CEVA, Inc. Announces Fourth Quarter and Year End 2012 Financial Results

   CEVA, Inc. Announces Fourth Quarter and Year End 2012 Financial Results

- Company reports 16% sequential royalty revenue growth

- Record quarterly and annual shipments of CEVA technology - 303 million units
and 1.08 billion units, respectively

PR Newswire

MOUNTAIN VIEW, Calif., Jan. 30, 2013

MOUNTAIN VIEW, Calif., Jan. 30, 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 electronics
markets, today announced its financial results for the fourth quarter and year
ended December 31, 2012.

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

Fourth Quarter 2012
Total revenue for the fourth quarter of 2012 was $13.0 million, a decrease of
19% compared to $16.0 million reported for the fourth quarter of 2011. Fourth
quarter 2012 licensing revenue was $3.6 million, a 25% decrease when compared
to $4.7 million reported for the fourth quarter of 2011. Royalty revenue for
the fourth quarter of 2012 was $8.2 million, a decrease of 19% compared to
$10.2 million reported for the fourth quarter of 2011. Other revenue for the
fourth quarter of 2012 was $1.2 million, an increase of 12% when compared to
$1.1 million reported for the fourth quarter of 2011, due to the licensing of
development tools to a large customer in conjunction with a fourth quarter
licensing agreement.

U.S. GAAP net income for the fourth quarter of 2012 was $2.8 million, a
decrease of 43% over $4.9 million reported for the same period in 2011. U.S.
GAAP diluted earnings per share for the fourth quarter of 2012 were $0.12, a
decrease of 40% compared to $0.20 for the fourth quarter of 2011.

Non-GAAP net income and diluted earnings per share for the fourth quarter of
2012 were $4.3 million and $0.19, respectively, representing a decrease of 33%
and 27%, respectively, over the $6.4 million and $0.26 reported for the fourth
quarter of 2011. Non-GAAP net income and diluted earnings per share for the
fourth quarter of 2012 excluded an aggregate equity-based compensation
expense, net of taxes, of $1.2 million, and $0.3 million related to
transaction costs associated with the MIPS transaction, net of taxes. Non-GAAP
net income and diluted earnings per share for the fourth quarter of 2011
excluded an aggregate equity-based compensation expense, net of taxes, of $1.5
million.

Gideon Wertheizer, Chief Executive Officer of CEVA, stated, "Fourth quarter
shipments of products powered by our technology reached an overall record high
of 303 million units, reflecting growth across every handset market segment.
Our customers continue to gain traction in the low cost 3G smartphone space
and the lucrative LTE smartphone market. Also, shipment volumes of
CEVA-powered 2G handsets showed sequential growth, coupled with an improved
mix of 2G smartphones as compared to feature phones."

Mr. Wertheizer continued, "Overall, 2012 was a challenging year for both CEVA
and the semiconductor industry, significantly more so than was originally
anticipated. Our licensing revenue was weaker than initially expected,
resulting from uncertainty in the macro environment and a prolonged
decision-making process by licensees for next-generation products. Despite
this, we managed to license our best-of-breed technologies to major strategic
customers throughout the year. Importantly, these customers are fueling
adoption of our products and laying the foundation that we expect will
generate future royalty revenue growth. We maintained our DSP market share
leadership in the handset market, and finished the year with record volume
shipments of CEVA-powered devices of approximately 1.1 billion units. Looking
forward, we are ideally positioned to leverage the ongoing market trends in
handsets, specifically the transition to 3G and LTE smartphones in emerging
and developed economies, and capitalize on our significant customer presence
across the handset industry."

During the fourth quarter of 2012, the Company concluded eight new license
agreements. Five of the agreements were for CEVA DSP cores, platforms, and
software and three agreements were for CEVA SATA/SAS technology. Target
applications for customer deployment consisted of baseband processors, G.Fast
wired modems, mobile audio and solid state drives. Geographically, two of the
license agreements were in the US, one in Europe, and five in Asia, including
Japan.

Full Year 2012 Review
Total revenue for 2012 was $53.7 million, a decrease of 11% compared to $60.2
million reported for 2011. Royalty revenue for 2012 was $32 million,
representing a decrease of 12% compared to $36.4 million reported for 2011.
Licensing revenue for 2012 was $18.2 million, a decrease of 10% compared to
$20.2 million reported for 2011. Other revenue for the 2012 was $3.5 million,
a decrease of 3% as compared to $3.6 million reported for 2011.

U.S. GAAP net income and diluted earnings per share for 2012 were $13.7
million and $0.59, respectively, a decrease of 26% and 23%, respectively,
compared to $18.6 million and $0.77 reported for 2011.

Non-GAAP net income and diluted earnings per share for 2012 were $18.4 million
and $0.79, respectively, representing a decrease of 22% and 19%, respectively,
over the $23.5 million and $0.97 reported for 2011. Non-GAAP net income and
diluted earnings per share for 2012 excluded an aggregate equity-based
compensation expense, net of taxes, of $4.4 million and $0.3 million related
to transaction costs associated with the MIPS transaction, net of taxes.
Non-GAAP net income and diluted earnings per share for 2011 excluded an
aggregate equity-based compensation expense, net of taxes, of $5.0 million.

Yaniv Arieli, Chief Financial Officer of CEVA, stated, "Our fourth quarter
results produced sequential revenue and EPS growth, reflecting improved
shipments and royalty revenue for our products in the third quarter. On an
annual basis, 2012 proved to be a transition year for CEVA, with our customers
increasing their penetration of the 3G and LTE markets, which partially offset
the ramp down of CEVA-powered legacy products at two OEMs and price erosion in
the 2G segment. We continued to actively exercise our share repurchase program
throughout the year, buying back approximately 1.5 million shares of our
common stock at an average price of $18.33 per share for a total consideration
of approximately $27.2million, illustrating our conviction in CEVA's
long-term growth prospects. As of December 31, 2012, CEVA's cash and cash
equivalent balances, marketable securities and long term bank deposits were
approximately $158 million."

CEVA Conference Call
On January 30, 2013, 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, 2012.

The conference call will be available via the following dial in numbers:

  oU.S. Participants: Dial 1-800-860-2442 (Access Code: CEVA)
  oInternational 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=91523. 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: 10023357) from one
hour after the end of the call until 9:00 a.m. (Eastern Time) on February 07,
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, 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.

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 CEVA's
royalty revenue growth prospects, the adoption of CEVA products and CEVA's
ideal position to leverage the ongoing market trends in handsets, and Mr.
Arieli's statements about CEVA's long term growth prospects and CEVA's stock
buyback activities reflecting such prospects. 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 and maintaining our market position in existing markets; the ability
of products incorporating our technologies to achieve market acceptance, the
effect of intense industry competition and consolidation, global chip market
trends, the possibility that markets for our 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.



CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME – U.S. GAAP
U.S. dollars in thousands, except per share data
                                     Quarter ended       Year ended
                                     December 31,        December 31,
                                     2012      2011      2012       2011
                                     Unaudited Unaudited Unaudited  Audited
Revenues:
Licensing                            $  3,555 $  4,711 $  18,248 $  20,239
Royalties                            8,203     10,159    31,950     36,403
Other revenues                       1,209     1,082     3,479      3,597
Total revenues                       12,967    15,952    53,677     60,239
Cost of revenues                     1,025     924       3,952      3,559
Gross profit                         11,942    15,028    49,725     56,680
Operating expenses:
Research and development, net        4,695     5,730     20,243     21,543
Sales and marketing                  2,603     2,287     9,231      8,937
General and administrative           2,226     2,096     7,884      7,639
Total operating expenses             9,524     10,113    37,358     38,119
Operating income                     2,418     4,915     12,367     18,561
Financial income, net                727       873       3,380      2,909
Income before taxes on income        3,145     5,788     15,747     21,470
Taxes on income                      390       935       2,062      2,908
Net income                           $2,755    $4,853    $13,685    $18,562
Basic earnings per share             $0.12     $0.21     $0.60      $0.80
Diluted earnings per share           $0.12     $0.20     $0.59      $0.77
Weighted-average number of Common
Stock used in computation of
earnings per share (in thousands):
Basic                                22,300    23,491    22,798     23,173
Diluted                              22,737    24,293    23,357     24,153



Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(U.S. Dollars in thousands, except per share amounts)
                                       Quarter ended       Year ended
                                       December 31,        December 31,
                                       2012      2011      2012      2011
                                       Unaudited Unaudited Unaudited Unaudited
GAAP net income                        2,755     4,853     13,685    18,562
Equity-based compensation expense      64        68        241       239
included in cost of revenue
Equity-based compensation expense
included in research and development   483       562       1,810     1,934
expenses
Equity-based compensation expense
included in sales and marketing        313       347       1,036     1,094
expenses
Equity-based compensation expense
included in general and administrative 535       641       1,996     1,891
expenses
MIPS transaction costs                 415(1)    -         415(1)    -
Taxes on income (benefit)              (277)     (106)     (827)     (204)
Non-GAAP net income                    4,288     6,365     18,356    23,516
GAAP weighted-average number of Common
Stock used in computation of diluted   22,737    24,293    23,357    24,153
earnings per share (in thousands)
Weighted-average number of shares      2         9         4         16
related to outstanding options
Weighted-average number of Common
Stock used in computation of diluted
earnings per share, excluding          22,739    24,302    23,361    24,169
equity-based compensation expense and
tax and transaction costs (in
thousands)
GAAP diluted earnings per share        $0.12     $0.20     $0.59     $0.77
Equity-based compensation expense      $0.06     $0.07     $0.22     $0.21
Taxes on income (benefit)              ($0.01)   ($0.01)   ($0.04)   ($0.01)
MIPS transaction costs                 $0.02               $0.02
Non-GAAP diluted earnings per share    $0.19     $0.26     $0.79     $0.97

(1) Results for the three months and for the year ended December 31, 2012
    included transaction costs associated with the MIPS transaction of $0.4.



CEVA, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
                                            December 31,      December 31,
                                            2012              2011 (*)
                                            Unaudited         Unaudited
ASSETS
Current assets:
Cash and cash equivalents                   $    18,422   $    14,954
Marketable securities and short term bank   116,572           124,458
deposits
Trade receivables, net                      6,232             5,116
Deferred tax assets                         2,065             2,248
Prepaid expenses and other accounts         2,361             2,320
receivables
Total current assets                        145,652           149,096
Long-term investments:
Long term bank deposits                     23,050            25,106
Severance pay fund                          6,130             5,473
Deferred tax assets                         1,178             832
Property and equipment, net                 1,392             1,235
Goodwill                                    36,498            36,498
Investment in other companies               2,433             900
Total assets                                $    216,333  $    219,140
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables                              $      1,176 $      580
Deferred revenues                           865               1,074
Accrued expenses and other payables         10,240            10,124
Taxes payable                               1,626             545
Deferred tax liabilities                    200               290
Total current liabilities                   14,107            12,613
Accrued severance pay                       6,158             5,607
Total liabilities                           20,265            18,220
Stockholders' equity:
Common Stock:                               22                24
Additional paid in-capital                  198,495           191,945
Treasury Stock                              (25,694)          -
Accumulated other comprehensive income      360               (901)
(loss)
Retained earnings                           22,885            9,852
Total stockholders' equity                  196,068           200,920
Total liabilities and stockholders' equity  $  216,333      $  219,140

(*) Derived from audited financial statements



SOURCE CEVA, Inc.

Website: http://www.ceva-dsp.com
Contact: Yaniv Arieli, CEVA, Inc., CFO, +1-650-417-7941,
yaniv.arieli@ceva-dsp.com; or Richard Kingston, CEVA, Inc., Director of
Marketing & Investor Relations, +1-650-417-7976, richard.kingston@ceva-dsp.com
 
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