Exhibit 99.1
Cavium
Announces Financial Results for Q2 2015
SAN JOSE, Calif., July 29, 2015 – Cavium, Inc. (NASDAQ: CAVM), a leading provider of semiconductor products that enable secure and intelligent processing for enterprise, data center, wired and wireless networking, today announced financial results for the second quarter ended June 30, 2015.
Net revenue in the second quarter of 2015 was $105.0 million, a 3.1% sequential increase from the $101.8 million reported in the first quarter of 2015 and a 15.8% year-over-year increase from the $90.7 million reported in the second quarter of 2014.
Generally Accepted Accounting Principles (GAAP) Results
Net loss in the second quarter of 2015 was $6.4 million, or $(0.11) per diluted share, compared to $13.9 million, or $(0.25) per diluted share in the first quarter of 2015. Gross margins were 64.1% in the second quarter of 2015 compared to 64.8% in the first quarter of 2015. Total cash and cash equivalents were $122.0 million at June 30, 2015.
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 2015, Non-GAAP net income was $24.2 million, or $0.41 per diluted share. Non-GAAP gross margin was 66.8% and Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue) was 23.0%.
Recent News Highlights
· | July 22, 2015 - Cavium Unveiled the 100 Gbps NITROX® V Security Processor Family |
· | July 13, 2015 - Cavium and Leading Partners Showcased Advanced ThunderX™ ARM-based Server Platforms and Software for High Performance Computing at ISC 2015 |
· | July 13, 2015 - Cavium Announced Beta Support for PathScale EKOPath Compiler and Optimized Math Libraries on ThunderX™ Processor Family |
· | July 13, 2015 - Cavium Unveiled Flash Support for the Cavium ThunderX™ Processor Family |
· | July 13, 2015 - Cavium Added Support for Mellanox InfiniBand Adapters for ThunderX™ Processor Family |
· | July 13, 2015 - Mont-Blanc HPC software stack tested on E4's HPC platform based on ARM64 Cavium ThunderX processor |
· | June 16, 2015 - Cavium Crowned Winner of SDN Idol 2015 at Open Networking Summit 2015 |
· | June 16, 2015 - Cavium Unleashed the Power of SDN through OpenFlow at ONS 2015 |
· | June 10, 2015 Cavium Announced New Low Power 16-core OCTEON® III SoC Processors for Next Generation Enterprise, Data Center and Service Provider Infrastructure |
· | June 10, 2015 - 64-bit MIPS architecture provides low-power, high-throughput processing for Cavium's new OCTEON® III processors |
· | June 10, 2015 - Green Hills Software Announced INTEGRITY® RTOS Multicore Support for OCTEON® III Family of SoC from Cavium |
· | June 6, 2015 - Qulsar's Processors Managed Timing Engine Enhances Timing Synchronization in Cavium Small Cell Basestation Designs |
· | June 1, 2015 - Cavium and Leading Partners Showcased Best-in-Class Product Solutions across Cloud, Data Center and Enterprise at Computex 2015 |
· | June 1, 2015 - Cavium Announced Collaboration with Pegatron on Server Platforms based on Cavium's ThunderX™ Workload Optimized Processor Family |
· | June 1, 2015 - Leading Network Solution Providers and ODMs Partner with Cavium to Bring to Market Multiple Hardware Ethernet Switch Platforms |
· | June 1, 2015 - Cavium OCTEON® III Expands Footprint to Industrial, Military and Aerospace Applications by Offering Standard Computer-On-Module Form Factors |
· | May 18, 2015 - Cavium Partners with Canonical to Demonstrate Optimized Cloud Infrastructure with OpenStack at Scale on ThunderX™ |
· | May 14, 2015 - QLogic and Cavium Collaborates to Deliver Accelerated Performance for Enterprise and Cloud Storage Applications |
Cavium, Inc. will broadcast its second quarter of 2015 financial results conference call today, July 29, 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 | |
| June 30, 2015 | | | March 31, 2015 | |
Net revenue | $ | 104,961 | | | $ | 101,778 | |
Cost of revenue | | 37,673 | | | | 35,799 | |
Gross profit | | 67,288 | | | | 65,979 | |
Operating expenses: | | | | | | | |
Research and development | | 52,225 | | | | 58,422 | |
Sales, general and administrative | | 20,336 | | | | 20,671 | |
Total operating expenses | | 72,561 | | | | 79,093 | |
Loss from operations | | (5,273 | ) | | | (13,114 | ) |
Other expense, net: | | | | | | | |
Interest expense | | (388 | ) | | | (410 | ) |
Other, net | | (33 | ) | | | (66 | ) |
Total other expense, net | | (421 | ) | | | (476 | ) |
Loss before income taxes | | (5,694 | ) | | | (13,590 | ) |
Provision for income taxes | | 661 | | | | 301 | |
Net loss | | (6,355 | ) | | | (13,891 | ) |
Net loss per common share, basic and diluted | $ | (0.11 | ) | | $ | (0.25 | ) |
Shares used in computing basic and diluted net loss per common share | | 55,507 | | | | 54,882 | |
CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
| Three Months Ended | |
| June 30, 2015 | | | March 31, 2015 | |
Reconciliation of GAAP operating expenses to non-GAAP: | | | | | | | |
GAAP research and development expenses | $ | 52,225 | | | $ | 58,422 | |
Stock-based compensation and related payroll taxes | | (7,896 | ) | | | (7,823 | ) |
Amortization of acquisition related assets | | (2,932 | ) | | | - | |
Net restructuring related expenses | | - | | | | (254 | ) |
Research and development expenses associated with Xpliant | | (8,845 | ) | | | (20,142 | ) |
Non-GAAP research and development expenses | $ | 32,552 | | | $ | 30,203 | |
| | | | | | | |
GAAP sales, general and administrative expenses | $ | 20,336 | | | $ | 20,671 | |
Stock-based compensation and related payroll taxes | | (4,429 | ) | | | (5,138 | ) |
Amortization of acquisition related assets | | (11 | ) | | | (11 | ) |
Net restructuring related expenses | | - | | | | (68 | ) |
Sales, general and administrative expenses associated with Xpliant | | (2,554 | ) | | | (1,979 | ) |
Non-GAAP sales, general and administrative expenses | $ | 13,342 | | | $ | 13,475 | |
Total Non-GAAP operating expenses | $ | 45,894 | | | $ | 43,678 | |
| | | | | | | |
Reconciliation of GAAP non-operating expenses to non-GAAP non-operating income: | | | | | | | |
GAAP non-operating expenses | $ | (421 | ) | | $ | (476 | ) |
Non-operating expenses associated with Xpliant | | 1,144 | | | | 1,124 | |
Total Non-GAAP non-operating income | $ | 723 | | | $ | 648 | |
CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data and percentages)
| Three Months Ended | |
| June 30, 2015 | | | March 31, 2015 | |
Reconciliation of GAAP gross profit & margin to non-GAAP: | | | | | | | |
Net revenue | $ | 104,961 | | | $ | 101,778 | |
GAAP gross profit | | 67,288 | | | | 65,979 | |
GAAP gross margin | | 64.1 | % | | | 64.8 | % |
| | | | | | | |
Stock-based compensation and related payroll taxes | | 212 | | | | 213 | |
Amortization of acquisition related assets | | 157 | | | | 795 | |
Discontinued mask | | 2,420 | | | | - | |
Net restructuring related expenses | | - | | | | 42 | |
Non-GAAP gross profit | $ | 70,077 | | �� | $ | 67,029 | |
Non-GAAP gross margin | | 66.8 | % | | | 65.9 | % |
| | | | | | | |
Reconciliation of GAAP loss from operations to non-GAAP income from operations: | | | | | | | |
GAAP loss from operations | $ | (5,273 | ) | | $ | (13,114 | ) |
Stock-based compensation and related payroll taxes | | 12,537 | | | | 13,174 | |
Amortization of acquisition related assets | | 3,100 | | | | 806 | |
Discontinued mask | | 2,420 | | | | - | |
Net restructuring related expenses | | - | | | | 364 | |
Loss from operations of Xpliant | | 11,399 | | | | 22,121 | |
Non-GAAP income from operations | $ | 24,183 | | | $ | 23,351 | |
Non-GAAP income from operations as a percentage of revenue | | 23.0 | % | | | 22.9 | % |
| | | | | | | |
Reconciliation of GAAP loss to non-GAAP net income: | | | | | | | |
GAAP net loss | $ | (6,355 | ) | | $ | (13,891 | ) |
Non-GAAP adjustments: | | | | | | | |
Stock-based compensation and related payroll taxes | | 12,537 | | | | 13,174 | |
Amortization of acquisition related assets | | 3,100 | | | | 806 | |
Discontinued mask | | 2,420 | | | | - | |
Net restructuring related expenses and other charges | | - | | | | 364 | |
Loss from operations and non-operating expenses of Xpliant | | 12,543 | | | | 23,245 | |
Total of non-GAAP adjustments | | 30,600 | | | | 37,589 | |
Non-GAAP net income | $ | 24,245 | | | $ | 23,698 | |
| | | | | | | |
GAAP net loss per share, diluted | $ | (0.11 | ) | | $ | (0.25 | ) |
Non-GAAP adjustments detailed above | | 0.52 | | | | 0.65 | |
Non-GAAP net income per share, diluted | $ | 0.41 | | | $ | 0.40 | |
| | | | | | | |
GAAP weighted average shares, diluted | | 55,507 | | | | 54,882 | |
Non-GAAP share adjustment | | 4,114 | | | | 4,286 | |
Non-GAAP weighted average shares, diluted | | 59,621 | | | | 59,168 | |
CAVIUM, INC.
Unaudited GAAP Condensed Consolidated Balance Sheets
(in thousands)
| As of June 30, 2015 | | | As of March 31, 2015 | |
Assets | | | | | | | |
Current assets | | | | | | | |
Cash and cash equivalents | $ | 121,984 | | | $ | 121,025 | |
Accounts receivable, net | | 67,165 | | | | 56,817 | |
Inventories | | 50,403 | | | | 52,312 | |
Prepaid expenses and other current assets | | 9,312 | | | | 8,944 | |
Total current assets | | 248,864 | | | | 239,098 | |
Property and equipment, net | | 60,235 | | | | 58,828 | |
Intangible assets, net | | 37,023 | | | | 37,532 | |
Goodwill | | 71,478 | | | | 71,478 | |
Other assets | | 1,952 | | | | 1,935 | |
Total assets | $ | 419,552 | | | $ | 408,871 | |
| | | | | | | |
Liabilities and Stockholders' Equity | | | | | | | |
Current liabilities | | | | | | | |
Accounts payable | $ | 32,702 | | | $ | 25,100 | |
Other accrued expenses and other current liabilities | | 14,950 | | | | 15,945 | |
Deferred revenue | | 7,273 | | | | 6,047 | |
Capital lease and technology license obligations | | 18,383 | | | | 16,324 | |
Total current liabilities | | 73,308 | | | | 63,416 | |
Capital lease and technology license obligations, net of current | | 15,981 | | | | 20,788 | |
Deferred tax liability | | 3,159 | | | | 2,997 | |
Other non-current liabilities | | 2,970 | | | | 2,819 | |
Total liabilities | | 95,418 | | | | 90,020 | |
| | | | | | | |
Stockholders' equity | | | | | | | |
Common stock | | 56 | | | | 55 | |
Additional paid-in capital | | 516,676 | | | | 505,039 | |
Accumulated deficit | | (192,598 | ) | | | (186,243 | ) |
Total stockholders' equity | | 324,134 | | | | 318,851 | |
Total liabilities and stockholders' equity | $ | 419,552 | | | $ | 408,871 | |
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 |
