SAN JOSE, Calif., Feb. 1, 2017 /PRNewswire/ -- Cavium, Inc.
(NASDAQ: CAVM), a leading provider of semiconductor products that
enable intelligent processing for enterprise, data center,
cloud, wired and wireless networking, today announced financial
results for the fourth quarter ended December 31, 2016.
Net revenue in the fourth quarter of 2016 was $226.2 million, a 34.5% sequential increase from
the $168.1 million reported in the
third quarter of 2016 and 124.0% from the $100.9 million reported in the fourth quarter of
2015.
Generally Accepted Accounting Principles (GAAP)
Results
Net loss for the fourth quarter of 2016 was $121.6 million, or ($1.82) per diluted share, compared to
$14.4 million, or ($0.23) per diluted share in the third quarter of
2016. Gross margins were 43.4% in the fourth quarter of 2016
compared to 28.2% in the third quarter of 2016. GAAP operating loss
(GAAP loss from operations as a percentage of revenue) was 12.9% in
the fourth quarter of 2016 compared to 56.1% in the third quarter
of 2016. Total cash and cash equivalents were $221.4 million at December
31, 2016.
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. Cavium
believes that these non-GAAP financial measures provide additional
insight into Cavium's ongoing performance and core operational
activities and has chosen to provide these measures for more
consistent and meaningful comparison between periods. 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 2016, Non-GAAP net income was
$39.8 million, or $0.56 per diluted share. Non-GAAP gross margin
was 65.0% and Non-GAAP operating margin (non-GAAP income from
operations as a percentage of revenue) was 21.6%.
Recent News Highlights
- January 31, 2017 -
Cavium QLogic Leads Ethernet & Fibre Channel I/O Innovation for
Next Generation Servers
- January 24, 2017 -
Cavium Contributes to the First Programmable Wedge 100C Switch
Design to OCP
- January 17, 2017 -
Cavium QLogic Delivers Expanded Options for Server and Storage
Connectivity
- January 16, 2017 -
Cavium's XPliant Family of Ethernet Switches Received Linley
Group's Analysts' Choice Award for Best Networking Chip 2016
- December 8, 2016 -
Cavium and China Unicom Signed Collaboration Agreement for
Virtualized RAN Technology
- November 15, 2016 - Cavium
and Leading Partners Showcased ThunderX ARM-based Server Platforms,
QLogic FastLinQ Ethernet Adapters and Fibre Channel HBAs for High
Performance Computing at SC16
Cavium will broadcast its fourth quarter of 2016 financial
results conference call today, February 1,
2017, 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 offers a broad portfolio of integrated, software
compatible processors ranging in performance from 1Gbps to
100Gbp that enable secure,
intelligent functionality in Enterprise, Data Center, Broadband,
Mobile and Service Provider Equipment, highly programmable switches
which scale to 3.2Tbps and Ethernet and Fibre Channel adapters up
to 100Gbps. Cavium processors are supported by ecosystem partners
that provide operating systems, tools and application support,
hardware reference designs and other products. Cavium is
headquartered in San Jose, CA with
design centers in California,
Massachusetts, India, Israel, China
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,
2016
|
|
|
September 30,
2016
|
|
|
Net
revenue
|
$
|
226,151
|
|
|
$
|
168,123
|
|
|
Cost of
revenue
|
|
127,926
|
|
|
|
120,709
|
|
|
Gross
profit
|
|
98,225
|
|
|
|
47,414
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
|
87,031
|
|
|
|
67,752
|
|
|
Sales, general and
administrative
|
|
40,340
|
|
|
|
73,904
|
|
|
Total
operating expenses
|
|
127,371
|
|
|
|
141,656
|
|
|
Loss from
operations
|
|
(29,146)
|
|
|
|
(94,242)
|
|
|
Other income
(expense), net:
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(8,073)
|
|
|
|
(4,268)
|
|
|
Other, net
|
|
158
|
|
|
|
54
|
|
|
Total other expense,
net
|
|
(7,915)
|
|
|
|
(4,214)
|
|
|
Loss before income
taxes
|
|
(37,061)
|
|
|
|
(98,456)
|
|
|
Provision for (benefit from)
income taxes
|
|
84,539
|
|
|
|
(84,090)
|
|
|
Net loss
|
$
|
(121,600)
|
|
|
$
|
(14,366)
|
|
|
Net loss per common
share, basic and diluted
|
$
|
(1.82)
|
|
|
$
|
(0.23)
|
|
|
Shares used in
computing basic and diluted net loss per common share
|
|
66,949
|
|
|
|
62,055
|
|
|
CAVIUM,
INC.
|
|
Unaudited
Reconciliation of Non-GAAP Adjustments
|
|
(in thousands,
except per share data and percentages)
|
|
|
|
|
Three Months
Ended
|
|
|
December 31,
2016
|
|
|
September 30,
2016
|
|
|
Reconciliation of
GAAP gross profit and margin to non-GAAP:
|
|
|
|
|
|
|
|
|
Net
revenue
|
$
|
226,151
|
|
|
$
|
168,123
|
|
|
GAAP gross
profit
|
|
98,225
|
|
|
|
47,414
|
|
|
GAAP gross
margin
|
|
43.4
|
%
|
|
|
28.2
|
%
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation and related payroll taxes from awards granted by the
Company
|
|
509
|
|
|
|
274
|
|
|
Stock-based
compensation and related payroll taxes from awards assumed from the
acquisition
|
|
75
|
|
|
|
134
|
|
|
Purchase accounting
effect on inventory
|
|
21,015
|
|
|
|
9,888
|
|
|
Manufacturing rights
buy-out
|
|
-
|
|
|
|
37,059
|
|
|
Amortization of
acquisition related assets
|
|
27,176
|
|
|
|
12,880
|
|
|
Non-GAAP gross
profit
|
$
|
147,000
|
|
|
$
|
107,649
|
|
|
Non-GAAP gross
margin
|
|
65.0
|
%
|
|
|
64.0
|
%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating expenses to non-GAAP:
|
|
|
|
|
|
|
|
|
GAAP research and
development expenses
|
$
|
87,031
|
|
|
$
|
67,752
|
|
|
Stock-based
compensation and related payroll taxes from awards granted by the
Company
|
|
(11,030)
|
|
|
|
(9,644)
|
|
|
Stock-based
compensation expense related to employees with change in control
provision
|
|
-
|
|
|
|
(956)
|
|
|
Stock-based
compensation and related payroll taxes from awards assumed from the
acquisition
|
|
(2,635)
|
|
|
|
(1,363)
|
|
|
Amortization of
acquisition related assets
|
|
(1,507)
|
|
|
|
(2,643)
|
|
|
IPR&D
written-off
|
|
(2,000)
|
|
|
|
-
|
|
|
Non-GAAP research and
development expenses
|
|
69,859
|
|
|
|
53,146
|
|
|
|
|
|
|
|
|
|
|
GAAP sales, general
and administrative expenses
|
|
40,340
|
|
|
|
73,904
|
|
|
Stock-based
compensation and related payroll taxes from awards granted by the
Company
|
|
(7,734)
|
|
|
|
(7,554)
|
|
|
Stock-based
compensation expense related to employees with change in control
provision
|
|
-
|
|
|
|
(15,625)
|
|
|
Stock-based
compensation and related payroll taxes from awards assumed from the
acquisition
|
|
(700)
|
|
|
|
(1,097)
|
|
|
Acquisition and
integration related costs
|
|
(2,282)
|
|
|
|
(13,486)
|
|
|
Amortization of
acquisition related assets
|
|
(1,422)
|
|
|
|
(524)
|
|
|
Restructuring,
severance and other employment charges
|
|
-
|
|
|
|
(13,477)
|
|
|
Non-GAAP sales,
general and administrative expenses
|
|
28,202
|
|
|
|
22,141
|
|
|
Total Non-GAAP
operating expenses
|
$
|
98,061
|
|
|
$
|
75,287
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP non-operating expenses to non-GAAP:
|
|
|
|
|
|
|
|
|
GAAP other expense,
net
|
$
|
(7,915)
|
|
|
$
|
(4,214)
|
|
|
Interest expense and
amortization of debt financing cost associated with interim term
loan facility
|
|
164
|
|
|
|
522
|
|
|
Non-GAAP other
expense, net
|
$
|
(7,751)
|
|
|
$
|
(3,692)
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP Income tax to non-GAAP:
|
|
|
|
|
|
|
|
|
GAAP provision for
(benefit from) income tax
|
$
|
84,539
|
|
|
$
|
(84,090)
|
|
|
Acquisition related
tax adjustments
|
|
(83,174)
|
|
|
|
84,792
|
|
|
Non-GAAP provision
for income tax
|
$
|
1,365
|
|
|
$
|
702
|
|
|
CAVIUM,
INC.
|
|
Unaudited
Reconciliation of Non-GAAP Adjustments
|
|
(in thousands,
except per share data and percentages)
|
|
|
|
|
Three Months
Ended
|
|
|
December 31,
2016
|
|
|
September 30,
2016
|
|
|
Reconciliation of
GAAP loss from operations to non-GAAP income from
operations:
|
|
|
|
|
|
|
|
|
GAAP loss from
operations
|
$
|
(29,146)
|
|
|
$
|
(94,242)
|
|
|
Stock-based
compensation and related payroll taxes from awards granted by the
Company
|
|
19,273
|
|
|
|
17,472
|
|
|
Stock-based
compensation expense related to employees with change in control
provision
|
|
-
|
|
|
|
16,581
|
|
|
Stock-based
compensation and related payroll taxes from awards assumed from the
acquisition
|
|
3,410
|
|
|
|
2,594
|
|
|
Purchase accounting
effect on inventory
|
|
21,015
|
|
|
|
9,888
|
|
|
Amortization of
acquisition related assets
|
|
30,105
|
|
|
|
16,047
|
|
|
Acquisition and
integration related costs
|
|
2,282
|
|
|
|
13,486
|
|
|
Manufacturing rights
buy-out
|
|
-
|
|
|
|
37,059
|
|
|
Restructuring,
severance and other employment charges
|
|
-
|
|
|
|
13,477
|
|
|
IPR&D
written-off
|
|
2,000
|
|
|
|
-
|
|
|
Non-GAAP income from
operations
|
$
|
48,939
|
|
|
$
|
32,362
|
|
|
Non-GAAP income from
operations as a percentage of revenue
|
|
21.6
|
%
|
|
|
19.2
|
%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP net loss to non-GAAP net income:
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
$
|
(121,600)
|
|
|
$
|
(14,366)
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
Stock-based
compensation and related payroll taxes from awards granted by the
Company
|
|
19,273
|
|
|
|
17,472
|
|
|
Stock-based
compensation expense related to employees with change in control
provision
|
|
-
|
|
|
|
16,581
|
|
|
Stock-based
compensation and related payroll taxes from awards assumed from the
acquisition
|
|
3,410
|
|
|
|
2,594
|
|
|
Purchase accounting
effect on inventory
|
|
21,015
|
|
|
|
9,888
|
|
|
Amortization of
acquisition related assets
|
|
30,105
|
|
|
|
16,047
|
|
|
Acquisition and
integration related costs
|
|
2,282
|
|
|
|
13,486
|
|
|
Manufacturing rights
buy-out
|
|
-
|
|
|
|
37,059
|
|
|
Restructuring,
severance and other employment charges
|
|
-
|
|
|
|
13,477
|
|
|
IPR&D
written-off
|
|
2,000
|
|
|
|
-
|
|
|
Interest expense and
amortization of debt financing cost associated with interim term
loan facility
|
|
164
|
|
|
|
522
|
|
|
Acquisition related
tax adjustments
|
|
83,174
|
|
|
|
(84,792)
|
|
|
Total of non-GAAP
adjustments
|
|
161,423
|
|
|
|
42,334
|
|
|
Non-GAAP net
income
|
$
|
39,823
|
|
|
$
|
27,968
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss per
share, diluted
|
$
|
(1.82)
|
|
|
$
|
(0.23)
|
|
|
Non-GAAP adjustments
detailed above
|
|
2.38
|
|
|
|
0.66
|
|
|
Non-GAAP net income
per share, diluted
|
$
|
0.56
|
|
|
$
|
0.43
|
|
|
|
|
|
|
|
|
|
|
GAAP weighted average
shares, diluted
|
|
66,949
|
|
|
|
62,055
|
|
|
Non-GAAP share
adjustment
|
|
4,365
|
|
|
|
3,062
|
|
|
Non-GAAP weighted
average shares, diluted
|
|
71,314
|
|
|
|
65,117
|
|
|
CAVIUM,
INC.
|
|
Unaudited GAAP
Condensed Consolidated Balance Sheets
|
|
(in
thousands)
|
|
|
|
|
As
of
|
|
|
December 31,
2016
|
|
|
September 30,
2016
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
221,439
|
|
|
$
|
192,378
|
|
|
Accounts receivable,
net
|
|
125,728
|
|
|
|
144,902
|
|
|
Inventories
|
|
119,692
|
|
|
|
118,936
|
|
|
Prepaid expenses and
other current assets
|
|
22,259
|
|
|
|
20,556
|
|
|
Asset held for
sale
|
|
-
|
|
|
|
38,511
|
|
|
Total current
assets
|
|
489,118
|
|
|
|
515,283
|
|
|
Property and
equipment, net
|
|
150,862
|
|
|
|
122,114
|
|
|
Intangible assets,
net
|
|
764,885
|
|
|
|
790,368
|
|
|
Goodwill
|
|
241,067
|
|
|
|
319,021
|
|
|
Other
assets
|
|
4,599
|
|
|
|
3,922
|
|
|
Total
assets
|
$
|
1,650,531
|
|
|
$
|
1,750,708
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
$
|
65,456
|
|
|
$
|
55,009
|
|
|
Accrued expenses and
other current liabilities
|
|
64,967
|
|
|
|
43,163
|
|
|
Deferred
revenue
|
|
8,412
|
|
|
|
9,399
|
|
|
Current portion of
long-term debt
|
|
3,865
|
|
|
|
53,774
|
|
|
Capital lease and
technology license obligations
|
|
25,535
|
|
|
|
27,747
|
|
|
Total current
liabilities
|
|
168,235
|
|
|
|
189,092
|
|
|
Long-term
debt
|
|
675,414
|
|
|
|
676,372
|
|
|
Capital lease and
technology license obligations, net of current
|
|
27,878
|
|
|
|
11,780
|
|
|
Deferred tax
liability
|
|
18,774
|
|
|
|
17,270
|
|
|
Other non-current
liabilities
|
|
18,386
|
|
|
|
18,266
|
|
|
Total
liabilities
|
|
908,687
|
|
|
|
912,780
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
Common
stock
|
|
67
|
|
|
|
66
|
|
|
Additional paid-in
capital
|
|
1,079,043
|
|
|
|
1,052,840
|
|
|
Accumulated
deficit
|
|
(336,621)
|
|
|
|
(215,021)
|
|
|
Accumulated other
comprehensive loss
|
|
(645)
|
|
|
|
43
|
|
|
Total stockholders'
equity
|
|
741,844
|
|
|
|
837,928
|
|
|
Total liabilities and
stockholders' equity
|
$
|
1,650,531
|
|
|
$
|
1,750,708
|
|
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SOURCE Cavium, Inc.