Fourth Quarter and Full Year 2014 Highlights:
- Revenues of $84.0 million for 2014 and $22.4 million for the fourth quarter
- Gross margin, on a GAAP basis, was 77.3% for 2014 and 65.9% for the fourth quarter
- Gross margin, on a non-GAAP basis, was 80.4% for 2014 and 76.4% for the fourth quarter
- Net income, on a GAAP basis, was $9.2 million for 2014 (reduced by expenses of $11.5 million related to the Tilera acquisition)
- Net loss, on a GAAP basis, of $7.3 million for the fourth quarter (reduced by expenses of $10.5 million related to the Tilera acquisition)
- Net income, on a non-GAAP basis, was $36.8 million for 2014 (44% of revenues) and $7.2 million for the fourth quarter (32% of revenues)
- Net cash at end of 2014 was $185.8 million
Fourth Quarter 2014 Results:
Total revenues in the fourth quarter of 2014 were $22.4 million, an increase of 11% compared to $20.1 million in the fourth quarter of 2013, and an increase of 16% compared to $19.2 million in the third quarter of 2014.
Net loss, on a GAAP basis, for the fourth quarter of 2014 was $7.3 million, reduced by expenses of $10.5 related to the Tilera acquisition, or $0.25 per share, compared to net income of $6.5 million, or $0.22 per share (diluted), in the fourth quarter of 2013, and net income of $4.2 million, or $0.14 per share (diluted), in the third quarter of 2014.
Net income, on a non-GAAP basis, for the fourth quarter of 2014 was $7.2 million, or $0.23 per share (diluted), compared to non-GAAP net income of $10.1 million, or $0.34 per share (diluted), in the fourth quarter of 2013, and non-GAAP net income of $8.5 million, or $0.28 per share (diluted), in the third quarter of 2014.
Cash, cash equivalents, marketable securities and deposits as of December 31, 2014, totaled $185.8 million, compared to $223.4 million as of September 30, 2014. Cash used in operations was $4.1 million, including approximately $7.0 million of working capital adjustments and transaction expenses related to the Tilera acquisition. Cash used in investing activities was $34.4 million, which included a payment of $31.6 million, reflecting the remaining purchase price due upon the consummation of the Tilera acquisition in November 2014. Cash provided by financing activities was $1.1 million, resulting from the exercise of options, and a decrease of $0.2 million resulting from cash adjustments of marketable securities, net.
Full Year 2014 Results:
Total revenues for the year ended December 31, 2014 were $84.0 million, a year-over-year increase of 19% compared to $70.9 million in 2013.
Net income on a GAAP basis for 2014 was $9.2 million, reduced by expenses of $11.5 related to the Tilera acquisition, or $0.31 per share (diluted), compared to net income of $21.7 million, or $0.74 per share (diluted), in 2013.
Net income on a non-GAAP basis for 2014 was $36.8 million or $1.19 per share (diluted), compared with non-GAAP net income of $35.6 million, or $1.18 per share (diluted), in 2013.
Cash, cash equivalents, marketable securities and deposits as of December 31, 2014, totaled $185.8 million, compared to $202.9 million as of December 31, 2013. Cash provided by operations was $28.7 million, partially offset by approximately $7.0 million of working capital adjustments and transaction expenses related to the Tilera acquisition. Cash used in investing activities was $47.3 million, which included the payment of the $41.6 million purchase price for the Tilera acquisition. Cash provided by financing activities was $2.0 million, resulting from the exercise of options, and a decrease of $0.5 million resulting from cash adjustments of marketable securities, net.
Eli Fruchter, CEO of EZchip, commented, "2014 has been a record year for EZchip in revenues, operating and net income in the midst of a weak carrier spending environment during the second half of 2014. We believe we will continue to generate revenue growth in 2015 due to two main drivers, one being that we are designed into our customer's newest and fastest growing products and second is the deployment of more line cards versus chassis, as carriers leverage available slots in their existing chassis.
"We believe our strongly differentiated technology enables us to strengthen our market leadership in high speed NPUs and we believe our revenue growth will continue to outpace the growth in the routing market and that of our competition. We believe that with the current market trend of OPEX reduction and increased focus on software versus hardware, we will see networking vendors looking more favorably towards merchant silicon versus in-house ASIC designs. As the leader in high-speed merchant NPUs, EZchip believes it can benefit from this broader industry trend, allowing us to win more designs and increase both our revenues and market share from existing and new products in the coming years. We recently announced that the NP-5 has entered production, already gaining strong customer traction with large current existing customers and with new customers to EZchip, and it is our belief that customers will ramp NP-5 quickly allowing it to potentially become a significant contributor to our 2015 revenues. We have made good progress with NPS, acquiring our first design wins in 2014 and we expect to sample the NPS during the second half of 2015, when we also expect to add design wins from significant tier one customers.
"Finally, during the year we have entered the multicore CPU market through the acquisition of Tilera, and, combined with the new markets addressed by NPS, we increased our expected 2017 TAM six fold to $2.2 billion. We have also defined our next-generation multicore product family, the TILE‑Mx, which is well underway in execution and we believe will leapfrog the competition. The TILE‑Mx is scheduled to be announced at the end of the month and is expected to sample during the second half of 2016.
"To summarize, we anticipate our current products are well positioned to drive growth in the next several years, and with the NPS starting to contribute to revenues in 2016 and the TILE-Mx in 2017 we are highly optimistic about our short term, mid term and long term opportunities," concluded Eli Fruchter, CEO of EZchip.
Conference Call
The Company will be hosting a conference call later today, February 11, 2015, at 10:00am ET, 7:00am PT, 3:00pm UK time and 5:00pm Israel time. On the call, management will review and discuss the results, and will be available to answer investor questions.
To participate through the live webcast, please access the investor relations section of the Company's web site at: http://www.ezchip.com/Investor-Relations/?ezchip=527, at least 10 minutes before the conference call commences. If you would like to ask a question on the call, please contact the investor relations team for the telephone dial-in numbers.
For those unable to listen to the live webcast, a replay of the webcast will be available the day after the call under the 'Investor Relations' section of the website.
Use of Non-GAAP Financial Information
In addition to disclosing financial results calculated in accordance with United States generally accepted accounting principles (GAAP), this release of operating results also contains non-GAAP financial measures, which EZchip believes are the principal indicators of the operating and financial performance of its business. The non-GAAP financial measures exclude the effects of stock-based compensation expenses recorded in accordance with FASB ASC 718, acquisition related costs and amortization of purchased intangible assets. Management believes the non-GAAP financial measures provided are useful to investors' understanding and assessment of the Company's on-going core operations and prospects for the future, as the charges eliminated are not part of the day-to-day business or reflective of the core operational activities of the Company. Management uses these non-GAAP financial measures as a basis for strategic decisions, forecasting future results and evaluating the Company's current performance. However, such measures should not be considered in isolation or as substitutes for results prepared in accordance with GAAP. Reconciliation of the non-GAAP measures to the most comparable GAAP measures are provided in the schedules attached to this release.
About EZchip
EZchip is a fabless semiconductor company that provides high-performance processing solutions for a wide range of applications for the carrier, cloud and data center networks. EZchip's broad portfolio of solutions scales from a few to hundreds of Gigabits-per-second, and includes network processors, multi-core processors, intelligent network adapters, high-performance appliances and a comprehensive software ecosystem. EZchip's processing solutions excel at providing great flexibility and high performance coupled with superior integration and power efficiency. For more information on our company, visit the web site at http://www.ezchip.com.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that are not historical facts and may include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. These statements are only predictions based on EZchip's current expectations and projections about future events based on its current knowledge. There are important factors that could cause EZchip's actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Those factors include, but are not limited to, the impact of general economic conditions, competitive products (including in-house customer developed products), product demand and market acceptance risks, customer order cancellations, reliance on key strategic alliances, fluctuations in operating results, delays in development of highly-complex products, the integration of Tilera's business and other factors indicated in EZchip's filings with the Securities and Exchange Commission (SEC). For more details, refer to EZchip's SEC filings and the amendments thereto, including its Annual Report on Form 20-F filed on March 27, 2014 and its Current Reports on Form 6-K. EZchip undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in our expectations, except as may be required by law.
Contact:
Jeffrey A Schreiner
Email Contact
Tel: (US) 1 408 520 3676
-- tables to follow --
|
EZchip Semiconductor Ltd. | ||||||||||
|
Condensed Consolidated Statements of Operations | ||||||||||
|
(U.S. Dollars in thousands, except per share amounts) | ||||||||||
|
(Unaudited) | ||||||||||
|
| ||||||||||
|
|
|
Three Months Ended |
|
Twelve Months Ended | ||||||
|
|
|
Dec. 31, |
|
Sept. 30, |
|
Dec. 31, |
|
Dec. 31, |
|
Dec. 31, |
|
|
|
2014 |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ 22,358 |
|
$ 19,241 |
|
$ 20,097 |
|
$ 83,989 |
|
$ 70,850 |
|
Cost of revenues |
|
7,620 |
|
3,367 |
|
3,680 |
|
19,075 |
|
12,022 |
|
Gross profit |
|
14,738 |
|
15,874 |
|
16,417 |
|
64,914 |
|
58,828 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Research and development, net |
|
11,172 |
|
7,953 |
|
6,923 |
|
33,621 |
|
25,815 |
|
Selling, general and administrative |
|
11,194 |
|
4,060 |
|
3,527 |
|
23,504 |
|
13,363 |
|
Total operating expenses |
|
22,366 |
|
12,013 |
|
10,450 |
|
57,125
|
|
39,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
(7,628) |
|
3,861 |
|
5,967 |
|
7,789 |
|
19,650 |
|
Financial income, net |
|
287 |
|
338 |
|
546 |
|
1,369 |
|
2,048 |
|
Net income (loss) |
|
$ (7,341) |
|
$ 4,199 |
|
$ 6,513 |
|
$ 9,158 |
|
$ 21,698 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ (0.25) |
|
$ 0.14 |
|
$ 0.23 |
|
$ 0.31 |
|
$ 0.76 |
|
Diluted |
|
$ (0.25) |
|
$ 0.14 |
|
$ 0.22 |
|
$ 0.31 |
|
$ 0.74 |
|
Weighted average shares used in per share calculation: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
29,537,166 |
|
29,297,876 |
|
28,825,291 |
|
29,244,428 |
|
28,628,798 |
|
Diluted |
|
29,537,166 |
|
29,657,471 |
|
29,171,552 |
|
29,887,263 |
|
29,188,736 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EZchip Semiconductor Ltd. | ||||||||||
|
Reconciliation of GAAP to Non-GAAP Measures | ||||||||||
|
(U.S. Dollars in thousands, except per share amounts) | ||||||||||
|
(Unaudited) | ||||||||||
|
| ||||||||||
|
|
|
|
|
| ||||||
|
|
|
Three Months Ended |
|
Twelve Months Ended | ||||||
|
|
|
Dec. 31, |
|
Sept. 30, |
|
Dec. 31, |
|
Dec. 31, |
|
Dec. 31, |
|
|
|
2014 |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit |
|
$ 14,738 |
|
$ 15,874 |
|
$ 16,417 |
|
$ 64,914 |
|
$ 58,828 |
|
Stock-based compensation |
|
206 |
|
75 |
|
73 |
|
431 |
|
292 |
|
Amortization of purchased intangible assets |
|
2,143 |
|
-- |
|
-- |
|
2,143 |
|
-- |
|
Non-GAAP gross profit |
|
$ 17,087 |
|
$ 15,949 |
|
$ 16,490 |
|
$ 67,488 |
|
$ 59,120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit as percentage of revenues |
|
65.9% |
|
82.5% |
|
81.7% |
|
77.3% |
|
83.0% |
|
Non-GAAP gross profit as percentage of revenues |
|
76.4% |
|
82.9% |
|
82.1% |
|
80.4% |
|
83.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses |
|
$ 22,366 |
|
$ 12,013 |
|
$ 10,450 |
|
$ 57,125 |
|
$ 39,178 |
|
Stock-based compensation: |
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
(4,311) |
|
(2,360) |
|
(2,045) |
|
(11,359) |
|
(7,963) |
|
Selling, general and administrative |
|
(2,417) |
|
(1,590) |
|
(1,515) |
|
(7,243) |
|
(5,665) |
|
Acquisition related costs |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
(5,383) |
|
(320) |
|
-- |
|
(6,363) |
|
-- |
|
Amortization of purchased intangible assets Selling, general and administrative |
|
(58) |
|
-- |
|
-- |
|
(58) |
|
-- |
|
Non-GAAP operating expenses |
|
$ 10,197 |
|
$ 7,743 |
|
$ 6,890 |
|
$ 32,102 |
|
$ 25,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss) |
|
$ (7,628) |
|
$ 3,861 |
|
$ 5,967 |
|
$ 7,789 |
|
$ 19,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating income |
|
$ 6,890 |
|
$ 8,206 |
|
$ 9,600 |
|
$ 35,386 |
|
$ 33,570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) |
|
$ (7,341) |
|
$ 4,199 |
|
$ 6,513 |
|
$ 9,158 |
|
$ 21,698 |
|
Stock-based compensation |
|
6,934 |
|
4,025 |
|
3,633 |
|
19,033 |
|
13,920 |
|
Acquisition related costs |
|
5,383 |
|
320 |
|
-- |
|
6,363 |
|
-- |
|
Amortization of purchased intangible assets |
|
2,201 |
|
-- |
|
-- |
|
2,201 |
|
-- |
|
Non-GAAP net income |
|
$ 7,177 |
|
$ 8,544 |
|
$ 10,146 |
|
$ 36,755 |
|
$ 35,618 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per share - Diluted |
|
$ 0.23 |
|
$ 0.28 |
|
$ 0.34 |
|
$ 1.19 |
|
$ 1.18 |
|
Non-GAAP weighted average shares - Diluted* |
|
31,026,773 |
|
30,784,673 |
|
30,213,501 |
|
30,871,759 |
|
30,074,563 |
|
| ||||||||||
|
* In calculating diluted non-GAAP net income per share, the diluted weighted average number of shares outstanding excludes the effects of stock-based compensation expenses in accordance with FASB ASC 718. | ||||||||||
|
EZchip Semiconductor Ltd. | ||||
|
Condensed Consolidated Balance Sheet | ||||
|
(U.S. Dollars in thousands) | ||||
|
| ||||
|
|
|
December 31, |
|
December 31, |
|
|
|
2014 |
|
2013 |
|
|
|
(Unaudited) |
|
(Audited) |
|
ASSETS |
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
Cash, cash equivalents, marketable securities and deposits |
|
$ 185,757 |
|
$ 202,865 |
|
Trade receivables, net |
|
10,865 |
|
7,416 |
|
Other receivables |
|
4,735 |
|
3,153 |
|
Inventories |
|
6,459 |
|
5,969 |
|
Total current assets |
|
207,816 |
|
219,403 |
|
|
|
|
|
|
|
NON CURRENT ASSETS: |
|
|
|
|
|
Severance pay fund |
|
7,091 |
|
7,416 |
|
Long term investment and others |
|
348 |
|
364 |
|
Total non current assets |
|
7,439 |
|
7,780 |
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT, NET |
|
3,601 |
|
2,114 |
|
|
|
|
|
|
|
INTANGIBLE ASSETS, NET |
|
17,312 |
|
4,127 |
|
|
|
|
|
|
|
GOODWILL |
|
127,355 |
|
96,276 |
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ 363,523 |
|
$ 329,700 |
|
|
|
|
| |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
Trade payables |
|
$ 2,664 |
|
$ 3,951 |
|
Other payables and accrued expenses |
|
13,726 |
|
7,309 |
|
Total current liabilities |
|
16,390 |
|
11,260 |
|
|
|
|
|
|
|
ACCRUED SEVERANCE PAY |
|
7,815 |
|
8,164 |
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY: |
|
|
|
|
|
Share capital |
|
169 |
|
164 |
|
Additional paid-in capital |
|
349,050 |
|
328,003 |
|
Accumulated other comprehensive income (loss) |
|
(731) |
|
437 |
|
Accumulated deficit |
|
(9,170) |
|
(18,328) |
|
Total shareholders' equity |
|
339,318 |
|
310,276 |
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
$ 363,523 |
|
$ 329,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
EZchip Semiconductor Ltd. | ||||||||||
|
Selected Condensed Consolidated Cash Flow Data on a Non-GAAP Basis | ||||||||||
|
(U.S. Dollars in thousands) | ||||||||||
|
(Unaudited) | ||||||||||
|
| ||||||||||
|
|
|
Three Months Ended |
|
Twelve Months Ended | ||||||
|
|
|
Dec. 31, |
|
Sept. 30, |
|
Dec. 31, |
|
Dec. 31, |
|
Dec. 31, |
|
|
|
2014 |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ (7,341) |
|
$ 4,199 |
|
$ 6,513 |
|
$ 9,158 |
|
$ 21,698 |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and Amortization |
|
2,752 |
|
175 |
|
161 |
|
3,261 |
|
603 |
|
Decrease (increase) in trade and other receivables, net |
|
(5,321) |
|
5,315 |
|
1,026 |
|
(1,574) |
|
(1,198) |
|
Decrease (increase) in inventory |
|
(152) |
|
1,645 |
|
(678) |
|
1,488 |
|
(1,446) |
|
Increase (decrease) in trade payables and other accrued liabilities, net |
|
(992) |
|
(1,233) |
|
2,199 |
|
(2,655) |
|
3,990 |
|
Stock-based compensation
|
|
6,934 |
|
4,025 |
|
3,633 |
|
19,033 |
|
13,920 |
|
Net cash provided by (used in) operating activities |
|
(4,120) |
|
14,126 |
|
12,854 |
|
28,711 |
|
37,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
(160) |
|
(318) |
|
(151) |
|
(698) |
|
(1,597) |
|
Purchase of technology |
|
(2,641) |
|
-- |
|
(533) |
|
(5,056) |
|
(1,827) |
|
Long term Investment and others |
|
(31,580) |
|
(10,000) |
|
-- |
|
(41,580) |
|
-- |
|
Net cash used in investing activities |
|
(34,381) |
|
(10,318) |
|
(684) |
|
(47,334) |
|
(3,424) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of options
|
|
1,117 |
|
498 |
|
79 |
|
2,019 |
|
1,363 |
|
Net cash provided by financing activities |
|
1,117 |
|
498 |
|
79 |
|
2,019 |
|
1,363 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash adjustment of marketable securities, net* |
|
(299) |
|
(85) |
|
(14) |
|
(504) |
|
(609) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash, cash equivalents, marketable securities and deposits
|
|
(37,683) |
|
4,221 |
|
12,235 |
|
(17,108) |
|
34,897 |
|
Cash, cash equivalents, marketable securities and deposits at the beginning of the period |
|
223,440 |
|
219,219 |
|
190,630 |
|
202,865 |
|
167,968 |
|
Cash, cash equivalents, marketable securities and deposits at the end of the period |
|
$ 185,757 |
|
$ 223,440 |
|
$ 202,865 |
|
$ 185,757 |
|
$ 202,865 |
|
|
|
|
|
|
|
|
|
|
|
|
|
* Including unrealized gain (loss) on marketable securities, accumulated interest accretion and amortization of discount and premium on marketable securities. | ||||||||||
To view the original version on PR Newswire, visit: http://www.prnewswire.com/news-releases/ezchip-announces-fourth-quarter-and-full-year-2014-results-300034348.html
SOURCE EZchip Semiconductor Ltd.
| Contact: |
| EZchip Semiconductor Ltd.
Web: http://www.ezchip.com |