SAN JOSE, CA — (Marketwire) — 10/31/11 — 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 third quarter of 2011 ended September 30, 2011.
Revenue in the third quarter of 2011 was $67.7 million, a 5.4% sequential decrease from the $71.6 million reported for the second quarter of 2011 and an increase of 22.7% from the $55.2 million reported for the third quarter of last year.
Net income for the third quarter of 2011, on a GAAP basis, was $6.0 million, or $0.12 per diluted share, compared to net income of $1.9 million, or $0.04 per diluted share in the second quarter of 2011, and a net income of $5.0 million, or $0.10 per diluted share in the third quarter of last year. Gross margins were 59.9% in the third quarter of 2011 compared to 59.9% in the second quarter of 2011 and 62.3% in the third quarter of last year. Total cash and cash equivalents were $74.6 million at September 30, 2011.
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 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 third quarter of 2011 exclude expenses totaling $8.3 million related to stock-based compensation and related payroll expense, amortization of acquired intangible assets, acquisition related expenses and change in earn-out liability. 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 third quarter of 2011 was $14.4 million, or $0.27 per diluted share, compared with non-GAAP net income of $18.4 million, or $0.34 per diluted share in the second quarter of 2011. Gross margins, on a non-GAAP basis, was 65.0% and operating margins (non-GAAP income from operations as a percentage of revenue), on a non-GAAP basis, was 20.3% in the third quarter of 2011.
“Though revenues this quarter were in line with the updated financial outlook we provided in September, they were weaker than originally expected, in the enterprise market as well as recognized software services revenue. Sales into the enterprise market were affected by a larger than expected impact of a hub transition at one of our major customers as well as lower demand from other enterprise customers as they adjust their supply chain inventory due to the softer demand environment,” said Syed Ali, President and CEO of Cavium. “However, we continued to experience high levels of design win activity across multiple product families and are confident that we are well positioned for the future.”
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Cavium, Inc. will broadcast its third quarter 2011 financial results conference call today, October 31, 2011, 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 . 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.
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 40 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 recently moved its principal office in San Jose, CA with design team locations in California, Massachusetts, India and Taiwan. For more information, please visit: .
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 and current expectations. Our actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks, uncertainties and assumptions. 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, the timing of purchases by Cavium-s customers, acceptance by customers of Cavium-s new product introductions, whether or not the company can continue to expand gross margins and operating margins, 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 10Q filed with the Securities and Exchange Commission on August 5, 2011. 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.
Art Chadwick
Vice President of Finance and Administration
and Chief Financial Officer
Tel: (408) 943-7104
Email:
Angel Atondo
Sr. Marketing Communications Manager
Tel: (408) 943-7417
Email:
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