SOURCE: Cavium, Inc.

Cavium, Inc.

February 02, 2012 16:01 ET

Cavium Announces Financial Results for Q4 2011

SAN JOSE, CA--(Marketwire - Feb 2, 2012) - 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 of 2011 ended December 31, 2011.

Revenue in the fourth quarter of 2011 was $56.3 million, a 16.9% sequential decrease from the $67.7 million reported for the third quarter of 2011.

Generally Accepted Accounting Principles (GAAP) Results

Net loss for the fourth quarter of 2011, on a GAAP basis, was $9.4 million, or $(0.19) per diluted share, compared to net income of $6.0 million, or $0.12 per diluted share in the third quarter of 2011. Gross margins were 58.1% in the fourth quarter of 2011 compared to 59.9% in the third quarter of 2011. Total cash and cash equivalents were $63.2 million at December 31, 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 the fourth quarter of 2011 exclude expenses totaling $18.2 million related to stock-based compensation and related payroll expense, amortization of acquired intangible assets, acquisition related expenses and write-down of intangible assets. 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 2011 was $8.7 million or $0.17 per diluted share, compared with non-GAAP income of $14.4 million, or $0.27 per diluted share in the third quarter of 2011. Gross margins, on a non-GAAP basis, were 63.5% and operating margins (non-GAAP income from operations as a percentage of revenue), on a non-GAAP basis, were 10.5% in the fourth quarter of 2011.

Recent News Highlights

  • January 23, 2012 - Cavium's OCTEON® II Wins The Linley Group "Best Embedded Processor" Award
  • January 18, 2012 - Enea Announces Bare Metal Performance Tools for Cavium OCTEON® Family of Multicore Processors
  • January 11, 2012 - Kontron 10-core "out-of-the-box" DPI AdvancedMC™ module designed for high bandwidth LTE network security applications
  • January 10, 2012 - Cavium to Showcase Industry-Leading Wireless Display and Broadband Gateway Solutions at the 2012 International Consumer Electronic Show
  • January 10, 2012 - Cavium's PureVu™ Media Processors Power Acer's New Line of Wireless Monitors
  • January 10, 2012 - Cavium Collaborates with Qualcomm Atheros on New Small Form-Factor, Portable Wireless Display TV Adapter
  • January 10, 2012 - Cavium's ARM-based ECONA SoC Powers D-Link's Routers
  • January 04, 2012 - Cavium to Collaborate with Intel on Providing Best-in-Class Wireless Display Consumer Experience
  • November 29, 2011 - Cavium's OCTEON® II Achieves World's Highest CoreMark Benchmark Score for an Integrated Communications Processor

Cavium, Inc. will broadcast its fourth quarter 2011 financial results conference call today, February 2, 2012, 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's principal office is in San Jose, CA with design team locations in California, Massachusetts, India 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
December 31, 2011 September 30, 2011
Net revenue $ 56,291 $ 67,729
Cost of revenue 23,586 27,172
Gross profit 32,705 40,557
Operating expenses:
Research and development 24,244 23,571
Sales, general and administrative 20,715 11,599
Total operating expenses 44,959 35,170
Income (loss) from operations (12,254 ) 5,387
Other income (expense), net:
Interest expense (38 ) (55 )
Other, net (137 ) (53 )
Total other expense, net (175 ) (108 )
Income (loss) before income taxes (12,429 ) 5,279
Benefit from income taxes (3,017 ) (752 )
Net income (loss) $ (9,412 ) $ 6,031
Net income (loss) per common share, basic $ (0.19 ) $ 0.12
Shares used in computing basic net income (loss) per common share 49,005 48,739
Net income (loss) per common share, diluted $ (0.19 ) $ 0.12
Shares used in computing diluted net income (loss) per common share 49,005 50,751
CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Three Months Ended
December 31, 2011 September 30, 2011
Reconciliation of GAAP research and development expenses to non-GAAP:
GAAP research and development expenses $ 24,244 $ 23,571
Stock-based compensation and related payroll taxes (3,842 ) (3,787 )
Acquisition-related expenses (744 ) (631 )
Acquisition-related compensation expenses (1,398 ) -
Non-GAAP research and development expenses $ 18,260 $ 19,153
Reconciliation of GAAP sales, general and administrative expenses to non-GAAP
GAAP sales, general and administrative expenses $ 20,715 $ 11,599
Stock-based compensation and related payroll taxes (4,562 ) (4,084 )
Amortization of acquired intangibles (347 ) (347 )
Acquisition-related expenses/adjustments (686 ) (114 )
Acquisition-related compensation expenses (66 ) (500 )
Write-down of intangible assets (3,480 ) -
Change in earn-out liability - 4,564
Non-GAAP sales, general and administrative expenses $ 11,574 $ 11,118
CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(In thousands, except per share data and percentages)
Three Months Ended
December 31, 2011 September 30, 2011
Reconciliation of GAAP gross profit & margin to non-GAAP:
Net revenue $ 56,291 $ 67,729
GAAP gross profit 32,705 40,557
GAAP gross margin 58.1 % 59.9 %
Acquisition-related expenses:
Cost of revenue 240 619
Amortization of acquired intangibles:
Cost of revenue 2,291 2,309
Stock-based compensation and related payroll taxes:
Cost of revenue 502 511
Non-GAAP gross profit $ 35,738 $ 43,996
Non-GAAP gross margin 63.5 % 65.0 %
Three Months Ended
December 31, 2011 September 30, 2011
Reconciliation of GAAP income from operations to non-GAAP:
GAAP income (loss) from operations $ (12,254 ) $ 5,387
Amortization of acquired intangibles 2,638 2,656
Stock-based compensation and related payroll taxes 8,906 8,382
Acquisition-related expenses/adjustments 1,670 1,364
Acquisition-related compensation expenses 1,464 500
Write-down of intangible assets 3,480 -
Change in earn-out liability - (4,564 )
Non-GAAP income from operations $ 5,904 $ 13,725
Non-GAAP income from operations as a percentage of revenue 10.5 % 20.3 %
Three Months Ended
December 31, 2011 September 30, 2011
Reconciliation of GAAP net income to non-GAAP:
GAAP net income (loss) $ (9,412 ) $ 6,031
Non-GAAP adjustments:
Stock-based compensation and related payroll taxes:
Cost of revenue 502 511
Research and development 3,842 3,787
Sales, general and administrative 4,562 4,084
Amortization of acquired intangibles:
Cost of revenue 2,291 2,309
Sales, general and administrative 347 347
Acquisition-related expenses 1,670 1,364
Acquisition-related compensation expenses 1,464 500
Write-down of intangible assets 3,480 -
Change in earn-out liability - (4,564 )
Total of non-GAAP adjustments 18,158 8,338
Non-GAAP net income $ 8,746 $ 14,369
GAAP net income (loss) per share, diluted $ (0.19 ) $ 0.12
Non-GAAP adjustments detailed above 0.36 0.15
Non-GAAP net income per share, diluted $ 0.17 $ 0.27
GAAP weighted average shares, diluted 49,005 50,751
Non-GAAP share adjustment 3,622 1,951
Non-GAAP weighted average shares, diluted 52,627 52,702
CAVIUM, INC.
Unaudited GAAP Condensed Consolidated Balance Sheets
(in thousands)
As of As of
December 31, 2011 September 30, 2011
Assets
Current assets:
Cash and cash equivalents $ 63,225 $ 74,582
Accounts receivable, net 37,839 47,496
Inventories 41,719 33,353
Prepaid expenses and other current assets 3,177 3,205
Deferred income taxes 5,604 9,025
Total current assets 151,564 167,661
Property and equipment, net 17,027 17,997
Intangible assets, net 54,215 58,496
Goodwill 101,402 101,402
Deferred income taxes 34,490 27,243
Other non-current assets 1,559 1,537
Total assets $ 360,257 $ 374,336
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 13,528 $ 24,738
Accrued expenses and other current liabilities 9,022 9,719
Deferred revenue 11,202 14,322
Capital lease and technology license obligations, current 6,385 6,396
Total current liabilities 40,137 55,175
Capital lease and technology license obligations, net of current 719 917
Deferred tax liability 5,946 5,917
Other non-current liabilities 2,762 1,778
Total liabilities 49,564 63,787
Stockholders' equity
Common stock 49 49
Additional paid-in capital 352,104 342,548
Accumulated deficit (41,460 ) (32,048 )
Total stockholders' equity 310,693 310,549
Total liabilities and stockholders' equity $ 360,257 $ 374,336

Contact Information

  • 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
    Senior Marketing Communications Manager
    Tel: (408) 943-7417
    Email: angel.atondo@cavium.com