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Cavium Networks Announces Financial Results for Q1 2009

MOUNTAIN VIEW, Calif., April 29, 2009 – 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 first quarter of 2009 ended March 31, 2009.

Revenue in the first quarter of 2009 was $20.4 million, an 8% sequential decrease from the $22.2 million reported for the fourth quarter of 2008 and an increase of 11% from the $18.3 million reported for the first quarter of last year.

Generally Accepted Accounting Principles (GAAP) Results
Net loss for the first quarter of 2009, on a GAAP basis, was $6.5 million, or $0.16 per share, compared to a net loss of $4.4 million, or $0.11 per share in the fourth quarter of 2008, and net income of $2.0 million, or $0.05 per share in the first quarter of last year. Gross margins were 46.9% in the first quarter of 2009 compared to 49.8% in the fourth quarter of 2008 and 64.1% in the first quarter of 2008. Total cash and cash equivalents were $65.6 million at March 31, 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 first quarter of 2009 exclude expenses totaling $4.8 million related to stock-based compensation, amortization of acquired intangible assets, 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 first quarter of 2009, on a non-GAAP basis, was $1.7 million, or $0.04 per share, compared with non-GAAP net income of $0.7 million, or $0.02 per share net income in the fourth quarter of 2008 and net income of $2.9 million, or $0.07 per share in the first quarter of last year. Gross margins, on a non-GAAP basis, were 53.7% in the first quarter of 2009 compared to 55.1% in the fourth quarter of last year.

“Sales during the first quarter were negatively impacted by the continuing weakness in the Enterprise and Data Center segments,” said Syed Ali, president and CEO of Cavium Networks. “Although overall sales in Q1 were sequentially down, new customer orders were sequentially higher, which we consider to be an encouraging sign that markets for our products are improving. Furthermore, we continue to experience record levels of design win activity at Tier 1 customers, across multiple market segments, which positions us well for the long term.”

Recent News Highlights:
  • February 11, 2009 - Continuous Computing and Cavium Networks Collaborate to Deliver Performance-Optimized Wireless Solutions for LTE Networks.
  • February 16, 2009 - Cavium Networks’ OCTEON Processors fuel array of New Wireless Products showcased at 2009 Mobile World Congress in Barcelona, Spain.
  • March 24, 2009 - Entropic Communications collaborates with Cavium to enable MoCA (Multimedia over Coax Alliance) based home networking solutions.
  • April 1, 2009 - Cavium Networks Demonstrates Full 1080p60 HD Video and Gaming over MoCA® Home Networks.
  • April 14, 2009 - Cavium Networks Announces Next Generation OCTEON™ 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.
  • April 14, 2009 - 20+ leading ecosystem partners announce support for Cavium Networks’ OCTEON II Processor Family, including: RadiSys, Wind River, 6Wind, Advantech, ATS, Bayside, Continuous Computing, D2 Technologies, embedUR, Enea, Fulcrum, GDA, Interphase, Kaspersky, Kontron, Lanner, Lauterbach, MIPS, MontaVista, NetLogic, PLX, Qosmos, QNX and Zarlink.
  • April 20, 2009 - Cavium Networks Introduces Low Latency Full-HD H.264 Micro-Module for Real-Time A/V Applications at NAB Show 2009.

Conference Call
Cavium Networks, Inc. will broadcast its first quarter 2009 financial results conference call today, April 29, 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 web site 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 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 and 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, CA with design team locations in California, Massachusetts and India. For more information, please visit: http://www.caviumnetworks.com.

Cavium Networks Contact:
Angel Atondo
Marketing Communications Manager
Cavium Networks
805 East Middlefield Road,
Mountain View, CA 94043
Telephone: 650-623-7033
Email: angel.atondo@caviumnetworks.com

 

 

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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

OCTEON™ and NITROX™ are trademarks of Cavium Networks, Inc . All other trademarks are the property of their respective owners. All rights reserved. © Cavium Networks, Inc. 2009.

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