Continuous Progress in DSP and Multimedia Business and Licensing Revenue, Non-GAAP Net Income for the First Time in Five Quarters
SAN JOSE, Calif. -- July 20, 2006 -- CEVA, Inc. (NASDAQ: CEVA)(LSE: CVA), the leading licensor of digital signal processor (DSP) cores, multimedia and storage platforms to the semiconductor industry, today announced financial results for the second quarter ended June 30, 2006.
Total revenue for the second quarter of 2006 was $8.4 million, a decrease of 12% compared to $9.5 million reported for the second quarter of 2005. Total revenue for the second quarter of 2006 increased 3% sequentially compared to $8.1 million reported for the first quarter of 2006. Second quarter of 2006 licensing revenue was $6.0 million, a decrease of 9% from the second quarter of 2005 and an increase of 13% from the first quarter of 2006.
Second quarter of 2006 royalty revenue was $1.4 million, a decrease of 11% compared to $1.6 million reported for the second quarter of 2005 and a decrease of 21% compared to $1.8 million reported for the first quarter of 2006. Revenue from services was $1.0 million for the second quarter of 2006, a decrease of 27% compared to $1.3 million for the second quarter of 2005 and a decrease of 2% compared to the first quarter of 2006.
Net loss for the second quarter of 2006 was $0.2 million, compared to net loss of $2.2 million for the second quarter of 2005 and net loss of $0.8 million for the first quarter of 2006. Net loss per share for the second quarter of 2006 was $0.01 per share compared to net loss of $0.12 per share for the second quarter of 2005 and net loss of $0.04 per share for the first quarter of 2006. The net loss for the second quarter of 2005 did not reflect the quarterly expense associated with equity based compensation which under Statement of Financial Accounting Standards No. 123R, "Share Based Payments" is required to be expensed for periods commencing after January 1, 2006.
In the second quarter of 2006, the Company recognized an equity-based compensation expense of $0.5 million pursuant to the adoption of SFAS 123R and a gain of $0.1 million reported in interest and other income related to the disposal of an investment. Non-GAAP net income and net income per share for the second quarter of fiscal 2006, excluding the equity-based compensation expense and the gain on investment, was $0.2 million and $0.01, respectively.
In the second quarter of 2006, nine license agreements were signed, bringing the total to sixteen new licensing agreements signed in the first six months of 2006. Of the nine license agreements, seven were for CEVA DSP cores and platforms, one for CEVA SATA technology and one for CEVA Bluetooth technology. In addition there was a renewal of a prepaid arrangement with an existing customer and a number of small PLL technology deals. Customer target applications for these licenses are cellular handsets, Mobile TV, consumer electronics, and networking products. Geographically, three license agreements were signed in the United States, five in Europe and one in the Asia Pacific region.
"The second quarter results illustrated continuous progress in our financial performance, both in revenue and profitability milestones set for 2006," said Gideon Wertheizer, Chief Executive Officer of CEVA. "We continue to reduce the company's operating expenses and for the first time in five quarters, we have presented a non-GAAP net income of $0.2 million. The recently announced divestment of our GPS technology and product line combined with the Company's cost control measures should further allow us to achieve additional profitability milestones."
Mr. Wertheizer added, "We signed nine license agreements in the second quarter, including one for our Mobile-Media2000 platform for deployment in a Mobile TV chip. This represents the fourth design win for our mobile multimedia platform in the lucrative personal multimedia player market and further reinforces our unique, all-in-software approach to developing multimedia platforms."
Yaniv Arieli, Chief Financial Officer of CEVA, commented, "As of June 30, 2006, our total cash and marketable securities position was $63.6 million. DSO for the second quarter hit a record low of 66 days. We believe that following the completion of the GPS divestment and realization of the related costs savings, management's goals of achieving positive operating income is obtainable in the near future."
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CEVA Conference Call
On July 20, 2006, CEVA's management will conduct a conference call at 8:30 a.m. Eastern Time / 1:30 p.m. London time, to discuss the company's operating performance for the quarter. The conference call will be available via the following dial-in numbers:
-- US Participants: Dial 1-888-459-5609 (CEVA reference number # 7595119)
-- UK/Rest of World: Dial +44-800-032-3836 (CEVA reference number # 7595119)
The conference call also will be available live via the Internet by accessing the CEVA web site at http://www.ceva-dsp.com/. 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 1-877-519-4471 (passcode: 7595119) for U.S. domestic callers and +44-800-169-3875 (passcode: 7595119) for international callers from two hours after the end of the call until 11:59 p.m. (Eastern Time) on July 27, 2006. The replay will also be available at CEVA's web site at http://www.ceva-dsp.com/.
About CEVA, Inc.
Headquartered in San Jose, Calif., CEVA is the leading licensor of digital signal processor (DSP) cores, multimedia and storage platforms to the semiconductor industry. CEVA licenses a family of programmable DSP cores, associated SoC system platforms and a portfolio of application platforms, including multimedia, audio, Voice over Packet (VoP), Bluetooth, Serial Attached SCSI (SAS) and Serial ATA (SATA). In 2005, CEVA's IP was shipped in over 130 million devices. For more information visit http://www.ceva-dsp.com/.