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| 8-K - FORM 8-K - CAVIUM, INC. | v366537_8k.htm |
Cavium Announces Financial Results for Q4 2013
SAN JOSE, Calif., Jan. 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 fourth quarter ended December 31, 2013.
Revenue in the fourth quarter of 2013 was $81.1 million, a 2.5% sequential increase from the $79.1 million reported in the third quarter of 2013. Total revenue for the fiscal year ended December 31, 2013 was $304.0 million, a 29.1% year-over-year increase from the $235.5 million reported for the fiscal year ended December 31, 2012.
Generally Accepted Accounting Principles (GAAP) Results
Net income attributable to the Company for the fourth quarter of 2013 on GAAP basis was $0.2 million, or $0.00 per diluted share compared to $4.3 million, or $0.08 per diluted share in the third quarter of 2013. Gross margins were 64.2% in the fourth quarter of 2013 compared to 64.0% in the third quarter of 2013. Total cash and cash equivalents were $127.8 million at December 31, 2013 compared to $113.0 million at end of 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 fourth quarter of 2013 was $17.4 million, or $0.31 per diluted share, compared to $16.0 million, or $0.29 per diluted share in the third quarter of 2013. Gross margin, on a non-GAAP basis, was 66.3% in the fourth quarter of 2013, compared to 66.0% in the third quarter of 2013. Operating margin (non-GAAP income from operations as a percentage of revenue), on a non-GAAP basis was 21.9% in the fourth quarter of 2013 compared to 21.6% in the third quarter of 2013.
Recent News Highlights
- November 14, 2013 - Cavium Ranked Amongst Fastest Growing Companies in North America on Deloitte's 2013 Technology Fast 500™ for 6th Consecutive Year
- January 6, 2014 - Cavium Demonstrated Complete Cloud to Home Solutions at International CES 2014
- January 21, 2014 - Cavium Joins Network Intelligence Alliance to Drive Innovation and Leadership for Next-Generation Network Solutions
Cavium, Inc. will broadcast its fourth quarter 2013 financial results conference call today, January 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 | ||
|
| December 31, 2013 |
| September 30, 2013 |
Net revenue | $ 81,135 |
| $ 79,124 |
Cost of revenue | 29,059 |
| 28,516 |
Gross profit | 52,076 |
| 50,608 |
Operating expenses: |
|
|
|
Research and development | 36,127 |
| 33,630 |
Sales, general and administrative | 17,871 |
| 14,833 |
Total operating expenses | 53,998 |
| 48,463 |
Income (loss) from operations | (1,922) |
| 2,145 |
Other expense, net: |
|
|
|
Interest expense | (395) |
| (390) |
Other, net | (74) |
| (126) |
Total other expense, net | (469) |
| (516) |
Income (loss) before income taxes | (2,391) |
| 1,629 |
Provision for income taxes | 120 |
| 714 |
Net income (loss) | (2,511) |
| 915 |
Net loss attributable to non-controlling interest | (2,698) |
| (3,421) |
Net income attributable to the Company | $ 187 |
| $ 4,336 |
Net income attributable to the Company per common share, basic | $ 0.00 |
| $ 0.08 |
Shares used in computing basic net income per common share | 52,104 |
| 51,772 |
Net income attributable to the Company per common share, diluted | $ 0.00 |
| $ 0.08 |
Shares used in computing diluted net income per common share | 53,772 |
| 53,492 |
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CAVIUM, INC. | |||
Unaudited Reconciliation of Non-GAAP Adjustments | |||
(in thousands) | |||
|
| Three Months Ended | ||
|
| December 31, 2013 |
| September 30, 2013 |
Reconciliation of GAAP research and development expenses to non-GAAP: |
|
|
|
GAAP research and development expenses | $ 36,127 |
| $ 33,630 |
Stock-based compensation and related payroll taxes | (5,022) |
| (5,056) |
Net restructuring related expenses | (74) |
| (38) |
Change in estimated useful lives of certain consumer product related intangible assets | (2,928) |
| - |
Expenses associated from a variable interest entity | (3,522) |
| (4,510) |
Non-GAAP research and development expenses | $ 24,581 |
| $ 24,026 |
Reconciliation of GAAP sales, general and administrative expenses to non-GAAP |
|
|
|
GAAP sales, general and administrative expenses | $ 17,871 |
| $ 14,833 |
Stock-based compensation and related payroll taxes | (3,683) |
| (3,740) |
Amortization of acquired intangible assets | (2,938) |
| (200) |
Net restructuring related expenses | 250 |
| 239 |
Non-GAAP sales, general and administrative expenses | $ 11,500 |
| $ 11,132 |
CAVIUM, INC. | |||
Unaudited Reconciliation of Non-GAAP Adjustments | |||
(in thousands, except per share data and percentages) | |||
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|
| Three Months Ended | ||
|
| December 31, 2013 |
| September 30, 2013 |
Reconciliation of GAAP gross profit & margin to non-GAAP: |
|
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|
Net revenue | $ 81,135 |
| $ 79,124 |
GAAP gross profit | 52,076 |
| 50,608 |
GAAP gross margin | 64.2% |
| 64.0% |
|
|
|
|
|
Stock-based compensation and related payroll taxes | 311 |
| 226 |
Amortization of acquired intangible assets | 1,548 |
| 1,579 |
Net restructuring related expenses | (110) |
| (193) |
Non-GAAP gross profit | $ 53,825 |
| $ 52,220 |
Non-GAAP gross margin | 66.3% |
| 66.0% |
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| Three Months Ended | ||
|
| December 31, 2013 |
| September 30, 2013 |
Reconciliation of GAAP income (loss) from operations to non-GAAP income from operations: |
|
|
|
GAAP income (loss) from operations | $ (1,922) |
| $ 2,145 |
Stock-based compensation and related payroll taxes | 9,016 |
| 9,022 |
Amortization of acquired intangible assets | 4,486 |
| 1,779 |
Net restructuring related expenses | (286) |
| (394) |
Change in estimated useful lives of certain consumer product related intangible assets | 2,928 |
| - |
Loss from operations of a variable interest entity | 3,522 |
| 4,510 |
Non-GAAP income from operations | $ 17,744 |
| $ 17,062 |
Non-GAAP income from operations as a percentage of revenue | 21.9% |
| 21.6% |
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| Three Months Ended | ||
|
| December 31, 2013 |
| September 30, 2013 |
Reconciliation of GAAP net income to non-GAAP net income: |
|
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GAAP net income attributable to the Company | $ 187 |
| $ 4,336 |
Non-GAAP adjustments: |
|
|
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Stock-based compensation and related payroll taxes: |
|
|
|
Cost of revenue | 311 |
| 226 |
Research and development | 5,022 |
| 5,056 |
Sales, general and administrative | 3,683 |
| 3,740 |
Amortization of acquired intangible assets: |
|
|
|
Cost of revenue | 1,548 |
| 1,579 |
Sales, general and administrative | 2,938 |
| 200 |
Net restructuring related expenses | (286) |
| (394) |
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 | 1,064 |
| 1,304 |
Total of non-GAAP adjustments | 17,208 |
| 11,711 |
Non-GAAP net income | $ 17,395 |
| $ 16,047 |
|
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GAAP net income attributable to the Company per share, diluted | $ 0.00 |
| $ 0.08 |
Non-GAAP adjustments detailed above | 0.31 |
| 0.21 |
Non-GAAP net income attributable to the Company per share, diluted | $ 0.31 |
| $ 0.29 |
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GAAP weighted average shares, diluted | 53,772 |
| 53,492 |
Non-GAAP share adjustment | 2,038 |
| 2,202 |
Non-GAAP weighted average shares, diluted | 55,810 |
| 55,694 |
CAVIUM, INC. | |||||
Unaudited GAAP Condensed Consolidated Balance Sheets | |||||
(in thousands) | |||||
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| As of
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| As of
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Assets |
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| |
Current assets: |
|
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|
| Cash and cash equivalents | $ 127,763 |
| $ 112,960 | |
|
| Accounts receivable, net | 43,636 |
| 46,504 | |
|
| Inventories | 45,768 |
| 42,455 | |
|
| Prepaid expenses and other current assets | 6,491 |
| 4,255 | |
|
| Deferred tax assets | 212 |
| 112 | |
|
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| Total current assets | 223,870 |
| 206,286 |
Property and equipment, net | 28,494 |
| 25,776 | ||
Intangible assets, net | 43,240 |
| 53,003 | ||
Goodwill |
| 71,478 |
| 71,478 | |
Deferred tax assets, net of current | 61 |
| 60 | ||
Other assets | 1,054 |
| 1,044 | ||
|
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| Total assets | $ 368,197 |
| $ 357,647 |
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Liabilities and Equity |
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Current liabilities: |
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| Accounts payable | $ 23,467 |
| $ 23,992 | |
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| Other accrued expenses and other current liabilities | 9,559 |
| 9,754 | |
|
| Deferred revenue | 8,669 |
| 10,689 | |
|
| Notes payable | 13,512 |
| 11,012 | |
|
| Capital lease and technology license obligations | 17,103 |
| 11,755 | |
|
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| Total current liabilities | 72,310 |
| 67,202 |
Capital lease and technology license obligations, net of current | 16,292 |
| 18,268 | ||
Deferred tax liability | 2,420 |
| 2,128 | ||
Other non-current liabilities | 2,344 |
| 2,789 | ||
|
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| Total liabilities | 93,366 |
| 90,387 |
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Equity |
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| |
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| Common stock | 53 |
| 52 | |
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| Additional paid-in capital | 443,588 |
| 433,507 | |
|
| Accumulated deficit | (157,057) |
| (157,244) | |
|
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| Total stockholders' equity attributable to the Company | 286,584 |
| 276,315 |
|
| Non-controlling interest | (11,753) |
| (9,055) | |
|
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| Total equity | 274,831 |
| 267,260 |
|
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| Total liabilities and equity | $ 368,197 |
| $ 357,647 |
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CONTACT: Art Chadwick, Vice President of Finance and Administration and Chief Financial Officer, Tel: (408) 943-7104, Email: art.chadwick@cavium.com, or Angel Atondo, Senior Marketing Communications Manager, Tel: (408) 943-7417, Email: angel.atondo@cavium.com