With our latest DSP platforms in the areas of vision, audio, voice and sensing and our Wi-Fi and Bluetooth connectivity products, we are now serving markets of much greater magnitude, totaling tens of billions of devices. Looking ahead, we believe we are well positioned to leverage our technologies and engineering talent to further expand our customer base and help us meet our strategic mid-term objective to power 700 million to 900 million non-baseband devices annually by 2018."

U.S. GAAP net loss for the fourth quarter of 2014 was $1.9 million, compared to net income of $3.1 million reported for the same period in 2013. U.S. GAAP diluted net loss per share for the fourth quarter of 2014 were $0.10, compared to net income per share of $0.14 for the fourth quarter of 2013. U.S. GAAP net loss for the fourth quarter of 2014 also included a one-time write off of a deferred tax asset in the U.S. of approximately $3.4 million.

Non-GAAP net income and diluted earnings per share for the fourth quarter of 2014 were $1.7 million and $0.08, respectively, representing a decrease of 61% and 60% over the $4.5 million and $0.20 reported for the fourth quarter of 2013, respectively. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2014 excluded: (a) equity-based compensation expense of $1.0 million, (b) the impact of the amortization of acquired intangibles, net of tax, of $0.2 million associated with the acquisition of RivieraWaves, (c) $0.1 million of costs associated with the RivieraWaves acquisition, and (d) one-time write off of a deferred tax asset related to stock based compensation, of approximately $2.2 million. Non-GAAP net income and diluted earnings per share for the fourth quarter of 2013 excluded an aggregate equity-based compensation expense, net of taxes, of $1.3 million.

During the fourth quarter of 2014, the Company concluded eleven new license agreements. Six of the agreements were for CEVA DSP cores, platforms and software, and five were for CEVA connectivity IPs. Target applications for customer deployment are smartphones, tablets, advanced driver assistance systems (ADAS), surveillance systems, satellite communications, G.fast, advanced hearing aids and game consoles. Geographically, two of the agreements were in the U.S., two were in Europe and seven were in Asia, including Japan.

Full Year 2014 Review
Total revenue for 2014 was $50.8 million, an increase of 4% compared to $48.9 million reported for 2013. Royalty revenue for 2014 was $22.5 million, representing a decrease of 15% compared to $26.5 million reported for 2013. Licensing and related revenue for 2014 was $28.3 million, an increase of 27% compared to $22.4 million reported for 2013.

U.S. GAAP net loss and diluted loss per share for 2014 were $0.8 million and $0.04, respectively, compared to net income of $6.7 million and diluted net income per share of $0.30 reported for 2013. U.S. GAAP net loss for 2014 also included (a) a one-time write off of a deferred tax asset in the U.S. of approximately $3.4 million, (b) loss of approximately $0.4 million from the sale of our minority equity holdings in Antcor, which was sold to u-blox in the third quarter, and (c) the impact of the amortization of acquired intangibles, net of tax, of $0.4 million, associated with the acquisition of RivieraWaves.

Non-GAAP net income and diluted earnings per share for 2014 were $7.4 million and $0.35, respectively, representing a decrease of 38% and 35%, respectively, over the $12 million and $0.54 reported for 2013. Non-GAAP net income and diluted earnings per share for 2014 excluded (a) equity-based compensation expense of $5.0 million, (b) the impact of the amortization of acquired intangibles, net of tax, of $0.4 million associated with the acquisition of RivieraWaves, (c) a loss of approximately $0.4 million from the sale of our minority equity holdings in Antcor, which was sold to u-blox in the third quarter, (d) $0.5 million of costs associated with the RivieraWaves acquisition, and (e) a one-time write off of a deferred tax asset related to stock based compensation of approximately $1.9 million. Non-GAAP net income and diluted earnings per share for 2013 excluded an aggregate equity-based compensation expense, net of taxes, of $5.3 million.

Yaniv Arieli, Chief Financial Officer, stated, "We are pleased to end the year on a strong note, with another well executed quarter that helped produce 27% growth year-over-year in licensing and related revenues. This strength in licensing paves the way for future royalty revenue and reinforces our leadership in the industry for DSP and connectivity IPs. During 2014, we continued to actively execute our share repurchase program, buying back approximately 1.2 million shares for a total consideration of approximately $19 million. We also invested approximately $15 million to acquire RivieraWaves. At the end of 2014, CEVA's cash and cash equivalent balances, marketable securities and bank deposits were approximately $130 million."

CEVA Conference Call
On February 03, 2015, 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 fourth quarter and year ended December 31, 2014.

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: http://www.videonewswire.com/event.asp?id=101303. 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: 10058291) from one hour after the end of the call until 9:00 a.m. (Eastern Time) on February 17, 2015. The replay will also be available at CEVA's web site www.ceva-dsp.com.

Financial Tables

To read financial tables, click here

About CEVA, Inc.
CEVA is the leading licensor of cellular, multimedia and connectivity technologies to semiconductor companies and OEMs serving the mobile, consumer, automotive and IoT markets. Our DSP IP portfolio includes comprehensive platforms for multimode 2G/3G/LTE/LTE-A baseband processing in terminals and infrastructure, computer vision and computational photography 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 (Smart and Smart Ready), Wi-Fi (802.11 b/g/n/ac up to 4x4) and serial storage (SATA and SAS). One in every three phones sold worldwide is powered by CEVA, from many of the world's leading OEMs including Samsung, Huawei, Xiaomi, Lenovo, HTC, LG, Coolpad, ZTE, Micromax and Meizu. Visit us at www.ceva-dsp.com.