CEVA Reports Increased Profits and Positive Cash Flow
SAN JOSE, Calif - October 26, 2004 - CEVA Inc. (NASDAQ: CEVA; LSE: CVA), the leading licensor of digital signal processor (DSP) cores and communications solutions to the semiconductor industry, today announced financial results for the third quarter of 2004, ended September 30, 2004.
Total revenue for the third quarter 2004 was $9.7 million, a slight increase from the $9.6 million reported in the second quarter 2004 and a 4% increase compared to $9.3 million in the third quarter 2003. Third quarter licensing revenue of $6.9 million was similar to the 2004 second quarter and increased 7% from $6.5 million in the third quarter 2003. Third quarter 2004 royalty revenue was $1.6 million, up 24% from $1.3 million reported in the second quarter 2004 and a 33% rise from the $1.2 million in the third quarter 2003.
Shipped units by licensees increased 30% to 30.5 million in the third quarter 2004 compared to 23 million shipped in the second quarter 2004 and a 110% increase from 14.5 million units shipped in the third quarter 2003.
Third quarter gross margin was 88% compared with 85% in the 2004 second quarter and 85% in the third quarter 2003. Third quarter net income increased 13% to $560,000, or $0.03 per share compared with second quarter 2004 net income of $494,000, or $0.027 per share. The Company recorded a net loss of $1.1 million, or $0.063 net loss per share in the third quarter 2003.
The Company generated $0.5 million of operating cash flow during the quarter. At September 30, 2004, cash equivalents and marketable securities were $57.8 million.
"CEVA's strong end-market growth drivers - wireless and consumer multimedia - resulted in a record 30 million units shipped in the third quarter with CEVA technology embedded as our licensees continue to thrive in the DSP industry," said Chet Silvestri, President and CEO of CEVA. "Although it is traditionally our weakest quarter, CEVA's revenue, gross margin and net income all recorded sequential improvements. Furthermore, our strong cash position gives us the flexibility to pursue internal and external growth initiatives to further extend our position as the leading licensor of DSP technology."
During the third quarter, CEVA completed six new licensing agreements including another licensee for CEVA-X and good adoption of CEVA's Serial-ATA solutions. In addition, a major Japanese wireless player was the first to license CEVA's Mobile Media solution following the launch of the technology in the quarter.
Additionally, further industry endorsement for CEVA technologies was underscored in the third quarter with the announcements that Atmel adopted CEVA for storage solutions, Zoran for DVD systems, Japan Radio Consortium for radio solutions, and Nemerix for location solutions.
"Notwithstanding the more moderate growth expectations for the semiconductor sector, our product portfolio of cores, solutions and services positions us well to continue our momentum of revenue and profit growth," continued Chet Silvestri.
Condensed Consolidated Statements of Operations & Condensed Consolidated Balance Sheets are available for download here (pdf 29KB)
On October 27, 2004, CEVA management will conduct a conference call at 10:30 a.m. EST/15.30 p.m. London time, to discuss the operating performance for the quarter. To participate in the conference call, US domestic callers can dial 877-951-7311 and international callers can dial +44-20-7019-0810, access code "CEVA."
The conference call will also be available live via the Internet by accessing the CEVA web site at 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 866-851-5345 for US domestic callers and +44-20-7108-6343 for international callers from two hours after the end of the call until 6:00 p.m. (ET) on November 3, 2004. The replay will also be available at CEVA's web site www.ceva-dsp.com.
For more information about CEVA, Inc, visit the about section of our website.
This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that if they ever 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. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. The forward looking statements in this press release include statements concerning CEVA pursuing internal and external growth initiatives, market growth, and continued momentum of revenue and profit growth, and extending its position as the number one licensor of DSP solutions for the semiconductor industry. The risks, uncertainties and assumptions referred to above include macroeconomic and geopolitical trends and events; intense competition within our industry; the industries in which we license our technology have experienced a challenging period of slow growth; that the market for the sale of our technology may not develop as expected; that we rely significantly on revenue derived from a limited number of licensees; the possible loss of key employees and/or senior management; the challenges of managing a geographically dispersed operation and other risks that are described from time to time in the Company's Securities and Exchange Commission reports, including but not limited to the Annual Report on Form 10-K for the fiscal year ended December 31, 2003, and reports filed after the Form 10-K. CEVA assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.