Cavium Announces Financial Results for Q4 2015

Jan 27, 2016, 16:05 ET from Cavium, Inc.

SAN JOSE, Calif., Jan. 27, 2016 /PRNewswire/ -- Cavium, Inc. (NASDAQ: CAVM), a leading provider of semiconductor products that enable secure and intelligent processing for enterprise, data center, cloud, wired and wireless networking, today announced financial results for the fourth quarter ended December 31, 2015.

Net revenue in the fourth quarter of 2015 was $100.9 million, a 3.9% sequential decrease from the $105.1 million reported in the third quarter of 2015 and relatively flat from the $101.2 million reported in the fourth quarter of 2014.

Generally Accepted Accounting Principles (GAAP) Results

Net loss in the fourth quarter of 2015 was $1.0 million, or $(0.02) per diluted share, compared to net income of $4.2 million, or $0.07 per diluted share in the third quarter of 2015. Gross margins were 66.2% in the fourth quarter of 2015 compared to 65.5% in the third quarter of 2015. Total cash and cash equivalents were $134.6 million at December 31, 2015.

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.

In the fourth quarter of 2015, Non-GAAP net income was $16.6 million, or $0.28 per diluted share. Non-GAAP gross margin was 66.6% and Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue) was 17.1%.

Recent News Highlights

  • November 16, 2015 - Cavium and Leading Partners Showcased ThunderX™ ARMv8-based Server Platforms for Next Generation Cloud Data Center at ARM TechCon 2015
  • November 16, 2015 - Cavium's ThunderX Workload Optimized Processors received Readers' and Editors' Choice Award for Top 5 New Products or Technologies to Watch from HPCwire
  • November 16, 2015 - E4 Computer Engineering announced production availability and customer shipment of ARKA Server Platforms with Cavium ThunderX™ ARMv8 Workload-Optimized Processors
  • November 16, 2015 - Cavium Announced Collaboration with Bright Computing to Support the ThunderX™ Processor Family
  • November 16, 2015 - Penguin Computing Announced Availability and Customer Shipments of Tundra Extreme Scale Valkre Servers Based on Cavium ThunderX™ Workload Optimized Processors
  • November 16, 2015 - Wistron Announced New Server Platforms based on Cavium's ThunderX™ Workload-Optimized Processor Family
  • November 16, 2015 - Inventec Enables Hadoop, Cloud Computing and Hyperscale Workloads with new K850G3 Server Platforms with Cavium ThunderX™ Workload Optimized Processors
  • November 16, 2015 - GIGABYTE Announced Availability and Production Shipments of Extensive Cavium ThunderX-based Server Portfolio
  • November 9, 2015 - Cavium and Pica8 Partners to Deliver Leading Edge Open Networking Solutions

Cavium, Inc. will broadcast its fourth quarter of 2015 financial results conference call today, January 27, 2016, 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 in enterprise, data center, cloud and wired and wireless service provider applications. Cavium offers a broad portfolio of integrated, software-compatible processors ranging in performance from 100 Mbps to 100 Gbps that enable secure, intelligent functionality in enterprise, data-center, broadband/consumer and access and service provider equipment. Cavium's 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


December 31, 2015


September 30, 2015

Net revenue

$

100,942


$

105,063

Cost of revenue


34,092



36,203

Gross profit


66,850



68,860

Operating expenses:






     Research and development


47,764



45,367

     Sales, general and administrative


19,397



18,522

        Total operating expenses


67,161



63,889

Income (loss) from operations


(311)



4,971

Other expense, net:






    Interest expense


(227)



(216)

    Other, net


(138)



(173)

Total other expense, net


(365)



(389)

     Income (loss) before income taxes


(676)



4,582

     Provision for income taxes


354



366

Net income (loss)

$

(1,030)


$

4,216

Net income (loss) per common share, basic

$

(0.02)


$

0.08

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


56,131



55,819

Net income (loss) per common share, diluted

$

(0.02)


$

0.07

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


56,131



57,457

 

CAVIUM, INC.

Unaudited Reconciliation of Non-GAAP Adjustments

(in thousands)




Three Months Ended


December 31, 2015


September 30, 2015

Reconciliation of GAAP operating expenses to non-GAAP:






GAAP research and development expenses

$

47,764


$

45,367

Stock-based compensation and related payroll taxes


(7,833)



(7,766)

Amortization of acquisition related assets


(3,667)



(3,471)

Net restructuring related expenses


-



(140)

Xpliant transition related expenses


(970)



(971)

Non-GAAP research and development expenses

$

35,294


$

33,019







GAAP sales, general and administrative expenses

$

19,397


$

18,522

Stock-based compensation and related payroll taxes


(4,764)



(4,946)

Amortization of acquisition related assets


-



(4)

Net restructuring related expenses


-



(255)

Non-GAAP sales, general and administrative expenses

$

14,633


$

13,317

Total Non-GAAP operating expenses

$

49,927


$

46,336







Reconciliation of GAAP non-operating expenses to non-GAAP:






GAAP non-operating expenses

$

(365)


$

(389)

Non-operating expenses associated with Xpliant


-



354

Total Non-GAAP non-operating expense

$

(365)


$

(35)

 

CAVIUM, INC.

Unaudited Reconciliation of Non-GAAP Adjustments

(in thousands, except per share data and percentages)





Three Months Ended



December 31, 2015



September 30, 2015


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








Net revenue

$

100,942



$

105,063


GAAP gross profit


66,850




68,860


GAAP gross margin


66.2

%



65.5

%









Stock-based compensation and related payroll taxes


198




211


Amortization of acquisition related assets


157




157


Non-GAAP gross profit

$

67,205



$

69,228


Non-GAAP gross margin


66.6

%



65.9

%









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








GAAP income (loss) from operations

$

(311)



$

4,971


Stock-based compensation and related payroll taxes


12,795




12,923


Amortization of acquisition related assets


3,824




3,632


Net restructuring related expenses


-




395


Xpliant transition related expenses


970




971


Non-GAAP income from operations

$

17,278



$

22,892


Non-GAAP income from operations as a percentage of revenue


17.1

%



21.8

%









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








GAAP net income (loss)

$

(1,030)



$

4,216


Non-GAAP adjustments:








Stock-based compensation and related payroll taxes


12,795




12,923


Amortization of acquisition related assets


3,824




3,632


Net restructuring related expenses


-




395


Xpliant transition related expenses


970




971


Non-operating expenses associated with Xpliant


-




354


Total of non-GAAP adjustments


17,589




18,275


Non-GAAP net income

$

16,559



$

22,491










GAAP net income (loss) per share, diluted

$

(0.02)



$

0.07


Non-GAAP adjustments detailed above


0.30




0.31


Non-GAAP net income per share, diluted

$

0.28



$

0.38










GAAP weighted average shares, diluted


56,131




57,457


Non-GAAP share adjustment


3,519




2,201


Non-GAAP weighted average shares, diluted


59,650




59,658


 

CAVIUM, INC.

Unaudited GAAP Condensed Consolidated Balance Sheets

(in thousands)




As of


December 31, 2015


September 30, 2015

Assets






Current assets






Cash and cash equivalents

$

134,646


$

130,985

Accounts receivable, net


68,742



61,696

Inventories


47,009



47,645

Prepaid expenses and other current assets


10,231



9,512

Total current assets


260,628



249,838

Property and equipment, net


64,677



64,414

Intangible assets, net


35,492



36,954

Goodwill


71,478



71,478

Other assets


1,718



2,019

Total assets

$

433,993


$

424,703







Liabilities and Stockholders' Equity






Current liabilities






Accounts payable

$

27,489


$

25,338

Other accrued expenses and other current liabilities


9,443



12,095

Deferred revenue


6,316



6,519

Capital lease and technology license obligations


20,608



17,004

Total current liabilities


63,856



60,956

Capital lease and technology license obligations, net of current


9,858



16,092

Deferred tax liability


3,417



3,320

Other non-current liabilities


2,962



2,849

Total liabilities


80,093



83,217







Stockholders' equity






Common stock


56



56

Additional paid-in capital


543,256



529,812

Accumulated deficit


(189,412)



(188,382)

Total stockholders' equity


353,900



341,486

Total liabilities and stockholders' equity

$

433,993


$

424,703

 

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SOURCE Cavium, Inc.



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