Marvell Technology Group Ltd, Form 8-K, 11/19/03

The information in this Current Report is being furnish and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On November 19, 2003, Marvell Technology Group, Ltd. (“Marvell”) issued a press release regarding its financial results for its third fiscal quarter ended November 1, 2003. The full text of Marvell’s press release is furnished herewith as Exhibit 99.1.

The following non-GAAP financial measures are included in the press release: pro forma net income and basic and diluted net income (loss) per share. These non-GAAP measures exclude the effects of acquisition-related expenses, amortization of stock-based compensation and charges related to facilities consolidation. A reconciliation to the most directly comparable GAAP measure is included in the financial statements portion of the press release.

Marvell’s management believes the non-GAAP information is useful because it can enhance the understanding of the company’s ongoing economic performance and Marvell therefore uses pro forma reporting internally to evaluate and manage the company’s 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.

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. Reports
Record Third Quarter Fiscal 2004 Results

Sunnyvale, CA. (November 19, 2003) – 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 third fiscal quarter ended November 1, 2003.

Net revenue for the third quarter of fiscal 2004 was a record $215.3 million, an increase of 58% over net revenue of $135.9 million for the third quarter of fiscal 2003 and a 12% sequential increase from net revenue of $192.9 million for the second quarter of fiscal 2004. Net income under generally accepted accounting principles (GAAP) was $12.0 million, or $0.08 per share (diluted), for the third quarter of fiscal 2004, compared with net loss under GAAP of $7.7 million, or $0.06 per share (diluted), for the third quarter of fiscal 2003.

Net revenue for the nine months ended November 1, 2003 was $576.5 million, an increase of 63% over net revenue of $354.4 million for nine months ended November 2, 2002. Net income under GAAP was $25.7 million, or $0.19 per share (diluted), for the nine months ended November 1, 2003, compared with net loss under GAAP of $47.9 million, or $0.40 per share (diluted), for the nine months ended November 2, 2002.

Marvell reports net income (loss) and basic and diluted net income (loss) 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 acquisition-related expenses, amortization of stock-based compensation and charges related to facilities consolidation. Pro forma net income was $35.1 million, or $0.25 per share (diluted), for the third quarter of fiscal 2004, compared with pro forma net income of $17.6 million, or $0.14 per share (diluted), for the third quarter of fiscal 2003. Shares used in computing pro forma net income per share for the third quarter of fiscal 2004 increased to 142.4 million, compared with 127.6 million for the third quarter of fiscal 2003.

Pro forma net income was $89.6 million, or $0.66 per share (diluted), for the nine months ended November 1, 2003, compared with pro forma net income of $42.3 million, or $0.33 per share (diluted), for the nine months ended November 2, 2002. Shares used in computing pro forma net income per share for the nine months ended November 1, 2003 were 136.3 million, compared to 129.9 million for the nine months ended November 2, 2002. 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 (loss) 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.

Marvell’s management believes the non-GAAP information is useful because it can enhance the understanding of the Company’s ongoing economic performance and Marvell therefore uses pro forma reporting internally to evaluate and manage the Company’s 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.

“Q3 was another very strong quarter for Marvell,” stated Dr. Sehat Sutardja, Marvell’s President and CEO. “Our continued growth is being fueled by our market share gains in the data storage market and our leadership position in driving the adoption of gigabit Ethernet. During the quarter we continued to improve our profitability and strengthen our balance sheet.”

Marvell will be conducting a conference call today at 1:45 p.m. PT to discuss its third quarter fiscal 2004 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 3757158. Replay of the conference call will be available until November 26, 2003 at midnight by calling (706) 645-9291. The conference call will also be available via the web at www.marvell.com until November 19, 2004.

About Marvell
Marvell (NASDAQ: MRVL) is the leading global semiconductor provider of complete broadband communications and storage solutions. The Company’s 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 our continued growth being fueled by market share gains in the data storage market and leadership position in driving the adoption of gigabit Ethernet. 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 Marvell’s results to vary from expectations, please see the sections titled “Additional Factors That May Affect Future Results” in Marvell’s annual report on Form 10-K for the fiscal year ended February 1, 2003 and Marvell’s 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.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)


			Three Months Ended					Nine Months Ended

			November 1,		November 2,			November 1,		November 2,
			2003		2002			2003		2002

Net revenue			$	215,331	$	135,944		$	576,468	$	354,438
Cost of goods sold				100,837		62,925			265,894		162,738

Gross profit				114,494		73,019			310,574		191,700
Operating expenses:
	Research and development			55,147		38,817			154,038		103,025
	Selling and marketing			15,738		12,298			45,984		35,631
	General and administrative			5,420		3,582			13,351		10,747
	Amortization of stock-based compensation			1,528		2,187			3,206		6,661
	Amortization of acquired intangible assets and other			21,641		21,323			60,649		63,969
	Facilities consolidation charge			—		1,763			—		19,562

		Total operating expenses		99,474		79,970			277,228		239,595

Operating income (loss)				15,020		(6,951	)		33,346		(47,895	)
Interest and other income, net				1,726		1,670			4,606		5,715

Income (loss) before income taxes				16,746		(5,281	)		37,952		(42,180	)
Provision for income taxes				4,790		2,399			12,217		5,760

Net income(loss)			$	11,956	$	(7,680	)	$	25,735	$	(47,940	)

Basic net income (loss) per share			$	0.09	$	(0.06	)	$	0.21	$	(0.40	)

Diluted net income (loss) per share			$	0.08	$	(0.06	)	$	0.19	$	(0.40	)

Weighted average shares—basic				127,456		119,577			124,153		118,851

Weighted average shares—diluted				142,417		119,577			136,265		118,851

Marvell Technology Group Ltd.
Pro Forma Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)


			Three Months Ended					Nine Months Ended

			November 1,		November 2,			November 1,		November 2,
			2003		2002			2003		2002

Net revenue			$	215,331	$	135,944		$	576,468	$	354,438
Cost of goods sold				100,837		62,925			265,894		162,738

Gross profit				114,494		73,019			310,574		191,700
Operating expenses:
	Research and development			55,147		38,817			154,038		103,025
	Selling and marketing			15,738		12,298			45,984		35,631
	General and administrative			5,420		3,582			13,351		10,747

		Total operating expenses		76,305		54,697			213,373		149,403

Operating income				38,189		18,322			97,201		42,297
Interest and other income, net				1,726		1,670			4,606		5,715

Income before income taxes				39,915		19,992			101,807		48,012
Provision for income taxes				4,790		2,399			12,217		5,760

Pro forma net income			$	35,125	$	17,593		$	89,590	$	42,252

Basic pro forma net income per share			$	0.28	$	0.15		$	0.72	$	0.36

Diluted pro forma net income per share			$	0.25	$	0.14		$	0.66	$	0.33

Weighted average shares — basic				127,456		119,577			124,153		118,851

Weighted average shares — diluted				142,417		127,589			136,265		129,891

Reconciliation of GAAP net income (loss) to pro forma net income:
GAAP net income (loss)			$	11,956	$	(7,680	)	$	25,735	$	(47,940	)
Amortization of stock-based compensation				1,528		2,187			3,206		6,661
Amortization of acquired intangible assets and other				21,641		21,323			60,649		63,969
Facilities consolidation charge				—		1,763			—		19,562

Pro forma net income			$	35,125	$	17,593		$	89,590	$	42,252

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 (loss) under generally accepted accounting principles for the impact of non cash stock-based compensation charges, non-cash charges associated with purchase accounting and charges for facilities consolidation.

Marvell Technology Group Ltd.
Consolidated Balance Sheets
(Unaudited)
(In thousands)


			November 1,			February 1,
			2003			2003

Assets
Current assets:
	Cash and cash equivalents		$	245,063		$	125,316
	Short-term investments			155,245			139,912
	Accounts receivable, net			119,855			86,175
	Inventory, net			76,959			39,712
	Prepaid expenses and other current assets			17,581			19,979

		Total current assets		614,703			411,094
Property and equipment, net				81,298			69,246
Goodwill and acquired intangible assets				1,616,391			1,570,643
Other noncurrent assets				38,789			49,313

		Total assets	$	2,351,181		$	2,100,296

Liabilities and Shareholders’ Equity
Current liabilities:
	Accounts payable		$	88,459		$	47,672
	Accrued liabilities			37,963			26,955
	Income taxes payable			10,685			2,247
	Deferred income			18,617			12,481
	Current portion of capital lease obligations			9,063			5,019

		Total current liabilities		164,787			94,374
Capital lease obligations				14,636			13,755
Other long-term liabilities				40,519			42,029

		Total liabilities		219,942			150,158

Shareholders’ equity:
	Common stock			260			243
	Additional paid-in capital			2,832,463			2,674,095
	Deferred stock-based compensation			(7,632	)		(5,899	)
	Accumulated other comprehensive income			702			1,988
	Accumulated deficit			(694,554	)		(720,289	)

		Total shareholders’ equity		2,131,239			1,950,138

		Total liabilities and shareholders’ equity	$	2,351,181		$	2,100,296


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


		4th Floor
		Windsor Place
		22 Queen Street
		P.O. Box HM 1179
		Hamilton HM EX
		Bermuda
		(Address of principal executive		(Zip Code)
		offices)


	Item 7. Financial Statements and Exhibits.
	Item 12. Results of Operations and Financial Condition.
SIGNATURE
EXHIBIT INDEX
EXHIBIT 99.1


Exhibit		Description

99.1		Press Release dated November 19, 2003.


Date: November 19, 2003
	MARVELL TECHNOLOGY GROUP LTD.



	By:	/s/ George A. Hervey

		George A. Hervey
		Vice President of Finance and Chief Financial Officer

Table of Contents

Table of Contents

Table of Contents

Table of Contents


Exhibit No.		Document

Exhibit 99.1		Press Release issued November 19, 2003.