SANTA CLARA, Calif.,
July 27, 2016 /PRNewswire/
-- Marvell (NASDAQ:MRVL), a world leader in storage, cloud
infrastructure, Internet of Things (IoT), connectivity and
multimedia semiconductor solutions, today reported financial
results for the first quarter of fiscal year 2017, ended
April 30, 2016.
Key First Quarter of Fiscal 2017
Highlights
- Revenue: Q1 FY 2017, $541
Million
- GAAP Net (Loss): Q1 FY 2017, ($23)
Million
- GAAP Diluted (Loss) Per Share: Q1 FY 2017, ($0.04)
- Non-GAAP Net Income: Q1 FY 2017, $7
Million
- Non-GAAP Diluted EPS: Q1 FY 2017, $0.01
- Cash Flow from Operations: Q1 FY 2017, ($610) Million
- Cash and ST Investments: $1.6
Billion
Second Quarter of Fiscal 2017 Financial Outlook
Marvell's financial outlook does not include the potential
impact of future share repurchases, pending litigation matters,
business combinations, asset acquisitions or other investments that
may be completed after July 26,
2016.
- Revenue is expected to be in the range of $625 Million to $635 Million.
- GAAP and Non-GAAP Gross Margins are expected to be in the range
of 52 percent to 54 percent.
- GAAP Operating Expenses are expected to be in the range of
$307 Million to $317 Million.
Non-GAAP Operating Expenses are expected to be in the range of
$270 Million to $280 Million.
- GAAP Diluted EPS are expected to be in the range of
$0.03 to $0.05. Non-GAAP
Diluted EPS are expected to be in the range of $0.10 to $0.12.
First Quarter of Fiscal 2017 Summary
Revenues for the first quarter of fiscal 2017 were $541 million, down approximately 12 percent from
$616 million in the fourth quarter of
fiscal 2016, ended January 30, 2016,
and down approximately 25 percent from $724
million in the first quarter of fiscal 2016, ended
May 2, 2015.
In the first quarter of fiscal 2017, storage revenue declined 16
percent sequentially, reflecting lower HDD industry demand
partially offset by growth in SSD. Networking revenue in the
first quarter of fiscal 2017 grew 5 percent sequentially due to
improved enterprise networking demand. Mobile and wireless
revenue decreased 29 percent sequentially, mainly driven by the
previously anticipated declines in revenue resulting from Marvell's
exit of the mobile handset business. Mobile handset revenues in the
first quarter of 2017, fourth quarter, and first quarter of fiscal
2016 were $22 million, $69 million and $65
million, respectively. The Company anticipates mobile
handset platform-related revenue to decline through fiscal year
2017 due to the restructuring actions announced on September 24, 2015.
GAAP net loss for the first quarter of fiscal 2017 was
($23) million, or ($0.04) per share (diluted) compared with a GAAP
net income of $4 million, or
$0.01 per share (diluted), for the
fourth quarter of fiscal 2016, and GAAP net income of $14 million, or $0.03 per share (diluted), for the first quarter
of fiscal 2016.
Non-GAAP net income for the first quarter of fiscal 2017 was
$7 million, or $0.01 per share (diluted), which included
adjustments of approximately $29
million including: $4 million
for restructuring, of which $1
million was related to the mobile handset platform business,
and $25 million for share-based
compensation. By comparison, non-GAAP net income for the fourth
quarter of fiscal 2016 was $55
million, or $0.11 per share
(diluted), which included adjustments of $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. Non-GAAP net income for the first
quarter of fiscal 2016 was $71
million, or $0.13 per share
(diluted), which included adjustments of $57
million including: $33 million
for share-based compensation and $24
million for other items. Refer to the GAAP to Non-GAAP
reconciliation table and related footnotes contained in this press
release for more details.
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 April 30, 2016, January 30, 2016, and May
2, 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 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 first quarter of fiscal
2017 was 52.1 percent, compared to 50.9 percent for the fourth
quarter of fiscal 2016 and 51.5 percent for the first quarter of
fiscal 2016.
Non-GAAP gross margin percentage for the first quarter of fiscal
2017 was 52.5 percent, compared to 51.9 percent for the fourth
quarter of fiscal 2016 and 51.6 percent for the first quarter of
fiscal 2016. The sequential improvement in fourth quarter GAAP and
Non-GAAP gross margin percentages was mainly due to a larger mix of
higher margin networking sales and a smaller mix of lower margin
mobile handset platform-related revenues compared to the prior
quarter. 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 first quarter of
fiscal 2017 were $311 million,
unchanged from the fourth quarter of fiscal year 2016, and 14
percent lower compared to $360
million in the first quarter of fiscal 2016.
Non-GAAP operating expenses were $280
million in the first quarter compared to $267 million in the fourth quarter, a 5 percent
increase, and $307 million in the
first quarter of fiscal 2016, a 9 percent decline. Refer to
the GAAP to Non-GAAP reconciliation table and related footnotes
contained in this press release for more details.
GAAP and Non-GAAP operating expenses for the first quarter of
fiscal 2017 and fourth quarter of fiscal year 2016 include
$17 million and $11 million, respectively of legal and accounting
fees related to the Audit Committee investigation, and the related
shareholder litigation and investigations by the SEC and
United States Attorney's Office
and other professional fees.
Shares used to compute GAAP net income per diluted share for the
first quarter of fiscal 2017 were 509 million shares, compared with
509 million shares in the fourth quarter of fiscal 2016 and 527
million shares in the first quarter of fiscal 2016.
Shares used to compute non-GAAP net income per diluted share for
the first quarter of fiscal 2017 were 522 million shares, compared
with 519 million shares for the fourth quarter of fiscal 2016 and
535 million shares for the first quarter of fiscal 2016.
Net cash provided from operations for the first quarter of
fiscal 2017 was ($610) million,
compared to $53 million in the fourth
quarter of fiscal 2016 and $59
million reported in the first quarter of fiscal 2016.
Net cash provided from operations for the first quarter of fiscal
2017 reflects the $750 million
payment related to the previously announced Carnegie Mellon University litigation
settlement. Free cash flow for the first quarter of fiscal
2017 was ($625) million, compared to
the $47 million in the fourth quarter
of fiscal 2016 and the $44 million
reported in the first quarter of fiscal 2016. 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 first quarter of fiscal
2017. Marvell paid a quarterly dividend of $0.06 per share on April
22, 2016 to all shareholders of record as of March 29, 2016.
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.
Update Regarding NASDAQ Compliance Plan
On May 3, 2016, Marvell announced
that it had 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.
The filings of the Company's Annual Report on Form 10-K for
fiscal year 2016, ended January 30,
2016, and its Quarterly Reports on Form 10-Q for the second
and third quarters of fiscal 2016, were completed on July 21, 2016. The preparation and filing of the
Company's Quarterly Report on Form 10-Q for the first quarter of
fiscal 2017 ended April 30, 2016 has
not yet been completed. The Company is working diligently to
complete the preparation and filing of the Form 10-Q for the first
quarter of 2017 as soon as practicable, at which time Marvell
believes it will regain full compliance with Nasdaq continued
listing requirements.
Conference Call
Marvell will conduct a conference call on Wednesday, July 27, 2016 at 1:45 p.m. Pacific Time to discuss results for the
first quarter of fiscal year 2017. Interested parties may join the
conference call by dialing 1-844-647-5488 or 1-615-247-0258,
pass-code 54569096. 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 27,
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
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, financial measures calculated in accordance with GAAP.
Consistent with this approach, Marvell believes that disclosing
non-GAAP financial measures to the readers of its financial
statements provides such readers with useful supplemental data
that, while not a substitute for GAAP financial measures, allows
for greater transparency in the review of its financial and
operational performance.
Externally, management believes that investors may find
Marvell's non-GAAP financial measures useful in their assessment of
Marvell's operating performance and the valuation of Marvell.
Internally, Marvell's non-GAAP financial measures are used in the
following areas:
- Management's evaluation of Marvell's operating
performance;
- Management's establishment of internal operating budgets;
- Management's performance comparisons with internal forecasts
and targeted business models; and
- Management's determination of the achievement and measurement
of certain performance-based equity awards (adjustments may vary
from award to award).
Non-GAAP financial measures have limitations in that they do not
reflect all of the costs associated with the operations of
Marvell's business as determined in accordance with GAAP. As a
result, you should not consider these measures in isolation or as a
substitute for analysis of Marvell's results as reported under
GAAP. Marvell expects to continue to incur expenses similar to the
non-GAAP adjustments described above, and exclusion of these items
from Marvell's non-GAAP net income should not be construed as an
inference that these costs are unusual, infrequent or
non-recurring.
Forward-Looking Statements under the Private Securities
Litigation Reform Act of 1995
This press release contains forward-looking statements within
the meaning of the federal securities laws that involve risks and
uncertainties, including: Marvell's expectations regarding its
second quarter of fiscal 2017 financial outlook; Marvell's belief
regarding the timing of its compliance with Nasdaq listing
standards; and Marvell's use of non-GAAP financial measures as
important supplemental information. Words such as "anticipates,"
"expects," "intends," "plans," "projects," "believes," "seeks,"
"estimates," "can," "may," "will," "would" and similar expressions
identify such forward-looking statements. These statements
are not guarantees of results and should not be considered as an
indication of future activity or future performance. Actual events
or results may differ materially from those described in this press
release due to a number of risks and uncertainties, including, but
not limited to: 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
fiscal year ended January 30, 2016 as
filed with the SEC on July 21, 2016,
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.
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Statements of Operations
|
(Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
April
30,
|
|
January
30,
|
|
May
2,
|
|
|
|
|
|
|
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
(Preliminary)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
|
|
|
$
540,822
|
|
$
616,158
|
|
$ 724,288
|
|
Cost of goods
sold
|
|
|
259,210
|
|
302,610
|
|
351,153
|
|
Gross
profit
|
|
|
|
281,612
|
|
313,548
|
|
373,135
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
241,271
|
|
239,703
|
|
280,114
|
|
|
Selling and
marketing
|
|
|
31,379
|
|
31,301
|
|
36,174
|
|
|
General and
administrative
|
|
35,623
|
|
37,812
|
|
41,027
|
|
|
Amortization and
write-off of acquired intangible assets
|
2,461
|
|
2,462
|
|
2,568
|
|
|
|
Total operating
expenses
|
|
310,734
|
|
311,278
|
|
359,883
|
|
Operating income
(loss)
|
|
|
(29,122)
|
|
2,270
|
|
13,252
|
|
Interest and other
income, net
|
|
1,488
|
|
1,084
|
|
5,167
|
|
Income (loss) before
income taxes
|
|
(27,634)
|
|
3,354
|
|
18,419
|
|
Provision (benefit)
for income taxes
|
|
(4,955)
|
|
(846)
|
|
4,329
|
|
Net income
(loss)
|
|
|
$
(22,679)
|
|
$
4,200
|
|
$
14,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share
|
|
$
(0.04)
|
|
$
0.01
|
|
$
0.03
|
|
Diluted net income
(loss) per share
|
|
$
(0.04)
|
|
$
0.01
|
|
$
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing basic earnings (loss) per share
|
508,794
|
|
506,352
|
|
516,228
|
|
Shares used in
computing diluted earnings (loss) per share
|
508,794
|
|
508,590
|
|
527,167
|
|
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April
30,
|
|
January
30,
|
Assets
|
|
|
|
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
|
(Preliminary)
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and short-term investments
|
|
$
1,615,240
|
|
$
2,282,749
|
|
Accounts receivable,
net
|
|
|
|
280,658
|
|
323,300
|
|
Inventories
|
|
|
|
|
|
196,739
|
|
210,017
|
|
Prepaid expenses and
other current assets
|
|
57,139
|
|
102,560
|
|
|
Total current
assets
|
|
|
|
2,149,776
|
|
2,918,626
|
Property and
equipment, net
|
|
|
|
283,584
|
|
299,540
|
Long-term
investments
|
|
|
|
|
8,974
|
|
11,296
|
Goodwill and acquired
intangible assets, net
|
|
|
2,045,009
|
|
2,047,955
|
Other non-current
assets
|
|
|
|
169,778
|
|
164,710
|
|
|
Total
assets
|
|
|
|
|
$
4,657,121
|
|
$
5,442,127
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
|
|
$
193,697
|
|
$
180,372
|
|
Accrued
liabilities
|
|
|
|
|
236,514
|
|
253,691
|
|
Carnige Mellon
University accrued litigation settlement
|
-
|
|
736,000
|
|
Deferred
income
|
|
|
|
|
54,488
|
|
55,722
|
|
|
Total current
liabilities
|
|
|
|
484,699
|
|
1,225,785
|
Other non-current
liabilities
|
|
|
|
72,604
|
|
76,219
|
|
|
Total
liabilities
|
|
|
|
|
557,303
|
|
1,302,004
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
|
|
1,022
|
|
1,015
|
|
Additional paid-in
capital
|
|
|
|
3,038,732
|
|
3,028,921
|
|
Accumulated other
comprehensive income
|
|
2,222
|
|
(795)
|
|
Retained
earnings
|
|
|
|
|
1,057,842
|
|
1,110,982
|
|
|
Total shareholders'
equity
|
|
|
4,099,818
|
|
4,140,123
|
|
|
Total liabilities and
shareholders' equity
|
|
$
4,657,121
|
|
$
5,442,127
|
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
April
30,
|
|
May
2,
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
(Preliminary)
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
|
|
$
(22,679)
|
|
$
14,090
|
|
Adjustments to
reconcile net income (loss) to net cash provided
|
|
|
|
|
|
by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
21,788
|
|
26,620
|
|
|
Share-based
compensation
|
|
|
|
|
24,453
|
|
33,221
|
|
|
Amortization and
write-off of acquired intangible assets
|
|
|
2,946
|
|
3,053
|
|
|
Non-cash
restructuring and other related charges
|
|
|
896
|
|
573
|
|
|
Other non-cash
expense, net
|
|
|
|
|
1,361
|
|
(561)
|
|
|
Excess tax benefits
from share-based compensation
|
|
|
—
|
|
(18)
|
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
|
|
42,642
|
|
27,141
|
|
|
Inventories
|
|
|
|
|
13,598
|
|
(31,318)
|
|
|
Prepaid expenses and
other assets(a)
|
|
|
|
38,056
|
|
1,969
|
|
|
Accounts
payable
|
|
|
|
|
19,922
|
|
17,125
|
|
|
Accrued liabilities and
other non-current liabilities (a)
|
|
(758,502)
|
|
(11,576)
|
|
|
Accrued employee
compensation
|
|
|
|
7,152
|
|
(14,424)
|
|
|
Deferred
income
|
|
|
|
|
(1,234)
|
|
(7,027)
|
|
|
Net
cash provided by (used in) operating activities
|
|
(609,601)
|
|
58,868
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of
available-for-sale securities
|
|
|
|
(93,365)
|
|
(392,900)
|
|
|
Sales and maturities
of available-for-sale securities
|
|
|
316,310
|
|
247,495
|
|
|
Purchase of
time deposits
|
|
|
|
|
(50,000)
|
|
—
|
|
|
Purchases of
technology licenses
|
|
|
|
(4,050)
|
|
(3,606)
|
|
|
Purchases of property
and equipment
|
|
|
|
(6,542)
|
|
(7,334)
|
|
|
Purchase of equipment
previously leased
|
|
|
|
—
|
|
(10,240)
|
|
|
Net
cash provided by (used in) investing activities
|
|
|
162,353
|
|
(166,585)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Repurchase of common
stock (b)
|
|
|
|
—
|
|
(20,273)
|
|
|
Proceeds from
employee stock plans
|
|
|
|
315
|
|
13,013
|
|
|
Minimum tax
withholding paid on behalf of employees
|
|
|
|
|
|
|
|
for net share
settlement
|
|
|
|
|
(15,270)
|
|
(22,310)
|
|
|
Dividend payments to
shareholders
|
|
|
|
|
|
|
(30,461)
|
|
(30,910)
|
|
|
Payments on
technology license obligations
|
|
|
|
|
|
|
(5,294)
|
|
(4,067)
|
|
|
Excess tax benefits
from share-based compensation
|
|
|
—
|
|
18
|
|
|
Net
cash used in financing activities
|
|
|
(50,710)
|
|
(64,529)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
|
(497,958)
|
|
(172,246)
|
|
Cash and cash
equivalents at beginning of period
|
|
|
1,278,180
|
|
1,210,977
|
|
Cash and cash
equivalents at end of period
|
|
|
|
$
780,222
|
|
$
1,038,731
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
In the three months
ended April 30, 2016, the Company paid a total of $750.0 million to
CMU in connection with the settlement agreement that was reached in
February 2016. Of this settlement, the Company recognized a
charge of $736.0 million in fiscal 2016. The remaining $14.0
million was recorded in prepaid expenses and other assets, to be
recognized in cost of good sold over the remaining term of the
license from February 2016 through April 2018. For further detail
of the accounting for the settlement, see "Note 15 – Subsequent
Events" in the Notes to the Consolidated Financial Statements
included in the Company's Annual Report on Form 10-K for fiscal
2016.
|
|
|
|
|
(b)
|
Marvell records all
repurchases as well as investment purchases and sales, based on
trade date in accordance with U.S. GAAP. Cash paid for repurchase
of Marvell common shares includes a total of 1.4 million shares
repurchased for $22.1 million in the first quarter of fiscal 2016,
adjusted for repurchases of $1.8 million made within the final
three days of the quarter that are accrued but not yet paid due to
the standard settlement period that normally takes up to three
days.
|
|
Marvell Technology
Group Ltd.
|
Reconciliations
from GAAP to Non-GAAP
|
(Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
April
30,
|
|
January
30,
|
|
May
2,
|
|
|
|
|
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
(Preliminary)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
|
$
(22,679)
|
|
$
4,200
|
|
$
14,090
|
|
Share-based
compensation
|
|
24,453
|
|
32,419
|
|
33,221
|
|
Restructuring and
other related charges (a)
|
|
|
|
4,441
|
|
4,396
|
|
592
|
|
Amortization and
write-off of acquired intangible assets
|
2,946
|
|
2,947
|
|
3,493
|
|
Litigation matters
(b)
|
|
|
100
|
|
3,791
|
|
(1,700)
|
|
Other
(c)
|
|
|
(2,743)
|
|
6,754
|
|
21,382
|
|
Non-GAAP net
income
|
|
$
6,518
|
|
$
54,507
|
|
$
71,078
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP weighted average
shares - diluted
|
|
508,794
|
|
508,590
|
|
527,167
|
|
|
Non-GAAP
adjustment
|
|
13,569
|
|
9,978
|
|
7,993
|
|
Non-GAAP weighted
average shares diluted (d)
|
522,363
|
|
518,568
|
|
535,160
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income per share
|
|
$
(0.04)
|
|
$
0.01
|
|
$
0.03
|
|
Non-GAAP diluted net
income per share
|
|
$
0.01
|
|
$
0.11
|
|
$
0.13
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit:
|
|
|
$
281,612
|
|
$
313,548
|
|
$ 373,135
|
|
|
Share-based
compensation
|
|
1,802
|
|
1,862
|
|
1,547
|
|
|
Restructuring and
other related charges (a)
|
|
|
|
-
|
|
7
|
|
-
|
|
|
Amortization of
acquired intangible assets
|
|
485
|
|
485
|
|
925
|
|
|
Litigation matters
(b)
|
|
-
|
|
3,711
|
|
(1,700)
|
|
Non-GAAP gross
profit
|
|
$
283,899
|
|
$
319,613
|
|
$ 373,907
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin
|
|
|
52.1%
|
|
50.9%
|
|
51.5%
|
|
|
Share-based
compensation
|
|
0.3%
|
|
0.3%
|
|
0.2%
|
|
|
Restructuring and
other related charges (a)
|
|
|
|
0.0%
|
|
0.0%
|
|
0.0%
|
|
|
Amortization of
acquired intangible assets
|
|
0.1%
|
|
0.1%
|
|
0.1%
|
|
|
Litigation matters
(b)
|
|
0.0%
|
|
0.6%
|
|
-0.2%
|
|
Non-GAAP gross
margin
|
|
52.5%
|
|
51.9%
|
|
51.6%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and
development:
|
|
$
241,271
|
|
$
239,703
|
|
$ 280,114
|
|
|
Share-based
compensation
|
|
(24,396)
|
|
(23,630)
|
|
(24,781)
|
|
|
Restructuring and
other related charges (a)
|
|
|
|
(813)
|
|
(3,703)
|
|
-
|
|
|
Other
(c)
|
|
|
49
|
|
(3,485)
|
|
-
|
|
Non-GAAP research and
development
|
|
$
216,111
|
|
$
208,885
|
|
$ 255,333
|
|
|
|
|
|
|
|
|
|
|
|
GAAP selling and
marketing:
|
|
$
31,379
|
|
$
31,301
|
|
$
36,174
|
|
|
Share-based
compensation
|
|
(2,942)
|
|
(3,214)
|
|
(2,577)
|
|
|
Restructuring and
other related charges (a)
|
|
|
|
1
|
|
(118)
|
|
-
|
|
|
Other
(c)
|
|
|
(304)
|
|
(393)
|
|
-
|
|
Non-GAAP selling and
marketing
|
|
$
28,134
|
|
$
27,576
|
|
$
33,597
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and
administrative:
|
|
$
35,623
|
|
$
37,812
|
|
$
41,027
|
|
|
Share-based
compensation
|
|
4,687
|
|
(3,713)
|
|
(4,316)
|
|
|
Restructuring and
other related charges (a)
|
|
|
|
(3,629)
|
|
(568)
|
|
(592)
|
|
|
Litigation matters
(b)
|
|
(100)
|
|
(80)
|
|
-
|
|
|
Other
(c)
|
|
|
(886)
|
|
(2,876)
|
|
(18,302)
|
|
Non-GAAP general and
administrative
|
|
$
35,695
|
|
$
30,575
|
|
$
17,817
|
|
|
|
|
|
|
|
|
|
|
|
GAAP provision
(benefit) for income taxes
|
|
$
(4,955)
|
|
$
(846)
|
|
$
4,329
|
|
|
Other
(c)
|
|
|
3,884
|
|
-
|
|
(3,080)
|
|
Non-GAAP provision
(benefit) for income taxes
|
$
(1,071)
|
|
$
(846)
|
|
$
1,249
|
|
|
(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 April 30, 2016,
such charges include $3.5 million for a remaining lease obligation
and $0.9 million for the impairment of certain mobile-related
equipment. For the three months ended January 30, 2016, such
other related charges include $0.4 million for the impairment of
certain leasehold improvements due to the restructuring of the
mobile platform business, in addition to $4.0 million of
restructuring charges, primarily for severance and facility-related
costs. For the three months ended May 2, 2015, such charges
includes $0.6 million for the impairment of equipment held for
sale.
|
|
|
(b)
|
The amounts recorded
represent charges recognized for pending litigation
proceedings.
|
|
|
(c)
|
Other costs include a
$3.9 million tax effect from restructuring charges within the
income tax provision for the three months ended April 30, 2016.
Other costs for each of the three months ended April 30, 2016 and
January 30, 2016 include expenses related to retention bonuses
offered to mobile employees expected to remain through the ramp
down of certain operations. Other costs for the three months ended
May 2, 2015 include a payment of $15.4 million to Dr. Sehat
Surtardja, the Company's former Chief Executive Officer, and its
related tax effect on the income tax provision.
|
|
|
(d)
|
For purposes of
calculating non-GAAP diluted net income per share, 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.
|
For further
information, contact:
|
|
John Spencer
Ahn
|
Sue Kim
|
Investor
Relations
|
Media
Relations
|
408-222-7544
|
408-222-1942
|
johnahn@marvell.com
|
suekim@marvell.com
|
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SOURCE Marvell Technology Group Ltd.