Marvell Technology Group Ltd. Reports Fourth Quarter and Fiscal Year 2021 Financial Results

 

Marvell Technology Group Ltd.

Reconciliations from GAAP to Non-GAAP (Unaudited)

(In thousands, except per share amounts)














Three Months Ended


Year Ended



January 30,
2021


October 31,
2020


February 1,
2020


January 30,
2021


February 1,
2020












GAAP gross profit:


$

421,132



$

381,060



$

304,744



$

1,488,350



$

1,356,941


Special items:











Share-based compensation


4,265



4,435



3,181



16,320



13,759


Amortization of acquired intangible assets


83,327



83,078



86,383



338,197



279,567


Other cost of goods sold (a)


796



4,296



52,510



35,284



57,718


Total special items


88,388



91,809



142,074



389,801



351,044


Non-GAAP gross profit


$

509,520



$

472,869



$

446,818



$

1,878,151



$

1,707,985













GAAP gross margin


52.8

%


50.8

%


42.5

%


50.1

%


50.3

%

Non-GAAP gross margin


63.9

%


63.0

%


62.3

%


63.3

%


63.3

%


































Total GAAP operating expenses


$

422,868



$

390,450



$

419,239



$

1,746,739



$

1,600,299


Special items:











Share-based compensation


(55,214)



(55,352)



(49,989)



(225,219)



(229,050)


Restructuring related charges (b)


(9,570)



(19,312)



(18,258)



(170,759)



(55,328)


Amortization of acquired intangible assets


(26,355)



(26,355)



(28,232)



(105,419)



(88,515)


Legal settlement (c)


(36,000)







(36,000)




Other operating expenses (d)


(12,480)



(9,490)



(16,621)



(49,498)



(63,361)


Total special items


(139,619)



(110,509)



(113,100)



(586,895)



(436,254)


Total non-GAAP operating expenses


$

283,249



$

279,941



$

306,139



$

1,159,844



$

1,164,045



































GAAP operating margin


(0.2)

%


(1.3)

%


(16.0)

%


(8.7)

%


(9.0)

%

Other cost of goods sold (a)


0.1

%


0.6

%


7.3

%


1.2

%


2.1

%

Share-based compensation


7.5

%


8.0

%


7.4

%


8.1

%


9.0

%

Restructuring related charges (b)


1.2

%


2.6

%


2.5

%


5.8

%


2.0

%

Amortization of acquired intangible assets


13.7

%


14.6

%


16.0

%


14.9

%


13.6

%

Legal settlement (c)


4.5

%


%


%


1.2

%


%

Other operating expenses (d)


1.6

%


1.2

%


2.4

%


1.7

%


2.5

%

Non-GAAP operating margin 


28.4

%


25.7

%


19.6

%


24.2

%


20.2

%












GAAP interest and other income (loss), net


$

(21,104)



$

(15,159)



$

1,102,902



$

(63,779)



$

1,041,740


Special items:











       Restructuring related items (e)


(28)



(1,002)



(1,122,988)



(596)



(1,124,197)


      Write-off of debt issuance costs (f)


6,045



453



1,621



6,498



2,079


       Deal costs (g)










1,505


Total special items


6,017



(549)



(1,121,367)



5,902



(1,120,613)


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


$

(15,087)



$

(15,708)



$

(18,465)



$

(57,877)



$

(78,873)



































GAAP net income (loss)


$

16,536



$

(22,908)



$

1,772,673



$

(277,298)



$

1,584,391


Special items:











Other cost of goods sold (a)


796



4,296



52,510



35,284



57,718


Share-based compensation


59,479



59,787



53,170



241,539



242,809


Restructuring related charges (gain) in operating expenses (b)


9,570



19,312



18,258



170,759



55,328


Legal settlement (c)


36,000







36,000




Other operating expenses (d)


12,480



9,490



16,621



49,498



63,361


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


(28)



(1,002)



(1,122,988)



(596)



(1,124,197)


Amortization of acquired intangible assets


109,682



109,433



114,615



443,616



368,082


Write-off of debt issuance costs (f)


6,045



453



1,621



6,498



2,079


Transaction costs included in interest and other income, net (g)










1,505


Pre-tax total special items


234,024



201,769



(866,193)



982,598



(333,315)


Other income tax effects and adjustments (h)


(49,936)



(10,502)



(789,761)



(77,893)



(806,938)


Non-GAAP net income


$

200,624



$

168,359



$

116,719



$

627,407



$

444,138
























Weighted-average shares — basic


673,529



670,487



665,562



668,772



664,709


Weighted-average shares — diluted


687,959



670,487



675,700



668,772



676,094


Non-GAAP weighted average shares — diluted (i)


687,959



682,724



675,700



679,944



676,094













GAAP diluted net income (loss) per share


$

0.02



$

(0.03)



$

2.62



$

(0.41)



$

2.34


Non-GAAP diluted net income per share


$

0.29



$

0.25



$

0.17



$

0.92



$

0.66




(a)

Other costs of goods sold includes inventory write-downs and amortization of acquired inventory fair value adjustments.



(b)

Restructuring related charges include asset impairment charges (i.e. due to changes to the scope of the server processor product line), employee severance costs, facilities related charges, and other.



(c)

Represents a legal settlement relating to a commercial agreement.



(d)

Other operating expenses include integration and merger costs associated with acquisitions.



(e)

Interest and other income (loss), net includes restructuring and other related items such as gain on sale of a business and foreign currency remeasurement associated with restructuring related accruals.



(f)

Write-off of debt issuance costs is associated with the partial term loan repayment and bridge financing.



(g)

Deal costs include transaction costs incurred in connection with divestiture of the Wi-Fi Connectivity business.



(h)

Other income tax effects and adjustments relate to tax provision based on a non-GAAP income tax rate of 5.0% for the three and twelve months ended January 30, 2021 and three months ended October 31, 2020. Other income tax effects and adjustments relate to tax provision based on a non-GAAP income tax rate of 4.5% for the three and twelve months ended February 1, 2020.



(i)

Non-GAAP diluted weighted average shares differs from GAAP diluted weighted average shares due to the non-GAAP net income reported.


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