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| 8-K - FORM 8-K - CAVIUM, INC. | v358584_8k.htm |
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.
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
| - |
| (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) | |||
|
|
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|
|
| 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% |
|
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|
|
|
|
| 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% |
|
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| 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) | |||||
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| As of | ||
|
|
|
| September 30, 2013 |
| June 30, 2013 |
Assets |
|
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| |
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 |
|
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Liabilities and Equity |
|
|
| ||
Current liabilities: |
|
|
| ||
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| 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 | ||
|
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| Total liabilities | 90,387 |
| 87,675 |
|
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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 |
CONTACT: Art Chadwick, Vice President of Finance and Administration and Chief Financial Officer, (408) 943-7104, art.chadwick@cavium.com, or Angel Atondo, Senior Marketing Communications Manager, (408) 943-7417, angel.atondo@cavium.com