SANTA CLARA, Calif.,
Sept. 24, 2015 /PRNewswire/
-- Marvell Technology Group Ltd. (NASDAQ: MRVL) today
announced a significant restructuring of its mobile platform
business in order to focus the mobile product line on anticipated
more profitable opportunities and right-size its expenses in line
with corporate targets. Marvell will continue its strong
commitment to wireless connectivity such as WiFi and other wireless
standards needed to support its strategies in existing markets as
well as expanding into emerging opportunities in IoT and
automotive.
As approved by the Company's Board of Directors, the Company
plans to significantly downsize the mobile platform organization to
refocus its technology to emerging opportunities in IoT,
automotive, and networking.
Operational Summary:
- Based on preliminary estimates for the first half of fiscal
2016, the Company's mobile platform generated roughly $122 million in revenues and roughly $13 million in gross profit.
- The successful restructuring of the mobile business is
currently expected to result in annualized operating expense
savings in the range of $170 million to $220
million. Included in this operating expense savings is
estimated share based compensation in the range of $15 million to $20 million.
- The downsizing of the mobile platform organization is currently
expected to result in an approximately 17% reduction in global
headcount.
- The restructuring will begin immediately and the Company
expects the major activities to take place through the end of
fiscal 2016. As a result, the Company expects to incur total
charges of approximately $100 million to
$130 million. The major components of the total charge
include severance and employee-related costs expected to be
incurred in the third and fourth quarters of fiscal 2016 and are
expected to be in the range of $45 million
to $55 million. Other major components include facilities
and asset impairment charges in the range of $30 million to $40 million and an inventory write
down charge in the range of $25 million to
$35 million. Given the early stages of this restructuring
process, the amount and timing of the aforementioned charges may be
updated.
Marvell does not plan to hold a conference call with investors
and analysts in association with this press release. The
Company will discuss the restructuring of the mobile platform
business in more detail during its next quarterly earnings
conference call, the date of which is yet to be
determined.
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995:
This press release contains forward-looking statements. Words
such as "anticipates," "expects," "intends," "plans," "believes,"
"seeks," "estimates," "may," "will," "should," and their variations
identify forward-looking statements. These statements include those
relating to the proposed restructuring, reduction in headcount,
reduction in operating expenses, changes in termination benefits,
impairment, inventory write-down, and settlement charges, increases
in the gross margin and operating margin and the market opportunity
for Marvell created by the restructuring. These statements
are not guarantees of results and are subject to risks and
uncertainties that could cause actual results to differ materially
from those anticipated in the forward-looking statements. These
risks and uncertainties include, but are not limited to, the
magnitude and timing of certain activities, the benefits of and the
costs to be incurred in conducting the restructuring activities,
the ability of the Company to redeploy technology and assets to and
compete in other markets, the size of market opportunities, the
timing and outcome of the Audit Committee's investigation and the
conclusions of the Audit Committee, actions that may be taken or
required as a result of the Audit Committee's investigation,
actions by the United States Securities and Exchange Commission
("SEC") or other regulatory agencies in connection with the Audit
Committee's investigation, and the outcome of NASDAQ's review of
Marvell's plan of compliance and the timing and outcome of any
NASDAQ decision. For other factors that could cause actual results
to vary from expectations, please see the sections titled "Risk
Factors" in Marvell's quarterly report on Form 10-Q for the fiscal
quarter ended May 2, 2015 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 (NASDAQ: MRVL) is a global leader in providing complete
silicon solutions and Kinoma® software enabling the "Smart Life and
Smart Lifestyle." From storage to Internet of Things (IoT), cloud
infrastructure, digital entertainment and in-home content delivery,
Marvell's diverse product portfolio aligns complete platform
designs with industry-leading performance, security, reliability
and efficiency. At the core of the world's most powerful consumer,
network and enterprise systems, Marvell empowers partners and their
customers to always stand at the forefront of innovation,
performance and mass appeal. By providing people around the world
with mobility and ease of access to services adding value to their
social, private and work lives, Marvell is committed to enhancing
the human experience.
As used in this release, the term "Marvell" and the "Company"
refers to Marvell Technology Group Ltd. and its subsidiaries. For
more information, please visit www.Marvell.com.
Marvell® and the Marvell logo are registered trademarks of
Marvell and/or its affiliates.
For further
information, contact:
|
|
John Spencer
Ahn
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Sue Kim
|
Investor
Relations
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Media
Relations
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408-222-7544
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408-222-1942
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johnahn@marvell.com
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suekim@marvell.com
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SOURCE Marvell Technology Group Ltd.