SANTA CLARA, Calif.,
March 7, 2019 /PRNewswire/
-- Marvell Technology Group Ltd. (NASDAQ: MRVL), a leader in
infrastructure semiconductor solutions, today reported financial
results for the fourth fiscal quarter and the full fiscal year,
ended February 2, 2019. Revenue for the fourth quarter of
fiscal 2019 was $745 million.
GAAP net loss from continuing operations for the fourth quarter
of fiscal 2019 was $(261) million, or
$(0.40) per diluted share. Non-GAAP
net income from continuing operations for the fourth quarter of
fiscal 2019 was $168 million, or
$0.25 per diluted share. Cash flow
from operations for the fourth quarter was $107 million.
Revenue for fiscal 2019 was $2.9
billion. GAAP net loss from continuing operations for fiscal
2019 was $(179) million, or
$(0.30) per diluted share. Non-GAAP
net income from continuing operations for fiscal 2019 was
$716 million, or $1.19 per diluted share. Cash flow from
operations for fiscal 2019 was $597
million
"Marvell continued to improve its financial performance in
fiscal 2019, while also increasing scale and diversifying its
business through the acquisition of Cavium. While macroeconomic
conditions are currently impacting our first quarter outlook, we
expect growth to resume in the second quarter," said Matt Murphy, Marvell's President and Chief
Executive Officer. "Looking ahead, we are excited about our
expanding position in the 5G market, including our recently
announced partnership with Samsung, which includes multiple
generations of baseband and control plane processors for both LTE
and 5G base stations."
First Quarter of Fiscal 2020 Financial Outlook
- Revenue is expected to be $650
million +/- 3%.
- GAAP gross margin is expected to be approximately 55%.
- Non-GAAP gross margin is expected to be approximately 64%.
- GAAP operating expenses are expected to be $378 million to $388
million.
- Non-GAAP operating expenses are expected to be $295 million to $300
million.
- GAAP diluted loss per share from continuing operations is
expected to be $(0.09) to
$(0.05) per share.
- Non-GAAP diluted income per share from continuing operations is
expected to be $0.12 to $0.16 per share.
Conference Call
Marvell will conduct a conference call on Thursday, March 7, 2019 at 1:45 p.m. Pacific Time to discuss results for the
fourth quarter and full fiscal year 2019. Interested parties may
join the conference call by dialing 1-844-647-5488 or
1-615-247-0258, passcode 1885417. The call will be webcast and can
be accessed at the Marvell Investor Relations website at
http://investor.marvell.com/ with a replay available following the
call until Friday, March 15,
2019.
Discussion of Non-GAAP Financial Measures
Non-GAAP financial measures exclude the effect of share-based
compensation expense, amortization of the inventory fair value step
up, amortization and write-off of acquired intangible assets,
acquisition-related costs, restructuring and other related charges,
litigation settlement, and certain expenses and benefits that are
driven primarily by discrete events that management does not
consider to be directly related to Marvell's core business.
Marvell uses a non-GAAP tax rate to compute the non-GAAP tax
provision. This non-GAAP tax rate is based on Marvell's estimated
annual GAAP income tax forecast, adjusted to account for items
excluded from GAAP income in calculating Marvell's non-GAAP income,
as well as the effects of significant non-recurring and period
specific tax items which vary in size and frequency. Marvell's
non-GAAP tax rate is determined on an annual basis and may be
adjusted during the year to take into account events that may
materially affect the non-GAAP tax rate such as tax law changes;
significant changes in Marvell's geographic mix of revenue and
expenses; or changes to Marvell's corporate structure. For the
fourth quarter of fiscal 2019, a non-GAAP tax rate of 4% has been
applied to the non-GAAP financial results.
Marvell believes that the presentation of non-GAAP financial
measures provide important supplemental information to management
and investors regarding financial and business trends relating to
Marvell's financial condition and results of operations. While
Marvell uses non-GAAP financial measures as a tool to enhance its
understanding of certain aspects of its financial performance,
Marvell does not consider these measures to be a substitute for, or
superior to, financial measures calculated in accordance with GAAP.
Consistent with this approach, Marvell believes that disclosing
non-GAAP financial measures to the readers of its financial
statements provides such readers with useful supplemental data
that, while not a substitute for GAAP financial measures, allows
for greater transparency in the review of its financial and
operational performance.
Externally, management believes that investors may find
Marvell's non-GAAP financial measures useful in their assessment of
Marvell's operating performance and the valuation of Marvell.
Internally, Marvell's non-GAAP financial measures are used in the
following areas:
- Management's evaluation of Marvell's operating
performance;
- Management's establishment of internal operating budgets;
- Management's performance comparisons with internal forecasts
and targeted business models; and
- Management's determination of the achievement and measurement
of certain performance-based equity awards (adjustments may vary
from award to award).
Non-GAAP financial measures have limitations in that they do not
reflect all of the costs associated with the operations of
Marvell's business as determined in accordance with GAAP. As a
result, you should not consider these measures in isolation or as a
substitute for analysis of Marvell's results as reported under
GAAP. Marvell expects to continue to incur expenses similar to the
non-GAAP adjustments described above, and exclusion of these items
from Marvell's non-GAAP net income should not be construed as an
inference that these costs are unusual, infrequent or
non-recurring.
Forward-Looking Statements under the Private Securities
Litigation Reform Act of 1995
This press release contains forward-looking statements within
the meaning of the federal securities laws that involve risks and
uncertainties, including: Marvell's expectations regarding its
first quarter of fiscal 2020 financial outlook, Marvell's
expectations regarding growth in the second quarter of fiscal 2020,
Marvell's position in the 5G market and Marvell's use of non-GAAP
financial measures as important supplemental information. Words
such as "anticipates," "expects," "intends," "plans," "projects,"
"believes," "seeks," "estimates," "can," "may," "will," "would" and
similar expressions identify such forward-looking statements. These
statements are not guarantees of results and should not be
considered as an indication of future activity or future
performance. Actual events or results may differ materially from
those described in this press release due to a number of risks and
uncertainties, including, but not limited to: the effect of the
consummation of our acquisition of Cavium on the combined
company's business relationships, operating results, and business
generally; potential difficulties in Cavium employee retention as a
result of the transaction; the ability of Marvell to
successfully integrate Cavium's operations and product lines; the
ability of Marvell to implement its plans, forecasts, and other
expectations with respect to Cavium's business and realize the
anticipated synergies and cost savings in the time frame
anticipated or at all, and identify and realize additional
opportunities; the risk of downturns in the highly cyclical
semiconductor industry; Marvell's dependence upon the storage and
networking markets, which are highly cyclical and intensely
competitive; the outcome of pending or future litigation and legal
and regulatory proceedings; Marvell's dependence on a small number
of customers; severe financial hardship or bankruptcy of one or
more of Marvell's major customers; Marvell's ability to define,
design and develop products for the 5G market; Marvell's ability to
market its 5G products to Tier 1 infrastructure customers;
Marvell's ability and the ability of its customers to successfully
compete in the markets in which it serves; Marvell's reliance on
independent foundries and subcontractors for the manufacture,
assembly and testing of its products; Marvell's ability and its
customers' ability to develop new and enhanced products and the
adoption of those products in the market; decreases in gross margin
and results of operations in the future due to a number of factors;
Marvell's ability to estimate customer demand and future sales
accurately; Marvell's ability to scale its operations in response
to changes in demand for existing or new products and services; the
impact of international conflict and continued economic volatility
in either domestic or foreign markets; the effects of transitioning
to smaller geometry process technologies; the risks associated with
manufacturing and selling a majority of products and customers'
products outside of the United
States; risks associated with acquisition and consolidation
activity in the semiconductor industry; the impact of any change in
the income tax laws in jurisdictions where Marvell operates and the
loss of any beneficial tax treatment that Marvell currently enjoys;
the effects of any potential acquisitions or investments; Marvell's
ability to protect its intellectual property; the impact and costs
associated with changes in international financial and regulatory
conditions; Marvell's maintenance of an effective system of
internal controls; and other risks detailed in Marvell's SEC
filings from time to time. For other factors that could cause
Marvell's results to vary from expectations, please see the risk
factors identified in Marvell's Quarterly Report on Form 10-Q
for the fiscal quarter ended November 3,
2018 as filed with the SEC on December 10, 2018, 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.
About Marvell
Marvell first revolutionized the digital storage industry by
moving information at speeds never thought possible. Today, that
same breakthrough innovation remains at the heart of the Company's
storage, processing, networking, security and connectivity
solutions. With leading intellectual property and deep system-level
knowledge, Marvell's semiconductor solutions continue to transform
the enterprise, cloud, automotive, industrial, and consumer
markets. To learn more, visit: www.marvell.com.
Marvell® and the Marvell logo are
registered trademarks of Marvell and/or its affiliates.
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
February 2,
2019
|
|
November 3,
2018
|
|
February 3,
2018
|
|
February 2,
2019
|
|
February 3,
2018
|
Net
revenue
|
$
|
744,799
|
|
|
$
|
851,051
|
|
|
$
|
615,409
|
|
|
$
|
2,865,791
|
|
|
$
|
2,409,170
|
|
Cost of goods
sold
|
422,797
|
|
|
467,464
|
|
|
241,927
|
|
|
1,407,399
|
|
|
947,230
|
|
Gross
profit
|
322,002
|
|
|
383,587
|
|
|
373,482
|
|
|
1,458,392
|
|
|
1,461,940
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development
|
256,102
|
|
|
264,888
|
|
|
180,000
|
|
|
914,009
|
|
|
714,444
|
|
Selling, general and
administrative
|
106,168
|
|
|
112,178
|
|
|
68,291
|
|
|
424,360
|
|
|
238,166
|
|
Litigation settlement
(a)
|
—
|
|
|
—
|
|
|
74,385
|
|
|
—
|
|
|
74,385
|
|
Restructuring related
charges (gain)
|
12,740
|
|
|
27,031
|
|
|
(3,205)
|
|
|
76,753
|
|
|
5,250
|
|
Total operating
expenses
|
375,010
|
|
|
404,097
|
|
|
319,471
|
|
|
1,415,122
|
|
|
1,032,245
|
|
Operating income
(loss) from continuing operations
|
(53,008)
|
|
|
(20,510)
|
|
|
54,011
|
|
|
43,270
|
|
|
429,695
|
|
Interest
income
|
1,236
|
|
|
1,046
|
|
|
5,738
|
|
|
11,926
|
|
|
17,381
|
|
Interest
expense
|
(21,953)
|
|
|
(22,370)
|
|
|
(292)
|
|
|
(60,362)
|
|
|
(685)
|
|
Other income (loss),
net
|
4,377
|
|
|
(2,628)
|
|
|
(658)
|
|
|
519
|
|
|
4,813
|
|
Interest and other
income (loss), net
|
(16,340)
|
|
|
(23,952)
|
|
|
4,788
|
|
|
(47,917)
|
|
|
21,509
|
|
Income (loss) from
continuing operations before income taxes
|
(69,348)
|
|
|
(44,462)
|
|
|
58,799
|
|
|
(4,647)
|
|
|
451,204
|
|
Provision for income
taxes
|
191,350
|
|
|
9,305
|
|
|
10,036
|
|
|
174,447
|
|
|
18,062
|
|
Income (loss) from
continuing operations, net of tax
|
(260,698)
|
|
|
(53,767)
|
|
|
48,763
|
|
|
(179,094)
|
|
|
433,142
|
|
Income from
discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87,689
|
|
Net income
(loss)
|
$
|
(260,698)
|
|
|
$
|
(53,767)
|
|
|
$
|
48,763
|
|
|
$
|
(179,094)
|
|
|
$
|
520,831
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share — Basic:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.40)
|
|
|
$
|
(0.08)
|
|
|
$
|
0.10
|
|
|
$
|
(0.30)
|
|
|
$
|
0.87
|
|
Discontinued
operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.18
|
|
Net income (loss) per
share - Basic
|
$
|
(0.40)
|
|
|
$
|
(0.08)
|
|
|
$
|
0.10
|
|
|
$
|
(0.30)
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share — Diluted:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.40)
|
|
|
$
|
(0.08)
|
|
|
$
|
0.10
|
|
|
$
|
(0.30)
|
|
|
$
|
0.85
|
|
Discontinued
operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.17
|
|
Net income (loss) per
share - Diluted
|
$
|
(0.40)
|
|
|
$
|
(0.08)
|
|
|
$
|
0.10
|
|
|
$
|
(0.30)
|
|
|
$
|
1.02
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
|
|
|
|
|
|
Basic
|
657,835
|
|
|
657,519
|
|
|
493,663
|
|
|
591,232
|
|
|
498,008
|
|
Diluted
|
657,835
|
|
|
657,519
|
|
|
506,197
|
|
|
591,232
|
|
|
509,667
|
|
|
|
(a)
|
Represents legal
settlement and associated costs related to Luna shareholder
litigation matter.
|
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(In
thousands)
|
|
|
|
February
2,
2019
|
|
February
3,
2018
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
582,410
|
|
$
|
888,482
|
Short-term
investments
|
|
—
|
|
952,790
|
Accounts receivable,
net
|
|
493,122
|
|
280,395
|
Inventories
|
|
276,005
|
|
170,039
|
Prepaid expenses and
other current assets
|
|
43,721
|
|
41,482
|
Assets held for
sale
|
|
—
|
|
30,767
|
Total current
assets
|
|
1,395,258
|
|
2,363,955
|
Property and
equipment, net
|
|
318,978
|
|
202,222
|
Goodwill
|
|
5,494,505
|
|
1,993,310
|
Acquired intangible
assets, net
|
|
2,560,682
|
|
—
|
Other non-current
assets
|
|
247,329
|
|
148,800
|
Total
assets
|
|
$
|
10,016,752
|
|
$
|
4,708,287
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
185,362
|
|
$
|
145,236
|
Accrued
liabilities
|
|
330,594
|
|
86,958
|
Accrued employee
compensation
|
|
115,925
|
|
127,711
|
Deferred
income
|
|
4,915
|
|
61,237
|
Total current
liabilities
|
|
636,796
|
|
421,142
|
Long-term
debt
|
|
1,732,699
|
|
—
|
Non-current income
taxes payable
|
|
59,221
|
|
56,976
|
Deferred tax
liabilities
|
|
246,252
|
|
52,204
|
Other non-current
liabilities
|
|
35,374
|
|
36,552
|
Total
liabilities
|
|
2,710,342
|
|
566,874
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Common
stock
|
|
1,317
|
|
991
|
Additional paid-in
capital
|
|
6,188,598
|
|
2,733,292
|
Accumulated other
comprehensive loss
|
|
—
|
|
(2,322)
|
Retained
earnings
|
|
1,116,495
|
|
1,409,452
|
Total shareholders'
equity
|
|
7,306,410
|
|
4,141,413
|
Total liabilities and
shareholders' equity
|
|
$
|
10,016,752
|
|
$
|
4,708,287
|
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(In
thousands)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
February 2,
2019
|
|
February 3,
2018
|
|
February 2,
2019
|
|
February 3,
2018
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(260,698)
|
|
|
$
|
48,763
|
|
|
$
|
(179,094)
|
|
|
$
|
520,831
|
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
37,627
|
|
|
20,918
|
|
|
123,983
|
|
|
83,487
|
|
Share-based
compensation
|
50,580
|
|
|
21,377
|
|
|
184,064
|
|
|
86,689
|
|
Amortization of
acquired intangible assets
|
78,688
|
|
|
358
|
|
|
183,318
|
|
|
3,570
|
|
Amortization of
inventory fair value adjustment associated with acquisition of
Cavium
|
97,597
|
|
|
—
|
|
|
223,372
|
|
|
—
|
|
Amortization of
deferred debt issuance costs and debt discounts
|
2,064
|
|
|
—
|
|
|
11,354
|
|
|
—
|
|
Restructuring related
impairment charges (gain)
|
(12,081)
|
|
|
(4,159)
|
|
|
(200)
|
|
|
(4,561)
|
|
Amortization of
premium /discount on available-for-sale securities
|
—
|
|
|
392
|
|
|
624
|
|
|
995
|
|
Deferred income
taxes
|
146,322
|
|
|
17,027
|
|
|
118,647
|
|
|
19,825
|
|
Gain on sale of
discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(88,406)
|
|
Loss (gain) on sale of
business
|
—
|
|
|
—
|
|
|
1,592
|
|
|
(5,254)
|
|
Other expense
(income), net
|
344
|
|
|
(277)
|
|
|
3,530
|
|
|
(1,920)
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(39,347)
|
|
|
85,719
|
|
|
(99,044)
|
|
|
54,989
|
|
Inventories
|
2,489
|
|
|
3,878
|
|
|
4,348
|
|
|
(12,160)
|
|
Prepaid expenses and
other assets
|
189
|
|
|
(627)
|
|
|
(11,685)
|
|
|
12,494
|
|
Accounts
payable
|
(28,753)
|
|
|
(36,700)
|
|
|
(6,493)
|
|
|
(16,613)
|
|
Accrued liabilities
and other non-current liabilities
|
55,329
|
|
|
(21,898)
|
|
|
84,352
|
|
|
(62,360)
|
|
Accrued employee
compensation
|
(25,677)
|
|
|
(1,324)
|
|
|
(46,599)
|
|
|
(11,936)
|
|
Deferred
income
|
1,968
|
|
|
(13,706)
|
|
|
675
|
|
|
(8,557)
|
|
Net cash provided by
operating activities
|
106,641
|
|
|
119,741
|
|
|
596,744
|
|
|
571,113
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of
available-for-sale securities
|
—
|
|
|
(162,607)
|
|
|
(14,956)
|
|
|
(835,494)
|
|
Sales of
available-for-sale securities
|
—
|
|
|
22,671
|
|
|
623,896
|
|
|
306,822
|
|
Maturities of
available-for-sale securities
|
—
|
|
|
120,639
|
|
|
187,985
|
|
|
426,341
|
|
Purchases of time
deposits
|
—
|
|
|
(75,000)
|
|
|
(25,000)
|
|
|
(300,000)
|
|
Maturities of time
deposits
|
—
|
|
|
75,000
|
|
|
175,000
|
|
|
300,000
|
|
Purchases of
technology licenses
|
(359)
|
|
|
(1,331)
|
|
|
(11,540)
|
|
|
(6,587)
|
|
Purchases of property
and equipment
|
(28,886)
|
|
|
(13,395)
|
|
|
(75,921)
|
|
|
(38,551)
|
|
Proceeds from sales of
property and equipment
|
42,707
|
|
|
10,571
|
|
|
43,525
|
|
|
12,559
|
|
Cash payment for
acquisition of Cavium, net of cash and cash equivalents
acquired
|
—
|
|
|
—
|
|
|
(2,649,465)
|
|
|
—
|
|
Net proceeds from sale
of discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
165,940
|
|
Net proceeds
(payments) from sale of business
|
—
|
|
|
—
|
|
|
(3,352)
|
|
|
2,402
|
|
Other
|
2,275
|
|
|
—
|
|
|
(2,725)
|
|
|
6,089
|
|
Net cash provided by
(used in) investing activities
|
15,737
|
|
|
(23,452)
|
|
|
(1,752,553)
|
|
|
39,521
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Repurchases of common
stock
|
(50,005)
|
|
|
—
|
|
|
(103,974)
|
|
|
(527,574)
|
|
Proceeds from employee
stock plans
|
40,189
|
|
|
42,878
|
|
|
100,961
|
|
|
180,302
|
|
Tax withholding paid
on behalf of employees for net share settlement
|
(9,248)
|
|
|
(905)
|
|
|
(54,939)
|
|
|
(26,840)
|
|
Dividend payments to
shareholders
|
(39,489)
|
|
|
(29,695)
|
|
|
(148,081)
|
|
|
(119,251)
|
|
Payments on technology
license obligations
|
(16,676)
|
|
|
(5,806)
|
|
|
(69,157)
|
|
|
(28,503)
|
|
Proceeds from issuance
of debt
|
—
|
|
|
—
|
|
|
1,892,605
|
|
|
—
|
|
Principal payments of
debt
|
(75,000)
|
|
|
—
|
|
|
(756,128)
|
|
|
—
|
|
Payment of equity and
debt financing costs
|
—
|
|
|
(14,378)
|
|
|
(11,550)
|
|
|
(14,378)
|
|
Net cash provided by
(used in) financing activities
|
(150,229)
|
|
|
(7,906)
|
|
|
849,737
|
|
|
(536,244)
|
|
Net increase
(decrease) in cash and cash equivalents
|
(27,851)
|
|
|
88,383
|
|
|
(306,072)
|
|
|
74,390
|
|
Cash and cash
equivalents at beginning of period
|
610,261
|
|
|
800,099
|
|
|
888,482
|
|
|
814,092
|
|
Cash and cash
equivalents at end of period
|
$
|
582,410
|
|
|
$
|
888,482
|
|
|
$
|
582,410
|
|
|
$
|
888,482
|
|
Marvell Technology
Group Ltd.
|
Reconciliations
from GAAP to Non-GAAP (Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
February 2,
2019
|
|
November 3,
2018
|
|
February 3,
2018
|
|
February 2,
2019
|
|
February 3,
2018
|
GAAP gross
profit:
|
$
|
322,002
|
|
|
$
|
383,587
|
|
|
$
|
373,482
|
|
|
$
|
1,458,392
|
|
|
$
|
1,461,940
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
2,942
|
|
|
2,429
|
|
|
1,662
|
|
|
12,024
|
|
|
6,645
|
|
Amortization of
acquired intangible assets
|
57,591
|
|
|
57,594
|
|
|
—
|
|
|
134,169
|
|
|
—
|
|
Other cost of goods
sold (a)
|
97,598
|
|
|
105,841
|
|
|
8,000
|
|
|
226,372
|
|
|
11,000
|
|
Total special
items
|
158,131
|
|
|
165,864
|
|
|
9,662
|
|
|
372,565
|
|
|
17,645
|
|
Non-GAAP gross
profit
|
$
|
480,133
|
|
|
$
|
549,451
|
|
|
$
|
383,144
|
|
|
$
|
1,830,957
|
|
|
$
|
1,479,585
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin
|
43.2
|
%
|
|
45.1
|
%
|
|
60.7
|
%
|
|
50.9
|
%
|
|
60.7
|
%
|
Non-GAAP gross
margin
|
64.5
|
%
|
|
64.6
|
%
|
|
62.3
|
%
|
|
63.9
|
%
|
|
61.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP operating
expenses
|
$
|
375,010
|
|
|
$
|
404,097
|
|
|
$
|
319,471
|
|
|
$
|
1,415,122
|
|
|
$
|
1,032,245
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
(47,638)
|
|
|
(47,811)
|
|
|
(19,715)
|
|
|
(186,071)
|
|
|
(78,477)
|
|
Restructuring related
charges (gain) (b)
|
(12,740)
|
|
|
(27,031)
|
|
|
3,205
|
|
|
(76,753)
|
|
|
(5,250)
|
|
Amortization of
acquired intangible assets
|
(21,097)
|
|
|
(21,098)
|
|
|
(358)
|
|
|
(49,150)
|
|
|
(3,570)
|
|
Litigation settlement
(c)
|
—
|
|
|
—
|
|
|
(74,385)
|
|
|
—
|
|
|
(74,385)
|
|
Other operating
expenses (d)
|
(7,392)
|
|
|
(11,222)
|
|
|
(10,579)
|
|
|
(62,095)
|
|
|
(14,689)
|
|
Total special
items
|
(88,867)
|
|
|
(107,162)
|
|
|
(101,832)
|
|
|
(374,069)
|
|
|
(176,371)
|
|
Total non-GAAP
operating expenses
|
$
|
286,143
|
|
|
$
|
296,935
|
|
|
$
|
217,639
|
|
|
$
|
1,041,053
|
|
|
$
|
855,874
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
(7.1)
|
%
|
|
(2.4)
|
%
|
|
8.8
|
%
|
|
1.5
|
%
|
|
17.8
|
%
|
Other cost of goods
sold (a)
|
13.1
|
%
|
|
12.4
|
%
|
|
1.3
|
%
|
|
7.9
|
%
|
|
0.5
|
%
|
Share-based
compensation
|
6.8
|
%
|
|
5.9
|
%
|
|
3.5
|
%
|
|
6.9
|
%
|
|
3.5
|
%
|
Restructuring related
charges (gain) (b)
|
1.7
|
%
|
|
3.2
|
%
|
|
(0.5)
|
%
|
|
2.7
|
%
|
|
0.2
|
%
|
Amortization of
acquired intangible assets
|
10.6
|
%
|
|
9.2
|
%
|
|
0.1
|
%
|
|
6.4
|
%
|
|
0.1
|
%
|
Litigation settlement
(c)
|
—
|
%
|
|
—
|
%
|
|
12.1
|
%
|
|
—
|
%
|
|
3.1
|
%
|
Other operating
expenses (d)
|
0.9
|
%
|
|
1.4
|
%
|
|
1.6
|
%
|
|
2.2
|
%
|
|
0.7
|
%
|
Non-GAAP operating
margin
|
26.0
|
%
|
|
29.7
|
%
|
|
26.9
|
%
|
|
27.6
|
%
|
|
25.9
|
%
|
|
|
|
|
|
|
|
|
|
|
GAAP interest and
other income (loss), net
|
$
|
(16,340)
|
|
|
$
|
(23,952)
|
|
|
$
|
4,788
|
|
|
$
|
(47,917)
|
|
|
$
|
21,509
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
Gain on sale of
intellectual property
|
(3,500)
|
|
|
—
|
|
|
—
|
|
|
(3,500)
|
|
|
—
|
|
Restructuring related
items (e)
|
157
|
|
|
1,491
|
|
|
1,355
|
|
|
15
|
|
|
(4,016)
|
|
Write-off of debt
issuance costs (f)
|
782
|
|
|
850
|
|
|
—
|
|
|
7,736
|
|
|
—
|
|
Total special
items
|
(2,561)
|
|
|
2,341
|
|
|
1,355
|
|
|
4,251
|
|
|
(4,016)
|
|
Total non-GAAP
interest and other income (loss), net
|
$
|
(18,901)
|
|
|
$
|
(21,611)
|
|
|
$
|
6,143
|
|
|
$
|
(43,666)
|
|
|
$
|
17,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
(260,698)
|
|
|
$
|
(53,767)
|
|
|
$
|
48,763
|
|
|
$
|
(179,094)
|
|
|
$
|
520,831
|
|
Less: Income (loss)
from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87,689
|
|
GAAP net income
(loss) from continuing operations
|
(260,698)
|
|
|
(53,767)
|
|
|
48,763
|
|
|
(179,094)
|
|
|
433,142
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
Other cost of goods
sold (a)
|
97,598
|
|
|
105,841
|
|
|
8,000
|
|
|
226,372
|
|
|
11,000
|
|
Share-based
compensation
|
50,580
|
|
|
50,240
|
|
|
21,377
|
|
|
198,095
|
|
|
85,122
|
|
Restructuring related
charges (gain) in operating expenses (b)
|
12,740
|
|
|
27,031
|
|
|
(3,205)
|
|
|
76,753
|
|
|
5,250
|
|
Restructuring related
items in interest and other income (loss), net (d)
|
157
|
|
|
1,491
|
|
|
1,355
|
|
|
15
|
|
|
(4,016)
|
|
Amortization of
acquired intangible assets
|
78,688
|
|
|
78,692
|
|
|
358
|
|
|
183,319
|
|
|
3,570
|
|
Litigation settlement
(c)
|
—
|
|
|
—
|
|
|
74,385
|
|
|
—
|
|
|
74,385
|
|
Gain on sale of
intellectual property
|
(3,500)
|
|
|
—
|
|
|
—
|
|
|
(3,500)
|
|
|
—
|
|
Write-off of debt
issuance costs (f)
|
782
|
|
|
850
|
|
|
—
|
|
|
7,736
|
|
|
—
|
|
Other operating
expenses (d)
|
7,392
|
|
|
11,222
|
|
|
10,579
|
|
|
62,095
|
|
|
14,689
|
|
Pre-tax total special
items
|
244,437
|
|
|
275,367
|
|
|
112,849
|
|
|
750,885
|
|
|
190,000
|
|
Other income tax
effects and adjustments (g)
|
184,348
|
|
|
55
|
|
|
3,170
|
|
|
144,585
|
|
|
(7,590)
|
|
Non-GAAP net income
from continuing operations
|
$
|
168,087
|
|
|
$
|
221,655
|
|
|
$
|
164,782
|
|
|
$
|
716,376
|
|
|
$
|
615,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares — basic
|
657,835
|
|
|
657,519
|
|
|
493,663
|
|
|
591,232
|
|
|
498,008
|
|
Weighted average
shares — diluted
|
657,835
|
|
|
657,519
|
|
|
506,197
|
|
|
591,232
|
|
|
509,667
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income (loss) per share from continuing operations
|
$
|
(0.40)
|
|
|
$
|
(0.08)
|
|
|
$
|
0.10
|
|
|
$
|
(0.30)
|
|
|
$
|
0.85
|
|
Non-GAAP diluted net
income per share from continuing operations (h)
|
$
|
0.25
|
|
|
$
|
0.33
|
|
|
$
|
0.32
|
|
|
$
|
1.19
|
|
|
$
|
1.19
|
|
|
|
(a)
|
Other costs of goods
sold includes amortization of the Cavium inventory fair value step
up and charges for past intellectual property licensing
matters.
|
|
|
(b)
|
Restructuring related
charges include employee severance, facilities related costs, and
impairment of equipment and other assets. Restructuring
related charges in the three months ended February 2, 2019 and
February 3, 2018 and the year ended February 2, 2019 and February
3, 2018 include gain on sale of a building that was a direct result
of restructuring.
|
|
|
(c)
|
Represents legal
settlement and associated costs related to shareholder litigation
matter.
|
|
|
(d)
|
Other operating
expenses primarily include Cavium merger costs, costs related to
royalty matters, and costs of retention bonuses offered to
employees who remained through the ramp down of certain operations
due to restructuring actions.
|
|
|
(e)
|
Interest and other
income (loss), net includes restructuring related items such as
gain on sale of a business and foreign currency remeasurement
associated with restructuring related accruals.
|
|
|
(f)
|
Write-off of debt
issuance costs is associated with the partial term loan repayment
and the terminated bridge loan commitment.
|
|
|
(g)
|
Other income tax
effects and adjustments relate to tax provision based on a non-GAAP
income tax rate of 4%.
|
|
|
(h)
|
Non-GAAP diluted net
income per share from continuing operations for the three months
ended February 2, 2019 and November 3, 2018 was calculated by
dividing non-GAAP net income from continuing operations by weighted
average shares outstanding (diluted) of 663,580 shares and 665,752
shares, respectively, due to the non-GAAP net income reported in
the respective period. Non-GAAP diluted net income per share from
continuing operations for the year ended February 2, 2019 was
calculated by dividing non-GAAP net income from continuing
operations by weighted average shares outstanding (diluted) of
600,049, due to the non-GAAP net income reported in the
period.
|
Marvell
Technology Group Ltd.
|
Outlook for
the First Quarter of Fiscal Year 2020
|
Reconciliations
from GAAP to Non-GAAP (Unaudited)
|
(In
millions, except per share amounts)
|
|
|
|
|
|
Outlook for Three
Months Ended
May 4,
2019
|
GAAP
revenue
|
$650 +/-
3%
|
Special
items:
|
—
|
Non-GAAP
revenue
|
$650 +/-
3%
|
|
|
GAAP gross
margin
|
55%
|
Special
items:
|
|
Share-based
compensation
|
0.3%
|
Amortization of
acquired intangible assets
|
8.9%
|
Non-GAAP gross
margin
|
64%
|
|
|
Total GAAP
operating expenses
|
$378 -
$388
|
Special
items:
|
|
Share-based
compensation
|
54
|
Restructuring related
charges
|
4
|
Amortization of
acquired intangible assets
|
20
|
Other operating
expenses
|
7
|
Total non-GAAP
operating expenses
|
$295 -
$300
|
|
|
|
|
GAAP diluted net
income per share from continuing operations
|
$(0.09) -
$(0.05)
|
Special
items:
|
|
Share-based
compensation
|
0.08
|
Amortization of
acquired intangible assets
|
0.12
|
Restructuring related
charges in operating expenses
|
0.01
|
Other operating
expenses
|
0.01
|
Other income tax
effects and adjustments
|
(0.01)
|
Non-GAAP diluted net
income per share from continuing operations
|
$0.12 -
$0.16
|
Quarterly Revenue
Trend (Unaudited)
|
(In
thousands)
|
|
|
Three Months
Ended
|
|
%
Change
|
|
February
2,
2019
|
|
November 3,
2018
|
|
February
3, 2018
|
|
YoY
|
|
QoQ
|
Storage
(1)
|
$
|
317,042
|
|
|
$
|
406,822
|
|
|
$
|
323,718
|
|
|
(2)
|
%
|
|
(22)
|
%
|
Networking
(2)
|
387,457
|
|
|
398,424
|
|
|
241,611
|
|
|
60
|
%
|
|
(3)
|
%
|
Total
Core
|
704,499
|
|
|
805,246
|
|
|
565,329
|
|
|
25
|
%
|
|
(13)
|
%
|
Other
(3)
|
40,300
|
|
|
45,805
|
|
|
50,080
|
|
|
(20)
|
%
|
|
(12)
|
%
|
Total
Revenue
|
$
|
744,799
|
|
|
$
|
851,051
|
|
|
$
|
615,409
|
|
|
21
|
%
|
|
(12)
|
%
|
|
Three Months
Ended
|
% of
Total
|
February
2, 2019
|
|
November
3, 2018
|
|
February
3, 2018
|
Storage
(1)
|
43
|
%
|
|
48
|
%
|
|
53
|
%
|
Networking
(2)
|
52
|
%
|
|
47
|
%
|
|
39
|
%
|
Total
Core
|
95
|
%
|
|
95
|
%
|
|
92
|
%
|
Other
(3)
|
5
|
%
|
|
5
|
%
|
|
8
|
%
|
Total
Revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
(1) Storage
products are comprised primarily of HDD and SSD Controllers, Fibre
Channel Adapters and Data Center Storage Solutions.
|
|
(2) Networking
products are comprised primarily of Ethernet Switches, Ethernet
Transceivers, Ethernet NICs, Embedded Communication Processors,
Automotive Ethernet, Security Adapters and Processors as well as
WiFi solutions including WiFi only, WiFi/Bluetooth combos and WiFi
Microcontroller combos. In addition, this grouping includes a
few legacy product lines in which we no longer invest, but will
generate revenue for several years.
|
|
(3) Other
products are comprised primarily of Printer Solutions, Application
Processors and others.
|
For further information, contact:
Ashish Saran
Vice President, Investor Relations
408-222-0777
ir@marvell.com
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SOURCE Marvell Technology Group Ltd.