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Marvell Technology Group Ltd. Reports Third Quarter of Fiscal Year 2019 Financial Results

- Q3 Revenue: $851 million

SANTA CLARA, Calif., Dec. 4, 2018 — (PRNewswire) — Marvell Technology Group Ltd. (NASDAQ: MRVL), a leader in infrastructure semiconductor solutions, today reported financial results for the third fiscal quarter of fiscal year 2019. Revenue for the third quarter of fiscal 2019 was $851 million, which exceeded the midpoint of the Company's guidance provided on September 6, 2018.

GAAP net loss from continuing operations for the third quarter of fiscal 2019 was $54 million, or $(0.08) per diluted share. Non-GAAP net income from continuing operations for the third quarter of fiscal 2019 was $222 million, or $0.33 per diluted share. Cash flow from operations for the third quarter was $299 million.

"In the first full quarter operating as a combined Marvell and Cavium team, we completed key integration milestones ahead of schedule, delivered revenue above the midpoint of our guidance, and generated strong free cash flow at 30 percent of revenue. We also expect renewed revenue growth from the Cavium business in the fourth quarter," said Matt Murphy, Marvell's President and Chief Executive Officer. "Looking ahead, we expect the deployment of 5G will accelerate our growth over the next several years as engagements with a growing list of Tier 1 customers continue to build momentum in this major infrastructure transition."

Fourth Quarter of Fiscal 2019 Financial Outlook

Conference Call

Marvell will conduct a conference call on Tuesday, December 4, 2018 at 1:45 p.m. Pacific Time to discuss results for the third quarter of fiscal 2019. Interested parties may join the conference call by dialing 1-844-647-5488 or 1-615-247-0258, pass-code 3069644. 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 Wednesday December 12, 2018.

Discussion of Non-GAAP Financial Measures

Non-GAAP financial measures exclude the effect of share-based compensation expense, amortization of the inventory fair value step up, 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 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 2019, a non-GAAP tax rate of 4% has been applied to the non-GAAP financial results.

Non-GAAP diluted net income per share from continuing operations is calculated by dividing non-GAAP net income from continuing operations by weighted average shares outstanding (diluted). Historically, Marvell included non-GAAP share adjustments in its earnings releases. Beginning in the third quarter of fiscal year 2019, Marvell no longer provides this non-GAAP adjustment and will calculate non-GAAP income (loss) per share using the GAAP weighted average shares.  Marvell is making this change in order to align with its industry peer companies' non-GAAP income (loss) per share reporting for comparability purposes.

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:

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: the impact on future performance of Marvell's newly announced products; Marvell's expectations regarding its fourth quarter of fiscal 2019 financial outlook, renewed revenue growth from the Cavium business and 5G product development growth; 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: the effect of the consummation of our acquisition of Cavium  on the combined company's business relationships, operating results, and business generally; potential difficulties in Cavium employee retention as a result of the transaction;  the ability of Marvell to successfully integrate Cavium's operations and product lines; the ability of Marvell to implement its plans, forecasts, and other expectations with respect to Cavium's business and realize the anticipated synergies and cost savings in the time frame anticipated or at all, and identify and realize additional opportunities; 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; severe financial hardship or bankruptcy of one or more of Marvell's major customers; 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; 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; the impact of international conflict and continued economic volatility in either domestic or foreign markets; the effects of transitioning to smaller geometry process technologies; the risks associated with manufacturing and selling a majority of products and customers' products outside of the United States; risks associated with acquisition and consolidation activity in the semiconductor industry; 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 effects of any potential acquisitions or investments; Marvell's ability to protect its intellectual property; the impact and costs associated with changes in international financial and regulatory conditions; Marvell's maintenance of an effective system of internal controls; 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 4, 2018 as filed with the SEC on September 12, 2018, 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 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 3,
2018

 

August 4,
2018

 

October 28,
2017

 

November 3,
2018

 

October 28,
2017

Net revenue

 

$

851,051

   

$

665,310

   

$

616,302

   

$

2,120,992

   

$

1,793,761

 

Cost of goods sold

 

467,464

   

288,200

   

238,533

   

984,602

   

705,303

 

Gross profit

 

383,587

   

377,110

   

377,769

   

1,136,390

   

1,088,458

 
                           

Operating expenses:

                         

Research and development

 

264,888

   

216,285

   

165,477

   

657,907

   

534,444

 

Selling, general and administrative

 

112,178

   

133,701

   

59,112

   

318,192

   

169,875

 

Restructuring related charges

 

27,031

   

35,415

   

3,284

   

64,013

   

8,455

 

Total operating expenses

 

404,097

   

385,401

   

227,873

   

1,040,112

   

712,774

 

Operating income (loss) from continuing operations

 

(20,510)

   

(8,291)

   

149,896

   

96,278

   

375,684

 

Interest income

 

1,046

   

3,575

   

4,301

   

10,690

   

11,643

 

Interest expense

 

(22,370)

   

(15,795)

   

(262)

   

(38,409)

   

(393)

 

Other income (loss), net

 

(2,628)

   

(2,701)

   

2,161

   

(3,858)

   

5,471

 

Interest and other income (loss), net

 

(23,952)

   

(14,921)

   

6,200

   

(31,577)

   

16,721

 

Income (loss) from continuing operations before income taxes

 

(44,462)

   

(23,212)

   

156,096

   

64,701

   

392,405

 

Provision (benefit) for income taxes

 

9,305

   

(29,971)

   

6,759

   

(16,903)

   

8,026

 

Income (loss) from continuing operations, net of tax

 

(53,767)

   

6,759

   

149,337

   

81,604

   

384,379

 

Income from discontinued operations, net of tax

 

   

   

50,851

   

   

87,689

 

Net income (loss)

 

$

(53,767)

   

$

6,759

   

$

200,188

   

$

81,604

   

$

472,068

 
                     

Net income (loss) per share — Basic:

                   

Continuing operations

 

$

(0.08)

   

$

0.01

   

$

0.30

   

$

0.14

   

$

0.77

 

Discontinued operations

 

$

   

$

   

$

0.11

   

$

   

$

0.17

 

Net income (loss) per share - Basic

 

$

(0.08)

   

$

0.01

   

$

0.41

   

$

0.14

   

$

0.94

 
                     

Net income (loss) per share — Diluted:

                   

Continuing operations

 

$

(0.08)

   

$

0.01

   

$

0.30

   

$

0.14

   

$

0.75

 

Discontinued operations

 

$

   

$

   

$

0.10

   

$

   

$

0.17

 

Net income (loss) per share - Diluted

 

$

(0.08)

   

$

0.01

   

$

0.40

   

$

0.14

   

$

0.92

 
                     

Weighted average shares:

                   

Basic

 

657,519

   

552,238

   

494,096

   

569,031

   

499,568

 

Diluted

 

657,519

   

562,149

   

504,903

   

578,872

   

510,935

 

 

 

Marvell Technology Group Ltd.

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands)

 
   

November 3,
2018

 

February 3,
2018

Assets

       

Current assets:

       

Cash and cash equivalents

 

$

610,261

 

$

888,482

Short-term investments

 

 

952,790

Accounts receivable, net

 

453,775

 

280,395

Inventories

 

376,210

 

170,039

Prepaid expenses and other current assets

 

49,230

 

41,482

Assets held for sale

 

30,745

 

30,767

Total current assets

 

1,520,221

 

2,363,955

Property and equipment, net

 

313,113

 

202,222

Goodwill

 

5,499,145

 

1,993,310

Acquired intangible assets, net

 

2,639,370

 

Other non-current assets

 

260,176

 

148,800

Total assets

 

$

10,232,025

 

$

4,708,287

         

Liabilities and Shareholders' Equity

       

Current liabilities:

       

Accounts payable

 

$

209,562

 

$

145,236

Accrued liabilities

 

302,095

 

86,958

Accrued employee compensation

 

141,602

 

127,711

Deferred income

 

2,947

 

61,237

Total current liabilities

 

656,206

 

421,142

Long-term debt

 

1,805,734

 

Non-current income taxes payable

 

53,862

 

56,976

Deferred tax liabilities

 

108,016

 

52,204

Other non-current liabilities

 

32,928

 

36,552

Total liabilities

 

2,656,746

 

566,874

         

Shareholders' equity:

       

Common stock

 

1,314

 

991

Additional paid-in capital

 

6,157,283

 

2,733,292

Accumulated other comprehensive loss

 

 

(2,322)

Retained earnings

 

1,416,682

 

1,409,452

Total shareholders' equity

 

7,575,279

 

4,141,413

Total liabilities and shareholders' equity

 

$

10,232,025

 

$

4,708,287

 

 

Marvell Technology Group Ltd.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

 
   

Three Months Ended

 

Nine Months Ended

   

November 3,
2018

 

October 28,
 2017

 

November 3,
2018

 

October 28,
 2017

Cash flows from operating activities:

               

Net income (loss)

 

$

(53,767)

   

$

200,188

   

$

81,604

   

$

472,068

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

               

Depreciation and amortization

 

39,259

   

21,383

   

86,356

   

62,569

 

Share-based compensation

 

50,240

   

18,873

   

133,484

   

65,312

 

Amortization of acquired intangible assets

 

78,691

   

1,076

   

104,630

   

3,212

 

Amortization of inventory fair value adjustment associated with acquisition of Cavium

 

102,842

   

   

125,775

   

 

Amortization of deferred debt issuance costs and debt discounts

 

2,217

   

   

9,290

   

 

Restructuring related impairment charges (gain)

 

9,888

   

44

   

11,881

   

(402)

 

Gain from investments in privately-held companies

 

   

(1,751)

   

(1,100)

   

(2,501)

 

Amortization (accretion) of premium/discount on available-for-sale securities

 

   

(200)

   

624

   

603

 

Other non-cash expense (income), net

 

   

2,755

   

4,227

   

1,331

 

Deferred income taxes

 

(6,261)

   

7

   

(27,675)

   

2,797

 

Loss (gain) on sale of property and equipment

 

179

   

(190)

   

59

   

(473)

 

Gain on sale of discontinued operations

 

   

(46,219)

   

   

(88,406)

 

Loss (gain) on sale of business

 

1,592

   

   

1,592

   

(5,254)

 

Changes in assets and liabilities:

               

Accounts receivable

 

(10,948)

   

5,583

   

(59,697)

   

(30,730)

 

Inventories

 

(5,007)

   

(1,327)

   

1,859

   

(16,039)

 

Prepaid expenses and other assets

 

7,630

   

5,268

   

(11,874)

   

13,122

 

Accounts payable

 

22,531

   

16,119

   

22,260

   

20,087

 

Accrued liabilities and other non-current liabilities

 

40,255

   

(7,046)

   

29,023

   

(40,462)

 

Accrued employee compensation

 

20,617

   

(2,237)

   

(20,922)

   

(10,612)

 

Deferred income

 

(564)

   

3,865

   

(1,293)

   

5,149

 

Net cash provided by operating activities

 

299,394

   

216,191

   

490,103

   

451,371

 

Cash flows from investing activities:

               

Purchases of available-for-sale securities

 

   

(296,659)

   

(14,956)

   

(672,887)

 

Sales of available-for-sale securities

 

   

167,451

   

623,896

   

284,151

 

Maturities of available-for-sale securities

 

   

136,090

   

187,985

   

305,702

 

Return of investment from privately-held companies

 

   

3,701

   

   

6,089

 

Purchases of time deposits

 

   

(75,000)

   

(25,000)

   

(225,000)

 

Maturities of time deposits

 

25,000

   

75,000

   

175,000

   

225,000

 

Purchases of technology licenses

 

(9,918)

   

(3,555)

   

(11,181)

   

(5,256)

 

Purchases of property and equipment

 

(12,646)

   

(10,613)

   

(47,035)

   

(25,156)

 

Proceeds from sales of property and equipment

 

595

   

249

   

818

   

1,988

 

Cash payment for acquisition of Cavium, net of cash and cash equivalents acquired

 

   

   

(2,649,465)

   

 

Net proceeds from sale of discontinued operations

 

   

93,735

   

   

165,940

 

Net proceeds (payments) from sale of business

 

(4,602)

   

2,402

   

(3,352)

   

2,402

 

Other

 

   

   

(5,000)

   

 

Net cash provided by (used in) investing activities

 

(1,571)

   

92,801

   

(1,768,290)

   

62,973

 

Cash flows from financing activities:

               

Repurchases of common stock

 

(53,969)

   

(140,017)

   

(53,969)

   

(527,574)

 

Proceeds from employee stock plans

 

16,192

   

39,614

   

60,772

   

137,424

 

Tax withholding paid on behalf of employees for net share settlement

 

(8,915)

   

(1,120)

   

(45,691)

   

(25,934)

 

Dividend payments to shareholders

 

(39,411)

   

(29,470)

   

(108,592)

   

(89,556)

 

Payments on technology license obligations

 

(23,003)

   

(8,401)

   

(52,481)

   

(22,697)

 

Proceeds from issuance of debt

 

   

   

1,892,605

   

 

Principal payments of debt

 

(75,000)

   

   

(681,128)

   

 

Payment of equity and debt financing costs

 

(2,115)

   

   

(11,550)

   

 

Net cash provided by (used in) financing activities

 

(186,221)

   

(139,394)

   

999,966

   

(528,337)

 

Net increase (decrease) in cash and cash equivalents

 

111,602

   

169,598

   

(278,221)

   

(13,993)

 

Cash and cash equivalents at beginning of period

 

498,659

   

630,501

   

888,482

   

814,092

 

Cash and cash equivalents at end of period

 

$

610,261

   

$

800,099

   

$

610,261

   

$

800,099

 

 

Marvell Technology Group Ltd.

Reconciliations from GAAP to Non-GAAP (Unaudited)

(In thousands, except per share amounts)

 
   

Three Months Ended

 

Nine Months Ended

   

November 3,
2018

 

August 4,
 2018

 

October 28,
2017

 

November 3,
2018

 

October 28,
2017

GAAP gross profit:

 

$

383,587

   

$

377,110

   

$

377,769

   

$

1,136,390

   

$

1,088,458

 

Special items:

                   

Share-based compensation

 

2,429

   

4,748

   

1,747

   

9,082

   

4,983

 

Amortization of acquired intangible assets

 

57,594

   

18,984

   

   

76,577

   

 

Other cost of goods sold (a)

 

105,841

   

22,933

   

   

128,774

   

3,000

 

Total special items

 

165,864

   

46,665

   

1,747

   

214,433

   

7,983

 

Non-GAAP gross profit

 

$

549,451

   

$

423,775

   

$

379,516

   

$

1,350,823

   

$

1,096,441

 
                     

GAAP gross margin

 

45.1

%

 

56.7

%

 

61.3

%

 

53.6

%

 

60.7

%

Non-GAAP gross margin

 

64.6

%

 

63.7

%

 

61.6

%

 

63.7

%

 

61.1

%

                     
                     
                     

Total GAAP operating expenses

 

$

404,097

   

$

385,401

   

$

227,873

   

$

1,040,112

   

$

712,774

 

Special items:

                   

Share-based compensation

 

(47,811)

   

(68,675)

   

(18,892)

   

(138,433)

   

(58,762)

 

Restructuring related charges (b)

 

(27,031)

   

(35,415)

   

(3,284)

   

(64,013)

   

(8,455)

 

Amortization of acquired intangible assets

 

(21,098)

   

(6,955)

   

(1,076)

   

(28,053)

   

(3,212)

 

Other operating expenses (c)

 

(11,222)

   

(28,229)

   

(120)

   

(54,703)

   

(4,110)

 

Total special items

 

(107,162)

   

(139,274)

   

(23,372)

   

(285,202)

   

(74,539)

 

Total non-GAAP operating expenses

 

$

296,935

   

$

246,127

   

$

204,501

   

$

754,910

   

$

638,235

 
                     
                     
                     

GAAP operating margin

 

(2.4)

%

 

(1.2)

%

 

24.3

%

 

4.5

%

 

20.9

%

Other cost of goods sold (a)

 

12.4

%

 

3.5

%

 

%

 

6.1

%

 

0.2

%

Share-based compensation

 

5.9

%

 

11.0

%

 

3.3

%

 

7.0

%

 

3.6

%

Restructuring related charges (b)

 

3.2

%

 

5.3

%

 

0.5

%

 

3.0

%

 

0.5

%

Amortization and write-off of acquired intangible assets

 

9.2

%

 

3.9

%

 

0.2

%

 

4.9

%

 

0.2

%

Other operating expenses (c)

 

1.4

%

 

4.2

%

 

0.1

%

 

2.6

%

 

0.1

%

Non-GAAP operating margin

 

29.7

%

 

26.7

%

 

28.4

%

 

28.1

%

 

25.5

%

                                         
                                         

GAAP interest and other income (loss), net

 

$

(23,952)

   

$

(14,921)

   

$

6,200

   

$

(31,577)

   

$

16,721

 

Special items:

                   

Restructuring related items (d)

 

1,491

   

(121)

   

(2,286)

   

(142)

   

(5,371)

 

Write-off of debt issuance costs (e)

 

850

   

6,104

   

   

6,954

   

 

Total special items

 

2,341

   

5,983

   

(2,286)

   

6,812

   

(5,371)

 

Total non-GAAP interest and other income (loss), net

 

$

(21,611)

   

$

(8,938)

   

$

3,914

   

$

(24,765)

   

$

11,350

 
                     
                     
                     

GAAP net income (loss)

 

$

(53,767)

   

$

6,759

   

$

200,188

   

$

81,604

   

$

472,068

 

Less: Income from discontinued operations, net of tax

 

   

   

50,851

   

   

87,689

 

GAAP net income (loss) from continuing operations

 

(53,767)

   

6,759

   

149,337

   

81,604

   

384,379

 

Special items:

                   

Other cost of goods sold (a)

 

105,841

   

22,933

   

   

128,774

   

3,000

 

Share-based compensation

 

50,240

   

73,423

   

20,639

   

147,515

   

63,745

 

Restructuring related charges in operating expenses (b)

 

27,031

   

35,415

   

3,284

   

64,013

   

8,455

 

Restructuring related items in interest and other income, net (d)

 

1,491

   

(121)

   

(2,286)

   

(142)

   

(5,371)

 

Amortization of acquired intangible assets

 

78,692

   

25,939

   

1,076

   

104,630

   

3,212

 

Write-off of debt issuance costs (e)

 

850

   

6,104

   

   

6,954

   

 

Other operating expenses (c)

 

11,222

   

28,229

   

120

   

54,703

   

4,110

 

Pre-tax total special items

 

275,367

   

191,922

   

22,833

   

506,447

   

77,151

 

Other income tax effects and adjustments (f)

 

55

   

(36,720)

   

(398)

   

(39,763)

   

(10,760)

 

Non-GAAP net income from continuing operations

 

$

221,655

   

$

161,961

   

$

171,772

   

$

548,288

   

$

450,770

 
                     
                     
                     

Weighted average shares — basic

 

657,519

   

552,238

   

494,096

   

569,031

   

499,568

 

Weighted average shares — diluted

 

657,519

   

562,149

   

504,903

   

578,872

   

510,935

 
                     

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

 

$

(0.08)

   

$

0.01

   

$

0.30

   

$

0.14

   

$

0.75

 

Non-GAAP diluted net income per share from continuing operations (g)

 

$

0.33

   

$

0.28

   

$

0.34

   

$

0.95

   

$

0.87

 
   

(a)

Other costs of goods sold includes amortization of the Cavium inventory fair value step up and 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 primarily include Cavium merger costs and costs of retention bonuses offered to employees who remained through the ramp down of certain operations due to restructuring actions.

   

(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 during the three months ended November 3, 2018 and the terminated bridge loan commitment during the three months ended August 4, 2018.

   

(f)

Other income tax effects and adjustments relate to tax provision based on a non-GAAP income tax rate of 4%.

   

(g)

Non-GAAP diluted net income per share from continuing operations for the three months ended November 3, 2018 was calculated by dividing non-GAAP net income from continuing operations by weighted average shares outstanding (diluted) of 665,752 shares due to the non-GAAP net income reported in that period.

 

Marvell Technology Group Ltd.

Outlook for the Fourth Quarter of Fiscal Year 2019

Reconciliations from GAAP to Non-GAAP (Unaudited)

(In millions, except per share amounts)

   
   
 

Outlook for Three Months Ended

February 2, 2019

GAAP revenue

 $790 - $830

Special items:

Non-GAAP revenue

$790 - $830

   

GAAP gross margin

46%

Special items:

 

Share-based compensation

0.2%

Amortization of acquired intangible assets

7%

Other costs of goods sold

12%

Non-GAAP gross margin

65%

   

Total GAAP operating expenses

 $375 - $385

Special items:

 

Share-based compensation

55

Restructuring related charges

15

Amortization of acquired intangible assets

21

Other operating expenses

2

Total non-GAAP operating expenses

$285 - $290

   
   

GAAP diluted net income per share from continuing operations

 $(0.05) - $(0.01)

Special items:

 

Other costs of goods sold

0.15

Share-based compensation

0.09

Restructuring related charges in operating expenses

0.02

Amortization of acquired intangible assets

0.12

Other (gains) and losses in interest and other income, net

(0.01)

Other income tax effects and adjustments

(0.02)

Non-GAAP diluted net income per share from continuing operations

$0.30 - $0.34

 

Quarterly Revenue Trend (Unaudited)

(In thousands)

     
 

Three Months Ended

 

% Change

 

November 3,
 2018

 

August 4,

2018*

 

October 28,
 2017

 

YoY

 

QoQ

Storage (1)

$

406,822

   

$

335,764

   

$

315,338

   

29

%

 

21

%

Networking (2)

398,424

   

283,330

   

253,159

   

57

%

 

41

%

   Total Core

805,246

   

619,094

   

568,497

   

42

%

 

30

%

Other (3)

45,805

   

46,216

   

47,805

   

(4)

%

 

(1)

%

Total Revenue

$

851,051

   

$

665,310

   

$

616,302

   

38

%

 

28

%

 

* Results for the three months ended August 4, 2018 include total Cavium revenue from the period July 6, 2018 to August 4, 2018.

 

 

Three Months Ended

% of Total

November 3,
 2018

 

August 4,
 2018

 

October 28,
 2017

Storage (1)

48

%

 

50

%

 

51

%

Networking (2)

47

%

 

43

%

 

41

%

   Total Core

95

%

 

93

%

 

92

%

Other (3)

5

%

 

7

%

 

8

%

Total Revenue

100

%

 

100

%

 

100

%

 

(1) Storage products are comprised primarily of HDD and SSD Controllers, Fibre Channel Adapters and Data Center Storage Solutions.

(2) 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 solutions including WiFi only, WiFi/Bluetooth combos and WiFi Microcontroller combos.  In addition, this grouping includes a few legacy product lines in which we no longer invest, but will generate revenue for several years.

(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
Email Contact

 

Marvell is a world leader in storage, cloud infrastructure, Internet of Things (IoT), connectivity and multimedia semiconductor solutions. (PRNewsfoto/Marvell Technology Group Ltd.)

 

 

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SOURCE Marvell Technology Group Ltd.

Contact:
Company Name: Marvell Technology Group Ltd.
Web: http://www.marvell.com
Financial data for Marvell Technology Group Ltd.