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Form 8-K CEVA INC For: Feb 03

February 3, 2015 8:02 AM EST

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section�13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February�3, 2015

CEVA, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

000-49842

(Commission File Number)

77-0556376

(I.R.S. Employer Identification No.)

1943 Landings Drive, Mountain View, CA

(Address of Principal Executive Offices)

94043

(Zip Code)

650/417/7900

(Registrant�s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


ITEM�2.02. ��RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On February�3, 2015, CEVA, Inc. (the �Company�) announced its financial results for the quarter and year ended December�31, 2014. A copy of the press release, dated February�3, 2015, is attached and filed herewith as Exhibit 99.1. This information, including Exhibit 99.1 attached hereto, shall not be deemed �filed� for purposes of Section�18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference to such filing.

In addition to the disclosure of financial results for the quarters and years ended December�31, 2014 and 2013 in accordance with generally accepted accounting principles in the United States (�GAAP�), the press release also included non-GAAP net income and diluted earnings per share (EPS) figures for the referenced periods.

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 taxes, of $0.2 million associated with the acquisition of RivieraWaves SAS (the �Acquisition�), (c)�$0.1 million of costs associated with the Acquisition, and (d)�one-time write off of a certain deferred tax asset 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.

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, (c)�a loss of approximately $0.4 million from the sale of the Company�s minority equity holdings in Antcor SA, (d)�$0.5 million of costs associated with the Acquisition, and (e)�a one-time write off of a certain deferred tax asset 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.

The Company believes that the reconciliation of financial measures in the press release is useful to investors in analyzing the results for the quarters and years ended December�31, 2014 and 2013 because the exclusion of such expenses may provide a more meaningful analysis of the Company�s core operating results and comparison of quarterly results. Further, the Company believes it is useful for investors to understand how the expenses associated with the application of FASB ASC No.�718 are reflected on its statements of income. The reconciliation of financial measures should be reviewed in addition to and in conjunction with results presented in accordance with GAAP, and are intended to provide additional insight into the Company�s operations that, when viewed with its GAAP results and the accompanying reconciliation, offer a more complete understanding of factors and trends affecting the Company�s business. The reconciliation of financial measures should not be viewed as a substitute for the Company�s reported GAAP results.

ITEM�9.01. ��FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.

99.1 Press Release of CEVA, Inc., dated February�3, 2015.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CEVA, INC.
Date: February 3, 2015 By:

/s/ Yaniv Arieli

Yaniv Arieli
Chief Financial Officer

Exhibit 99.1

LOGO

CEVA, Inc. Announces Fourth Quarter and 2014 Financial Results

Licensing driven by strong demand for vision and connectivity products

Growing shipments of CEVA-powered LTE and 3G WCDMA smartphones

2014 licensing and related revenues up 27% year-over-year

MOUNTAIN VIEW, Calif. � February�03, 2015CEVA, 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.

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 (802.11b/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 and follow us on Twitter, YouTube and LinkedIn.


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 statement that CEVA is well positioned to leverage its technologies and engineering talent to further expand its customer base and CEVA�s IP will power 700�million to 900�million non-baseband devices annually by 2018, as well as Mr.�Arieli�s statement expressing optimism about CEVA�s recent licensing deals will pave the way for future royalty revenue. 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, specifically non-baseband markets, and maintaining our market position in existing markets; the ability of products incorporating our technologies to achieve market acceptance, the speed and extent of the expansion of the 3G and LTE networks, as well as the IoT space, 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.

For More Information Contact:

Yaniv Arieli

CEVA, Inc.

CFO

+1.650.417.7941

[email protected]

Richard Kingston

CEVA, Inc.

VP, Investor Relations & Corporate Communications

+1.650.417.7976

[email protected]


CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS � U.S. GAAP

U.S. dollars in thousands, except per share data

�� Quarter ended �� Year ended
�� December�31, �� December�31,
�� 2014 2013 �� 2014 2013 (*)
�� Unaudited Unaudited �� Unaudited Unaudited

Revenues:

��

Licensing and related revenues

�� $ 7,359 �� $ 7,264 �� �� $ 28,348 �� $ 22,372 ��

Royalties

�� 6,462 �� 6,702 �� �� 22,460 �� 26,528 ��
��

��

Total revenues

13,821 �� 13,966 �� 50,808 �� 48,900 ��
��

��

Cost of revenues

1,263 �� 1,364 �� 5,000 �� 5,163 ��
��

��

Gross profit

12,558 �� 12,602 �� 45,808 �� 43,737 ��
��

��

Operating expenses:

Research and development, net

7,328 �� 4,937 �� 25,828 �� 21,216 ��

Sales and marketing

2,614 �� 2,821 �� 9,815 �� 10,092 ��

General and administrative

1,930 �� 2,082 �� 8,054 �� 7,670 ��

Amortization of intangible assets

323 �� 649 ��
��

��

Total operating expenses

12,195 �� 9,840 �� 44,346 �� 38,978 ��
��

��

Operating income

363 �� 2,762 �� 1,462 �� 4,759 ��

Financial and other income, net

32 �� 661 �� 571 �� 2,714 ��
��

��

Income before taxes on income

395 �� 3,423 �� 2,033 �� 7,473 ��

Taxes on income

2,329 �� 295 �� 2,852 �� 788 ��
��

��

Net income (loss)

$ (1,934 )� $ 3,128 �� $ (819 )� $ 6,685 ��
��

��

Basic net income (loss) per share

$ (0.10 )� $ 0.14 �� $ (0.04 )� $ 0.30 ��

Diluted net income (loss) per share

$ (0.10 )� $ 0.14 �� $ (0.04 )� $ 0.30 ��

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

Basic

20,209 �� 21,685 �� 20,622 �� 22,009 ��

Diluted

20,209 �� 22,063 �� 20,622 �� 22,465 ��
��

��

(*) Derived from audited financial statements


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,
�� 2014 2013 2014 2013
�� Unaudited Unaudited Unaudited Unaudited

GAAP net income

�� (1,934 )� 3,128 �� (819 )� 6,685 ��

Equity-based compensation expense included in cost of revenue

�� 34 �� 89 �� 193 �� 312 ��

Equity-based compensation expense included in research and development expenses

�� 452 �� 525 �� 2,027 �� 2,014 ��

Equity-based compensation expense included in sales and marketing expenses

�� 156 �� 290 �� 909 �� 1,311 ��

Equity-based compensation expense included in general and administrative expenses

�� 386 �� 592 �� 1,882 �� 2,283 ��

Income tax benefit related to equity-based compensation expenses

�� ��� �� (167 )� ��� �� (578 )�

costs associated with the RivieraWaves acquisition (1)

�� 91 �� ��� �� 480 �� ��� ��

Amortization of intangible assets related to RivieraWaves transaction, net of tax

�� 210 �� ��� �� 445 �� ��� ��

Loss from realize of investment in other company associated with Antcor

�� ��� �� ��� �� 404 �� ��� ��

One-time write off of a tax asset related to equity-based compensation expenses

�� 2,214 �� ��� �� 1,890 �� ��� ��

Income tax related to RivieraWaves acquisition

�� 118 �� ��� �� ��� �� ��� ��
��

Non-GAAP net income

�� 1,727 �� 4,457 �� 7,411 �� 12,027 ��
��

GAAP weighted-average number of Common Stock used in computation of diluted earnings per share (in thousands)

�� 20,209 �� 22,063 �� 20,622 �� 22,465 ��

Weighted-average number of shares related to outstanding options

�� ��� �� ��� �� ��� �� 14 ��
��

Weighted-average number of Common Stock used in computation of diluted earnings per share, excluding the above (in thousands)

�� 20,209 �� 22,063 �� 20,622 �� 22,479 ��

GAAP diluted earnings per share

�� $ (0.10 )� $ 0.14 �� $ (0.04 )� $ 0.30 ��

Equity-based compensation expense, net of taxes

�� $ 0.05 �� $ 0.06 �� $ 0. 24 �� $ 0. 24 ��

costs associated with the RivieraWaves acquisition (1)

�� ��� �� $ 0.02 ��

Amortization of intangible assets related to RivieraWaves transaction, net of tax

�� $ 0.01 �� $ 0.02 ��

Loss from realize of investment in other company associated with Antcor

�� ��� �� $ 0.02 ��

One-time write off of a tax asset related to equity-based compensation expenses

�� 0.11 �� $ 0.09 ��

Income tax related to RivieraWaves acquisition

�� $ 0.01 ��
��

Non-GAAP diluted earnings per share

�� $ 0.08 �� $ 0.20 �� $ 0.35 �� $ 0.54 ��
��

(1) Acquisition and related costs pertain to tax and legal services and adjustment to the contingent consideration associated with the RivieraWaves transaction.


CEVA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)

�� December�31, December�31,
�� 2014 2013 (*)
�� Unaudited Unaudited

ASSETS

��

Current assets:

��

Cash and cash equivalents

�� $ 16,166 �� $ 24,117 ��

Marketable securities and short term bank deposits

�� 85,277 �� 110,411 ��

Trade receivables, net

�� 8,347 �� 5,629 ��

Deferred tax assets

�� 1,868 �� 3,457 ��

Prepaid expenses and other current assets

�� 3,982 �� 1,996 ��
��

Total current assets

115,640 �� 145,610 ��
��

Long-term assets:

Long term bank deposits

28,424 �� 17,066 ��

Severance pay fund

7,011 �� 7,215 ��

Deferred tax assets

399 �� 955 ��

Property and equipment, net

2,605 �� 1,616 ��

Goodwill

46,612 �� 36,498 ��

Investment in other companies

1,806 �� 3,367 ��

Other Intangible assets

5,512 �� ��� ��
��

Total assets

$ 208,009 �� $ 212,327 ��
��

LIABILITIES AND STOCKHOLDERS� EQUITY

Current liabilities:

Trade payables

$ 864 �� $ 1,085 ��

Deferred revenues

1,681 �� 623 ��

Accrued expenses and other payables

16,711 �� 10,563 ��

Taxes payable

739 �� 1,833 ��

Deferred tax liabilities

464 �� 73 ��
��

Total current liabilities

20,459 �� 14,177 ��

Long-term liabilities:

Accrued severance pay

7,096 �� 7,255 ��

Deferred tax liabilities

1,405 �� ��� ��
��

Total liabilities

28,960 �� 21,432 ��
��

Stockholders� equity:

Common Stock:

20 �� 21 ��

Additional paid in-capital

209,426 �� 204,415 ��

Treasury Stock

(54,708 )� (41,005 )�

Accumulated other comprehensive loss

(436 )� (81 )�

Retained earnings

24,747 �� 27,545 ��
��

Total stockholders� equity

179,049 �� 190,895 ��
��

Total liabilities and stockholders� equity

$ 208,009 �� $ 212,327 ��
��

(*) Derived from audited financial statements


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