|By PR Newswire||
|February 13, 2013 08:01 AM EST||
YOKNEAM, Israel, February 13, 2013 /PRNewswire/ --
EZchip Semiconductor Ltd. (NASDAQ: EZCH), a leader in Ethernet network processors, today announced its results for the fourth quarter and full year ended December 31, 2012.
Fourth Quarter and Full Year 2012 Highlights:
- Annual revenues for 2012 of $54.7 million
- Fourth quarter revenues of $15.2 million
- Fourth quarter gross margin reached 83.2% on a GAAP basis and 83.7% on a non-GAAP basis
- Net income, on a GAAP basis, was $15.7 million for 2012 and $4.8 million for the fourth quarter
- Net income, on a non-GAAP basis, was $27.1 million for 2012 (49% of revenues) and $7.8 million for the fourth quarter (51% of revenues)
- Non-GAAP operating cash flow of $29.2 million for 2012 and $7.1 million for the fourth quarter
- Net cash at end of 2012 was $168.0 million
Fourth Quarter 2012 Results:
Total revenues in the fourth quarter of 2012 were $15.2 million, an increase of 7% compared to $14.3 million in the fourth quarter of 2011, and an increase of 64% compared to $9.3 million in the third quarter of 2012.
Net income, on a GAAPbasis, for the fourth quarter of 2012 was $4.8 million, or $0.17 per share (diluted), compared to net loss of $6.0 million, which included a one-time charge due to early repayment of $9.9 million to the Israeli Office of Chief Scientist (OCS), or $0.22 per share, in the fourth quarter of 2011, and net income of $0.1 million, or $0.00 per share (diluted), in the third quarter of 2012.
Net income, on a non-GAAP basis, for the fourth quarter of 2012 was $7.8 million, or $0.26 per share (diluted), compared to non-GAAP net income of $6.3 million, or $0.22 per share (diluted), in the fourth quarter of 2011, and non-GAAP net income of $3.1 million, or $0.10 per share (diluted), in the third quarter of 2012.
Full Year 2012 Results:
Total revenues for the year ended December 31, 2012 were $54.7 million, a year-over-year decrease of 14% compared to $63.5 million in 2011.
Net income on a GAAP basis for 2012 was $15.7 million, or $0.54 per share (diluted), compared to net income of $7.9 million, or $0.28 per share (diluted), in 2011.
Net income on a non-GAAP basis for 2012 was $27.1 million or $0.92 per share (diluted), compared with non-GAAP net income of $31.0 million, or $1.09 per share (diluted), in 2011.
Cash, cash equivalents, marketable securities and deposits as of December 31, 2012, totaled $168.0 million, compared to $160.1 million as of September 30, 2012 and compared to $126.8 million as of December 31, 2011. Cash generated from operations was $7.1 million for the fourth quarter and $29.2 million for the year, cash used in investing activities was $0.2 million for the fourth quarter and $1.5 million for the year, cash provided by financing activities (resulting from the exercise of options) was $1.0 million for the fourth quarter and $12.9 million for the year and an additional $0.6 million increase resulted from unrealized gains in marketable securities during 2012.
Eli Fruchter, CEO of EZchip, commented, "2012 was another transition year for EZchip. First, we completed the transition to Cisco becoming our largest customer, with all revenues being royalty-based, thereby increasing our gross margins to 84% and maintaining our outstanding 49% net margin in line with the net margin we achieved in 2010 and 2011. Second, we transitioned to NP-4, which surpassed the NP-3 run rate in its first full production year, and became our largest revenue generator. Finally, we laid the foundation for the NPS line of network processors for smart networks that will target both next-generation edge routers and data centers, and we believe could double our total available market.
"Of our five major NP-4 customers, two are in production and two entered production at the end of the third quarter and have placed initial production orders. The fifth customer, Huawei, is also expected to enter production in the first quarter; however, it has not yet placed any production orders and we believe Huawei may proceed to offer a lower-end in-house solution in parallel to the high-end NP-4 solution.
"Looking ahead, we believe that high-end NPUs, such as the NP-4, are required for high-end edge routers to be competitive. Therefore, based on the success of our customer products in the marketplace and the level of carriers' investment in Internet infrastructure, we believe NP-4 can significantly increase our revenues in the next few years. As for this year, we expect year-over-year growth in both Q1 and 2013, also when compared with 2011."
The Company will be hosting a conference call later today, February 13, 2013, 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.htm, 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, amortization of intangible assets, one-time charge due to early repayment of OCS grants and taxes on income. 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.
EZchip is a fabless semiconductor company that provides Ethernet network processors for networking equipment. EZchip provides solutions that scale from a few to hundreds of Gigabits-per-second. EZchip's network processors provide great flexibility and high performance coupled with superior integration and power efficiency for a wide range of applications in carrier, cloud and data center network equipment. 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. 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, 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 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 29, 2012 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.
EZchip Semiconductor Ltd. Condensed Consolidated Statements of Operations (U.S. Dollars in thousands, except per share amounts) (Unaudited) Three Months Ended Twelve Months Ended ________________________________________________________________ December September December December December 31, 30, 31, 31, 31, 2012 2012 2011 2012 2011 ________ _________ _________ __________ _________ Revenues $ 15,207 $ 9,287 $ 14,269 $ 54,707 $ 63,457 Cost of revenues 2,555 1,497 3,386 9,118 14,409 Amortization of purchased technology -- -- -- -- 597 Repayment of OCS grants -- -- 9,938 -- 9,938 _________ _________ _________ _________ _________ Gross profit 12,652 7,790 945 45,589 38,513 Operating expenses: Research and development, net 5,180 5,182 4,352 19,736 16,695 Selling, general and administrative 3,220 3,047 3,097 12,634 12,059 _________ _________ _________ _________ _________ Total operating 32,370 28,754 expenses 8,400 8,229 7,449 Operating 4,252 (439) (6,504) 13,219 9,759 income (loss) Financial income, net 587 566 551 2,432 1,713 _________ _________ _________ _________ _________ Income (loss) before taxes 4,839 127 (5,953) 15,651 11,472 ========= ========= ========= ========= ========= Taxes on income -- -- -- -- (3,530) Net income (loss) $ 4,839 $ 127 $ (5,953) $ 15,651 $ 7,942 Net income (loss) per share: Basic $ 0.17 $ 0.00 $ (0.22) $ 0.56 $ 0.30 Diluted $ 0.17 $ 0.00 $ (0.22) $ 0.54 $ 0.28 Weighted average shares used in per share calculation: Basic 28,233,299 28,119,713 27,015,478 27,981,243 26,681,749 Diluted 28,869,499 28,748,784 27,015,478 28,842,408 28,001,428 __________ __________ __________ __________ __________
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 ________________________________________________________________ December September December December December 31, 30, 31, 31, 31, 2012 2012 2011 2012 2011 _________ _________ _________ _________ _________ GAAP gross profit $ 12,652 $ 7,790 $ 945 $ 45,589 $ 38,513 Stock-based compensation 74 73 73 298 359 Amortization of purchased technology -- -- -- -- 597 Repayment of OCS grants* -- -- 9,938 -- 9,938 Non-GAAP gross profit $ 12,726 $ 7,863 $ 10,956 $ 45,887 $ 49,407 _________ _________ _________ _________ _________ GAAP gross profit as percentage of revenues 83.2% 83.9% 6.6% 83.3% 60.7% Non-GAAP gross profit as percentage of revenues 83.7% 84.7% 76.8% 83.9% 77.9% _________ __________ _________ _________ _________ GAAP operating expenses $ 8,400 $ 8,229 $ 7,449 $ 32,370 $ 28,754 Stock-based compensation: Research and development (1,563) (1,557) (1,094) (6,026) (4,446) Selling, general and administrative (1,265) (1,249) (1,051) (4,874) (3,801) Amortization of intangible assets Selling, general and administrative (51) (51) (95) (204) (380) Non-GAAP operating expenses $ 5,521 $ 5,372 $ 5,209 $ 21,266 $ 20,127 _________ _________ _________ _________ _________ GAAP operating income (loss) $ 4,252 $ (439) $ (6,504) $ 13,219 $ 9,759 Non-GAAP operating income $ 7,205 $ 2,491 $ 5,747 $ 24,621 $ 29,280 _________ _________ _________ _________ _________ GAAP net income (loss) $ 4,839 $ 127 $ (5,953) $ 15,651 $ 7,942 Stock-based compensation 2,902 2,879 2,218 11,198 8,606 Amortization of purchased intangible assets 51 51 95 204 977 Repayment of OCS grants* -- -- 9,938 -- 9,938 Taxes on income** -- -- -- -- 3,530 _________ _________ _________ _________ _________ Non-GAAP net income $ 7,792 $ 3,057 $ 6,298 $ 27,053 $ 30,993 _________ _________ _________ _________ _________ Non-GAAP net income per share - Diluted $ 0.26 $ 0.10 $ 0.22 $ 0.92 $ 1.09 Non-GAAP weighted average shares - Diluted*** 29,634,765 29,588,230 28,605,559 29,473,851 28,432,175
* During December 2011 we made a one-time early payment of $9.9 million to the Israeli Office of Chief Scientist, representing the full balance of the contingent liability related to the NP-4 and NPA grants received. Upon making this payment, we have eliminated all future royalty obligations related to our anticipated NP-4 and NPA revenues and saved the associated future interest payments related to such obligations. This amount was excluded from the non-GAAP statements of operations as it represents future royalty obligations.
** Taxes on income represent the non-cash utilization of a deferred tax asset with respect to the Company's estimate of its accumulated taxable income in accordance with FASB ASC 740. During 2011, EZchip Technologies, the Company's main subsidiary completed the utilization of the deferred tax asset, and started to enjoy the ten year period of exemption from Israeli corporate taxes due to benefits provided pursuant to its Israeli approved and privileged enterprise programs.
*** 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. Selected Condensed Consolidated Cash Flow Data on a Non-GAAP Basis (U.S. Dollars in thousands) (Unaudited) Three Months Ended Twelve Months Ended _________________________________________________________ December September December December December 31, 30, 31, 31, 31, 2012 2012 2011 2012 2011 _________ _________ _________ _________ _________ Cash flows from operating activities: Net income (loss) $ 4,839 $ 127 $ (5,953) $ 15,651 $ 7,942 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Repayment of OCS grants* -- -- 9,938 -- 9,938 Depreciation and amortization 183 178 163 661 1,227 Decrease (increase) in trade and other receivables, net (1,878) 2,991 1,113 1,870 (621) Decrease (increase) in inventory 948 521 259 1,265 (1,266) Decrease in deferred tax asset -- -- -- -- 3,513 Increase (decrease) in trade payables and other accrued liabilities, net 138 (585) 1,213 (1,400) (494) Stock-based compensation 2,902 2,879 2,218 11,198 8,606 Net cash provided by operating _________ _________ _________ _________ _________ activities 7,132 6,111 8,951 29,245 28,845 _________ _________ _________ _________ _________ Cash flows from investing activities: Purchase of property and _________ _________ _________ _________ _________ equipment (239) (95) (97) (1,008) (411) Purchase of _________ _________ _________ _________ _________ technology -- -- (500) (500) (500) Net cash used in investing activities (239) (95) (597) (1,508) (911) Cash flows from financing activities: Proceeds from exercise of options 1,027 96 711 12,890 8,082 Net cash provided by financing _________ _________ _________ _________ _________ activities 1,027 96 711 12,890 8,082 _________ _________ _________ _________ _________ Repayment of OCS grants* -- -- (9,938) -- (9,938) Unrealized gain (loss) on marketable securities, net (33) 205 6 571 (618) _________ _________ _________ __________ _________ Increase (decrease) in cash, cash equivalents, marketable securities and deposits 7,887 6,317 (867) 41,198 25,460 Cash, cash equivalents, marketable securities and deposits at the beginning of the period 160,081 153,764 127,637 126,770 101,310 Cash, cash equivalents, marketable securities and deposits at the end of the period _________ _________ __________ _________ _________ $ 167,968 $ 160,081 $ 126,770 $ 167,968 $ 126,770 ========= ========= ========== ========= =========
* During December 2011 we made a one-time early payment of $9.9 million to the Israeli Office of Chief Scientist, representing the full balance of the contingent liability related to the NP-4 and NPA grants received. Upon making this payment, we have eliminated all future royalty obligations related to our anticipated NP-4 and NPA revenues and saved the associated future interest payments related to such obligations. This amount was excluded from the non-GAAP operating cash flow as it represents future royalty obligations.
Ehud Helft / Kenny Green
CCG Investor Relations
Tel: (US) +1-646-201-9246
SOURCE EZchip Semiconductor Ltd
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
Nov. 29, 2015 02:00 PM EST Reads: 481
Culture is the most important ingredient of DevOps. The challenge for most organizations is defining and communicating a vision of beneficial DevOps culture for their organizations, and then facilitating the changes needed to achieve that. Often this comes down to an ability to provide true leadership. As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership ab...
Nov. 29, 2015 01:00 PM EST Reads: 410
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
Nov. 29, 2015 01:00 PM EST Reads: 347
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Su...
Nov. 29, 2015 12:45 PM EST Reads: 415
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningf...
Nov. 29, 2015 12:30 PM EST Reads: 419
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
Nov. 29, 2015 12:00 PM EST Reads: 523
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
Nov. 29, 2015 11:45 AM EST Reads: 323
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
Nov. 29, 2015 11:30 AM EST Reads: 272
In recent years, at least 40% of companies using cloud applications have experienced data loss. One of the best prevention against cloud data loss is backing up your cloud data. In his General Session at 17th Cloud Expo, Sam McIntyre, Partner Enablement Specialist at eFolder, presented how organizations can use eFolder Cloudfinder to automate backups of cloud application data. He also demonstrated how easy it is to search and restore cloud application data using Cloudfinder.
Nov. 29, 2015 10:00 AM EST Reads: 199
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, exploreed the current state of IoT connectivity and review key trends and t...
Nov. 29, 2015 09:45 AM EST Reads: 451
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
Nov. 29, 2015 08:45 AM EST Reads: 215
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now ...
Nov. 29, 2015 08:00 AM EST Reads: 270
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
Nov. 29, 2015 06:00 AM EST Reads: 375
Discussions of cloud computing have evolved in recent years from a focus on specific types of cloud, to a world of hybrid cloud, and to a world dominated by the APIs that make today's multi-cloud environments and hybrid clouds possible. In this Power Panel at 17th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the importance of customers being able to use the specific technologies they need, through environments and ecosystems that expose their APIs to make true ...
Nov. 29, 2015 06:00 AM EST Reads: 555
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem"...
Nov. 29, 2015 05:00 AM EST Reads: 460
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound...
Nov. 29, 2015 04:30 AM EST Reads: 484
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, San...
Nov. 29, 2015 03:00 AM EST Reads: 597
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Ben Perlmutter, a Sales Engineer with IBM Cloudant, demonstrated techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, faster user e...
Nov. 29, 2015 02:45 AM EST Reads: 425
In today's enterprise, digital transformation represents organizational change even more so than technology change, as customer preferences and behavior drive end-to-end transformation across lines of business as well as IT. To capitalize on the ubiquitous disruption driving this transformation, companies must be able to innovate at an increasingly rapid pace. Traditional approaches for driving innovation are now woefully inadequate for keeping up with the breadth of disruption and change facin...
Nov. 29, 2015 02:30 AM EST Reads: 502
I recently attended and was a speaker at the 4th International Internet of @ThingsExpo at the Santa Clara Convention Center. I also had the opportunity to attend this event last year and I wrote a blog from that show talking about how the “Enterprise Impact of IoT” was a key theme of last year’s show. I was curious to see if the same theme would still resonate 365 days later and what, if any, changes I would see in the content presented.
Nov. 29, 2015 01:00 AM EST Reads: 439