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Cavium Announces Financial Results for Q2 2016

SAN JOSE, Calif., July 26, 2016 — (PRNewswire) —  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 second quarter ended June 30, 2016.

 Cavium, Inc. Logo.

Net revenue in the second quarter was $107.2 million, a 5.2% sequential increase from the $101.9 million reported in the first quarter of 2016 and 2.1% from the $105.0 million reported in the second quarter of 2015.

Generally Accepted Accounting Principles (GAAP) Results

Net loss for the second quarter of 2016 was $7.4 million, or $(0.13) per diluted share, compared to $3.8 million, or $(0.07) per diluted share in the first quarter of 2016. Gross margins were 66.9% in the second quarter of 2016 compared to 66.8% in the first quarter of 2016. GAAP operating loss (GAAP loss from operations as a percentage of revenue) was 6.3% in the second quarter of 2016 compared to 3.3% in the first quarter of 2016. Total cash and cash equivalents were $140.4 million at June 30, 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. 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 2016, Non-GAAP net income was $17.2 million, or $0.29 per diluted share. Non-GAAP gross margin was 67.3% and Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue) was 16.6%.

Recent News Highlights

Cavium, Inc. will broadcast its second quarter of 2016 financial results conference call today, July 26, 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



June 30, 2016



March 31, 2016


Net revenue

$

107,158



$

101,882


Cost of revenue


35,499




33,866


Gross profit


71,659




68,016


Operating expenses:








     Research and development


52,578




50,455


     Sales, general and administrative


25,882




20,925


        Total operating expenses


78,460




71,380


Loss from operations


(6,801)




(3,364)


Other income (expense), net:








    Interest expense


(185)




(208)


    Other, net


(151)




14


Total other expense, net


(336)




(194)


     Loss before income taxes


(7,137)




(3,558)


     Provision for income taxes


273




275


Net loss

$

(7,410)



$

(3,833)


Net loss per common share, basic and diluted

$

(0.13)



$

(0.07)


Shares used in computing basic and diluted net loss per common share


57,527




56,932


 

CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)





Three Months Ended



June 30, 2016



March 31, 2016


Reconciliation of GAAP operating expenses to non-GAAP:








GAAP research and development expenses

$

52,578



$

50,455


Stock-based compensation and related payroll taxes


(9,017)




(8,773)


Amortization of acquisition related assets and other


(3,523)




(3,532)


Non-GAAP research and development expenses

$

40,038



$

38,150










GAAP sales, general and administrative expenses

$

25,882



$

20,925


Stock-based compensation and related payroll taxes


(5,263)




(5,984)


Acquisition related expenses


(6,339)




-


Non-GAAP sales, general and administrative expenses

$

14,280



$

14,941


Total Non-GAAP operating expenses

$

54,318



$

53,091










 

CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data and percentages)





Three Months Ended



June 30, 2016



March 31, 2016


Reconciliation of GAAP gross profit and margin to non-GAAP:








Net revenue

$

107,158



$

101,882


GAAP gross profit


71,659




68,016


GAAP gross margin


66.9

%



66.8

%









Stock-based compensation and related payroll taxes


261




191


Amortization of acquisition related assets


157




157


Non-GAAP gross profit

$

72,077



$

68,364


Non-GAAP gross margin


67.3

%



67.1

%









Reconciliation of GAAP loss from operations to non-GAAP income from operations:








GAAP loss from operations

$

(6,801)



$

(3,364)


Stock-based compensation and related payroll taxes


14,541




14,948


Amortization of acquisition related assets and other


3,680




3,689


Acquisition related expenses


6,339




-


Non-GAAP income from operations

$

17,759



$

15,273


Non-GAAP income from operations as a percentage of revenue


16.6

%



15.0

%









Reconciliation of GAAP net loss to non-GAAP net income:








GAAP net loss

$

(7,410)



$

(3,833)


Non-GAAP adjustments:








Stock-based compensation and related payroll taxes


14,541




14,948


Amortization of acquisition related assets and other


3,680




3,689


Acquisition related expenses


6,339




-


Total of non-GAAP adjustments


24,560




18,637


Non-GAAP net income

$

17,150



$

14,804










GAAP net loss per share, diluted

$

(0.13)



$

(0.07)


Non-GAAP adjustments detailed above


0.42




0.32


Non-GAAP net income per share, diluted

$

0.29



$

0.25










GAAP weighted average shares, diluted


57,527




56,932


Non-GAAP share adjustment


2,471




3,233


Non-GAAP weighted average shares, diluted


59,998




60,165


 

CAVIUM, INC.
Unaudited GAAP Condensed Consolidated Balance Sheets
(in thousands)





As of



June 30, 2016



March 31, 2016


Assets








Current assets








Cash and cash equivalents

$

140,419



$

129,629


Accounts receivable, net


82,137




79,594


Inventories


52,702




48,092


Prepaid expenses and other current assets


10,109




8,233


Total current assets


285,367




265,548


Property and equipment, net


64,917




63,303


Intangible assets, net


36,698




37,907


Goodwill


71,478




71,478


Other assets


1,822




1,738


Total assets

$

460,282



$

439,974










Liabilities and Stockholders' Equity








Current liabilities








Accounts payable

$

30,024



$

25,668


Other accrued expenses and other current liabilities


16,447




8,326


Deferred revenue


7,856




6,425


Capital lease and technology license obligations


17,380




17,286


Total current liabilities


71,707




57,705


Capital lease and technology license obligations, net of current


4,182




6,932


Deferred tax liability


3,923




3,785


Other non-current liabilities


4,140




2,907


Total liabilities


83,952




71,329










Stockholders' equity








Common stock


58




57


Additional paid-in capital


576,927




561,833


Accumulated deficit


(200,655)




(193,245)


Total stockholders' equity


376,330




368,645


Total liabilities and stockholders' equity

$

460,282



$

439,974


 

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SOURCE Cavium, Inc.

Contact:
Cavium, Inc.
Art Chadwick, Vice President of Finance and Administration and Chief Financial Officer, Tel: (408) 943-7104, Email: Email Contact
Angel Atondo, Senior Marketing Communications Manager, Tel: (408) 943-7417, Email: Email Contact
Web: http://www.cavium.com