EX-99.1 3 f94769exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
 

Exhibit 99.1

NEWS RELEASE

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