SANTA CLARA, Calif.,
Aug. 27, 2020 /PRNewswire/ -- Marvell
Technology Group Ltd. (NASDAQ: MRVL), a leader in infrastructure
semiconductor solutions, today reported financial results for the
second quarter of fiscal year 2021.
Revenue for the second quarter of fiscal 2021 was $727 million, which exceeded the midpoint of the
Company's guidance provided on May 28,
2020. GAAP net loss for the second quarter of fiscal 2021
was $(158) million, or $(0.24) per diluted share. Non-GAAP net income
for the second quarter of fiscal 2021 was $140 million, or $0.21 per diluted share. Cash flow from
operations for the second quarter was $226
million.
"Marvell delivered strong second quarter financial results with
revenue above the mid-point of guidance, growing 11% year on year
and 5% sequentially. We are expecting revenue growth to continue in
the third quarter, driven primarily from 5G wireless infrastructure
and cloud datacenter end markets" said Matt
Murphy, Marvell's President and CEO. "We also announced the
extension of our long-term collaboration with TSMC to deliver a
comprehensive silicon portfolio for the data infrastructure market
leveraging the industry's most advanced 5 nanometer (nm) process
technology. While we continue to invest in advanced technologies
for future growth, our team also remains focused on driving
operational excellence. Through successful integration execution
and continued operational discipline, we expect to drive earnings
expansion in the third quarter."
Marvell's third quarter guidance takes into account the U.S.
Government's export restrictions on certain Chinese customers.
Given the ongoing uncertainty associated with COVID-19 and related
public health measures, we also have temporarily widened the
guidance range on revenue.
Third Quarter of Fiscal 2021 Financial Outlook
- Revenue is expected to be $750
million +/- 5%.
- GAAP gross margin is expected to be approximately 51.4%.
- Non-GAAP gross margin is expected to be approximately 63%.
- GAAP operating expenses are expected to be approximately
$368 million.
- Non-GAAP operating expenses are expected to be approximately
$280 million.
- GAAP diluted income (loss) per share is expected to be
$(0.04) to $0.04 per share.
- Non-GAAP diluted income per share is expected to be
$0.22 to $0.28 per share.
Conference Call
Marvell will conduct a conference call on Thursday, August 27, 2020 at 1:45 p.m. Pacific Time to discuss results for the
second quarter of fiscal 2021. Interested parties may join the
conference call by dialing 1-844-647-5488 or 1-615-247-0258,
pass-code 9776144. 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 Thursday, September 3,
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
(including, but not limited to, asset impairment charges, employee
severance costs, and facilities 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
second quarter of fiscal 2021, a non-GAAP tax rate of 5.0% has been
applied to the non-GAAP financial results.
Marvell believes that the presentation of non-GAAP financial
measures provides 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:
risks related to the impact on our business of the novel
coronavirus (COVID-19) pandemic which have impacted, and may
continue to impact, our workforce and operations and the
transportation and manufacturing of our products; risks related to
the impact of the COVID-19 pandemic which have impacted, and may
continue to impact the operations of our customers, distributors,
vendors, suppliers, and partners; increased disruption and
volatility in the capital markets and credit markets as a result of
COVID-19, which could adversely affect our liquidity and capital
resources; the impact of COVID-19, or other future pandemics, on
the U.S. and global economies; disruptions caused by COVID-19
resulting in worker absenteeism, quarantines and restrictions on
our employees' ability to work, innovate, collaborate, and travel;
the effects that the current credit and market conditions caused
by, or resulting from, COVID-19 could have on the liquidity and
financial condition of our customers and suppliers, including any
impact on their ability to meet their contractual obligations; the
impact of international conflict and economic volatility in either
domestic or foreign markets including risks related to trade
conflicts, regulations, and tariffs, including but not limited to,
restrictions imposed on our Chinese customers; 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; extension of lead time due to supply
chain disruptions or component shortages that may impact the
production of our products and any constrained availability from
other electronic suppliers impacting our customers' ability to ship
their products, which in turn may adversely impact our sales to
those customers; Marvell's reliance on independent foundries and
subcontractors for the manufacture, assembly and testing of our
products; cancellations, rescheduling or deferrals of significant
customer orders or shipments, as well as the ability of our
customers to manage inventory; our ability to realize the expected
benefits from restructuring activities; 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; 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 to 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 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; 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 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
Annual Report on Form 10-K for the fiscal year ended February 1, 2020 as filed with the SEC on
March 23, 2020, Marvell's Quarterly
Report on Form 10-Q for the fiscal quarter ended May 2, 2020 as filed with the SEC on May 29, 2020, 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
|
|
Six Months
Ended
|
|
|
August
1, 2020
|
|
May
2, 2020
|
|
August
3, 2019
|
|
August
1, 2020
|
|
August
3, 2019
|
Net revenue
|
|
$
|
727,297
|
|
|
$
|
693,641
|
|
|
$
|
656,568
|
|
|
$
|
1,420,938
|
|
|
$
|
1,319,020
|
|
Cost of goods
sold
|
|
368,041
|
|
|
366,739
|
|
|
305,866
|
|
|
734,780
|
|
|
606,890
|
|
Gross profit
|
|
359,256
|
|
|
326,902
|
|
|
350,702
|
|
|
686,158
|
|
|
712,130
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
277,139
|
|
|
279,584
|
|
|
266,354
|
|
|
556,723
|
|
|
533,221
|
|
Selling, general and
administrative
|
|
112,794
|
|
|
122,027
|
|
|
113,990
|
|
|
234,821
|
|
|
223,995
|
|
Restructuring related
charges
|
|
120,590
|
|
|
21,287
|
|
|
16,586
|
|
|
141,877
|
|
|
22,268
|
|
Total operating
expenses
|
|
510,523
|
|
|
422,898
|
|
|
396,930
|
|
|
933,421
|
|
|
779,484
|
|
Operating
loss
|
|
(151,267)
|
|
|
(95,996)
|
|
|
(46,228)
|
|
|
(247,263)
|
|
|
(67,354)
|
|
Interest
income
|
|
577
|
|
|
1,058
|
|
|
1,077
|
|
|
1,635
|
|
|
2,345
|
|
Interest
expense
|
|
(15,635)
|
|
|
(16,830)
|
|
|
(20,531)
|
|
|
(32,465)
|
|
|
(41,734)
|
|
Other income (loss),
net
|
|
(440)
|
|
|
3,754
|
|
|
(2,197)
|
|
|
3,314
|
|
|
(2,313)
|
|
Interest and other
income (loss), net
|
|
(15,498)
|
|
|
(12,018)
|
|
|
(21,651)
|
|
|
(27,516)
|
|
|
(41,702)
|
|
Loss before income
taxes
|
|
(166,765)
|
|
|
(108,014)
|
|
|
(67,879)
|
|
|
(274,779)
|
|
|
(109,056)
|
|
Provision (benefit) for
income taxes
|
|
(8,872)
|
|
|
5,019
|
|
|
(10,548)
|
|
|
(3,853)
|
|
|
(3,275)
|
|
Net loss
|
|
$
|
(157,893)
|
|
|
$
|
(113,033)
|
|
|
$
|
(57,331)
|
|
|
$
|
(270,926)
|
|
|
$
|
(105,781)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share —
basic:
|
|
$
|
(0.24)
|
|
|
$
|
(0.17)
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.41)
|
|
|
$
|
(0.16)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share —
diluted:
|
|
$
|
(0.24)
|
|
|
$
|
(0.17)
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.41)
|
|
|
$
|
(0.16)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
667,574
|
|
|
663,547
|
|
|
663,603
|
|
|
665,541
|
|
|
661,280
|
|
Diluted
|
|
667,574
|
|
|
663,547
|
|
|
663,603
|
|
|
665,541
|
|
|
661,280
|
|
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(In
thousands)
|
|
|
|
August
1,
2020
|
|
February
1,
2020
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
831,534
|
|
|
$
|
647,604
|
|
Accounts receivable,
net
|
|
483,542
|
|
|
492,346
|
|
Inventories
|
|
262,875
|
|
|
322,980
|
|
Prepaid expenses and
other current assets
|
|
54,136
|
|
|
74,567
|
|
Total current
assets
|
|
1,632,087
|
|
|
1,537,497
|
|
Property and
equipment, net
|
|
335,035
|
|
|
357,092
|
|
Goodwill
|
|
5,337,405
|
|
|
5,337,405
|
|
Acquired intangible
assets, net
|
|
2,489,815
|
|
|
2,764,600
|
|
Deferred tax
assets
|
|
645,633
|
|
|
639,791
|
|
Other non-current
assets
|
|
486,507
|
|
|
496,850
|
|
Total
assets
|
|
$
|
10,926,482
|
|
|
$
|
11,133,235
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
238,537
|
|
|
$
|
213,747
|
|
Accrued
liabilities
|
|
406,804
|
|
|
346,639
|
|
Accrued employee
compensation
|
|
131,241
|
|
|
149,780
|
|
Short-term
debt
|
|
448,248
|
|
|
—
|
|
Total current
liabilities
|
|
1,224,830
|
|
|
710,166
|
|
Long-term
debt
|
|
992,436
|
|
|
1,439,024
|
|
Other non-current
liabilities
|
|
291,679
|
|
|
305,465
|
|
Total
liabilities
|
|
2,508,945
|
|
|
2,454,655
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Common
shares
|
|
1,340
|
|
|
1,328
|
|
Additional paid-in
capital
|
|
6,225,242
|
|
|
6,135,939
|
|
Accumulated other
comprehensive income
|
|
450
|
|
|
—
|
|
Retained
earnings
|
|
2,190,505
|
|
|
2,541,313
|
|
Total shareholders'
equity
|
|
8,417,537
|
|
|
8,678,580
|
|
Total liabilities and
shareholders' equity
|
|
$
|
10,926,482
|
|
|
$
|
11,133,235
|
|
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
August 1,
2020
|
|
August 3,
2019
|
|
August 1,
2020
|
|
August 3,
2019
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(157,893)
|
|
|
$
|
(57,331)
|
|
|
$
|
(270,926)
|
|
|
$
|
(105,781)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
51,605
|
|
|
37,926
|
|
|
102,088
|
|
|
76,580
|
|
Share-based
compensation
|
|
62,586
|
|
|
63,676
|
|
|
122,273
|
|
|
122,274
|
|
Amortization of
acquired intangible assets
|
|
111,579
|
|
|
80,967
|
|
|
224,501
|
|
|
160,707
|
|
Amortization of
inventory fair value adjustment associated with
acquisitions
|
|
—
|
|
|
—
|
|
|
17,284
|
|
|
—
|
|
Restructuring related
impairment charges
|
|
114,723
|
|
|
6,281
|
|
|
117,546
|
|
|
10,097
|
|
Other expense,
net
|
|
6,282
|
|
|
5,773
|
|
|
14,910
|
|
|
14,534
|
|
Deferred income
taxes
|
|
(2,816)
|
|
|
(1,982)
|
|
|
(444)
|
|
|
2,374
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(14,782)
|
|
|
17,601
|
|
|
8,804
|
|
|
40,376
|
|
Inventories
|
|
(33)
|
|
|
(7,174)
|
|
|
35,801
|
|
|
8,674
|
|
Prepaid expenses and
other assets
|
|
3,679
|
|
|
(15,997)
|
|
|
(3,015)
|
|
|
(7,993)
|
|
Accounts
payable
|
|
33,204
|
|
|
24,370
|
|
|
29,647
|
|
|
22,497
|
|
Accrued liabilities
and other non-current liabilities
|
|
10,732
|
|
|
(49,188)
|
|
|
21,528
|
|
|
(80,117)
|
|
Accrued employee
compensation
|
|
6,964
|
|
|
(31,782)
|
|
|
(18,539)
|
|
|
(25,266)
|
|
Net cash provided by
operating activities
|
|
225,830
|
|
|
73,140
|
|
|
401,458
|
|
|
238,956
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of
technology licenses
|
|
(3,080)
|
|
|
(38)
|
|
|
(6,764)
|
|
|
(1,522)
|
|
Purchases of property
and equipment
|
|
(17,540)
|
|
|
(23,010)
|
|
|
(52,883)
|
|
|
(42,193)
|
|
Other, net
|
|
34
|
|
|
(47)
|
|
|
699
|
|
|
(389)
|
|
Net cash used in
investing activities
|
|
(20,586)
|
|
|
(23,095)
|
|
|
(58,948)
|
|
|
(44,104)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Repurchases of common
stock
|
|
—
|
|
|
(16,250)
|
|
|
(25,202)
|
|
|
(64,272)
|
|
Proceeds from employee
stock plans
|
|
42,776
|
|
|
50,230
|
|
|
48,234
|
|
|
81,314
|
|
Tax withholding paid
on behalf of employees for net share settlement
|
|
(25,213)
|
|
|
(32,884)
|
|
|
(56,714)
|
|
|
(61,642)
|
|
Dividend payments to
shareholders
|
|
(40,119)
|
|
|
(39,889)
|
|
|
(79,882)
|
|
|
(79,356)
|
|
Payments on technology
license obligations
|
|
(18,702)
|
|
|
(13,056)
|
|
|
(42,509)
|
|
|
(28,324)
|
|
Principal payments of
debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,000)
|
|
Other, net
|
|
—
|
|
|
3,407
|
|
|
(2,507)
|
|
|
(1,486)
|
|
Net cash used in
financing activities
|
|
(41,258)
|
|
|
(48,442)
|
|
|
(158,580)
|
|
|
(203,766)
|
|
Net increase (decrease)
in cash and cash equivalents
|
|
163,986
|
|
|
1,603
|
|
|
183,930
|
|
|
(8,914)
|
|
Cash and cash
equivalents at beginning of period
|
|
667,548
|
|
|
571,893
|
|
|
647,604
|
|
|
582,410
|
|
Cash and cash
equivalents at end of period
|
|
$
|
831,534
|
|
|
$
|
573,496
|
|
|
$
|
831,534
|
|
|
$
|
573,496
|
|
Marvell Technology
Group Ltd.
|
Reconciliations
from GAAP to Non-GAAP (Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
August 1,
2020
|
|
May 2,
2020
|
|
August 3,
2019
|
|
August 1,
2020
|
|
August 3,
2019
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit:
|
|
$
|
359,256
|
|
|
$
|
326,902
|
|
|
$
|
350,702
|
|
|
$
|
686,158
|
|
|
$
|
712,130
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
4,082
|
|
|
3,538
|
|
|
3,662
|
|
|
7,620
|
|
|
6,588
|
|
Amortization of
acquired intangible assets
|
|
85,225
|
|
|
86,567
|
|
|
61,132
|
|
|
171,792
|
|
|
121,038
|
|
Other cost of goods
sold (a)
|
|
11,630
|
|
|
18,562
|
|
|
—
|
|
|
30,192
|
|
|
450
|
|
Total special
items
|
|
100,937
|
|
|
108,667
|
|
|
64,794
|
|
|
209,604
|
|
|
128,076
|
|
Non-GAAP gross
profit
|
|
$
|
460,193
|
|
|
$
|
435,569
|
|
|
$
|
415,496
|
|
|
$
|
895,762
|
|
|
$
|
840,206
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin
|
|
49.4
|
%
|
|
47.1
|
%
|
|
53.4
|
%
|
|
48.3
|
%
|
|
54.0
|
%
|
Non-GAAP gross
margin
|
|
63.3
|
%
|
|
62.8
|
%
|
|
63.3
|
%
|
|
63.0
|
%
|
|
63.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP operating
expenses
|
|
$
|
510,523
|
|
|
$
|
422,898
|
|
|
$
|
396,930
|
|
|
$
|
933,421
|
|
|
$
|
779,484
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
(58,504)
|
|
|
(56,149)
|
|
|
(60,014)
|
|
|
(114,653)
|
|
|
(115,686)
|
|
Restructuring related
charges (b)
|
|
(120,590)
|
|
|
(21,287)
|
|
|
(16,586)
|
|
|
(141,877)
|
|
|
(22,268)
|
|
Amortization of
acquired intangible assets
|
|
(26,354)
|
|
|
(26,355)
|
|
|
(19,835)
|
|
|
(52,709)
|
|
|
(39,669)
|
|
Other operating
expenses (c)
|
|
(8,125)
|
|
|
(19,403)
|
|
|
(20,676)
|
|
|
(27,528)
|
|
|
(27,245)
|
|
Total special
items
|
|
(213,573)
|
|
|
(123,194)
|
|
|
(117,111)
|
|
|
(336,767)
|
|
|
(204,868)
|
|
Total non-GAAP
operating expenses
|
|
$
|
296,950
|
|
|
$
|
299,704
|
|
|
$
|
279,819
|
|
|
$
|
596,654
|
|
|
$
|
574,616
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
(20.8)
|
%
|
|
(13.8)
|
%
|
|
(7.0)
|
%
|
|
(17.4)
|
%
|
|
(5.1)
|
%
|
Other cost of goods
sold (a)
|
|
1.6
|
%
|
|
2.7
|
%
|
|
—
|
%
|
|
2.1
|
%
|
|
—
|
%
|
Share-based
compensation
|
|
8.6
|
%
|
|
8.6
|
%
|
|
9.7
|
%
|
|
8.6
|
%
|
|
9.3
|
%
|
Restructuring related
charges (b)
|
|
16.6
|
%
|
|
3.1
|
%
|
|
2.5
|
%
|
|
10.0
|
%
|
|
1.7
|
%
|
Amortization of
acquired intangible assets
|
|
15.3
|
%
|
|
16.3
|
%
|
|
12.3
|
%
|
|
15.8
|
%
|
|
12.2
|
%
|
Other operating
expenses (c)
|
|
1.1
|
%
|
|
2.7
|
%
|
|
3.2
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
Non-GAAP operating
margin
|
|
22.4
|
%
|
|
19.6
|
%
|
|
20.7
|
%
|
|
21.1
|
%
|
|
20.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP interest and
other income (loss), net
|
|
$
|
(15,498)
|
|
|
$
|
(12,018)
|
|
|
$
|
(21,651)
|
|
|
$
|
(27,516)
|
|
|
$
|
(41,702)
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
other related items (d)
|
|
—
|
|
|
434
|
|
|
75
|
|
|
434
|
|
|
(263)
|
|
Write-off of debt
issuance costs (e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
458
|
|
Deal costs
(f)
|
|
—
|
|
|
—
|
|
|
1,009
|
|
|
—
|
|
|
1,009
|
|
Total special
items
|
|
—
|
|
|
434
|
|
|
1,084
|
|
|
434
|
|
|
1,204
|
|
Total non-GAAP
interest and other income (loss), net
|
|
$
|
(15,498)
|
|
|
$
|
(11,584)
|
|
|
$
|
(20,567)
|
|
|
$
|
(27,082)
|
|
|
$
|
(40,498)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
|
(157,893)
|
|
|
$
|
(113,033)
|
|
|
$
|
(57,331)
|
|
|
$
|
(270,926)
|
|
|
$
|
(105,781)
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Other cost of goods
sold (a)
|
|
11,630
|
|
|
18,562
|
|
|
—
|
|
|
30,192
|
|
|
450
|
|
Share-based
compensation
|
|
62,586
|
|
|
59,687
|
|
|
63,676
|
|
|
122,273
|
|
|
122,274
|
|
Restructuring related
charges in operating expenses (b)
|
|
120,590
|
|
|
21,287
|
|
|
16,586
|
|
|
141,877
|
|
|
22,268
|
|
Other operating
expenses (c)
|
|
8,125
|
|
|
19,403
|
|
|
20,676
|
|
|
27,528
|
|
|
27,245
|
|
Restructuring and
other related items in interest and other income, net
(d)
|
|
—
|
|
|
434
|
|
|
75
|
|
|
434
|
|
|
(263)
|
|
Amortization of
acquired intangible assets
|
|
111,579
|
|
|
112,922
|
|
|
80,967
|
|
|
224,501
|
|
|
160,707
|
|
Write-off of debt
issuance costs (e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
458
|
|
Transaction costs
included in interest and other income, net (f)
|
|
—
|
|
|
—
|
|
|
1,009
|
|
|
—
|
|
|
1,009
|
|
Pre-tax total special
items
|
|
314,510
|
|
|
232,295
|
|
|
182,989
|
|
|
546,805
|
|
|
334,148
|
|
Other income tax
effects and adjustments (g)
|
|
(16,226)
|
|
|
(1,229)
|
|
|
(15,728)
|
|
|
(17,455)
|
|
|
(13,404)
|
|
Non-GAAP net
income
|
|
$
|
140,391
|
|
|
$
|
118,033
|
|
|
$
|
109,930
|
|
|
$
|
258,424
|
|
|
$
|
214,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP weighted average
shares — basic
|
|
667,574
|
|
|
663,547
|
|
|
663,603
|
|
|
665,541
|
|
|
661,280
|
|
GAAP weighted average
shares — diluted
|
|
667,574
|
|
|
663,547
|
|
|
663,603
|
|
|
665,541
|
|
|
661,280
|
|
Non-GAAP weighted
average shares — diluted (h)
|
|
678,304
|
|
|
670,841
|
|
|
675,755
|
|
|
674,553
|
|
|
673,399
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net loss
per share
|
|
$
|
(0.24)
|
|
|
$
|
(0.17)
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.41)
|
|
|
$
|
(0.16)
|
|
Non-GAAP diluted net
income per share
|
|
$
|
0.21
|
|
|
$
|
0.18
|
|
|
$
|
0.16
|
|
|
$
|
0.38
|
|
|
$
|
0.32
|
|
|
|
(a)
|
Other costs of goods
sold includes inventory write-downs and amortization of acquired
inventory fair value adjustments.
|
(b)
|
Restructuring related
charges include asset impairment charges (including asset
impairment charges due to changes to the scope of the server
processor product line), employee severance costs, facilities
related charges, and other.
|
(c)
|
Other operating
expenses include integration costs associated with recent
acquisitions.
|
(d)
|
Interest and other
income (loss), net, includes restructuring and other related items
such as foreign currency remeasurement associated with
restructuring related accruals.
|
(e)
|
Write-off of debt
issuance costs is associated with partial term loan
repayment.
|
(f)
|
Deal costs include
transaction costs incurred in connection with 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 5.0% for the three and six months ended August
1, 2020 and three months ended May 2, 2020. Other income tax
effects and adjustments relate to tax provision based on a non-GAAP
income tax rate of 4.5% for the three and six months ended August
3, 2019.
|
(h)
|
Non-GAAP diluted
weighted average shares differs from GAAP diluted weighted average
shares due to the non-GAAP net income reported.
|
Marvell Technology
Group Ltd.
|
Outlook for
the Third Quarter of Fiscal Year 2021
|
Reconciliations
from GAAP to Non-GAAP (Unaudited)
|
(In
millions, except per share amounts)
|
|
|
|
|
|
Outlook for Three
Months Ended October 31, 2020
|
GAAP
revenue
|
$750 +/-
5%
|
Special
items:
|
—
|
Non-GAAP
revenue
|
$750 +/-
5%
|
|
|
GAAP gross
margin
|
~51.4%
|
Special
items:
|
|
Share-based
compensation
|
0.5%
|
Amortization of
acquired intangible assets
|
11.1%
|
Non-GAAP gross
margin
|
~63%
|
|
|
Total GAAP
operating expenses
|
~$368
|
Special
items:
|
|
Share-based
compensation
|
56
|
Amortization of
acquired intangible assets
|
26
|
Restructuring related
charges
|
2
|
Other operating
expenses
|
4
|
Total non-GAAP
operating expenses
|
~$280
|
|
|
|
|
GAAP diluted net
income (loss) per share
|
$(0.04) -
$0.04
|
Special
items:
|
|
Share-based
compensation
|
0.09
|
Amortization of
acquired intangible assets
|
0.16
|
Other operating
expenses
|
0.01
|
Other income tax
effects and adjustments
|
(0.01)
|
Non-GAAP diluted net
income per share
|
$0.22 -
$0.28
|
Quarterly Revenue
Trend (Unaudited)
|
(In
thousands)
|
|
|
Three Months
Ended
|
|
%
Change
|
|
August
1,
2020
|
|
May
2,
2020
|
|
August
3,
2019
|
|
YoY
|
|
QoQ
|
Networking
(1)
|
$
|
406,008
|
|
|
$
|
393,920
|
|
|
$
|
329,605
|
|
|
23
|
%
|
|
3
|
%
|
Storage
(2)
|
290,495
|
|
|
258,688
|
|
|
274,905
|
|
|
6
|
%
|
|
12
|
%
|
Total
Core
|
696,503
|
|
|
652,608
|
|
|
604,510
|
|
|
15
|
%
|
|
7
|
%
|
Other
(3)
|
30,794
|
|
|
41,033
|
|
|
52,058
|
|
|
(41)
|
%
|
|
(25)
|
%
|
Total
Revenue
|
$
|
727,297
|
|
|
$
|
693,641
|
|
|
$
|
656,568
|
|
|
11
|
%
|
|
5
|
%
|
|
Three Months
Ended
|
% of
Total
|
August 1,
2020
|
|
May 2,
2020
|
|
August 3,
2019
|
Networking
(1)
|
56
|
%
|
|
57
|
%
|
|
50
|
%
|
Storage
(2)
|
40
|
%
|
|
37
|
%
|
|
42
|
%
|
Total
Core
|
96
|
%
|
|
94
|
%
|
|
92
|
%
|
Other
(3)
|
4
|
%
|
|
6
|
%
|
|
8
|
%
|
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.
|
For further information, contact:
Ashish Saran
Vice President, Investor Relations
408-222-0777
ir@marvell.com
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SOURCE Marvell