MOUNTAIN VIEW, CA -- (Marketwire) -- 07/28/09 -- Cavium Networks, Inc. (NASDAQ: CAVM), a
leading provider of highly integrated semiconductor products that enable
intelligent processing for networking, communications, storage, wireless,
video and security applications, today announced financial results for the
second quarter of 2009 ended June 30, 2009.
Revenue in the second quarter of 2009 was $22.8 million, a 12% sequential
increase from the $20.4 million reported for the first quarter of 2009 and
an increase of 6% from the $21.6 million reported for the second quarter of
last year.
Generally Accepted Accounting Principles (GAAP) Results
Net loss for the second quarter of 2009, on a GAAP basis, was $6.2 million,
or $0.15 per share, compared to a net loss of $6.5 million, or $0.16 per
share in the first quarter of 2009, and net income of $2.1 million, or
$0.05 per diluted share in the second quarter of last year. Gross margins
were 46.8% in the second quarter of 2009 compared to 46.9% in the first
quarter of 2009 and 63.8% in the second quarter of 2008. Total cash and
cash equivalents were $66.7 million at June 30, 2009.
Non-GAAP Results
Cavium Networks believes that the presentation of non-GAAP financial
measures provides important supplemental information to management and
investors regarding financial and business trends relating to the company's
financial condition and results of operations. These measures should only
be used to evaluate the Company's results of operations in conjunction with
the corresponding GAAP measures. Non-GAAP financial measures in the second
quarter of 2009 exclude expenses totaling $5.2 million related to
stock-based compensation and related payroll expense, amortization of
acquired intangible assets, restructuring, acquisition related compensation
expense and adjustments related to past acquisitions and related tax
effects. The reconciliation between GAAP and non-GAAP financial results is
provided in the financial statements portion of this release.
Net loss for the second quarter of 2009, on a non-GAAP basis, was $1.0
million, or $0.02 per share, compared with non-GAAP net loss of $1.7
million, or $0.04 per share net loss in the first quarter of 2009 and net
income of $3.8 million, or $0.09 per diluted share in the second quarter of
last year. Gross margins, on a non-GAAP basis, were 52.0% in the second
quarter of 2009 compared to 53.7% in the first quarter of 2009.
"The strong sequential growth this quarter was driven by the Broadband and
Consumer business," said Syed Ali, president and CEO of Cavium Networks.
"We are also seeing a healthy rebound in the Enterprise and Data Center
markets, which bodes well for the second half of the year. New design wins
were also very strong this quarter which resulted in our closing a record
number of design wins, spread across all of our market segments."
Recent News Highlights:
-- April 14, 2009 - Cavium Networks Announces Next Generation OCTEON(TM)
II Internet Application Processor (IAP) family of multi-core MIPS64®
processors, with one to 32 cores. The OCTEON II IAP offers up to 4x
performance over the existing OCTEON Plus processor family, with more than
twice the performance/watt and performance/dollar. The new product family
adds revolutionary new application acceleration engines, and is designed to
address the voice, video and data convergence driven by cloud computing,
virtualization, HD video over IP, Web 2.0 and mobile 3G/4G applications,
all of which require significantly increased packet processing, secure
application delivery and quality of service (QoS) performance.
-- May 19 2009 - Cavium Networks and Ecosystem Partners Demonstrate
Intelligent Networking, Wireless, Video and Security Solutions at Interop
2009. Cavium Networks demonstrates the OCTEON family of multi-core MIPS64
processors with 1 to 32 cores, the ECONA ARM family of connected home and
office processors, the PureVu family of H.264 Video processors, the NITROX
family of security processors and 10G Intelligent Network Adaptors.
-- June 1 2009 - Cavium Networks Introduces netHD(TM) (Networked High
Definition) Wi-Fi Reference Design for In-Home Wireless HD Video
Distribution with 1080p60 Quality and Sub-Frame Latency, to be used by
consumer electronic manufacturers, gaming console vendors, media PC and
HDMI cable replacement vendors to introduce systems that deliver full HD
1080p60 quality in-home video distribution to a single or multiple flat
panel displays within the home.
-- June 1 2009 - Cavium Networks Collaborates with Atheros to offer an
integrated platform that enables wireless HD Video distribution to flat
panel televisions and displays.
-- June 2 2009 - Cavium Networks Introduces the ECONA CNS2135 ARM SOC
Processor solution for small form factor and low power network and storage
applications, for network and storage applications including Network
Attached Storage (NAS) appliances and Internet download and streaming
systems.
-- July 20 2009 - Cavium Networks Introduces NITROX DPI Family of Layer 7
Content Processors. This family incorporates 3rd generation Cavium
Networks Deep Packet Inspection technology that targets a wide range of
applications including firewalls, intrusion prevention (IPS), gateway anti-
virus, unified threat management and content-based QoS in routers,
switches, and services blades for the Enterprise, Datacenter and Service
Provider markets.
Conference Call
Cavium Networks, Inc. will broadcast its second quarter 2009 financial
results conference call today, July 28th, 2009, 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 Networks website at
http://www.caviumnetworks.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 website for a limited period of time.
About Cavium Networks
Cavium Networks is a leading provider of highly integrated semiconductor
products that enable intelligent processing in networking, communications,
storage, wireless, video and security applications. Cavium Networks offers
a broad portfolio of integrated, software compatible processors ranging in
performance from 10 Mbps to 20 Gbps that enable secure, intelligent
functionality in enterprise, data-center, broadband/consumer and access &
service provider equipment. Cavium Networks processors are supported by
ecosystem partners that provide operating systems, tool support, reference
designs and other services. Cavium Networks' principal offices are in
Mountain View, California with design team locations in California,
Massachusetts, India and Taiwan. For more information, please visit:
http://www.caviumnetworks.com.
Note on Forward-Looking Statements
This press release may contain forward-looking statements regarding future
events that involve risks and uncertainties. Readers are cautioned that
these forward-looking statements are only predictions and may differ
materially from actual future events or results. These forward-looking
statements involve risks and uncertainties, as well as assumptions that if
they do not fully materialize or prove incorrect, could cause our results
to differ materially from those expressed or implied by such
forward-looking statements. The risks and uncertainties that could cause
our results to differ materially from those expressed or implied by such
forward-looking statements include but are not limited to the rate of new
design wins, the rate at which existing design wins go into production,
pricing pressures; general economic conditions; manufacturing difficulties;
and other risks and uncertainties described more fully in our documents
filed with or furnished to the Securities and Exchange Commission. More
information about these and other risks that may impact Cavium's business
are set forth in the "Risk Factors" section of our Form 10K filed with the
Securities and Exchange Commission on March 2, 2009. All forward-looking
statements in this press release are based on information available to us
as of the date hereof and qualified in their entirety by this cautionary
statement, and we assume no obligation to revise or update these
forward-looking statements.
CAVIUM NETWORKS, INC.
Unaudited GAAP Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended
------------------
June 30, March 31,
2009 2009
-------- --------
Net revenue $ 22,804 $ 20,382
Cost of revenue 12,139 10,814
-------- --------
Gross profit 10,665 9,568
-------- --------
Operating expenses:
Research and development 10,274 9,991
Sales, general and administrative 6,526 6,137
-------- --------
Total operating expenses 16,800 16,128
-------- --------
Loss from operations (6,135) (6,560)
-------- --------
Other income, net:
Interest expense (67) (79)
Interest income and other 90 134
-------- --------
Total other income, net 23 55
-------- --------
Loss before income tax (6,112) (6,505)
Income tax expense 56 28
-------- --------
Net loss $ (6,168) $ (6,533)
======== ========
Net loss per common share, basic and diluted $ (0.15) $ (0.16)
Shares used in computing basic and diluted net loss per
common share 41,212 41,083
CAVIUM NETWORKS, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(In thousands)
Reconciliation of GAAP research and development
expenses to non-GAAP:
GAAP research and development expenses $ 10,274 $ 9,991
Stock-based compensation and related payroll
taxes 1,441 1,235
Acquisition related compensation expense and
related payroll taxes 754 812
Restructuring 221 -
-------- --------
Non-GAAP research and development expenses $ 7,858 $ 7,944
======== ========
Reconciliation of GAAP sales, general and
administrative expenses to non-GAAP
GAAP sales, general and administrative expenses $ 6,526 $ 6,137
Stock-based compensation and related payroll
taxes 1,461 1,300
Restructuring 95 -
Amortization of acquired intangibles 35 35
Acquisition related compensation expense and
related payroll taxes 18 19
-------- --------
Non-GAAP sales, general and administrative
expenses $ 4,917 $ 4,783
======== ========
CAVIUM NETWORKS, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(In thousands, except per share data and percentages)
Three Months Ended
----------------------
Reconciliation of GAAP gross profit & margin to June 30, March 31,
non-GAAP: 2009 2009
---------- ----------
Net revenue $ 22,804 $ 20,382
GAAP gross profit 10,665 9,568
GAAP gross margin 46.8% 46.9%
Amortization of acquired intangibles:
Cost of revenue 1,021 1,070
Stock-based compensation and related
payroll taxes:
Cost of revenue 80 87
Fair value adjustment of acquired
inventory 87 228
---------- ----------
Non-GAAP gross profit $ 11,853 $ 10,953
========== ==========
Non-GAAP gross margin 52.0% 53.7%
========== ==========
Reconciliation of GAAP loss from operations to
non-GAAP: Three Months Ended
----------------------
June 30, March 31,
2009 2009
---------- ----------
GAAP loss from operations $ (6,135) $ (6,560)
Amortization of acquired intangibles 1,056 1,105
Stock-based compensation and related payroll
taxes 2,982 2,622
Restructuring 316 -
Acquisition related compensation expense and
related payroll taxes 772 831
Fair value adjustment of acquired
inventory 87 228
---------- ----------
Non-GAAP loss from operations $ (922) $ (1,774)
========== ==========
Non-GAAP loss from operations as a percentage of
revenue -4.0% -8.7%
========== ==========
Reconciliation of GAAP net loss to non-GAAP: Three Months Ended
----------------------
June 30, March 31,
2009 2009
---------- ----------
GAAP net loss $ (6,168) $ (6,533)
Non-GAAP adjustments:
Stock-based compensation and related payroll taxes:
Cost of revenue 80 87
Research and development 1,441 1,235
Sales, general and administrative 1,461 1,300
Amortization of acquired intangibles:
Cost of revenue 1,021 1,070
Sales, general and administrative 35 35
Fair value adjustment of acquired inventory 87 228
Restructuring 316 -
Acquisition related compensation expense and
related payroll taxes 772 831
---------- ----------
Total of non-GAAP adjustments 5,213 4,786
---------- ----------
Non-GAAP loss $ (955) $ (1,747)
========== ==========
GAAP net loss per share (diluted) $ (0.15) $ (0.16)
========== ==========
Non-GAAP adjustments detailed above 0.13 0.12
Non-GAAP loss per share (diluted) $ (0.02) $ (0.04)
========== ==========
GAAP weighted average shares (diluted) 41,212 41,083
CAVIUM NETWORKS, INC.
Unaudited GAAP Condensed Consolidated Balance Sheets
(In thousands)
As of
----------------------
June 30, March 31,
2009 2009
---------- ----------
Assets
Current assets:
Cash and cash equivalents $ 66,747 $ 65,618
Accounts receivable, net 15,292 14,681
Inventories 16,484 16,171
Prepaid expenses and other current assets 3,149 4,446
---------- ----------
Total current assets 101,672 100,916
Property and equipment, net 8,853 10,304
Intangible assets, net 14,433 15,659
Goodwill 13,047 13,092
Other assets 447 443
---------- ----------
Total assets $ 138,452 $ 140,414
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 7,473 $ 4,600
Accrued expenses and other current liabilities 2,706 4,137
Deferred revenue 1,676 1,322
Capital lease and technology license
obligations, current 2,476 2,545
---------- ----------
Total current liabilities 14,331 12,604
Capital lease and technology license obligations,
net of current 892 1,507
Other non-current liabilities 1,430 1,617
---------- ----------
Total liabilities 16,653 15,728
---------- ----------
Stockholders' equity
Common stock 41 41
Additional paid-in capital 191,682 188,401
Accumulated deficit (69,924) (63,756)
---------- ----------
Total stockholders' equity 121,799 124,686
---------- ----------
Total liabilities and stockholders' equity $ 138,452 $ 140,414
========== ==========
Cavium Networks Contact:
Art Chadwick
Vice President of Finance and Administration and Chief Financial Officer
Tel: (650) 623-7063
Email: Email Contact
Angel Atondo
Marketing Communications Manager
Tel: (650) 623-7033
Email: Email Contact
