Cavium Announces Financial Results for Q4 2014
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Cavium Announces Financial Results for Q4 2014

SAN JOSE, Calif., Jan. 28, 2015 — (PRNewswire) —  Cavium, Inc. (NASDAQ: CAVM), a leading provider of semiconductor products that enable intelligent processing for enterprise, data center, wired and wireless networking, today announced financial results for the fourth quarter ended December 31, 2014.

Cavium, Inc. Logo.

Revenue in the fourth quarter of 2014 was $101.2 million, a 3.5% sequential increase from the $97.8 million reported in the third quarter of 2014 and a 24.8% year-over-year increase from the $81.1 million reported in the fourth quarter of 2013.

Generally Accepted Accounting Principles (GAAP) Results

Net loss attributable to the Company in the fourth quarter of 2014 was $12.0 million, or $(0.22) per diluted share, compared to net income attributable to the Company of $5.4 million, or $0.10 per diluted share in the third quarter of 2014. Gross margins were 62.1% in the fourth quarter of 2014 compared to 63.5% in the third quarter of 2014. Total cash and cash equivalents were $131.7 million at December 31, 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 fourth quarter of 2014, Non-GAAP net income was $24.5 million, or $0.42 per diluted share. Non-GAAP gross margin was 65.5% and Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue) was 24.2%.

Recent News Highlights

Cavium, Inc. will broadcast its fourth quarter of 2014 financial results conference call today, January 28, 2015, 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 in enterprise, data center, cloud and wired and wireless service provider applications. Cavium offers a broad portfolio of integrated, software-compatible processors ranging in performance from 100 Mbps to 100 Gbps that enable secure, intelligent functionality in enterprise, data-center, broadband/consumer and access and service provider equipment. Cavium's 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, 2014



September 30, 2014


Net revenue

$

101,223



$

97,833


Cost of revenue


38,402




35,710


Gross profit


62,821




62,123


Operating expenses:








     Research and development


55,108




40,459


     Sales, general and administrative


19,314




18,141


        Total operating expenses


74,422




58,600


Income (loss) from operations


(11,601)




3,523


Other expense, net:








    Interest expense


(293)




(387)


    Change in estimated fair value of variable interest entity's (VIE) notes payable and other


-




(103)


    Other, net


(313)




(116)


Total other expense, net


(606)




(606)


     Income (loss) before income taxes


(12,207)




2,917


     Provision for income taxes


268




811


Net income (loss)


(12,475)




2,106


Net loss attributable to non-controlling interest


(444)




(3,327)


Net income (loss) attributable to the Company

$

(12,031)



$

5,433


Net income (loss) attributable to the Company per common share, basic

$

(0.22)



$

0.10


Shares used in computing basic net income (loss) per common share


54,249




53,786


Net income (loss) attributable to the Company per common share, diluted

$

(0.22)



$

0.10


Shares used in computing diluted net income (loss) per common share


54,249




55,540


 

 

CAVIUM, INC.


Unaudited Reconciliation of Non-GAAP Adjustments


(in thousands)











Three Months Ended



December 31, 2014



September 30, 2014


Reconciliation of GAAP research and development expenses to non-GAAP:








GAAP research and development expenses

$

55,108



$

40,459


Stock-based compensation and related payroll taxes


(16,128)




(5,932)


Net restructuring related expenses


(617)




(307)


Research and development expenses associated with a VIE


(8,769)




(5,870)


Non-GAAP research and development expenses

$

29,594



$

28,350










Reconciliation of GAAP sales, general and administrative expenses to non-GAAP:








GAAP sales, general and administrative expenses

$

19,314



$

18,141


Stock-based compensation and related payroll taxes


(5,969)




(5,071)


Amortization of acquired intangible assets


(33)




(35)


Net restructuring related expenses


(27)




(188)


Sales, general and administrative expenses associated with a VIE


(1,017)




(1,169)


Non-GAAP sales, general and administrative expenses

$

12,268



$

11,678


Total Non-GAAP operating expenses

$

41,862



$

40,028










Reconciliation of GAAP non-operating expenses to non-GAAP non-operating income:








GAAP non-operating expenses

$

(606)



$

(606)


Change in estimated fair value of VIE's notes payable and other


-




103


Non-operating expenses associated with a VIE


905




509


Total Non-GAAP non-operating income

$

299



$

6


 

 

CAVIUM, INC.


Unaudited Reconciliation of Non-GAAP Adjustments


(in thousands, except per share data and percentages)











Three Months Ended



December 31, 2014



September 30, 2014


Reconciliation of GAAP gross profit & margin to non-GAAP:








Net revenue

$

101,223



$

97,833


GAAP gross profit


62,821




62,123


GAAP gross margin


62.1

%



63.5

%









Stock-based compensation and related payroll taxes


237




254


Amortization of acquired intangible assets


1,252




1,267


Net restructuring related expenses


2,002




158


Non-GAAP gross profit

$

66,312



$

63,802


Non-GAAP gross margin


65.5

%



65.2

%









Reconciliation of GAAP income (loss) from operations to non-GAAP income from operations:








GAAP income (loss) from operations

$

(11,601)



$

3,523


Stock-based compensation and related payroll taxes


22,334




11,257


Amortization of acquired intangible assets


1,285




1,302


Net restructuring related expenses


2,646




653


Loss from operations of a variable interest entity


9,786




7,039


Non-GAAP income from operations

$

24,450



$

23,774


Non-GAAP income from operations as a percentage of revenue


24.2

%



24.3

%









Reconciliation of GAAP net income (loss) to non-GAAP net income:








GAAP net income (loss) attributable to the Company

$

(12,031)



$

5,433


Non-GAAP adjustments:








Stock-based compensation and related payroll taxes


22,334




11,257


Amortization of acquired intangible assets


1,285




1,302


Net restructuring related expenses


2,646




653


Net loss of a variable interest entity (excluding stock based compensation and related taxes) attributable to the Company


10,247




4,324


Total of non-GAAP adjustments


36,512




17,536


Non-GAAP net income

$

24,481



$

22,969










GAAP net income (loss) attributable to the Company per share, diluted

$

(0.22)



$

0.10


Non-GAAP adjustments detailed above


0.64




0.30


Non-GAAP net income attributable to the Company per share, diluted

$

0.42



$

0.40










GAAP weighted average shares, diluted


54,249




55,540


Non-GAAP share adjustment


4,089




2,236


Non-GAAP weighted average shares, diluted


58,338




57,776


 

 

CAVIUM, INC.


Unaudited GAAP Condensed Consolidated Balance Sheets


(in thousands)











As of

December 31, 2014



As of

September 30, 2014


Assets








Current assets








Cash and cash equivalents

$

131,718



$

156,330


Accounts receivable, net


48,199




45,278


Inventories


51,922




54,083


Prepaid expenses and other current assets


9,130




7,240


Total current assets


240,969




262,931


Property and equipment, net


56,963




33,298


Intangible assets, net


37,644




39,082


Goodwill


71,478




71,478


Other assets


1,806




1,863


Total assets

$

408,860



$

408,652










Liabilities and Equity








Current liabilities








Accounts payable

$

26,447



$

23,039


Other accrued expenses and other current liabilities


8,326




9,640


Deferred revenue


6,285




7,786


Notes payable and other


-




29,800


Capital lease and technology license obligations


23,002




17,066


Total current liabilities


64,060




87,331


Capital lease and technology license obligations, net of current


22,894




10,198


Deferred tax liability


2,292




2,675


Other non-current liabilities


2,931




2,532


Total liabilities


92,177




102,736










Equity








Common stock


54




54


Additional paid-in capital


488,981




488,012


Accumulated deficit


(172,352)




(160,321)


Total stockholders' equity attributable to the Company


316,683




327,745


Non-controlling interest


-




(21,829)


Total equity


316,683




305,916


Total liabilities and equity

$

408,860



$

408,652


 

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SOURCE Cavium, Inc.

Contact:
Cavium, Inc.
Art Chadwick, Vice President of Finance and Administration and Chief Financial Officer, Tel: (408) 943-7104, Email: Email Contact
Angel Atondo, Senior Marketing Communications Manager, Tel: (408) 943-7417, Email: Email Contact
Web: http://www.cavium.com