Attached files
| file | filename |
|---|---|
| 8-K - 8K-Q12017 EARNINGSRELEASE - CAVIUM, INC. | cavm-8k_20170426.htm |
Exhibit 99.1
Cavium
Announces Financial Results for Q1 2017
SAN JOSE, Calif., April 26, 2017 – Cavium, Inc. (NASDAQ: CAVM), a leading provider of semiconductor products that enable intelligent processing for enterprise, data center, cloud, wired and wireless networking, today announced financial results for the first quarter ended March 31, 2017.
Net revenue in the first quarter of 2017 was $229.6 million, a 1.5% sequential increase from the $226.2 million reported in the fourth quarter of 2016 and 125.3% from the $101.9 million reported in the first quarter of 2016.
Generally Accepted Accounting Principles (GAAP) Results
Net loss for the first quarter of 2017 was $50.5 million, or ($0.75) per diluted share, compared to $121.6 million, or ($1.82) per diluted share in the fourth quarter of 2016. Gross margins were 40.1% in the first quarter of 2017 compared to 43.4% in the fourth quarter of 2016. GAAP operating loss (GAAP loss from operations as a percentage of revenue) was 17.0% in the first quarter of 2017 compared to 12.9% in the fourth quarter of 2016. Total cash and cash equivalents were $132.4 million at March 31, 2017.
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. Cavium believes that these non-GAAP financial measures provide additional insight into Cavium’s ongoing performance and core operational activities and has chosen to provide these measures for more consistent and meaningful comparison between periods. 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 first quarter of 2017, Non-GAAP net income was $41.7 million, or $0.58 per diluted share, Non-GAAP gross margin was 65.7% and Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue) was 22.0%.
Recent News Highlights
|
|
• |
April 3, 2017 - Networking Industry Leaders Joined Forces to Expand New Open Source Community to Drive Development of the DPDK Project |
|
|
• |
April 3, 2017 - Cavium FastLinQ® 25/100GbE Ethernet Adapter Accelerates Telco NFV & Cloud Workloads |
|
|
• |
March 27, 2017 - Cavium FastLinQ® Ethernet First Achieves Microsoft Windows Server SDDC Premium Certification |
|
|
• |
March 20, 2017 - Cavium and Elenion Technologies Collaborated to Offer Silicon Photonics Enabled End-to-End Server-to-Switch Solutions |
|
|
• |
March 8, 2017 - Cavium Collaborated with Microsoft to Showcase SONiC Compatibility at OCP US Summit 2017 |
|
|
• |
March 8, 2017 - Cavium and Microsoft Collaborated to Accelerate Cloud Services with ThunderX2™ |
|
|
• |
February 27, 2017 - Cavium Showcased Extensive Portfolio of Solutions for 5G Infrastructure at Mobile World Congress 2017 |
|
|
• |
February 27, 2017 - Cavium Joined Telecom Infra Project to Enable OpenCellular Access to LTE, LTE-A and NFV/5G Technologies |
|
|
• |
February 27, 2017 - Cavium Announced Expansion of OCTEON Fusion-M® Baseband Products |
|
|
• |
February 27, 2017 - Cavium and Trend Micro Introduced Mobile Edge Computing and NFV Solutions on ThunderX® and OCTEON TX™ Platforms |
|
|
• |
February 27, 2017 - Cavium Partners with China Unicom and Showcased M-CORD NFV/5G at Mobile World Congress 2017 |
|
|
• |
February 13, 2017 - Cavium Demonstrated the Newest Infrastructure Security Solutions at RSA 2017 |
Cavium will broadcast its first quarter of 2017 financial results conference call today, April 26, 2017, 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 offers a broad portfolio of integrated, software compatible processors ranging in performance from 1Gbps to 100Gbp that enable secure, intelligent functionality in Enterprise, Data Center, Broadband, Mobile and Service Provider Equipment, highly programmable switches which scale to 3.2Tbps and Ethernet and Fibre Channel adapters up to 100Gbps. Cavium processors are supported by ecosystem partners that provide operating systems, tools and application support, hardware reference designs and other products. Cavium is headquartered in San Jose, CA with design centers in California, Massachusetts, India, Israel, China and Taiwan. 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 |
|
|||||
|
|
March 31, 2017 |
|
|
December 31, 2016 |
|
||
|
Net revenue |
$ |
229,577 |
|
|
$ |
226,151 |
|
|
Cost of revenue |
|
137,454 |
|
|
|
127,926 |
|
|
Gross profit |
|
92,123 |
|
|
|
98,225 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
90,713 |
|
|
|
87,031 |
|
|
Sales, general and administrative |
|
40,397 |
|
|
|
40,340 |
|
|
Total operating expenses |
|
131,110 |
|
|
|
127,371 |
|
|
Loss from operations |
|
(38,987 |
) |
|
|
(29,146 |
) |
|
Other income (expense), net: |
|
|
|
|
|
|
|
|
Interest expense |
|
(10,124 |
) |
|
|
(8,073 |
) |
|
Other, net |
|
(133 |
) |
|
|
158 |
|
|
Total other expense, net |
|
(10,257 |
) |
|
|
(7,915 |
) |
|
Loss before income taxes |
|
(49,244 |
) |
|
|
(37,061 |
) |
|
Provision for income taxes |
|
1,279 |
|
|
|
84,539 |
|
|
Net loss |
$ |
(50,523 |
) |
|
$ |
(121,600 |
) |
|
Net loss per common share, basic and diluted |
$ |
(0.75 |
) |
|
$ |
(1.82 |
) |
|
Shares used in computing basic and diluted net loss per common share |
|
67,640 |
|
|
|
66,949 |
|
CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data and percentages)
|
|
Three Months Ended |
|
|||||
|
|
March 31, 2017 |
|
|
December 31, 2016 |
|
||
|
Reconciliation of GAAP gross profit and margin to non-GAAP: |
|
|
|
|
|
|
|
|
Net revenue |
$ |
229,577 |
|
|
$ |
226,151 |
|
|
GAAP gross profit |
|
92,123 |
|
|
|
98,225 |
|
|
GAAP gross margin |
|
40.1 |
% |
|
|
43.4 |
% |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation and related payroll taxes |
|
694 |
|
|
|
584 |
|
|
Inventory charges |
|
25,803 |
|
|
|
21,015 |
|
|
Realignment charges |
|
5,104 |
|
|
|
- |
|
|
Amortization of acquisition related assets |
|
27,053 |
|
|
|
27,176 |
|
|
Non-GAAP gross profit |
$ |
150,777 |
|
|
$ |
147,000 |
|
|
Non-GAAP gross margin |
|
65.7 |
% |
|
|
65.0 |
% |
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP operating expenses to non-GAAP: |
|
|
|
|
|
|
|
|
GAAP research and development expenses |
$ |
90,713 |
|
|
$ |
87,031 |
|
|
Stock-based compensation and related payroll taxes |
|
(16,214 |
) |
|
|
(13,665 |
) |
|
Realignment charges |
|
(422 |
) |
|
|
- |
|
|
Amortization of acquisition related assets |
|
(743 |
) |
|
|
(1,507 |
) |
|
Acquisition and integration related costs |
|
(1,346 |
) |
|
|
- |
|
|
IPR&D written-off |
|
- |
|
|
|
(2,000 |
) |
|
Non-GAAP research and development expenses |
|
71,988 |
|
|
|
69,859 |
|
|
|
|
|
|
|
|
|
|
|
GAAP sales, general and administrative expenses |
|
40,397 |
|
|
|
40,340 |
|
|
Stock-based compensation and related payroll taxes |
|
(8,769 |
) |
|
|
(8,434 |
) |
|
Realignment charges |
|
(552 |
) |
|
|
- |
|
|
Amortization of acquisition related assets |
|
(1,246 |
) |
|
|
(1,422 |
) |
|
Acquisition and integration related costs |
|
(1,618 |
) |
|
|
(2,282 |
) |
|
Non-GAAP sales, general and administrative expenses |
|
28,212 |
|
|
|
28,202 |
|
|
Total Non-GAAP operating expenses |
$ |
100,200 |
|
|
$ |
98,061 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP non-operating expenses to non-GAAP: |
|
|
|
|
|
|
|
|
GAAP other expense, net |
$ |
(10,257 |
) |
|
$ |
(7,915 |
) |
|
Acquisition related debt refinancing costs |
|
2,680 |
|
|
|
- |
|
|
Financing costs associated with interim term loan facility |
|
- |
|
|
|
164 |
|
|
Non-GAAP other expense, net |
$ |
(7,577 |
) |
|
$ |
(7,751 |
) |
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Income tax to non-GAAP: |
|
|
|
|
|
|
|
|
GAAP provision for income tax |
$ |
1,279 |
|
|
$ |
84,539 |
|
|
Acquisition related tax adjustments |
|
- |
|
|
|
(83,174 |
) |
|
Non-GAAP provision for income tax |
$ |
1,279 |
|
|
$ |
1,365 |
|
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data and percentages)
|
|
Three Months Ended |
|
|||||
|
|
March 31, 2017 |
|
|
December 31, 2016 |
|
||
|
Reconciliation of GAAP loss from operations to non-GAAP income from operations: |
|
|
|
|
|
|
|
|
GAAP loss from operations |
$ |
(38,987 |
) |
|
$ |
(29,146 |
) |
|
Stock-based compensation and related payroll taxes |
|
25,677 |
|
|
|
22,683 |
|
|
Inventory charges |
|
25,803 |
|
|
|
21,015 |
|
|
Realignment charges |
|
6,078 |
|
|
|
- |
|
|
Amortization of acquisition related assets |
|
29,042 |
|
|
|
30,105 |
|
|
Acquisition and integration related costs |
|
2,964 |
|
|
|
2,282 |
|
|
IPR&D written-off |
|
- |
|
|
|
2,000 |
|
|
Non-GAAP income from operations |
$ |
50,577 |
|
|
$ |
48,939 |
|
|
Non-GAAP income from operations as a percentage of revenue |
|
22.0 |
% |
|
|
21.6 |
% |
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP net loss to non-GAAP net income: |
|
|
|
|
|
|
|
|
GAAP net loss |
$ |
(50,523 |
) |
|
$ |
(121,600 |
) |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
Stock-based compensation and related payroll taxes |
|
25,677 |
|
|
|
22,683 |
|
|
Inventory charges |
|
25,803 |
|
|
|
21,015 |
|
|
Realignment charges |
|
6,078 |
|
|
|
- |
|
|
Amortization of acquisition related assets |
|
29,042 |
|
|
|
30,105 |
|
|
Acquisition and integration related costs |
|
2,964 |
|
|
|
2,282 |
|
|
IPR&D written-off |
|
- |
|
|
|
2,000 |
|
|
Acquisition related debt refinancing costs |
|
2,680 |
|
|
|
- |
|
|
Financing costs associated with interim term loan facility |
|
- |
|
|
|
164 |
|
|
Acquisition related tax adjustments |
|
- |
|
|
|
83,174 |
|
|
Total of non-GAAP adjustments |
|
92,244 |
|
|
|
161,423 |
|
|
Non-GAAP net income |
$ |
41,721 |
|
|
$ |
39,823 |
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per share, diluted |
$ |
(0.75 |
) |
|
$ |
(1.82 |
) |
|
Non-GAAP adjustments detailed above |
|
1.33 |
|
|
|
2.38 |
|
|
Non-GAAP net income per share, diluted |
$ |
0.58 |
|
|
$ |
0.56 |
|
|
|
|
|
|
|
|
|
|
|
GAAP weighted average shares, diluted |
|
67,640 |
|
|
|
66,949 |
|
|
Non-GAAP share adjustment |
|
4,688 |
|
|
|
4,365 |
|
|
Non-GAAP weighted average shares, diluted |
|
72,328 |
|
|
|
71,314 |
|
CAVIUM, INC.
Unaudited GAAP Condensed Consolidated Balance Sheets
(in thousands)
|
|
As of |
|
|||||
|
|
March 31, 2017 |
|
|
December 31, 2016 |
|
||
|
Assets |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
132,409 |
|
|
$ |
221,439 |
|
|
Accounts receivable, net |
|
136,510 |
|
|
|
125,728 |
|
|
Inventories |
|
100,467 |
|
|
|
119,692 |
|
|
Prepaid expenses and other current assets |
|
22,461 |
|
|
|
22,259 |
|
|
Total current assets |
|
391,847 |
|
|
|
489,118 |
|
|
Property and equipment, net |
|
152,690 |
|
|
|
150,862 |
|
|
Intangible assets, net |
|
740,004 |
|
|
|
764,885 |
|
|
Goodwill |
|
241,067 |
|
|
|
241,067 |
|
|
Other assets |
|
5,559 |
|
|
|
4,599 |
|
|
Total assets |
$ |
1,531,167 |
|
|
$ |
1,650,531 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
$ |
68,772 |
|
|
$ |
65,456 |
|
|
Accrued expenses and other current liabilities |
|
54,704 |
|
|
|
64,967 |
|
|
Deferred revenue |
|
8,213 |
|
|
|
8,412 |
|
|
Current portion of long-term debt |
|
3,249 |
|
|
|
3,865 |
|
|
Capital lease and technology license obligations |
|
21,402 |
|
|
|
25,535 |
|
|
Total current liabilities |
|
156,340 |
|
|
|
168,235 |
|
|
Long-term debt |
|
593,880 |
|
|
|
675,414 |
|
|
Capital lease and technology license obligations, net of current |
|
24,929 |
|
|
|
27,878 |
|
|
Deferred tax liability |
|
19,314 |
|
|
|
18,774 |
|
|
Other non-current liabilities |
|
17,735 |
|
|
|
18,386 |
|
|
Total liabilities |
|
812,198 |
|
|
|
908,687 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
Common stock |
|
68 |
|
|
|
67 |
|
|
Additional paid-in capital |
|
1,106,649 |
|
|
|
1,079,043 |
|
|
Accumulated deficit |
|
(388,016 |
) |
|
|
(336,621 |
) |
|
Accumulated other comprehensive income (loss) |
|
268 |
|
|
|
(645 |
) |
|
Total stockholders' equity |
|
718,969 |
|
|
|
741,844 |
|
|
Total liabilities and stockholders' equity |
$ |
1,531,167 |
|
|
$ |
1,650,531 |
|
Cavium Contact:
|
Art Chadwick |
|
Angel Atondo |
|
Vice President of Finance and Administration and Chief Financial Officer |
|
Senior Marketing Communications Manager |
|
Tel: (408) 943-7104 |
|
Tel: (408) 943-7417 |
|
Email: art.chadwick@cavium.com |
|
Email: angel.atondo@cavium.com |