4/30/2003 - ParthusCeva, Inc. (NASDAQ: PCVA; LSE: PCV), the industry's leading provider of licensable Digital Signal Processor (DSP) cores and platform-level IP solutions, announced results for the first quarter ended March 31, 2003.
In accordance with US GAAP, total revenues for the first quarter 2003 were $8.8 million, an increase of 56% over $5.7 million in the fourth quarter 2002. Royalty revenues in the first quarter 2003 were $606,000 with licensing and royalty revenues representing 79% of total revenues. Gross margins in the first quarter 2003 were 81%, an increase of three basis points from 78% in the fourth quarter 2002. In first quarter 2003, ParthusCeva signed six license agreements across a range of DSP cores, GPS and Wireless-LAN platforms. These included significant deals with two companies that are recognized leaders in the cellular market, one in Asia and one in the US.
Operating expenses, in accordance with US GAAP, for the first quarter 2003 were $8.6 million, compared to $28.5 million in fourth quarter 2002. Operating expenses, on a pro forma basis (see note 'a'), for the first quarter 2003 were $6.9 million compared to $8.4 million in the fourth quarter 2002, a decrease of 18%. Cash and cash equivalents at the end of the first quarter 2003 amounted to $68.5 million.
Net loss, in accordance with US GAAP, for the first quarter 2003 amounted to $1.3 million compared to a net loss of $24.4 million for the fourth quarter 2002. Net loss per share for the first quarter 2003 amounted to $0.073. On a pro forma basis, (see note 'b'), net income for the first quarter 2003 amounted to $346,000 with net earnings per share of $0.02.
Brian Long, Chief Executive Officer of ParthusCeva, commented:
"Against the backdrop of a continued weak semiconductor industry, I am pleased that ParthusCeva has achieved pro forma profitability following strong licensing performance in the quarter and good cost control resulting from the restructuring program implemented in November 2002. In the quarter we achieved some notable design wins, with strong licensing performance across the breadth of our technologies. We also announced some new and exciting products which will be available for license in the second quarter. This strong performance in quarter one combined with the knowledge that we have already completed several significant deals in the first month of quarter two, gives us confidence that we can sustain the licensing momentum generated in the first quarter of 2003."
Eli Ayalon, Executive Chairman of ParthusCeva, commented:
"I am encouraged by our quarter one performance and believe that our recently announced initiative to strengthen our US operations will assist us in meeting our corporate goals of market leadership in DSP technologies and profitable growth."
Pro Forma Results
Management believes that the presentation of pro forma information is useful to investors because such information excludes accounting charges (whether one-time or amortized over time) associated with the Company's past acquisitions and restructuring, and gives investors insight into the profitability of the Company's operating business. Management also believes that the presentation of pro forma results is consistent with its past practice, as well as industry practice in general, and will enable investors and analysts to compare the current pro forma results with pro forma results from prior periods and with pro forma results from others in the industry.
Pro forma operating expenses for the fourth quarter 2002 of $8.4 million excludes a reorganization charge of $6.5 million, a one-time, non-cash charge for in-process research and development of $15.8 million and non-cash amortization of intangibles of $189,000 from the US GAAP operating costs of US$28.5 million and includes $2.3 million of Parthus pre-merger operating costs for the month of October to enable comparable quarterly trends. Pro forma operating expenses for the first quarter 2003 excludes non-cash amortization of intangibles of $284,000 and a non recurring reorganization charge of $1.4 million.
Pro forma net income excludes a non-recurring reorganization charge of $1.4 million and non-cash amortization of intangible assets charge of $284,000.
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