CAVIUM INC 
By SAN JOSE, Calif., Jan. 29, 2014 /PRNewswire/ -- 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 ended December 31, 2013.
(Logo: http://photos.prnewswire.com/prnh/20120604/LA18845LOGO)
Revenue in the fourth quarter of 2013 was $81.1 million, a 2.5% sequential increase from the $79.1 million reported in the third quarter of 2013. Total revenue for the fiscal year ended December 31, 2013 was $304.0 million, a 29.1% year-over-year increase from the $235.5 million reported for the fiscal year ended December 31, 2012.
Generally Accepted Accounting Principles (GAAP) Results
Net income attributable to the Company for the fourth quarter of 2013 on GAAP basis was $0.2 million, or $0.00 per diluted share compared to $4.3 million, or $0.08 per diluted share in the third quarter of 2013. Gross margins were 64.2% in the fourth quarter of 2013 compared to 64.0% in the third quarter of 2013. Total cash and cash equivalents were $127.8 million at December 31, 2013 compared to $113.0 million at end of September 30, 2013.
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.
Non-GAAP net income for the fourth quarter of 2013 was $17.4 million, or $0.31 per diluted share, compared to $16.0 million, or $0.29 per diluted share in the third quarter of 2013. Gross margin, on a non-GAAP basis, was 66.3% in the fourth quarter of 2013, compared to 66.0% in the third quarter of 2013. Operating margin (non-GAAP income from operations as a percentage of revenue), on a non-GAAP basis was 21.9% in the fourth quarter of 2013 compared to 21.6% in the third quarter of 2013.
Recent News Highlights
-- November 14, 2013 - Cavium Ranked Amongst Fastest Growing Companies in
North America on Deloitte's 2013 Technology Fast 500(TM) for 6th
Consecutive Year
-- January 6, 2014 - Cavium Demonstrated Complete Cloud to Home Solutions
at International CES 2014
-- January 21, 2014 - Cavium Joins Network Intelligence Alliance to Drive
Innovation and Leadership for Next-Generation Network Solutions
Cavium, Inc. will broadcast its fourth quarter 2013 financial results conference call today, January 29, 2014, 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 100 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 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, 2013 September 30, 2013
----------------- ------------------
Net revenue $81,135 $79,124
Cost of revenue 29,059 28,516
------ ------
Gross profit 52,076 50,608
------ ------
Operating expenses:
Research and
development 36,127 33,630
Sales, general
and
administrative 17,871 14,833
------ ------
Total operating
expenses 53,998 48,463
------ ------
Income (loss)
from
operations (1,922) 2,145
------ -----
Other expense, net:
Interest
expense (395) (390)
Other, net (74) (126)
--- ----
Total other
expense, net (469) (516)
---- ----
Income (loss)
before income
taxes (2,391) 1,629
Provision for
income taxes 120 714
--- ---
Net income
(loss) (2,511) 915
Net loss
attributable
to non-
controlling
interest (2,698) (3,421)
------ ------
Net income
attributable
to the Company $187 $4,336
==== ======
Net income
attributable
to the Company
per common
share, basic $0.00 $0.08
Shares used in
computing
basic net
income per
common share 52,104 51,772
Net income
attributable
to the Company
per common
share, diluted $0.00 $0.08
Shares used in
computing
diluted net
income per
common share 53,772 53,492
CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Three Months Ended
------------------
December 31, 2013 September 30, 2013
----------------- ------------------
Reconciliation of GAAP research and development
expenses to non-GAAP:
GAAP research
and
development
expenses $36,127 $33,630
Stock-based
compensation
and related
payroll taxes (5,022) (5,056)
Net
restructuring
related
expenses (74) (38)
Change in
estimated
useful lives
of certain
consumer
product
related
intangible
assets (2,928) -
Expenses
associated
from a
variable
interest
entity (3,522) (4,510)
------ ------
Non-GAAP
research and
development
expenses $24,581 $24,026
======= =======
Reconciliation of GAAP sales, general and
administrative expenses to non-GAAP
GAAP sales,
general and
administrative
expenses $17,871 $14,833
Stock-based
compensation
and related
payroll taxes (3,683) (3,740)
Amortization of
acquired
intangible
assets (2,938) (200)
Net
restructuring
related
expenses 250 239
--- ---
Non-GAAP
sales, general
and
administrative
expenses $11,500 $11,132
======= =======
CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data and percentages)
Three Months Ended
------------------
December 31, 2013 September 30, 2013
----------------- ------------------
Reconciliation of GAAP gross profit & margin to non-GAAP:
Net revenue $81,135 $79,124
GAAP gross
profit 52,076 50,608
GAAP gross
margin 64.2% 64.0%
Stock-based
compensation
and related
payroll taxes 311 226
Amortization of
acquired
intangible
assets 1,548 1,579
Net
restructuring
related
expenses (110) (193)
---- ----
Non-GAAP gross
profit $53,825 $52,220
======= =======
Non-GAAP gross
margin 66.3% 66.0%
==== ====
Three Months Ended
------------------
December 31, 2013 September 30, 2013
----------------- ------------------
Reconciliation of GAAP income (loss) from operations to
non-GAAP income from operations:
GAAP income
(loss) from
operations $(1,922) $2,145
Stock-based
compensation
and related
payroll taxes 9,016 9,022
Amortization of
acquired
intangible
assets 4,486 1,779
Net
restructuring
related
expenses (286) (394)
Change in
estimated
useful lives
of certain
consumer
product
related
intangible
assets 2,928 -
Loss from
operations of
a variable
interest
entity 3,522 4,510
----- -----
Non-GAAP
income from
operations $17,744 $17,062
======= =======
Non-GAAP
income from
operations as
a percentage
of revenue 21.9% 21.6%
==== ====
Three Months Ended
------------------
December 31, 2013 September 30, 2013
----------------- ------------------
Reconciliation of GAAP net income to non-GAAP net income:
GAAP net income
attributable
to the Company $187 $4,336
Non-GAAP adjustments:
Stock-based compensation and related payroll taxes:
Cost of revenue 311 226
Research and
development 5,022 5,056
Sales, general
and
administrative 3,683 3,740
Amortization of acquired intangible assets:
Cost of revenue 1,548 1,579
Sales, general
and
administrative 2,938 200
Net
restructuring
related
expenses (286) (394)
Change in
estimated
useful lives
of certain
consumer
product
related
intangible
assets 2,928 -
Net loss of a
variable
interest
entity
attributable
to the Company 1,064 1,304
----- -----
Total of non-
GAAP
adjustments 17,208 11,711
------ ------
Non-GAAP net
income $17,395 $16,047
======= =======
GAAP net income
attributable
to the Company
per share,
diluted $0.00 $0.08
===== =====
Non-GAAP
adjustments
detailed above 0.31 0.21
Non-GAAP net
income
attributable
to the Company
per share,
diluted $0.31 $0.29
===== =====
GAAP weighted
average
shares,
diluted 53,772 53,492
Non-GAAP share
adjustment 2,038 2,202
----- -----
Non-GAAP
weighted
average
shares,
diluted 55,810 55,694
CAVIUM, INC.
Unaudited GAAP Condensed Consolidated Balance Sheets
(in thousands)
As of As of
December 31, 2013 September 30, 2013
----------------- ------------------
Assets
Current assets:
Cash and cash
equivalents $127,763 $112,960
Accounts
receivable,
net 43,636 46,504
Inventories 45,768 42,455
Prepaid
expenses and
other
current
assets 6,491 4,255
Deferred tax
assets 212 112
-------------
Total current assets 223,870 206,286
Property and equipment, net 28,494 25,776
Intangible assets, net 43,240 53,003
Goodwill 71,478 71,478
Deferred tax assets, net of current 61 60
Other assets 1,054 1,044
----- -----
Total assets $368,197 $357,647
======== ========
Liabilities and Equity
Current liabilities:
Accounts
payable $23,467 $23,992
Other accrued
expenses and
other
current
liabilities 9,559 9,754
Deferred
revenue 8,669 10,689
Notes payable 13,512 11,012
Capital lease
and
technology
license
obligations 17,103 11,755
--------------
Total current liabilities 72,310 67,202
Capital lease and technology license
obligations, net of current 16,292 18,268
Deferred tax liability 2,420 2,128
Other non-current liabilities 2,344 2,789
----- -----
Total liabilities 93,366 90,387
====== ======
Equity
Common stock 53 52
Additional
paid-in
capital 443,588 433,507
Accumulated
deficit (157,057) (157,244)
------------
Total stockholders'
equity attributable to
the Company 286,584 276,315
Non-
controlling
interest (11,753) (9,055)
------------
Total equity 274,831 267,260
------- -------
Total liabilities and
equity $368,197 $357,647
======== ========
SOURCE Cavium, Inc.
