Cavium Inc (CAVM) saw its loss narrow to $50.52 million, or $0.75 a share for the quarter ended Mar. 31, 2017. In the previous year period, the company reported a loss of $121.60 million, or $1.82 a share. On the other hand, adjusted net income for the quarter stood at $41.72 million, or $0.58 a share compared with $39.82 million or $0.56 a share, a year ago. Revenue during the quarter went up marginally by 1.51 percent to $229.58 million from $226.15 million in the previous year period. Gross margin for the quarter contracted 331 basis points over the previous year period to 40.13 percent. Operating margin for the quarter stood at negative 16.98 percent as compared to a negative 12.89 percent for the previous year period.
Operating loss for the quarter was $38.99 million, compared with an operating loss of $29.15 million in the previous year period.
However, the adjusted operating income for the quarter stood at $50.58 million compared to $48.94 million in the prior year period. At the same time, adjusted operating margin improved 39 basis points in the quarter to 22.03 percent from 21.64 percent in the last year period.
Working capital increases
Cavium Inc has recorded an increase in the working capital over the last year. It stood at $235.51 million as at Mar. 31, 2017, up 13.31 percent or $27.66 million from $207.84 million on Mar. 31, 2016. Current ratio was at 2.51 as on Mar. 31, 2017, down from 4.60 on Mar. 31, 2016. Cash conversion cycle (CCC) has decreased to 42 days for the quarter from 45 days for the last year period. Days sales outstanding went up to 40 days for the quarter compared with 30 days for the same period last year.
Days inventory outstanding was almost stable at 33 days for the quarter, when compared with the last year period. At the same time, days payable outstanding went up to 32 days for the quarter from 19 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 $643.46 million as on Mar. 31, 2017, up 2,556.95 percent or $619.24 million from $24.22 million on Mar. 31, 2016. Total debt was 42.02 percent of total assets as on Mar. 31, 2017, compared with 5.50 percent on Mar. 31, 2016. Debt to equity ratio was at 0.89 as on Mar. 31, 2017, up from 0.07 as on Mar. 31, 2016.
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