Cavium Announces Financial Results for Q4 2014

News provided by

Cavium, Inc.

Jan 28, 2015, 04:01 ET

SAN JOSE, Calif., Jan. 28, 2015 /PRNewswire/ -- Cavium, Inc. (NASDAQ: CAVM), a leading provider of semiconductor products that enable intelligent processing for enterprise, data center, wired and wireless networking, today announced financial results for the fourth quarter ended December 31, 2014.

Revenue in the fourth quarter of 2014 was $101.2 million, a 3.5% sequential increase from the $97.8 million reported in the third quarter of 2014 and a 24.8% year-over-year increase from the $81.1 million reported in the fourth quarter of 2013.

Generally Accepted Accounting Principles (GAAP) Results

Net loss attributable to the Company in the fourth quarter of 2014 was $12.0 million, or $(0.22) per diluted share, compared to net income attributable to the Company of $5.4 million, or $0.10 per diluted share in the third quarter of 2014. Gross margins were 62.1% in the fourth quarter of 2014 compared to 63.5% in the third quarter of 2014. Total cash and cash equivalents were $131.7 million at December 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 fourth quarter of 2014, Non-GAAP net income was $24.5 million, or $0.42 per diluted share. Non-GAAP gross margin was 65.5% and Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue) was 24.2%.

Recent News Highlights

  • December 15, 2014 - Momentum Builds for NBASE-T Alliance with Twelve New Participants
  • December 1, 2014 - Cavium Accelerates Customers Time to Market with ThunderX™ Reference Platforms in Industry Standard 1U and 2U Form Factors
  • December 1, 2014 - Cavium Announces Availability of ThunderX™: Industry's First 48 Core Family of ARMv8 Workload Optimized Processors for Next Generation Data Center & Cloud Infrastructure
  • November 17, 2014 - Cavium was at Supercomputing 2014 
  • November 17, 2014 - ARM HPC Ecosystem Continues to Build Momentum with Introduction of PathScale EKOPath Compiler
  • November 17, 2014 - Cray Explored Alternative Processor Technologies for Supercomputing
  • November 14, 2014 - Cavium Ranked One of the Fastest Growing Companies in North America on Deloitte's 2014 Technology Fast 500™

Cavium, Inc. will broadcast its fourth quarter of 2014 financial results conference call today, January 28, 2015, 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, 2014

September 30, 2014

Net revenue

$

101,223

$

97,833

Cost of revenue

38,402


35,710

Gross profit

62,821


62,123

Operating expenses:






     Research and development

55,108


40,459

     Sales, general and administrative

19,314


18,141

        Total operating expenses

74,422


58,600

Income (loss) from operations

(11,601)


3,523

Other expense, net:






    Interest expense

(293)


(387)

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

-


(103)

    Other, net

(313)


(116)

Total other expense, net

(606)


(606)

     Income (loss) before income taxes

(12,207)


2,917

     Provision for income taxes

268


811

Net income (loss)

(12,475)


2,106

Net loss attributable to non-controlling interest

(444)


(3,327)

Net income (loss) attributable to the Company

$

(12,031)

$

5,433

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

$

(0.22)

$

0.10

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

54,249


53,786

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

$

(0.22)

$

0.10

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

54,249


55,540

CAVIUM, INC.

Unaudited Reconciliation of Non-GAAP Adjustments

(in thousands)









Three Months Ended

December 31, 2014

September 30, 2014

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






GAAP research and development expenses

$

55,108

$

40,459

Stock-based compensation and related payroll taxes

(16,128)


(5,932)

Net restructuring related expenses

(617)


(307)

Research and development expenses associated with a VIE

(8,769)


(5,870)

Non-GAAP research and development expenses

$

29,594

$

28,350








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






GAAP sales, general and administrative expenses

$

19,314

$

18,141

Stock-based compensation and related payroll taxes

(5,969)


(5,071)

Amortization of acquired intangible assets

(33)


(35)

Net restructuring related expenses

(27)


(188)

Sales, general and administrative expenses associated with a VIE

(1,017)


(1,169)

Non-GAAP sales, general and administrative expenses

$

12,268

$

11,678

Total Non-GAAP operating expenses

$

41,862

$

40,028








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






GAAP non-operating expenses

$

(606)

$

(606)

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

-


103

Non-operating expenses associated with a VIE

905


509

Total Non-GAAP non-operating income

$

299

$

6

CAVIUM, INC.

Unaudited Reconciliation of Non-GAAP Adjustments

(in thousands, except per share data and percentages)









Three Months Ended

December 31, 2014

September 30, 2014

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






Net revenue

$

101,223

$

97,833

GAAP gross profit

62,821


62,123

GAAP gross margin

62.1

%

63.5

%








Stock-based compensation and related payroll taxes

237


254

Amortization of acquired intangible assets

1,252


1,267

Net restructuring related expenses

2,002


158

Non-GAAP gross profit

$

66,312

$

63,802

Non-GAAP gross margin

65.5

%

65.2

%








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






GAAP income (loss) from operations

$

(11,601)

$

3,523

Stock-based compensation and related payroll taxes

22,334


11,257

Amortization of acquired intangible assets

1,285


1,302

Net restructuring related expenses

2,646


653

Loss from operations of a variable interest entity

9,786


7,039

Non-GAAP income from operations

$

24,450

$

23,774

Non-GAAP income from operations as a percentage of revenue

24.2

%

24.3

%








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






GAAP net income (loss) attributable to the Company

$

(12,031)

$

5,433

Non-GAAP adjustments:






Stock-based compensation and related payroll taxes

22,334


11,257

Amortization of acquired intangible assets

1,285


1,302

Net restructuring related expenses

2,646


653

Net loss of a variable interest entity (excluding stock based compensation and related taxes) attributable to the Company

10,247


4,324

Total of non-GAAP adjustments

36,512


17,536

Non-GAAP net income

$

24,481

$

22,969








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

$

(0.22)

$

0.10

Non-GAAP adjustments detailed above

0.64


0.30

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

$

0.42

$

0.40








GAAP weighted average shares, diluted

54,249


55,540

Non-GAAP share adjustment

4,089


2,236

Non-GAAP weighted average shares, diluted

58,338


57,776

CAVIUM, INC.

Unaudited GAAP Condensed Consolidated Balance Sheets

(in thousands)









As of

December 31, 2014

As of

September 30, 2014

Assets






Current assets






Cash and cash equivalents

$

131,718

$

156,330

Accounts receivable, net

48,199


45,278

Inventories

51,922


54,083

Prepaid expenses and other current assets

9,130


7,240

Total current assets

240,969


262,931

Property and equipment, net

56,963


33,298

Intangible assets, net

37,644


39,082

Goodwill

71,478


71,478

Other assets

1,806


1,863

Total assets

$

408,860

$

408,652








Liabilities and Equity






Current liabilities






Accounts payable

$

26,447

$

23,039

Other accrued expenses and other current liabilities

8,326


9,640

Deferred revenue

6,285


7,786

Notes payable and other

-


29,800

Capital lease and technology license obligations

23,002


17,066

Total current liabilities

64,060


87,331

Capital lease and technology license obligations, net of current

22,894


10,198

Deferred tax liability

2,292


2,675

Other non-current liabilities

2,931


2,532

Total liabilities

92,177


102,736








Equity






Common stock

54


54

Additional paid-in capital

488,981


488,012

Accumulated deficit

(172,352)


(160,321)

Total stockholders' equity attributable to the Company

316,683


327,745

Non-controlling interest

-


(21,829)

Total equity

316,683


305,916

Total liabilities and equity

$

408,860

$

408,652

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

SOURCE Cavium, Inc.

Related Links

http://www.cavium.com

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