Cavium Inc (ticker: CAVM, exchange: NASDAQ Global Market (.O))
News Release -
31-Oct-2011
Cavium Announces Financial Results for Q3 2011SAN JOSE, CA, Oct 31, 2011 (MARKETWIRE via COMTEX) -- 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 of 2011 ended September 30,
2011.
Revenue in the third quarter of 2011 was $67.7 million, a 5.4%
sequential decrease from the $71.6 million reported for the second
quarter of 2011 and an increase of 22.7% from the $55.2 million
reported for the third quarter of last year.
Generally Accepted Accounting Principles (GAAP) Results
Net income for the third quarter of 2011, on a GAAP basis, was $6.0
million, or $0.12 per diluted share, compared to net income of $1.9
million, or $0.04 per diluted share in the second quarter of 2011,
and a net income of $5.0 million, or $0.10 per diluted share in the
third quarter of last year. Gross margins were 59.9% in the third
quarter of 2011 compared to 59.9% in the second quarter of 2011 and
62.3% in the third quarter of last year. Total cash and cash
equivalents were $74.6 million at September 30, 2011.
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 the
company's financial condition and results of operations. These
measures should only be used to evaluate the Company's results of
operations in conjunction with the corresponding GAAP measures.
Non-GAAP financial measures in third quarter of 2011 exclude expenses
totaling $8.3 million related to stock-based compensation and related
payroll expense, amortization of acquired intangible assets,
acquisition related expenses and change in earn-out liability. 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 2011 was $14.4 million,
or $0.27 per diluted share, compared with non-GAAP net income of
$18.4 million, or $0.34 per diluted share in the second quarter of
2011. Gross margins, on a non-GAAP basis, was 65.0% and operating
margins (non-GAAP income from operations as a percentage of revenue),
on a non-GAAP basis, was 20.3% in the third quarter of 2011.
"Though revenues this quarter were in line with the updated financial
outlook we provided in September, they were weaker than originally
expected, in the enterprise market as well as recognized software
services revenue. Sales into the enterprise market were affected by a
larger than expected impact of a hub transition at one of our major
customers as well as lower demand from other enterprise customers as
they adjust their supply chain inventory due to the softer demand
environment," said Syed Ali, President and CEO of Cavium. "However,
we continued to experience high levels of design win activity across
multiple product families and are confident that we are well
positioned for the future."
Recent News Highlights
-- October 31, 2011 -- Cavium Announces Shipment of 64-core NITROX(R)
III - World's Highest Performance Security and Compression Processors
for Cloud Computing and Enterprise
-- October 31, 2011 -- Radisys Announces Ultra-high Capacity Network
Search Solution for Deep Packet Inspection In Next Generation Wireless
Infrastructure
-- October 25, 2011 -- Cavium Partners with Aricent to Provide
Comprehensive 4G Mobile Evolved Packet Core and Radio Access Solutions
for OCTEON(R) II and OCTEON Fusion Processor Families
-- October 24, 2011 -- Cavium and Partners Showcase End-to-End,
Market-Leading Carrier Class Solutions for Next Generation Wireless
infrastructure at 4G World 2011
-- October 10, 2011 -- 6WIND Announces Availability of Packet Processing
Software Optimized for Cavium's Market-Leading OCTEON(R) II CN68XX
Processor Family
-- October 3, 2011 -- Cavium Unveils OCTEON Fusion(TM): Industry's Most
Powerful "Base Station-on-a-Chip" Family
-- September 27, 2011 -- Cavium Ships New Multi-Format High Definition
Set Top Box SoC for OTT, IPTV and Pay Cable Markets
-- September 27, 2011 -- Cavium to Showcase Innovations for Set Top Box,
Broadband Gateway, and Wireless Display Applications at Broadband
World Forum 2011
-- September 6, 2011 -- Sensory Networks Releases DPI Software Optimized
for Cavium OCTEON(R) II Processors
-- August 2, 2011 -- Cavium Announces Shipment of Industry-Leading
10-core OCTEON(R) II Processors into Mobile Basestation, Enterprise
Router, Storage and 10G Adapter Applications
-- August 2, 2011 -- Cavium Disrupts TCAM Market with Ultra Low Power
NEURON Search(TM) Processor Family
Cavium, Inc. will broadcast its third quarter 2011 financial results
conference call today, October 31, 2011, 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 40 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 recently moved its principal
office in San Jose, CA with design team locations in California,
Massachusetts, India and Taiwan. For more information, please visit:
http://www.cavium.com.
Note on Forward-Looking Statements
This press release may contain forward-looking statements regarding
future events that involve risks and uncertainties. Readers are
cautioned that these forward-looking statements are only predictions
and may differ materially from actual future events or results. These
forward-looking statements involve risks and uncertainties, as well
as assumptions and current expectations. Our actual results and the
timing of events could differ materially from those anticipated in
such forward-looking statements as a result of these risks,
uncertainties and assumptions. The risks and uncertainties that could
cause our results to differ materially from those expressed or
implied by such forward-looking statements include but are not
limited to the rate of new design wins, the rate at which existing
design wins go into production, the timing of purchases by Cavium's
customers, acceptance by customers of Cavium's new product
introductions, whether or not the company can continue to expand
gross margins and operating margins, pricing pressures, general
economic conditions, manufacturing difficulties, and other risks and
uncertainties described more fully in our documents filed with or
furnished to the Securities and Exchange Commission. More information
about these and other risks that may impact Cavium's business are set
forth in the "Risk Factors" section of our Form 10Q filed with the
Securities and Exchange Commission on August 5, 2011. All
forward-looking statements in this press release are based on
information available to us as of the date hereof and qualified in
their entirety by this cautionary statement, and we assume no
obligation to revise or update these forward-looking statements.
CAVIUM, INC.
Unaudited GAAP Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended
------------------------------
September 30,
2011 June 30, 2011
-------------- --------------
Net revenue $ 67,729 $ 71,615
Cost of revenue 27,172 28,698
-------------- --------------
Gross profit 40,557 42,917
-------------- --------------
Operating expenses:
Research and development 23,571 23,660
Sales, general and administrative 11,599 17,554
-------------- --------------
Total operating expenses 35,170 41,214
-------------- --------------
Income from operations 5,387 1,703
-------------- --------------
Other income (expense), net:
Interest expense (55) (63)
Other, net (53) 49
-------------- --------------
Total other expense, net (108) (14)
-------------- --------------
Income before income taxes 5,279 1,689
Benefit from income taxes (752) (233)
-------------- --------------
Net income $ 6,031 $ 1,922
============== ==============
Net income per common share, basic $ 0.12 $ 0.04
Shares used in computing basic net income
per common share 48,739 48,381
Net income per common share, diluted $ 0.12 $ 0.04
Shares used in computing diluted net income
per common share 50,751 51,104
CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Reconciliation of GAAP research and
development expenses to non-GAAP:
GAAP research and development expenses $ 23,571 $ 23,660
Stock-based compensation and related
payroll taxes (3,787) (3,992)
Acquisition-related expenses (631) (586)
Acquisition-related compensation
expenses - (1,324)
-------------- --------------
Non-GAAP research and development expenses $ 19,153 $ 17,758
============== ==============
Reconciliation of GAAP sales, general and
administrative expenses to non-GAAP
GAAP sales, general and administrative
expenses $ 11,599 $ 17,554
Stock-based compensation and related
payroll taxes (4,084) (4,425)
Amortization of acquired intangibles (347) (347)
Acquisition-related expenses (114) (632)
Acquisition-related compensation
expenses (500) (1,087)
Change in earn-out liability 4,564 -
-------------- --------------
Non-GAAP sales, general and administrative
expenses $ 11,118 $ 11,063
============== ==============
CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(In thousands, except per share data and percentages)
Three Months Ended
------------------------------
Reconciliation of GAAP gross profit & margin September 30,
to non-GAAP: 2011 June 30, 2011
-------------- --------------
Net revenue $ 67,729 $ 71,615
GAAP gross profit 40,557 42,917
GAAP gross margin 59.9% 59.9%
Acquisition-related expenses:
Cost of revenue 619 1,268
Amortization of acquired intangibles:
Cost of revenue 2,309 2,309
Stock-based compensation and related
payroll taxes:
Cost of revenue 511 480
-------------- --------------
Non-GAAP gross profit $ 43,996 $ 46,974
============== ==============
Non-GAAP gross margin 65.0% 65.6%
============== ==============
Three Months Ended
------------------------------
Reconciliation of GAAP income from September 30,
operations to non-GAAP: 2011 June 30, 2011
-------------- --------------
GAAP income from operations $ 5,387 $ 1,703
Amortization of acquired intangibles 2,656 2,656
Stock-based compensation and related
payroll taxes 8,382 8,897
Acquisition-related expenses 1,364 2,486
Acquisition-related compensation expenses 500 2,411
Change in earn-out liability (4,564) -
-------------- --------------
Non-GAAP income from operations $ 13,725 $ 18,153
============== ==============
Non-GAAP income from operations as a
percentage of revenue 20.3% 25.3%
============== ==============
Three Months Ended
------------------------------
Reconciliation of GAAP net income to non- September 30,
GAAP: 2011 June 30, 2011
-------------- --------------
GAAP net income $ 6,031 $ 1,922
Non-GAAP adjustments:
Stock-based compensation and related
payroll taxes:
Cost of revenue 511 480
Research and development 3,787 3,992
Sales, general and administrative 4,084 4,425
Amortization of acquired intangibles:
Cost of revenue 2,309 2,309
Sales, general and administrative 347 347
Acquisition-related expenses 1,364 2,486
Acquisition-related compensation expenses 500 2,411
Change in earn-out liability (4,564) -
-------------- --------------
Total of non-GAAP adjustments 8,338 16,450
-------------- --------------
Non-GAAP net income $ 14,369 $ 18,372
============== ==============
GAAP net income per share, diluted $ 0.12 $ 0.04
============== ==============
Non-GAAP adjustments detailed above 0.15 0.30
Non-GAAP net income per share, diluted $ 0.27 $ 0.34
============== ==============
GAAP weighted average shares, diluted 50,751 51,104
Non-GAAP share adjustment 1,951 2,710
-------------- --------------
Non-GAAP weighted average shares, diluted 52,702 53,814
CAVIUM, INC.
Unaudited GAAP Condensed Consolidated Balance Sheets
(in thousands)
As of As of
-------------- --------------
September 30,
2011 June 30, 2011
-------------- --------------
Assets
Current assets:
Cash and cash equivalents $ 74,582 $ 69,233
Accounts receivable, net 47,496 46,188
Inventories 33,353 28,245
Prepaid expenses and other current assets 3,205 3,762
Deferred income taxes 9,025 9,039
-------------- --------------
Total current assets 167,661 156,467
Property and equipment, net 17,997 15,091
Intangible assets, net 58,496 58,148
Goodwill 101,402 101,402
Deferred income taxes 27,243 27,173
Other non-current assets 1,537 1,566
-------------- --------------
Total assets $ 374,336 $ 359,847
============== ==============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 24,738 $ 16,693
Accrued expenses and other current
liabilities 9,719 14,023
Deferred revenue 14,322 14,927
Capital lease and technology license
obligations, current 6,396 9,328
-------------- --------------
Total current liabilities 55,175 54,971
Capital lease and technology license
obligations, net of current 917 796
Deferred tax liability 5,917 5,917
Other non-current liabilities 1,778 2,596
-------------- --------------
Total liabilities 63,787 64,280
-------------- --------------
Stockholders' equity
Common stock 49 49
Additional paid-in capital 342,548 333,597
Accumulated deficit (32,048) (38,079)
-------------- --------------
Total stockholders' equity 310,549 295,567
-------------- --------------
Total liabilities and stockholders'
equity $ 374,336 $ 359,847
============== ==============
Cavium Contact:
Art Chadwick
Vice President of Finance and Administration
and Chief Financial Officer
Tel: (408) 943-7104
Email: art.chadwick@cavium.com
Angel Atondo
Sr. Marketing Communications Manager
Tel: (408) 943-7417
Email: angel.atondo@cavium.com
SOURCE: Cavium, Inc.
mailto:art.chadwick@cavium.com
mailto:angel.atondo@cavium.com
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Cavium Inc
