Document
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM 8-K
_________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report: May 31, 2018
(Date of earliest event reported)
_________________________
MARVELL TECHNOLOGY GROUP LTD.
(Exact name of registrant as specified in its charter)
 _________________________

Bermuda
 
0-30877
 
77-0481679
(State or other jurisdiction of
incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)

Canon’s Court
22 Victoria Street
Hamilton HM 12
Bermuda
(Address of principal executive offices, including Zip Code)
(441) 296-6395
(Registrant’s telephone number, including area code)
_________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).                    Emerging growth company    ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ¨
 


Item 2.02 Results of Operations and Financial Condition.

The information in Item 2.02 of this Current Report, including the accompanying Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of Section 18. The information in Item 2.02 of this Current Report shall not be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language contained in such filing.
 
On May 31, 2018, Marvell Technology Group Ltd. (“Marvell”) issued a press release reporting its financial results for the first quarter of fiscal 2019 ended May 5, 2018. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated by reference herein.

Marvell will conduct a conference call on Thursday, May 31, 2018 at 1:45 p.m. Pacific Time to discuss results for the first quarter of fiscal 2019. Interested parties may join the conference call by dialing 1-844-647-5488 or 1-615-247-0258, pass-code 1449837. 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, June 8, 2018.
   

Item 9.01    Financial Statements and Exhibits.
    
(d)    Exhibits.
99.1







SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
MARVELL TECHNOLOGY GROUP LTD.
 
Date: May 31, 2018
By:
/s/ JEAN HU
 
 
Jean Hu
 
 
Chief Financial Officer
 
 
 


Exhibit
Exhibit 99.1
 
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12287974&doc=3
Marvell Technology Group Ltd. Reports First Quarter of Fiscal Year 2019
Financial Results
 

Q1 Revenue: $605 million
Q1 Gross Margin: 62.1% GAAP gross margin; 62.5% non-GAAP gross margin
Q1 Diluted earnings per share: $0.25 GAAP diluted earnings per share from continuing operations; $0.32 non-GAAP diluted earnings per share from continuing operations
Cash and short-term investments: $1.9 billion

Santa Clara, Calif. (May 31, 2018) - Marvell Technology Group Ltd. (NASDAQ: MRVL), a leader in storage, networking and connectivity semiconductor solutions, today reported financial results for the first fiscal quarter of fiscal year 2019. Revenue for the first quarter of fiscal 2019 was $605 million, which exceeded the midpoint of the Company’s guidance provided on March 8, 2018.
GAAP net income from continuing operations for the first quarter of fiscal 2019 was $129 million, or $0.25 per diluted share. Non-GAAP net income from continuing operations for the first quarter of fiscal 2019 was $165 million, or $0.32 per diluted share. Cash flow from operations for the first quarter was $129 million.

“Fiscal 2019 is off to a strong start, driven by the performance of our storage, networking and connectivity businesses which grew 7% year over year in Q1. Marvell’s R&D engine is executing well, and our newly announced products are fueling a growing design win pipeline,” said Marvell President and CEO Matt Murphy. “Overall, I'm pleased with the results and thank the entire Marvell team for their effort and contribution.”

Second Quarter of Fiscal 2019 Financial Outlook
 
Revenue is expected to be $600 million to $630 million. This guidance range excludes approximately $7 million in revenue from a Chinese OEM due to the trade restrictions imposed by the U.S. government.
GAAP and non-GAAP gross margins are expected to be approximately 63% to 64%.
GAAP operating expenses are expected to be $260 million to $270 million.
Non-GAAP operating expenses are expected to be approximately $210 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 $0.32 to $0.36 per share.




Conference Call
Marvell will conduct a conference call on Thursday, May 31, 2018 at 1:45 p.m. Pacific Time to discuss results for the first quarter of fiscal 2019. Interested parties may join the conference call by dialing 1-844-647-5488 or 1-615-247-0258, pass-code 1449837. 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, June 8, 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.
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 first 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 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: the impact on future performance of Marvell’s newly announced products; Marvell’s expectations regarding its second 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 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’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 Annual Report on Form 10-K for the fiscal year ended February 3, 2018 as filed with the SEC on March 29, 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, 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
 
 
May 5, 2018
 
February 3, 2018
 
April 29, 2017
Net revenue
 
$
604,631

 
$
615,409

 
$
572,709

Cost of goods sold
 
228,938

 
241,927

 
227,198

Gross profit
 
375,693

 
373,482

 
345,511

 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
Research and development
 
176,734

 
180,000

 
188,096

Selling, general and administrative
 
72,313

 
68,291

 
55,104

Litigation settlement (a)
 

 
74,385

 

Restructuring related charges (gain)
 
1,567

 
(3,205
)
 
886

Total operating expenses
 
250,614

 
319,471

 
244,086

Operating income from continuing operations
 
125,079

 
54,011

 
101,425

Interest and other income, net
 
7,296

 
4,788

 
3,333

Income from continuing operations before income taxes
 
132,375

 
58,799

 
104,758

Provision for income taxes
 
3,763

 
10,036

 
5,166

Income from continuing operations, net of tax
 
128,612

 
48,763

 
99,592

Income from discontinued operations, net of tax
 

 

 
7,029

Net income
 
$
128,612

 
$
48,763

 
$
106,621

 
 
 
 
 
 
 
Net income per share — Basic:
 
 
 
 
 
 
Continuing operations
 
$
0.26

 
$
0.10

 
$
0.20

Discontinued operations
 
$

 
$

 
$
0.01

Net income per share - Basic
 
$
0.26

 
$
0.10

 
$
0.21

 
 
 
 
 
 
 
Net income per share — Diluted:
 
 
 
 
 
 
Continuing operations
 
$
0.25

 
$
0.10

 
$
0.20

Discontinued operations
 
$

 
$

 
$
0.01

Net income per share - Diluted
 
$
0.25

 
$
0.10

 
$
0.21

 
 
 
 
 
 
 
Weighted average shares:
 
 
 
 
 
 
Basic
 
497,335

 
493,663

 
503,790

Diluted
 
508,716

 
506,197

 
517,592


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



Marvell Technology Group Ltd.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
 
 
May 5, 2018

February 3, 2018
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
1,167,258

 
$
888,482

Short-term investments
 
712,053

 
952,790

Accounts receivable, net
 
329,650

 
280,395

Inventories
 
169,556

 
170,039

Prepaid expenses and other current assets
 
38,868

 
41,482

Assets held for sale
 
30,707

 
30,767

Total current assets
 
2,448,092

 
2,363,955

Property and equipment, net
 
213,656

 
202,222

Goodwill
 
1,993,310

 
1,993,310

Other non-current assets
 
209,261

 
148,800

Total assets
 
$
4,864,319

 
$
4,708,287

 
 
 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
157,043

 
$
145,236

Accrued liabilities
 
180,117

 
86,958

Accrued employee compensation
 
105,601

 
127,711

Deferred income
 
1,880

 
61,237

Total current liabilities
 
444,641

 
421,142

Non-current income taxes payable
 
56,606

 
56,976

Other non-current liabilities
 
77,561

 
88,756

Total liabilities
 
578,808

 
566,874

 
 
 
 
 
Shareholders’ equity:
 
 
 
 
Common stock
 
1,000

 
991

Additional paid-in capital
 
2,744,478

 
2,733,292

Accumulated other comprehensive loss
 
(2,404
)
 
(2,322
)
Retained earnings
 
1,542,437

 
1,409,452

Total shareholders’ equity
 
4,285,511

 
4,141,413

Total liabilities and shareholders’ equity
 
$
4,864,319

 
$
4,708,287






Marvell Technology Group Ltd.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)


 
Three Months Ended

 
May 5, 2018

April 29, 2017
Cash flows from operating activities:
 



Net income
 
$
128,612

 
$
106,621

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
 
 
Depreciation and amortization
 
20,343

 
20,742

Share-based compensation
 
23,852

 
24,017

Amortization and write-off of acquired intangible assets
 

 
1,071

Restructuring related impairment charges (gain)
 

 
(516
)
Gain from investments in privately-held companies
 
(1,100
)
 

Amortization of premium /discount on available-for-sale securities
 
1,161

 
206

Other non-cash expense (income), net
 
813

 
(25
)
Deferred income taxes
 
824

 
783

Loss on sale of property and equipment
 
17

 
58

Gain on sale of discontinued operations
 

 
(8,155
)
Changes in assets and liabilities:
 
 
 
 
Accounts receivable
 
(47,393
)
 
(21,763
)
Inventories
 
2,680

 
(11,542
)
Prepaid expenses and other assets
 
(14,108
)
 
5,394

Accounts payable
 
14,744

 
31,423

Accrued liabilities and other non-current liabilities
 
21,236

 
(11,625
)
Accrued employee compensation
 
(22,110
)
 
(7,529
)
Deferred income
 
(797
)
 
5,016

Net cash provided by operating activities
 
128,774

 
134,176

Cash flows from investing activities:
 


 
Purchases of available-for-sale securities
 
(13,457
)
 
(198,416
)
Sales of available-for-sale securities
 
70,273

 
78,764

Maturities of available-for-sale securities
 
128,820

 
82,235

Purchases of time deposits
 
(25,000
)
 
(75,000
)
Maturities of time deposits
 
75,000

 
75,000

Purchases of technology licenses
 
(360
)
 
(1,093
)
Purchases of property and equipment
 
(13,588
)
 
(9,741
)
Proceeds from sales of property and equipment
 
11

 
685

Net proceeds from sale of discontinued operations
 

 
22,954

Other
 
(5,000
)
 
7,275

Net cash provided by (used in) investing activities
 
216,699

 
(17,337
)
Cash flows from financing activities:
 
 

 
Repurchases of common stock
 

 
(166,293
)
Proceeds from employee stock plans
 
11,055

 
19,939

Minimum tax withholding paid on behalf of employees for net share settlement
 
(23,893
)
 
(21,809
)
Dividend payments to shareholders
 
(29,798
)
 
(29,991
)
Payments on technology license obligations
 
(20,461
)
 
(6,815
)
Payment of equity and debt financing costs
 
(3,600
)
 

Net cash used in financing activities
 
(66,697
)
 
(204,969
)
Net increase (decrease) in cash and cash equivalents
 
278,776

 
(88,130
)
Cash and cash equivalents at beginning of period
 
888,482

 
814,092

Cash and cash equivalents at end of period
 
$
1,167,258

 
$
725,962

 






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








 

Three Months Ended
 

May 5, 2018

February 3, 2018

April 29, 2017
GAAP gross profit:

$
375,693

 
$
373,482

 
$
345,511

Special items:

 
 
 
 
 
Share-based compensation

1,905

 
1,662

 
1,426

Other cost of goods sold (a)


 
8,000

 

Total special items

1,905

 
9,662

 
1,426

Non-GAAP gross profit

$
377,598

 
$
383,144

 
$
346,937



 
 
 
 
 
GAAP gross margin

62.1
%
 
60.7
 %
 
60.3
%
Non-GAAP gross margin

62.5
%
 
62.3
 %
 
60.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
Total GAAP operating expenses

$
250,614

 
$
319,471

 
$
244,086

Special items:

 
 
 
 
 
Share-based compensation

(21,947
)
 
(19,715
)
 
(20,313
)
Restructuring related (charges) gain (b)

(1,567
)
 
3,205

 
(886
)
Amortization of and write-off acquired intangible assets


 
(358
)
 
(1,071
)
Litigation settlement (c)
 

 
(74,385
)
 

Other operating expenses (d)

(15,252
)
 
(10,579
)
 
(2,303
)
Total special items

(38,766
)
 
(101,832
)
 
(24,573
)
Total non-GAAP operating expenses

$
211,848

 
$
217,639

 
$
219,513



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP operating margin

20.7
%
 
8.8
 %
 
17.7
%
Other cost of goods sold (a)
 
%
 
1.3
 %
 
%
Share-based compensation
 
3.9
%
 
3.5
 %
 
3.8
%
Restructuring related charges (gain) (b)
 
0.3
%
 
(0.5
)%
 
0.2
%
Amortization and write-off of acquired intangible assets
 
%
 
0.1
 %
 
0.2
%
Litigation settlement (c)
 
%
 
12.1
 %
 
%
Other operating expenses (d)
 
2.5
%
 
1.6
 %
 
0.3
%
Non-GAAP operating margin 

27.4
%
 
26.9
 %
 
22.2
%


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



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








 

Three Months Ended
 

May 5, 2018

February 3, 2018

April 29, 2017
GAAP interest and other income, net
 
$
7,296

 
$
4,788

 
$
3,333

Special items:
 
 
 
 
 
 
       Restructuring related items (e)
 
(1,512
)
 
1,355

 

Total special items
 
(1,512
)
 
1,355

 

Total non-GAAP interest and other income, net
 
$
5,784

 
$
6,143

 
$
3,333

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP net income

$
128,612

 
$
48,763

 
$
106,621

Less: Income from discontinued operations, net of tax


 

 
7,029

GAAP net income from continuing operations

128,612

 
48,763

 
99,592

Special items:

 
 
 
 
 
Other cost of goods sold (a)
 

 
8,000

 

Share-based compensation

23,852

 
21,377

 
21,739

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

1,567

 
(3,205
)
 
886

Restructuring related items in interest and other income, net (e)
 
(1,512
)
 
1,355

 

Amortization of and write-off acquired intangible assets


 
358

 
1,071

Litigation settlement (c)
 

 
74,385

 

Other operating expenses (d)

15,252

 
10,579

 
2,303

Pre-tax total special items

39,159

 
112,849

 
25,999

Other income tax effects and adjustments (f)

(3,098
)
 
3,170

 
(64
)
Non-GAAP net income from continuing operations

$
164,673

 
$
164,782

 
$
125,527



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares — diluted

508,716

 
506,197

 
517,592

Non-GAAP adjustment
 
6,871

 
6,026

 
5,562

Non-GAAP weighted average shares — diluted (g)

515,587

 
512,223

 
523,154



 
 
 
 
 
GAAP diluted net income per share from continuing operations

$
0.25

 
$
0.10

 
$
0.20

Non-GAAP diluted net income per share from continuing operations

$
0.32

 
$
0.32

 
$
0.24

 
(a)
Other costs of goods sold in the three months ended February 3, 2018 include charges for past intellectual property licensing matters.
(b)
Restructuring related charges include employee severance, facilities related costs, and impairment of equipment. Restructuring related charges in the three months ended February 3, 2018 includes the gain on sale of a building that was the 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 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 foreign currency remeasurement associated with restructuring related accruals.
(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 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
 
May 5, 2018
 
February 3, 2018
 
April 29, 2017
 
YoY
 
QoQ
Storage (1)
$
317,069

 
$
323,718

 
$
303,808

 
4
 %
 
(2
)%
Networking (2)
153,734

 
155,340

 
144,815

 
6
 %
 
(1
)%
Connectivity (3)
90,494

 
86,271

 
76,091

 
19
 %
 
5
 %
   Total Core
561,297

 
565,329

 
524,714

 
7
 %
 
(1
)%
Other (4)
43,334

 
50,080

 
47,995

 
(10
)%
 
(13
)%
Total Revenue
$
604,631

 
$
615,409

 
$
572,709

 
6
 %
 
(2
)%


 
Three Months Ended
% of Total
May 5, 2018
 
February 3, 2018
 
April 29, 2017
Storage (1)
52
%
 
53
%
 
53
%
Networking (2)
26
%
 
25
%
 
25
%
Connectivity (3)
15
%
 
14
%
 
13
%
   Total Core
93
%
 
92
%
 
91
%
Other (4)
7
%
 
8
%
 
9
%
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