SANTA CLARA, Calif.,
March 4, 2020 /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 1, 2020. Revenue for the fourth quarter of
fiscal 2020 was $718
million.
Marvell completed the acquisition of Avera Semiconductor
("Avera"), the Application Specific Integrated Circuit ("ASIC")
business of GlobalFoundries on November
5, 2019. Marvell's results for the fourth quarter of
fiscal 2020 and fiscal year 2020 include the results of Avera from
the acquisition date, while prior periods presented do
not.
On December 6, 2019, the Company
completed the divestiture of the Wi-Fi Connectivity business to
NXP. The Company received $1.7
billion in cash proceeds. The divestiture resulted in
a pre-tax gain on sale of $1.1
billion. Marvell's results for the fourth quarter of fiscal
2020 and fiscal year 2020 include the results of the Wi-Fi
Connectivity business through the divestiture date, while prior
periods presented include the results of the Wi-Fi Connectivity
business for the entire period.
On December 31, 2019, the Company
completed an intra-entity asset transfer of certain of the
Company's intellectual property to a subsidiary in Singapore. The internal restructuring aligns
the global economic ownership of the Company's intellectual
property rights with the Company's current and future business
operations. The internal restructuring resulted in an income tax
benefit of approximately $763 million
for the fourth quarter of fiscal 2020 and for fiscal year 2020,
which primarily captures the tax effect of future deductions.
GAAP net income for the fourth quarter of fiscal 2020 was
$1.8 billion, or $2.62 per diluted share. Non-GAAP net income for
the fourth quarter of fiscal 2020 was $117
million, or $0.17 per diluted
share.
Revenue for fiscal 2020 was $2.7
billion. GAAP net income for fiscal 2020 was $1.6 billion, or $2.34 per diluted share. Non-GAAP net income for
fiscal 2020 was $444 million, or
$0.66 per diluted share.
"Marvell delivered fourth quarter revenue above the mid-point of
guidance with solid results from both our networking and storage
businesses. Our guidance for the first quarter of fiscal 2021
reflects the reduction of approximately 5 percent of revenue to
account for coronavirus impacts we are aware of so far," said
Matt Murphy, Marvell's President and
CEO. "Our customer and design win traction in the wireless
infrastructure market continues to grow and Nokia announced an
expanded relationship with Marvell to develop multiple generations
of leading 5G silicon solutions. We also announced the extension of
our long-term collaboration with Samsung on the radio access
network."
Marvell's first quarter guidance takes into account the U.S.
Government's export restriction on certain Chinese customers. Given
the ongoing uncertainty associated with the coronavirus, we also
have temporarily widened the guidance range on revenue.
First Quarter of Fiscal 2021 Financial Outlook
- Revenue is expected to be $680
million +/- 5%.
- GAAP gross margin is expected to be approximately 47.5%.
- Non-GAAP gross margin is expected to be approximately 63%.
- GAAP operating expenses are expected to be $410 million +/- $3
million.
- Non-GAAP operating expenses are expected to be $310 million +/- $2.5
million.
- GAAP diluted loss per share is expected to be $(0.20) to $(0.12)
per share.
- Non-GAAP diluted income per share is expected to be
$0.11 to $0.17 per share.
Conference Call
Marvell will conduct a conference call on Wednesday, March 4, 2020 at 1:45 p.m. Pacific Time to discuss results for the
fourth quarter and full fiscal year 2020. Interested parties may
join the conference call by dialing 1-844-647-5488 or
1-615-247-0258, passcode 3670507. 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 Wednesday, March 11,
2020.
Discussion of Non-GAAP Financial Measures
Non-GAAP financial measures exclude the effect of share-based
compensation expense, amortization of the inventory fair value
adjustment associated with the Aquantia and Avera acquisitions,
amortization of acquired intangible assets, acquisition and
divestiture-related costs, restructuring and other related charges,
resolution of legal matters, 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 2020, a non-GAAP tax rate of 4.5% 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. The exclusion of the above items from our GAAP financial
metrics does not necessarily mean that these costs are unusual or
infrequent.
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. 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 risk that the company may not realize the anticipated benefits
of the acquisitions of Aquantia Corp. and the Application Specific
Integrated Circuit (ASIC) business of GLOBALFOUNDRIES and the
divestiture of NXP (collectively, the "Transactions"); the effect
of the consummation of the Transactions on the company's business
relationships, operating results, and business generally; potential
difficulties in employee retention as a result of the Transactions;
the ability of Marvell to successfully integrate operations and
product lines related to the acquisitions; the ability of Marvell
to implement its plans, forecasts, and other expectations with
respect to the Transactions and realize the anticipated synergies
and cost savings in the time frame anticipated or at all; the
impact of international conflict and economic volatility in either
domestic or foreign markets including risks related to trade
conflicts, bans and tariffs; the risks associated with
manufacturing and selling products and customers' products outside
of the United States; 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; the effects of transitioning to smaller
geometry process technologies; 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 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;
the impact and costs associated with changes in international
financial and regulatory conditions; 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; the effects of epidemics like the coronavirus on
Marvell's employees, customers and suppliers; 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;
risks associated with acquisition and consolidation activity in the
semiconductor industry; the effects of any other potential
acquisitions, divestitures or investments; Marvell's ability to
protect its intellectual property; Marvell's maintenance of
an effective system of internal controls; severe financial hardship
or bankruptcy of one or more of Marvell's major customers; 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 2, 2019 as filed with the
SEC on December 4, 2019, and other
factors detailed from time to time in Marvell's filings with the
SEC. Marvell undertakes no obligation to revise or publicly update
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
1,
2020
|
|
November
2,
2019
|
|
February
2,
2019
|
|
February
1,
2020
|
|
February
2,
2019
|
Net revenue
|
|
$
|
717,671
|
|
|
$
|
662,470
|
|
|
$
|
744,799
|
|
|
$
|
2,699,161
|
|
|
$
|
2,865,791
|
|
Cost of goods
sold
|
|
412,927
|
|
|
322,403
|
|
|
422,797
|
|
|
1,342,220
|
|
|
1,407,399
|
|
Gross
profit
|
|
304,744
|
|
|
340,067
|
|
|
322,002
|
|
|
1,356,941
|
|
|
1,458,392
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
279,389
|
|
|
267,781
|
|
|
256,102
|
|
|
1,080,391
|
|
|
914,009
|
|
Selling, general and
administrative
|
|
121,592
|
|
|
118,993
|
|
|
106,168
|
|
|
464,580
|
|
|
424,360
|
|
Restructuring related
charges
|
|
18,258
|
|
|
14,802
|
|
|
12,740
|
|
|
55,328
|
|
|
76,753
|
|
Total operating
expenses
|
|
419,239
|
|
|
401,576
|
|
|
375,010
|
|
|
1,600,299
|
|
|
1,415,122
|
|
Operating income
(loss)
|
|
(114,495)
|
|
|
(61,509)
|
|
|
(53,008)
|
|
|
(243,358)
|
|
|
43,270
|
|
Interest
income
|
|
1,379
|
|
|
1,092
|
|
|
1,236
|
|
|
4,816
|
|
|
11,926
|
|
Interest
expense
|
|
(22,656)
|
|
|
(21,241)
|
|
|
(21,953)
|
|
|
(85,631)
|
|
|
(60,362)
|
|
Other income,
net
|
|
1,124,179
|
|
|
689
|
|
|
4,377
|
|
|
1,122,555
|
|
|
519
|
|
Interest and other
income (loss), net
|
|
1,102,902
|
|
|
(19,460)
|
|
|
(16,340)
|
|
|
1,041,740
|
|
|
(47,917)
|
|
Income (loss) before
income taxes
|
|
988,407
|
|
|
(80,969)
|
|
|
(69,348)
|
|
|
798,382
|
|
|
(4,647)
|
|
Provision (benefit)
for income taxes
|
|
(784,266)
|
|
|
1,532
|
|
|
191,350
|
|
|
(786,009)
|
|
|
174,447
|
|
Net income
(loss)
|
|
$
|
1,772,673
|
|
|
$
|
(82,501)
|
|
|
$
|
(260,698)
|
|
|
$
|
1,584,391
|
|
|
$
|
(179,094)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share - Basic
|
|
$
|
2.66
|
|
|
$
|
(0.12)
|
|
|
$
|
(0.40)
|
|
|
$
|
2.38
|
|
|
$
|
(0.30)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share - Diluted
|
|
$
|
2.62
|
|
|
$
|
(0.12)
|
|
|
$
|
(0.40)
|
|
|
$
|
2.34
|
|
|
$
|
(0.30)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
665,562
|
|
|
668,178
|
|
|
657,835
|
|
|
664,709
|
|
|
591,232
|
Diluted
|
|
675,700
|
|
|
668,178
|
|
|
657,835
|
|
|
676,094
|
|
|
591,232
|
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
February
1,
2020
|
|
February
2,
2019
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
647,604
|
|
|
$
|
582,410
|
|
Accounts receivable,
net
|
|
492,346
|
|
|
493,122
|
|
Inventories
|
|
322,980
|
|
|
276,005
|
|
Prepaid expenses and
other current assets
|
|
74,567
|
|
|
43,721
|
|
Total current
assets
|
|
1,537,497
|
|
|
1,395,258
|
|
Property and
equipment, net
|
|
357,092
|
|
|
318,978
|
|
Goodwill
|
|
5,337,405
|
|
|
5,494,505
|
|
Acquired intangible
assets, net
|
|
2,764,600
|
|
|
2,560,682
|
|
Deferred tax
assets
|
|
639,791
|
|
|
12,460
|
|
Other non-current
assets
|
|
496,850
|
|
|
234,869
|
|
Total
assets
|
|
$
|
11,133,235
|
|
|
$
|
10,016,752
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
213,747
|
|
|
$
|
185,362
|
|
Accrued
liabilities
|
|
346,639
|
|
|
335,509
|
|
Accrued employee
compensation
|
|
149,780
|
|
|
115,925
|
|
Total current
liabilities
|
|
710,166
|
|
|
636,796
|
|
Long-term
debt
|
|
1,439,024
|
|
|
1,732,699
|
|
Deferred tax
liabilities
|
|
31,233
|
|
|
246,252
|
|
Other non-current
liabilities
|
|
274,232
|
|
|
94,595
|
|
Total
liabilities
|
|
2,454,655
|
|
|
2,710,342
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Common
stock
|
|
1,328
|
|
|
1,317
|
|
Additional paid-in
capital
|
|
6,135,939
|
|
|
6,188,598
|
|
Retained
earnings
|
|
2,541,313
|
|
|
1,116,495
|
|
Total shareholders'
equity
|
|
8,678,580
|
|
|
7,306,410
|
|
Total liabilities and
shareholders' equity
|
|
$
|
11,133,235
|
|
|
$
|
10,016,752
|
|
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
February
1,
2020
|
|
February
2,
2019
|
|
February
1,
2020
|
|
February
2,
2019
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
1,772,673
|
|
|
$
|
(260,698)
|
|
|
$
|
1,584,391
|
|
|
$
|
(179,094)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
43,996
|
|
|
37,627
|
|
|
156,658
|
|
|
123,983
|
|
Share-based
compensation
|
|
53,171
|
|
|
50,580
|
|
|
242,207
|
|
|
184,064
|
|
Amortization of
acquired intangible assets
|
|
114,615
|
|
|
78,688
|
|
|
368,082
|
|
|
183,318
|
|
Amortization of
inventory fair value adjustment associated with
acquisitions
|
|
52,510
|
|
|
97,597
|
|
|
55,826
|
|
|
223,372
|
|
Amortization of
deferred debt issuance costs and debt discounts
|
|
2,723
|
|
|
2,064
|
|
|
6,763
|
|
|
11,354
|
|
Restructuring related
impairment charges (gain)
|
|
1,328
|
|
|
(12,081)
|
|
|
17,571
|
|
|
(200)
|
|
Deferred income
taxes
|
|
(777,257)
|
|
|
146,322
|
|
|
(785,158)
|
|
|
118,647
|
|
Gain on sale of
business
|
|
(1,123,223)
|
|
|
—
|
|
|
(1,121,709)
|
|
|
1,592
|
|
Other expense
(income), net
|
|
9,287
|
|
|
344
|
|
|
26,448
|
|
|
4,154
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
2,870
|
|
|
(39,347)
|
|
|
11,244
|
|
|
(99,044)
|
|
Inventories
|
|
43,361
|
|
|
2,489
|
|
|
12,759
|
|
|
4,348
|
|
Prepaid expenses and
other assets
|
|
(43,099)
|
|
|
189
|
|
|
(54,138)
|
|
|
(11,685)
|
|
Accounts
payable
|
|
(29,143)
|
|
|
(28,753)
|
|
|
1,658
|
|
|
(6,493)
|
|
Accrued liabilities
and other non-current liabilities
|
|
(76,635)
|
|
|
57,297
|
|
|
(182,893)
|
|
|
85,027
|
|
Accrued employee
compensation
|
|
8,661
|
|
|
(25,677)
|
|
|
20,588
|
|
|
(46,599)
|
|
Net cash provided by
operating activities
|
|
55,838
|
|
|
106,641
|
|
|
360,297
|
|
|
596,744
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of
available-for-sale securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,956)
|
|
Sales of
available-for-sale securities
|
|
—
|
|
|
—
|
|
|
18,832
|
|
|
623,896
|
|
Maturities of
available-for-sale securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
187,985
|
|
Purchases of time
deposits
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,000)
|
|
Maturities of time
deposits
|
|
—
|
|
|
—
|
|
|
—
|
|
|
175,000
|
|
Purchases of
technology licenses
|
|
(2,776)
|
|
|
(359)
|
|
|
(4,712)
|
|
|
(11,540)
|
|
Purchases of property
and equipment
|
|
(18,986)
|
|
|
(28,886)
|
|
|
(81,921)
|
|
|
(75,921)
|
|
Proceeds from sales of
property and equipment
|
|
89
|
|
|
42,707
|
|
|
620
|
|
|
43,525
|
|
Cash payment for
acquisition, net of cash and cash equivalents acquired
|
|
(593,500)
|
|
|
—
|
|
|
(1,071,079)
|
|
|
(2,649,465)
|
|
Net proceeds from sale
of business
|
|
1,699,835
|
|
|
—
|
|
|
1,698,783
|
|
|
(3,352)
|
|
Other
|
|
(405)
|
|
|
2,275
|
|
|
(1,677)
|
|
|
(2,725)
|
|
Net cash provided by
(used in) investing activities
|
|
1,084,257
|
|
|
15,737
|
|
|
558,846
|
|
|
(1,752,553)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Repurchases of common
stock
|
|
(300,000)
|
|
|
(50,005)
|
|
|
(364,272)
|
|
|
(103,974)
|
|
Proceeds from employee
stock plans
|
|
44,167
|
|
|
40,189
|
|
|
147,276
|
|
|
100,961
|
|
Tax withholding paid
on behalf of employees for net share settlement
|
|
(17,440)
|
|
|
(9,248)
|
|
|
(98,302)
|
|
|
(54,939)
|
|
Dividend payments to
shareholders
|
|
(40,077)
|
|
|
(39,489)
|
|
|
(159,573)
|
|
|
(148,081)
|
|
Payments on technology
license obligations
|
|
(15,053)
|
|
|
(16,676)
|
|
|
(72,266)
|
|
|
(69,157)
|
|
Proceeds from issuance
of debt
|
|
600,000
|
|
|
—
|
|
|
950,000
|
|
|
1,892,605
|
|
Principal payments of
debt
|
|
(1,200,000)
|
|
|
(75,000)
|
|
|
(1,250,000)
|
|
|
(756,128)
|
|
Payment of equity and
debt financing costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,550)
|
|
Other, net
|
|
(2,457)
|
|
|
—
|
|
|
(6,812)
|
|
|
—
|
|
Net cash provided by
(used in) financing activities
|
|
(930,860)
|
|
|
(150,229)
|
|
|
(853,949)
|
|
|
849,737
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
209,235
|
|
|
(27,851)
|
|
|
65,194
|
|
|
(306,072)
|
|
Cash and cash
equivalents at beginning of period
|
|
438,369
|
|
|
610,261
|
|
|
582,410
|
|
|
888,482
|
|
Cash and cash
equivalents at end of period
|
|
$
|
647,604
|
|
|
$
|
582,410
|
|
|
$
|
647,604
|
|
|
$
|
582,410
|
|
Marvell Technology
Group Ltd.
|
Reconciliations
from GAAP to Non-GAAP (Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
February
1,
2020
|
|
November
2,
2019
|
|
February
2,
2019
|
|
February
1,
2020
|
|
February
2,
2019
|
GAAP gross
profit:
|
|
$
|
304,744
|
|
|
$
|
340,067
|
|
|
$
|
322,002
|
|
|
$
|
1,356,941
|
|
|
$
|
1,458,392
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
3,181
|
|
|
3,990
|
|
|
2,942
|
|
|
13,759
|
|
|
12,024
|
|
Amortization of
acquired intangible assets
|
|
86,383
|
|
|
72,146
|
|
|
57,591
|
|
|
279,567
|
|
|
134,169
|
|
Other cost of goods
sold (a)
|
|
52,510
|
|
|
4,758
|
|
|
97,598
|
|
|
57,718
|
|
|
226,372
|
|
Total special
items
|
|
142,074
|
|
|
80,894
|
|
|
158,131
|
|
|
351,044
|
|
|
372,565
|
|
Non-GAAP gross
profit
|
|
$
|
446,818
|
|
|
$
|
420,961
|
|
|
$
|
480,133
|
|
|
$
|
1,707,985
|
|
|
$
|
1,830,957
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin
|
|
42.5
|
%
|
|
51.3
|
%
|
|
43.2
|
%
|
|
50.3
|
%
|
|
50.9
|
%
|
Non-GAAP gross
margin
|
|
62.3
|
%
|
|
63.5
|
%
|
|
64.5
|
%
|
|
63.3
|
%
|
|
63.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP operating
expenses
|
|
$
|
419,239
|
|
|
$
|
401,576
|
|
|
$
|
375,010
|
|
|
$
|
1,600,299
|
|
|
$
|
1,415,122
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
(49,989)
|
|
|
(63,375)
|
|
|
(47,638)
|
|
|
(229,050)
|
|
|
(186,071)
|
|
Restructuring related
charges (b)
|
|
(18,258)
|
|
|
(14,802)
|
|
|
(12,740)
|
|
|
(55,328)
|
|
|
(76,753)
|
|
Amortization of
acquired intangible assets
|
|
(28,232)
|
|
|
(20,614)
|
|
|
(21,097)
|
|
|
(88,515)
|
|
|
(49,150)
|
|
Other operating
expenses (c)
|
|
(16,621)
|
|
|
(19,495)
|
|
|
(7,392)
|
|
|
(63,361)
|
|
|
(62,095)
|
|
Total special
items
|
|
(113,100)
|
|
|
(118,286)
|
|
|
(88,867)
|
|
|
(436,254)
|
|
|
(374,069)
|
|
Total non-GAAP
operating expenses
|
|
$
|
306,139
|
|
|
$
|
283,290
|
|
|
$
|
286,143
|
|
|
$
|
1,164,045
|
|
|
$
|
1,041,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
(16.0)
|
%
|
|
(9.3)
|
%
|
|
(7.1)
|
%
|
|
(9.0)
|
%
|
|
1.5
|
%
|
Other cost of goods
sold (a)
|
|
7.3
|
%
|
|
0.7
|
%
|
|
13.1
|
%
|
|
2.1
|
%
|
|
7.9
|
%
|
Share-based
compensation
|
|
7.4
|
%
|
|
10.2
|
%
|
|
6.8
|
%
|
|
9.0
|
%
|
|
6.9
|
%
|
Restructuring related
charges (b)
|
|
2.5
|
%
|
|
2.2
|
%
|
|
1.7
|
%
|
|
2.0
|
%
|
|
2.7
|
%
|
Amortization of
acquired intangible assets
|
|
16.0
|
%
|
|
14.0
|
%
|
|
10.6
|
%
|
|
13.6
|
%
|
|
6.4
|
%
|
Other operating
expenses (c)
|
|
2.4
|
%
|
|
3.0
|
%
|
|
0.9
|
%
|
|
2.5
|
%
|
|
2.2
|
%
|
Non-GAAP operating
margin
|
|
19.6
|
%
|
|
20.8
|
%
|
|
26.0
|
%
|
|
20.2
|
%
|
|
27.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP interest and
other income (loss), net
|
|
$
|
1,102,902
|
|
|
$
|
(19,460)
|
|
|
$
|
(16,340)
|
|
|
$
|
1,041,740
|
|
|
$
|
(47,917)
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of
intellectual property
|
|
—
|
|
|
—
|
|
|
(3,500)
|
|
|
—
|
|
|
(3,500)
|
|
Restructuring
related items (d)
|
|
(1,122,988)
|
|
|
(946)
|
|
|
157
|
|
|
(1,124,197)
|
|
|
15
|
|
Write-off of
debt issuance costs (e)
|
|
1,621
|
|
|
—
|
|
|
782
|
|
|
2,079
|
|
|
7,736
|
|
Deal costs
(f)
|
|
—
|
|
|
496
|
|
|
—
|
|
|
1,505
|
|
|
—
|
|
Total special
items
|
|
(1,121,367)
|
|
|
(450)
|
|
|
(2,561)
|
|
|
(1,120,613)
|
|
|
4,251
|
|
Total non-GAAP
interest and other income (loss), net
|
|
$
|
(18,465)
|
|
|
$
|
(19,910)
|
|
|
$
|
(18,901)
|
|
|
$
|
(78,873)
|
|
|
$
|
(43,666)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
|
$
|
1,772,673
|
|
|
$
|
(82,501)
|
|
|
$
|
(260,698)
|
|
|
$
|
1,584,391
|
|
|
$
|
(179,094)
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Other cost of goods
sold (a)
|
|
52,510
|
|
|
4,758
|
|
|
97,598
|
|
|
57,718
|
|
|
226,372
|
|
Share-based
compensation
|
|
53,170
|
|
|
67,365
|
|
|
50,580
|
|
|
242,809
|
|
|
198,095
|
|
Restructuring related
charges (gain) in operating expenses (b)
|
|
18,258
|
|
|
14,802
|
|
|
12,740
|
|
|
55,328
|
|
|
76,753
|
|
Restructuring related
items in interest and other income (loss), net (d)
|
|
(1,122,988)
|
|
|
(946)
|
|
|
157
|
|
|
(1,124,197)
|
|
|
15
|
|
Amortization of
acquired intangible assets
|
|
114,615
|
|
|
92,760
|
|
|
78,688
|
|
|
368,082
|
|
|
183,319
|
|
Gain on sale of
intellectual property
|
|
—
|
|
|
—
|
|
|
(3,500)
|
|
|
—
|
|
|
(3,500)
|
|
Write-off of debt
issuance costs (e)
|
|
1,621
|
|
|
—
|
|
|
782
|
|
|
2,079
|
|
|
7,736
|
|
Transaction costs
included in interest and other income, net (f)
|
|
—
|
|
|
496
|
|
|
—
|
|
|
1,505
|
|
|
—
|
|
Other operating
expenses (c)
|
|
16,621
|
|
|
19,495
|
|
|
7,392
|
|
|
63,361
|
|
|
62,095
|
|
Pre-tax total special
items
|
|
(866,193)
|
|
|
198,730
|
|
|
244,437
|
|
|
(333,315)
|
|
|
750,885
|
|
Other income tax
effects and adjustments (g)
|
|
(789,761)
|
|
|
(3,773)
|
|
|
184,348
|
|
|
(806,938)
|
|
|
144,585
|
|
Non-GAAP net
income
|
|
$
|
116,719
|
|
|
$
|
112,456
|
|
|
$
|
168,087
|
|
|
$
|
444,138
|
|
|
$
|
716,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares — basic
|
|
665,562
|
|
|
668,178
|
|
|
657,835
|
|
|
664,709
|
|
|
591,232
|
|
Weighted average
shares — diluted
|
|
675,700
|
|
|
668,178
|
|
|
657,835
|
|
|
676,094
|
|
|
591,232
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income (loss) per share
|
|
$
|
2.62
|
|
|
$
|
(0.12)
|
|
|
$
|
(0.40)
|
|
|
$
|
2.34
|
|
|
$
|
(0.30)
|
|
Non-GAAP diluted net
income per share (h)
|
|
$
|
0.17
|
|
|
$
|
0.17
|
|
|
$
|
0.25
|
|
|
$
|
0.66
|
|
|
$
|
1.19
|
|
|
|
(a)
|
Other costs of goods
sold includes amortization of the Avera and Aquantia inventory fair
value adjustment in fiscal 2020, amortization of the Cavium
inventory fair value adjustment in fiscal 2019, as well as 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 and twelve months ended
February 2, 2019 include gain on sale of a building that was a
direct result of restructuring.
|
|
|
(c)
|
Other operating
expenses primarily include Cavium, Aquantia and Avera merger
costs.
|
|
|
(d)
|
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.
|
|
|
(e)
|
Write-off of debt
issuance costs is associated with the partial term loan
repayment.
|
|
|
(f)
|
Costs incurred in
connection with preparation of the divestiture of the Wi-Fi
Connectivity business.
|
|
|
(g)
|
Other income tax
effects and adjustments relate to tax provision based on a non-GAAP
income tax rate of 4.5% for the three months ended November 2, 2019
and the three and twelve months ended February 1, 2020, and based
on a non-GAAP income tax rate of 4% for the three and twelve months
ended February 2, 2019.
|
|
|
(h)
|
Non-GAAP diluted net
income per share for the three months ended November 2, 2019 and
February 2, 2019 was calculated by dividing non-GAAP net income by
weighted average shares outstanding (diluted) of 679,345 and
663,580 shares, respectively, due to the non-GAAP net income
reported in the respective period. Non-GAAP diluted net income per
share for the year ended February 2, 2019 was calculated by
dividing non-GAAP net income 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 2021
|
Reconciliations
from GAAP to Non-GAAP (Unaudited)
|
(In
millions, except per share amounts)
|
|
|
|
|
|
Outlook for Three
Months Ended May 2, 2020
|
GAAP
revenue
|
$680 +/-
5%
|
Special
items:
|
—
|
Non-GAAP
revenue
|
$680 +/-
5%
|
|
|
GAAP gross
margin
|
47.5%
|
Special
items:
|
|
Share-based
compensation
|
0.3%
|
Amortization of
acquired intangible assets
|
15.2%
|
Non-GAAP gross
margin
|
63%
|
|
|
Total GAAP
operating expenses
|
$410 +/-
3
|
Special
items:
|
|
Share-based
compensation
|
57
|
Restructuring related
charges
|
10
|
Amortization of
acquired intangible assets
|
26
|
Other operating
expenses
|
7
|
Total non-GAAP
operating expenses
|
$310 +/-
2.5
|
|
|
|
|
GAAP diluted net
income per share
|
$(0.20) -
$(0.12)
|
Special
items:
|
|
Share-based
compensation
|
0.09
|
Amortization of
acquired intangible assets
|
0.19
|
Restructuring related
charges in operating expenses
|
0.01
|
Other operating
expenses
|
0.01
|
Non-GAAP diluted net
income per share
|
$0.11 -
$0.17
|
Quarterly Revenue
Trend (Unaudited)
|
(In
thousands)
|
|
|
|
|
Three Months
Ended
|
|
%
Change
|
|
February
1,
2020
|
|
November
2,
2019
|
|
February
2,
2019
|
|
YoY
|
|
QoQ
|
Networking
(1)
|
$
|
376,724
|
|
|
$
|
329,962
|
|
|
$
|
387,457
|
|
|
(3)
|
%
|
|
14
|
%
|
Storage
(2)
|
296,486
|
|
|
287,708
|
|
|
317,042
|
|
|
(6)
|
%
|
|
3
|
%
|
Total
Core
|
673,210
|
|
|
617,670
|
|
|
704,499
|
|
|
(4)
|
%
|
|
9
|
%
|
Other (3)
|
44,461
|
|
|
44,800
|
|
|
40,300
|
|
|
10
|
%
|
|
(1)
|
%
|
Total
Revenue
|
$
|
717,671
|
|
|
$
|
662,470
|
|
|
$
|
744,799
|
|
|
(4)
|
%
|
|
8
|
%
|
|
Three Months
Ended
|
% of
Total
|
February
1,
2020
|
|
November
2,
2019
|
|
February
2,
2019
|
Networking
(1)
|
52
|
%
|
|
50
|
%
|
|
52
|
%
|
Storage (2)
|
41
|
%
|
|
43
|
%
|
|
43
|
%
|
Total
Core
|
93
|
%
|
|
93
|
%
|
|
95
|
%
|
Other (3)
|
7
|
%
|
|
7
|
%
|
|
5
|
%
|
Total
Revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
(1) Networking products are comprised
primarily of Ethernet Solutions, Embedded Processors and Custom
ASICs.
|
|
(2) Storage products are comprised
primarily of Storage Controllers and Fibre Channel
Adapters.
|
|
(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