Cavium Announces Financial Results for Q1 2017

SAN JOSE, Calif., April 26, 2017 – Cavium, Inc. (NASDAQ: CAVM), a leading provider of semiconductor products that enable intelligent processing for enterprise, data center, cloud, wired and wireless networking, today announced financial results for the first quarter ended March 31, 2017.

Net revenue in the first quarter of 2017 was $229.6 million, a 1.5% sequential increase from the $226.2 million reported in the fourth quarter of 2016 and 125.3% from the $101.9 million reported in the first quarter of 2016.

Generally Accepted Accounting Principles (GAAP) Results
Net loss for the first quarter of 2017 was $50.5 million, or ($0.75) per diluted share, compared to $121.6 million, or ($1.82) per diluted share in the fourth quarter of 2016. Gross margins were 40.1% in the first quarter of 2017 compared to 43.4% in the fourth quarter of 2016. GAAP operating loss (GAAP loss from operations as a percentage of revenue) was 17.0% in the first quarter of 2017 compared to 12.9% in the fourth quarter of 2016. Total cash and cash equivalents were $132.4 million at March 31, 2017.

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. Cavium believes that these non-GAAP financial measures provide additional insight into Cavium’s ongoing performance and core operational activities and has chosen to provide these measures for more consistent and meaningful comparison between periods. 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 first quarter of 2017, Non-GAAP net income was $41.7 million, or $0.58 per diluted share, Non-GAAP gross margin was 65.7% and Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue) was 22.0%.

Recent News Highlights

• April 3, 2017  - Networking Industry Leaders Joined Forces to Expand New Open Source Community to Drive Development of the DPDK Project
• April 3, 2017  - Cavium FastLinQ® 25/100GbE Ethernet Adapter Accelerates Telco NFV & Cloud Workloads
• March 27, 2017  - Cavium FastLinQ® Ethernet First Achieves Microsoft Windows Server SDDC Premium Certification
• March 20, 2017  - Cavium and Elenion Technologies Collaborated to Offer Silicon Photonics Enabled End-to-End Server-to-Switch Solutions
• March 8, 2017  - Cavium Collaborated with Microsoft to Showcase SONiC Compatibility at OCP US Summit 2017
• March 8, 2017  - Cavium and Microsoft Collaborated to Accelerate Cloud Services with ThunderX2™
• February 27, 2017  - Cavium Showcased Extensive Portfolio of Solutions for 5G Infrastructure at Mobile World Congress 2017
• February 27, 2017 - Cavium Joined Telecom Infra Project to Enable OpenCellular Access to LTE, LTE-A and NFV/5G Technologies
• February 27, 2017  - Cavium Announced Expansion of OCTEON Fusion-M® Baseband Products
• February 27, 2017 - Cavium and Trend Micro Introduced Mobile Edge Computing and NFV Solutions on ThunderX® and OCTEON TX™ Platforms
• February 27, 2017 - Cavium Partners with China Unicom and Showcased M-CORD NFV/5G at Mobile World Congress 2017
• February 13, 2017 - Cavium Demonstrated the Newest Infrastructure Security Solutions at RSA 2017

Cavium will broadcast its first quarter of 2017 financial results conference call today, April 26, 2017, 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 offers a broad portfolio of integrated, software compatible processors ranging in performance from 1Gbps to 100Gbp that enable secure, intelligent functionality in Enterprise, Data Center, Broadband, Mobile and Service Provider Equipment, highly programmable switches which scale to 3.2Tbps and Ethernet and Fibre Channel adapters up to 100Gbps. Cavium processors are supported by ecosystem partners that provide operating systems, tools and application support, hardware reference designs and other products. Cavium is headquartered in San Jose, CA with design centers in California, Massachusetts, India, Israel, China and Taiwan. For more information, please visit: http://www.cavium.com.

Cavium Contact
Angel Atondo
Sr. Marketing Communications Manager
Tel: (408) 943-7417
Email:angel.atondo@cavium.com

Source: Cavium Inc

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Cavium, Inc. Commences Exchange Offer to Acquire QLogic Corporation

San Jose, California., July 13, 2016 – Cavium, Inc. (Nasdaq: CAVM) ("Cavium"), a leading provider of semiconductor products that enable intelligent processing for enterprise, data center, cloud, wired and wireless networking, today announced that it commenced an exchange offer (the "Offer") for all of the outstanding shares of QLogic Corporation (Nasdaq: QLGC) ("QLogic"), a leading supplier of high performance networking infrastructure solutions, through a wholly-owned subsidiary of Cavium, pursuant to their previously announced merger agreement, dated June 15, 2016. Subject to the terms and conditions of the Offer, QLogic stockholders who validly tender their shares in the Offer will receive $11.00 in cash and 0.098 shares of Cavium common stock for each share of QLogic common stock.

The Offer is scheduled to expire at 12:00 midnight, New York City time, at the end of August 9, 2016, unless earlier extended or terminated. The terms and conditions of the Offer are described in the exchange offer documents, which will be mailed to QLogic stockholders and have been filed with the Securities and Exchange Commission ("SEC").
 
Upon satisfaction of the conditions to the Offer, and after the shares tendered in the Offer are accepted for payment, Cavium and QLogic intend, as promptly as practicable, to effect a merger pursuant to Section 251(h) of the Delaware General Corporation Law, which would not require a vote of QLogic's stockholders, and which would result in each outstanding share of QLogic common stock not tendered in the Offer (other than shares held by QLogic in treasury, by Cavium or its subsidiaries or by QLogic stockholders who have validly exercised their appraisal rights under Delaware law) being converted into the right to receive $11.00 in cash and 0.098 shares of Cavium common stock. The Offer is subject to customary conditions, including the tender by QLogic stockholders of a number of shares of QLogic common stock that, together with any shares already held by Cavium, represents at least a majority of the outstanding shares of QLogic's common stock and certain regulatory clearances, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. No approval of the stockholders of QLogic is required in connection with the proposed transaction. The board of directors of QLogic unanimously recommends that QLogic stockholders accept the Offer and tender their shares of QLogic common stock to Cavium pursuant to the Offer.

In connection with the Offer, Cavium has filed a registration statement on Form S-4 including a prospectus/offer to exchange and certain ancillary documentation that will be mailed to QLogic stockholders and a tender offer statement on Schedule TO with the SEC, and QLogic has filed a solicitation/recommendation statement on Schedule 14D-9 that will also be mailed to QLogic stockholders. These documents contain important information about the Offer that should be read carefully before any decision is made with respect to the Offer.

About Cavium
Cavium is a leading provider of highly integrated semiconductor products that enable intelligent processing in enterprise, data center, cloud, wired and wireless service provider applications. Cavium offers a broad portfolio of integrated, software compatible processors ranging in performance up to 100 Gbps that enable secure, intelligent functionality in enterprise, data center, broadband and access & 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 offices are in San Jose, California with design team locations in California, Massachusetts, India, and China. For more information, please visit: http://www.Cavium.com.

Cautionary Note Concerning Forward-Looking Statements:
Certain statements made herein, including, for example, information regarding the proposed transaction between Cavium and QLogic, the expected timetable for completing the transaction, and the potential benefits of the transaction, are "forward-looking statements." These forward-looking statements reflect the current analysis of existing information and are subject to various risks and uncertainties. As a result, caution must be exercised in relying on forward-looking statements. Due to known and unknown risks, our actual results may differ materially from our expectations or projections.

The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements: the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the outcome of any legal proceedings that could be instituted against QLogic or its directors or Cavium related to the merger agreement; the possibility that various conditions to the consummation of the Cavium exchange offer and merger may not be satisfied or waived, including the receipt of all regulatory clearances related to the merger; the failure of Cavium to obtain the necessary financing pursuant to the arrangements set forth in the debt commitment letter delivered pursuant to the merger agreement or otherwise; uncertainty as to how many shares of QLogic common stock will be tendered into the Cavium exchange offer; the risk that the Cavium exchange offer and merger will not close within the anticipated time periods; risks related to the ultimate outcome and results of integrating the operations of Cavium and QLogic, the ultimate outcome of Cavium's operating strategy applied to QLogic and the ultimate ability to realize synergies; the effects of the business combination on Cavium and QLogic, including the increased level of indebtedness resulting from the transaction, and the combined company's future financial condition, operating results, strategy and plans; risks that the proposed transaction disrupts current plans and operations, and potential difficulties in employee retention as a result of the merger; the risk of downturns in the semiconductor and networking industries; the effects of local and national economic, credit and capital market conditions on the economy in general; and other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in our other reports and other public filings with the SEC, including, but not limited to, those detailed in QLogic's Annual Report on Form 10-K for the year ended April 3, 2016, and Cavium's Annual Report on Form 10-K for the year ended December 31, 2015 and Cavium's most recent Quarterly Report on Form 10-Q filed with the SEC. The forward-looking statements contained herein are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Additional Information and Where to Find It
This document relates to a pending business combination transaction between Cavium and QLogic. This document does not constitute an offer to sell or exchange, or the solicitation of an offer to buy or exchange, any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, sale or exchange would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Cavium has filed a registration statement on Form S-4 related to the transaction with the SEC and may file amendments thereto. Cavium and a wholly-owned subsidiary of Cavium has filed a tender offer statement on Schedule TO (including a prospectus/offer to exchange, a related letter of transmittal and other exchange offer documents) related to the transaction with the SEC and may file amendments thereto. QLogic has filed a solicitation/recommendation statement on Schedule 14D-9 with the SEC and may file amendments thereto. QLogic and Cavium may also file other documents with the SEC regarding the transaction. This document is not a substitute for any registration statement, Schedule TO, Schedule 14D-9 or any other document which QLogic or Cavium may file with the SEC in connection with the transaction. Investors and security holders are urged to read the registration statement, the Schedule TO (including the prospectus/offer to exchange, related letter of transmittal and other exchange offer documents), the solicitation/recommendation statement on Schedule 14D-9 and the other relevant materials with respect to the transaction carefully and in their entirety when they become available before making any investment decision with respect to the transaction, because they contain important information about the transaction.

The prospectus/offer to exchange, the related letter of transmittal and certain other exchange offer documents, as well as the solicitation/recommendation statement, will be made available to all holders of QLogic's stock at no expense to them. The exchange offer materials and the solicitation/recommendation statement are available for free at the SEC's website at www.sec.gov. Additional copies of the exchange offer materials and the solicitation/recommendation statement may be obtained for free by contacting Cavium's Investor Relations department at (408) 943-7417 or at angel.atondo@cavium.com. Additional copies of the solicitation/recommendation statement may be obtained for free by contacting QLogic's Investor Relations department at (949) 542-1330 or at doug.naylor@qlogic.com. 

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