Cavium Announces Financial Results for Q3 2014

News provided by

Cavium, Inc.

Oct 29, 2014, 04:01 ET

SAN JOSE, Calif., Oct. 29, 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 third quarter ended September 30, 2014.

Revenue in the third quarter of 2014 was $97.8 million, a 7.9% sequential increase from the $90.7 million reported in the second quarter of 2014 and a 23.6% year-over-year increase from the $79.1 million reported in the third quarter of 2013.

Generally Accepted Accounting Principles (GAAP) Results

Net income attributable to the Company in the third quarter of 2014 was $5.4 million, or $0.10 per diluted share, compared to net loss attributable to the Company of $11.0 million, or $(0.21) per diluted share in the second quarter of 2014. Gross margins were 63.5% in the third quarter of 2014 compared to 62.6% in the second quarter of 2014. Total cash and cash equivalents were $156.3 million at September 30, 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 third quarter of 2014, Non-GAAP net income was $23.0 million, or $0.40 per diluted share, Non-GAAP gross margin was 65.2% and Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue) was 24.3%.

Recent News Highlights

  • October 1, 2014 - Cavium at ARM Tech Conference 2014  
  • October 1, 2014 - Cavium Joins Linux Foundation Open Platform for NFV Project
  • October 1, 2014 - Cavium Sponsors FreeBSD ARMv8 Based Implementation
  • September 17, 2014 - Cavium Demonstrated Multiple OpenDataPlane™ (ODP) Applications at Linaro Connect USA 2014
  • September 16, 2014 - Cavium and XPliant Introduced a Fully Programmable Switch Silicon Family Scaling to 3.2 Terabits per Second
  • July 30, 2014 - Cavium to Acquire Switching and SDN Specialist Xpliant to Accelerate Deployment of Software Defined Networks

Cavium, Inc. will broadcast its third quarter of 2014 financial results conference call today, October 29, 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

September 30, 2014

June 30, 2014

Net revenue

$

97,833

$

90,681

Cost of revenue

35,710

33,897

Gross profit

62,123

56,784

Operating expenses:




     Research and development

40,459

38,834

     Sales, general and administrative

18,141

17,017

        Total operating expenses

58,600

55,851

Income from operations

3,523

933

Other expense, net:




    Interest expense

(387)

(333)

    Change in estimated fair value of variable interest entity's (VIE) notes payable and other

(103)

(13,927)

    Other, net

(116)

(53)

Total other expense, net

(606)

(14,313)

     Income (loss) before income taxes

2,917

(13,380)

     Provision for income taxes

811

311

Net income (loss)

2,106

(13,691)

Net loss attributable to non-controlling interest

(3,327)

(2,647)

Net income (loss) attributable to the Company

$

5,433

$

(11,044)

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

$

0.10

$

(0.21)

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

53,786

53,197

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

$

0.10

$

(0.21)

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

55,540

53,197






CAVIUM, INC.

Unaudited Reconciliation of Non-GAAP Adjustments

(in thousands)









Three Months Ended

September 30, 2014

June 30, 2014

Reconciliation of GAAP research and development expenses to non-GAAP:





GAAP research and development expenses

$

40,459

$

38,834

Stock-based compensation and related payroll taxes

(5,932)


(6,104)

Net restructuring related expenses

(307)


(894)

Research and development expenses associated from a VIE

(5,870)


(5,400)

Non-GAAP research and development expenses

$

28,350

$

26,436








Reconciliation of GAAP sales, general and administrative expenses to non-GAAP:






GAAP sales, general and administrative expenses

$

18,141

$

17,017

Stock-based compensation and related payroll taxes

(5,071)


(4,525)

Amortization of acquired intangible assets

(35)


(35)

Net restructuring related expenses

(188)


(218)

Sales, general and administrative expenses associated from a VIE

(1,169)


(404)

Non-GAAP sales, general and administrative expenses

$

11,678

$

11,835

Total Non-GAAP operating expenses

$

40,028

$

38,271








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






GAAP non-operating expenses

$

(606)

$

(14,313)

Change in estimated fair value of VIE's notes payable and other

103


13,927

Non-operating expenses associated from a VIE

509


337

Total Non-GAAP non-operating income (expense)

$

6

$

(49)








CAVIUM, INC.

Unaudited Reconciliation of Non-GAAP Adjustments

(in thousands, except per share data and percentages)









Three Months Ended

September 30, 2014

June 30, 2014

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






Net revenue

$

97,833

$

90,681

GAAP gross profit

62,123


56,784

GAAP gross margin

63.5

%

62.6

%








Stock-based compensation and related payroll taxes

254


258

Amortization of acquired intangible assets

1,267


1,267

Net restructuring related expenses

158


172

Non-GAAP gross profit

$

63,802

$

58,481

Non-GAAP gross margin

65.2

%

64.5

%








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






GAAP income from operations

$

3,523

$

933

Stock-based compensation and related payroll taxes

11,257


10,887

Amortization of acquired intangible assets

1,302


1,302

Net restructuring related expenses

653


1,284

Loss from operations of a variable interest entity

7,039


5,804

Non-GAAP income from operations

$

23,774

$

20,210

Non-GAAP income from operations as a percentage of revenue

24.3

%

22.3

%








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






GAAP net income (loss) attributable to the Company

$

5,433

$

(11,044)

Non-GAAP adjustments:






Stock-based compensation and related payroll taxes

11,257


10,887

Amortization of acquired intangible assets

1,302


1,302

Net restructuring related expenses

653


1,284

Net loss of a variable interest entity attributable to the Company

4,324


17,421

Total of non-GAAP adjustments

17,536


30,894

Non-GAAP net income

$

22,969

$

19,850








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

$

0.10

$

(0.21)

Non-GAAP adjustments detailed above

0.30


0.56

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

$

0.40

$

0.35








GAAP weighted average shares, diluted

55,540


53,197

Non-GAAP share adjustment

2,236


4,123

Non-GAAP weighted average shares, diluted

57,776


57,320








CAVIUM, INC.

Unaudited GAAP Condensed Consolidated Balance Sheets

(in thousands)









As of

September 30, 2014

As of

June 30, 2014

Assets






Current assets






Cash and cash equivalents

$

156,330

$

140,580

Accounts receivable, net

45,278


52,141

Inventories

54,083


56,750

Prepaid expenses and other current assets

7,240


7,903

Total current assets

262,931


257,374

Property and equipment, net

33,298


30,319

Intangible assets, net

39,082


39,161

Goodwill

71,478


71,478

Other assets

1,863


1,600

Total assets

$

408,652

$

399,932








Liabilities and Equity






Current liabilities






Accounts payable

$

23,039

$

28,466

Other accrued expenses and other current liabilities

9,640


10,196

Deferred revenue

7,786


8,151

Notes payable and other

29,800


29,697

Capital lease and technology license obligations

17,066


16,375

Total current liabilities

87,331


92,885

Capital lease and technology license obligations, net of current

10,198


11,557

Deferred tax liability

2,675


2,461

Other non-current liabilities

2,532


2,521

Total liabilities

102,736


109,424








Equity






Common stock

54


54

Additional paid-in capital

488,012


474,710

Accumulated deficit

(160,321)


(165,754)

Total stockholders' equity attributable to the Company

327,745


309,010

Non-controlling interest

(21,829)


(18,502)

Total equity

305,916


290,508

Total liabilities and equity

$

408,652

$

399,932

Logo - http://photos.prnewswire.com/prnh/20120604/LA18845LOGO

SOURCE Cavium, Inc.

Related Links

http://www.cavium.com

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