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Marvell Technology Group Ltd. Reports Fourth Quarter and Fiscal Year 2018 Financial Results
- Q4 Revenue: $615 million
- Q4 Gross Margin: 60.7% GAAP gross margin; 62.3% non-GAAP gross margin
- Q4 Diluted earnings per share: $0.10 GAAP diluted earnings per share from continuing operations; $0.32 non-GAAP diluted earnings per share from continuing operations
- Cash and short-term investments: $1.8 billion

SANTA CLARA, Calif., March 8, 2018 /PRNewswire/ -- Marvell Technology Group Ltd. (NASDAQ: MRVL), a leader in storage, networking and connectivity semiconductor solutions, today reported financial results for the fourth fiscal quarter and the full fiscal year, ended February 3, 2018. Revenue for the fourth quarter of fiscal 2018 was $615 million, which exceeded the midpoint of the Company's guidance provided on November 28, 2017.

GAAP net income from continuing operations for the fourth quarter of fiscal 2018 was $49 million, or $0.10 per share. Non-GAAP net income from continuing operations for the fourth quarter of fiscal 2018 was $165 million, or $0.32 per diluted share. Cash flow from operations for the fourth quarter was $120 million.

"Our strong fourth quarter and fiscal year results continue to demonstrate that Marvell's strategy is working and that our team is executing it very well," said Marvell President and CEO Matt Murphy. "We are making tremendous progress in the transformation of Marvell, and I look forward to the year ahead."

First Quarter of Fiscal 2019 Financial Outlook

  • Revenue is expected to be $585 million to $615 million.
  • GAAP and non-GAAP gross margins are expected to be approximately 62% to 63%.
  • GAAP operating expenses are expected to be $250 million to $260 million.
  • Non-GAAP operating expenses are expected to be approximately $215 million.
  • GAAP diluted EPS from continuing operations is expected to be in the range of $0.22 to $0.26 per share.
  • Non-GAAP diluted EPS from continuing operations is expected to be in the range of $0.29 to $0.33 per share.

Conference Call

Marvell will conduct a conference call on Thursday, March 8, 2018 at 1:45 p.m. Pacific Time to discuss results for the fourth quarter and full fiscal year 2018. Interested parties may join the conference call by dialing 1-844-647-5488 or 1-615-247-0258, passcode 4297718. The call will be webcast by Thomson Reuters and can be accessed at the Marvell Investor Relations website at http://investor.marvell.com/ with a replay available following the call until Friday, March 16, 2018.

Discussion of Non-GAAP Financial Measures

Non-GAAP financial measures exclude the effect of share-based compensation expense, 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.

In fiscal 2018, Marvell began using 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 fourth quarter of fiscal 2018, 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 non-GAAP weighted average shares outstanding (diluted). For purposes of calculating non-GAAP diluted net income per share, the GAAP weighted average shares outstanding (diluted) is adjusted to exclude the potential benefits of share-based compensation expected to be incurred in future periods but not yet recognized in the financial statements. The expected compensation costs are treated as additional proceeds assumed to be used to repurchase shares under the GAAP treasury stock method.

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, including:  Marvell's expectations regarding its first quarter of fiscal 2019 financial outlook; 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 risk that the Cavium transaction may not be completed in a timely manner or at all, which may adversely affect Cavium's business and the price of its common stock and/or Marvell's business and the price of its common shares; the failure to satisfy the conditions to the consummation of the transaction, including the adoption of the merger agreement by the stockholders of Cavium, the approval of the issuance of Marvell shares in the transaction by the shareholders of Marvell, and the receipt of certain governmental and regulatory approvals; the failure of Marvell to obtain the necessary financing pursuant to the arrangements set forth in the debt commitment letters delivered pursuant to the merger agreement or otherwise; the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; the effect of the announcement or pendency of the transaction on Cavium's business relationships, operating results, and business generally; risks that the proposed transaction disrupts current plans and operations of Cavium or Marvell and potential difficulties in Cavium employee retention as a result of the transaction; risks related to diverting management's attention from Cavium's ongoing business operations; the outcome of any legal proceedings that may be instituted against Marvell or against Cavium related to the merger agreement or 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 after the completion of the proposed merger 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, networking and connectivity 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 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'sSEC 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 October 28, 2017 as filed with the SEC on December 4, 2017, 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, networking 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

 

Year Ended

 

February 3,
2018

 

October 28,
2017

 

January 28,
2017

 

February 3,
2018

 

January 28,
2017

Net revenue

$

615,409

   

$

616,302

   

$

566,362

   

$

2,409,170

   

$

2,300,992

 

Cost of goods sold

241,927

   

238,533

   

240,448

   

947,230

   

1,017,564

 

Gross profit

373,482

   

377,769

   

325,914

   

1,461,940

   

1,283,428

 
                   

Operating expenses:

                 

Research and development

180,000

   

165,477

   

175,262

   

714,444

   

805,029

 

Selling, general and administrative

68,291

   

59,112

   

59,140

   

238,166

   

251,191

 

Litigation settlement (a)

74,385

   

   

   

74,385

   

 

Restructuring related charges (gain)

(3,205)

   

3,284

   

90,475

   

5,250

   

96,801

 

Total operating expenses

319,471

   

227,873

   

324,877

   

1,032,245

   

1,153,021

 

Operating income from continuing operations

54,011

   

149,896

   

1,037

   

429,695

   

130,407

 

Interest and other income, net                  

4,788

   

6,200

   

3,780

   

21,509

   

17,022

 

Income from continuing operations before income taxes

58,799

   

156,096

   

4,817

   

451,204

   

147,429

 

Provision (benefit) for income taxes

10,036

   

6,759

   

68,345

   

18,062

   

72,608

 

Income from continuing operations, net of tax

48,763

   

149,337

   

(63,528)

   

433,142

   

74,821

 

Income (loss) from discontinued operations, net of tax

   

50,851

   

(16,563)

   

87,689

   

(53,670)

 

Net income

$

48,763

   

$

200,188

   

$

(80,091)

   

$

520,831

   

$

21,151

 
                   

Net income (loss) per share — Basic:

                 

Continuing operations

$

0.10

   

$

0.30

   

$

(0.13)

   

$

0.87

   

$

0.15

 

Discontinued operations

$

   

$

0.11

   

$

(0.03)

   

$

0.18

   

$

(0.11)

 

Net income per share - Basic

$

0.10

   

$

0.41

   

$

(0.16)

   

$

1.05

   

$

0.04

 
                   

Net income (loss) per share — Diluted:

                 

Continuing operations

$

0.10

   

$

0.30

   

$

(0.13)

   

$

0.85

   

$

0.14

 

Discontinued operations

$

   

$

0.10

   

$

(0.03)

   

$

0.17

   

$

(0.10)

 

Net income per share - Diluted

$

0.10

   

$

0.40

   

$

(0.16)

   

$

1.02

   

$

0.04

 
                   

Weighted average shares:

                 

Basic

493,663

   

494,096

   

507,834

   

498,008

   

509,738

 

Diluted

506,197

   

504,903

   

507,834

   

509,667

   

517,513

 
   

(a)

Represents legal settlement and associated costs related to Luna shareholder litigation matter.

 

Marvell Technology Group Ltd.

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands)

 
 

February 3, 2018

 

January 28, 2017

Assets

     

Current assets:

     

Cash and cash equivalents

$

888,482

   

$

814,092

Short-term investments

952,790

   

854,268

Accounts receivable, net

280,395

   

335,384

Inventories

170,039

   

170,842

Prepaid expenses and other current assets

41,482

   

58,771

Assets held for sale

30,767

   

57,077

Total current assets

2,363,955

   

2,290,434

Property and equipment, net

202,222

   

243,397

Goodwill and acquired intangible assets, net

1,993,310

   

1,996,880

Other non-current assets

148,800

   

117,939

Total assets

$

4,708,287

   

$

4,648,650

       

Liabilities and Shareholders' Equity

     

Current liabilities:

     

Accounts payable

$

145,236

   

$

143,484

Accrued liabilities

86,958

   

143,491

Accrued employee compensation

127,711

   

139,647

Deferred income

61,237

   

63,976

Liabilities held for sale

   

5,818

Total current liabilities

421,142

   

496,416

Non-current income taxes payable

56,976

   

60,646

Other non-current liabilities

88,756

   

63,937

Total liabilities

566,874

   

620,999

       

Shareholders' equity:

     

Common stock

991

   

1,012

Additional paid-in capital

2,733,292

   

3,016,775

Accumulated other comprehensive income (loss)

(2,322)

   

23

Retained earnings

1,409,452

   

1,009,841

Total shareholders' equity

4,141,413

   

4,027,651

Total liabilities and shareholders' equity

$

4,708,287

   

$

4,648,650

 

Marvell Technology Group Ltd.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

 
 

Three Months Ended

 

Year Ended

 

February 3, 2018

 

January 28, 2017

 

February 3, 2018

 

January 28, 2017

Cash flows from operating activities:

             

Net income (loss)

$

48,763

   

$

(80,091)

   

$

520,831

   

$

21,151

 

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

             

Depreciation and amortization

20,918

   

26,683

   

83,487

   

107,851

 

Share-based compensation

21,377

   

24,058

   

86,689

   

113,970

 

Amortization and write-off of acquired intangible assets

358

   

1,965

   

3,570

   

10,641

 

Restructuring related impairment charges (gain)

(4,159)

   

50,500

   

(4,561)

   

52,581

 

Gain from investments in privately-held companies

   

   

(2,501)

   

 

Amortization of premium /discount on available-for-sale securities

392

   

1,622

   

995

   

3,319

 

Other non-cash expense (income), net

(7)

   

(2,635)

   

1,324

   

(3,312)

 

Excess tax benefits from share-based compensation

   

(27)

   

   

(37)

 

Deferred income taxes

17,027

   

46,859

   

19,825

   

44,637

 

Gain on sale of property and equipment

(270)

   

   

(743)

   

 

Gain on sale of discontinued operations

   

   

(88,406)

   

 

Gain on sale of business

   

   

(5,254)

   

 

Changes in assets and liabilities:

             

Accounts receivable

85,719

   

26,811

   

54,989

   

(12,084)

 

Inventories

3,878

   

18,381

   

(12,160)

   

29,325

 

Prepaid expenses and other assets

(627)

   

2,181

   

12,494

   

1,825

 

Accounts payable

(36,700)

   

(38,694)

   

(16,613)

   

(28,153)

 

Accrued liabilities and other non-current liabilities

(21,898)

   

27,498

   

(62,360)

   

3,763

 

Carnegie Mellon University accrued litigation settlement (a)

   

   

   

(736,000)

 

Accrued employee compensation

(1,324)

   

7,597

   

(11,936)

   

18,016

 

Deferred income

(13,706)

   

6,138

   

(8,557)

   

14,072

 

Net cash provided by (used in) operating activities

119,741

   

118,846

   

571,113

   

(358,435)

 

Cash flows from investing activities:

             

Purchases of available-for-sale securities

(162,607)

   

(146,046)

   

(835,494)

   

(489,856)

 

Sales of available-for-sale securities

22,671

   

157,953

   

306,822

   

616,697

 

Maturities of available-for-sale securities

120,639

   

41,264

   

426,341

   

239,557

 

Return of investment from (in) privately-held companies

   

(258)

   

6,089

   

16

 

Purchases of time deposits

(75,000)

   

(75,000)

   

(300,000)

   

(275,000)

 

Maturities of time deposits

75,000

   

75,000

   

300,000

   

125,000

 

Purchases of technology licenses

(1,331)

   

(1,870)

   

(6,587)

   

(10,309)

 

Purchases of property and equipment

(13,395)

   

(6,786)

   

(38,551)

   

(44,510)

 

Proceeds from sales of property and equipment

10,571

   

   

12,559

   

 

Net proceeds from sale of discontinued operations

   

   

165,940

   

 

Net proceeds from sale of business

   

   

2,402

   

 

Net cash provided by (used in) investing activities

(23,452)

   

44,257

   

39,521

   

161,595

 

Cash flows from financing activities:

             

Repurchases of common stock

   

(125,033)

   

(527,574)

   

(181,564)

 

Proceeds from employee stock plans

42,878

   

62,383

   

180,302

   

74,219

 

Minimum tax withholding paid on behalf of employees for net share settlement

(905)

   

(402)

   

(26,840)

   

(16,683)

 

Dividend payments to shareholders

(29,695)

   

(30,457)

   

(119,251)

   

(122,292)

 

Payments on technology license obligations

(5,806)

   

(7,117)

   

(28,503)

   

(20,965)

 

Excess tax benefits from share-based compensation

   

27

   

   

37

 

Payment of equity and debt financing costs

(14,378)

   

   

(14,378)

   

 

Net cash used in financing activities

(7,906)

   

(100,599)

   

(536,244)

   

(267,248)

 

Net increase (decrease) in cash and cash equivalents

88,383

   

62,504

   

74,390

   

(464,088)

 

Cash and cash equivalents at beginning of period

800,099

   

751,588

   

814,092

   

1,278,180

 

Cash and cash equivalents at end of period

$

888,482

   

$

814,092

   

$

888,482

   

$

814,092

 
   

(a)

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

 

Marvell Technology Group Ltd.

Reconciliations from GAAP to Non-GAAP (Unaudited)

(In thousands, except per share amounts)

                   
 

Three Months Ended

 

Year Ended

 

February 3,
2018

 

October 28,
2017

 

January 28,
2017

 

February 3,
2018

 

January 28,
2017

GAAP gross profit:

$

373,482

   

$

377,769

   

$

325,914

   

$

1,461,940

   

$

1,283,428

 

Special items:

                 

Share-based compensation

1,662

   

1,747

   

1,641

   

6,645

   

8,334

 

Other cost of goods sold (a)

8,000

   

   

   

11,000

   

 

Total special items

9,662

   

1,747

   

1,641

   

17,645

   

8,334

 

Non-GAAP gross profit

$

383,144

   

$

379,516

   

$

327,555

   

$

1,479,585

   

$

1,291,762

 
                   

GAAP gross margin

60.7

%

 

61.3

%

 

57.5

%

 

60.7

%

 

55.8

%

Non-GAAP gross margin

62.3

%

 

61.6

%

 

57.8

%

 

61.4

%

 

56.1

%

                   
                   
                   

Total GAAP operating expenses

$

319,471

   

$

227,873

   

$

324,877

   

$

1,032,245

   

$

1,153,021

 

Special items:

                 

Share-based compensation

(19,715)

   

(18,892)

   

(20,021)

   

(78,477)

   

(93,065)

 

Restructuring related charges (gain) (b)

3,205

   

(3,284)

   

(90,475)

   

(5,250)

   

(96,801)

 

Amortization and write-off of acquired intangible assets

(358)

   

(1,076)

   

(1,480)

   

(3,570)

   

(8,376)

 

Litigation settlement (c)

(74,385)

   

   

   

(74,385)

   

 

Other operating expenses (d)

(10,579)

   

(120)

   

(315)

   

(14,689)

   

(1,544)

 

Total special items

(101,832)

   

(23,372)

   

(112,291)

   

(176,371)

   

(199,786)

 

Total non-GAAP operating expenses

$

217,639

   

$

204,501

   

$

212,586

   

$

855,874

   

$

953,235

 
                   
                   
                   

GAAP operating margin

8.8

%

 

24.3

%

 

0.2

%

 

17.8

%

 

5.7

%

Other cost of goods sold (a)

1.3

%

 

%

 

%

 

0.5

%

 

%

Share-based compensation

3.5

%

 

3.3

%

 

3.8

%

 

3.5

%

 

4.4

%

Restructuring related charges (gain) (b)

(0.5)

%

 

0.5

%

 

16.0

%

 

0.2

%

 

4.2

%

Amortization and write-off of acquired intangible assets

0.1

%

 

0.2

%

 

0.2

%

 

0.1

%

 

0.3

%

Litigation settlement (c)

12.1

%

 

%

 

%

 

3.1

%

 

%

Other operating expenses (d)

1.6

%

 

0.1

%

 

0.1

%

 

0.7

%

 

0.1

%

Non-GAAP operating margin

26.9

%

 

28.4

%

 

20.3

%

 

25.9

%

 

14.7

%

                   
                   

GAAP interest and other income, net

$

4,788

   

$

6,200

   

$

3,780

   

$

21,509

   

$

17,022

 

Special items:

                 

       Restructuring related items (e)

1,355

   

(2,286)

   

   

(4,016)

   

 

Total special items

1,355

   

(2,286)

   

   

(4,016)

   

 

Total non-GAAP interest and other income, net

$

6,143

   

$

3,914

   

$

3,780

   

$

17,493

   

$

17,022

 
                   
                   
                   

GAAP net income

$

48,763

   

$

200,188

   

$

(80,091)

   

$

520,831

   

$

21,151

 

Less: Income (loss) from discontinued operations, net of tax

   

50,851

   

(16,563)

   

87,689

   

(53,670)

 

GAAP net income from continuing operations

48,763

   

149,337

   

(63,528)

   

433,142

   

74,821

 

Special items:

                 

Other cost of goods sold (a)

8,000

   

   

   

11,000

   

 

Share-based compensation

21,377

   

20,639

   

21,662

   

85,122

   

101,399

 

Restructuring related charges (gain) (b)

(1,850)

   

998

   

90,475

   

1,234

   

96,801

 

Amortization and write-off of acquired intangible assets

358

   

1,076

   

1,480

   

3,570

   

8,376

 

Litigation settlement (c)

74,385

   

   

   

74,385

   

 

Other operating expenses (d)

10,579

   

120

   

315

   

14,689

   

1,544

 

Pre-tax total special items

112,849

   

22,833

   

113,932

   

190,000

   

208,120

 

Other income tax effects and         adjustments (f)

3,170

   

(398)

   

67,989

   

(7,590)

   

66,918

 

Non-GAAP net income from continuing operations

$

164,782

   

$

171,772

   

$

118,393

   

$

615,552

   

$

349,859

 
                   
                   
                   

Weighted average shares — basic

493,663

   

494,096

   

507,834

   

498,008

   

509,738

 

Weighted average shares — diluted

506,197

   

504,903

   

507,834

   

509,667

   

517,513

 

Non-GAAP weighted average shares — diluted (g)

512,223

   

512,676

   

528,141

   

516,789

   

527,197

 
                   
                   

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

$

0.10

   

$

0.30

   

$

(0.13)

   

$

0.85

   

$

0.14

 

Non-GAAP diluted net income per share from continuing operations

$

0.32

   

$

0.34

   

$

0.22

   

$

1.19

   

$

0.66

 
   

(a)

Other costs of goods sold in the three months ended February 3, 2018 and the year ended February 3, 2018 include charges for past intellectual property licensing matters.

   

(b)

Restructuring related charges include costs that are a direct result of restructuring. Such charges include employee severance, facilities related costs, contract cancellation charges and impairment of equipment.  Restructuring related charges in the three months ended February 3, 2018 and the year ended February 3, 2018 includes the gain on sale of a building that was a direct result of restructuring.

   

(c)

Represents legal settlement and associated costs related to shareholder litigation matter.

   

(d)

Other operating expenses primarily include Cavium merger costs, costs related to royalty matters, and costs of retention bonuses offered to employees who remained through the ramp down of certain operations due to restructuring actions.

   

(e)

Interest and other income, net includes restructuring related items such as gain on sale of a business and foreign currency remeasurement related to restructuring related accruals.

   

(f)

Other income tax effects and adjustments in the three months ended February 3, 2018 and October 28, 2017 and in the year ended February 3, 2018 include 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 and the year ended January 28, 2017 include $68.0 million and $67.0 million, respectively, of tax expense relating to restructuring charges.

   

(g)

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.

 

Quarterly Revenue Trend (Unaudited)

(In thousands)

 
 

Three Months Ended

 

% Change

 

February 3, 2018

 

October 28, 2017

 

January 28, 2017

 

YoY

 

QoQ

Storage (1)

$

323,718

   

$

315,338

   

$

310,771

   

4

%

 

3

%

Networking (2)

155,340

   

150,497

   

148,090

   

5

%

 

3

%

Connectivity (3)

86,271

   

102,662

   

65,638

   

31

%

 

(16)

%

   Total Core

565,329

   

568,497

   

524,499

   

8

%

 

(1)

%

Other (4)

50,080

   

47,805

   

41,863

   

20

%

 

5

%

Total Revenue

$

615,409

   

$

616,302

   

$

566,362

   

9

%

 

%

 

 

Three Months Ended

% of Total

February 3, 2018

 

October 28, 2017

 

January 28, 2017

Storage (1)

53

%

 

51

%

 

55

%

Networking (2)

25

%

 

24

%

 

26

%

Connectivity (3)

14

%

 

17

%

 

12

%

   Total Core

92

%

 

92

%

 

93

%

Other (4)

8

%

 

8

%

 

7

%

Total Revenue

100

%

 

100

%

 

100

%

 

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

 

(2) Networking products are comprised primarily of Ethernet Switches, Ethernet Transceivers, Embedded ARM Processors and Automotive Ethernet, as well as a few legacy product lines in which we no longer invest, but will generate revenue for several years.

 

(3) Connectivity products are comprised primarily of WiFi solutions including WiFi only, WiFi/Bluetooth combos and WiFi Microcontroller combos.

 

(4) Other products are comprised primarily of Printer Solutions, Application Processors and others.

For further information, contact:
T. Peter Andrew
Vice President, Treasury and Investor Relations
408-222-0777
ir@marvell.com

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

 

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/marvell-technology-group-ltd-reports-fourth-quarter-and-fiscal-year-2018-financial-results-300611047.html

SOURCE Marvell Technology Group Ltd.