2014

Cavium Announces Financial Results for Q3 2013

SAN JOSE, Calif., Oct. 30, 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 third quarter ended September 30, 2013.

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

Revenue in the third quarter of 2013 was $79.1 million, a 6.6% sequential increase from the $74.2 million reported in the second quarter of 2013 and a 29.5% year-over-year increase from the $61.1 million reported in the third quarter of 2012.

Generally Accepted Accounting Principles (GAAP) Results

Net income attributable to the Company for the third quarter of 2013, on GAAP basis was $4.3 million, or $0.08 per diluted share compared to net loss attributable to the Company of $4.3 million, or $(0.08) per diluted share in the second quarter of 2013. Gross margins were 64.0% in the third quarter of 2013 compared to 58.3% in the second quarter of 2013. Total cash and cash equivalents were $113.0 million at September 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 third quarter of 2013 was $16.0 million or $0.29 per diluted share, compared to $12.6 million or $0.23 per diluted share in the second quarter of 2013. Gross margins, on a non-GAAP basis, were 66.0% and operating margins (non-GAAP income from operations as a percentage of revenue), on a non-GAAP basis were 21.6% in the third quarter of 2013.

Recent News Highlights

  • October 29, 2013 - Cavium's Thunder is First 64-bit ARMv8 Processor supported in Ubuntu Server 13.10
  • October 23, 2013 - Cavium to Demonstrate Project Thunder Software Development Kit at ARM® TechCon™ 2013
  • October 15, 2013 - Cavium's New OCTEON® III Multicore Processors Supported by Optimized Versions of Wind River Linux and VxWorks
  • October 14, 2013 - Cavium Presented at Linley Tech Processor Conference 2013
  • September 19, 2013 - Northforge Joined Cavium PACE Partner Ecosystem to Develop Expert Network Communications
  • September 12, 2013 - Netgear Announced its First Customer Shipments for New Hybrid Set-Top Box

Cavium, Inc. will broadcast its third quarter 2013 financial results conference call today, October 30, 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 


September 30, 2013


June 30, 2013

Net revenue

$                79,124


$       74,204

Cost of revenue 

28,516


30,945

Gross profit 

50,608


43,259

Operating expenses:




     Research and development 

33,630


32,424

     Sales, general and administrative 

14,833


16,144

        Total operating expenses 

48,463


48,568

Income (loss) from operations 

2,145


(5,309)

Other expense, net:




    Interest expense

(390)


(375)

    Other, net

(126)


(418)

Total other expense, net

(516)


(793)

     Income (loss) before income taxes 

1,629


(6,102)

     Provision for income taxes

714


677

Net income (loss) 

915


(6,779)

Net loss attributable to non-controlling interest

(3,421)


(2,475)

Net income (loss) attributable to the Company

$                  4,336


$       (4,304)

Net income (loss) attributable to the Company per common share, basic

$                    0.08


$         (0.08)

Shares used in computing basic net income (loss) per common share

51,772


51,493

Net income (loss) attributable to the Company per common share, diluted

$                    0.08


$         (0.08)

Shares used in computing diluted net income (loss) per common share

53,492


51,493





 

CAVIUM, INC.

Unaudited Reconciliation of Non-GAAP Adjustments

(in thousands)


Three Months Ended

Reconciliation of GAAP research and development expenses to

September 30, 2013


June 30, 2013

non-GAAP:




    GAAP research and development expenses

$ 33,630


$ 32,424

        Stock-based compensation and related payroll taxes

(5,056)


(5,099)

        Net restructuring related expenses

(38)


(38)

        Expenses associated from a variable interest entity

(4,510)


(3,531)

    Non-GAAP research and development expenses

$ 24,026


$ 23,756

Reconciliation of GAAP sales, general and administrative expenses to




non-GAAP




    GAAP sales, general and administrative expenses

$ 14,833


$ 16,144

        Stock-based compensation and related payroll taxes

(3,740)


(3,732)

        Amortization of acquired intangible assets

(200)


(200)

        Net restructuring related expenses

239


246

        Potential contractual settlement payment related to
MontaVista automotive business

-


(1,250)

Non-GAAP sales, general and administrative expenses

$ 11,132


$ 11,208





 

CAVIUM, INC.

Unaudited Reconciliation of Non-GAAP Adjustments

(in thousands, except per share data and percentages)






Three Months Ended 


September 30, 2013


June 30, 2013

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




Net revenue

$                   79,124


$         74,204

GAAP gross profit

50,608


43,259

GAAP gross margin

64.0%


58.3%





          Stock-based compensation and related payroll taxes

226


158

          Amortization of acquired intangible assets

1,579


1,592

          Net restructuring related expenses

(193)


(109)

          Inventory write-down for discontinued consumer products

-


3,943

Non-GAAP gross profit

$                   52,220


$         48,843

Non-GAAP gross margin

66.0%


65.8%






Three Months Ended 


September 30, 2013


June 30, 2013

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




GAAP income (loss) from operations

$                     2,145


$         (5,309)

          Stock-based compensation and related payroll taxes

9,022


8,989

          Amortization of acquired intangible assets

1,779


1,792

          Net restructuring related expenses

(394)


(317)

          Potential contractual settlement payment related to MontaVista automotive business

-


1,250

          Inventory write-down for discontinued consumer products

-


3,943

          Loss from operations of a variable interest entity

4,510


3,531

Non-GAAP income from operations

$                   17,062


$         13,879

Non-GAAP income from operations as a percentage of revenue

21.6%


18.7%






Three Months Ended 


September 30, 2013


June 30, 2013

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




GAAP net income (loss) attributable to the Company

$                     4,336


$         (4,304)

Non-GAAP adjustments:




      Stock-based compensation and related payroll taxes:




          Cost of revenue

226


158

          Research and development 

5,056


5,099

          Sales, general and administrative 

3,740


3,732

      Amortization of acquired intangible assets:




          Cost of revenue

1,579


1,592

          Sales, general and administrative 

200


200

      Net restructuring related expenses

(394)


(317)

      Potential contractual settlement payment related to MontaVista automotive business

-


1,250

      Inventory write-down for discontinued consumer products

-


3,943

      Net loss of a variable interest entity attributable to the Company

1,304


1,225

     Total of non-GAAP adjustments

11,711


16,882

Non-GAAP net income 

$                   16,047


$         12,578





GAAP net income (loss) attributable to the Company per share, diluted

$                       0.08


$           (0.08)

   Non-GAAP adjustments detailed above

0.21


0.31

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

$                       0.29


$             0.23





GAAP weighted average shares, diluted

53,492


51,493

   Non-GAAP share adjustment

2,202


3,307

Non-GAAP weighted average shares, diluted

55,694


54,800

 

CAVIUM, INC.

Unaudited GAAP Condensed Consolidated Balance Sheets

(in thousands)










As of




September 30, 2013


 June 30, 2013 

Assets





Current assets:





Cash and cash equivalents

112,960


97,643


Accounts receivable, net 

46,504


44,721


Inventories

42,455


39,563


Prepaid expenses and other current assets

4,255


4,405


Deferred tax assets

112


44



Total current assets

206,286


186,376

Property and equipment, net

25,776


27,200

Intangible assets, net

53,003


56,587

Goodwill


71,478


71,478

Deferred tax assets, net of current 

60


91

Other assets

1,044


1,334



Total assets

357,647


343,066







Liabilities and Equity 




Current liabilities:





Accounts payable

23,992


19,520


Other accrued expenses and other current liabilities

9,754


8,849


Deferred revenue

10,689


10,597


Notes payable

11,012


1,012


Capital lease and technology license obligations

11,755


14,869



Total current liabilities

67,202


54,847

Notes payable, net of current portion

-


8,550

Capital lease and technology license obligations, net of current 

18,268


19,723

Deferred tax liability

2,128


1,939

Other non-current liabilities

2,789


2,616



Total liabilities

90,387


87,675







Equity 






Common stock

52


52


Additional paid-in capital

433,507


422,553


Accumulated deficit

(157,244)


(161,580)



Total stockholders' equity attributable to the Company

276,315


261,025


Non-controlling interest

(9,055)


(5,634)



Total equity

267,260


255,391



Total liabilities and equity 

357,647


343,066

 

SOURCE Cavium, Inc.



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