Form: 8-K

Current report

February 23, 2001

Documents

EXHIBIT 99.1

Published on February 23, 2001



EXHIBIT 99.1

NEWS RELEASE


MARVELL TECHNOLOGY GROUP LTD. REPORTS RECORD FOURTH QUARTER REVENUE

Sunnyvale, CA. (February 22, 2001) -- Marvell Technology Group Ltd. (NASDAQ:
MRVL), a technology leader in the development of extreme broadband
communications solutions, today reported record revenues for its fourth fiscal
quarter and year ended January 27, 2001.

Net sales for the fourth quarter of fiscal 2001 were a record $45.8 million, an
increase of 70% over the $27.0 million for the comparable quarter in fiscal
2000. Pro forma net income for the quarter was $4.5 million, or $0.05 per share
(diluted), compared with pro forma net income of $4.4 million, or $0.05 per
share (diluted), for the comparable quarter in fiscal 2000. Shares used in
computing earnings per share for the fourth quarter of fiscal 2001 were 98.5
million, compared to 84.8 million shares for the fourth quarter of fiscal 2000.

Net sales for the year ended January 27, 2001 totaled $143.9 million, an
increase of 77% over the $81.4 million for the year ended January 29, 2000. Pro
forma net income for fiscal year 2001 totaled $14.0 million, or $0.15 per share
(diluted), compared with $14.7 million, or $0.18 per share (diluted), for fiscal
year 2000. Shares used in computing earnings per share for fiscal year 2001 were
92.6 million, compared with 81.5 million for fiscal year 2000.

Marvell reports net income and diluted earnings per share on a pro forma basis,
which excludes the effects of acquisition-related expenses and amortization of
stock compensation. Net loss, including these charges, substantially all of
which were non-cash, for the fourth quarter of fiscal year 2001 was $239.6
million, or $2.85 per share (diluted), compared with net income of $3.2 million,
or $0.04 per share (diluted), for the comparable quarter of fiscal 2000.
Including the charges excluded in pro forma reporting, net loss for fiscal year
2001 was $235.1 million, or $3.55 per share (diluted), compared with net income
of $13.1 million, or $0.16 per share (diluted) for fiscal year 2000.

In the fourth quarter, Marvell completed its acquisition of Galileo Technology
Ltd., a market leader in digital communications systems on silicon for the LAN
(local area network), MAN (metropolitan area network) and WAN (wide area
network). The acquisition was accounted for under the purchase method of
accounting.

"This quarter, Marvell has achieved several industry firsts with respect to
technology and product advancements," stated Dr. Sehat Sutardja, President and
CEO of Marvell Technology Group Ltd. "In our storage business, we announced the
industry's first read channel physical layer device to exceed Gigahertz speeds
as well as the first Gigabit CMOS preamplifier available on the market today. In
our communications business, we introduced the Alaska(TM) Quad transceiver, the
industry's first and only quad-port DSP Gigabit transceiver, the Alaska Quad+
device, which supports both copper and fiber Gigabit interfaces, a complete
chipset solution to address the high port count Gigabit Ethernet Switch market,
and two system controllers for our next-generation Discovery(TM) family."



Added Dr. Sutardja, "With the acquisition of Galileo, and the addition of its
switching and internetworking products to Marvell's communications portfolio,
the Company is now strategically positioned to provide end-to-end communications
solutions to our networking customers."

ABOUT MARVELL

Marvell, a technology leader in the development of extreme broadband
communications solutions, comprises Marvell Technology Group Ltd. (MTGL) and its
subsidiaries, Marvell Semiconductor Inc. (MSI), Marvell Asia Pte Ltd. (MAPL),
Marvell Japan K.K. (MJKK), and Galileo Technology Ltd. (GTL). On behalf of MTGL,
MSI designs, develops and markets integrated circuits utilizing proprietary
Communications Mixed-Signal Processing (CMSP) and digital signal processing
technologies for communications signal processing markets. MAPL is headquartered
in Singapore and is responsible for Marvell's production and distribution
operations. GTL develops high-performance communications Internetworking and
Switching products for the broadband communications market. As used in this
release, the terms "Company" and "Marvell" refer to the entire group of
companies. The Company applies its technology to the extreme broadband
communications market where its products are used in network access equipment to
provide the interface between communications systems and data transmission
media. MSI is headquartered at 645 Almanor Ave., Sunnyvale, Calif., 94085;
phone: (408) 222-2500, fax: (408) 328-0120.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:

This release may contain forward-looking statements based on our current
expectations, estimates and projections about our products, our industry, our
markets, management's beliefs, and certain assumptions made by us. Words such as
"anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates,"
"may," "will," "should," and variations of these words or similar expressions,
are intended to identify forward-looking statements. In addition, any statements
that refer to expectations, projections or other characterizations of future
events or circumstances, including any underlying assumptions, are
forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and assumptions that
are difficult to predict. Therefore, market results may differ materially and
adversely from those expressed in any forward-looking statements in this
release.

Important risks, uncertainties and assumptions that may cause such a difference
for Marvell include, but are not limited to, the timing, cost and successful
completion of technology and product development through volume production; the
rate at which our present and future customers and end-users adopt our products;
the timing and results of customer-industry qualification and certification of
our products; and, the timing, pricing, rescheduling, or cancellation of
significant customer orders.

For other factors that could cause the Company's results to vary from
expectations, please see the `Risk Factors' section of Marvell's joint
proxy/prospectus on Form S-4 relating to the Company's merger and the Company's
Quarterly Report on Form 10-Q for the quarter ended January 27, 2001.

We undertake no obligation to revise or update publicly any forward-looking
statements for any reason.



MARVELL TECHNOLOGY GROUP LTD.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)




THREE MONTHS ENDED YEAR ENDED
JANUARY 27, JANUARY 29, JANUARY 27, JANUARY 29,
2001 2000 2001 2000
----------- ----------- ----------- -----------

Net revenue $ 45,843 $ 26,996 $143,894 $ 81,375
Cost of goods sold 21,788 11,584 67,047 33,773
-------- -------- -------- --------
Gross profit 24,055 15,412 76,847 47,602
Operating expenses:
Research and development 11,786 5,368 35,152 14,452
Selling and marketing 6,305 3,180 21,686 10,436
General and administrative 1,908 1,215 6,185 3,443
-------- -------- -------- --------
Total operating expenses 19,999 9,763 63,023 28,331
-------- -------- -------- --------
Operating income 4,056 5,649 13,824 19,271
Interest income, net 1,714 206 4,559 330
-------- -------- -------- --------
Income before income taxes 5,770 5,855 18,383 19,601
Provision for income taxes 1,251 1,464 4,404 4,900
-------- -------- -------- --------
Pro forma net income $ 4,519 $ 4,391 $ 13,979 $ 14,701
======== ======== ======== ========

Pro forma net income per share
Basic $ 0.05 $ 0.10 $ 0.21 $ 0.36
======== ======== ======== ========
Diluted $ 0.05 $ 0.05 $ 0.15 $ 0.18
======== ======== ======== ========
Weighted average common shares outstanding:
Basic 84,007 42,051 66,259 41,094
======== ======== ======== ========
Diluted 98,539 84,823 92,635 81,545
======== ======== ======== ========



NOTE:

The above pro forma financial statements are based upon our unaudited
consolidated financial statements for the periods shown, with the adjustments
described below.

The pro forma statement of income for the three months ended January 27, 2001
has been adjusted to eliminate $1.6 million of stock compensation expense and
the related $0.4 million tax effect; $6.4 million of goodwill amortization
expense; $1.6 million of purchased intangible asset amortization expense; and
$234.9 million of in-process research and development expense.

The pro forma statement of income for the three months ended January 29, 2000
has been adjusted to eliminate $1.6 million of stock compensation expense and
the related $0.4 million tax effect.

The pro forma statement of income for the year ended January 27, 2001 has been
adjusted to eliminate $8.3 million of stock compensation expense and the related
$2.1 million tax effect; $6.4 million of goodwill amortization expense; $1.6
million of purchased intangible asset amortization expense; and $234.9 million
of in-process research and development expense.

The pro forma statement of income for the year ended January 29, 2000 has been
adjusted to eliminate $2.2 million of stock compensation expense and the related
$0.5 million tax effect.

The format presented above is not intended to be in accordance with Generally
Accepted Accounting Principles.



MARVELL TECHNOLOGY GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)





THREE MONTHS ENDED YEAR ENDED
JANUARY 27, JANUARY 29, JANUARY 27, JANUARY 29,
2001 2000 2001 2000
----------- ----------- ----------- -----------

Net revenue $ 45,843 $ 26,996 $ 143,894 $ 81,375
Cost of goods sold 21,788 11,584 67,047 33,773
--------- --------- --------- ---------
Gross profit 24,055 15,412 76,847 47,602
Operating expenses:
Research and development 11,786 5,368 35,152 14,452
Selling and marketing 6,305 3,180 21,686 10,436
General and administrative 1,908 1,215 6,185 3,443
Amortization of stock compensation 1,632 1,610 8,259 2,175
Amortization of goodwill 6,431 -- 6,431 --
Amortization of purchased intangible
assets 1,600 -- 1,600 --
In-process research and development 234,874 -- 234,874 --
--------- --------- --------- ---------
Total operating expenses 264,536 11,373 314,187 30,506
--------- --------- --------- ---------
Operating income (loss) (240,481) 4,039 (237,340) 17,096
Interest income, net 1,714 206 4,559 330
--------- --------- --------- ---------
Income (loss) before income taxes (238,767) 4,245 (232,781) 17,426
Provision for income taxes 843 1,061 2,339 4,356
--------- --------- --------- ---------
Net income (loss) $(239,610) $ 3,184 $(235,120) $ 13,070
========= ========= ========= =========

Net income (loss) per share:
Basic $ (2.85) $ 0.08 $ (3.55) $ 0.32
========= ========= ========= =========
Diluted $ (2.85) $ 0.04 $ (3.55) $ 0.16
========= ========= ========= =========
Weighted average common shares outstanding:
Basic 84,007 42,051 66,259 41,094
========= ========= ========= =========
Diluted 84,007 84,823 66,259 81,545
========= ========= ========= =========




MARVELL TECHNOLOGY GROUP LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)




JANUARY 27, JANUARY 29,
2001 2000
----------- -----------

ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 224,063 $ 16,600
Accounts receivable, net of allowance
for doubtful accounts of $100 37,543 14,701
Inventory, net 30,924 4,830
Prepaid expenses and other current assets 11,479 2,651
----------- -----------
Total current assets 304,009 38,782

Property and equipment, net 31,184 7,413
Goodwill and intangible assets 2,100,839 --
Other noncurrent assets 11,454 305
----------- -----------
Total assets $ 2,447,486 $ 46,500
=========== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 24,818 $ 5,698
Accrued liabilities 17,323 4,524
Accrued merger costs 29,530 --
Income taxes payable 9,998 5,875
Deferred revenue 6,516 --
Capital lease obligations 37 74
----------- -----------
Total current liabilities 88,222 16,171
Long-term liabilities 2,598 36
----------- -----------
Total liabilities 90,820 16,207

Mandatorily redeemable convertible preferred stock -- 22,353
Shareholders' equity:
Common stock, $0.002 par value; 242,000,000 shares
authorized; 115,337,133 and 48,931,560 shares
issued and outstanding at January 27, 2001
and January 29, 2000, respectively 231 98
Additional paid-in capital 2,617,509 17,580
Deferred stock-based compensation (28,113) (11,897)
Retained earnings (232,961) 2,159
----------- -----------
Total shareholders' equity 2,356,666 7,940
----------- -----------
Total liabilities and shareholders' equity $ 2,447,486 $ 46,500
=========== ===========