SANTA CLARA, Calif.,
Dec. 3, 2019 /PRNewswire/
-- Marvell Technology Group Ltd. (NASDAQ: MRVL), a leader in
infrastructure semiconductor solutions, today reported financial
results for the third quarter of fiscal year 2020.
Marvell completed the acquisition of Aquantia Corp. ("Aquantia")
on September 19, 2019 (the
"acquisition date"), approximately 6 weeks before the end of the
third quarter of fiscal 2020. Marvell's results for the third
quarter of fiscal 2020 include the results of Aquantia from the
acquisition date, while prior periods presented do not.
Subsequent to Marvell's third quarter end, on November 5, 2019, Marvell completed the
acquisition of Avera Semiconductor ("Avera"), the Application
Specific Integrated Circuit ("ASIC") business of
GlobalFoundries.
Revenue for the third quarter of fiscal 2020 was $662 million, which exceeded the midpoint of the
Company's guidance provided on August 29,
2019. GAAP net loss for the third quarter of fiscal 2020 was
$(83) million, or $(0.12) per diluted share. Non-GAAP net income
for the third quarter of fiscal 2020 was $112 million, or $0.17 per diluted share. Cash flow from
operations for the third quarter was $66
million.
"Marvell delivered solid results for the third quarter and I am
pleased that our storage business grew sequentially led by a strong
performance from our enterprise and datacenter products. In
addition, we ramped our first 5G product shipments in volume,
successfully responding to our customer's aggressive schedule
requests, ahead of the plan we had laid out early this year," said
Matt Murphy, Marvell's President and
CEO. "We also recently completed the strategic acquisitions of
Aquantia, a pioneer in multi-gig ethernet, and Avera, a leader in
custom ASICs. These acquisitions broaden our technology portfolio
for infrastructure customers and expand our addressable market by
approximately $4 billion."
Marvell's fourth quarter guidance includes expected results from
the Aquantia and Avera acquisitions for the full quarter. This
guidance also includes expected results for the full quarter from
the Wi-Fi Connectivity Business. Once the Wi-Fi Connectivity
Business is divested to NXP, Marvell will update its revenue
guidance for the fourth quarter. Marvell's fourth quarter guidance
also takes into account the U.S. Government's export restriction on
certain Chinese customers.
Fourth Quarter of Fiscal 2020 Financial Outlook
- Revenue is expected to be $750
million +/- 3%.
- GAAP gross margin is expected to be approximately 45.5%.
- Non-GAAP gross margin is expected to be approximately 62%.
- GAAP operating expenses are expected to be $445 million to $455
million.
- Non-GAAP operating expenses are expected to be $315 million to $320
million.
- GAAP diluted loss per share is expected to be $(0.23) to $(0.17)
per share.
- Non-GAAP diluted income per share is expected to be
$0.15 to $0.19 per share.
Conference Call
Marvell will conduct a conference call on Tuesday, December 3, 2019 at 1:45 p.m. Pacific Time to discuss results for the
third quarter of fiscal 2020. Interested parties may join the
conference call by dialing 1-844-647-5488 or 1-615-247-0258,
pass-code 4437138. The call will be webcast and can be accessed at
the Marvell Investor Relations website at
http://investor.marvell.com/ with a replay available following the
call until Tuesday, December 10,
2019.
Discussion of Non-GAAP Financial Measures
Non-GAAP financial measures exclude the effect of share-based
compensation expense, amortization of the inventory fair value
adjustment associated with the Aquantia acquisition, amortization
of acquired intangible assets, acquisition and divestiture-related
costs, restructuring and other related charges, resolution of legal
matters, and certain expenses and benefits that are driven
primarily by discrete events that management does not consider to
be directly related to Marvell's core business.
Marvell uses a non-GAAP tax rate to compute the non-GAAP tax
provision. This non-GAAP tax rate is based on Marvell's estimated
annual GAAP income tax forecast, adjusted to account for items
excluded from GAAP income in calculating Marvell's non-GAAP income,
as well as the effects of significant non-recurring and period
specific tax items which vary in size and frequency. Marvell's
non-GAAP tax rate is determined on an annual basis and may be
adjusted during the year to take into account events that may
materially affect the non-GAAP tax rate such as tax law changes;
significant changes in Marvell's geographic mix of revenue and
expenses; or changes to Marvell's corporate structure. For the
third quarter of fiscal 2020, a non-GAAP tax rate of 4.5% has been
applied to the non-GAAP financial results.
Marvell believes that the presentation of non-GAAP financial
measures provide 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. 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:
the risk that the proposed divestiture of Marvell's Wi-Fi
Connectivity business to NXP will not be completed; the risk that
the company may not realize the anticipated benefits of the
acquisitions of Aquantia Corp. and the Application Specific
Integrated Circuit (ASIC) business of GLOBALFOUNDRIES and the
divestiture to NXP (collectively, the "Transactions"); the effect
of the consummation of the Transactions on the company's business
relationships, operating results, and business generally; potential
difficulties in employee retention as a result of the Transactions;
the ability of Marvell to successfully integrate operations and
product lines related to the acquisitions; the ability of Marvell
to implement its plans, forecasts, and other expectations with
respect to the Transactions and realize the anticipated synergies
and cost savings in the time frame anticipated or at all; the
impact of international conflict and economic volatility in either
domestic or foreign markets including risks related to trade
conflicts, bans and tariffs; the risks associated with
manufacturing and selling products and customers' products outside
of the United States; Marvell's
ability to define, design and develop products for the 5G market;
Marvell's ability to market its 5G products to Tier 1
infrastructure customers; the effects of transitioning to smaller
geometry process technologies; the impact of any change in the
income tax laws in jurisdictions where Marvell operates and the
loss of any beneficial tax treatment that Marvell currently enjoys;
the risk of downturns in the highly cyclical semiconductor
industry; Marvell's dependence upon the storage and networking
markets, which are highly cyclical and intensely competitive; the
outcome of pending or future litigation and legal and regulatory
proceedings; Marvell's dependence on a small number of customers;
the impact and costs associated with changes in international
financial and regulatory conditions; Marvell's ability and the
ability of its customers to successfully compete in the markets in
which it serves; Marvell's reliance on independent foundries and
subcontractors for the manufacture, assembly and testing of its
products; Marvell's ability and its customers' ability to develop
new and enhanced products and the adoption of those products in the
market; decreases in gross margin and results of operations in the
future due to a number of factors; Marvell's ability to estimate
customer demand and future sales accurately; Marvell's ability to
scale its operations in response to changes in demand for existing
or new products and services; risks associated with acquisition and
consolidation activity in the semiconductor industry; the effects
of any other potential acquisitions, divestitures or investments;
Marvell's ability to protect its intellectual property;
Marvell's maintenance of an effective system of internal controls;
severe financial hardship or bankruptcy of one or more of Marvell's
major customers; and other risks detailed in Marvell's SEC filings
from time to time. For other factors that could cause Marvell's
results to vary from expectations, please see the risk factors
identified in Marvell's Quarterly Report on Form 10-Q for the
fiscal quarter ended August 3, 2019
as filed with the SEC on September 4,
2019, and other factors detailed from time to time in
Marvell's filings with the SEC. Marvell undertakes no obligation to
revise or publicly update any forward-looking statements.
About Marvell
Marvell first revolutionized the digital storage industry by
moving information at speeds never thought possible. Today, that
same breakthrough innovation remains at the heart of the Company's
storage, processing, networking, security and connectivity
solutions. With leading intellectual property and deep system-level
knowledge, Marvell's semiconductor solutions continue to transform
the enterprise, cloud, automotive, industrial, and consumer
markets. To learn more, visit: www.marvell.com.
Marvell® and the Marvell logo are
registered trademarks of Marvell and/or its affiliates.
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
November 2,
2019
|
|
August 3,
2019
|
|
November 3,
2018
|
|
November 2,
2019
|
|
November 3,
2018
|
Net
revenue
|
|
$
|
662,470
|
|
|
$
|
656,568
|
|
|
$
|
851,051
|
|
|
$
|
1,981,490
|
|
|
$
|
2,120,992
|
|
Cost of goods
sold
|
|
322,403
|
|
|
305,866
|
|
|
467,464
|
|
|
929,293
|
|
|
984,602
|
|
Gross
profit
|
|
340,067
|
|
|
350,702
|
|
|
383,587
|
|
|
1,052,197
|
|
|
1,136,390
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
267,781
|
|
|
266,354
|
|
|
264,888
|
|
|
801,002
|
|
|
657,907
|
|
Selling, general and
administrative
|
|
118,993
|
|
|
113,990
|
|
|
112,178
|
|
|
342,988
|
|
|
318,192
|
|
Restructuring related
charges
|
|
14,802
|
|
|
16,586
|
|
|
27,031
|
|
|
37,070
|
|
|
64,013
|
|
Total operating
expenses
|
|
401,576
|
|
|
396,930
|
|
|
404,097
|
|
|
1,181,060
|
|
|
1,040,112
|
|
Operating income
(loss)
|
|
(61,509)
|
|
|
(46,228)
|
|
|
(20,510)
|
|
|
(128,863)
|
|
|
96,278
|
|
Interest
income
|
|
1,092
|
|
|
1,077
|
|
|
1,046
|
|
|
3,437
|
|
|
10,690
|
|
Interest
expense
|
|
(21,241)
|
|
|
(20,531)
|
|
|
(22,370)
|
|
|
(62,975)
|
|
|
(38,409)
|
|
Other income (loss),
net
|
|
689
|
|
|
(2,197)
|
|
|
(2,628)
|
|
|
(1,624)
|
|
|
(3,858)
|
|
Interest and other
income (loss), net
|
|
(19,460)
|
|
|
(21,651)
|
|
|
(23,952)
|
|
|
(61,162)
|
|
|
(31,577)
|
|
Income (loss) before
income taxes
|
|
(80,969)
|
|
|
(67,879)
|
|
|
(44,462)
|
|
|
(190,025)
|
|
|
64,701
|
|
Provision (benefit)
for income taxes
|
|
1,532
|
|
|
(10,548)
|
|
|
9,305
|
|
|
(1,743)
|
|
|
(16,903)
|
|
Net income
(loss)
|
|
(82,501)
|
|
|
(57,331)
|
|
|
(53,767)
|
|
|
(188,282)
|
|
|
81,604
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share — Basic:
|
|
$
|
(0.12)
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.08)
|
|
|
$
|
(0.28)
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share — Diluted:
|
|
$
|
(0.12)
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.08)
|
|
|
$
|
(0.28)
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
668,178
|
|
|
663,603
|
|
|
657,519
|
|
|
667,184
|
|
|
569,031
|
|
Diluted
|
|
668,178
|
|
|
663,603
|
|
|
657,519
|
|
|
667,184
|
|
|
578,872
|
|
Marvell Technology
Group Ltd.
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(In
thousands)
|
|
|
|
November 2,
2019
|
|
February 2,
2019
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
438,369
|
|
|
$
|
582,410
|
|
Accounts receivable,
net
|
|
495,216
|
|
|
493,122
|
|
Inventories
|
|
308,299
|
|
|
276,005
|
|
Prepaid expenses and
other current assets
|
|
43,789
|
|
|
43,721
|
|
Assets held for
sale
|
|
600,893
|
|
|
—
|
|
Total current
assets
|
|
1,886,566
|
|
|
1,395,258
|
|
Property and
equipment, net
|
|
316,214
|
|
|
318,978
|
|
Goodwill
|
|
5,161,312
|
|
|
5,494,505
|
|
Acquired intangible
assets, net
|
|
2,500,215
|
|
|
2,560,682
|
|
Other non-current
assets
|
|
438,955
|
|
|
247,329
|
|
Total
assets
|
|
$
|
10,303,262
|
|
|
$
|
10,016,752
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
212,955
|
|
|
$
|
185,362
|
|
Accrued
liabilities
|
|
305,827
|
|
|
335,509
|
|
Accrued employee
compensation
|
|
130,062
|
|
|
115,925
|
|
Liabilities held for
sale
|
|
5,610
|
|
|
—
|
|
Total current
liabilities
|
|
654,454
|
|
|
636,796
|
|
Long-term
debt
|
|
2,036,441
|
|
|
1,732,699
|
|
Non-current income
taxes payable
|
|
48,136
|
|
|
59,221
|
|
Deferred tax
liabilities
|
|
214,492
|
|
|
246,252
|
|
Other non-current
liabilities
|
|
183,921
|
|
|
35,374
|
|
Total
liabilities
|
|
3,137,444
|
|
|
2,710,342
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Common
shares
|
|
1,341
|
|
|
1,317
|
|
Additional paid-in
capital
|
|
6,355,723
|
|
|
6,188,598
|
|
Accumulated other comprehensive
income
|
|
37
|
|
|
—
|
|
Retained
earnings
|
|
808,717
|
|
|
1,116,495
|
|
Total shareholders'
equity
|
|
7,165,818
|
|
|
7,306,410
|
|
Total liabilities and
shareholders' equity
|
|
$
|
10,303,262
|
|
|
$
|
10,016,752
|
|
Marvell Technology
Group Ltd.
Condensed
Consolidated Statements of Cash Flows (Unaudited)
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
November 2,
2019
|
|
November 3,
2018
|
|
November 2,
2019
|
|
November 3,
2018
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(82,501)
|
|
|
$
|
(53,767)
|
|
|
$
|
(188,282)
|
|
|
$
|
81,604
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
40,508
|
|
|
39,259
|
|
|
126,747
|
|
|
86,356
|
|
Share-based
compensation
|
|
66,762
|
|
|
50,240
|
|
|
189,036
|
|
|
133,484
|
|
Amortization and write
off of acquired intangible assets
|
|
92,760
|
|
|
78,691
|
|
|
253,467
|
|
|
104,630
|
|
Amortization of
inventory fair value adjustment associated with
acquisition
|
|
3,316
|
|
|
102,842
|
|
|
3,316
|
|
|
125,775
|
|
Amortization of
deferred debt issuance costs and debt discounts
|
|
1,181
|
|
|
2,217
|
|
|
4,040
|
|
|
9,290
|
|
Restructuring related
impairment charges
|
|
6,146
|
|
|
9,888
|
|
|
16,243
|
|
|
11,881
|
|
Other expense,
net
|
|
2,574
|
|
|
1,771
|
|
|
4,590
|
|
|
5,402
|
|
Deferred income
taxes
|
|
(10,275)
|
|
|
(6,261)
|
|
|
(7,901)
|
|
|
(27,675)
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(32,002)
|
|
|
(10,948)
|
|
|
8,374
|
|
|
(59,697)
|
|
Inventories
|
|
(39,276)
|
|
|
(5,007)
|
|
|
(30,602)
|
|
|
1,859
|
|
Prepaid expenses and
other assets
|
|
(3,046)
|
|
|
7,630
|
|
|
(11,039)
|
|
|
(11,874)
|
|
Accounts
payable
|
|
8,304
|
|
|
22,531
|
|
|
30,801
|
|
|
22,260
|
|
Accrued liabilities
and other non-current liabilities
|
|
(26,141)
|
|
|
39,691
|
|
|
(106,258)
|
|
|
27,730
|
|
Accrued employee
compensation
|
|
37,193
|
|
|
20,617
|
|
|
11,927
|
|
|
(20,922)
|
|
Net cash provided by
operating activities
|
|
65,503
|
|
|
299,394
|
|
|
304,459
|
|
|
490,103
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of
available-for-sale securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,956)
|
|
Sales of
available-for-sale securities
|
|
18,832
|
|
|
—
|
|
|
18,832
|
|
|
623,896
|
|
Maturities of
available-for-sale securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
187,985
|
|
Purchases of time
deposits
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,000)
|
|
Maturities of time
deposits
|
|
—
|
|
|
25,000
|
|
|
—
|
|
|
175,000
|
|
Purchases of
technology licenses
|
|
(414)
|
|
|
(9,918)
|
|
|
(1,936)
|
|
|
(11,181)
|
|
Purchases of property
and equipment
|
|
(20,742)
|
|
|
(12,646)
|
|
|
(62,935)
|
|
|
(47,035)
|
|
Cash payment for
acquisition, net of cash and cash equivalents acquired
|
|
(477,579)
|
|
|
—
|
|
|
(477,579)
|
|
|
(2,649,465)
|
|
Other, net
|
|
(1,404)
|
|
|
(4,007)
|
|
|
(1,793)
|
|
|
(7,534)
|
|
Net cash used in
investing activities
|
|
(481,307)
|
|
|
(1,571)
|
|
|
(525,411)
|
|
|
(1,768,290)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Repurchases of common
stock
|
|
—
|
|
|
(53,969)
|
|
|
(64,272)
|
|
|
(53,969)
|
|
Proceeds from employee
stock plans
|
|
21,795
|
|
|
16,192
|
|
|
103,109
|
|
|
60,772
|
|
Tax withholding paid
on behalf of employees for net share settlement
|
|
(19,220)
|
|
|
(8,915)
|
|
|
(80,862)
|
|
|
(45,691)
|
|
Dividend payments to
shareholders
|
|
(40,140)
|
|
|
(39,411)
|
|
|
(119,496)
|
|
|
(108,592)
|
|
Payments on technology
license obligations
|
|
(28,889)
|
|
|
(23,003)
|
|
|
(57,213)
|
|
|
(52,481)
|
|
Proceeds from
issuance of debt
|
|
350,000
|
|
|
—
|
|
|
350,000
|
|
|
1,892,605
|
|
Principal payments of
debt
|
|
—
|
|
|
(75,000)
|
|
|
(50,000)
|
|
|
(681,128)
|
|
Payment of equity and
debt financing costs
|
|
—
|
|
|
(2,115)
|
|
|
—
|
|
|
(11,550)
|
|
Other, net
|
|
(2,869)
|
|
|
—
|
|
|
(4,355)
|
|
|
—
|
|
Net cash provided by
(used in) in financing activities
|
|
280,677
|
|
|
(186,221)
|
|
|
76,911
|
|
|
999,966
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
(135,127)
|
|
|
111,602
|
|
|
(144,041)
|
|
|
(278,221)
|
|
Cash and cash
equivalents at beginning of period
|
|
573,496
|
|
|
498,659
|
|
|
582,410
|
|
|
888,482
|
|
Cash and cash
equivalents at end of period
|
|
$
|
438,369
|
|
|
$
|
610,261
|
|
|
$
|
438,369
|
|
|
$
|
610,261
|
|
Marvell Technology
Group Ltd.
Reconciliations
from GAAP to Non-GAAP (Unaudited)
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
November 2,
2019
|
|
August 3,
2019
|
|
November 3,
2018
|
|
November 2,
2019
|
|
November 3,
2018
|
GAAP gross
profit:
|
|
$
|
340,067
|
|
|
$
|
350,702
|
|
|
$
|
383,587
|
|
|
$
|
1,052,197
|
|
|
$
|
1,136,390
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
3,990
|
|
|
3,662
|
|
|
2,429
|
|
|
10,578
|
|
|
9,082
|
|
Amortization of
acquired intangible assets
|
|
72,146
|
|
|
61,132
|
|
|
57,594
|
|
|
193,184
|
|
|
76,577
|
|
Other cost of goods
sold (a)
|
|
4,758
|
|
|
—
|
|
|
105,841
|
|
|
5,208
|
|
|
128,774
|
|
Total special
items
|
|
80,894
|
|
|
64,794
|
|
|
165,864
|
|
|
208,970
|
|
|
214,433
|
|
Non-GAAP gross
profit
|
|
$
|
420,961
|
|
|
$
|
415,496
|
|
|
$
|
549,451
|
|
|
$
|
1,261,167
|
|
|
$
|
1,350,823
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin
|
|
51.3
|
%
|
|
53.4
|
%
|
|
45.1
|
%
|
|
53.1
|
%
|
|
53.6
|
%
|
Non-GAAP gross
margin
|
|
63.5
|
%
|
|
63.3
|
%
|
|
64.6
|
%
|
|
63.6
|
%
|
|
63.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP operating
expenses
|
|
$
|
401,576
|
|
|
$
|
396,930
|
|
|
$
|
404,097
|
|
|
$
|
1,181,060
|
|
|
$
|
1,040,112
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
(63,375)
|
|
|
(60,014)
|
|
|
(47,811)
|
|
|
(179,061)
|
|
|
(138,433)
|
|
Restructuring related
charges (b)
|
|
(14,802)
|
|
|
(16,585)
|
|
|
(27,031)
|
|
|
(37,070)
|
|
|
(64,013)
|
|
Amortization of
acquired intangible assets
|
|
(20,614)
|
|
|
(19,835)
|
|
|
(21,098)
|
|
|
(60,283)
|
|
|
(28,053)
|
|
Other operating
expenses (c)
|
|
(19,495)
|
|
|
(20,676)
|
|
|
(11,222)
|
|
|
(46,740)
|
|
|
(54,703)
|
|
Total special
items
|
|
(118,286)
|
|
|
(117,110)
|
|
|
(107,162)
|
|
|
(323,154)
|
|
|
(285,202)
|
|
Total non-GAAP
operating expenses
|
|
$
|
283,290
|
|
|
$
|
279,820
|
|
|
$
|
296,935
|
|
|
$
|
857,906
|
|
|
$
|
754,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
(9.3)
|
%
|
|
(7.0)
|
%
|
|
(2.4)
|
%
|
|
(6.5)
|
%
|
|
4.5
|
%
|
Other cost of goods
sold (a)
|
|
0.7
|
%
|
|
—
|
%
|
|
12.4
|
%
|
|
0.3
|
%
|
|
6.1
|
%
|
Share-based
compensation
|
|
10.2
|
%
|
|
9.7
|
%
|
|
5.9
|
%
|
|
9.6
|
%
|
|
7.0
|
%
|
Restructuring related
charges (b)
|
|
2.2
|
%
|
|
2.5
|
%
|
|
3.2
|
%
|
|
1.9
|
%
|
|
3.0
|
%
|
Amortization of
acquired intangible assets
|
|
14.0
|
%
|
|
12.3
|
%
|
|
9.2
|
%
|
|
12.8
|
%
|
|
4.9
|
%
|
Other operating
expenses (c)
|
|
3.0
|
%
|
|
3.2
|
%
|
|
1.4
|
%
|
|
2.3
|
%
|
|
2.6
|
%
|
Non-GAAP operating
margin
|
|
20.8
|
%
|
|
20.7
|
%
|
|
29.7
|
%
|
|
20.4
|
%
|
|
28.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP interest and
other income (loss), net
|
|
$
|
(19,460)
|
|
|
$
|
(21,651)
|
|
|
$
|
(23,952)
|
|
|
$
|
(61,162)
|
|
|
$
|
(31,577)
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Restructuring related
items (d)
|
|
(946)
|
|
|
75
|
|
|
1,491
|
|
|
(1,209)
|
|
|
(142)
|
|
Write-off of debt
issuance costs (e)
|
|
—
|
|
|
—
|
|
|
850
|
|
|
458
|
|
|
6,954
|
|
Deal costs
(f)
|
|
496
|
|
|
1,009
|
|
|
—
|
|
|
1,505
|
|
|
—
|
|
Total special
items
|
|
(450)
|
|
|
1,084
|
|
|
2,341
|
|
|
754
|
|
|
6,812
|
|
Total non-GAAP
interest and other income (loss), net
|
|
$
|
(19,910)
|
|
|
$
|
(20,567)
|
|
|
$
|
(21,611)
|
|
|
$
|
(60,408)
|
|
|
$
|
(24,765)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
|
$
|
(82,501)
|
|
|
$
|
(57,331)
|
|
|
$
|
(53,767)
|
|
|
$
|
(188,282)
|
|
|
$
|
81,604
|
|
Special
items:
|
|
|
|
|
|
|
|
|
|
|
Other cost of goods
sold (a)
|
|
4,758
|
|
|
—
|
|
|
105,841
|
|
|
5,208
|
|
|
128,774
|
|
Share-based
compensation
|
|
67,365
|
|
|
63,676
|
|
|
50,240
|
|
|
189,639
|
|
|
147,515
|
|
Restructuring related
charges in operating expenses (b)
|
|
14,802
|
|
|
16,585
|
|
|
27,031
|
|
|
37,070
|
|
|
64,013
|
|
Restructuring related
items in interest and other income, net (d)
|
|
(946)
|
|
|
75
|
|
|
1,491
|
|
|
(1,209)
|
|
|
(142)
|
|
Amortization of
acquired intangible assets
|
|
92,760
|
|
|
80,967
|
|
|
78,692
|
|
|
253,467
|
|
|
104,630
|
|
Write-off of debt
issuance costs (e)
|
|
—
|
|
|
—
|
|
|
850
|
|
|
458
|
|
|
6,954
|
|
Transaction costs
included in interest and other income, net (f)
|
|
496
|
|
|
1,009
|
|
|
—
|
|
|
1,505
|
|
|
—
|
|
Other operating
expenses (c)
|
|
19,495
|
|
|
20,676
|
|
|
11,222
|
|
|
46,740
|
|
|
54,703
|
|
Pre-tax total special
items
|
|
198,730
|
|
|
182,988
|
|
|
275,367
|
|
|
532,878
|
|
|
506,447
|
|
Other income tax
effects and adjustments (g)
|
|
(3,773)
|
|
|
(15,728)
|
|
|
55
|
|
|
(17,177)
|
|
|
(39,763)
|
|
Non-GAAP net
income
|
|
$
|
112,456
|
|
|
$
|
109,929
|
|
|
$
|
221,655
|
|
|
$
|
327,419
|
|
|
$
|
548,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares — basic
|
|
668,178
|
|
|
663,603
|
|
|
657,519
|
|
|
667,184
|
|
|
569,031
|
|
Weighted average
shares — diluted
|
|
668,178
|
|
|
663,603
|
|
|
657,519
|
|
|
667,184
|
|
|
578,872
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income (loss) per share
|
|
$
|
(0.12)
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.08)
|
|
|
$
|
(0.28)
|
|
|
$
|
0.14
|
|
Non-GAAP diluted net
income per share (h)
|
|
$
|
0.17
|
|
|
$
|
0.16
|
|
|
$
|
0.33
|
|
|
$
|
0.48
|
|
|
$
|
0.95
|
|
|
|
(a)
|
Other costs of goods
sold includes amortization of the Aquantia inventory fair value
adjustment in 2019, amortization of the Cavium inventory fair value
adjustment in 2018, as well as charges for past intellectual
property licensing matters.
|
(b)
|
Restructuring related
charges include employee severance, facilities related costs, and
impairment of equipment and other assets.
|
(c)
|
Other operating
expenses include Cavium, Aquantia, and Avera merger
costs.
|
(d)
|
Interest and other
income, net, includes restructuring related items such as foreign
currency remeasurement associated with restructuring related
accruals.
|
(e)
|
Write-off of debt
issuance costs is associated with the partial term loan
repayment.
|
(f)
|
Costs incurred in
connection with preparation of the impending divestiture of the
Wi-Fi Connectivity business.
|
(g)
|
Other income tax
effects and adjustments relate to tax provision based on a non-GAAP
income tax rate of 4.5% for the three months ended August 3, 2019
and the three and nine months ended November 2, 2019, and based on
a non-GAAP income tax rate of 4% for the three and nine months
ended November 3, 2018.
|
(h)
|
Non-GAAP diluted net
income per share for the three months ended November 2, 2019,
August 3, 2019 and November 3, 2018 was calculated by dividing
non-GAAP net income by weighted average shares outstanding
(diluted) of 679,345, 675,755 shares and 665,752 shares,
respectively, due to the non-GAAP net income reported in the
respective period. Non-GAAP diluted net income per share for the
nine months ended November 2, 2019 was calculated by dividing
non-GAAP net income by weighted average shares outstanding
(diluted) of 678,986 shares due to the non-GAAP net income reported
in the period.
|
Marvell
Technology Group Ltd.
|
Outlook for
the Fourth Quarter of Fiscal Year 2020
|
Reconciliations
from GAAP to Non-GAAP (Unaudited)
|
(In
millions, except per share amounts)
|
|
|
|
|
|
Outlook for Three
Months Ended
February 1,
2020
|
GAAP
revenue
|
$750 +/-
3%
|
Special
items:
|
—
|
Non-GAAP
revenue
|
$750 +/-
3%
|
|
|
GAAP gross
margin
|
45.5%
|
Special
items:
|
|
Share-based
compensation
|
0.3%
|
Amortization of
acquired intangible assets
|
16.2%
|
Non-GAAP gross
margin
|
62%
|
|
|
Total GAAP
operating expenses
|
$445 -
$455
|
Special
items:
|
|
Share-based
compensation
|
65
|
Restructuring related
charges
|
23
|
Amortization of
acquired intangible assets
|
23
|
Other operating
expenses
|
22
|
Total non-GAAP
operating expenses
|
$315 -
$320
|
|
|
|
|
GAAP diluted net
loss per share
|
$(0.23) -
$(0.17)
|
Special
items:
|
|
Share-based
compensation
|
0.10
|
Amortization of
acquired intangible assets
|
0.21
|
Restructuring related
charges in operating expenses
|
0.04
|
Other operating
expenses
|
0.03
|
Other income tax
effects and adjustments
|
(0.01)
|
Non-GAAP diluted net
income per share
|
$0.15 -
$0.19
|
Quarterly Revenue
Trend (Unaudited)
(In
thousands)
|
|
|
|
|
Three Months
Ended
|
|
%
Change
|
|
November 2,
2019
|
|
August 3,
2019
|
|
November 3,
2018
|
|
YoY
|
|
QoQ
|
Networking
(1)
|
$
|
329,962
|
|
|
$
|
329,605
|
|
|
$
|
398,424
|
|
|
(17)
|
%
|
|
—
|
%
|
Storage
(2)
|
287,708
|
|
|
274,905
|
|
|
406,822
|
|
|
(29)
|
%
|
|
5
|
%
|
Total
Core
|
617,670
|
|
|
604,510
|
|
|
805,246
|
|
|
(23)
|
%
|
|
2
|
%
|
Other
(3)
|
44,800
|
|
|
52,058
|
|
|
45,805
|
|
|
(2)
|
%
|
|
(14)
|
%
|
Total
Revenue
|
$
|
662,470
|
|
|
$
|
656,568
|
|
|
$
|
851,051
|
|
|
(22)
|
%
|
|
1
|
%
|
|
Three Months
Ended
|
% of
Total
|
November 2,
2019
|
|
August 3,
2019
|
|
November 3,
2018
|
Networking
(1)
|
50
|
%
|
|
50
|
%
|
|
47
|
%
|
Storage
(2)
|
43
|
%
|
|
42
|
%
|
|
48
|
%
|
Total
Core
|
93
|
%
|
|
92
|
%
|
|
95
|
%
|
Other
(3)
|
7
|
%
|
|
8
|
%
|
|
5
|
%
|
Total
Revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
(1)
|
Networking products
are comprised primarily of Ethernet Switches, Ethernet
Transceivers, Ethernet NICs, Embedded Communication Processors,
Automotive Ethernet, Security Adapters and Processors as well as
WiFi Connectivity products. In addition, this grouping
includes a few legacy product lines in which we no longer invest,
but will generate revenue for several years.
|
(2)
|
Storage products are
comprised primarily of HDD and SSD Controllers, Fibre Channel
Adapters and Data Center Storage Solutions.
|
(3)
|
Other products are
comprised primarily of Printer Solutions, Application Processors
and others.
|
For further information, contact:
Ashish Saran
Vice President, Investor Relations
408-222-0777
ir@marvell.com
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SOURCE Marvell