Record DSP Licensing in the Fourth Quarter
San Jose, CA - January 27, 2004 - CEVA, Inc. (NASDAQ: CEVA; LSE: CVA), the leading licensor of Digital Signal Processor (DSP) cores and communication solutions to the semiconductor industry, today announced results for the fourth quarter and year ended Dec. 31, 2003.
Total revenues in the fourth quarter increased to $9.6 million, compared with $9.3 million in the third quarter. Licensing revenues increased to $6.6 million, compared with $6.5 million in the third quarter. Royalty revenues increased to $1.4 million, compared with $1.2 million in the third quarter. Gross margins were 85 percent, unchanged from the third quarter.
In the fourth quarter, CEVA signed eight new license agreements, launched its pioneering CEVA-X DSP architecture, which it licensed to leading cellular handset and semiconductor companies, and announced further licensing agreements with industry leaders including Broadcom, Spreadtrum and Via Telecom. This industry adoption drove significant growth in DSP revenues over the third quarter. Royalty revenues posted continued growth reflecting the success of licensees shipping CEVA powered DSP solutions into the wireless and digital multimedia markets.
CEVA implemented a realignment program in the fourth quarter to eliminate non-strategic products, focus the organization on DSP technologies, and position the company for profitability in 2004. As a result, the company incurred a fourth quarter restructuring and impairment of assets charge of $9.1 million, of which $3.1 million was a cash charge. Including the restructuring and impairment of assets charge, net loss in the fourth quarter was $9.6 million or $0.53 net loss per share, compared with a net loss of $1.1 million or $0.06 net loss per share in the third quarter. Excluding the restructuring and impairment of assets charge, net loss in the fourth quarter was $500,000 or $0.03 net loss per share.
Total revenues for 2003 were $36.8 million. Licensing revenues for the year were $25.7 million and royalty revenues were $4.1 million. The remaining $7.0 million revenues was derived from services and consulting. The company signed a total of 25 licensing agreements, predominantly in DSP technologies, the company's core focus. Gross margins for 2003 were 84 percent. Including restructuring and impairment of assets charges of $11.9 million during fiscal year 2003, total operating expenses were $42.5 million, net loss was $12 million, and net loss per share was $0.66.
Cash and cash equivalents at the end of the fourth quarter were $59.1 million.
"The fourth quarter was very successful on many fronts. We achieved our best ever performance in DSP licensing and again recorded good growth in royalties, which grew 23 percent over the third quarter," said Chet Silvestri, president and CEO of CEVA. "In the fourth quarter we also launched our industry-leading CEVA-X DSP architecture, which we have now licensed to two industry leaders in the wireless market. In addition, our realignment program is resulting in a more cost-efficient company, positioned to expand our leadership in the high-growth DSP market."
"Supported by continued industry growth in programmable DSP shipments, with a strong portfolio of licensable DSP cores and solutions and a more cost-efficient organization, we believe we are well positioned to achieve our corporate goals of growth and profitability," said Christine Russell, CFO of CEVA.
The management of CEVA will hold a conference call for investors and analysts at 8:00 am PST, 11:00 am EST, 16:00 GMT and 17:00 CET on Wednesday Jan. 28, 2004. The conference call will be available via the following dial-in numbers:
- US Participants Telephone: +1 866 629 0054 (password: CEVA)
- UK/European Participants Telephone: +44 1452 569 340 (Password: CEVA)
A recording will be available approximately one hour after the call for five working days at the following dial-in numbers:
- US Participants Telephone: +1 706 645 9291 (Access code: 4884580#)
- UK/European Participants Telephone: +44 1452 55 00 00 (Access code: 4884580#)
The call can also be accessed via CEVA's website at www.ceva-dsp.com. Follow the directions on the main page to link to the audio. Please go to the website at least 15 minutes prior to the call to register, and to download and install any necessary audio software. The webcast will be archived for 30 days.
For more information about CEVA, Inc, visit the about section of our website.
Management believes that it is useful to present net income (loss) and expenses figures above, excluding the restructuring charge, because management believes that the figures provide a better picture of the company's historical operating results and a more useful point of comparison for its future performance.
Condensed Consolidated Statements of Operations & Condensed Consolidated Balance Sheets are available for download here (pdf 23KB)
Various statements in this press release concerning CEVA's future expectations, plans and prospects are "forward-looking statements", which are subject to certain risks and uncertainties that could cause actual results to differ materially from those stated. Any statements that are not statements of historical fact (including, without limitation, statements to the effect that the company or its management "believes", "expects", "anticipates", "plans" and similar expressions) should be considered forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described, including the following:
- The industries in which we license our technology are experiencing a challenging period of slow growth that has negatively impacted and could continue to negatively impact our business and operating results;
- The markets in which we operate are highly competitive, and as a result we could experience a loss of sales, lower prices and lower revenue;
- Our operating results fluctuate from quarter to quarter due to a variety of factors including our lengthy sales cycle, and are not a meaningful indicator for future performance
- We rely significantly on revenue derived from a limited number of licensees; and
- Other risks discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations--Factors that Could Affect Our Operating Results," in our quarterly report on Form 10-Q for the third quarter of 2003, filed with the U.S. Securities and Exchange Commission on November 13, 2003.