Exhibit 99.1
Cavium
Announces Financial Results for Q4 2015
SAN JOSE, Calif., January 27, 2016 – Cavium, Inc. (NASDAQ: CAVM), a leading provider of semiconductor products that enable secure and intelligent processing for enterprise, data center, cloud, wired and wireless networking, today announced financial results for the fourth quarter ended December 31, 2015.
Net revenue in the fourth quarter of 2015 was $100.9 million, a 3.9% sequential decrease from the $105.1 million reported in the third quarter of 2015 and relatively flat from the $101.2 million reported in the fourth quarter of 2014.
Generally Accepted Accounting Principles (GAAP) Results
Net loss in the fourth quarter of 2015 was $1.0 million, or $(0.02) per diluted share, compared to net income of $4.2 million, or $0.07 per diluted share in the third quarter of 2015. Gross margins were 66.2% in the fourth quarter of 2015 compared to 65.5% in the third quarter of 2015. Total cash and cash equivalents were $134.6 million at December 31, 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 fourth quarter of 2015, Non-GAAP net income was $16.6 million, or $0.28 per diluted share. Non-GAAP gross margin was 66.6% and Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue) was 17.1%.
Recent News Highlights
| · | November 16, 2015 - Cavium and Leading Partners Showcased ThunderX™ ARMv8-based Server Platforms for Next Generation Cloud Data Center at ARM TechCon 2015 |
| · | November 16, 2015 - Cavium’s ThunderX Workload Optimized Processors received Readers’ and Editors’ Choice Award for Top 5 New Products or Technologies to Watch from HPCwire |
| · | November 16, 2015 - E4 Computer Engineering announced production availability and customer shipment of ARKA Server Platforms with Cavium ThunderX™ ARMv8 Workload-Optimized Processors |
| · | November 16, 2015 - Cavium Announced Collaboration with Bright Computing to Support the ThunderX™ Processor Family |
| · | November 16, 2015 - Penguin Computing Announced Availability and Customer Shipments of Tundra Extreme Scale Valkre Servers Based on Cavium ThunderX™ Workload Optimized Processors |
| · | November 16, 2015 - Wistron Announced New Server Platforms based on Cavium's ThunderX™ Workload-Optimized Processor Family |
| · | November 16, 2015 - Inventec Enables Hadoop, Cloud Computing and Hyperscale Workloads with new K850G3 Server Platforms with Cavium ThunderX™ Workload Optimized Processors |
| · | November 16, 2015 - GIGABYTE Announced Availability and Production Shipments of Extensive Cavium ThunderX-based Server Portfolio |
| · | November 9, 2015 - Cavium and Pica8 Partners to Deliver Leading Edge Open Networking Solutions |
Cavium, Inc. will broadcast its fourth quarter of 2015 financial results conference call today, January 27, 2016, 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, 2015 | | | September 30, 2015 | |
Net revenue | $ | 100,942 | | | $ | 105,063 | |
Cost of revenue | | 34,092 | | | | 36,203 | |
Gross profit | | 66,850 | | | | 68,860 | |
Operating expenses: | | | | | | | |
Research and development | | 47,764 | | | | 45,367 | |
Sales, general and administrative | | 19,397 | | | | 18,522 | |
Total operating expenses | | 67,161 | | | | 63,889 | |
Income (loss) from operations | | (311 | ) | | | 4,971 | |
Other expense, net: | | | | | | | |
Interest expense | | (227 | ) | | | (216 | ) |
Other, net | | (138 | ) | | | (173 | ) |
Total other expense, net | | (365 | ) | | | (389 | ) |
Income (loss) before income taxes | | (676 | ) | | | 4,582 | |
Provision for income taxes | | 354 | | | | 366 | |
Net income (loss) | $ | (1,030 | ) | | $ | 4,216 | |
Net income (loss) per common share, basic | $ | (0.02 | ) | | $ | 0.08 | |
Shares used in computing basic net income (loss) per common share | | 56,131 | | | | 55,819 | |
Net income (loss) per common share, diluted | $ | (0.02 | ) | | $ | 0.07 | |
Shares used in computing diluted net income (loss) per common share | | 56,131 | | | | 57,457 | |
CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
| Three Months Ended | |
| December 31, 2015 | | | September 30, 2015 | |
Reconciliation of GAAP operating expenses to non-GAAP: | | | | | | | |
GAAP research and development expenses | $ | 47,764 | | | $ | 45,367 | |
Stock-based compensation and related payroll taxes | | (7,833 | ) | | | (7,766 | ) |
Amortization of acquisition related assets | | (3,667 | ) | | | (3,471 | ) |
Net restructuring related expenses | | - | | | | (140 | ) |
Xpliant transition related expenses | | (970 | ) | | | (971 | ) |
Non-GAAP research and development expenses | $ | 35,294 | | | $ | 33,019 | |
| | | | | | | |
GAAP sales, general and administrative expenses | $ | 19,397 | | | $ | 18,522 | |
Stock-based compensation and related payroll taxes | | (4,764 | ) | | | (4,946 | ) |
Amortization of acquisition related assets | | - | | | | (4 | ) |
Net restructuring related expenses | | - | | | | (255 | ) |
Non-GAAP sales, general and administrative expenses | $ | 14,633 | | | $ | 13,317 | |
Total Non-GAAP operating expenses | $ | 49,927 | | | $ | 46,336 | |
| | | | | | | |
Reconciliation of GAAP non-operating expenses to non-GAAP: | | | | | | | |
GAAP non-operating expenses | $ | (365 | ) | | $ | (389 | ) |
Non-operating expenses associated with Xpliant | | - | | | | 354 | |
Total Non-GAAP non-operating expense | $ | (365 | ) | | $ | (35 | ) |
CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data and percentages)
| Three Months Ended | |
| December 31, 2015 | | | September 30, 2015 | |
Reconciliation of GAAP gross profit & margin to non-GAAP: | | | | | | | |
Net revenue | $ | 100,942 | | | $ | 105,063 | |
GAAP gross profit | | 66,850 | | | | 68,860 | |
GAAP gross margin | | 66.2 | % | | | 65.5 | % |
| | | | | | | |
Stock-based compensation and related payroll taxes | | 198 | | | | 211 | |
Amortization of acquisition related assets | | 157 | | | | 157 | |
Non-GAAP gross profit | $ | 67,205 | | | $ | 69,228 | |
Non-GAAP gross margin | | 66.6 | % | | | 65.9 | % |
| | | | | | | |
Reconciliation of GAAP income (loss) from operations to non-GAAP income from operations: | | | | | | | |
GAAP income (loss) from operations | $ | (311 | ) | | $ | 4,971 | |
Stock-based compensation and related payroll taxes | | 12,795 | | | | 12,923 | |
Amortization of acquisition related assets | | 3,824 | | | | 3,632 | |
Net restructuring related expenses | | - | | | | 395 | |
Xpliant transition related expenses | | 970 | | | | 971 | |
Non-GAAP income from operations | $ | 17,278 | | | $ | 22,892 | |
Non-GAAP income from operations as a percentage of revenue | | 17.1 | % | | | 21.8 | % |
| | | | | | | |
Reconciliation of GAAP income (loss) to non-GAAP net income: | | | | | | | |
GAAP net income (loss) | $ | (1,030 | ) | | $ | 4,216 | |
Non-GAAP adjustments: | | | | | | | |
Stock-based compensation and related payroll taxes | | 12,795 | | | | 12,923 | |
Amortization of acquisition related assets | | 3,824 | | | | 3,632 | |
Net restructuring related expenses | | - | | | | 395 | |
Xpliant transition related expenses | | 970 | | | | 971 | |
Non-operating expenses associated with Xpliant | | - | | | | 354 | |
Total of non-GAAP adjustments | | 17,589 | | | | 18,275 | |
Non-GAAP net income | $ | 16,559 | | | $ | 22,491 | |
| | | | | | | |
GAAP net income (loss) per share, diluted | $ | (0.02 | ) | | $ | 0.07 | |
Non-GAAP adjustments detailed above | | 0.30 | | | | 0.31 | |
Non-GAAP net income per share, diluted | $ | 0.28 | | | $ | 0.38 | |
| | | | | | | |
GAAP weighted average shares, diluted | | 56,131 | | | | 57,457 | |
Non-GAAP share adjustment | | 3,519 | | | | 2,201 | |
Non-GAAP weighted average shares, diluted | | 59,650 | | | | 59,658 | |
CAVIUM, INC.
Unaudited GAAP Condensed Consolidated Balance Sheets
(in thousands)
| As of | |
| December 31, 2015 | | | September 30, 2015 | |
Assets | | | | | | | |
Current assets | | | | | | | |
Cash and cash equivalents | $ | 134,646 | | | $ | 130,985 | |
Accounts receivable, net | | 68,742 | | | | 61,696 | |
Inventories | | 47,009 | | | | 47,645 | |
Prepaid expenses and other current assets | | 10,231 | | | | 9,512 | |
Total current assets | | 260,628 | | | | 249,838 | |
Property and equipment, net | | 64,677 | | | | 64,414 | |
Intangible assets, net | | 35,492 | | | | 36,954 | |
Goodwill | | 71,478 | | | | 71,478 | |
Other assets | | 1,718 | | | | 2,019 | |
Total assets | $ | 433,993 | | | $ | 424,703 | |
| | | | | | | |
Liabilities and Stockholders' Equity | | | | | | | |
Current liabilities | | | | | | | |
Accounts payable | $ | 27,489 | | | $ | 25,338 | |
Other accrued expenses and other current liabilities | | 9,443 | | | | 12,095 | |
Deferred revenue | | 6,316 | | | | 6,519 | |
Capital lease and technology license obligations | | 20,608 | | | | 17,004 | |
Total current liabilities | | 63,856 | | | | 60,956 | |
Capital lease and technology license obligations, net of current | | 9,858 | | | | 16,092 | |
Deferred tax liability | | 3,417 | | | | 3,320 | |
Other non-current liabilities | | 2,962 | | | | 2,849 | |
Total liabilities | | 80,093 | | | | 83,217 | |
| | | | | | | |
Stockholders' equity | | | | | | | |
Common stock | | 56 | | | | 56 | |
Additional paid-in capital | | 543,256 | | | | 529,812 | |
Accumulated deficit | | (189,412 | ) | | | (188,382 | ) |
Total stockholders' equity | | 353,900 | | | | 341,486 | |
Total liabilities and stockholders' equity | $ | 433,993 | | | $ | 424,703 | |
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 |
