2014

Cavium Announces Financial Results for Q2 2013

SAN JOSE, Calif., July 31, 2013 /PRNewswire/ -- Cavium, Inc. (NASDAQ: CAVM), a leading provider of highly integrated semiconductor products that enable intelligent processing for networking, communications, and the digital home, today announced financial results for the second quarter ended June 30, 2013.

(Logo: http://photos.prnewswire.com/prnh/20120604/LA18845LOGO)

Revenue in the second quarter of 2013 was $74.2 million, a 6.7% sequential increase from the $69.5 million reported in the first quarter of 2013 and a 34.2% year-over-year increase from the $55.3 million reported in the second quarter of 2012.

Generally Accepted Accounting Principles (GAAP) Results

Net loss attributable to the Company for the second quarter of 2013, on GAAP basis was $4.3 million, or $(0.08) per diluted share compared to $3.2 million, or $(0.06) per diluted share in the first quarter of 2013. Gross margins were 58.3% in the second quarter of 2013 compared to 62.4% in the first quarter of 2013. Total cash and cash equivalents were $97.6 million at June 30, 2013.

Non-GAAP Results

Cavium believes that the presentation of non-GAAP financial measures provides important supplemental information to management and investors regarding financial and business trends relating to Cavium's financial condition and results of operations. These measures should only be used to evaluate Cavium's results of operations in conjunction with the corresponding GAAP measures. The reconciliation between GAAP and non-GAAP financial results is provided in the financial statements portion of this release.

Non-GAAP net income for the second quarter of 2013 was $12.6 million or $0.23 per diluted share, compared with non-GAAP net income of $10.2 million or $0.19 per diluted share in the first quarter of 2013. Gross margins, on a non-GAAP basis, were 65.8% and operating margins (non-GAAP income from operations as a percentage of revenue), on a non-GAAP basis were 18.7% in the second quarter of 2013.

Recent News Highlights

  • July 30, 2013 - Altera Demonstrates Interlaken Connectivity with Cavium OCTEON® Multicore Processors
  • June 25, 2013 - Industry-Leading Companies Join PLUMgrid's Virtual Network Infrastructure Ecosystem
  • June 17, 2013 - Cavium's New OCTEON III family of processors feature latest Imagination Technologies MIPSr5 architecture
  • June 4, 2013 - ASUS Selects Cavium's PureVu® SoC for its Wireless Display Adapter for ASUS MeMO Pad FHD10 Tablets
  • June 3, 2013 - G-cluster and Cavium Enable Cloud Gaming on the TV
  • June 3, 2013 - Cavium Announces New Low Power Dual and Quad Core OCTEON® III SoC Processors
  • June 3, 2013 - Cavium Introduces TurboSTOR™ for OCTEON® Processors - Complete Out of the Box Software Solution for Network Attached Storage
  • June 3, 2013 - Cavium Launches New Production Ready Small Cell Reference Design with Support for Dual Radio Access Technology
  • June 3, 2013 - Cavium to Demonstrate a Broad Range of New SoC Solutions for Enterprise, Service Provider and the Digital Home at Computex 2013
  • May 14, 2013 - Cavium TurboDPI™ II Software to Accelerate Development of Deep Packet Inspection Solutions on Emerson Network Power Centellis ATCA Systems
  • May 7, 2013 - Cavium Introduces LiquidIO™ Family of 10 Gigabit Server Adapters to enable SDN for Cloud and Datacenters
  • May 7, 2013 - Qosmos Leverages Latest Generation of OCTEON® II Processors to Deliver High Performance Network Intelligence
  • May 6, 2013 - Cavium to Demonstrate Innovative New Silicon and Software Solutions for the Secure Virtualized Enterprise and Cloud at INTEROP 2013

Cavium, Inc. will broadcast its second quarter 2013 financial results conference call today, July 31, 2013, at 2 p.m. Pacific time (5 p.m. Eastern time).  The conference call will be available via a live web cast on the investor relations section of the Cavium website at http://www.cavium.com.  Please access the website at least a few minutes prior to the start of the call in order to download and install any necessary audio software. An archived web cast replay of the call will be available on the web site for a limited period of time.

About Cavium

Cavium is a leading provider of highly integrated semiconductor products that enable intelligent processing for networking, communications and the digital home. Cavium offers a broad portfolio of integrated, software-compatible processors ranging in performance from 10 Mbps to 100 Gbps that enable secure, intelligent functionality in enterprise, data-center, broadband/consumer and access and service provider equipment. Cavium processors are supported by ecosystem partners that provide operating systems, tool support, reference designs and other services. Cavium's principal office is in San Jose, CA with design team locations in California, Massachusetts, India and China. For more information, please visit: http://www.cavium.com.

CAVIUM, INC.

Unaudited GAAP Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)


Three Months Ended 


June 30, 2013


March 31, 2013

Net revenue

$       74,204


$          69,530

Cost of revenue 

30,945


26,159

Gross profit 

43,259


43,371

Operating expenses:




     Research and development 

32,424


32,415

     Sales, general and administrative 

16,144


15,240

        Total operating expenses 

48,568


47,655

Loss from operations 

(5,309)


(4,284)

Other expense, net:




    Interest expense

(375)


(342)

    Other, net

(418)


(261)

Total other expense, net

(793)


(603)

     Loss before income taxes 

(6,102)


(4,887)

     Provision for income taxes

677


426

Net loss 

(6,779)


(5,313)

Net loss attributable to non-controlling interest

(2,475)


(2,129)

Net loss attributable to the Company

$       (4,304)


$          (3,184)

Net loss attributable to the Company per common share, basic

$         (0.08)


$            (0.06)

Shares used in computing basic net loss per common share

51,493


51,001

Net loss attributable to the Company per common share, diluted

$         (0.08)


$            (0.06)

Shares used in computing diluted net loss per common share

51,493


51,001









CAVIUM, INC.

Unaudited Reconciliation of Non-GAAP Adjustments

(in thousands)


Three Months Ended 

Reconciliation of GAAP research and development expenses to 

June 30, 2013


March 31, 2013

     non-GAAP:




    GAAP research and development expenses

$       32,424


$          32,415

          Stock-based compensation and related payroll taxes

(5,099)


(4,042)

          Net restructuring related expenses 

(38)


(1,174)

          Expenses associated from a variable interest entity

(3,531)


(3,585)

     Non-GAAP research and development expenses

$       23,756


$          23,614

Reconciliation of GAAP sales, general and administrative expenses to 




     non-GAAP 




    GAAP sales, general and administrative expenses

$       16,144


$          15,240

          Stock-based compensation and related payroll taxes

(3,732)


(4,149)

          Amortization of acquired intangible assets

(200)


(200)

          Net restructuring related expenses

246


(914)

          Potential contractual settlement payment related to
                MontaVista automotive business

(1,250)


-

          Gain on sale of certain assets

-


747

     Non-GAAP sales, general and administrative expenses

$       11,208


$          10,724





 

CAVIUM, INC.

Unaudited Reconciliation of Non-GAAP Adjustments

(in thousands, except per share data and percentages)






Three Months Ended 


June 30, 2013


March 31, 2013

Reconciliation of GAAP gross profit & margin to non-GAAP:




Net revenue

$         74,204


$            69,530

GAAP gross profit

43,259


43,371

GAAP gross margin

58.3%


62.4%





          Stock-based compensation and related payroll taxes

158


296

          Amortization of acquired intangible assets

1,592


1,607

          Net restructuring related expenses

(109)


178

          Inventory write-down for discontinued consumer products

3,943


-

Non-GAAP gross profit

$         48,843


$            45,452

Non-GAAP gross margin

65.8%


65.4%






Three Months Ended 


June 30, 2013


March 31, 2013

Reconciliation of GAAP loss from operations to non-GAAP income from operations:




GAAP loss from operations

$         (5,309)


$            (4,284)

          Stock-based compensation and related payroll taxes

8,989


8,487

          Amortization of acquired intangible assets

1,792


1,807

          Net restructuring related expenses

(317)


2,266

          Potential contractual settlement payment related to
                MontaVista automotive business

1,250


-

          Inventory write-down for discontinued consumer products

3,943


-

          Gain on sale of certain assets

-


(747)

          Loss from operations of a variable interest entity

3,531


3,585

Non-GAAP income from operations

$         13,879


$            11,114

Non-GAAP income from operations as a percentage of revenue

18.7%


16.0%






Three Months Ended 


June 30, 2013


March 31, 2013

Reconciliation of GAAP net loss to non-GAAP net income:




GAAP net loss attributable to the Company

$         (4,304)


$            (3,184)

Non-GAAP adjustments:




      Stock-based compensation and related payroll taxes:




          Cost of revenue

158


296

          Research and development 

5,099


4,042

          Sales, general and administrative 

3,732


4,149

      Amortization of acquired intangible assets:




          Cost of revenue

1,592


1,607

          Sales, general and administrative 

200


200

      Net restructuring related expenses

(317)


2,266

      Potential contractual settlement payment related to
                MontaVista automotive business

1,250


-

      Inventory write-down for discontinued consumer products

3,943


-

      Gain on sale of certain assets

-


(747)

      Net loss of a variable interest entity attributable to the Company

1,225


1,594

     Total of non-GAAP adjustments

16,882


13,407

Non-GAAP net income 

$         12,578


$            10,223





GAAP net loss attributable to the Company per share, diluted

$           (0.08)


$              (0.06)

   Non-GAAP adjustments detailed above

0.31


0.25

Non-GAAP net income attributable to the Company per share, diluted

$             0.23


$                0.19





GAAP weighted average shares, diluted

51,493


51,001

   Non-GAAP share adjustment

3,307


3,705

Non-GAAP weighted average shares, diluted

54,800


54,706





 

CAVIUM, INC.

Unaudited GAAP Condensed Consolidated Balance Sheets

(in thousands)









As of




June 30, 2013

March 31, 2013

Assets




Current assets:




Cash and cash equivalents

$       97,643

$          86,511


Accounts receivable, net 

44,721

36,127


Inventories

39,563

41,403


Prepaid expenses and other current assets

4,405

3,315


Deferred tax assets

44

508



Total current assets

186,376

167,864

Property and equipment, net

27,200

28,805

Intangible assets, net

56,587

59,037

Goodwill


71,478

71,478

Deferred tax assets, net of current 

91

512

Other assets

1,334

1,434



Total assets

$     343,066

$        329,130






Liabilities and Equity 



Current liabilities:




Accounts payable

$       19,520

$          13,110


Other accrued expenses and other current liabilities

8,849

6,698


Deferred revenue

10,597

10,657


Notes payable

1,012

1,012


Capital lease and technology license obligations

14,869

11,984



Total current liabilities

54,847

43,461

Notes payable, net of current portion

8,550

4,500

Capital lease and technology license obligations, net of current 

19,723

23,843

Deferred tax liability

1,939

2,617

Other non-current liabilities

2,616

1,847



Total liabilities

87,675

76,268






Equity 





Common stock

52

51


Additional paid-in capital

422,553

413,246


Accumulated deficit

(161,580)

(157,276)



Total stockholders' equity attributable to the Company

261,025

256,021


Non-controlling interest

(5,634)

(3,159)



Total equity

255,391

252,862



Total liabilities and equity 

$     343,066

$        329,130






SOURCE Cavium, Inc.




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