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| 8-K - CURRENT REPORT - CAVIUM, INC. | v385116_8k.htm |
Exhibit 99.1
Cavium Announces Financial Results for Q2 2014
SAN JOSE, Calif., July 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 second quarter ended June 30, 2014.
Revenue in the second quarter of 2014 was $90.7 million, an 8.9% sequential increase from the $83.2 million reported in the first quarter of 2014 and a 22.2% year-over-year increase from the $74.2 million reported in the second quarter of 2013.
Generally Accepted Accounting Principles (GAAP) Results
Net loss attributable to the Company in the second quarter of 2014 was $11.0 million, or $(0.21) per diluted share, compared to net income attributable to the Company of $2.3 million, or $0.04 per diluted share in the first quarter of 2014. Gross margins were 62.6% in the second quarter of 2014 compared to 63.5% in the first quarter of 2014. Total cash and cash equivalents were $140.6 million at June 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 second quarter of 2014, Non-GAAP net income was $19.9 million, or $0.35 per diluted share, Non-GAAP gross margin was 64.5% and Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue) was 22.3%.
Recent News Highlights
- July 21, 2014 - Cavium and Quortus Enabled Unique LTE RAN and EPC on Single Chip for Portable Applications
- June 23, 2014 - Altera and Cavium Delivered Pre-Verified Packet Classification Solution for Networking Appliances
- June 3, 2014 - Cavium Introduced ThunderX™: A 2.5 GHz, 48 Core Family of Workload Optimized Processors for Next Generation Data Center and Cloud Applications
- June 3, 2014 - Cavium Announced Collaboration with Oracle to Support the ThunderX™ Processor Family
- June 3, 2014 - Cavium Expanded Collaboration with Fedora Project to Accelerate ARMv8 Software Ecosystem
- June 3, 2014 - openSUSE Community Announced Partnership with Cavium to Support the ThunderX™ Workload Optimized Processor Family
- June 3, 2014 - Canonical Announced Expanded Ubuntu Support for the Cavium Workload Optimized ThunderX™ Processor Family
- June 3, 2014 - Cavium Delivered Next Generation Xen Virtualization with ThunderX™ Family of Workload Optimized Processors
- June 3, 2014 - American Megatrends Announced Partnership with Cavium to Support the ThunderX™ Processor Family
- June 3, 2014 - Gigabyte Technology Announced Expansion of Server Platforms based on Cavium's ThunderX™ Workload Optimized Processor Family
- June 3, 2014 - Cavium Contributed ARMv8 Based Platform Architecture to Open Compute Project, Based on ThunderX™ Family of Workload-Optimized Processors
- June 3, 2014 - MontaVista Announced MV Cloud Support for the Cavium ThunderX™ Workload Optimized Processor Family
- June 3, 2014 - Cavium Joined Xen Project Advisory Board
- June 2, 2014 - Cavium Introduced Project Thunder at Computex 2014
- June 2, 2014 - Cavium Demonstrated a Broad Range of New SoC Solutions for RAN Core and Cloud Infrastructure at Computex 2014
Cavium, Inc. will broadcast its second quarter of 2014 financial results conference call today, July 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 | ||
|
| June 30, 2014 |
| March 31, 2014 |
Net revenue | $ 90,681 |
| $ 83,241 |
Cost of revenue | 33,897 |
| 30,350 |
Gross profit | 56,784 |
| 52,891 |
Operating expenses: |
|
|
|
Research and development | 38,834 |
| 37,289 |
Sales, general and administrative | 17,017 |
| 15,932 |
Total operating expenses | 55,851 |
| 53,221 |
Income (loss) from operations | 933 |
| (330) |
Other income (expense), net: |
|
|
|
Interest expense | (333) |
| (459) |
Change in estimated fair value of variable interest entity's (VIE) notes
| (13,927) |
| (858) |
Other, net | (53) |
| 135 |
Total other expense, net | (14,313) |
| (1,182) |
Loss before income taxes | (13,380) |
| (1,512) |
Provision for income taxes | 311 |
| 243 |
Net loss | (13,691) |
| (1,755) |
Net loss attributable to non-controlling interest | (2,647) |
| (4,102) |
Net income (loss) attributable to the Company | $ (11,044) |
| $ 2,347 |
Net income (loss) attributable to the Company per common share, basic | $ (0.21) |
| $ 0.04 |
Shares used in computing basic net income (loss) per common share | 53,197 |
| 52,550 |
Net income (loss) attributable to the Company per common share, diluted | $ (0.21) |
| $ 0.04 |
Shares used in computing diluted net income (loss) per common share | 53,197 |
| 54,221 |
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CAVIUM, INC. | |||
Unaudited Reconciliation of Non-GAAP Adjustments | |||
(in thousands) | |||
|
| Three Months Ended | ||
Reconciliation of GAAP research and development expenses to non-GAAP: | June 30, 2014 |
| March 31, 2014 |
GAAP research and development expenses | $ 38,834 |
| $ 37,289 |
Stock-based compensation and related payroll taxes | (6,104) |
| (6,026) |
Net restructuring related expenses | (894) |
| (509) |
Research and development expenses associated from a VIE | (5,400) |
| (4,767) |
Non-GAAP research and development expenses | $ 26,436 |
| $ 25,987 |
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Reconciliation of GAAP sales, general and administrative expenses to non-GAAP: |
|
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GAAP sales, general and administrative expenses | $ 17,017 |
| $ 15,932 |
Stock-based compensation and related payroll taxes | (4,525) |
| (4,177) |
Amortization of acquired intangible assets | (35) |
| (35) |
Net restructuring related expenses | (218) |
| (243) |
Sales, general and administrative expenses associated from a VIE | (404) |
| (286) |
Non-GAAP sales, general and administrative expenses | $ 11,835 |
| $ 11,191 |
Total Non-GAAP operating expenses | $ 38,271 |
| $ 37,178 |
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Reconciliation of GAAP non-operating expenses to non-GAAP: |
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GAAP non-operating expenses | $ (14,313) |
| $ (1,182) |
Change in estimated fair value of VIE's notes payable and other | 13,927 |
| 858 |
Non-operating expenses associated from a VIE | 337 |
| 369 |
Total Non-GAAP non-operating income (expense) | $ (49) |
| $ 45 |
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CAVIUM, INC. | |||
Unaudited Reconciliation of Non-GAAP Adjustments | |||
(in thousands, except per share data and percentages) | |||
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| Three Months Ended | ||
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| June 30, 2014 |
| March 31, 2014 |
Reconciliation of GAAP gross profit & margin to non-GAAP: |
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Net revenue | $ 90,681 |
| $ 83,241 |
GAAP gross profit | 56,784 |
| 52,891 |
GAAP gross margin | 62.6% |
| 63.5% |
|
|
|
|
|
Stock-based compensation and related payroll taxes | 258 |
| 259 |
Amortization of acquired intangible assets | 1,267 |
| 1,267 |
Net restructuring related expenses | 172 |
| - |
Non-GAAP gross profit | $ 58,481 |
| $ 54,417 |
Non-GAAP gross margin | 64.5% |
| 65.4% |
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| Three Months Ended | ||
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| June 30, 2014 |
| March 31, 2014 |
Reconciliation of GAAP loss from operations to non-GAAP income from operations: |
|
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GAAP income (loss) from operations | $ 933 |
| $ (330) |
Stock-based compensation and related payroll taxes | 10,887 |
| 10,462 |
Amortization of acquired intangible assets | 1,302 |
| 1,302 |
Net restructuring related expenses | 1,284 |
| 752 |
Loss from operations of a variable interest entity | 5,804 |
| 5,053 |
Non-GAAP income from operations | $ 20,210 |
| $ 17,239 |
Non-GAAP income from operations as a percentage of revenue | 22.3% |
| 20.7% |
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| Three Months Ended | ||
|
| June 30, 2014 |
| March 31, 2014 |
Reconciliation of GAAP net income (loss) to non-GAAP net income: |
|
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GAAP net income (loss) attributable to the Company | $ (11,044) |
| $ 2,347 |
Non-GAAP adjustments: |
|
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Stock-based compensation and related payroll taxes | 10,887 |
| 10,462 |
Amortization of acquired intangible assets | 1,302 |
| 1,302 |
Net restructuring related expenses | 1,284 |
| 752 |
Net loss of a variable interest entity attributable to the Company | 17,421 |
| 2,178 |
Total of non-GAAP adjustments | 30,894 |
| 14,694 |
Non-GAAP net income | $ 19,850 |
| $ 17,041 |
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GAAP net income (loss) attributable to the Company per share, diluted | $ (0.21) |
| $ 0.04 |
Non-GAAP adjustments detailed above | 0.56 |
| 0.26 |
Non-GAAP net income attributable to the Company per share, diluted | $ 0.35 |
| $ 0.30 |
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GAAP weighted average shares, diluted | 53,197 |
| 54,221 |
Non-GAAP share adjustment | 4,123 |
| 2,338 |
Non-GAAP weighted average shares, diluted | 57,320 |
| 56,559 |
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 | $ 140,580 |
| $ 124,106 | |
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| Accounts receivable, net | 52,141 |
| 56,819 | |
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| Inventories | 56,750 |
| 49,048 | |
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| Prepaid expenses and other current assets | 7,903 |
| 5,834 | |
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| Total current assets | 257,374 |
| 235,807 |
Property and equipment, net | 30,319 |
| 28,562 | ||
Intangible assets, net | 39,161 |
| 41,453 | ||
Goodwill |
| 71,478 |
| 71,478 | |
Other assets | 1,600 |
| 1,096 | ||
|
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| Total assets | $ 399,932 |
| $ 378,396 |
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Liabilities and Equity |
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Current liabilities: |
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| Accounts payable | $ 28,466 |
| $ 24,060 | |
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| Other accrued expenses and other current liabilities | 10,196 |
| 9,519 | |
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| Deferred revenue | 8,151 |
| 8,475 | |
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| Notes payable and other | 29,697 |
| 15,770 | |
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| Capital lease and technology license obligations | 16,375 |
| 14,227 | |
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| Total current liabilities | 92,885 |
| 72,051 |
Capital lease and technology license obligations, net of current | 11,557 |
| 15,297 | ||
Deferred tax liability | 2,461 |
| 2,365 | ||
Other non-current liabilities | 2,521 |
| 2,437 | ||
|
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| Total liabilities | 109,424 |
| 92,150 |
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Equity |
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| Common stock | 54 |
| 53 | |
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| Additional paid-in capital | 474,710 |
| 456,758 | |
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| Accumulated deficit | (165,754) |
| (154,710) | |
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| Total stockholders' equity attributable to the Company | 309,010 |
| 302,101 |
|
| Non-controlling interest | (18,502) |
| (15,855) | |
|
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| Total equity | 290,508 |
| 286,246 |
|
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| Total liabilities and equity | $ 399,932 |
| $ 378,396 |
CONTACT: Art Chadwick, Vice President of Finance and Administration and Chief Financial Officer, Tel: (408) 943-7104, Email: art.chadwick@cavium.com, Angel Atondo, Senior Marketing Communications Manager, Tel: (408) 943-7417, Email: angel.atondo@cavium.com