EX-99.1
Published on February 24, 2005
EXHIBIT 99.1
NEWS RELEASE
Marvell® Technology Group Ltd. Reports
Record Fourth Quarter Fiscal 2005 Results
Sunnyvale, CA. (February 24, 2005) Marvell® Technology Group Ltd. (NASDAQ: MRVL), the technology leader in the development of extreme broadband communications and storage solutions, today reported financial results for its fourth fiscal quarter and year ended January 29, 2005.
Net revenue for the fourth quarter of fiscal 2005 was a record $340.3 million, an increase of 40% over net revenue of $243.3 million for the fourth quarter of fiscal 2004 and a 7% sequential increase from net revenue of $317.6 million for the third quarter of fiscal 2005. Net income under generally accepted accounting principles (GAAP) was $54.9 million, or $0.18 per share (diluted), for the fourth quarter of fiscal 2005, compared with a net income under GAAP of $19.8 million, or $0.07 per share (diluted), for the fourth quarter of fiscal 2004.
Net revenue for the year ended January 29, 2005 was $1,224.6 million, an increase of 49% over net revenue of $819.8 million for the year ended January 31, 2004. Net income under GAAP was $141.7 million, or $0.47 per share (diluted), for the year ended January 29, 2005, compared with a net income under GAAP of $45.5 million, or $0.16 per share (diluted), for the year ended January 31, 2004.
Marvell reports net income and basic and diluted net income per share in accordance with GAAP and additionally on a non-GAAP basis, referred to as pro forma. Pro forma net income, where applicable, excludes the effect of amortization and write-off of acquired intangible assets and other, amortization of stock-based compensation and charges related to facilities consolidation. Pro forma net income was $75.2 million, or $0.24 per share (diluted), for the fourth quarter of fiscal 2005, compared with pro forma net income of $41.3 million, or $0.14 per share (diluted), for the fourth quarter of fiscal 2004. Shares used in computing net income per share for the fourth quarter of fiscal 2005 increased to 308.0 million, compared with 288.3 million for the fourth quarter of fiscal 2004.
Pro forma net income was $250.6 million, or $0.84 per share (diluted), for the year ended January 29, 2005, compared with pro forma net income of $130.8 million, or $0.47 per share (diluted), for the year ended January 31, 2004. Shares used in computing pro forma net income per share for the year ended January 29, 2005 increased to 299.0 million, compared with 276.5 million for the year ended January 31, 2004.
These non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP. A reconciliation of GAAP net income to pro forma net income is included in the financial statements portion of this release as well as on our website in the Investors section at www.marvell.com.
Marvells management believes the non-GAAP information is useful because it can enhance the understanding of the Companys ongoing economic performance and Marvell therefore uses pro forma reporting internally to evaluate and manage the Companys operations. Marvell has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results.
We are pleased to announce the results of another outstanding year and fourth quarter for Marvell, stated Dr. Sehat Sutardja, Marvells President and CEO. As we enter fiscal 2006, we are excited about the growing breadth of the several large volume markets we are serving as we expand our offerings into the consumer electronics markets. We expect continued strong market adoption of our advanced technologies into a variety of emerging consumer applications as well as continued solid growth from the enterprise markets.
Revenue for the fourth quarter was a record for Marvell and represented the 29th consecutive quarter of sequential revenue growth. During the quarter, Marvell continued to generate strong positive cash flows and reported its highest level of cash, cash equivalents and short-term investments with a balance of $660.0 million. The following is a review of some of the recent highlights that occurred since last quarters earnings release:
During the quarter, Marvell announced the worlds first 802.11 a/g solution embedding TCP/IP networking to provide the most advanced wireless LAN solution for mobile consumer applications. By combining embedded TCP, UDP and IP networking functions with Marvells proven multimode 802.11 a/g technology, Marvell enables new usage models such as peer to peer printing, ad-hoc gaming, streaming audio/video and a variety of Voice over IP applications. This ultra-low power and small size device is designed to meet the unique requirements of consumer products.
Marvell expects continued strong growth from the consumer markets adoption of hard disk drives into a variety of high volume applications ranging from small form factor disk drives utilized in such applications as MP3 players to high capacity 3.5 inch desktop drives used in digital video recorders and gaming consoles. In January, two new customers introduced new one inch small form factor drives based upon Marvells advanced system-on-chip solutions.
Marvell expects to continue to drive widespread adoption of WLAN into a variety of consumer electronic devices. During the quarter, Marvell experienced strong WLAN shipments into new emerging applications such as the Sony PSP. Also, new WLAN based products such as digital still cameras and printers were introduced into the market based on Marvells ultra compact, low power solutions.
Marvell will be conducting a conference call today at 1:45 p.m. PST to discuss its fourth quarter financial results. To listen to the conference call, investors can dial (706) 679-0800 approximately ten minutes prior to the initiation of the teleconference and refer to conference code 3830407. Replay of the conference call will be available until March 4, 2005 at midnight PST by dialing (706) 645-9291. The conference call will also be available via the web at www.marvell.com. Please visit the Investor Events section. Replay on the Internet will be available until February 24, 2006.
The financial results included in this release are unaudited. The complete, audited financial statements of the Company for the fiscal year ended January 29, 2005, including our assessment of internal controls, as well as our independent auditors report on internal controls, will be included in Marvells Annual Report on Form 10-K to be filed with the SEC on or before April 14, 2005.
About
Marvell
Marvell (NASDAQ: MRVL) is the leading global
semiconductor provider of complete broadband communications and storage
solutions. The Companys 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 terms Company
and Marvell refer to Marvell Technology Group Ltd. and its subsidiaries,
including Marvell Semiconductor, Inc. (MSI), Marvell Asia Pte Ltd. (MAPL),
Marvell Japan K.K., Marvell Taiwan Ltd., Marvell International Ltd. (MIL),
Marvell U.K. Limited, Marvell Semiconductor Israel Ltd. (MSIL), RADLAN Computer
Communications Ltd., and SysKonnect GmbH. MSI is headquartered in
Sunnyvale, Calif., and designs, develops and markets products on behalf of MIL
and MAPL. MSI may be contacted at (408) 222-2500 or at www.marvell.com.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:
This release contains forward-looking statements based on projections and assumptions about our products and our markets. Words such as anticipates, expects, intends, plans, believes, seeks, estimates, may, will, should, and their variations identify forward-looking statements. These statements include those relating to growing large volume markets, adoption of our technologies in consumer applications, devices and markets and growth in the enterprise market. Statements that refer to, or are based on projections, uncertain events or assumptions also identify forward-looking statements. These statements are not guarantees of results and are subject to risks and uncertainties. Some risks and uncertainties that may adversely impact the statements in this release include, but are not limited to, the timing, cost and successful completion of development and volume production, end-customer qualification and adoption, and the timing, pricing, rescheduling, or cancellation of orders. For other factors that could cause Marvells results to vary from expectations, please see the sections titled Additional Factors That May Affect Future Results in Marvells annual report on Form 10-K for the fiscal year ended January 31, 2004 and Marvells subsequent reports on Form 10-Q. We undertake no obligation to revise or update publicly any forward-looking statements.
Marvell® and the Marvell logo are trademarks of Marvell. All other trademarks are the property of their respective owners.
Marvell Technology Group Ltd.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
|
|
|
Three Months Ended |
|
Year Ended |
|
||||||||
|
|
|
January 29, |
|
January 31, |
|
January 29, |
|
January 31, |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net revenue |
|
$ |
340,266 |
|
$ |
243,294 |
|
$ |
1,224,580 |
|
$ |
819,762 |
|
|
Cost of goods sold |
|
162,756 |
|
116,312 |
|
581,757 |
|
382,206 |
|
||||
|
Gross profit |
|
177,510 |
|
126,982 |
|
642,823 |
|
437,556 |
|
||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
||||
|
Research and development |
|
69,575 |
|
59,702 |
|
263,261 |
|
213,740 |
|
||||
|
Selling and marketing |
|
18,604 |
|
16,366 |
|
76,570 |
|
62,350 |
|
||||
|
General and administrative |
|
8,391 |
|
5,653 |
|
32,220 |
|
19,004 |
|
||||
|
Amortization of stock-based compensation |
|
480 |
|
1,737 |
|
3,977 |
|
4,943 |
|
||||
|
Amortization/write-off of acquired intangible assets and other |
|
19,759 |
|
19,741 |
|
102,534 |
|
80,390 |
|
||||
|
Facilities consolidation |
|
|
|
|
|
2,414 |
|
|
|
||||
|
Total operating expenses |
|
116,809 |
|
103,199 |
|
480,976 |
|
380,427 |
|
||||
|
Operating income |
|
60,701 |
|
23,783 |
|
161,847 |
|
57,129 |
|
||||
|
Interest and other income, net |
|
2,599 |
|
1,617 |
|
7,657 |
|
6,223 |
|
||||
|
Income before income taxes |
|
63,300 |
|
25,400 |
|
169,504 |
|
63,352 |
|
||||
|
Provision for income taxes |
|
8,355 |
|
5,625 |
|
27,843 |
|
17,842 |
|
||||
|
Net income |
|
$ |
54,945 |
|
$ |
19,775 |
|
$ |
141,661 |
|
$ |
45,510 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Basic net income per share |
|
$ |
0.20 |
|
$ |
0.08 |
|
$ |
0.53 |
|
$ |
0.18 |
|
|
Diluted net income per share |
|
$ |
0.18 |
|
$ |
0.07 |
|
$ |
0.47 |
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Weighted average shares basic |
|
275,555 |
|
261,296 |
|
269,687 |
|
251,554 |
|
||||
|
Weighted average shares diluted |
|
308,034 |
|
288,342 |
|
299,012 |
|
276,483 |
|
||||
Marvell Technology Group Ltd.
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
|
|
|
Three Months Ended |
|
Year Ended |
|
|||||||||||||
|
|
|
January 29, |
|
January 31, |
|
January 29, |
|
January 31, |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net revenue |
|
$ |
340,266 |
|
$ |
243,294 |
|
$ |
1,224,580 |
|
$ |
819,762 |
|
|||||
|
Cost of goods sold |
|
162,756 |
|
116,312 |
|
581,757 |
|
382,206 |
|
|||||||||
|
Gross profit |
|
177,510 |
|
126,982 |
|
642,823 |
|
437,556 |
|
|||||||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||||||||
|
Research and development |
|
69,575 |
|
59,702 |
|
263,261 |
|
213,740 |
|
|||||||||
|
Selling and marketing |
|
18,604 |
|
16,366 |
|
76,570 |
|
62,350 |
|
|||||||||
|
General and administrative |
|
8,391 |
|
5,653 |
|
32,220 |
|
19,004 |
|
|||||||||
|
Total operating expenses |
|
96,570 |
|
81,721 |
|
372,051 |
|
295,094 |
|
|||||||||
|
Operating income |
|
80,940 |
|
45,261 |
|
270,772 |
|
142,462 |
|
|||||||||
|
Interest and other income, net |
|
2,599 |
|
1,617 |
|
7,657 |
|
6,223 |
|
|||||||||
|
Income before income taxes |
|
83,539 |
|
46,878 |
|
278,429 |
|
148,685 |
|
|||||||||
|
Provision for income taxes |
|
8,355 |
|
5,625 |
|
27,843 |
|
17,842 |
|
|||||||||
|
Pro forma net income |
|
$ |
75,184 |
|
$ |
41,253 |
|
$ |
250,586 |
|
$ |
130,843 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Basic pro forma net income per share |
|
$ |
0.27 |
|
$ |
0.16 |
|
$ |
0.93 |
|
$ |
0.52 |
|
|||||
|
Diluted pro forma net income per share |
|
$ |
0.24 |
|
$ |
0.14 |
|
$ |
0.84 |
|
$ |
0.47 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Weighted average shares basic |
|
275,555 |
|
261,296 |
|
269,687 |
|
251,554 |
|
|||||||||
|
Weighted average shares diluted |
|
308,034 |
|
288,342 |
|
299,012 |
|
276,483 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Reconciliation of GAAP net income to pro forma net income: |
|
|
|
|
|
|
|
|
|
|||||||||
|
GAAP net income |
|
$ |
54,945 |
|
$ |
19,775 |
|
$ |
141,661 |
|
$ |
45,510 |
|
|||||
|
Amortization of stock-based compensation |
|
480 |
|
1,737 |
|
3,977 |
|
4,943 |
|
|||||||||
|
Amortization/write-off of acquired intangible assets and other |
|
19,759 |
|
19,741 |
|
102,534 |
|
80,390 |
|
|||||||||
|
Facilities consolidation charge |
|
|
|
|
|
2,414 |
|
|
|
|||||||||
|
Pro forma net income |
|
$ |
75,184 |
|
$ |
41,253 |
|
$ |
250,586 |
|
$ |
130,843 |
|
|||||
The above pro forma statements of operations are for informational purposes only and are provided for understanding our operating results. The pro forma statements of operations have not been prepared in accordance with GAAP, should not be considered a substitute for our historical financial information prepared in accordance with GAAP and may be different from pro forma measures used by other companies. The pro forma income has been derived by adjusting the net income under generally accepted accounting principles for the impact of non cash stock-based compensation charges, non-cash charges associated with purchase accounting, facilities consolidation and other write-off related expenses.
Marvell Technology Group Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
|
|
|
January 29, |
|
January 31, |
|
|||||
|
|
|
2005 |
|
2004 |
|
|||||
|
Assets |
|
|
|
|
|
|||||
|
Current assets: |
|
|
|
|
|
|||||
|
Cash, cash equivalents and short-term investments |
|
$ |
660,014 |
|
$ |
386,271 |
|
|||
|
Accounts receivable, net |
|
200,954 |
|
136,513 |
|
|||||
|
Inventory, net |
|
128,889 |
|
91,785 |
|
|||||
|
Prepaid expenses and other current assets |
|
27,937 |
|
18,713 |
|
|||||
|
Total current assets |
|
1,017,794 |
|
633,282 |
|
|||||
|
Property and equipment, net |
|
161,770 |
|
149,705 |
|
|||||
|
Goodwill and acquired intangible assets |
|
1,560,636 |
|
1,615,084 |
|
|||||
|
Other noncurrent assets |
|
48,762 |
|
37,394 |
|
|||||
|
Total assets |
|
$ |
2,788,962 |
|
$ |
2,435,465 |
|
|||
|
|
|
|
|
|
|
|||||
|
Liabilities and Shareholders Equity |
|
|
|
|
|
|||||
|
Current liabilities: |
|
|
|
|
|
|||||
|
Accounts payable |
|
$ |
129,728 |
|
$ |
121,190 |
|
|||
|
Accrued liabilities |
|
52,740 |
|
36,823 |
|
|||||
|
Income taxes payable |
|
3,195 |
|
2,155 |
|
|||||
|
Deferred income |
|
15,938 |
|
12,996 |
|
|||||
|
Current portion of capital lease obligations |
|
13,204 |
|
10,747 |
|
|||||
|
Total current liabilities |
|
214,805 |
|
183,911 |
|
|||||
|
Capital lease obligations |
|
11,590 |
|
19,944 |
|
|||||
|
Other long-term liabilities |
|
65,137 |
|
40,769 |
|
|||||
|
Total liabilities |
|
291,532 |
|
244,624 |
|
|||||
|
|
|
|
|
|
|
|||||
|
Shareholders equity: |
|
|
|
|
|
|||||
|
Common stock |
|
555 |
|
527 |
|
|||||
|
Additional paid-in capital |
|
3,035,200 |
|
2,872,281 |
|
|||||
|
Deferred stock-based compensation |
|
(3,400 |
) |
(7,945 |
) |
|||||
|
Accumulated other comprehensive income (loss) |
|
(1,807 |
) |
757 |
|
|||||
|
Accumulated deficit |
|
(533,118 |
) |
(674,779 |
) |
|||||
|
Total shareholders equity |
|
2,497,430 |
|
2,190,841 |
|
|||||
|
Total liabilities and shareholders equity |
|
$ |
2,788,962 |
|
$ |
2,435,465 |
|
|||