Marvell Technology Group Ltd. Reports First Quarter of Fiscal Year 2018 Financial Results

(a)

The Company paid $750.0 million to Carnegie Mellon University in connection with a litigation settlement agreement reached in February 2016.

 

Marvell Technology Group Ltd.
Reconciliations from GAAP to Non-GAAP
(Unaudited)
(In thousands, except per share amounts)










Three Months Ended



April 29,
2017


January 28,
2017


April 30,
2016

GAAP gross profit:


$

348,631



$

327,517



$

275,029


Special items:







Share-based compensation


1,426



1,641



1,784


Non-GAAP gross profit


$

350,057



$

329,158



$

276,813









GAAP gross margin


60.2

%


57.3

%


53.0

%

Non-GAAP gross margin


60.4

%


57.6

%


53.3

%








Total GAAP operating expenses


$

249,743



$

339,650



$

295,145


Special items:







Share-based compensation


(20,941)



(20,764)



(20,396)


Restructuring related charges (a)


(1,505)



(98,860)



(4,441)


Amortization of and write-off acquired intangible assets


(1,071)



(1,480)



(2,298)


Other operating expenses (b)


(2,304)



(315)



(1,242)


Total special items


(25,821)



(121,419)



(28,377)


Total non-GAAP operating expenses


$

223,922



$

218,231



$

266,768









GAAP operating margin


17.1

%


(2.1)%



(3.9)%


Share-based compensation


3.9

%


3.9

%


4.3

%

Restructuring related charges (a)


0.3

%


17.3

%


0.9

%

Amortization of and write-off acquired intangible assets


0.2

%


0.3

%


0.4

%

Other operating expenses (b)


0.3

%


%


0.2

%

Non-GAAP operating margin


21.8

%


19.4

%


1.9

%








GAAP net income (loss)


$

106,621



$

(80,091)



$

(22,679)


        Loss (income) from discontinued operations, net of tax


(9,651)



3,214



9,408


GAAP net income (loss) from continuing operations


96,970



(76,877)



(13,271)


Special items:







Share-based compensation


22,367



22,405



22,180


Restructuring related charges (a)


1,505



98,860



4,441


Amortization of and write-off acquired intangible assets


1,071



1,480



2,298


Other operating expenses (b)


2,304



315



1,242


Pre-tax total special items


27,247



123,060



30,161


Non-GAAP income before income taxes


124,217



46,183



16,890


        Other income tax effects and adjustments (c)


72



67,989



(1,071)


Non-GAAP net income from continuing operations


$

124,289



$

114,172



$

15,819









Weighted average shares — basic


503,790



507,834



508,794


Weighted average shares — diluted


517,592



507,834



508,794


Non-GAAP weighted average shares — diluted (d)


523,154



528,141



522,363









GAAP diluted net income (loss) per share from continuing operations


$

0.19



$

(0.15)



$

(0.03)


Non-GAAP diluted net income per share from continuing operations


$

0.24



$

0.22



$

0.03




(a)

Restructuring 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)

Other operating expenses in the three months ended April 29, 2017 include costs of retention bonuses offered to employees who remained through the ramp down of certain operations due to the restructuring action announced in November 2016.



(c)

Other income tax effects and adjustments in the three months ended April 29, 2017 includes adjustment to the tax provision based on a non-GAAP tax rate of 4%. Other income tax effects and adjustments in the three months ended January 28, 2017 included $68.0 million of tax expense related to restructuring actions.



(d)

Non-GAAP diluted share count excludes the impact of share-based compensation expense expected to be incurred in future periods and not yet recognized in the Company's financial statements, which would otherwise be assumed to be used to repurchase shares under the GAAP treasury stock method.



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