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Marvell Technology Group Ltd. Reports Fiscal Third Quarter ResultsRevenue: $803.1 Million, Up 25 Percent Sequentially
Santa Clara, California
(December 3, 2009) —
Marvell Technology Group Ltd. (Nasdaq: MRVL), a world leader in storage, communications and consumer silicon solutions, today reported financial results for the third quarter of fiscal 2010, ended October 31, 2009. Conference CallMarvell will be conducting a conference call on December 3, 2009 at 1:30 p.m. PST to discuss results for the third quarter ended October 31, 2009. Interested parties may dial-in to the conference call at 1-866-271-0675, pass-code 78345706. The call is being webcast by Thomson Reuters and can be accessed at Marvell's website under the Investor Events section of the Investor Relations page at http://www.marvell.com/investors/events.jsp. Replay on the internet will be available following the call until January 3, 2009. Discussion of Non-GAAP Financial MeasuresNon-GAAP financial measures exclude stock-based compensation expense as well as charges related to acquisitions, restructuring, gains and other charges that are driven primarily by discrete events that management does not consider to be directly related to Marvell's core operating performance. Non-GAAP earnings per share is calculated by dividing non-GAAP net income by non-GAAP weighted average shares outstanding (diluted). For purposes of calculating non-GAAP earnings per share, the GAAP weighted average shares outstanding (diluted) is adjusted to exclude the potential benefits of compensation costs expected to be incurred in future periods, but not yet recognized in the financial statements. The expected compensation costs are treated as proceeds assumed to be used to repurchase shares under the GAAP treasury stock method. About MarvellMarvell (NASDAQ: MRVL) is a global leader in the development of storage, communications and consumer silicon solutions. Marvell's diverse product portfolio includes switching, transceiver, communications controller, wireless, and storage solutions that power the entire communications infrastructure, including enterprise, metro, home, and storage networking. As used in this release, the terms "Company" and "Marvell" refer to Marvell Technology Group Ltd. and its subsidiaries. For more information visit www.marvell.com. Forward-Looking StatementsThis press release contains forward-looking statements that involve risks and uncertainties, including statements regarding the Company's expectations regarding the entrenchment of financial discipline; and statements concerning the Company's use of non-GAAP financial measures as important supplemental information. These statements are not guarantees of results and should not be considered as an indication of future performance. Actual events or results may differ materially from those described in this document due to a number of risks and uncertainties, including, among others, the Company's reliance on major customers and suppliers; market acceptance of new products; uncertainty in the worldwide economic environment; successful execution of the Company's restructuring plan and other risks detailed in Marvell's SEC filings. When Marvell files its Form 10-Q for the third quarter of fiscal 2010, the financial statements may differ from the results disclosed in this press release because judgments and estimates that management used in preparing the financial results reported in this press release may need to be updated to the date of the filing. The Company's results also remain subject to review by the Company's independent registered public accounting firm. For other factors that could cause Marvell's results to vary from expectations, please see the risk factors identified in Marvell's latest Annual Report on Form 10-K for the year end January 31, 2009, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as filed with the SEC and other factors detailed from time to time in Marvell's filings with the SEC. Marvell undertakes no obligation to revise or update publicly any forward-looking statements.
Marvell Technology Group Ltd.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
October 31, August 1, November 1, October 31, November 1,
2009 2009 2008 2009 2008
Net revenue $803,098 $640,620 $791,046 $1,965,152 $2,437,696
Cost of goods
sold 341,617 288,059 379,137 887,306 1,173,892
Gross profit 461,481 352,561 411,909 1,077,846 1,263,804
Operating
expenses:
Research and
development 212,873 196,190 234,222 615,152 722,411
Selling and
marketing 35,442 32,907 41,158 102,260 129,080
General and
administrative 16,660 29,469 28,869 148,856 72,809
Amortization
and write-
off of
acquired
intangible
assets 26,450 26,446 34,814 83,252 105,049
Total
operating
expenses 291,425 285,012 339,063 949,520 1,029,349
Operating
income 170,056 67,549 72,846 128,326 234,455
Interest and
other income
(expense), net (1,373) 279 11,543 (1,254) 6,097
Income before
income taxes 168,683 67,828 84,389 127,072 240,552
Provision
(benefit)
for income
taxes (32,916) 9,335 13,443 (21,563) 28,300
Net income $201,599 $58,493 $70,946 148,635 212,252
Basic net
income per
share $0.32 $0.09 $0.12 $0.24 $0.35
Diluted net
income per
share $0.31 $0.09 $0.11 $0.23 $0.34
Shares used in
computing
basic earnings
per share 623,613 620,881 611,945 621,057 606,676
Shares used in
computing
diluted
earnings per
share 659,739 648,110 630,810 647,863 630,997
Marvell Technology Group Ltd.
Reconciliation of GAAP Net Income to Non-GAAP Net Income:
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
October 31, August 1, November 1, October 31, November 1,
2009 2009 2008 2009 2008
GAAP net
income $201,599 $58,493 $70,946 $148,635 $212,252
Stock-based
compensation 34,377 30,015 39,578 96,040 132,431
Amortization
and write-off
of acquired
intangible
assets 26,450 26,446 34,814 83,252 105,049
Restructuring (b) 1,919 4,956 - 15,211 -
Legal/Tax
related
matters (a) (32,569) (1,202) - 38,229 -
Other (b) - - - 990 -
Non-GAAP net
income $231,776 $118,708 $145,338 $382,357 $449,732
GAAP weighted
average
shares -
diluted 659,739 648,110 630,810 647,863 630,997
Non-GAAP
adjustment 4,297 3,651 1,740 2,938 168
Non-GAAP
weighted
average
shares
diluted (c) 664,036 651,761 632,550 650,801 631,165
GAAP
diluted
net income
per share $0.31 $0.09 $0.11 $0.23 $0.34
Non-GAAP
diluted
net income
per share $0.35 $0.18 $0.23 $0.59 $0.71
GAAP gross
profit: $461,481 $352,561 $411,909 $1,077,846 $1,263,804
Stock-based
compensation 2,389 1,810 1,795 8,315 8,623
Other - - - 990 -
Non-GAAP gross
profit $463,870 $354,371 $413,704 $1,087,151 $1,272,427
GAAP gross
profit as
a % of
revenue 57.5% 55.0% 52.1% 54.8% 51.8%
Stock-based
compensation 0.3% 0.3% 0.2% 0.4% 0.4%
Other - - - 0.0% -
Non-GAAP
gross profit 57.8% 55.3% 52.3% 55.3% 52.2%
GAAP research
and
development: $212,873 $196,190 $234,222 $615,152 $722,411
Stock-based
compensation (24,134) (22,193) (30,607) (68,064) (93,537)
Restructuring (1,338) (3,526) - (10,704) -
Legal/Tax
settlement - 1,820 - 1,820 -
Non-GAAP
research
and
development $187,401 $172,291 $203,615 $538,204 $628,874
GAAP selling
and marketing: $35,442 $32,907 $41,158 $102,260 $129,080
Stock-based
compensation (4,087) (3,659) (6,896) (11,457) (20,403)
Restructuring (51) (523) - (1,839) -
Legal/Tax
settlement - 659 - 659 -
Non-GAAP
selling
and marketing $31,304 $29,384 $34,262 $89,623 $108,677
GAAP general
and
administrative: $16,660 $29,469 $28,869 $148,856 $72,809
Stock-based
compensation (3,767) (2,353) (280) (8,204) (9,868)
Restructuring (530) (907) - (2,668) -
Legal/Tax
settlement - 158 - (71,842) -
Non-GAAP
general
and
administrative $12,363 $26,367 $28,589 $66,142 $62,941
GAAP
provision
(benefit)
for income
taxes: $(32,916) $9,335 $13,443 $(21,563) $28,300
Tax reserve
reversal 27,317 - - 27,317 -
Income tax
payable
adjustment 5,252 - - 5,252 -
Non-GAAP
provision
(benefit)
for income
taxes $(347) $9,335 $13,443 $11,006 $28,300
(a) Fiscal quarter ended
Marvell Technology Group Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
October 31, January 31,
Assets 2009 2009
Current assets:
Cash, cash equivalents, and
short-term investments $1,464,187 $951,909
Accounts receivable, net 394,319 222,101
Inventories 239,209 310,654
Prepaid expenses, deferred income taxes
and other current assets 72,796 75,651
Total current assets 2,170,511 1,560,315
Property and equipment, net 349,276 390,853
Long-term investments 39,274 40,541
Goodwill and acquired intangible assets,
net 2,201,016 2,284,164
Other non-current assets 127,643 138,327
Total assets $4,887,720 $4,414,200
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $317,233 $139,028
Accrued liabilities 201,033 175,135
Income taxes payable 14,671 35,803
Deferred income 71,273 57,895
Current portion of capital lease
obligations 1,901 1,787
Total current liabilities 606,111 409,648
Capital lease obligations, net of current
portion 1,011 2,451
Other long-term liabilities 174,298 173,034
Total liabilities 781,420 585,133
Shareholders' equity:
Common stock 1,249 1,233
Additional paid-in capital 4,501,258 4,372,265
Accumulated other comprehensive income
(loss) (1,129) (718)
Accumulated deficit (395,078) (543,713)
Total shareholders' equity 4,106,300 3,829,067
Total liabilities and shareholders'
equity $4,887,720 $4,414,200
Marvell Technology Group Ltd.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Three Months Ended Nine Months Ended
October 31, November 1, October 31, November 1,
2009 2008 2009 2008
Cash flows from
operating activities:
Net income $201,599 $70,946 $148,635 $212,252
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 24,571 29,136 74,976 85,786
Stock-based
compensation 34,377 39,578 96,040 132,431
Amortization and
write-off
of acquired intangible
assets 26,450 34,814 83,252 105,049
Fair market value
adjustment to
SOURCE Jeff Palmer, Investor Relations, +1-408-222-8373, jpalmer@marvell.com, or  |
