November 20, 2014 - EX-99.1 - 8-K: Current report | Marvell Technology, Inc. (MRVL)

Exhibit 99.1

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For further information, contact:

John Spencer Ahn

Investor Relations

408-222-7544

johnahn@marvell.com

Sue Kim

Media Relations

408-222-1942

suekim@marvell.com

Marvell Technology Group Ltd. Reports Third Quarter of Fiscal Year 2015 Financial Results

Santa Clara, Calif. (November 20, 2014) Marvell Technology Group Ltd. (NASDAQ: MRVL), a global leader in integrated silicon solutions, today reported financial results for the third quarter of fiscal year 2015, ended November 1, 2014.

Key Third Quarter of Fiscal 2015 Financial Highlights

Revenue: Q3 FY 2015, $930 Million

GAAP Net Income: Q3 FY 2015, $115 Million

GAAP Diluted EPS: Q3 FY 2015, $0.22

Non-GAAP Net Income: Q3 FY 2015, $155 Million

Non-GAAP Diluted EPS: Q3 FY 2015, $0.29

Free Cash Flow: Q3 FY 2015, $167 Million

Fourth Quarter of Fiscal 2015 Financial Outlook

Marvells financial outlook does not include the potential impact of future share repurchases, pending litigation matters, business combinations, asset acquisitions or other investments that may be completed after November 19, 2014.

Revenue is expected to be in the range of $880 Million to $900 Million.

GAAP Gross Margin is expected to be in the range of 50.1% +/- 100 bps. Non-GAAP Gross Margin is expected to be in the range of 50.5% +/- 100 bps.

GAAP Operating Expenses are expected to be in the range of $365 Million +/- $10 Million. Non-GAAP Operating Expenses to be in the range of $320 Million +/- $10 Million.

GAAP Diluted EPS expected to be in the range of $0.16 +/- $0.02. Non-GAAP Diluted EPS expected to be in the range of $0.24 +/- $0.02.

Third Quarter of Fiscal 2015 Summary

Revenue for the third quarter of fiscal 2015 was $930 million, down approximately 3% from $962 million in the second quarter of fiscal 2015, ended August 2, 2014, and approximately flat from $931 million in the third quarter of fiscal 2014, ended November 2, 2013.

GAAP net income for the third quarter of fiscal 2015 was $115 million, or $0.22 per share (diluted), compared with GAAP net income of $139 million, or $0.27 per share (diluted), for the second quarter of fiscal 2015, and $103 million, or $0.21 per share (diluted), for the third quarter of fiscal 2014.

Non-GAAP net income was $155 million, or $0.29 per share (diluted), for the third quarter of fiscal 2015, compared with non-GAAP net income of $181 million, or $0.34 per share (diluted), for the second quarter of fiscal 2015 and $163 million, or $0.32 per share (diluted), for the third quarter of fiscal 2014.

Marvell reports net income, basic and diluted net income per share, in accordance with U.S. generally accepted accounting principles (GAAP) and on a non-GAAP basis as outlined below. Reconciliations of GAAP net income to non-GAAP net income for the three months ended November 1, 2014, August 2, 2014 and November 2, 2013 appear in the financial statements below. Non-GAAP net income, where applicable, excludes the effect of share-based compensation, amortization and write-off of acquired intangible assets, acquisition-related costs, restructuring and other exit related costs, litigation settlement and certain one-time expenses and benefits.

GAAP gross margin for the third quarter of fiscal 2015 was 51.1 percent, compared to 50.3 percent for the second quarter of fiscal 2015 and 50.1 percent for the third quarter of fiscal 2014.

Non-GAAP gross margin for the third quarter of fiscal 2015 was 51.0 percent, compared to 50.6 percent for the second quarter of fiscal 2015 and 50.3 percent for the third quarter of fiscal 2014.

Shares used to compute GAAP net income per diluted share for the third quarter of fiscal 2015 were 520 million shares, compared with 520 million shares in the second quarter of fiscal 2015 and 501 million shares in the third quarter of fiscal 2014.

Shares used to compute non-GAAP net income per diluted share for the third quarter of fiscal 2015 were 533 million shares, compared with 533 million shares for the second quarter of fiscal 2015 and 514 million shares for the third quarter of fiscal 2014.

Cash flow from operations for the third quarter of fiscal 2015 was $195 million, compared to the $157 million reported in the second quarter of fiscal 2015 and the $177 million reported in the third quarter of fiscal 2014. Free cash flow for the third quarter of fiscal 2015 was $167 million, compared to the $137 million reported in the second quarter of fiscal 2015 and the $157 million reported in the third quarter of fiscal 2014. Free cash flow as presented above is defined as cash flow from operations, less capital expenditures and purchases of technology licenses reported under investing and financing activities in the consolidated statement of cash flows.

Under the companys authorized share repurchase program, Marvell repurchased approximately 3.7 million shares for a total of $45 million in the third quarter of fiscal 2015. Marvell paid a quarterly dividend of $0.06 per share on October 2, 2014 to all shareholders of record as of September 11, 2014. Marvell intends to pay its next quarterly dividend of $0.06 per share on December 29, 2014 to all shareholders of record as of December 11, 2014.

The payment of future quarterly cash dividends on Marvells common shares is subject to, among other things, the best interests of its shareholders, its results of operations, cash balances and future cash requirements, financial condition, developments in ongoing litigation, statutory requirements of Bermuda law, and other factors that the board of directors may deem relevant.

Conference Call

Marvell will be conducting a conference call on Thursday, November 20, 2014 at 1:45 p.m. Pacific Time to discuss results for the third quarter of fiscal year 2015. Interested parties may join the conference call by dialing 1-800-322-2803 or 1-617-614-4925, pass-code 459 797 93. 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 December 20, 2014.

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 exit-related costs, litigation settlement, and certain one-time expenses and benefits that are driven primarily by discrete events that management does not consider to be directly related to Marvells core operating performance. Non-GAAP net income per share is calculated by dividing non-GAAP net income by non-GAAP weighted average shares outstanding (diluted). For purposes of calculating non-GAAP 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 proceeds assumed to be used to repurchase shares under the GAAP treasury stock method and also include the dilutive/anti-dilutive effects of common stock options and restricted stock units.

Marvell believes that the presentation of non-GAAP financial measures provides important supplemental information to management and investors regarding financial and business trends relating to Marvells 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, the information provided by GAAP financial measures. 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. For further information regarding why Marvell believes that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to Marvells Current Report on Form 8-K filed today with the SEC. The Form 8-K is available on the SECs website at www.sec.gov as well as on the Marvell website in the Investor Relations section at www.marvell.com.

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: Marvells expectations and statements regarding its financial outlook for the fourth quarter of fiscal 2015; its dividend program including the declaration of, timing of, funding of, payment of and quarterly amount of dividends; and its use of non-GAAP financial measures as important

supplemental information. Words such as anticipates, expects, intends, plans, believes, seeks, estimates, can, will 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, among others: Marvells reliance on a few customers for a significant portion of its revenue; costs and liabilities relating to current and future litigation; Marvells ability to develop and introduce new and enhanced products in a timely and cost effective manner and the adoption of those products in the market; seasonality in sales of consumer devices in which Marvells products are incorporated; Marvells ability to compete in products and prices in an intensely competitive industry; uncertainty in the worldwide economic conditions; Marvells ability to recruit and retain skilled personnel; and other risks detailed in Marvells SEC filings from time to time. When Marvell files its Quarterly Report on Form 10-Q for the third quarter of fiscal 2015, the financial statements may differ from the results disclosed in this press release because judgments and estimates that management used in preparing the financial results reported in this press release may need to be updated to the date of the filing. For other factors that could cause Marvells results to vary from expectations, please see the risk factors identified in the Marvells latest Quarterly Report on Form 10-Q for the quarter ended August 2, 2014 as filed with the SEC, and other factors detailed from time to time in Marvells filings with the SEC. Marvell undertakes no obligation to revise or update publicly any forward-looking statements.

About Marvell

Marvell (NASDAQ: MRVL) is a global leader in providing complete silicon solutions and Kinoma^® software enabling the Smart Life and Smart Lifestyle. From mobile communications to storage, Internet of Things (IoT), cloud infrastructure, digital entertainment and in-home content delivery, Marvells diverse product portfolio aligns complete platform designs with industry-leading performance, security, reliability and efficiency. At the core of the worlds most powerful consumer, network and enterprise systems, Marvell empowers partners and their customers to always stand at the forefront of innovation, performance and mass appeal. By providing people around the world with mobility and ease of access to services adding value to their social, private and work lives, Marvell is committed to enhancing the human experience.

As used in this release, the term Marvell refers to Marvell Technology Group Ltd. and its subsidiaries. For more information, please 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								Nine Months Ended
	November 1, 2014		August 2, 2014			November 2, 2013			November 1, 2014			November 2, 2013
Net revenue	$	930,136	$	961,545		$	931,226		$	2,849,511		$	2,472,651
Cost of goods sold		454,974		477,741			464,981			1,426,575			1,186,478

Gross profit		475,162		483,804			466,245			1,422,936			1,286,173
Operating expenses:
Research and development		288,435		294,764			296,291			878,562			867,985
Selling and marketing		34,410		33,949			37,496			106,717			116,033
General and administrative		33,473		31,333			26,589			95,379			80,104
Amortization and write-off of acquired intangible assets		3,304		3,304			10,645			13,297			31,969

Total operating expenses		359,622		363,350			371,021			1,093,955			1,096,091

Operating income		115,540		120,454			95,224			328,981			190,082
Interest and other income, net		4,764		12,263			1,536			18,952			12,949

Income before income taxes		120,304		132,717			96,760			347,933			203,031
Provision (benefit) for income taxes		5,000		(6,153	)		(6,396	)		(5,720	)		(15,160	)

Net income	$	115,304	$	138,870		$	103,156		$	353,653		$	218,191


Basic net income per share	$	0.22	$	0.27		$	0.21		$	0.69		$	0.44

Diluted net income per share	$	0.22	$	0.27		$	0.21		$	0.68		$	0.43


Shares used in computing basic earnings per share		513,859		511,821			491,979			510,261			496,151
Shares used in computing diluted earnings per share		519,907		520,269			501,189			520,309			502,401

Marvell Technology Group Ltd.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)


	November 1, 2014			February 1, 2014
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	2,402,778		$	1,969,405
Accounts receivable, net		445,050			453,496
Inventories		356,417			347,861
Prepaid expenses and other current assets		82,117			68,458

Total current assets		3,286,362			2,839,220
Property and equipment, net		343,101			356,165
Long-term investments		10,077			16,279
Goodwill and acquired intangible assets, net		2,064,228			2,078,980
Other non-current assets		145,039			160,366

Total assets	$	5,848,807		$	5,451,010


Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	341,431		$	316,389
Accrued liabilities		293,143			273,170
Deferred income		70,834			61,747

Total current liabilities		705,408			651,306
Other non-current liabilities		109,489			123,794

Total liabilities		814,897			775,100


Shareholders' equity:
Common stock		1,022			1,005
Additional paid-in capital		3,041,400			2,941,650
Accumulated other comprehensive income		(2,964	)		597
Retained earnings		1,994,452			1,732,658

Total shareholders' equity		5,033,910			4,675,910

Total liabilities and shareholders' equity	$	5,848,807		$	5,451,010

Marvell Technology Group Ltd.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Three Months Ended						Nine Months Ended
	November 1, 2014			November 2, 2013			November 1, 2014			November 2, 2013
Cash flows from operating activities:
Net income	$	115,304		$	103,156		$	353,653		$	218,191
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		26,515			25,913			79,784			76,576
Share-based compensation		34,294			43,201			99,283			117,805
Amortization and write-off of acquired intangible assets		3,789			10,645			14,752			31,969
Other expense (income), net		(6,034	)		1,655			(12,160	)		5,994
Excess tax benefits from share-based compensation		(2	)		(10	)		(78	)		(42	)
Changes in assets and liabilities:
Accounts receivable		53,434			(35,855	)		23,275			(136,491	)
Inventories		37,506			(45,157	)		(8,793	)		(129,450	)
Prepaid expenses and other assets		18,536			(4,293	)		(8,621	)		15,012
Accounts payable		(70,749	)		44,442			16,937			128,311
Accrued liabilities and other non-current liabilities		(24,997	)		12,584			(22,035	)		(20,510	)
Accrued employee compensation		19,101			10,013			41,651			13,965
Deferred income		(12,053	)		10,905			9,087			26,220

Net cash provided by operating activities		194,644			177,199			586,735			347,550
Cash flows from investing activities:
Purchases of available-for-sale securities		(448,526	)		(220,280	)		(784,296	)		(691,749	)
Sales and maturities of available-for-sale securities		205,685			346,826			578,095			845,506
Investments in privately-held companies		(260	)		(1,119	)		(701	)		(1,869	)
Cash paid for acquisitions, net											(2,551	)
Purchases of technology licenses		(5,105	)		(6,383	)		(14,514	)		(13,993	)
Purchases of property and equipment		(16,661	)		(14,222	)		(48,615	)		(53,283	)

Net cash provided by (used in) investing activities		(264,867	)		104,822			(270,031	)		82,061
Cash flows from financing activities:
Repurchase of common stock (a)		(43,774	)		(71,477	)		(43,774	)		(376,285	)
Proceeds from employee stock plans		2,934			24,155			71,308			97,276
Minimum tax withholding paid on behalf of employees
for net share settlement		(663	)		(518	)		(25,586	)		(10,406	)
Dividend payments to shareholders		(30,867	)		(29,516	)		(91,859	)		(89,560	)
Payments on technology license obligations		(5,951	)					(8,628	)		(6,301	)
Excess tax benefits from share-based compensation		2			10			78			42

Net cash used in financing activities		(78,319	)		(77,346	)		(98,461	)		(385,234	)

Net increase (decrease) in cash and cash equivalents		(148,542	)		204,675			218,243			44,377

Cash and cash equivalents at beginning of period		1,332,535			591,655			965,750			751,953

Cash and cash equivalents at end of period	$	1,183,993		$	796,330		$	1,183,993		$	796,330

(a)

Marvell records all repurchases as well as investment purchases and sales, based on trade date in accordance with U.S. GAAP. Cash paid for repurchase of Marvell common shares includes a total of 3.6 million shares repurchased for $45.0 million in the third quarter of fiscal 2015, adjusted for repurchases of $1.2 million made within the final three days of the quarter that are accrued but not yet paid due to the standard settlement period that normally takes up to three days.

Marvell Technology Group Ltd.

Reconciliations from GAAP to Non-GAAP

(Unaudited)

(In thousands, except per share amounts)


	Three Months Ended									Nine Months Ended
	November 1, 2014			August 2, 2014			November 2, 2013			November 1, 2014			November 2, 2013
GAAP net income	$	115,304		$	138,870		$	103,156		$	353,653		$	218,191
Share-based compensation		34,294			35,020			43,201			99,283			117,805
Amortization and write-off of acquired intangible assets		4,229			4,229			10,645			16,072			31,969
Acquisition-related costs (a)								433						(183	)
Restructuring and other exit-related costs (b)		1,203			735			5,935			7,026			6,341
Litigation settlement (c)		(2,398	)		475						77			5,228
Other (d)		2,318			2,155						4,473

Non-GAAP net income	$	154,950		$	181,484		$	163,370		$	480,584		$	379,351


GAAP weighted average sharesdiluted		519,907			520,269			501,189			520,309			502,401
Non-GAAP adjustment		12,905			13,201			13,014			11,910			15,042

Non-GAAP weighted average shares diluted (e)		532,812			533,470			514,203			532,219			517,443


GAAP diluted net income per share	$	0.22		$	0.27		$	0.21		$	0.68		$	0.43

Non-GAAP diluted net income per share	$	0.29		$	0.34		$	0.32		$	0.90		$	0.73


GAAP gross profit:	$	475,162		$	483,804		$	466,245		$	1,422,936		$	1,286,173
Share-based compensation		1,934			1,733			2,531			5,966			6,266
Amortization of acquired intangible assets		925			925						2,775
Litigation settlement (c)		(3,998	)								(3,998	)		4,728

Non-GAAP gross profit	$	474,023		$	486,462		$	468,776		$	1,427,679		$	1,297,167


GAAP gross margin		51.1	%		50.3	%		50.1	%		49.9	%		52.0	%
Share-based compensation		0.2	%		0.2	%		0.2	%		0.2	%		0.3	%
Amortization of acquired intangible assets		0.1	%		0.1	%					0.1	%
Litigation settlement (c)		-0.4	%					0.0	%		-0.1	%		0.2	%

Non-GAAP gross margin		51.0	%		50.6	%		50.3	%		50.1	%		52.5	%


GAAP research and development:	$	288,435		$	294,764		$	296,291		$	878,562		$	867,985
Share-based compensation		(24,198	)		(24,276	)		(30,084	)		(68,842	)		(82,345	)
Acquisition-related costs (a)								(414	)					321
Restructuring and other exit-related costs (b)		(88	)		(412	)		(4,613	)		(5,182	)		(4,613	)

Non-GAAP research and development	$	264,149		$	270,076		$	261,180		$	804,538		$	781,348


GAAP selling and marketing:	$	34,410		$	33,949		$	37,496		$	106,717		$	116,033
Share-based compensation		(2,855	)		(2,617	)		(3,738	)		(8,400	)		(10,778	)
Acquisition-related costs (a)														(79	)
Restructuring and other exit-related costs (b)					48			(795	)					(795	)
Litigation settlement (c)		(1,600	)								(1,600	)

Non-GAAP selling and marketing	$	29,955		$	31,380		$	32,963		$	96,717		$	104,381


GAAP general and administrative:	$	33,473		$	31,333		$	26,589		$	95,379		$	80,104
Share-based compensation		(5,307	)		(6,394	)		(6,848	)		(16,075	)		(18,416	)
Acquisition-related costs (a)								(19	)					(59	)
Restructuring and other exit-related costs (b)		(1,115	)		(371	)		(527	)		(1,844	)		(933	)
Litigation settlement (c)					(475	)					(2,475	)
Other (d)		(2,318	)		(2,155	)					(4,473	)		(500	)

Non-GAAP general and administrative	$	24,733		$	21,938		$	19,195		$	70,512		$	60,196

(a)

Acquisition-related costs include the amortization of retention bonuses required by the terms of an acquisition.

(b)

Restructuring and other exit-related costs include costs that qualify under U.S. GAAP as restructuring costs, as well as operating expenses related to assets classified as held-for-sale that did not qualify as discontinued operations.

(c)

The amounts recorded do not relate to Marvell's litigation with Carnegie Mellon University.

(d)

Other includes costs associated with the surety bond to appeal the Carnegie Mellon University judgment.

(e)

For purposes of calculating non-GAAP diluted net income per share, the GAAP diluted weighted average shares outstanding is adjusted to exclude the potential benefits of share-based compensation costs expected to be incurred in future periods but not yet recognized in the financial statements.

Marvell Technology Group Ltd.

Reconciliations from GAAP to Non-GAAP Outlook

(Unaudited)

(In millions, except per share amounts)


Note : Amounts represent the midpoint of the expected range	Q4 FY2015 Outlook
GAAP gross margin		50.1	%
Share-based compensation, amortization of intangible assets and other		0.4	%

Non-GAAP gross margin		50.5	%


	Q4 FY2015 Outlook
GAAP operating expenses	$	365
Share-based compensation, restructuring, amortization of intangible assets and other		(45	)

Non-GAAP operating expenses	$	320


	Q4 FY2015 Outlook
GAAP diluted earnings per share	$	0.16
Share-based compensation, restructuring, amortization of intangible assets and other		0.08

Non-GAAP diluted earnings per share	$	0.24

Form: 8-K

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