SANTA CLARA, Calif.,
July 19, 2016 /PRNewswire/ -- Marvell
Technology Group Ltd. (NASDAQ: MRVL), a global leader in integrated
silicon solutions, today reported financial results for the fourth
fiscal quarter and fiscal year 2016, ended January 30, 2016, and reported updated financial
results for the second and third quarters of fiscal 2016, ended
August 1, 2015 and October 31, 2015, respectively.
Key Fourth Quarter of Fiscal 2016 and Fiscal Year 2016
Financial
Highlights
- Revenue: Q4 FY 2016, $616
Million; FY 2016, $2.7
Billion
- GAAP Net Earnings (Loss): Q4 FY 2016, $4
Million; FY 2016, ($811)
Million (includes the settlement with CMU described
below)
- GAAP Diluted Earnings (Loss) Per Share: Q4 FY 2016,
$0.01; FY 2016, ($1.59)
- Non-GAAP Net Income: Q4 FY 2016, $55
Million; FY 2016 $194
Million
- Non-GAAP Diluted EPS: Q4 FY 2016, $0.11; FY 2016 $0.37
- Cash Flow from Operations: Q4 FY 2016, $53 Million; FY 2016 $205
Million
- Cash and ST Investments: $2.3
Billion (prior to giving effect to the settlement with CMU
described below)
Fourth Quarter of Fiscal 2016 and Fiscal Year 2016
Summary
Revenues for the fourth quarter of fiscal 2016 were $616 million, down approximately 9 percent from
$675 million in the third quarter of
fiscal 2016, ended October 31, 2015,
and down approximately 28 percent from $857
million in the fourth quarter of fiscal 2015, ended
January 31, 2015.
In the fourth quarter of fiscal 2016, storage revenue increased
12 percent sequentially, reflecting improved demand from HDD
customers but was partially offset by slightly lower SSD controller
sales. Networking revenue in the fourth quarter of fiscal
2016 grew 8 percent sequentially due to broad-based demand
improvement across most of our product areas. Mobile and
wireless revenue decreased 34 percent sequentially, mainly driven
by the previously anticipated declines in revenue resulting from
Marvell's exit of the mobile handset business. The Company
anticipates mobile handset platform-related revenue to decline
through fiscal year 2017 due to the restructuring actions announced
on September 24, 2015.
For the fiscal year end January 30,
2016, revenue was $2.7
billion, a decrease of 26 percent from $3.7 billion for the fiscal year ended
January 31, 2015. For the
fiscal year 2016, storage revenues declined 31 percent from fiscal
year 2015 mainly due to soft PC demand compounded by lower SSD
controller shipments. Networking revenue in fiscal 2016
declined 18 percent due to weak enterprise switching/routing
demand. Mobile and wireless revenue in fiscal 2016 declined
27 percent mainly due to lower mobile handset platform-related
revenue resulting from Marvell's exit of the mobile handset
business.
GAAP net earnings for the fourth quarter of fiscal 2016 was
$4 million, or $0.01 per share (diluted) compared with a GAAP
net loss of ($58) million, or
($0.11) loss per share (diluted), for
the third quarter of fiscal 2016, and GAAP net income of
$82 million, or $0.16 per share (diluted), for the fourth quarter
of fiscal 2015.
For the fiscal year ended January 30,
2016, GAAP net loss was ($811)
million, or ($1.59) per share
(diluted), compared with GAAP net income of $435 million, or $0.84 per share (diluted), for the fiscal year
ended January 31, 2015. The
GAAP net loss in fiscal year 2016 was largely due to the payment of
$750 million related to the
Carnegie Mellon University litigation
settlement.
Non-GAAP net income for the fourth quarter of fiscal 2016 was
$55 million, or $0.11 per share (diluted), which included
adjustments of approximately $50
million including: $4 million
for restructuring related to the mobile handset platform business,
$32 million for share-based
compensation, $4 million for
litigation reserves and settlements, and $10
million for other items. By comparison, non-GAAP net income
for the third quarter of fiscal 2016 was $29
million, or $0.06 per share
(diluted), which included adjustments of $87
million including: $46 million
for restructuring related to the mobile handset platform business,
$31 million for share-based
compensation, $1 million for
litigation reserves and settlements, and $9
million for other items. Non-GAAP net income for the fourth
quarter of fiscal 2015 was $131
million, or $0.25 per share
(diluted), which included adjustments of $49
million including: $38 million
for share-based compensation and $11
million for other items. Refer to the GAAP to Non-GAAP
reconciliation table and related footnotes contained in this press
release for more details.
For the fiscal year ended January 30,
2016, non-GAAP net income was $194
million, or $0.37 per share
(diluted), compared with non-GAAP net income of $611 million, or $1.15 per share (diluted) for the fiscal year
ended January 31, 2015.
Marvell reports net income, basic and diluted net income per
share, in accordance with generally accepted accounting principles
(GAAP) and on a non-GAAP basis as outlined below. Reconciliations
of GAAP net income to non-GAAP net income for the three months
ended January 30, 2016, October 31, 2015, and August 31, 2015, as well as the fiscal years
ended January 30, 2016 and
January 31, 2015, appear in the
financial statements below. Non-GAAP net income, where
applicable, excludes the effect of share-based compensation,
amortization and write-off of acquired intangible assets,
acquisition-related costs, restructuring and other related charges,
estimated litigation reserves and settlements, and certain one-time
expenses and benefits that are driven by discrete events that
management does not consider to be directly related to Marvell's
core operating performance.
GAAP gross margin percentage for the fourth quarter of fiscal
2016 was 50.9 percent, compared to 43.8 percent for the third
quarter of fiscal 2016 and 51.4 percent for the fourth quarter of
fiscal 2015. GAAP gross margin for fiscal year 2016 was 45.2
percent as compared to 50.3 percent in fiscal year 2015.
Non-GAAP gross margin percentage for the fourth quarter of
fiscal 2016 was 51.9 percent, compared to 46.0 percent for the
third quarter of fiscal 2016 and 51.8 percent for the fourth
quarter of fiscal 2015. The sequential improvement in fourth
quarter GAAP and Non-GAAP gross margin percentages was mainly due
to a more lower mix of lower margin mobile handset platform-related
revenues relative the prior quarter. Non-GAAP gross margin for
fiscal year 2016 was 49.1 percent compared to 50.5 percent in
fiscal year 2015. The decline in GAAP and non-GAAP gross
margin percentages in fiscal year 2016 was mainly due to a higher
mix of lower margin mobile handset platform-related revenues
relative to fiscal year 2015. Refer to the GAAP to Non-GAAP
reconciliation table and related footnotes at the end of this press
release for more details.
Operating expenses on a GAAP basis for the fourth quarter of
fiscal 2016 were $311 million, or 12
percent lower compared with $355
million in the third quarter of fiscal year 2016, and 14
percent lower compared to $360
million in the fourth quarter of fiscal 2015. Operating
expenses on a GAAP basis for fiscal year 2016 were $2 billion, or 41 percent higher compared to
$1.5 billion in fiscal year
2015. GAAP operating expenses for fiscal 2016 include
approximately $655 million related to
the Carnegie Mellon University
litigation settlement, with $78.9
million of the $750 million
settlement recorded in COGS. Operating expenses for the third
and fourth quarters of fiscal year 2016 include $6 million and $11
million, respectively, of legal and accounting fees related
to the Audit Committee investigation, and the related shareholder
litigation and inquiries by the SEC and United States Attorney's Office.
Non-GAAP operating expenses were $267
million in the fourth quarter compared to $283 million in the third quarter, a 6 percent
decline, and $315 million in the
fourth quarter of fiscal 2015, a 15 percent decline. For fiscal
year 2016, non-GAAP operating expenses were $1.2 billion (excluding the impact of
$655 million related to Carnegie Mellon University litigation settlement
recorded in operating expenses), a decline of 10 percent from
$1.3 billion in fiscal year
2015. Refer to the GAAP to Non-GAAP reconciliation table and
related footnotes contained in this press release for more
details.
Shares used to compute GAAP net income per diluted share for the
fourth quarter of fiscal 2016 were 509 million shares, compared
with 505 million shares in the third quarter of fiscal 2016 and 522
million shares in the fourth quarter of fiscal 2015. Shares
used to compute GAAP net income per diluted share for fiscal year
2016 were 511 million shares as compared with 521 million shares
for fiscal year 2015.
Shares used to compute non-GAAP net income per diluted share for
the fourth quarter of fiscal 2016 were 519 million shares, compared
with 519 million shares for the third quarter of fiscal 2016 and
533 million shares for the fourth quarter of fiscal 2015.
Shares used to compute non-GAAP net income per diluted share for
fiscal year 2016 were 526 million shares as compared with 532
million shares for fiscal year 2015.
Cash flow from operations for the fourth quarter of fiscal 2016
was $53 million, compared to
$67 million in the third quarter of
fiscal 2016 and $155 million reported
in the fourth quarter of fiscal 2015. Cash flow from
operations for fiscal year 2016 was $205
million, compared to $729
million in fiscal year 2015. Free cash flow for the fourth
quarter of fiscal 2016 was $47
million, compared to the $64
million in the third quarter of fiscal 2016 and the
$135 million reported in the fourth
quarter of fiscal 2015. Free cash flow for fiscal year 2016
was $147 million, compared to
$636 million in fiscal year
2015. Free cash flow as presented above is defined as cash
flow from operations, less capital expenditures and purchases of
technology licenses reported under investing and financing
activities in the consolidated statement of cash flows.
Marvell made no share repurchases in the fourth quarter of
fiscal 2016. In fiscal year 2016, under the company's
authorized share repurchase program, Marvell repurchased
approximately 19.7 million shares for about $261 million. The remaining authorized amount for
share repurchases at the end of fiscal 2016 was approximately
$183 million.
Marvell paid a quarterly dividend of $0.06 per share on December 29, 2015 to all shareholders of record
as of December 16, 2015. On
March 16 and May 18, 2016, the Company declared cash dividends
of $0.06 per share that were paid on
April 22 and July 12, 2016, respectively.
The payment of future quarterly cash dividends on Marvell's
common shares is subject to, among other things, the best interests
of the company and its shareholders, its results of operations,
cash balances and future cash requirements, financial condition,
developments in ongoing litigation, statutory requirements of
Bermuda law, and other factors
that the board of directors may deem relevant.
Key Third Quarter of Fiscal 2016 Financial Highlights
(Updated)
- Revenue: Q3 FY 2016, $675
Million
- GAAP Net Loss: Q3 FY 2016, ($58)
Million
- GAAP Diluted Loss Per Share: Q3 FY 2016, ($0.11)
- Non-GAAP Net Income: Q3 FY 2016, $29
Million
- Non-GAAP Diluted EPS: Q3 FY 2016, $0.06
- Cash Flow from Operations: Q3 FY 2016, $67 Million
On December 7, 2015, Marvell
released preliminary financial results for the third quarter of
fiscal 2016, ended October 31, 2015.
Due to the Company's delayed filing of its Form 10-Q, the Company
is obligated to continue to adjust its financial results to account
for subsequent activities (Type 1 subsequent events) occurring
after December 7, 2015. For the third
quarter of fiscal 2016, adjustments that have been recorded to the
Company's preliminary financial results after December 7, 2015 are detailed in the footnotes to
the condensed consolidated statements of operations at the end of
this press release. Accordingly, the Company's GAAP net loss
and GAAP diluted loss per share for the third quarter of fiscal
2016 are approximately ($4) million
and ($0.01) less than previously
reported, respectively. Due to the delayed filing and as a result
of future subsequent events, there may be additional adjustments to
these preliminary financial results through the date of the
Company's filing of its Form 10-Q for the third quarter of fiscal
2016.
Key Second Quarter of Fiscal 2016 Financial Highlights
(Updated)
- Revenue: Q2 FY 2016, $710
Million
- GAAP Net Loss: Q2 FY 2016, ($772)
Million
- GAAP Diluted Loss Per Share: Q2 FY 2016, ($1.49)
- Non-GAAP Net Income: Q2 FY 2016, $39
Million
- Non-GAAP Diluted EPS: Q2 FY 2016, $0.07
- Cash Flow from Operations: Q2 FY 2016, $27 Million
On December 7, 2015, Marvell
released updated preliminary financial results for the second
quarter of fiscal 2016, ended August 1,
2015. Due to the Company's delayed filing of its Form 10-Q,
the Company is obligated to continue to adjust its financial
results to account for subsequent activities (Type 1 subsequent
events) occurring after September 11,
2015. For the second quarter of fiscal 2016,
adjustments that that have been recorded to the Company's
preliminary financial results after December
7, 2015 are detailed in the footnotes to the condensed
consolidated statements of operations at the end of this press
release including an additional $350.5
million charge due to the subsequent settlement in
February 2016 for the Carnegie Mellon litigation (of which $78.9 million was recorded to COGS).
Accordingly, the Company's GAAP net loss and GAAP diluted
loss per share for the second quarter of fiscal 2016 are
approximately ($369) million and
($0.71) more than previously
reported, respectively. Due to the delayed filing and as a result
of future subsequent events, there may be additional adjustments to
these preliminary financial results through the date of the
Company's filing of its Form 10-Q for the second quarter of fiscal
2016.
From time to time, our customers agreed to take shipments in an
earlier fiscal quarter than the fiscal quarter they originally
requested delivery. When such agreement would not have occurred but
for the request made by Marvell, we refer to such transactions
internally as "pull-ins." Pull-in sales increased compared to
historical levels beginning in the fourth quarter of fiscal 2015
and returned to historical levels in the third quarter of fiscal
2016. Net revenue in fiscal 2016 related to pull-in sales for
shipments taken early by our customers was approximately 9 percent
and 11 percent of net revenue in the first and second quarters of
fiscal 2016, respectively, and declined to less than 1 percent of
net revenue in both the third and fourth quarters of fiscal 2016.
This compares to net revenue in fiscal 2015 related to pull-in
sales for shipments taken early by our customers, which was less
than 1 percent in the first and second quarters of fiscal 2015, 1
percent in the second quarter of fiscal 2015, and increased to 3
percent in the fourth quarter of fiscal 2015. Beginning in fiscal
2017, our policy is not to engage in pull-in transactions and we
therefore do not expect them to have any meaningful impact on net
revenue in future periods.
CMU Settlement
On February 17, 2016, Marvell
announced that, pursuant to a court-ordered mediation, the company
and Carnegie Mellon University settled
their patent infringement lawsuit. The parties resolved the
case on mutually acceptable terms, including an aggregate payment
by Marvell to CMU of $750 million,
with no ongoing royalty payments. Marvell paid the
$750 million in the first quarter of
fiscal 2017.
NASDAQ Compliance Plan
On May 3, 2016, Marvell announced
that the company received written notification from Nasdaq that,
following Marvell's hearing before The Nasdaq Hearings Panel on
April 14, 2016, it granted the
Company an extension of time to September 6,
2016 to regain compliance with continued listing
requirements. Until that time, shares of Marvell stock will
remain listed on The Nasdaq Stock Market.
On February 22, 2016, the Audit
Committee approved the engagement of Deloitte & Touche LLP as
the Company's new independent public accounting firm. On
March 1, 2016, the Company reported
the results of the Audit Committee's independent investigation of
certain accounting and internal control matters. The
preparation and filing of the Company's Annual Report on Form 10-K
for fiscal 2016 and its Quarterly Reports on Form 10-Q for the
second and third quarters of fiscal 2016 and for the first quarter
of fiscal 2017 have yet to be completed. The Company is
working diligently to complete these filings as soon as
practicable, at which time Marvell believes it will regain full
compliance with continued listing requirements.
Additions to Company Leadership
On April 5, 2016, Marvell
announced a senior leadership transition with the departure of
Chief Executive Officer Dr. Sehat
Sutardja and President Weili
Dai from their management positions. On May 1, 2016, Richard S.
Hill was appointed Chairman of the Board. Mr. Hill will also
serve as the company's principal executive officer through the
filing of Marvell's Quarterly Report on Form 10-Q for the quarter
ended July 30, 2016.
On July 11, 2016, Matthew J. Murphy joined Marvell as President
and Chief Executive Officer and as a director. A veteran of
Maxim Integrated, Mr. Murphy joins an executive team and Board of
Directors that has seen a significant infusion of new talent over
the past few months, and will be leading that team in the
transformation of the Company with a focus on profitable
growth.
In addition to Mr. Murphy and Mr. Hill, joining the Board of
Directors since April 1, 2016 are
Peter A. Feld, Oleg Khaykin, Robert E.
Switz and Michael
Strachan. Recent additions to the executive team
include Mitchell Gaynor, Executive
Vice President and Chief Legal Officer, Chris Koopmans, Executive Vice President
Marketing and Sales, and Andy
Micallef, Chief Operations Officer. Maya
Strelar-Migotti has returned to her role as Executive Vice
President of the Smart Networked Devices and Solutions Business
Group and Pantelis Alexopoulos has
returned to his role as Executive Vice President of the Storage
Business Group. While a search for a permanent Chief
Financial Officer is on-going, the company also recently announced
Willem Meintjes as Senior Vice
President of Finance.
Conference Call
Marvell will conduct a conference call on Tuesday, July 19, 2016 at 1:45 p.m. Pacific Time to discuss results for the
fourth quarter and full year fiscal 2016. Interested parties may
join the conference call by dialing 1-844-647-5488 or
1-615-247-0258, pass-code 45077084. The call will be webcast
by Thomson Reuters and can be accessed at the Marvell Investor
Relations website at http://investor.marvell.com/ with a
replay available following the call until August 19, 2016.
Discussion of Non-GAAP Financial Measures
Non-GAAP financial measures exclude the effect of share-based
compensation expense, amortization and write-off of acquired
intangible assets, acquisition-related costs, restructuring and
other related charges, litigation settlement, and certain
one-time expenses and benefits that are driven primarily by
discrete events that management does not consider to be directly
related to Marvell's core operating performance. Non-GAAP diluted
net income per share is calculated by dividing non-GAAP net income
by non-GAAP weighted average shares outstanding (diluted). For
purposes of calculating non-GAAP diluted net income per share, the
GAAP weighted average shares outstanding (diluted) is adjusted to
exclude the potential benefits of share-based compensation expected
to be incurred in future periods but not yet recognized in the
financial statements. The expected compensation costs are treated
as proceeds assumed to be used to repurchase shares under the GAAP
treasury stock method and also include the dilutive/anti-dilutive
effects of common stock options and restricted stock
units.
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, the information provided by GAAP financial measures.
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. For further information regarding
why Marvell believes that these non-GAAP measures provide useful
information to investors, the specific manner in which management
uses these measures, and some of the limitations associated with
the use of these measures, please refer to Marvell's Current Report
on Form 8-K filed today with the SEC. The Form 8-K is available on
the SEC's website at www.sec.gov as well as on the Marvell website
in the Investor Relations section at www.marvell.com.
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: its use of non-GAAP financial measures as
important supplemental information. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates,"
"can," "will" 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: actions that may
be taken by Marvell as a result of the Audit Committee's
investigation; adverse impacts of litigation or regulatory
activities; Marvell's ability to hire a permanent Chief Financial
Officer and Chief Accounting Officer and Controller in a timely
manner; Marvell's ability to regain compliance with its SEC
reporting obligations within the time of the exemption granted by
NASDAQ; Marvell's ability to compete in products and prices in an
intensely competitive industry; Marvell's reliance on the hard disk
drive and mobile and wireless markets, which are highly cyclical
and intensely competitive; costs and liabilities relating to
current and future litigation; Marvell's reliance on a few
customers for a significant portion of its revenue; Marvell's
ability to develop and introduce new and enhanced products in a
timely and cost effective manner and the adoption of those products
in the market; seasonality in sales of consumer devices in which
Marvell's products are incorporated; uncertainty in the worldwide
economic conditions; risks associated with manufacturing and
selling a majority of Marvell's products and Marvell's customers'
products outside of the United
States; 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 latest Annual Report on Form 10-K for the
year ended January 31, 2015 and its
latest Quarterly Report on Form 10-Q for the quarter ended
May 2, 2015 as filed with the SEC on
June 4, 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. From storage to cloud infrastructure, Internet
of Things (IoT), connectivity and multimedia, 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, personal
and work lives, Marvell is committed to enhancing the human
experience.
As used in this release, the term "Marvell" 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:
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John Spencer
Ahn
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Sue Kim
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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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Condensed
Consolidated Statements of Operations
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(Unaudited)
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(In thousands,
except per share amounts)
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Fiscal
2016
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Fiscal
2015
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Three Months
Ended
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Three Months
Ended
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Year
Ended
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January
30,
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October
31,
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August
1,
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January
31,
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November
1,
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August
2,
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January
30,
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January
31,
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2016
(a)
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2015 (a)
(b)
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2015 (a)
(c)
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2015
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2014
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2014
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2016
(a)
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2015
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(Preliminary)
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(Preliminary)
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Net
revenue
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$
616,158
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$
674,890
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$
710,492
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$
857,452
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$
930,136
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$
961,545
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$
2,725,828
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$
3,706,963
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Cost of goods
sold
|
302,610
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|
379,254
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|
461,719
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|
|
417,131
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|
454,974
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|
477,741
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1,494,736
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1,843,706
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Gross
profit
|
313,548
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|
295,636
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|
248,773
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440,321
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475,162
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483,804
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1,231,092
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1,863,257
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Operating
expenses:
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Research and
development
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239,703
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284,308
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297,321
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285,497
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288,435
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294,764
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1,101,446
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1,164,059
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Selling and
marketing
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31,301
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32,481
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30,841
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37,235
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34,410
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33,949
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|
|
130,797
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|
143,952
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General and
administrative
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37,812
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|
34,771
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|
36,563
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|
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34,651
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|
33,473
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|
31,333
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|
|
150,173
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|
130,030
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Carnegie Mellon
University litigation settlement
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-
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-
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654,667
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-
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-
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-
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654,667
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-
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Amortization and
write-off of acquired intangible assets
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2,462
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3,150
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2,568
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3,100
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3,304
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3,304
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|
|
10,748
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|
16,397
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Total operating
expenses
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311,278
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|
354,710
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|
1,021,960
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360,483
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359,622
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363,350
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|
|
2,047,831
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|
1,454,438
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Operating income
(loss)
|
2,270
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|
(59,074)
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(773,187)
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|
79,838
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|
115,540
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|
120,454
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(816,739)
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|
408,819
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Interest and other
income, net
|
1,084
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|
4,644
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|
6,790
|
|
|
4,382
|
|
4,764
|
|
12,263
|
|
|
17,685
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|
23,334
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Income (loss) before
income taxes
|
3,354
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(54,430)
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(766,397)
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84,220
|
|
120,304
|
|
132,717
|
|
|
(799,054)
|
|
432,153
|
Provision (benefit)
for income taxes
|
(846)
|
|
3,320
|
|
5,543
|
|
|
2,527
|
|
5,000
|
|
(6,153)
|
|
|
12,346
|
|
(3,193)
|
Net income
(loss)
|
$
4,200
|
|
$
(57,750)
|
|
$
(771,940)
|
|
|
$
81,693
|
|
$
115,304
|
|
$
138,870
|
|
|
$
(811,400)
|
|
$
435,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share
|
$
0.01
|
|
$
(0.11)
|
|
$
(1.49)
|
|
|
$
0.16
|
|
$
0.22
|
|
$
0.27
|
|
|
$
(1.59)
|
|
$
0.85
|
Diluted net income
(loss) per share
|
$
0.01
|
|
$
(0.11)
|
|
$
(1.49)
|
|
|
$
0.16
|
|
$
0.22
|
|
$
0.27
|
|
|
$
(1.59)
|
|
$
0.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing basic earnings (loss) per share
|
506,352
|
|
504,831
|
|
516,368
|
|
|
513,574
|
|
513,859
|
|
511,821
|
|
|
510,945
|
|
511,089
|
Shares used in
computing diluted earnings (loss) per share
|
508,590
|
|
504,831
|
|
516,368
|
|
|
522,112
|
|
519,907
|
|
520,269
|
|
|
510,945
|
|
520,760
|
|
|
|
|
(a)
|
The condensed
consolidated financial statements for each of the three
months ended January 30, 2016, October 31, 2015 and August 1, 2015
are preliminary, as well as the twelve months ended January 30,
2016, and therefore, subject to adjustments in connection with
subsequent events arising through the date of the Company's filing
of its Quarterly Reports on Form 10-Q and Annual Report on Form
10-K for the corresponding periods. The filing of each respective
Form 10-Q and 10-K will be completed as soon as practicable after
the completion of the audit of the Company's fiscal 2016 financial
statements by Deloitte & Touche LLP, its newly appointed
independent registered public accounting
firm.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
The condensed
consolidated financial statements for the three months ended
October 31, 2015, for which the Company previously reported
preliminary financial results on December 7, 2015 have been
adjusted due to the delayed filing of its Form 10-Q for the third
quarter. These adjustments were made to account for subsequent
activities associated with conditions that existed as of October
31, 2015 (Type I Subsequent Events) and are not related to the
Audit Committee's investigation of certain accounting and internal
control matters. Adjustments that have been recorded to the
Company's preliminary financial results after December 7, 2015
include a credit adjustment of $4.3 million to COGS due to the
subsequent settlement in February 2016 for the Carnegie Mellon
University litigation, a $1.5 million charge to write down
equipment and intangible asset related to a development project the
Company decided to discontinue, the recognition of an additional
$0.8 million of revenue due to a subsequent rebate adjustment and
corresponding reduction to the tax provision of $0.4 million. Due
to the delayed filing and as a result of future subsequent events,
there may be additional adjustments to these preliminary financial
results through the date of the Company's filing of its Form
10-Q.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
The condensed
consolidated financial statements for the three months ended August
1, 2015, for which the Company previously reported preliminary
financial results on September 11, 2015, have been adjusted due to
the delayed filing of its Form 10-Q for the second quarter. These
adjustments were made to account for subsequent activities
associated with conditions that existed as of August 1, 2015 (Type
I Subsequent Events) and are not related to the Audit Committee's
investigation of certain accounting and internal control matters.
Adjustments that have been recorded to the Company's preliminary
financial results after September 11, 2015 include an additional
$350.5 million charge due to the subsequent settlement in February
2016 for the Carnegie Mellon University litigation (of which $78.9
million was recorded to COGS), a $13.9 million write down of
inventory primarily associated with certain products for the mobile
platform business, $3.7 million related to other litigation
charges, a $1.5 million charge related to a pension plan and
an additional $3.0 million representing other net subsequent
charges, as well as corresponding changes to the income tax benefit
from $11.4 million to an income tax provision of $ 5.5 million. Due
to the delayed filing and as a result of future subsequent events,
there may be additional adjustments to these preliminary financial
results through the date of the Company's filing of its Form
10-Q.
|
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January
30,
|
|
January
31,
|
Assets
|
2016
(a)
|
|
2015
|
|
(Preliminary)
|
|
|
Current
assets:
|
|
|
|
|
Cash, cash
equivalents and short-term investments
|
$
2,282,749
|
|
$
2,529,555
|
|
Accounts receivable,
net
|
323,300
|
|
420,955
|
|
Inventories
|
210,017
|
|
308,162
|
|
Prepaid expenses and
other current assets
|
102,560
|
|
85,368
|
|
|
Total current
assets
|
2,918,626
|
|
3,344,040
|
Property and
equipment, net
|
299,540
|
|
340,639
|
Long-term
investments
|
11,296
|
|
10,226
|
Goodwill and acquired
intangible assets, net
|
2,047,955
|
|
2,060,643
|
Other non-current
assets
|
164,710
|
|
128,839
|
|
|
Total
assets
|
$
5,442,127
|
|
$
5,884,387
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
180,372
|
|
$
282,899
|
|
Accrued
liabilities
|
253,691
|
|
286,357
|
|
Carnegie Mellon
University accrued litigation settlement
|
736,000
|
|
-
|
|
Deferred
income
|
55,722
|
|
68,120
|
|
|
Total current
liabilities
|
1,225,785
|
|
637,376
|
Other non-current
liabilities
|
76,219
|
|
100,922
|
|
|
Total
liabilities
|
1,302,004
|
|
738,298
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Common
stock
|
1,015
|
|
1,030
|
|
Additional paid-in
capital
|
3,028,921
|
|
3,099,548
|
|
Accumulated other
comprehensive income (loss)
|
(795)
|
|
308
|
|
Retained
earnings
|
1,110,982
|
|
2,045,203
|
|
|
Total shareholders'
equity
|
4,140,123
|
|
5,146,089
|
|
|
Total liabilities and
shareholders' equity
|
$
5,442,127
|
|
$
5,884,387
|
|
|
|
|
|
|
|
|
(a)
|
The condensed
consolidated balance sheet at January 30, 2016 is preliminary and
therefore, subject to adjustments in connection with subsequent
events arising through the date of the Company's filing of its
Annual Report on Form 10-K for the corresponding period. The filing
of the Form 10-K will be completed as soon as practicable after the
completion of the audit of the Company's fiscal 2016 financial
statements by Deloitte & Touche LLP, its newly appointed
independent registered public accounting firm.
|
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
2016
|
|
Fiscal
2015
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
January
30,
|
|
October
31,
|
|
August
1,
|
|
January
31,
|
|
November
1,
|
|
August
2,
|
|
|
January
30,
|
|
January
31,
|
|
|
|
|
2016
(a)
|
|
2015
(a)
|
|
2015
(a)
|
|
2015
|
|
2014
|
|
2014
|
|
|
2016
(a)
|
|
2015
|
|
|
|
|
(Preliminary)
|
|
|
|
|
(Preliminary)
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
4,200
|
|
$
(57,750)
|
|
$
(771,940)
|
|
$
81,693
|
|
$
115,304
|
|
$
138,870
|
|
|
$
(811,400)
|
|
$
435,346
|
Adjustments to
reconcile net income (loss) to net cash
provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
22,800
|
|
25,565
|
|
25,191
|
|
26,464
|
|
26,515
|
|
26,263
|
|
|
100,176
|
|
106,248
|
|
Share-based
compensation
|
32,419
|
|
31,465
|
|
36,674
|
|
37,963
|
|
34,294
|
|
35,020
|
|
|
133,779
|
|
137,246
|
|
Amortization and
write-off of acquired intangible assets
|
2,947
|
|
3,635
|
|
3,053
|
|
3,585
|
|
3,789
|
|
3,789
|
|
|
12,688
|
|
18,337
|
|
Non-cash
restructuring and other related charges
|
289
|
|
14,270
|
|
900
|
|
3,230
|
|
-
|
|
-
|
|
|
16,032
|
|
17
|
|
Other non-cash
expense (income), net
|
7,885
|
|
4,205
|
|
2,283
|
|
(1,699)
|
|
(6,034)
|
|
(7,596)
|
|
|
13,811
|
|
(10,646)
|
|
Excess tax benefits
from share-based compensation
|
1
|
|
(2)
|
|
(7)
|
|
(67)
|
|
(2)
|
|
(32)
|
|
|
(26)
|
|
(145)
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
57,628
|
|
36,793
|
|
(23,907)
|
|
25,719
|
|
40,214
|
|
33,419
|
|
|
97,655
|
|
34,165
|
|
|
Inventories
|
69,544
|
|
39,457
|
|
12,903
|
|
48,247
|
|
37,506
|
|
(43,194)
|
|
|
90,586
|
|
39,454
|
|
|
Prepaid expenses and
other assets
|
(35,245)
|
|
6,804
|
|
9,358
|
|
4,087
|
|
18,536
|
|
(24,996)
|
|
|
(17,113)
|
|
(7,125)
|
|
|
Accounts
payable
|
(62,163)
|
|
(55,693)
|
|
(5,167)
|
|
(60,808)
|
|
(70,749)
|
|
2,558
|
|
|
(105,898)
|
|
(43,871)
|
|
|
Accrued liabilities
and other non-current liabilities
|
(27,218)
|
|
3,958
|
|
19,634
|
|
(12,189)
|
|
(24,997)
|
|
10,096
|
|
|
(15,202)
|
|
(30,024)
|
|
|
Carnegie Mellon
University accrued litigation settlement
|
1,285
|
|
1,158
|
|
733,557
|
|
-
|
|
-
|
|
-
|
|
|
736,000
|
|
-
|
|
|
Accrued employee
compensation
|
(18,702)
|
|
14,295
|
|
(14,507)
|
|
1,910
|
|
19,101
|
|
(7,451)
|
|
|
(33,338)
|
|
43,561
|
|
|
Deferred
income
|
(2,364)
|
|
(1,566)
|
|
(1,441)
|
|
(2,714)
|
|
(12,053)
|
|
(9,792)
|
|
|
(12,398)
|
|
6,373
|
|
|
|
Net cash provided by
operating activities
|
53,306
|
|
66,594
|
|
26,584
|
|
155,421
|
|
181,424
|
|
156,954
|
|
|
205,352
|
|
728,936
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of
available-for-sale securities
|
(133,215)
|
|
(356,465)
|
|
(173,465)
|
|
(344,023)
|
|
(448,526)
|
|
(153,881)
|
|
|
(1,056,045)
|
|
(1,128,319)
|
|
Sales and maturities
of available-for-sale securities
|
477,301
|
|
356,409
|
|
222,295
|
|
248,215
|
|
205,685
|
|
190,099
|
|
|
1,303,500
|
|
826,310
|
|
Distribution from
(investments in) privately-held companies
|
(119)
|
|
(130)
|
|
208
|
|
-
|
|
(260)
|
|
-
|
|
|
(41)
|
|
(701)
|
|
Proceeds from sale of
an investment in a privately-held company
|
-
|
|
-
|
|
-
|
|
-
|
|
13,220
|
|
-
|
|
|
-
|
|
13,220
|
|
Purchases of
technology licenses
|
(1,579)
|
|
(980)
|
|
(2,071)
|
|
(1,910)
|
|
(5,105)
|
|
(1,298)
|
|
|
(8,236)
|
|
(16,424)
|
|
Purchases of property
and equipment
|
(3,894)
|
|
(9,041)
|
|
(16,986)
|
|
(14,415)
|
|
(16,661)
|
|
(15,823)
|
|
|
(37,255)
|
|
(63,030)
|
|
Purchase of equipment
previously leased
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
(10,240)
|
|
-
|
|
Net proceeds from
sale of equipment held for sale
|
-
|
|
10,007
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
10,007
|
|
-
|
|
|
|
Net cash provided by
(used in) investing activities
|
338,494
|
|
(200)
|
|
29,981
|
|
(112,133)
|
|
(251,647)
|
|
19,097
|
|
|
201,690
|
|
(368,944)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase of common
stock (b)
|
-
|
|
(65,291)
|
|
(175,311)
|
|
(21,188)
|
|
(43,774)
|
|
-
|
|
|
(260,875)
|
|
(64,962)
|
|
Proceeds from
employee stock plans
|
21,369
|
|
2,174
|
|
44,161
|
|
41,049
|
|
2,934
|
|
49,282
|
|
|
80,717
|
|
112,357
|
|
Minimum tax
withholding paid on behalf of employees for net share settlement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(482)
|
|
(869)
|
|
(697)
|
|
(908)
|
|
(663)
|
|
(637)
|
|
|
(24,358)
|
|
(26,494)
|
|
Dividend payments to
shareholders
|
(30,447)
|
|
(30,270)
|
|
(31,194)
|
|
(30,942)
|
|
(30,867)
|
|
(30,820)
|
|
|
(122,821)
|
|
(122,801)
|
|
Payments on
technology license obligations
|
(1,112)
|
|
(2,617)
|
|
(4,732)
|
|
(4,382)
|
|
(5,951)
|
|
(2,677)
|
|
|
(12,528)
|
|
(13,010)
|
|
Excess tax benefits
from share-based compensation
|
(1)
|
|
2
|
|
7
|
|
67
|
|
2
|
|
32
|
|
|
26
|
|
145
|
|
|
|
Net cash provided by
(used in) financing activities
|
(10,673)
|
|
(96,871)
|
|
(167,766)
|
|
(16,304)
|
|
(78,319)
|
|
15,180
|
|
|
(339,839)
|
|
(114,765)
|
Net increase
(decrease) in cash and cash equivalents
|
381,127
|
|
(30,477)
|
|
(111,201)
|
|
26,984
|
|
(148,542)
|
|
191,231
|
|
|
67,203
|
|
245,227
|
Cash and cash
equivalents at beginning of period
|
897,053
|
|
927,530
|
|
1,038,731
|
|
1,183,993
|
|
1,332,535
|
|
1,141,304
|
|
|
1,210,977
|
|
965,750
|
Cash and cash
equivalents at end of period
|
$
1,278,180
|
|
$
897,053
|
|
$
927,530
|
|
$
1,210,977
|
|
$
1,183,993
|
|
$
1,332,535
|
|
|
$
1,278,180
|
|
$
1,210,977
|
|
|
|
|
(a)
|
The condensed
consolidated statement of cash flows for each of the three months
ended January 30, 2016, October 31, 2015 and August 1, 2015 are
preliminary, as well as the twelve months ended January 30, 2016,
and therefore, subject to adjustments in connection with subsequent
events arising through the date of the Company's filing of its
Annual Report on Form 10-K for the corresponding period. The filing
of the Form 10-K will be completed as soon as practicable after the
completion of the audit of the Company's fiscal 2016 financial
statements by Deloitte & Touche LLP, its newly appointed
independent registered public accounting firm.
|
|
|
(b)
|
Marvell records all
repurchases as well as investment purchases and sales, based on
trade date in accordance with U.S. GAAP.
|
Marvell Technology
Group Ltd.
|
Reconciliations
from GAAP to Non-GAAP
|
(Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
2016
|
|
Fiscal
2015
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
Year
Ended
|
January
30,
|
|
October
31,
|
|
August
1,
|
|
January
31,
|
|
November
1,
|
|
August
2,
|
|
|
January
30,
|
|
January
31,
|
|
2016
(e)
|
|
2015 (e)
(f)
|
|
2015 (e)
(g)
|
|
2015
|
|
2014
|
|
2014
|
|
|
2016
(e)
|
|
2015
|
|
(Preliminary)
|
|
|
|
|
|
|
|
|
(Preliminary)
|
|
|
GAAP net income
(loss)
|
$
4,200
|
|
$
(57,750)
|
|
$
(771,940)
|
|
$
81,693
|
|
$
115,304
|
|
$
138,870
|
|
|
$
(811,400)
|
|
$
435,346
|
Share-based
compensation
|
32,419
|
|
31,465
|
|
36,674
|
|
37,963
|
|
34,294
|
|
35,020
|
|
|
133,779
|
|
137,246
|
Restructuring and
other related charges (a)
|
4,396
|
|
45,555
|
|
13,000
|
|
3,412
|
|
1,203
|
|
735
|
|
|
63,543
|
|
10,438
|
Amortization and
write-off of acquired intangible assets
|
2,947
|
|
3,635
|
|
3,346
|
|
4,025
|
|
4,229
|
|
4,229
|
|
|
13,421
|
|
20,097
|
Litigation matters
(b)
|
3,791
|
|
1,158
|
|
748,117
|
|
-
|
|
(2,398)
|
|
475
|
|
|
751,366
|
|
77
|
Other
(c)
|
6,754
|
|
4,942
|
|
10,205
|
|
3,764
|
|
2,318
|
|
2,155
|
|
|
43,283
|
|
8,237
|
Non-GAAP net
income
|
$
54,507
|
|
$
29,005
|
|
$
39,402
|
|
$
130,857
|
|
$
154,950
|
|
$
181,484
|
|
|
$
193,992
|
|
$
611,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP weighted average
shares - diluted
|
508,590
|
|
504,831
|
|
516,368
|
|
522,112
|
|
519,907
|
|
520,269
|
|
|
510,945
|
|
520,760
|
|
Non-GAAP
adjustment
|
9,978
|
|
13,674
|
|
16,574
|
|
10,688
|
|
12,905
|
|
13,201
|
|
|
15,349
|
|
11,604
|
Non-GAAP weighted
average shares diluted (d)
|
518,568
|
|
518,505
|
|
532,942
|
|
532,800
|
|
532,812
|
|
533,470
|
|
|
526,294
|
|
532,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income (loss) per share
|
$
0.01
|
|
$
(0.11)
|
|
$
(1.49)
|
|
$
0.16
|
|
$
0.22
|
|
$
0.27
|
|
|
$
(1.59)
|
|
$
0.84
|
Non-GAAP diluted net
income per share
|
$
0.11
|
|
$
0.06
|
|
$
0.07
|
|
$
0.25
|
|
$
0.29
|
|
$
0.34
|
|
|
$
0.37
|
|
$
1.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit:
|
$
313,548
|
|
$
295,636
|
|
$
248,773
|
|
$
440,321
|
|
$
475,162
|
|
$
483,804
|
|
|
$
1,231,092
|
|
$
1,863,257
|
|
Share-based
compensation
|
1,861
|
|
2,495
|
|
2,012
|
|
2,006
|
|
1,934
|
|
1,733
|
|
|
7,915
|
|
7,972
|
|
Restructuring and
other related charges (a)
|
7
|
|
10,285
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
10,292
|
|
-
|
|
Amortization of
acquired intangible assets
|
485
|
|
485
|
|
778
|
|
925
|
|
925
|
|
925
|
|
|
2,673
|
|
3,700
|
|
Litigation matters
(b)
|
3,711
|
|
1,158
|
|
81,390
|
|
-
|
|
(3,998)
|
|
-
|
|
|
84,559
|
|
(3,998)
|
|
Other
(c)
|
-
|
|
-
|
|
-
|
|
1,000
|
|
-
|
|
-
|
|
|
-
|
|
1,000
|
Non-GAAP gross
profit
|
$
319,612
|
|
$
310,059
|
|
$
332,953
|
|
$
444,252
|
|
$
474,023
|
|
$
486,462
|
|
|
$
1,336,531
|
|
$
1,871,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin
|
50.9%
|
|
43.8%
|
|
35.0%
|
|
51.4%
|
|
51.1%
|
|
50.3%
|
|
|
45.2%
|
|
50.3%
|
|
Share-based
compensation
|
0.3%
|
|
0.4%
|
|
0.3%
|
|
0.2%
|
|
0.2%
|
|
0.2%
|
|
|
0.3%
|
|
0.2%
|
|
Restructuring and
other related charges (a)
|
0.0%
|
|
1.5%
|
|
0.0%
|
|
0.0%
|
|
0.0%
|
|
0.0%
|
|
|
0.4%
|
|
0.0%
|
|
Amortization of
acquired intangible assets
|
0.1%
|
|
0.1%
|
|
0.1%
|
|
0.1%
|
|
0.1%
|
|
0.1%
|
|
|
0.1%
|
|
0.1%
|
|
Litigation matters
(b)
|
0.6%
|
|
0.1%
|
|
11.5%
|
|
0.0%
|
|
-0.4%
|
|
0.0%
|
|
|
3.0%
|
|
-0.1%
|
|
Other
(c)
|
0.0%
|
|
0.0%
|
|
0.0%
|
|
0.1%
|
|
0.0%
|
|
0.0%
|
|
|
0.0%
|
|
0.0%
|
Non-GAAP gross
margin
|
51.9%
|
|
45.9%
|
|
46.9%
|
|
51.8%
|
|
51.0%
|
|
50.6%
|
|
|
49.0%
|
|
50.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and
development:
|
$
239,703
|
|
$
284,308
|
|
$
297,321
|
|
$
285,497
|
|
$
288,435
|
|
$
294,764
|
|
|
$
1,101,446
|
|
$
1,164,059
|
|
Share-based
compensation
|
(23,631)
|
|
(22,573)
|
|
(27,807)
|
|
(25,590)
|
|
(24,198)
|
|
(24,276)
|
|
|
(98,792)
|
|
(94,432)
|
|
Restructuring and
other related charges (a)
|
(3,703)
|
|
(31,806)
|
|
(11,680)
|
|
(67)
|
|
(88)
|
|
(412)
|
|
|
(47,189)
|
|
(5,249)
|
|
Litigation matters
(b)
|
-
|
|
-
|
|
(5,000)
|
|
-
|
|
-
|
|
-
|
|
|
(5,000)
|
|
-
|
|
Other
(c)
|
(3,485)
|
|
(894)
|
|
(134)
|
|
-
|
|
-
|
|
-
|
|
|
(4,513)
|
|
-
|
Non-GAAP research and
development
|
$
208,884
|
|
$
229,035
|
|
$
252,700
|
|
$
259,840
|
|
$
264,149
|
|
$
270,076
|
|
|
$
945,952
|
|
$
1,064,378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP selling and
marketing:
|
$
31,301
|
|
$
32,481
|
|
$
30,841
|
|
$
37,235
|
|
$
34,410
|
|
$
33,949
|
|
|
$
130,797
|
|
$
143,952
|
|
Share-based
compensation
|
(3,214)
|
|
(2,608)
|
|
(2,707)
|
|
(3,069)
|
|
(2,855)
|
|
(2,617)
|
|
|
(11,106)
|
|
(11,469)
|
|
Restructuring and
other related charges (a)
|
(118)
|
|
(1,899)
|
|
-
|
|
-
|
|
-
|
|
48
|
|
|
(2,017)
|
|
-
|
|
Litigation matters
(b)
|
-
|
|
-
|
|
-
|
|
-
|
|
(1,600)
|
|
-
|
|
|
-
|
|
(1,600)
|
|
Other
(c)
|
(393)
|
|
(39)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
(432)
|
|
-
|
Non-GAAP selling and
marketing
|
$
27,576
|
|
$
27,935
|
|
$
28,134
|
|
$
34,166
|
|
$
29,955
|
|
$
31,380
|
|
|
$
117,242
|
|
$
130,883
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and
administrative:
|
$
37,812
|
|
$
34,771
|
|
$
36,563
|
|
$
34,651
|
|
$
33,473
|
|
$
31,333
|
|
|
$
150,173
|
|
$
130,030
|
|
Share-based
compensation
|
(3,713)
|
|
(3,789)
|
|
(4,148)
|
|
(7,298)
|
|
(5,307)
|
|
(6,394)
|
|
|
(15,966)
|
|
(23,373)
|
|
Restructuring and
other related charges (a)
|
(568)
|
|
(1,565)
|
|
(1,320)
|
|
(3,345)
|
|
(1,115)
|
|
(371)
|
|
|
(4,045)
|
|
(5,189)
|
|
Litigation matters
(b)
|
(80)
|
|
-
|
|
(7,060)
|
|
-
|
|
-
|
|
(475)
|
|
|
(7,140)
|
|
(2,475)
|
|
Other
(c)
|
(2,876)
|
|
(2,901)
|
|
(2,748)
|
|
(2,764)
|
|
(2,318)
|
|
(2,155)
|
|
|
(26,827)
|
|
(7,237)
|
Non-GAAP general and
administrative
|
$
30,575
|
|
$
26,516
|
|
$
21,287
|
|
$
21,244
|
|
$
24,733
|
|
$
21,938
|
|
|
$
96,195
|
|
$
91,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Carnegie Mellon
University litigation settlement
|
$
-
|
|
$
-
|
|
$
654,667
|
|
$
-
|
|
$
-
|
|
$
-
|
|
|
$
654,667
|
|
$
-
|
|
Litigation matters
(b)
|
-
|
|
-
|
|
(654,667)
|
|
-
|
|
-
|
|
-
|
|
|
(654,667)
|
|
-
|
Non-GAAP Carnegie
Mellon University litigation settlement
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
|
$
-
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP provision
(benefit) for income taxes
|
$
(846)
|
|
$
3,320
|
|
$
5,543
|
|
$
2,527
|
|
$
5,000
|
|
$
(6,153)
|
|
|
$
12,346
|
|
$
(3,193)
|
|
Other
(c)
|
-
|
|
(1,108)
|
|
(7,323)
|
|
-
|
|
-
|
|
-
|
|
|
(11,511)
|
|
-
|
Non-GAAP provision
(benefit) for income taxes
|
$
(846)
|
|
$
2,212
|
|
$
(1,780)
|
|
$
2,527
|
|
$
5,000
|
|
$
(6,153)
|
|
|
$
835
|
|
$
(3,193)
|
|
|
|
|
(a)
|
Restructuring and
other related charges include costs that qualify under U.S. GAAP as
restructuring costs and other incremental charges that are a direct
result of restructuring. For the three months ended January 30,
2016, such other related charges include $0.3 million for the
impairment of certain leasehold improvements due to the
restructuring of the mobile platform business, in addition to $4.1
million of restructuring charges, primarily for severance and
facility-related costs. For the three months ended October 31,
2015, such other related charges include $6.2 million for the
impairment of certain equipment (of which $2.2 million is in cost
of goods sold) and an $8.1 million write down of inventory (in cost
of goods sold) due to the restructuring of the mobile platform
business, in addition to $31.3 million of restructuring charges,
primarily for severance and other-exit related costs. For the three
months ended August 1, 2015, such other related charges included a
$0.9 million impairment of equipment held for sale (in general and
administrative), in addition to $12.1 million of restructuring
charges, primarily for severance. In addition, other related
charges for all periods reported include operating expenses
incurred for the maintenance of equipment held for sale.
|
|
|
(b)
|
Litigation matters
represent accruals recognized by the Company under ASC Topic 450,
"Contingencies," in connection with the Carnegie Mellon University
and certain other pending litigation.
|
|
|
(c)
|
Other costs included
in general and administrative expenses for the year ended January
30, 2016 include a cash payment authorized by the Board of
Directors of $15.4 million to Dr. Sehat Sutardja, the Company's
former Chief Executive Officer ("CEO") (see "Note 15 - Subsequent
Events" in the Notes to the Consolidated Financial Statements set
forth in Part II, Item 8 of the Company's Annual Report on Form
10-K for fiscal 2015). Other costs for all periods presented
includes costs primarily associated with the surety bond to appeal
the Carnegie Mellon University judgment. Other costs included in
the provision for income taxes also reflects the tax effect of
restructuring costs in each of the three months ended August 1,
2015 and October 31, 2015, as well as the year ended January 30,
2015. Other costs included in the provision for income taxes for
the year ended January 30, 2016 include the corporate income tax
effect of the $15.4 million cash payment to the Company's
CEO.
|
|
|
(d)
|
For purposes of
calculating non-GAAP diluted net income per share in all periods
presented, the GAAP diluted weighted average shares outstanding is
adjusted to exclude the potential benefits of share-based
compensation costs expected to be incurred in future periods but
not yet recognized in the financial statements. The non-GAAP
diluted weighted average shares outstanding for the three months
ended August 1, 2015 and October 31, 2015, and for the twelve
months ended January 30, 2016 also include the effects from
dilutive securities which were excluded from the GAAP diluted
weighted average shares outstanding since their effect was
antidilutive due to the GAAP net loss reported in each of the
corresponding periods.
|
|
|
(e)
|
The condensed
consolidated financial statements for each of the three months
ended August 1, 2015, October 31, 2015 and January 30, 2016, as
well as the twelve months ended January 30, 2016 are preliminary
and therefore, subject to adjustments in connection with subsequent
events arising through the date of the Company's filing of its
Quarterly Reports on Form 10-Q and Annual Report on Form 10-K for
the corresponding periods. The filing of each respective Form 10-Q
and Form 10-K will be completed as soon as practicable after the
completion of the audit of the Company's fiscal 2016 financial
statements by Deloitte & Touche LLP, its newly appointed
independent registered public accounting firm.
|
|
|
(f)
|
The condensed
consolidated financial statements for the three months ended
October 31, 2015, for which the Company previously reported
preliminary financial results on December 7, 2015 have been
adjusted due to the delayed filing of its Form 10-Q for the third
quarter. These adjustments were made to account for subsequent
activities associated with conditions that existed as of October
31, 2015 (Type I Subsequent Events) and are not related to the
Audit Committee's investigation of certain accounting and internal
control matters. Adjustments that have been recorded to the
Company's preliminary financial results after December 7, 2015
include a credit adjustment of $4.3 million to COGS due to the
subsequent settlement in February 2016 for the Carnegie Mellon
University litigation, a $1.5 million charge to write down
equipment and intangible asset related to a development project the
Company decided to discontinue, the recognition of an additional
$0.8 million of revenue due to a subsequent rebate adjustment and
corresponding reduction to the tax provision of $0.4 million. Due
to the delayed filing and as a result of future subsequent events,
there may be additional adjustments to these preliminary financial
results through the date of the Company's filing of its Form
10-Q.
|
|
|
(g)
|
The condensed
consolidated financial statements for the three months ended August
1, 2015, for which the Company previously reported preliminary
financial results on September 11, 2015, have been adjusted due to
the delayed filing of its Form 10-Q for the second quarter. These
adjustments were made to account for subsequent activities
associated with conditions that existed as of August 1, 2015 (Type
I Subsequent Events) and are not related to the Audit Committee's
investigation of certain accounting and internal control matters.
Adjustments that have been recorded to the Company's preliminary
financial results after September 11, 2015 include an additional
$350.5 million charge due to the subsequent settlement in February
2016 for the Carnegie Mellon University litigation (of which $78.9
million was recorded to COGS), a $13.9 million write down of
inventory primarily associated with certain products for the mobile
platform business, $3.7 million related to other litigation
charges, a $1.5 million charge related to a pension plan and
an additional $3.0 million representing other net subsequent
charges, as well as corresponding changes to the income tax benefit
from $11.4 million to an income tax provision of $ 5.5 million. Due
to the delayed filing and as a result of future subsequent events,
there may be additional adjustments to these preliminary financial
results through the date of the Company's filing of its Form
10-Q.
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SOURCE Marvell Technology Group Ltd.