Cavium, Inc. (CAVM) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $14.37 million, or $ 0.23 a share in the quarter, against a net profit of $4.22 million, or $0.07 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $27.97 million, or $0.43 a share compared with $22.49 million or $0.38 a share, a year ago.
Revenue during the quarter surged 60.02 percent to $168.12 million from $105.06 million in the previous year period. Gross margin for the quarter contracted 3734 basis points over the previous year period to 28.20 percent. Operating margin for the quarter stood at negative 56.06 percent as compared to a positive 4.73 percent for the previous year period.
Operating loss for the quarter was $94.24 million, compared with an operating income of $4.97 million in the previous year period.
However, the adjusted operating income for the quarter stood at $32.36 million compared to $22.89 million in the prior year period. At the same time, adjusted operating margin contracted 254 basis points in the quarter to 19.25 percent from 21.79 percent in the last year period.
Working capital increases sharply
Cavium, Inc. has recorded an increase in the working capital over the last year. It stood at $326.19 million as at Sep. 30, 2016, up 72.70 percent or $137.31 million from $188.88 million on Sep. 30, 2015. Current ratio was at 2.73 as on Sep. 30, 2016, down from 4.10 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 70 days for the quarter from 107 days for the last year period. Days sales outstanding went up to 58 days for the quarter compared with 56 days for the same period last year.
Days inventory outstanding has decreased to 45 days for the quarter compared with 125 days for the previous year period. At the same time, days payable outstanding went down to 33 days for the quarter from 74 for the same period last year.
Debt increases substantially
Cavium, Inc. has witnessed an increase in total debt over the last one year. It stood at $769.67 million as on Sep. 30, 2016, up 2,225.58 percent or $736.58 million from $33.10 million on Sep. 30, 2015. Total debt was 43.96 percent of total assets as on Sep. 30, 2016, compared with 7.79 percent on Sep. 30, 2015. Debt to equity ratio was at 0.92 as on Sep. 30, 2016, up from 0.10 as on Sep. 30, 2015.
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