SANTA CLARA, Calif.,
Sept. 6, 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 second quarter
of fiscal year 2017, ended July 30,
2016. Revenues for the second quarter of fiscal 2017
were $626 million, up approximately
16 percent from $541 million in the
prior quarter and down approximately 12 percent from the same
quarter of last year.
"We experienced a seasonally strong second quarter, driven by
solid demand from customers across storage, networking, and
wireless end markets," said Matt
Murphy, President and CEO. "We are also beginning to
see the benefits of improved focus on product cost as well as a
more disciplined approach to spending, which resulted in better
than expected earnings per
share."
In the second quarter of fiscal 2017, storage revenue increased
13 percent sequentially, reflecting higher HDD and SSD demand.
Networking revenue in the second quarter of fiscal 2017 grew 12
percent sequentially due to continued strength in enterprise
networking demand. Mobile and wireless revenue grew 21
percent sequentially, mainly driven by seasonal game console
production ramps. Mobile handset-related revenues in the second
quarter of fiscal 2017 were $9
million, down from $22 million
in the first quarter, reflecting the anticipated declines due to
the restructuring actions announced on September 24, 2015.
Net income on a GAAP basis for the second quarter of fiscal 2017
was $51 million, or $0.10 per diluted share. On a non-GAAP basis, net
income for the second fiscal quarter of 2017 was $92 million, or $0.18 per diluted share.
Third 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 September 5, 2016.
- Revenue is expected to be flat to down 4 percent from the
second quarter.
- GAAP and Non-GAAP Gross Margins are expected to be in the range
of 52 percent to 54 percent.
- GAAP and Non-GAAP Operating Expenses are expected to be
approximately flat from the second quarter.
- GAAP Diluted EPS are expected to be in the range of
$0.03 to $0.08.
- Non-GAAP Diluted EPS are expected to be in the range of
$0.08 to $0.13.
Adjustments to Reported Non-GAAP EPS for Q1 FY2017
In
the first quarter of fiscal 2017, Marvell reported Non-GAAP diluted
net income per share of $0.01.
Subsequent to our earnings release on July
27, 2016, the Company discovered an error in the calculation
of reported Non-GAAP tax benefit for income tax for the first
quarter of fiscal 2017 which resulted in an understatement of our
Non-GAAP net income and Non-GAAP EPS (diluted). After
correction of this error, Non-GAAP net income increased from
$6.5 million, as reported, to
$9.3 million, as adjusted, and
Non-GAAP EPS (diluted) increased from $0.01 to $0.02 per
share. This error had no effect on the Company's reported
GAAP results for the first quarter of fiscal 2017. Refer to
the Reconciliation from GAAP to Non-GAAP table and related
footnotes at the end of the press release for more details.
Conference Call
Marvell will conduct a conference call
on Tuesday, September 6, 2016 at
8:15 a.m. Eastern Time (5:15 a.m. Pacific Time) to discuss results for
the second 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 63627351. 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 October
6, 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 and to
also include the dilutive/anti-dilutive effects of common stock
options and restricted stock units, as applicable. The
expected compensation costs are treated as proceeds assumed to be
used to repurchase shares under the GAAP treasury stock
method.
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 third quarter of
fiscal 2017 financial outlook; 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 Chief Accounting Officer
and Controller in a timely manner; 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 Quarterly Report on Form
10-Q for the fiscal quarter ended April 30,
2016 as filed with the SEC on August
10, 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.
MarvellĀ® and the Marvell logo are registered trademarks of
Marvell and/or its affiliates.
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Statements of Operations
|
(Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
July
30,
|
|
April
30,
|
|
August
1,
|
|
July
30,
|
|
August
1,
|
|
|
|
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
|
|
|
$ 626,404
|
|
$ 540,822
|
|
$
710,492
|
|
$
1,167,226
|
|
$
1,434,780
|
Cost of goods
sold
|
|
|
287,608
|
|
259,210
|
|
461,719
|
|
546,818
|
|
812,872
|
Gross
profit
|
|
|
|
338,796
|
|
281,612
|
|
248,773
|
|
620,408
|
|
621,908
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
228,562
|
|
241,271
|
|
297,321
|
|
469,833
|
|
577,435
|
|
Selling and
marketing
|
|
|
31,094
|
|
31,379
|
|
30,841
|
|
62,473
|
|
67,015
|
|
General and
administrative
|
|
37,173
|
|
35,623
|
|
691,230
|
|
72,796
|
|
732,257
|
|
Amortization of
acquired intangible assets
|
2,461
|
|
2,461
|
|
2,568
|
|
4,922
|
|
5,136
|
|
|
Total operating
expenses
|
|
299,290
|
|
310,734
|
|
1,021,960
|
|
610,024
|
|
1,381,843
|
Operating income
(loss)
|
|
|
39,506
|
|
(29,122)
|
|
(773,187)
|
|
10,384
|
|
(759,935)
|
Interest and other
income, net
|
|
6,284
|
|
1,488
|
|
6,790
|
|
7,772
|
|
11,957
|
Income (loss) before
income taxes
|
|
45,790
|
|
(27,634)
|
|
(766,397)
|
|
18,156
|
|
(747,978)
|
Provision (benefit)
for income taxes
|
|
(5,515)
|
|
(4,955)
|
|
5,543
|
|
(10,470)
|
|
9,872
|
Net income
(loss)
|
|
|
$
51,305
|
|
$ (22,679)
|
|
$
(771,940)
|
|
$
28,626
|
|
$
(757,850)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share
|
|
$
0.10
|
|
$
(0.04)
|
|
$
(1.49)
|
|
$
0.06
|
|
$
(1.47)
|
Diluted net income
(loss) per share
|
|
$
0.10
|
|
$
(0.04)
|
|
$
(1.49)
|
|
$
0.06
|
|
$
(1.47)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing basic earnings (loss) per share
|
511,235
|
|
508,794
|
|
516,368
|
|
510,014
|
|
516,298
|
Shares used in
computing diluted earnings (loss) per share
|
514,314
|
|
508,794
|
|
516,368
|
|
513,669
|
|
516,298
|
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July
30,
|
|
January
30,
|
Assets
|
|
|
|
|
|
2016
|
|
2016
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and short-term investments
|
|
$
1,624,009
|
|
$
2,282,749
|
|
Accounts receivable,
net
|
|
|
|
348,683
|
|
323,300
|
|
Inventories
|
|
|
|
|
|
202,717
|
|
210,017
|
|
Prepaid expenses and
other current assets
|
|
54,870
|
|
102,560
|
|
|
Total current
assets
|
|
|
|
2,230,279
|
|
2,918,626
|
Property and
equipment, net
|
|
|
|
274,774
|
|
299,540
|
Long-term
investments
|
|
|
|
|
8,974
|
|
11,296
|
Goodwill and acquired
intangible assets, net
|
|
|
2,042,063
|
|
2,047,955
|
Other non-current
assets
|
|
|
|
160,586
|
|
164,710
|
|
|
Total
assets
|
|
|
|
|
$
4,716,676
|
|
$
5,442,127
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
|
|
$
212,950
|
|
$
180,372
|
|
Accrued
liabilities
|
|
|
|
|
219,489
|
|
253,691
|
|
Carnige Mellon
University accrued litigation settlement
|
-
|
|
736,000
|
|
Deferred
income
|
|
|
|
|
72,049
|
|
55,722
|
|
|
Total current
liabilities
|
|
|
|
504,488
|
|
1,225,785
|
Other non-current
liabilities
|
|
|
|
53,100
|
|
76,219
|
|
|
Total
liabilities
|
|
|
|
|
557,588
|
|
1,302,004
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
|
|
1,022
|
|
1,015
|
|
Additional paid-in
capital
|
|
|
|
3,075,579
|
|
3,028,921
|
|
Accumulated other
comprehensive income
|
|
4,015
|
|
(795)
|
|
Retained
earnings
|
|
|
|
|
1,078,472
|
|
1,110,982
|
|
|
Total shareholders'
equity
|
|
|
4,159,088
|
|
4,140,123
|
|
|
Total liabilities and
shareholders' equity
|
|
$
4,716,676
|
|
$
5,442,127
|
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
July
30,
|
|
August
1,
|
|
|
July
30,
|
|
August
1,
|
|
|
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
51,305
|
|
$
(771,940)
|
|
|
$
28,626
|
|
$
(757,850)
|
Adjustments to
reconcile net income (loss) to net cash provided
|
|
|
|
|
|
|
|
|
by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
26,866
|
|
25,191
|
|
|
53,980
|
|
51,811
|
|
Share-based
compensation
|
37,196
|
|
36,674
|
|
|
61,649
|
|
69,895
|
|
Amortization of
acquired intangible assets
|
2,946
|
|
3,053
|
|
|
5,892
|
|
6,106
|
|
Non-cash
restructuring and other related charges
|
129
|
|
900
|
|
|
1,025
|
|
1,473
|
|
Other non-cash
expense, net
|
589
|
|
2,282
|
|
|
1,950
|
|
1,721
|
|
Excess tax benefits
from share-based compensation
|
(5)
|
|
(7)
|
|
|
(5)
|
|
(25)
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
(68,025)
|
|
(23,907)
|
|
|
(25,383)
|
|
3,234
|
|
|
Inventories
|
(6,364)
|
|
12,903
|
|
|
7,234
|
|
(18,415)
|
|
|
Prepaid expenses and
other assets(a)
|
6,658
|
|
9,359
|
|
|
(9,035)
|
|
11,328
|
|
|
Accounts
payable
|
20,437
|
|
(5,167)
|
|
|
40,359
|
|
11,958
|
|
|
Accrued liabilities
and other non-current liabilities (a)
|
(7,741)
|
|
753,191
|
|
|
(766,243)
|
|
741,615
|
|
|
Accrued employee
compensation
|
(22,270)
|
|
(14,507)
|
|
|
(15,118)
|
|
(28,931)
|
|
|
Deferred
income
|
17,561
|
|
(1,441)
|
|
|
16,327
|
|
(8,468)
|
|
|
|
Net cash provided by
(used in) operating activities
|
59,282
|
|
26,584
|
|
|
(598,742)
|
|
85,452
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of
available-for-sale securities
|
(110,358)
|
|
(173,465)
|
|
|
(203,723)
|
|
(566,365)
|
|
Sales and maturities
of available-for-sale securities
|
116,506
|
|
222,295
|
|
|
486,565
|
|
469,790
|
|
Purchase of time
deposits
|
(75,000)
|
|
-
|
|
|
(125,000)
|
|
-
|
|
Distribution from
(investments in) privately-held companies
|
-
|
|
208
|
|
|
-
|
|
208
|
|
Purchases of
technology licenses
|
(3,995)
|
|
(2,071)
|
|
|
(8,045)
|
|
(5,677)
|
|
Purchases of property
and equipment
|
(12,509)
|
|
(16,986)
|
|
|
(24,377)
|
|
(24,320)
|
|
Purchase of equipment
previously leased
|
-
|
|
-
|
|
|
-
|
|
(10,240)
|
|
|
|
Net cash provided by
(used in) investing activities
|
(85,356)
|
|
29,981
|
|
|
125,420
|
|
(136,604)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
Repurchase of common
stock (b)
|
-
|
|
(175,311)
|
|
|
-
|
|
(195,584)
|
|
Proceeds from
employee stock plans
|
244
|
|
44,161
|
|
|
559
|
|
57,174
|
|
Minimum tax
withholding paid on behalf of employees
|
|
|
|
|
|
|
|
|
|
for net share
settlement
|
(112)
|
|
(697)
|
|
|
(15,382)
|
|
(23,007)
|
|
Dividend payments to
shareholders
|
(30,675)
|
|
(31,194)
|
|
|
(61,136)
|
|
(62,104)
|
|
Payments on
technology license obligations
|
(4,858)
|
|
(4,732)
|
|
|
(10,152)
|
|
(8,799)
|
|
Excess tax benefits
from share-based compensation
|
5
|
|
7
|
|
|
5
|
|
25
|
|
|
|
Net cash used in
financing activities
|
(35,396)
|
|
(167,766)
|
|
|
(86,106)
|
|
(232,295)
|
Net increase
(decrease) in cash and cash equivalents
|
(61,470)
|
|
(111,201)
|
|
|
(559,428)
|
|
(283,447)
|
Cash and cash
equivalents at beginning of period
|
780,222
|
|
1,038,731
|
|
|
1,278,180
|
|
1,210,977
|
Cash and cash
equivalents at end of period
|
$ 718,752
|
|
$
927,530
|
|
|
$
718,752
|
|
$
927,530
|
|
|
(a)
|
In the six months
ended July 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 13 ā Carnegie Mellon
University Settlement\" in the Notes to the Unaudited
Condensed Consolidated Financial Statements included in the
Company's Quarterly Report on Form 10-Q for the quarter ended April
30, 2016.
|
(b)
|
Marvell records all
repurchases of common stock consistent with the way it records
investment purchases and sales, based on trade date in accordance
with U.S. GAAP. In the three and six months ended August 1, 2015,
cash paid for repurchase of Marvell common shares was adjusted for
repurchases of $19.7 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.
|
Reconciliations
from GAAP to Non-GAAP
|
(Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
|
July
30,
|
|
April
30,
|
|
August
1,
|
|
July
30,
|
|
August
1,
|
|
|
2016
|
|
2016(d)
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
51,305
|
|
$ (22,679)
|
|
$
(771,940)
|
|
$
28,626
|
|
$
(757,850)
|
Share-based
compensation
|
37,196
|
|
24,453
|
|
36,674
|
|
61,649
|
|
69,895
|
Restructuring and
other related charges (a)
|
721
|
|
4,441
|
|
13,000
|
|
5,162
|
|
13,592
|
Amortization of
acquired intangible assets
|
2,946
|
|
2,946
|
|
3,346
|
|
5,892
|
|
6,839
|
Litigation matters
(b)
|
(115)
|
|
100
|
|
748,117
|
|
(15)
|
|
746,417
|
Other
(c)
|
103
|
|
(2,743)
|
|
10,205
|
|
173
|
|
31,587
|
Non-GAAP net income,
as reported
|
$
92,156
|
|
$
6,518
|
|
$
39,402
|
|
$ 101,487
|
|
$
110,480
|
Non-GAAP net income,
as adjusted (d)
|
|
|
$
9,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP weighted average
shares - diluted
|
514,314
|
|
508,794
|
|
516,368
|
|
513,669
|
|
516,298
|
|
Non-GAAP
adjustment
|
12,139
|
|
13,569
|
|
16,574
|
|
10,739
|
|
17,753
|
Non-GAAP weighted
average shares diluted (e)
|
526,453
|
|
522,363
|
|
532,942
|
|
524,408
|
|
534,051
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income per share
|
$
0.10
|
|
$
(0.04)
|
|
$
(1.49)
|
|
$
0.06
|
|
$
(1.47)
|
Non-GAAP diluted net
income per share, as reported
|
$
0.18
|
|
$
0.01
|
|
$
0.07
|
|
$
0.19
|
|
$
0.21
|
Non-GAAP diluted net
income per share, as adjusted (d)
|
|
|
$
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit:
|
$ 338,796
|
|
$ 281,612
|
|
$
248,773
|
|
$ 620,408
|
|
$
621,908
|
|
Share-based
compensation
|
2,832
|
|
1,802
|
|
2,012
|
|
4,634
|
|
3,559
|
|
Restructuring and
other related charges (a)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Amortization of
acquired intangible assets
|
485
|
|
485
|
|
778
|
|
970
|
|
1,703
|
|
Litigation matters
(b)
|
-
|
|
-
|
|
81,390
|
|
-
|
|
79,690
|
Non-GAAP gross
profit
|
$ 342,113
|
|
$ 283,899
|
|
$
332,953
|
|
$ 626,012
|
|
$
706,860
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin
|
54.1%
|
|
52.1%
|
|
35.0%
|
|
53.2%
|
|
43.3%
|
|
Share-based
compensation
|
0.4%
|
|
0.3%
|
|
0.3%
|
|
0.3%
|
|
0.3%
|
|
Restructuring and
other related charges (a)
|
0.0%
|
|
0.0%
|
|
0.0%
|
|
0.0%
|
|
0.0%
|
|
Amortization of
acquired intangible assets
|
0.1%
|
|
0.1%
|
|
0.1%
|
|
0.1%
|
|
0.1%
|
|
Litigation matters
(b)
|
0.0%
|
|
0.0%
|
|
11.5%
|
|
0.0%
|
|
5.6%
|
Non-GAAP gross
margin
|
54.6%
|
|
52.5%
|
|
46.9%
|
|
53.6%
|
|
49.3%
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and
development:
|
$ 228,562
|
|
$ 241,271
|
|
$
297,321
|
|
$ 469,833
|
|
$
577,435
|
|
Share-based
compensation
|
(28,581)
|
|
(24,396)
|
|
(27,807)
|
|
(52,977)
|
|
(52,588)
|
|
Restructuring and
other related charges (a)
|
329
|
|
(813)
|
|
(11,680)
|
|
(484)
|
|
(11,680)
|
|
Litigation matters
(b)
|
-
|
|
-
|
|
(5,000)
|
|
-
|
|
(5,000)
|
|
Other
(c)
|
(174)
|
|
49
|
|
(134)
|
|
(125)
|
|
(134)
|
Non-GAAP research and
development
|
$ 200,136
|
|
$ 216,111
|
|
$
252,700
|
|
$ 416,247
|
|
$
508,033
|
|
|
|
|
|
|
|
|
|
|
|
GAAP selling and
marketing:
|
$
31,094
|
|
$
31,379
|
|
$
30,841
|
|
$
62,473
|
|
$
67,015
|
|
Share-based
compensation
|
(3,315)
|
|
(2,942)
|
|
(2,707)
|
|
(6,257)
|
|
(5,284)
|
|
Restructuring and
other related charges (a)
|
(27)
|
|
1
|
|
-
|
|
(26)
|
|
-
|
|
Other
(c)
|
71
|
|
(304)
|
|
-
|
|
(233)
|
|
-
|
Non-GAAP selling and
marketing
|
$
27,823
|
|
$
28,134
|
|
$
28,134
|
|
$
55,957
|
|
$
61,731
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and
administrative:
|
$
37,173
|
|
$
35,623
|
|
$
36,563
|
|
$
72,796
|
|
$
77,590
|
|
Share-based
compensation
|
(2,468)
|
|
4,687
|
|
(4,148)
|
|
2,219
|
|
(8,464)
|
|
Restructuring and
other related charges (a)
|
(1,023)
|
|
(3,629)
|
|
(1,320)
|
|
(4,652)
|
|
(1,912)
|
|
Litigation matters
(b)
|
115
|
|
(100)
|
|
(7,060)
|
|
15
|
|
(7,060)
|
|
Other
(c)
|
-
|
|
(886)
|
|
(2,748)
|
|
(886)
|
|
(21,050)
|
Non-GAAP general and
administrative
|
$
33,797
|
|
$
35,695
|
|
$
21,287
|
|
$
69,492
|
|
$
39,104
|
|
|
|
|
|
|
|
|
|
|
|
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
|
$
(5,515)
|
|
$
(4,955)
|
|
$
5,543
|
|
$ (10,470)
|
|
$
9,872
|
|
Other
(c)
|
-
|
|
3,884
|
|
(7,323)
|
|
1,071
|
|
(10,403)
|
Non-GAAP provision
(benefit) for income taxes, as reported
|
$
(5,515)
|
|
$
(1,071)
|
|
$
(1,780)
|
|
$
(9,399)
|
|
$
(531)
|
Non-GAAP provision
(benefit) for income taxes, as adjusted (d)
|
|
|
$
(3,884)
|
|
|
|
|
|
|
|
|
(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. Examples of other incremental charges
include impairment of equipment specifically identified as part of
the restructuring action.
|
(b)
|
The amounts recorded
represent charges recognized for pending litigation
proceedings.
|
(c)
|
Other costs for each
of the three months ended July 30, 2016, April 30, 2016 and August
1, 2015, and the six months ended July 30, 2016 and August 1, 2015
include expenses related to retention bonuses offered to employees
expected to remain through the ramp down of certain operations
related to the mobile business, as well as the closure of certain
design center operations in Europe. Other costs for the three
months ended April 30, 2016 and August 1, 2015, and the six months
ended July 30, 2016 and August 1, 2015 also include costs for the
surety bonds related to the litigation with CMU that was settled in
February 2016. In addition, other costs for the six months ended
August 1, 2015 include a payment of $15.4 million due to Dr. Sehat
Sutardja, the Company's former Chief Executive Officer (see "Note
14 ā Related Party Transactions" in the Notes to the Consolidated
Financial Statements set forth in the Company's Annual Report on
Form 10-K for fiscal 2016). The related tax effect of the payment
to Dr. Sutardja is also included in other costs for the three
months ended April 30, 2016, and the six months ended July 30, 2016
and August 1, 2015. The tax effect of certain restructuring charges
in the three and six months ended August 1, 2015 is also included
in other costs for those periods.
|
(d)
|
For the three months
ended April 30, 2016, the Company made a correction to the non-GAAP
benefit for income taxes of $1,071 thousand that it previously
reported in its fiscal 2017 first quarter earnings announcement on
Wednesday, July 27, 2016. As a result, the Company now reports
non-GAAP net income, as adjusted of $9,331 thousand, non-GAAP
earnings per share, as adjusted of $0.02 per share, and non-GAAP
benefit for income taxes, as adjusted of $3,884 thousand for the
three months ended April 30, 2016.
|
(e)
|
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 and to also include the dilutive/anti-dilutive effects
of common stock options and restricted stock units, as applicable.
The expected compensation costs are treated as proceeds assumed to
be used to repurchase shares under the GAAP treasury stock
method.
|
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