Cavium Announces Financial Results for Q1 2014
SAN JOSE, Calif., April 30, 2014 /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 first quarter ended March 31, 2014.
Revenue in the first quarter of 2014 was $83.2 million, a 2.5% sequential increase from the $81.1 million reported in the fourth quarter of 2013 and a 19.7% year-over-year increase from the $69.5 million reported in the first quarter of 2013.
Generally Accepted Accounting Principles (GAAP) Results
Net income attributable to the Company in the first quarter of 2014 was $2.3 million, or $0.04 per diluted share, compared to $0.2 million, or $0.00 per diluted share in the fourth quarter of 2013. Gross margins were 63.5% in the first quarter of 2014 compared to 64.2% in the fourth quarter of 2013. Total cash and cash equivalents were $124.1 million at March 31, 2014.
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 first quarter of 2014, Non-GAAP net income was $17.0 million, or $0.30 per diluted share, Non-GAAP gross margin was 65.4% and Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue) was 20.7%.
Recent News Highlights
- April 8, 2014 - Cavium Announced Availability of Complete TD-LTE Support for OCTEON Fusion® Small Cell Base Station
- April 8, 2014 - AKM Demonstrated New Family of LTE™ Base Station Transceivers in Cavium's Small Cell eNodeB Design at the Small Cells Asia Conference
- April 1, 2014 - Cavium Demonstrated Range of Secure Scalable Solutions for Virtualized Enterprise and Cloud Infrastructure at Interop Las Vegas
- April 1, 2014 - 6WIND and Cavium Extended Partnership to Deliver Compelling High Performance Solutions for NFV and SDN
- February 24, 2014 - Cavium Showcased a Range of Solutions for RAN, Core and Cloud Infrastructure at Mobile World Congress 2014
- February 24, 2014 - Cavium Unveiled UniFiRAN a Unified Architecture from Small Cell to Cloud RAN at Mobile World Congress
- February 24, 2014 - Cavium Introduced Highly Optimized, Small Form Factor 64 User OCTEON Fusion® Small Cell Base Station Design
- February 24, 2014 - Cavium Supports Telkomsel in LTE Network Trials
- February 24, 2014 - Arcadyan Selected Cavium for Carrier-grade LTE Small Cells with Data Offload and DPI for Enterprise Applications
- February 24, 2014 - MontaVista Introduced MV Cloud – A High Performance, Carrier Grade Cloud Platform for the Mobile and NFV Market
Cavium, Inc. will broadcast its first quarter of 2014 financial results conference call today, April 30, 2014, 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 |
|||
| March 31, 2014 |
December 31, 2013 |
||
| Net revenue |
$ 83,241 |
$ 81,135 |
|
| Cost of revenue |
30,350 |
29,059 |
|
| Gross profit |
52,891 |
52,076 |
|
| Operating expenses: |
|||
| Research and development |
37,289 |
36,127 |
|
| Sales, general and administrative |
15,932 |
17,871 |
|
| Total operating expenses |
53,221 |
53,998 |
|
| Loss from operations |
(330) |
(1,922) |
|
| Other income (expense), net: |
|||
| Interest expense |
(459) |
(395) |
|
| Change in estimated fair value of notes payable and other |
(858) |
- |
|
| Other, net |
135 |
(74) |
|
| Total other expense, net |
(1,182) |
(469) |
|
| Loss before income taxes |
(1,512) |
(2,391) |
|
| Provision for income taxes |
243 |
120 |
|
| Net loss |
(1,755) |
(2,511) |
|
| Net loss attributable to non-controlling interest |
(4,102) |
(2,698) |
|
| Net income attributable to the Company |
$ 2,347 |
$ 187 |
|
| Net income attributable to the Company per common share, basic |
$ 0.04 |
$ 0.00 |
|
| Shares used in computing basic net income per common share |
52,550 |
52,104 |
|
| Net income attributable to the Company per common share, diluted |
$ 0.04 |
$ 0.00 |
|
| Shares used in computing diluted net income per common share |
54,221 |
53,772 |
|
| CAVIUM, INC. |
|||
| Unaudited Reconciliation of Non-GAAP Adjustments |
|||
| (in thousands) |
|||
| Three Months Ended |
|||
| Reconciliation of GAAP research and development expenses to |
March 31, 2014 |
December 31, 2013 |
|
| non-GAAP: |
|||
| GAAP research and development expenses |
$ 37,289 |
$ 36,127 |
|
| Stock-based compensation and related payroll taxes |
(6,026) |
(5,022) |
|
| Net restructuring related expenses |
(509) |
(74) |
|
| Expenses associated from a variable interest entity |
(4,767) |
(3,522) |
|
| Change in estimated useful lives of certain consumer product |
- |
(2,928) |
|
| Non-GAAP research and development expenses |
$ 25,987 |
$ 24,581 |
|
| Reconciliation of GAAP sales, general and administrative expenses to |
|||
| non-GAAP |
|||
| GAAP sales, general and administrative expenses |
$ 15,932 |
$ 17,871 |
|
| Stock-based compensation and related payroll taxes |
(4,177) |
(3,683) |
|
| Amortization of acquired intangible assets |
(35) |
(2,938) |
|
| Net restructuring related expenses |
(243) |
250 |
|
| Expenses associated from a variable interest entity |
(286) |
- |
|
| Non-GAAP sales, general and administrative expenses |
$ 11,191 |
$ 11,500 |
|
| CAVIUM, INC. |
|||
| Unaudited Reconciliation of Non-GAAP Adjustments |
|||
| (in thousands, except per share data and percentages) |
|||
| Three Months Ended |
|||
| March 31, 2014 |
December 31, 2013 |
||
| Reconciliation of GAAP gross profit & margin to non-GAAP: |
|||
| Net revenue |
$ 83,241 |
$ 81,135 |
|
| GAAP gross profit |
52,891 |
52,076 |
|
| GAAP gross margin |
63.5% |
64.2% |
|
| Stock-based compensation and related payroll taxes |
259 |
311 |
|
| Amortization of acquired intangible assets |
1,267 |
1,548 |
|
| Net restructuring related expenses |
- |
(110) |
|
| Non-GAAP gross profit |
$ 54,417 |
$ 53,825 |
|
| Non-GAAP gross margin |
65.4% |
66.3% |
|
| Three Months Ended |
|||
| March 31, 2014 |
December 31, 2013 |
||
| Reconciliation of GAAP loss from operations to non-GAAP income from operations: |
|||
| GAAP loss from operations |
$ (330) |
$ (1,922) |
|
| Stock-based compensation and related payroll taxes |
10,462 |
9,016 |
|
| Amortization of acquired intangible assets |
1,302 |
4,486 |
|
| Net restructuring related expenses |
752 |
(286) |
|
| Change in estimated useful lives of certain consumer product related intangible assets |
- |
2,928 |
|
| Loss from operations of a variable interest entity |
5,053 |
3,522 |
|
| Non-GAAP income from operations |
$ 17,239 |
$ 17,744 |
|
| Non-GAAP income from operations as a percentage of revenue |
20.7% |
21.9% |
|
| Three Months Ended |
|||
| March 31, 2014 |
December 31, 2013 |
||
| Reconciliation of GAAP net income to non-GAAP net income: |
|||
| GAAP net income attributable to the Company |
$ 2,347 |
$ 187 |
|
| Non-GAAP adjustments: |
|||
| Stock-based compensation and related payroll taxes: |
|||
| Cost of revenue |
259 |
311 |
|
| Research and development |
6,026 |
5,022 |
|
| Sales, general and administrative |
4,177 |
3,683 |
|
| Amortization of acquired intangible assets: |
|||
| Cost of revenue |
1,267 |
1,548 |
|
| Sales, general and administrative |
35 |
2,938 |
|
| Net restructuring related expenses |
752 |
(286) |
|
| Change in estimated useful lives of certain consumer product related intangible assets |
- |
2,928 |
|
| Net loss of a variable interest entity attributable to the Company |
2,178 |
1,064 |
|
| Total of non-GAAP adjustments |
14,694 |
17,208 |
|
| Non-GAAP net income |
$ 17,041 |
$ 17,395 |
|
| GAAP net income attributable to the Company per share, diluted |
$ 0.04 |
$ 0.00 |
|
| Non-GAAP adjustments detailed above |
0.26 |
0.31 |
|
| Non-GAAP net income attributable to the Company per share, diluted |
$ 0.30 |
$ 0.31 |
|
| GAAP weighted average shares, diluted |
54,221 |
53,772 |
|
| Non-GAAP share adjustment |
2,338 |
2,038 |
|
| Non-GAAP weighted average shares, diluted |
56,559 |
55,810 |
|
| CAVIUM, INC. |
|||||
| Unaudited GAAP Condensed Consolidated Balance Sheets |
|||||
| (in thousands) |
|||||
| As of |
As of |
||||
| Assets |
|||||
| Current assets: |
|||||
| Cash and cash equivalents |
$ 124,106 |
$ 127,763 |
|||
| Accounts receivable, net |
56,819 |
43,636 |
|||
| Inventories |
49,048 |
45,768 |
|||
| Prepaid expenses and other current assets |
5,834 |
6,491 |
|||
| Total current assets |
235,807 |
223,658 |
|||
| Property and equipment, net |
28,562 |
28,494 |
|||
| Intangible assets, net |
41,453 |
43,240 |
|||
| Goodwill |
71,478 |
71,478 |
|||
| Deferred tax assets |
61 |
61 |
|||
| Other assets |
1,035 |
1,054 |
|||
| Total assets |
$ 378,396 |
$ 367,985 |
|||
| Liabilities and Equity |
|||||
| Current liabilities: |
|||||
| Accounts payable |
$ 24,060 |
$ 23,467 |
|||
| Other accrued expenses and other current liabilities |
9,519 |
9,836 |
|||
| Deferred revenue |
8,475 |
8,669 |
|||
| Notes payable and other |
15,770 |
13,512 |
|||
| Capital lease and technology license obligations |
14,227 |
17,103 |
|||
| Total current liabilities |
72,051 |
72,587 |
|||
| Capital lease and technology license obligations, net of current |
15,297 |
16,292 |
|||
| Deferred tax liability |
2,365 |
1,931 |
|||
| Other non-current liabilities |
2,437 |
2,344 |
|||
| Total liabilities |
92,150 |
93,154 |
|||
| Equity |
|||||
| Common stock |
53 |
53 |
|||
| Additional paid-in capital |
456,758 |
443,588 |
|||
| Accumulated deficit |
(154,710) |
(157,057) |
|||
| Total stockholders' equity attributable to the Company |
302,101 |
286,584 |
|||
| Non-controlling interest |
(15,855) |
(11,753) |
|||
| Total equity |
286,246 |
274,831 |
|||
| Total liabilities and equity |
$ 378,396 |
$ 367,985 |
|||
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SOURCE Cavium, Inc.
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