Marvell Technology Reaches Settlement in Shareholder Class Action Lawsuit
SANTA CLARA, Calif., June 9 /PRNewswire-FirstCall/ -- Marvell Technology Group Ltd. (Nasdaq: MRVL), a world leader in storage, communications and consumer silicon solutions, today announced that it had entered into an agreement to resolve a shareholder class action lawsuit filed on August 16, 2007 against Marvell and certain of its former and current officers and directors relating to Marvell's historic stock option granting practices. The settlement provides for a payment by Marvell to the class of $72 million.
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The agreement was entered into after the end of the first quarter of fiscal 2010, ended May 2, 2009. However, since the litigation existed during the first quarter of fiscal 2010, results for the first quarter have been updated from what was previously reported on May 28, 2009 to adjust for this settlement. The impact of the settlement, recorded as general and administrative expense, changes the GAAP net loss to $111.5 million, or $0.18 per share (diluted), which is a decrease of $0.12 per share (diluted) compared to what was previously reported. Marvell does not typically include one-time litigation settlements when it reports its non-GAAP results, and as a result this expense will not impact Marvell's non-GAAP results of operations previously reported. Included with this release are updated financial tables.
This class action settlement is subject to preliminary and then, following notice to class members, final approval by the United States District Court for the Northern District of California. Final approval of this settlement and the settlement of the shareholder derivative lawsuit announced previously would mark the end of all shareholder litigation involving Marvell related to its historic stock option granting practices.
About Marvell
Marvell Technology (NASDAQ: MRVL) is a global leader in the development of storage, communications and consumer silicon solutions. Marvell's diverse product portfolio includes switching, transceiver, communications controller, wireless, and storage solutions that power the entire communications infrastructure, including enterprise, metro, home, and storage networking. As used in this release, the term "Marvell" refers to Marvell Technology Group Ltd. and its subsidiaries. For more information visit www.marvell.com.
For further information, contact:
Jeff Palmer Tom Hayes
Investor Relations Corporate Communications
408-222-8373 408-222-2815
jpalmer@marvell.com tom@marvell.com
Marvell Technology Group Ltd.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended
------------------
May 2, January 31, May 3,
2009 2009 2008
---- ---- ----
Net revenue $521,434 $512,867 $804,075
Cost of goods sold 257,630 252,732 388,842
------- ------- -------
Gross profit 263,804 260,135 415,233
Operating expenses:
Research and
development 200,249 207,579 238,475
Selling and marketing 32,646 31,893 46,088
General and
administrative 101,496 31,979 12,951
Amortization and
write-off of acquired
intangible assets 30,356 48,274 35,247
Restructuring 8,336 9,689 -
----- ----- ---
Total operating
expenses 373,083 329,414 332,761
------- ------- -------
Operating income (loss) (109,279) (69,279) 82,472
Interest and other
income (expense), net (160) (440) (4,692)
---- ---- ------
Income (loss) before
income taxes (109,439) (69,719) 77,780
Provision (benefit) for
income taxes 2,018 (4,709) 7,841
----- ------ -----
Net income (loss) $(111,457) $(65,010) $69,939
========= ======== =======
Basic net income (loss)
per share $(0.18) $(0.11) $0.12
====== ====== =====
Diluted net income
(loss) per share $(0.18) $(0.11) $0.11
====== ====== =====
Shares used in
computing basic
earnings per share 618,677 614,960 601,222
Shares used in
computing diluted
earnings per share 618,677 614,960 624,351
Marvell Technology Group Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
May 2, January 31,
Assets 2009 2009
---- ----
Current assets:
Cash, cash equivalents, and short-term
investments $1,083,705 $951,909
Accounts receivable, net 285,367 222,101
Inventories 203,590 310,654
Prepaid expenses, deferred income taxes and
other current assets 67,038 75,651
------ ------
Total current assets 1,639,700 1,560,315
Property and equipment, net 371,229 390,853
Long-term investments 39,655 40,541
Goodwill and acquired intangible assets, net 2,253,854 2,284,164
Other non-current assets 136,773 138,327
------- -------
Total assets $4,441,211 $4,414,200
========== ==========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $166,988 $139,028
Accrued liabilities 268,326 175,135
Income taxes payable 47,257 35,803
Deferred income 47,800 57,895
Current portion of capital lease obligations 1,824 1,787
----- -----
Total current liabilities 532,195 409,648
Capital lease obligations, net of current
portion 1,981 2,451
Other long-term liabilities 161,480 173,034
------- -------
Total liabilities 695,656 585,133
------- -------
Shareholders' equity:
Common stock 1,238 1,233
Additional paid-in capital 4,402,167 4,372,265
Accumulated other comprehensive income
(loss) (2,680) (718)
Accumulated deficit (655,170) (543,713)
-------- --------
Total shareholders' equity 3,745,555 3,829,067
--------- ---------
Total liabilities and shareholders' equity $4,441,211 $4,414,200
========== ==========
Marvell Technology Group Ltd.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Three Months Ended
------------------
May 2, January 31, May 3,
2009 2009 2008
---- ---- ----
Cash flows from operating activities:
Net income (loss) $(111,457) $(65,010) $69,939
Adjustments to reconcile net income
(loss) to net cash provided
by operating activities:
Depreciation and amortization 25,375 27,038 28,618
Stock-based compensation 31,648 44,701 45,226
Amortization and write-off of
acquired intangible assets 30,356 48,274 35,247
Fair market value adjustment to
Intel inventory sold (1,343) (1,196) (6,383)
Unrealized loss on derivative
contract 475 - -
Deferred tax (provision) benefit - (17,467) -
Excess tax benefits from stock-
based compensation (29) (9) (169)
Changes in assets and liabilities,
net of assets acquired and
liabilities assumed in acquisitions:
Restricted cash - - (24,500)
Accounts receivable (63,266) 175,735 (38,152)
Inventories 106,281 31,088 55,918
Prepaid expenses and other
assets 14,330 1,629 32,466
Accounts payable 30,738 (82,791) (63,076)
Accrued liabilities and other 62,980 (13,016) (18,807)
Accrued employee compensation 13,033 (44,615) 16,963
Income taxes payable 1,343 11,607 6,656
Deferred income 4,065 (6,825) (9,753)
----- ------ ------
Net cash provided by
operating activities 144,529 109,143 130,193
Cash flows from investing activities:
Cash paid in acquisitions, net - (5,287) -
Purchases of investments - - (10,126)
Sales and maturities of short-
term and long-term investments - - 23,793
Purchases of technology licenses (9,300) (2,550) -
Purchases of property and
equipment (3,414) (13,931) (30,522)
------ ------- -------
Net cash used in investing
activities (12,714) (21,768) (16,855)
Cash flows from financing activities:
Proceeds from the issuance of
common shares 385 12,192 17,054
Principal payments on capital
lease and debt obligations (433) (192,174) (2,125)
Excess tax benefits from stock-
based compensation 29 9 169
--- --- ---
Net cash provided by (used
in) financing activities (19) (179,973) 15,098
--- -------- ------
Net increase (decrease) in cash and
cash equivalents 131,796 (92,598) 128,436
------- ------- -------
Cash and cash equivalents at
beginning of period 927,409 1,020,007 615,648
------- --------- -------
Cash and cash equivalents at end of
period $1,059,205 $927,409 $744,084
========== ======== ========
SOURCE Marvell Technology Group Ltd.
Released June 9, 2009
