ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Bermuda | 77-0481679 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | ý | Accelerated filer | ¨ |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
Page | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
November 3, 2018 | February 3, 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 610,261 | $ | 888,482 | |||
Short-term investments | — | 952,790 | |||||
Accounts receivable, net | 453,775 | 280,395 | |||||
Inventories | 376,210 | 170,039 | |||||
Prepaid expenses and other current assets | 49,230 | 41,482 | |||||
Assets held for sale | 30,745 | 30,767 | |||||
Total current assets | 1,520,221 | 2,363,955 | |||||
Property and equipment, net | 313,113 | 202,222 | |||||
Goodwill | 5,499,145 | 1,993,310 | |||||
Acquired intangible assets, net | 2,639,370 | — | |||||
Other non-current assets | 260,176 | 148,800 | |||||
Total assets | $ | 10,232,025 | $ | 4,708,287 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 209,562 | $ | 145,236 | |||
Accrued liabilities | 302,095 | 86,958 | |||||
Accrued employee compensation | 141,602 | 127,711 | |||||
Deferred income | 2,947 | 61,237 | |||||
Total current liabilities | 656,206 | 421,142 | |||||
Long-term debt | 1,805,734 | — | |||||
Non-current income taxes payable | 53,862 | 56,976 | |||||
Deferred tax liabilities | 108,016 | 52,204 | |||||
Other non-current liabilities | 32,928 | 36,552 | |||||
Total liabilities | 2,656,746 | 566,874 | |||||
Commitments and contingencies (Note 11) | |||||||
Shareholders’ equity: | |||||||
Common shares, $0.002 par value | 1,314 | 991 | |||||
Additional paid-in capital | 6,157,283 | 2,733,292 | |||||
Accumulated other comprehensive loss | — | (2,322 | ) | ||||
Retained earnings | 1,416,682 | 1,409,452 | |||||
Total shareholders’ equity | 7,575,279 | 4,141,413 | |||||
Total liabilities and shareholders’ equity | $ | 10,232,025 | $ | 4,708,287 |
Three Months Ended | Nine Months Ended | ||||||||||||||
November 3, 2018 | October 28, 2017 | November 3, 2018 | October 28, 2017 | ||||||||||||
Net revenue | $ | 851,051 | $ | 616,302 | $ | 2,120,992 | $ | 1,793,761 | |||||||
Cost of goods sold | 467,464 | 238,533 | 984,602 | 705,303 | |||||||||||
Gross profit | 383,587 | 377,769 | 1,136,390 | 1,088,458 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 264,888 | 165,477 | 657,907 | 534,444 | |||||||||||
Selling, general and administrative | 112,178 | 59,112 | 318,192 | 169,875 | |||||||||||
Restructuring related charges | 27,031 | 3,284 | 64,013 | 8,455 | |||||||||||
Total operating expenses | 404,097 | 227,873 | 1,040,112 | 712,774 | |||||||||||
Operating income (loss) from continuing operations | (20,510 | ) | 149,896 | 96,278 | 375,684 | ||||||||||
Interest income | 1,046 | 4,301 | 10,690 | 11,643 | |||||||||||
Interest expense | (22,370 | ) | (262 | ) | (38,409 | ) | (393 | ) | |||||||
Other income (loss), net | (2,628 | ) | 2,161 | (3,858 | ) | 5,471 | |||||||||
Interest and other income (loss), net | (23,952 | ) | 6,200 | (31,577 | ) | 16,721 | |||||||||
Income (loss) from continuing operations before income taxes | (44,462 | ) | 156,096 | 64,701 | 392,405 | ||||||||||
Provision (benefit) for income taxes | 9,305 | 6,759 | (16,903 | ) | 8,026 | ||||||||||
Income (loss) from continuing operations, net of tax | (53,767 | ) | 149,337 | 81,604 | 384,379 | ||||||||||
Income from discontinued operations, net of tax | — | 50,851 | — | 87,689 | |||||||||||
Net income (loss) | $ | (53,767 | ) | $ | 200,188 | $ | 81,604 | $ | 472,068 | ||||||
Net income (loss) per share - Basic: | |||||||||||||||
Continuing operations | $ | (0.08 | ) | $ | 0.30 | $ | 0.14 | $ | 0.77 | ||||||
Discontinued operations | $ | — | $ | 0.11 | $ | — | $ | 0.17 | |||||||
Net income (loss) per share - Basic | $ | (0.08 | ) | $ | 0.41 | $ | 0.14 | $ | 0.94 | ||||||
Net income (loss) per share - Diluted: | |||||||||||||||
Continuing operations | $ | (0.08 | ) | $ | 0.30 | $ | 0.14 | $ | 0.75 | ||||||
Discontinued operations | $ | — | $ | 0.10 | $ | — | $ | 0.17 | |||||||
Net income (loss) per share - Diluted | $ | (0.08 | ) | $ | 0.40 | $ | 0.14 | $ | 0.92 | ||||||
Weighted average shares: | |||||||||||||||
Basic | 657,519 | 494,096 | 569,031 | 499,568 | |||||||||||
Diluted | 657,519 | 504,903 | 578,872 | 510,935 | |||||||||||
Cash dividends declared per share | $ | 0.06 | $ | 0.06 | $ | 0.18 | $ | 0.18 |
Three Months Ended | Nine Months Ended | ||||||||||||||
November 3, 2018 | October 28, 2017 | November 3, 2018 | October 28, 2017 | ||||||||||||
Net income (loss) | $ | (53,767 | ) | $ | 200,188 | $ | 81,604 | $ | 472,068 | ||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Net change in unrealized gain (loss) on marketable securities | — | 726 | 2,322 | 608 | |||||||||||
Net change in unrealized gain (loss) on cash flow hedges | — | (1,817 | ) | — | (823 | ) | |||||||||
Other comprehensive income (loss), net of tax | — | (1,091 | ) | 2,322 | (215 | ) | |||||||||
Comprehensive income (loss), net of tax | $ | (53,767 | ) | $ | 199,097 | $ | 83,926 | $ | 471,853 |
Nine Months Ended | |||||||
November 3, 2018 | October 28, 2017 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 81,604 | $ | 472,068 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 86,356 | 62,569 | |||||
Share-based compensation | 133,484 | 65,312 | |||||
Amortization of acquired intangible assets | 104,630 | 3,212 | |||||
Amortization of inventory fair value adjustment associated with acquisition of Cavium | 125,775 | — | |||||
Amortization of deferred debt issuance costs and debt discounts | 9,290 | — | |||||
Restructuring related impairment charges (gain) | 11,881 | (402 | ) | ||||
Gain from investments in privately-held companies | (1,100 | ) | (2,501 | ) | |||
Amortization of premium/discount on available-for-sale securities | 624 | 603 | |||||
Other non-cash expense (income), net | 4,227 | 1,331 | |||||
Deferred income taxes | (27,675 | ) | 2,797 | ||||
Loss (gain) on sale of property and equipment | 59 | (473 | ) | ||||
Gain on sale of discontinued operations | — | (88,406 | ) | ||||
Loss (gain) on sale of business | 1,592 | (5,254 | ) | ||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (59,697 | ) | (30,730 | ) | |||
Inventories | 1,859 | (16,039 | ) | ||||
Prepaid expenses and other assets | (11,874 | ) | 13,122 | ||||
Accounts payable | 22,260 | 20,087 | |||||
Accrued liabilities and other non-current liabilities | 29,023 | (40,462 | ) | ||||
Accrued employee compensation | (20,922 | ) | (10,612 | ) | |||
Deferred income | (1,293 | ) | 5,149 | ||||
Net cash provided by operating activities | 490,103 | 451,371 | |||||
Cash flows from investing activities: | |||||||
Purchases of available-for-sale securities | (14,956 | ) | (672,887 | ) | |||
Sales of available-for-sale securities | 623,896 | 284,151 | |||||
Maturities of available-for-sale securities | 187,985 | 305,702 | |||||
Return of investment from privately-held companies | — | 6,089 | |||||
Purchases of time deposits | (25,000 | ) | (225,000 | ) | |||
Maturities of time deposits | 175,000 | 225,000 | |||||
Purchases of technology licenses | (11,181 | ) | (5,256 | ) | |||
Purchases of property and equipment | (47,035 | ) | (25,156 | ) | |||
Proceeds from sales of property and equipment | 818 | 1,988 | |||||
Cash payment for acquisition of Cavium, net of cash and cash equivalents acquired | (2,649,465 | ) | — | ||||
Net proceeds from sale of discontinued operations | — | 165,940 | |||||
Net proceeds (payments) from sale of business | (3,352 | ) | 2,402 | ||||
Other | (5,000 | ) | — | ||||
Net cash provided by (used in) investing activities | (1,768,290 | ) | 62,973 | ||||
Cash flows from financing activities: | |||||||
Repurchases of common stock | (53,969 | ) | (527,574 | ) | |||
Proceeds from employee stock plans | 60,772 | 137,424 | |||||
Tax withholding paid on behalf of employees for net share settlement | (45,691 | ) | (25,934 | ) | |||
Dividend payments to shareholders | (108,592 | ) | (89,556 | ) | |||
Payments on technology license obligations | (52,481 | ) | (22,697 | ) | |||
Proceeds from issuance of debt | 1,892,605 | — | |||||
Principal payments of debt | (681,128 | ) | — | ||||
Payment of equity and debt financing costs | (11,550 | ) | — | ||||
Net cash provided by (used in) financing activities | 999,966 | (528,337 | ) | ||||
Net decrease in cash and cash equivalents | (278,221 | ) | (13,993 | ) | |||
Cash and cash equivalents at beginning of period | 888,482 | 814,092 | |||||
Cash and cash equivalents at end of period | $ | 610,261 | $ | 800,099 |
Cash consideration to Cavium common stockholders | $ | 2,819,812 | ||
Common stock (153,376,408 shares of the Company's common stock at $21.34 per share) | 3,273,053 | |||
Cash consideration for intrinsic value of vested director stock options and employee accelerated awards attributable to pre-acquisition service | 10,642 | |||
Stock consideration for employee accelerated awards attributable to pre-acquisition service | 7,804 | |||
Fair value of the replacement equity awards attributable to pre-acquisition service | 50,485 | |||
Total merger consideration | $ | 6,161,796 |
Previously Reported August 4, 2018 (Provisional) | Measurement Period Adjustments | November 3, 2018 | ||||||||
Cash and cash equivalents | $ | 180,989 | $ | — | $ | 180,989 | ||||
Accounts receivable | 112,270 | — | 112,270 | |||||||
Inventories | 330,778 | — | 330,778 | |||||||
Prepaid expense and other current assets | 19,890 | — | 19,890 | |||||||
Assets held for sale | 483 | — | 483 | |||||||
Property and equipment | 115,428 | — | 115,428 | |||||||
Acquired intangible assets | 2,744,000 | — | 2,744,000 | |||||||
Other non-current assets | 89,139 | — | 89,139 | |||||||
Goodwill | 3,504,302 | 1,537 | 3,505,839 | |||||||
Accounts payable | (52,383 | ) | — | (52,383 | ) | |||||
Accrued liabilities | (127,837 | ) | (13 | ) | (127,850 | ) | ||||
Accrued employee compensation | (34,813 | ) | — | (34,813 | ) | |||||
Deferred income | (2,466 | ) | — | (2,466 | ) | |||||
Current portion of long-term debt | (6,123 | ) | — | (6,123 | ) | |||||
Liabilities held for sale | (3,032 | ) | — | (3,032 | ) | |||||
Long-term debt | (600,005 | ) | — | (600,005 | ) | |||||
Non-current income taxes payable | (8,365 | ) | (89 | ) | (8,454 | ) | ||||
Deferred tax liabilities | (84,360 | ) | (1,435 | ) | (85,795 | ) | ||||
Other non-current liabilities | (16,099 | ) | — | $ | (16,099 | ) | ||||
Total merger consideration | $ | 6,161,796 | $ | — | $ | 6,161,796 |
Nine months ended | ||||||||
| November 3, 2018 | October 28, 2017 | ||||||
Pro forma net revenue | $ | 2,463,924 | $ | 2,517,418 | ||||
Pro forma net income (loss) | 71,994 | (151,793 | ) |
November 3, 2018 | |||||||||||||
Gross Carrying Amounts | Accumulated Amortization | Net Carrying Amounts | Weighted average remaining amortization period (years) | ||||||||||
Developed technologies | $ | 1,743,000 | $ | (76,577 | ) | $ | 1,666,423 | 7.34 | |||||
Customer contracts and related relationships | 465,000 | (26,220 | ) | 438,780 | 8.67 | ||||||||
Trade names | 23,000 | (1,833 | ) | 21,167 | 4.08 | ||||||||
Total acquired amortizable intangible assets | $ | 2,231,000 | $ | (104,630 | ) | $ | 2,126,370 | 7.58 | |||||
IPR&D | 513,000 | — | 513,000 | n/a | |||||||||
Total acquired intangible assets | $ | 2,744,000 | $ | (104,630 | ) | $ | 2,639,370 |
Fiscal Year | Amount | |||
Remainder of 2019 | $ | 78,688 | ||
2020 | 309,701 | |||
2021 | 301,580 | |||
2022 | 293,024 | |||
2023 | 285,596 | |||
Thereafter | 857,781 | |||
$ | 2,126,370 |
November 3, 2018 | February 3, 2018 | ||||||
Inventories: | |||||||
Work-in-process | $ | 206,976 | $ | 103,711 | |||
Finished goods | 169,234 | 66,328 | |||||
Total inventories | $ | 376,210 | $ | 170,039 |
November 3, 2018 | February 3, 2018 | ||||||
Property and equipment, net: | |||||||
Machinery and equipment | $ | 610,541 | $ | 535,416 | |||
Land, buildings, and leasehold improvements | 279,975 | 247,675 | |||||
Computer software | 102,897 | 98,253 | |||||
Furniture and fixtures | 24,871 | 21,139 | |||||
1,018,284 | 902,483 | ||||||
Less: Accumulated depreciation and amortization | (705,171 | ) | (700,261 | ) | |||
Total property and equipment, net | $ | 313,113 | $ | 202,222 |
November 3, 2018 | February 3, 2018 | ||||||
Accrued liabilities: | |||||||
Contract liabilities | $ | 121,669 | $ | — | |||
Technology license obligations | 58,606 | 28,488 | |||||
Accrued royalties | 16,315 | 11,860 | |||||
Accrued rebates (1) | — | 9,292 | |||||
Accrued legal related expenses | 18,436 | 13,050 | |||||
Unsettled investment trades (2) | — | 4,497 | |||||
Restructuring liabilities | 26,412 | 1,612 | |||||
Accrued interest | 17,041 | — | |||||
Accrued income tax payable | 18,483 | 959 | |||||
Other | 25,133 | 17,200 | |||||
Total accrued liabilities | $ | 302,095 | $ | 86,958 |
Unrealized Gain (Loss) on Marketable Securities (1) | |||
Balance at February 3, 2018 | $ | (2,322 | ) |
Other comprehensive loss before reclassifications | (733 | ) | |
Amounts reclassified from accumulated other comprehensive gain | 3,055 | ||
Net current-period other comprehensive gain, net of tax | 2,322 | ||
Balance at November 3, 2018 | $ | — |
Unrealized Gain (Loss) on Marketable Securities (1) | Unrealized Gain (Loss) on Cash Flow Hedges (2) | Total | |||||||||
Balance at January 28, 2017 | $ | (801 | ) | $ | 824 | $ | 23 | ||||
Other comprehensive income (loss) before reclassifications | 653 | 2,341 | 2,994 | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (45 | ) | (3,164 | ) | (3,209 | ) | |||||
Net current-period other comprehensive income (loss), net of tax | 608 | (823 | ) | (215 | ) | ||||||
Balance at October 28, 2017 | $ | (193 | ) | $ | 1 | $ | (192 | ) |
Severance and related costs | Facilities and related costs | Other exit-related costs | Total | ||||||||||||
Balance at February 3, 2018 | $ | 654 | $ | 462 | $ | 555 | $ | 1,671 | |||||||
Restructuring charges - continuing operations | 38,143 | 13,247 | 978 | 52,368 | |||||||||||
Net cash payments | (18,039 | ) | (3,520 | ) | (946 | ) | (22,505 | ) | |||||||
Release of reserves | (307 | ) | — | — | (307 | ) | |||||||||
Exchange rate adjustment | (51 | ) | — | — | (51 | ) | |||||||||
Balance at November 3, 2018 | $ | 20,400 | $ | 10,189 | $ | 587 | $ | 31,176 | |||||||
Less: non-current portion | $ | — | $ | 4,764 | $ | — | $ | 4,764 | |||||||
Current portion | $ | 20,400 | $ | 5,425 | $ | 587 | $ | 26,412 |
February 3, 2018 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
Short-term investments: | |||||||||||||||
Available-for-sale: | |||||||||||||||
U.S. government and agency debt | $ | 248,336 | $ | 49 | $ | (644 | ) | $ | 247,741 | ||||||
Foreign government and agency debt | 7,004 | — | (17 | ) | 6,987 | ||||||||||
Municipal debt securities | 2,734 | — | (6 | ) | 2,728 | ||||||||||
Corporate debt securities | 504,609 | 469 | (1,999 | ) | 503,079 | ||||||||||
Asset backed securities | 42,429 | 3 | (177 | ) | 42,255 | ||||||||||
Held-to-maturity: | |||||||||||||||
Time deposits | 150,000 | — | — | 150,000 | |||||||||||
Total short-term investments | 955,112 | 521 | (2,843 | ) | 952,790 | ||||||||||
Total investments | $ | 955,112 | $ | 521 | $ | (2,843 | ) | $ | 952,790 |
Three Months Ended | Nine Months Ended | ||||||||||||||
November 3, 2018 | October 28, 2017 | November 3, 2018 | October 28, 2017 | ||||||||||||
Gross realized gains | $ | — | $ | 92 | $ | 371 | $ | 177 | |||||||
Gross realized losses | — | (2,847 | ) | (3,437 | ) | (2,960 | ) | ||||||||
Total net realized gains (losses) | $ | — | $ | (2,755 | ) | $ | (3,066 | ) | $ | (2,783 | ) |
November 3, 2018 | February 3, 2018 | ||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||
Due in one year or less | $ | — | $ | — | $ | 554,247 | $ | 553,866 | |||||||
Due between one and five years | — | — | 400,866 | 398,924 | |||||||||||
Due over five years | — | — | — | — | |||||||||||
$ | — | $ | — | $ | 955,113 | $ | 952,790 |
February 3, 2018 | |||||||||||||||||||||||
Less than 12 months | 12 months or more | Total | |||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||
U.S. government and agency debt | $ | 148,538 | $ | (298 | ) | $ | 51,332 | $ | (346 | ) | $ | 199,870 | $ | (644 | ) | ||||||||
Foreign government and agency debt | 3,993 | (1 | ) | 2,994 | (16 | ) | 6,987 | (17 | ) | ||||||||||||||
Municipal debt securities | 1,969 | (6 | ) | — | — | 1,969 | (6 | ) | |||||||||||||||
Corporate debt securities | 253,380 | (1,514 | ) | 46,805 | (485 | ) | 300,185 | (1,999 | ) | ||||||||||||||
Asset backed securities | 37,636 | (145 | ) | 2,167 | (32 | ) | 39,803 | (177 | ) | ||||||||||||||
Total securities | $ | 445,516 | $ | (1,964 | ) | $ | 103,298 | $ | (879 | ) | $ | 548,814 | $ | (2,843 | ) |
Amount of Gains (Losses) in Statements of Operations | |||||||||
Three Months Ended | Nine Months Ended | ||||||||
Location of Gains (Losses) in Statements of Operations | October 28, 2017 | October 28, 2017 | |||||||
Derivatives designated as cash flow hedges: | |||||||||
Forward contracts: | Research and development | $ | 1,497 | $ | 3,223 | ||||
Selling, general and administrative | 329 | 723 | |||||||
$ | 1,826 | $ | 3,946 |
Three Months Ended | Nine Months Ended | |||||||
Affected Line Item in the Statements of Operations: | October 28, 2017 | October 28, 2017 | ||||||
Operating costs and expenses: | ||||||||
Cash flow hedges: | ||||||||
Research and development | $ | 1,490 | $ | 2,564 | ||||
Selling, general and administrative | 328 | 601 | ||||||
Total | $ | 1,818 | $ | 3,165 |
Fair Value Measurements at November 3, 2018 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Items measured at fair value on a recurring basis: | |||||||||||||||
Assets | |||||||||||||||
Cash equivalents: | |||||||||||||||
Money market funds | $ | 21,162 | $ | — | $ | — | $ | 21,162 | |||||||
Time deposits | — | 62,775 | — | 62,775 | |||||||||||
Other non-current assets: | |||||||||||||||
Severance pay fund | 882 | — | 882 | ||||||||||||
Total assets | $ | 21,162 | $ | 63,657 | $ | — | $ | 84,819 |
Fair Value Measurements at February 3, 2018 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Items measured at fair value on a recurring basis: | |||||||||||||||
Assets | |||||||||||||||
Cash equivalents: | |||||||||||||||
Money market funds | $ | 18,503 | $ | — | $ | — | $ | 18,503 | |||||||
Time deposits | — | 65,117 | — | 65,117 | |||||||||||
U.S. government and agency debt | 51,589 | — | — | 51,589 | |||||||||||
Municipal debt securities | — | 5,290 | — | 5,290 | |||||||||||
Corporate debt securities | — | 127,076 | — | 127,076 | |||||||||||
Short-term investments: | |||||||||||||||
Time deposits | — | 150,000 | — | 150,000 | |||||||||||
U.S. government and agency debt | 247,741 | — | — | 247,741 | |||||||||||
Foreign government and agency debt | — | 6,987 | — | 6,987 | |||||||||||
Municipal debt securities | — | 2,728 | — | 2,728 | |||||||||||
Corporate debt securities | — | 503,079 | — | 503,079 | |||||||||||
Asset backed securities | — | 42,255 | — | 42,255 | |||||||||||
Other non-current assets: | |||||||||||||||
Severance pay fund | — | 896 | — | 896 | |||||||||||
Total assets | $ | 317,833 | $ | 903,428 | $ | — | $ | 1,221,261 |
November 3, 2018 | ||||
Face Value Outstanding: | ||||
Term Loan | $ | 825,000 | ||
2023 Notes | 500,000 | |||
2028 Notes | 500,000 | |||
Total borrowings | $ | 1,825,000 | ||
Less: Unamortized debt discount and issuance cost | (19,266 | ) | ||
Net carrying amount of debt | $ | 1,805,734 | ||
Less: Current portion | $ | — | ||
Non-current portion | $ | 1,805,734 |
Fiscal year | Amount | |||
2019 | $ | — | ||
2020 | — | |||
2021 | — | |||
2022 | 825,000 | |||
2023 | — | |||
Thereafter | $ | 1,000,000 |
(In thousands) | Balance as of February 3, 2018 | Adjustments | Opening Balance as of February 4, 2018 | ||||||||
Consolidated balance sheet: | |||||||||||
Assets | |||||||||||
Accounts receivable, net | $ | 280,395 | $ | 1,862 | $ | 282,257 | |||||
Inventory | 170,039 | 2,016 | 172,055 | ||||||||
Other non-current assets | 148,800 | 42,116 | 190,916 | ||||||||
Liabilities and shareholders' equity: | |||||||||||
Accrued liabilities | 86,958 | 70,336 | 157,294 | ||||||||
Deferred income | 61,237 | (58,560 | ) | 2,677 | |||||||
Retained earnings | $ | 1,409,452 | $ | 34,218 | $ | 1,443,670 |
November 3, 2018 | |||||||||||
(In thousands) | As currently reported | Adjustments | Balances without adoption of new revenue standard | ||||||||
Consolidated balance sheet: | |||||||||||
Assets | |||||||||||
Accounts receivable, net | $ | 453,775 | $ | — | $ | 453,775 | |||||
Inventories | 376,210 | (1,015 | ) | 375,195 | |||||||
Other non-current assets | 260,176 | (68,263 | ) | 191,913 | |||||||
Liabilities and shareholders' equity: | |||||||||||
Accrued liabilities | 302,095 | (106,572 | ) | 195,523 | |||||||
Deferred income | 2,947 | 101,957 | 104,904 | ||||||||
Retained earnings | $ | 1,416,682 | $ | (64,663 | ) | $ | 1,352,019 |
Three Months Ended November 3, 2018 | Nine Months Ended November 3, 2018 | ||||||||||||||||||||||
(In thousands, except per share amounts) | As currently reported | Adjustments | Balances without adoption of new revenue standard | As currently reported | Adjustments | Balances without adoption of new revenue standard | |||||||||||||||||
Consolidated statement of operation: | |||||||||||||||||||||||
Net revenue | $ | 851,051 | $ | (22,340 | ) | $ | 828,711 | $ | 2,120,992 | $ | (39,871 | ) | $ | 2,081,121 | |||||||||
Cost of goods sold | 467,464 | (3,931 | ) | 463,533 | 984,602 | (9,426 | ) | 975,176 | |||||||||||||||
Net income (loss) | (53,767 | ) | (18,409 | ) | (72,176 | ) | 81,604 | (30,445 | ) | 51,159 | |||||||||||||
Net income (loss) per share - Basic | (0.08 | ) | (0.03 | ) | (0.11 | ) | 0.14 | (0.05 | ) | 0.09 | |||||||||||||
Net income (loss) per share - Diluted | $ | (0.08 | ) | $ | (0.03 | ) | $ | (0.11 | ) | $ | 0.14 | $ | (0.05 | ) | $ | 0.09 |
Three Months Ended | Nine Months Ended | |||||||||||||
November 3, 2018 | % of Total | November 3, 2018 | % of Total | |||||||||||
Net revenue by product group: | ||||||||||||||
Storage (1) | $ | 406,822 | 48 | % | 1,059,655 | 50 | % | |||||||
Networking (2) | 398,424 | 47 | % | 925,982 | 44 | % | ||||||||
Other (3) | 45,805 | 5 | % | 135,355 | 6 | % | ||||||||
$ | 851,051 | $ | 2,120,992 |
1) | Storage products are comprised primarily of HDD, SSD Controllers, Fibre Channel Adapters and Data Center Storage Solutions. |
2) | Networking products are comprised primarily of Ethernet Switches, Ethernet Transceivers, Ethernet NICs, Embedded Communications and Infrastructure Processors, Automotive Ethernet, Security Adapters and Processors as well as Connectivity products. In addition, this grouping includes a few legacy product lines in which the Company no longer invests, but will generate revenue for several years. |
3) | Other products are comprised of primarily Printer Solutions, Application Processors and others. |
Three Months Ended | Nine Months Ended | |||||||||||||
November 3, 2018 | % of Total | November 3, 2018 | % of Total | |||||||||||
Net revenue based on destination of shipment: | ||||||||||||||
China | $ | 332,011 | 39 | % | $ | 907,630 | 43 | % | ||||||
Malaysia | 105,857 | 12 | % | 293,778 | 14 | % | ||||||||
Philippines | 62,272 | 7 | % | 175,455 | 8 | % | ||||||||
United States | 94,742 | 11 | % | 142,694 | 7 | % | ||||||||
Thailand | 44,439 | 5 | % | 126,439 | 6 | % | ||||||||
Other | 211,730 | 26 | % | 474,996 | 22 | % | ||||||||
$ | 851,051 | $ | 2,120,992 |
Three Months Ended | Nine Months Ended | |||||||||||||
November 3, 2018 | % of Total | November 3, 2018 | % of Total | |||||||||||
Net revenue by customer type: | ||||||||||||||
Direct customers | $ | 630,022 | 74 | % | 1,632,646 | 77 | % | |||||||
Distributors | 221,029 | 26 | % | 488,346 | 23 | % | ||||||||
$ | 851,051 | $ | 2,120,992 |
Three Months Ended | Nine Months Ended | ||||||||||||||
November 3, 2018 | October 28, 2017 | November 3, 2018 | October 28, 2017 | ||||||||||||
Numerator: | |||||||||||||||
Income from continuing operations, net of tax | $ | (53,767 | ) | $ | 149,337 | $ | 81,604 | $ | 384,379 | ||||||
Income from discontinued operations, net of tax | — | 50,851 | — | 87,689 | |||||||||||
Net income | $ | (53,767 | ) | $ | 200,188 | $ | 81,604 | $ | 472,068 | ||||||
Denominator: | |||||||||||||||
Weighted average shares — basic | 657,519 | 494,096 | 569,031 | 499,568 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Share-based awards | — | 10,807 | 9,841 | 11,367 | |||||||||||
Weighted average shares — diluted | 657,519 | 504,903 | 578,872 | 510,935 | |||||||||||
Income from continuing operations per share: | |||||||||||||||
Basic | $ | (0.08 | ) | $ | 0.30 | $ | 0.14 | $ | 0.77 | ||||||
Diluted | $ | (0.08 | ) | $ | 0.30 | $ | 0.14 | $ | 0.75 | ||||||
Income from discontinued operations per share: | |||||||||||||||
Basic | $ | — | $ | 0.11 | $ | — | $ | 0.17 | |||||||
Diluted | $ | — | $ | 0.10 | $ | — | $ | 0.17 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | (0.08 | ) | $ | 0.41 | $ | 0.14 | $ | 0.94 | ||||||
Diluted | $ | (0.08 | ) | $ | 0.40 | $ | 0.14 | $ | 0.92 |
Three Months Ended | Nine Months Ended | ||||||||||
November 3, 2018 | October 28, 2017 | November 3, 2018 | October 28, 2017 | ||||||||
Weighted average shares outstanding: | |||||||||||
Share-based awards | 25,048 | 876 | 6,915 | 3,122 |
• | our ability to successfully integrate the business of Cavium with our business; |
• | our ability to realize anticipated synergies in connection with the Cavium acquisition; |
• | our dependence on a small number of customers; |
• | severe financial hardship or bankruptcy of one or more of our major customers; |
• | the effects of any potential future acquisitions, strategic investments, divestitures, mergers or joint ventures; |
• | risks associated with acquisition and consolidation activity in the semiconductor industry; |
• | our dependence upon the storage market, which is highly cyclical and intensely competitive; |
• | our ability and our customers’ ability to develop new and enhanced products and the adoption of those products in the market; |
• | our ability to define, design and develop products for the infrastructure and 5G market and market and sell those products to infrastructure customers; |
• | decreases in our gross margin and results of operations in the future due to a number of factors; |
• | our reliance on independent foundries and subcontractors for the manufacture, assembly and testing of our products; |
• | the risks associated with manufacturing and selling a majority of our products and our customers’ products outside of the United States; |
• | the effects of transitioning to smaller geometry process technologies; |
• | our ability to scale our operations in response to changes in demand for existing or new products and services; |
• | our ability to limit costs related to defective products; |
• | our ability to recruit and retain experienced executive management as well as highly skilled engineering and sales and marketing personnel; |
• | our ability to mitigate risks related to our information technology systems; |
• | our ability to protect our intellectual property; |
• | our ability to estimate customer demand and future sales accurately; |
• | our reliance on third-party distributors and manufacturers' representatives to sell our products; |
• | the impact of international conflict and continued economic volatility in either domestic or foreign markets; |
• | the impact and costs associated with changes in international financial and regulatory conditions; |
• | the impact of any changes in our application of the United Stated federal income tax laws and the loss of any beneficial treatment that we currently enjoy; |
• | our maintenance of an effective system of internal controls; and |
• | the outcome of pending or future litigation and legal and regulatory proceedings. |
Three Months Ended | Nine Months Ended | ||||||||||
November 3, 2018 | October 28, 2017 | November 3, 2018 | October 28, 2017 | ||||||||
End Customer: | |||||||||||
Western Digital | 11 | % | 17 | % | 13 | % | 20 | % | |||
Toshiba | 11 | % | 14 | % | 12 | % | 14 | % | |||
Seagate | * | 12 | % | 11 | % | 11 | % | ||||
Distributor: | |||||||||||
Wintech | * | 11 | % | * | 11 | % |
* | Less than 10% of net revenue |
Three Months Ended | Nine Months Ended | ||||||||||
November 3, 2018 | October 28, 2017 | November 3, 2018 | October 28, 2017 | ||||||||
Net revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||
Cost of goods sold | 54.9 | 38.7 | 46.4 | 39.3 | |||||||
Gross profit | 45.1 | 61.3 | 53.6 | 60.7 | |||||||
Operating expenses: | |||||||||||
Research and development | 31.1 | 26.8 | 31.0 | 29.8 | |||||||
Selling, general and administrative | 13.2 | 9.6 | 15.0 | 9.5 | |||||||
Restructuring related charges | 3.2 | 0.5 | 3.0 | 0.5 | |||||||
Total operating expenses | 47.5 | 36.9 | 49.0 | 39.8 | |||||||
Operating income (loss) from continuing operations | (2.4 | ) | 24.4 | 4.6 | 20.9 | ||||||
Interest income | 0.1 | 0.7 | 0.5 | 0.6 | |||||||
Interest expense | (2.6 | ) | — | (1.8 | ) | — | |||||
Other income (loss), net | (0.3 | ) | 0.3 | (0.2 | ) | 0.3 | |||||
Income (loss) from continuing operations before income taxes | (5.2 | ) | 25.4 | 3.1 | 21.8 | ||||||
Provision (benefit) for income taxes | 1.1 | 1.1 | (0.8 | ) | 0.4 | ||||||
Income (loss) from continuing operations, net of tax | (6.3 | )% | 24.3 | % | 3.9 | % | 21.4 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
November 3, 2018 | October 28, 2017 | % Change | November 3, 2018 | October 28, 2017 | % Change | ||||||||||||||||
(in thousands, except percentage) | |||||||||||||||||||||
Net revenue | $ | 851,051 | $ | 616,302 | 38.1 | % | $ | 2,120,992 | $ | 1,793,761 | 18.2 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
November 3, 2018 | October 28, 2017 | % Change | November 3, 2018 | October 28, 2017 | % Change | ||||||||||||||||
(in thousands, except percentage) | |||||||||||||||||||||
Cost of goods sold | $ | 467,464 | $ | 238,533 | 96.0 | % | $ | 984,602 | $ | 705,303 | 39.6 | % | |||||||||
% of net revenue | 54.9 | % | 38.7 | % | 46.4 | % | 39.3 | % | |||||||||||||
Gross profit | $ | 383,587 | $ | 377,769 | 1.5 | % | $ | 1,136,390 | $ | 1,088,458 | 4.4 | % | |||||||||
% of net revenue | 45.1 | % | 61.3 | % | 53.6 | % | 60.7 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
November 3, 2018 | October 28, 2017 | % Change | November 3, 2018 | October 28, 2017 | % Change | ||||||||||||||||
(in thousands, except percentage) | |||||||||||||||||||||
Research and development | $ | 264,888 | $ | 165,477 | 60.1 | % | $ | 657,907 | $ | 534,444 | 23.1 | % | |||||||||
% of net revenue | 31.1 | % | 26.8 | % | 31.0 | % | 29.8 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
November 3, 2018 | October 28, 2017 | % Change | November 3, 2018 | October 28, 2017 | % Change | ||||||||||||||||
(in thousands, except percentage) | |||||||||||||||||||||
Selling, general and administrative | $ | 112,178 | $ | 59,112 | 89.8 | % | $ | 318,192 | $ | 169,875 | 87.3 | % | |||||||||
% of net revenue | 13.2 | % | 9.6 | % | 15.0 | % | 9.5 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
November 3, 2018 | October 28, 2017 | % Change | November 3, 2018 | October 28, 2017 | % Change | ||||||||||||||||
(in thousands, except percentage) | |||||||||||||||||||||
Restructuring related charges | $ | 27,031 | $ | 3,284 | 723.1 | % | $ | 64,013 | $ | 8,455 | 657.1 | % | |||||||||
% of net revenue | 3.2 | % | 0.5 | % | 3.0 | % | 0.5 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
November 3, 2018 | October 28, 2017 | % Change | November 3, 2018 | October 28, 2017 | % Change | ||||||||||||||||
(in thousands, except percentage) | |||||||||||||||||||||
Interest income | $ | 1,046 | $ | 4,301 | (75.7 | )% | $ | 10,690 | $ | 11,643 | (8.2 | )% | |||||||||
% of net revenue | 0.1 | % | 0.7 | % | 0.5 | % | 0.6 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
November 3, 2018 | October 28, 2017 | % Change | November 3, 2018 | October 28, 2017 | % Change | ||||||||||||||||
(in thousands, except percentage) | |||||||||||||||||||||
Interest expense | $ | (22,370 | ) | $ | (262 | ) | 8,438.2 | % | $ | (38,409 | ) | $ | (393 | ) | 9,673.3 | % | |||||
% of net revenue | (2.6 | )% | — | % | (1.8 | )% | — | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
November 3, 2018 | October 28, 2017 | % Change | November 3, 2018 | October 28, 2017 | % Change | ||||||||||||||||
(in thousands, except percentage) | |||||||||||||||||||||
Other income (loss), net | $ | (2,628 | ) | $ | 2,161 | (221.6 | )% | $ | (3,858 | ) | $ | 5,471 | (170.5 | )% | |||||||
% of net revenue | (0.3 | )% | 0.3 | % | (0.2 | )% | 0.3 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
November 3, 2018 | October 28, 2017 | % Change | November 3, 2018 | October 28, 2017 | % Change | ||||||||||||||||
(in thousands, except percentage) | |||||||||||||||||||||
Provision (benefit) for income taxes | $ | 9,305 | $ | 6,759 | 37.7 | % | $ | (16,903 | ) | $ | 8,026 | (310.6 | )% |
• | difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from combining the businesses; |
• | difficulties entering new markets or manufacturing in new geographies where we have no or limited direct prior experience; |
• | difficulties in the integration of operations and systems; |
• | difficulties in the assimilation of employees; |
• | difficulties in managing the expanded operations of a significantly larger and more complex company; and |
• | challenges in maintaining existing, and establishing new, business relationships. |
• | increasing our vulnerability to adverse general economic and industry conditions; |
• | requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, |
• | limiting our flexibility in planning for, or reacting to, changes in the economy and the semiconductor industry; |
• | placing us at a competitive disadvantage compared to our competitors with less indebtedness; |
• | exposing us to interest rate risk to the extent of our variable rate indebtedness; and |
• | making it more difficult to borrow additional funds in the future to fund growth, acquisitions, working capital, capital expenditures and other purposes. |
• | our ability to realize anticipated synergies in connection with the Cavium acquisition; |
• | changes in general economic and political conditions and specific conditions in the end markets we address, including the continuing volatility in the technology sector and semiconductor industry; |
• | the effects of any acquisitions, divestitures or significant investments, including the Cavium acquisition; |
• | the highly competitive nature of the end markets we serve, particularly within the semiconductor industry; |
• | our dependence on a few customers for a significant portion of our revenue; |
• | severe financial hardship or bankruptcy of one or more of our major customers; |
• | our ability to maintain a competitive cost structure for our manufacturing and assembly and test processes and our reliance on third parties to produce our products; |
• | any current and future litigation that could result in substantial costs and a diversion of management’s attention and resources that are needed to successfully maintain and grow our business; |
• | cancellations, rescheduling or deferrals of significant customer orders or shipments, as well as the ability of our customers to manage inventory; |
• | gain or loss of a design win or key customer; |
• | seasonality in sales of consumer devices in which our products are incorporated; |
• | failure to qualify our products or our suppliers’ manufacturing lines; |
• | our ability to develop and introduce new and enhanced products in a timely and effective manner, as well as our ability to anticipate and adapt to changes in technology; |
• | failure to protect our intellectual property; |
• | impact of a significant natural disaster, including earthquakes, floods and tsunamis, particularly in certain regions in which we operate or own buildings, such as Santa Clara, California, and where our third party suppliers operate, such as Taiwan and elsewhere in the Pacific Rim; and |
• | our ability to attract, retain and motivate a highly skilled workforce, especially managerial, engineering, sales and marketing personnel. |
• | a significant portion of our sales are made on a purchase order basis, which allows our customers to cancel, change or delay product purchase commitments with relatively short notice to us; |
• | customers may purchase integrated circuits from our competitors; |
• | customers may discontinue sales or lose market share in the markets for which they purchase our products; |
• | customers may develop their own solutions or acquire fully developed solutions from third-parties; |
• | customers may be subject to severe business disruptions, including, but not limited to, those driven by financial instability; or |
• | customers may consolidate (for example, Western Digital acquired SanDisk in 2017, and Toshiba Corporation sold control of a portion of its semiconductor business in 2018), which could lead to changing demand for our products, replacement of our products by the merged entity with those of our competitors and cancellation of orders. |
• | diversion of management attention from running our existing business; |
• | increased expenses, including, but not limited to, legal, administrative and compensation expenses related to newly hired or terminated employees; |
• | key personnel of an acquired company may decide not to work for us; |
• | increased costs to integrate or, in the case of a divestiture, separate the technology, personnel, customer base and business practices of the acquired or divested business or assets; |
• | assuming the legal obligations of the acquired company, including potential exposure to material liabilities not discovered in the due diligence process; |
• | ineffective or inadequate control, procedures and policies at the acquired company may negatively impact our results of operations; |
• | potential adverse effects on reported operating results due to possible write-down of goodwill and other intangible assets associated with acquisitions; |
• | potential damage to customer relationships or loss of synergies in the case of divestitures; and |
• | unavailability of acquisition financing on reasonable terms or at all. |
• | failure to obtain regulatory or other approvals; |
• | IP disputes or other litigation; or |
• | difficulties obtaining financing for the transaction. |
• | our customers usually require a comprehensive technical evaluation of our products before they incorporate them into their designs. |
• | it can take from six months to three years from the time our products are selected to commence commercial shipments; and |
• | our customers may experience changed market conditions or product development issues. |
• | loss of or delay in market acceptance of our products; |
• | material recall and replacement costs; |
• | delay in revenue recognition or loss of revenue; |
• | writing down the inventory of defective products; |
• | the diversion of the attention of our engineering personnel from product development efforts; |
• | our having to defend against litigation related to defective products or related property damage or personal injury; and |
• | damage to our reputation in the industry that could adversely affect our relationships with our customers. |
• | political, social and economic instability, including wars, terrorism, political unrest, boycotts, curtailment of trade and other business restrictions; |
• | volatile global economic conditions, including downturns in which some competitors may become more aggressive in their pricing practices, which would adversely impact our gross margin; |
• | compliance with domestic and foreign export and import regulations, including pending changes thereto, and difficulties in obtaining and complying with domestic and foreign export, import and other governmental approvals, permits and licenses; |
• | local laws and practices that favor local companies, including business practices in which we are prohibited from engaging by the Foreign Corrupt Practices Act and other anti-corruption laws and regulations; |
• | difficulties in staffing and managing foreign operations; |
• | natural disasters, including earthquakes, tsunamis and floods; |
• | trade restrictions, higher tariffs, worsening trade relationship between the United States and China, or changes in cross border taxation, particularly in light of the recently imposed tariffs announced by the Trump administration; |
• | transportation delays; |
• | difficulties of managing distributors; |
• | less effective protection of intellectual property than is afforded to us in the United States or other developed countries; |
• | inadequate local infrastructure; and |
• | exposure to local banking, currency control and other financial-related risks. |
• | stop selling, offering for sale, making, having made or exporting products or using technology that contains the allegedly infringing intellectual property; |
• | limit or restrict the type of work that employees involved in such litigation may perform for us; |
• | pay substantial damages and/or license fees and/or royalties to the party claiming infringement or other license violations that could adversely impact our liquidity or operating results; |
• | attempt to obtain or renew licenses to the relevant intellectual property, which licenses may not be available on reasonable terms or at all; and |
• | attempt to redesign those products that contain the allegedly infringing intellectual property. |
• | the possibility of environmental contamination and the costs associated with remediating any environmental problems; |
• | adverse changes in the value of these properties due to interest rate changes, changes in the neighborhood in which the property is located, or other factors; |
• | the possible need for structural improvements in order to comply with zoning, seismic and other legal or regulatory requirements; |
• | the potential disruption of our business and operations arising from or connected with a relocation due to moving to or renovating the facility; |
• | increased cash commitments for improvements to the buildings or the property, or both; |
• | increased operating expenses for the buildings or the property, or both; |
• | possible disputes with tenants or other third parties related to the buildings or the property, or both; |
• | failure to achieve expected cost savings due to extended non-occupancy of a vacated property intended to be leased; and |
• | the risk of financial loss in excess of amounts covered by insurance, or uninsured risks, such as the loss caused by damage to the buildings as a result of earthquakes, floods and/or other natural disasters. |
Period (1) | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | |||||||||
August 5 – September 1, 2018 | — | $ | — | — | $ | 357,956 | |||||||
September 2 – September 29, 2018 | 1,869 | $ | 18.71 | 1,869 | $ | 322,985 | |||||||
September 30 – November 3, 2018 | 1,026 | $ | 18.52 | 1,026 | $ | 1,003,987 | |||||||
Total | 2,895 | $ | 18.64 | 2,895 | $ | 1,003,987 |
(1) | The monthly periods presented above for the three months ended November 3, 2018, are based on our fiscal accounting periods which follow a quarterly 4-4-5 week fiscal accounting period. |
(2) | On November 17, 2016, we announced that our Board of Directors had authorized a $1 billion share repurchase plan. On October 16, 2018, we announced that our Board of Directors authorized a $700 million addition to the balance of our existing share repurchase plan. Our existing share repurchase program had approximately $304 million of repurchase authority remaining as of October 16, 2018 prior to the approved addition. We intend to effect share repurchases in accordance with the conditions of Rule 10b-18 under the Exchange Act, but may also make repurchases in the open market outside of Rule 10b-18 or in privately negotiated transactions. The share repurchase program will be subject to market conditions and other factors and does not obligate us to repurchase any dollar amount or number of our common shares and the repurchase program may be extended, modified, suspended or discontinued at any time. |
Item 6. Exhibits | ||||||||||
Exhibit No. | Item | Form | File Number | Incorporated by Reference from Exhibit Number | Filed with SEC | |||||
3.1 | 10-K | 000-30877 | 3.1 | 3/29/2018 | ||||||
3.2 | 10-Q | 000-30877 | 3.2 | 6/5/2018 | ||||||
3.3 | 8-K | 000-30877 | 3.1 | 11/10/2016 | ||||||
3.4 | 10-Q | 000-30877 | 3.4 | 6/5/2018 | ||||||
3.5 | 10-Q | 000-30877 | 3.5 | 6/5/2018 | ||||||
31.1 | Filed herewith | |||||||||
31.2 | Filed herewith | |||||||||
32.1* | Filed herewith | |||||||||
32.2* | Filed herewith | |||||||||
101.INS | XBRL Instance Document | Filed herewith | ||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | Filed herewith | ||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith | ||||||||
101.DEF | XBRL Taxonomy Extension Definition Document | Filed herewith | ||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | Filed herewith | ||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith |
# | Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate. |
* | The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. |
MARVELL TECHNOLOGY GROUP LTD. | ||
Date: December 10, 2018 | By: | /s/ JEAN HU |
Jean Hu | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Marvell Technology Group Ltd.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: December 10, 2018 | By: | /s/ MATTHEW J. MURPHY |
Matthew J. Murphy President and Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Marvell Technology Group Ltd.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: December 10, 2018 | By: | /s/ JEAN HU |
Jean Hu Chief Financial Officer (Principal Financial Officer) |
(i) | the Quarterly Report of the Registrant on Form 10-Q for the fiscal quarter ended November 3, 2018 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
Date: December 10, 2018 | By: | /s/ MATTHEW J. MURPHY |
Matthew J. Murphy President and Chief Executive Officer (Principal Executive Officer) |
(i) | the Quarterly Report of the Registrant on Form 10-Q for the fiscal quarter ended November 3, 2018 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
Date: December 10, 2018 | By: | /s/ JEAN HU |
Jean Hu Chief Financial Officer (Principal Financial Officer) |
Document and Entity Information - shares shares in Millions |
9 Months Ended | |
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Nov. 03, 2018 |
Dec. 03, 2018 |
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Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Nov. 03, 2018 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MRVL | |
Entity Registrant Name | MARVELL TECHNOLOGY GROUP LTD | |
Entity Central Index Key | 0001058057 | |
Current Fiscal Year End Date | --02-02 | |
Entity File Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 657.4 |
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Nov. 03, 2018 |
Feb. 03, 2018 |
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Statement of Financial Position [Abstract] | ||
Common shares, par value (in usd per share) | $ 0.002 | $ 0.002 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Nov. 03, 2018 |
Oct. 28, 2017 |
Nov. 03, 2018 |
Oct. 28, 2017 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (53,767) | $ 200,188 | $ 81,604 | $ 472,068 |
Other comprehensive income (loss), net of tax: | ||||
Net change in unrealized gain (loss) on marketable securities | 0 | 726 | 2,322 | 608 |
Net change in unrealized gain (loss) on cash flow hedges | 0 | (1,817) | 0 | (823) |
Other comprehensive income (loss), net of tax | 0 | (1,091) | 2,322 | (215) |
Comprehensive income (loss), net of tax | $ (53,767) | $ 199,097 | $ 83,926 | $ 471,853 |
Basis of Presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements of Marvell Technology Group Ltd., a Bermuda exempted company, and its wholly owned subsidiaries (the “Company”), as of and for the three and nine months ended November 3, 2018, have been prepared as required by the U.S. Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted as permitted by the SEC. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company's fiscal year 2018 audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended February 3, 2018. In the opinion of management, the financial statements include all adjustments, including normal recurring adjustments and other adjustments, that are considered necessary for fair presentation of the Company’s financial position and results of operations. All inter-company accounts and transactions have been eliminated. Operating results for the periods presented herein are not necessarily indicative of the results that may be expected for the entire year. Certain prior year amounts have been reclassified to conform to current year presentation. These amounts were not material to any of the periods presented. These financial statements should also be read in conjunction with the Company’s critical accounting policies included in the Company’s Annual Report on Form 10-K for the year ended February 3, 2018 and those included in this Form 10-Q below. The Company’s fiscal year is the 52- or 53-week period ending on the Saturday closest to January 31. Accordingly, every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the fourth quarter, making such quarter consist of 14 weeks. Fiscal 2018 had a 53-week year. Fiscal 2019 is a 52-week year. On July 6, 2018, the Company completed its acquisition of Cavium, Inc. (“Cavium”). Cavium is a provider of highly integrated semiconductor processors that enable intelligent processing for wired and wireless infrastructure and cloud for networking, communications, storage and security applications. Cavium designs, develops and markets semiconductor processors for intelligent and secure networks. The consolidated financial statements include the operating results of Cavium for the period from the date of acquisition to the Company's third quarter ended November 3, 2018. See “Note 3 - Business Combination” for more information. |
Recent Accounting Pronouncements |
9 Months Ended |
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Nov. 03, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Recently Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard on the recognition of revenue from contracts with customers that superseded nearly all existing revenue recognition guidance under GAAP. The new standard requires an entity to recognize revenue from the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance addresses, in particular, contracts with more than one performance obligation, as well as the accounting for certain costs to obtain or fulfill a contract with a customer, and provides for additional disclosures with respect to revenue and cash flows arising from contracts with customers. Public entities are required to apply the amendments on either a full or modified retrospective basis for annual periods beginning after December 15, 2017 and for interim periods within those annual periods. The Company adopted the standard on a modified retrospective basis in the first quarter of fiscal year 2019, with the cumulative effect recognized in retained earnings at the date of adoption. See "Note 12 - Revenue" for additional information on the impact of the adoption of the new standard on the Company’s consolidated financial statements. In January 2016, the FASB issued an accounting standard update that changes the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements. In August 2016, the FASB issued an accounting standards update to add or clarify guidance on the classification of certain cash receipts and cash payments in the statement of cash flows. The amendments in the update provide guidance on eight specific cash flow issues. The amendments to the guidance should be applied using a retrospective transition method for each period presented and, if it is impracticable to apply all of the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In October 2016, the FASB issued new guidance that simplifies the accounting for the income tax effects of intra-entity transfers and will require companies to recognize the income tax effects of intra-entity transfers of assets other than inventory when the transfer occurs. Previous guidance required companies to defer the income tax effects of intra-entity transfers of assets until the asset had been sold to an outside party or otherwise recognized. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In November 2016, the FASB issued new guidance that requires entities to include in their cash and cash-equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. As a result, companies will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements. In January 2017, the FASB issued an accounting standards update that revises the definition of a business. The amendments provide a more robust framework for determining when a set of assets and activities is a business. The update is intended to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In May 2017, the FASB issued an accounting standards update that provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Unless the changes in terms or conditions meet all three criteria outlined in the guidance, modification accounting should be applied. The three criteria relate to changes in the terms and conditions that affect the fair value, vesting conditions, or classification of a share-based payment award. The guidance is required to be applied prospectively to an award modified on or after the adoption date. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In August 2017, the FASB issued an accounting standards update that simplifies the application and administration of hedge accounting. The guidance amends the presentation and disclosure requirements and changes how companies assess effectiveness. The guidance is intended to more closely align hedge accounting with companies' risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020. Early adoption is permitted. The guidance will be applied to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements will be applied prospectively. The Company early adopted the standard in the third quarter of fiscal 2019. The adoption of this guidance did not have a significant effect on the Company's consolidated financial statements. In June 2018, the FASB issued an accounting standards update that substantially aligns the accounting for shared-based payments to non-employees and employees. The standard is required to be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company early adopted the standard in the second quarter of fiscal 2019. The adoption of this guidance did not have a significant effect on the Company's consolidated financial statements. Accounting Pronouncements Not Yet Effective In February 2016, the FASB issued a new standard on the accounting for leases, which requires a lessee to record a right-of-use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than twelve months. The standard also expands the required quantitative and qualitative disclosures for lease arrangements. The standard is effective for the Company beginning in the first quarter of fiscal year 2020. The Company will adopt the new lease accounting standard using a modified retrospective method and will not restate comparative periods. The Company currently estimates that the adoption of the new leasing standard will result in recognition of $135 million to $165 million in lease related right-of-use assets and liabilities on the company's condensed consolidated balance sheet, primarily related to real estate. The estimate could change as the Company finalizes estimates and proceeds towards implementation of the standard and will also fluctuate based on the lease portfolio, discount rates and foreign currency exchange rates as of the adoption date. The Company is in the process of implementing changes to its processes and systems to support the adoption of the new lease accounting standard. In June 2016, the FASB issued a new standard requiring financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard eliminates the threshold for initial recognition in current GAAP and reflects an entity’s current estimate of all expected credit losses. The measurement of expected credit losses is based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets. The standard is effective for the Company beginning in the first quarter of fiscal year 2021. The Company does not expect the adoption of this guidance will have a material effect on its consolidated financial statements. In August 2018, the FASB issued an accounting standards update to align the requirements for capitalizing implementation costs incurred in a software hosting arrangement that is a service contract and costs to develop or obtain internal-use software. The guidance is effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is evaluating the effect this new guidance will have on its consolidated financial statements. In August 2018, the FASB issued an accounting standards update that modifies the disclosure requirements on fair value measurements. The new guidance adds, modifies and removes certain fair value measurement disclosure requirements. The guidance is effective for the company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is evaluating the effect this new guidance will have on its consolidated financial statements. In November 2018, the FASB issued an accounting standards update that clarifies when transactions between participants in a collaborative arrangement are within the scope of the new revenue recognition standard that the Company adopted at the beginning of fiscal 2019. The guidance is effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The guidance must be applied retrospectively as of the date of initial application of the revenue recognition standard. In addition, entities may elect to apply the guidance to all collaborative arrangements or only to collaborative arrangements that are not completed as of the date of initial application of the aforementioned revenue recognition standard. The Company is evaluating the effect this new guidance will have on its consolidated financial statements. |
Business Combination |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination | Business Combination On July 6, 2018, the Company completed the acquisition of Cavium (the “Cavium acquisition”). Cavium is a provider of highly integrated semiconductor processors that enable intelligent processing for wired and wireless infrastructure and cloud for networking, communications, storage and security applications. The Cavium acquisition was primarily intended to create an opportunity for the combined company to emerge as a leader in infrastructure solutions. In accordance with the terms of the Agreement and Plan of Merger, dated as of November 19, 2017, by and among the Company and Cavium (the “Cavium merger agreement”), the Company acquired all outstanding shares of common stock of Cavium (the “Cavium shares”) for $40.00 per share in cash and 2.1757 shares of the Company’s common stock exchanged for each share of Cavium stock. The Company also made cash payments for the fractional shares that resulted from conversion as specified in the Cavium merger agreement. The merger consideration was funded with a combination of cash on hand, new debt financing and issuance of the Company’s common shares. See “Note 10 - Debt” for discussion of the debt financing. The following table summarizes the total merger consideration (in thousands, except share and per share data):
Pursuant to the Cavium merger agreement, the Company assumed the outstanding employee equity awards originally granted by Cavium and converted such shares into the Company’s equivalent awards. The outstanding vested options held by directors of Cavium were settled in cash as specified in the Cavium merger agreement. The portion of the fair value of partially vested awards associated with pre-acquisition service of Cavium employees represented a component of the total consideration, as presented above. The merger consideration allocation set forth herein is preliminary and may be revised as additional information becomes available during the measurement period which could be up to 12 months from the closing date of the acquisition. Any such revisions or changes may be material. In accordance with US GAAP requirements for business combinations, the Company allocated the fair value of the purchase consideration to the tangible assets, liabilities and intangible assets acquired, including in-process research and development, or IPR&D, generally based on their estimated fair values. The excess purchase price over those fair values is recorded as goodwill. Goodwill of $3.5 billion recorded for the Cavium acquisition is not expected to be deductible for tax purposes. IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When an IPR&D project is completed, the IPR&D is reclassified as an amortizable purchased intangible asset and amortized over the asset’s estimated useful life. The Company’s valuation assumptions of acquired assets and assumed liabilities require significant estimates, especially with respect to intangible assets. Acquisition-related costs are expensed in the periods in which the costs are incurred. The purchase price allocation is as follows, including adjustments to the purchase price allocation from the previously reported figures at August 4, 2018 (in thousands):
The provisional amounts presented in the table above pertained to the preliminary purchase price allocation reported in the Company’s Form 10-Q for the second quarter ended August 4, 2018. The measurement period adjustments were primarily related to the completion of the final Cavium income tax returns and adjustments to uncertain tax positions. The Company does not believe that the measurement period adjustments had a material impact on its consolidated statements of operations, balance sheets or cash flows in any periods previously reported. The Company incurred total acquisition related costs of $53.7 million which were recorded in selling, general and administrative expense in the condensed consolidated statements of operations. The Company also incurred $22.8 million of debt financing costs. As of November 3, 2018, $0.4 million associated with the Revolving Credit Facility was classified in prepaid expenses and other current assets, $1.4 million associated with the Revolving Credit Facility was classified in other non-current assets, and $12.2 million associated with the term loan and senior notes was classified in long-term debt in the condensed consolidated balance sheet. See “Note 10. Debt” for additional information. Additionally, the Company incurred $2.9 million of equity issuance costs, which were recorded in additional paid-in capital in the condensed consolidated balance sheet. Since the date of the acquisition, Cavium contributed $212.9 million and $254.3 million of the consolidated net revenue for the three and nine months ended November 3, 2018. Cavium net loss incurred in the three and nine months ended November 3, 2018 was $184.8 million and $305.4 million, which included restructuring costs of $19.1 million and $41.4 million, respectively. Supplemental Pro Forma Information The supplemental pro forma financial information presented below is for illustrative purposes only and is not necessarily indicative of the financial position or results of operations that would have been realized if the acquisition had been completed on the date indicated, does not reflect synergies that might have been achieved, nor is it indicative of future operating results or financial position. The pro forma adjustments are based upon currently available information and certain assumptions the Company believe are reasonable under the circumstances. The following supplemental pro forma information presents the combined results of operations for each of the periods presented, as if Cavium had been acquired as of the beginning of fiscal year 2018. The supplemental pro forma information includes adjustments to amortization and depreciation for acquired intangible assets and property and equipment, adjustments to share-based compensation expense, the purchase accounting effect on inventories acquired, interest expense, and transaction costs. For fiscal year 2018, nonrecurring pro forma adjustments directly attributable to the Cavium acquisition included (i) share-based compensation expense of $37.8 million, (ii) the purchase accounting effect of inventories acquired of $223.0 million, (iii) bridge loan related debt issuance costs of $6.1 million and (iv) transaction costs of $121.8 million. The supplemental pro forma information presented below is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the Cavium acquisition actually occurred at the beginning of fiscal year 2018 or of the results of our future operations of the combined business. The supplemental pro forma financial information for the periods presented is as follows (in thousands):
Consolidated Statements of Cash Flows The noncash consideration paid for the acquisition of Cavium was $3.3 billion for the nine months ended November 3, 2018. |
Goodwill and Acquired Intangible Assets, Net |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Acquired Intangible Assets, Net | Goodwill and Acquired Intangible Assets, Net Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The carrying value of goodwill as of November 3, 2018 and February 3, 2018 is $5.5 billion and $2.0 billion, respectively. The change in the carrying value of goodwill from February 3, 2018 to November 3, 2018 was due to the Cavium acquisition. See “Note 3 - Business Combination” for further discussion of the acquisition. Acquired Intangible Assets, Net There had been no new acquired intangible assets in fiscal year 2018, and as of February 3, 2018, the gross value of acquired intangible assets was fully amortized. In connection with the Cavium acquisition on July 6, 2018, the Company acquired $2.7 billion of intangible assets. As of the third quarter ended November 3, 2018, net carrying amounts are as follows (in thousands, except for weighted average remaining amortization period):
The intangible assets are amortized on a straight-line basis over the estimated useful lives, except for customer contracts and related relationships, which are amortized using an accelerated method of amortization over the expected customer lives, which more accurately reflects the pattern of realization of economic benefits expected to be obtained. The IPR&D will be accounted for as an indefinite-lived intangible asset and will not be amortized until the underlying projects reach technological feasibility and commercial production at which point the IPR&D will be amortized over the estimated useful life. Useful lives for these IPR&D projects are expected to range between 4 to 9 years. In the event the IPR&D is abandoned the related assets will be written off. Amortization expense from acquired intangible assets for the three and nine months ended November 3, 2018 was $78.7 million and $104.6 million respectively. The following table presents the estimated future amortization expense of acquired amortizable intangible assets as of November 3, 2018 (in thousands):
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Supplemental Financial Information |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Information | Supplemental Financial Information (in thousands) Consolidated Balance Sheets
The inventory balance at November 3, 2018 includes $97.6 million related to the inventory step-up adjustment from the Cavium acquisition.
Current accrued liabilities are comprised of the following at November 3, 2018 and February 3, 2018, respectively:
(1) Accrued rebates are classified as part of contract liabilities beginning in fiscal year 2019 upon adoption of the new revenue recognition standard. (2) Unsettled investment trades represent amounts owed to third parties for investment purchases for which cash settlement has not yet occurred. Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) by components are presented in the following tables:
(1) The amounts of gains (losses) associated with the Company's marketable securities reclassified from accumulated other comprehensive income (loss) are recorded in interest and other income, net. (2) The amounts of gains (losses) associated with the Company's derivative financial instruments reclassified from accumulated other comprehensive income (loss) are recorded in operating expenses. See "Note 8- Derivative Financial Instruments" for additional information on the affected line items in the condensed consolidated statements of operations. Share Repurchase Program On October 16, 2018, the Company announced that its Board of Directors authorized a $700 million addition to the balance of its existing share repurchase plan. As of November 3, 2018, there was $1.0 billion remaining available for future share repurchases. Under the program authorized by its Board of Directors, the Company may repurchase shares in the open-market or through privately negotiated transactions. The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations, as determined by the Company's management team. The repurchase program may be suspended or discontinued at any time. The Company repurchased 2.9 million of its common shares for $54.0 million during the nine months ended November 3, 2018. The Company repurchased 31.5 million shares for $527.6 million during the nine months ended October 28, 2017. The repurchased shares were retired immediately after the repurchases were completed. As of November 3, 2018, a total of 289.3 million shares have been repurchased to date under the Company’s share repurchase program for a total $3.8 billion in cash. |
Restructuring and Other Related Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Other Related Charges | Restructuring and Other Related Charges The Company continuously evaluates its existing operations to increase operational efficiency, decrease costs and increase profitability. The Company recorded restructuring and other related charges of $27.0 million for the three months ended November 3, 2018. These restructuring costs consist of approximately $14.2 million in severance and related costs, $2.2 million in facilities and related costs, $0.7 million in other exit-related costs and $9.9 million in asset write off costs. The asset write off costs include $6.5 million of technology license impairment and $3.4 million from fixed asset write offs and accelerated depreciation expense as a result of facility consolidation. The Company expects to complete these restructuring actions by the end of fiscal 2020. The Company recorded restructuring and other related charges of $64.0 million for the nine months ended November 3, 2018. These restructuring and other related charges consist of approximately $37.9 million in severance and related costs, $13.2 million in facilities and related costs, $1.0 million in other exit-related costs and $11.9 million in asset write off costs and accelerated depreciation expense. The accrued restructuring liability as of November 3, 2018 was $31.2 million. The following table sets forth a reconciliation of the beginning and ending restructuring liability balances by each major type of cost associated with the restructuring charges (in thousands):
The remaining accrued severance and related costs and the other exit-related costs are expected to be paid in fiscal 2019. The remaining accrued facility and related costs includes remaining payments under lease obligations related to vacated space that are expected to be paid through fiscal 2028, net of estimated sub-lease income. |
Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments As of November 3, 2018, the Company has no investments on hand. As of February 3, 2018, the following table summarizes the Company’s investments (in thousands):
Short-term, highly liquid investments of $83.9 million and $267.6 million as of November 3, 2018 and February 3, 2018, respectively, included in cash and cash equivalents on the accompanying consolidated balance sheets are not included in the table above because the gross unrealized gains and losses were immaterial as the carrying values approximate fair value due to the short term maturity of such investments. Gross realized gains and gross realized losses on sales of available-for-sale securities are presented in the following tables (in thousands):
The contractual maturities of available-for-sale and held-to-maturity securities are presented in the following tables (in thousands):
There are no securities on hand at November 3, 2018 that have been in a continuous unrealized loss position. Such securities are presented as follows for the fiscal year ended February 3, 2018:
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments The Company manages some of its foreign currency exchange rate risk through the purchase of foreign currency exchange contracts that hedge against the short-term effect of currency fluctuations. The Company’s policy is to enter into foreign currency forward contracts with maturities less than 12 months which mitigates the effect of rate fluctuations on certain local currency denominated operating expenses. All derivative instruments are recorded at fair value in either prepaid expenses and other current assets or accrued liabilities. The Company reports cash flows from derivative instruments in cash flows from operating activities. The Company uses quoted prices to value its derivative instruments. There were no outstanding forward contracts at November 3, 2018 and February 3, 2018. Cash Flow Hedges. The Company designates and documents its foreign currency forward exchange contracts as cash flow hedges for certain operating expenses. The Company evaluates and calculates the effectiveness of each hedge at least quarterly. The effective change is recorded in accumulated other comprehensive income and is subsequently reclassified to operating expense when the hedged expense is recognized. Ineffectiveness is recorded in interest and other income, net. For the three and nine months ended November 3, 2018, the Company did not have any derivative financial instruments. The following table provides information about gains (losses) associated with the Company’s derivative financial instruments for the three and nine months ended October 28, 2017 (in thousands):
The amounts of gains (losses) associated with the Company's derivative financial instruments reclassified from accumulated other comprehensive loss for the three and nine months ended October 28, 2017 are presented in the following table (in thousands):
The portion of gains (losses) excluded from the assessment of hedge effectiveness is included in interest and other income, net. These amounts were not material in the three and nine months ended October 28, 2017. The Company did not have hedge ineffectiveness from derivative financial instruments in the three and nine months ended November 3, 2018 and October 28, 2017. No cash flow hedges were terminated as a result of forecasted transactions that did not occur. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value is an exit price representing the amount that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1—Observable inputs that reflect quoted prices for identical assets or liabilities in active markets. Level 2—Other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs that are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s Level 1 assets include institutional money-market funds that are classified as cash equivalents and marketable investments in U.S. government and agency debt, which are valued primarily using quoted market prices. The Company’s Level 2 assets include its marketable investments in time deposits, foreign government and agency debt, municipal debt securities, corporate debt securities and asset backed securities as the market inputs used to value these instruments consist of market yields, reported trades and broker/dealer quotes, which are corroborated with observable market data. In addition, the severance pay fund is classified as Level 2 assets as the valuation inputs are based on quoted prices and market observable data of similar instruments. The tables below set forth, by level, the Company’s assets and liabilities that are measured at fair value on a recurring basis. The tables do not include assets and liabilities that are measured at historical cost or any basis other than fair value (in thousands):
Fair Value of Debt The Company classified the Term Loan, the 2023 Notes and 2028 Notes under Level 2 of the fair value measurement hierarchy. The carrying value of the Term Loan approximates its fair value as the Term Loan is carried at a market observable interest rate that resets periodically. At November 3, 2018, the estimated aggregate fair value of the 2023 Notes and 2028 Notes was $987.8 million and were classified as Level 2 as there are quoted prices from less active markets for the notes. |
Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt On July 6, 2018, the Company completed its acquisition of Cavium. In connection with the acquisition (see "Note 3 - Business Combination"), the Company executed debt agreements in June 2018 to obtain a $900 million term loan, a $500 million revolving credit facility and $1.0 billion of senior unsecured notes. Upon completion of the offering of the senior unsecured notes in June 2018, the Company terminated an $850 million bridge loan commitment. This bridge loan commitment was provided by the underwriting bankers at the time of the Merger Agreement was executed in November 2017. The bridge loan was never drawn upon. Term Loan and Revolving Credit Facility On June 13, 2018, the Company entered into a credit agreement (“Credit Agreement”) with certain lenders and Goldman Sachs Bank USA, as the general administrative agent and the term facility agent, and Bank of America, N.A., as the revolving facility agent. The Credit Agreement provides for borrowings of: (i) up to $500.0 million in the form of a revolving line of credit (“Revolving Credit Facility”) and (ii) $900.0 million in the form of a term loan (“Term Loan”). The proceeds of the Term Loan were used to fund a portion of the cash consideration for the Cavium acquisition, repay Cavium’s debt, and pay transaction expenses in connection with the Cavium acquisition. The proceeds of the Revolving Credit Facility is intended for general corporate purposes of the Company and its subsidiaries, which may include, among other things, the financing of acquisitions, the refinancing of other indebtedness and the payment of transaction expenses related to the foregoing. As of November 3, 2018, the Revolving Credit Facility has not been drawn upon. Following is further detail of the terms of the various debt agreements. The Term Loan has a three year term which matures on June 13, 2021 and has a stated floating interest rate which equates to reserve-adjusted LIBOR + 137.5 bps as of November 3, 2018. The effective interest rate for the Term Loan was 4.134% as of November 3, 2018. The Term Loan does not require any scheduled principal payments prior to final maturity but does permit the Company to make early principal payments without premium or penalty. During the three months ended November 3, 2018, the Company repaid $75 million of the principal outstanding, and wrote off $0.9 million of associated unamortized debt issuance costs. The Revolving Credit Facility has a five year term and has a stated floating interest rate which equates to reserve-adjusted LIBOR + 150.0 bps. As of November 3, 2018, the full amount of the Revolving Credit Facility of $500 million was undrawn and will be available for draw down through June 13, 2023. An unused commitment fee is payable quarterly based on unused balances at a rate that is based on the ratings of the Company's senior unsecured long-term indebtedness. This rate was initially 0.175% per year. The Credit Agreement requires that the Company and its subsidiaries comply, subject to certain exceptions, with covenants relating to customary matters such as creating or permitting certain liens, entering into sale and leaseback transactions, consolidating, merging, liquidating or dissolving, and entering into restrictive agreements. It also prohibits subsidiaries of the Company from incurring additional indebtedness, and requires the Company to comply with a leverage ratio financial covenant not to exceed 3 to 1 as of the end of any fiscal quarter. As of November 3, 2018, the Company was in compliance with all of its debt covenants. Senior Unsecured Notes On June 22, 2018, the Company completed a public offering of (i) $500.0 million aggregate principal amount of the Company's 4.200% Senior Notes due 2023 (the “2023 Notes”) and (ii) $500.0 million aggregate principal amount of the Company's 4.875% Senior Notes due 2028 (the “2028 Notes” and, together with the 2023 Notes, the "Senior Notes”). The 2023 Notes mature on June 22, 2023 and the 2028 Notes mature on June 22, 2028. The stated and effective interest rates for the 2023 Notes are 4.200% and 4.423%, respectively. The stated and effective interest rates for the 2028 Notes are 4.875% and 5.012%, respectively. The Company may redeem the Senior Notes, in whole or in part, at any time prior to their maturity at the redemption prices set forth in Senior Notes. In addition, upon the occurrence of a change of control repurchase event (which involves the occurrence of both a change of control and a ratings event involving the Senior Notes being rated below investment grade), the Company will be required to make an offer to repurchase the Senior Notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest to, but excluding, the repurchase date. The indenture governing the Senior Notes also contains certain limited covenants restricting the Company’s ability to incur certain liens, enter into certain sale and leaseback transactions and merge or consolidate with any other entity or convey, transfer or lease all or substantially all of the Company’s properties or assets to another person, which, in each case, are subject to certain qualifications and exceptions. Summary of Borrowings and Outstanding Debt The following table summarizes the Company's outstanding debt at November 3, 2018 (in thousands):
During the three and nine months ended November 3, 2018, the Company recognized $20.9 million and $29.8 million of interest expense in its consolidated statements of operations related to interest, amortization of debt issuance costs and accretion of discount associated with the outstanding Term Loan and Senior Notes, respectively. As of November 3, 2018, the aggregate future contractual maturities of the Company's outstanding debt, at face value, were as follows (in thousands):
Repayment of Debt and Termination of Credit Facility of Cavium On July 6, 2018, concurrent with completing the acquisition of Cavium as further described in “Note 3 - Business Combination,” the Company assumed and paid all of Cavium's outstanding debt and accrued interest of $606.6 million. Cavium's debt was governed under a credit agreement dated August 16, 2016, which was terminated following the repayment. |
Commitments and Contingencies |
9 Months Ended |
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Nov. 03, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments Under the Company’s manufacturing relationships with its foundry partners, cancellation of outstanding purchase orders is allowed but requires payment of all costs and expenses incurred through the date of cancellation. As of November 3, 2018, these foundries had incurred approximately $149.1 million of manufacturing costs and expenses relating to the Company’s outstanding purchase orders. Intellectual Property Indemnification The Company has agreed to indemnify certain customers for claims made against the Company’s products where such claims allege infringement or misappropriation of third-party intellectual property rights, including, but not limited to, patents, registered trademarks, copyrights and/or trade secrets. Under the aforementioned indemnification clauses, the Company may be obligated to defend customers and pay for the damages awarded against the customer under an infringement or misappropriation claim, as well as customers' attorneys’ fees and costs. The Company’s indemnification obligations generally do not expire after termination or expiration of the agreement containing the indemnification obligation. However, there are typically limits on and exceptions to the Company’s potential liability for indemnification. Although historically the Company has not made significant payments under these indemnification obligations, the Company cannot estimate the amount of potential future payments, if any, that it might be required to make as a result of these agreements. The maximum potential amount of any future payments that the Company could be required to make under these indemnification obligations could be significant. Contingencies and Legal Proceedings The Company and certain of its subsidiaries are engaged in legal proceedings and claims which arise in the ordinary course of its business. The Company is currently unable to predict the final outcome of these matters and, therefore, cannot determine the likelihood of loss or estimate a range of possible loss, except with respect to amounts where it has determined a loss is both probable and estimable and where it has made an accrual. Litigation is subject to inherent uncertainties and unfavorable rulings could occur. An unfavorable ruling in litigation, particularly patent litigation, could require the Company to pay damages, one-time license fees or ongoing royalty payments, and could prevent the Company from manufacturing or selling some of its products or limit or restrict the type of work that employees involved in such litigation may perform for the Company, any of which could adversely affect financial results in future periods. There can be no assurance that these matters will be resolved in a manner that is not adverse to the Company’s business, financial condition, results of operations or cash flows. Indemnities, Commitments and Guarantees During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities may include intellectual property indemnities to the Company’s customers in connection with the sales of its products, indemnities for liabilities associated with the infringement of other parties’ technology based upon the Company’s products, indemnities for general commercial obligations, indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease, and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of Bermuda. In addition, the Company has contractual commitments to various customers that could require the Company to incur costs to repair an epidemic defect with respect to its products outside of the normal warranty period if such defect were to occur. The duration of these indemnities, commitments and guarantees varies and, in certain cases, is indefinite. Some of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. In general, the Company does not record any liability for these indemnities, commitments and guarantees in the accompanying consolidated balance sheets as the amounts cannot be reasonably estimated and are not considered probable. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when the loss is both estimable and probable. |
Revenue |
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Revenue | Revenue Effect of the Adoption of the New Revenue Standard At the beginning of fiscal year 2019, the Company adopted the new revenue recognition standard on a modified retrospective basis, with the cumulative effect recognized in retained earnings at the date of adoption. The Company elected to apply the new revenue standard retrospectively to all contracts that are not completed contracts at the date of the initial adoption. Based on the Company’s assessment of this new accounting standard, a change in revenue recognition timing on its component sales made to distributors was made in the first quarter of fiscal year 2019 and the Company started to recognize revenue when the Company transfers control to the distributor rather than deferring recognition until the distributor sells the components. In addition, the Company established accruals for the variable consideration aspect of sales, estimated based on historical experience, which include estimates for price discounts, price protection, rebates, returns and stock rotation programs. On the date of initial adoption, the Company removed the deferred income on component sales made to distributors and recorded estimates of the accruals for variable consideration through a cumulative adjustment to retained earnings. The net impact to the opening balance of retained earnings related to the adoption of the new standard was an increase of $34.2 million. The following table summarizes the effects of adopting the new revenue standard on the Company's financial statements for the fiscal year beginning February 4, 2018 as an adjustment to the opening balance. Such adjustments were of a non-cash nature.
The following tables summarize financial statement line items that are affected in the current reporting period by the application of the new revenue recognition policy as compared with the previous revenue recognition policy which was in effect in prior periods in accordance with ASC 605, Revenue Recognition:
Adoption of the new revenue standard had no impact to cash from or used in operating, financing, or investing activities on the condensed consolidated statements of cash flow. New Revenue Recognition Policy Including Significant Judgments and Estimates Through the fiscal year ended February 3, 2018, in accordance with ASC 605, Revenue Recognition, the Company recognized revenue when there was persuasive evidence of an arrangement, delivery had occurred, the fee was fixed or determinable, and collection was reasonably assured. If the Company granted extended payment terms greater than its standard terms for a customer such that collectability was not assured, the revenue was deferred upon shipment and would be recognized when the payment became due provided all other revenue recognition criteria had been satisfied. Product revenue was generally recognized upon shipment of product to customers, net of accruals for estimated sales returns and rebates. However, some of the Company’s sales were made through distributors under agreements allowing for price protection and limited rights of stock rotation on products unsold by the distributors. Product revenue on sales made through distributors were deferred until the distributors sold the product to end customers. Deferred revenue less the related cost of the inventories was reported as deferred income. The Company did not believe that there was any significant exposure related to impairment of deferred cost of sales, as its historical returns had been minimal and inventory turnover for its distributors generally ranged from 60 to 90 days. The Company’s sales to direct customers were made primarily pursuant to standard purchase orders for delivery of products. As a result of the adoption of the new revenue standard on February 4, 2018, at the beginning of the first quarter of fiscal year 2019, the Company revised its revenue recognition policy. The Company now recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Under the new revenue recognition standard, the Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. The Company enters into contracts that may include various combinations of products and services that are capable of being distinct and accounted for as separate performance obligations. To date, the majority of the revenue has been generated by sales associated with storage and networking products. Revenue from services has been insignificant. Performance obligations associated with product sales transactions are generally satisfied when control passes to customers upon shipment. Accordingly, product revenue is recognized at a point in time when control of the asset is transferred to the customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a product to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For product revenue, the performance obligation is deemed to be the delivery of the product and therefore, the revenue is generally recognized upon shipment to customers, net of accruals for estimated sales returns and rebates. These estimates are based on historical returns, analysis of credit memo data and other known factors. Actual returns could differ from these estimates. The Company accounts for rebates by recording reductions to revenue for rebates in the same period that the related revenue is recorded. The amount of these reductions is based upon the terms agreed to with the customer. Some of the Company’s sales are made to distributors under agreements allowing for price protection, price discounts and limited rights of stock rotation on products unsold by the distributors. Control passes to the distributor upon shipment, and terms and payment by the Company’s distributors is not contingent on resale of the product. Product revenue on sales made to distributors with price protection and stock rotation rights is recognized upon shipment to distributors, with an accrual for the variable consideration aspect of sales to distributors, estimated based on historical experience, including estimates for price discounts, price protection, rebates, and stock rotation programs. The Company’s products are generally subject to warranty, which provides for the estimated future costs of replacement upon shipment of the product. The Company’s products carry a standard one-year warranty, with certain exceptions in which the warranty period can extend to more than one year based on contractual agreements. The warranty accrual is estimated primarily based on historical claims compared to historical revenues and assumes that the Company will have to replace products subject to a claim. From time to time, the Company becomes aware of specific warranty situations, and it records specific accruals to cover these exposures. Warranty expenses were not material for the periods presented. Disaggregation of Revenue The majority of the Company's revenue is generated from sales of the Company’s products. The following table summarizes net revenue disaggregated by product group (in thousands, except percentages):
The following table summarizes net revenue disaggregated by primary geographical market (in thousands, except percentages):
The following table summarizes net revenue disaggregated by customer type (in thousands, except percentages):
Contract Liabilities Contract liabilities consist of the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration or the amount is due from the customer. As of November 3, 2018, contract liability balances are comprised of variable consideration estimated based on a portfolio basis using the expected value methodology based on analysis of historical data, current economic conditions, and contractual terms. Variable consideration estimates consist of the estimated returns, price discounts, price protection, rebates, and stock rotation programs. As of the end of a reporting period, some of the performance obligations associated with contracts will have been unsatisfied or only partially satisfied. In accordance with the practical expedients available in the guidance, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less. Contract liabilities are included in accrued liabilities in the condensed consolidated balance sheets. The opening balance of contract liabilities at the beginning of the first quarter of fiscal year 2019 was $79.6 million. During the nine months ended November 3, 2018, contract liabilities increased by $562.1 million associated with variable consideration estimates, offset by $520.0 million decrease in such reserves primarily due to credit memos issued to customers. The ending balance of contract liabilities as of the third quarter of fiscal year 2019 was $121.7 million. Sales Commissions Sales commissions are generally earned by the salespersons based on shipments to customers. The Company has elected to apply the practical expedient to expense these costs when incurred as the amortization period is typically one year or less. These costs are recorded in selling, general and administrative expenses in the condensed consolidated statements of operations. |
Income Tax |
9 Months Ended |
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Nov. 03, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax | Income Tax The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company’s quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in accurately predicting our pre-tax income or loss and the mix of jurisdictions to which they relate, intercompany transactions, the applicability of special tax regimes, changes in how we do business, and acquisitions, as well as the integration of such acquisitions. The Company’s estimated effective tax rate for the year differs from the U.S. statutory rate of 21% primarily due to the benefit of a substantial portion of its earnings being taxed at rates lower than the U.S. statutory rate. The Company estimates that its effective tax rate could be adversely affected by pre-tax losses incurred in certain non-U.S. jurisdictions subject to tax rates lower than 21% for which it does not realize a tax benefit. These losses reduce the Company's pre-tax income without a corresponding reduction in its tax expense, and therefore increase its effective tax rate. On July 6, 2018, the Company completed the acquisition of Cavium, Inc. (“Cavium”). With this acquisition, the Company is projecting significant amounts of pre-tax losses in the U.S. in the current fiscal year for which an income tax benefit is realized at the U.S. statutory rate of 21%. This income tax benefit is in excess of the Company's projected income taxes from other jurisdictions. As a result, the Company's estimated annual effective tax rate reflects a consolidated income tax benefit. It is possible that significant negative evidence may become available to reach a conclusion that a valuation allowance will be needed, and as such, the Company may recognize a valuation allowance in the next 12 months. The income tax expense of $9.3 million for the three months ended November 3, 2018 included tax expense related to discrete items recorded in the quarter of $1.9 million. The income tax benefit of $16.9 million for the nine months ended November 3, 2018, included a tax benefit from a net reduction in unrecognized tax benefits of $6.8 million, and a tax benefit related to other discrete items recorded in the nine month period of $0.9 million. The Tax Cuts and Jobs Act (“2017 Tax Act”) was signed into law on December 22, 2017. The 2017 Tax Act significantly revised the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21%, eliminating certain deductions, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. The 2017 Tax Act also enhanced and extended through 2026 the option to claim accelerated depreciation deductions on qualified property. The Company has not completed its determination of the accounting implications of the 2017 Tax Act on its tax accruals. However, the Company reasonably estimated the effects of the 2017 Tax Act and recorded provisional amounts in its financial statements as of February 3, 2018. There were no additional adjustments made to these amounts in the three or nine month period ended November 3, 2018. As the Company continues its analysis of the 2017 Tax Act, collects and prepares necessary data, and interprets any additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service (“I.R.S.”), and other standard-setting bodies, the Company may make adjustments to the provisional amounts. Those adjustments may materially impact the Company's provision for income taxes in the period in which the adjustments are made. The Company's gross unrecognized tax benefits were $150.5 million and $23.2 million on November 3, 2018 and February 3, 2018, respectively. The net increase to the Company's gross unrecognized tax benefits of $127.3 million is primarily the result of certain unrecognized tax benefits recorded in the Company's accounting for the acquisition of Cavium. If the gross unrecognized tax benefits as of November 3, 2018 were realized in a subsequent period, the Company would record a tax benefit of $120.2 million within its provision of income taxes at such time. The amount of interest and penalties accrued as of November 3, 2018 and February 3, 2018 was $14.3 million and $17.2 million, respectively. It is reasonably possible that the amount of unrecognized tax benefits could increase or decrease significantly due to changes in tax law in various jurisdictions, new tax audits and changes in the U.S. dollar as compared to foreign currencies within the next 12 months. Excluding these factors, uncertain tax positions may decrease by as much as $10.5 million from the lapse of statutes of limitation in various jurisdictions during the next 12 months. Government tax authorities from several non-U.S. jurisdictions are also examining the Company’s tax returns. The Company believes that it has adequately provided for any reasonably foreseeable outcomes related to its tax audits and that any settlement will not have a material effect on its results at this time. The Company operates under tax incentives in certain countries that may be extended if certain additional requirements are satisfied. The tax incentives are conditional upon meeting certain employment and investment thresholds. The impact of these tax incentives decreased foreign taxes by $0.6 million and $1.7 million for the three and nine months ended November 3, 2018 respectively, and $0.1 million and $1.6 million for the three and nine months ended October 28, 2017, respectively. The benefit of these tax incentives on net income per share was less than $0.01 per share for both the three and nine months ended November 3, 2018 and October 28, 2017. The Company’s principal source of liquidity as of November 3, 2018 consisted of approximately $610 million of cash, cash equivalents and short-term investments, of which approximately $550 million was held by subsidiaries outside of Bermuda. The Company has not recognized a deferred tax liability on $440 million of the excess financial reporting basis over the tax basis of investments in foreign subsidiaries outside of Bermuda that is indefinitely reinvested. The Company plans to use such amounts to fund various activities outside of Bermuda, including working capital requirements, capital expenditures for expansion, funding of future acquisitions or other financing activities. If such amounts were no longer considered indefinitely reinvested, the Company would incur a tax expense of approximately $120 million. |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share | Net Income Per Share The Company reports both basic net income per share, which is based on the weighted average number of common shares outstanding during the period, and diluted net income per share, which is based on the weighted average number of common shares outstanding and potentially dilutive shares outstanding during the period. The computations of basic and diluted net income per share are presented in the following table (in thousands, except per share amounts):
Potential dilutive securities include dilutive common shares from share-based awards attributable to the assumed exercise of stock options, restricted stock units and employee stock purchase plan shares using the treasury stock method. Under the treasury stock method, potential common shares outstanding are not included in the computation of diluted net income per share if their effect is anti-dilutive. Anti-dilutive potential shares are presented in the following table (in thousands):
Anti-dilutive potential shares from share-based awards are excluded from the calculation of diluted earnings per share for all periods reported above because either their exercise price exceeded the average market price during the period or the share-based awards were determined to be anti-dilutive based on applying the treasury stock method. Anti-dilutive potential shares are also excluded from the calculation of diluted earnings per share for the three months ended November 3, 2018 due to the net loss reported in that period. |
Basis of Presentation (Policies) |
9 Months Ended |
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Nov. 03, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fiscal Period | The Company’s fiscal year is the 52- or 53-week period ending on the Saturday closest to January 31. Accordingly, every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the fourth quarter, making such quarter consist of 14 weeks. Fiscal 2018 had a 53-week year. Fiscal 2019 is a 52-week year. |
Accounting Pronouncements Recently Adopted and Accounting Pronouncements Not Yet Effective | Accounting Pronouncements Recently Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard on the recognition of revenue from contracts with customers that superseded nearly all existing revenue recognition guidance under GAAP. The new standard requires an entity to recognize revenue from the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance addresses, in particular, contracts with more than one performance obligation, as well as the accounting for certain costs to obtain or fulfill a contract with a customer, and provides for additional disclosures with respect to revenue and cash flows arising from contracts with customers. Public entities are required to apply the amendments on either a full or modified retrospective basis for annual periods beginning after December 15, 2017 and for interim periods within those annual periods. The Company adopted the standard on a modified retrospective basis in the first quarter of fiscal year 2019, with the cumulative effect recognized in retained earnings at the date of adoption. See "Note 12 - Revenue" for additional information on the impact of the adoption of the new standard on the Company’s consolidated financial statements. In January 2016, the FASB issued an accounting standard update that changes the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements. In August 2016, the FASB issued an accounting standards update to add or clarify guidance on the classification of certain cash receipts and cash payments in the statement of cash flows. The amendments in the update provide guidance on eight specific cash flow issues. The amendments to the guidance should be applied using a retrospective transition method for each period presented and, if it is impracticable to apply all of the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In October 2016, the FASB issued new guidance that simplifies the accounting for the income tax effects of intra-entity transfers and will require companies to recognize the income tax effects of intra-entity transfers of assets other than inventory when the transfer occurs. Previous guidance required companies to defer the income tax effects of intra-entity transfers of assets until the asset had been sold to an outside party or otherwise recognized. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In November 2016, the FASB issued new guidance that requires entities to include in their cash and cash-equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. As a result, companies will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements. In January 2017, the FASB issued an accounting standards update that revises the definition of a business. The amendments provide a more robust framework for determining when a set of assets and activities is a business. The update is intended to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In May 2017, the FASB issued an accounting standards update that provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Unless the changes in terms or conditions meet all three criteria outlined in the guidance, modification accounting should be applied. The three criteria relate to changes in the terms and conditions that affect the fair value, vesting conditions, or classification of a share-based payment award. The guidance is required to be applied prospectively to an award modified on or after the adoption date. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this guidance did not have an impact on the Company's consolidated financial statements. In August 2017, the FASB issued an accounting standards update that simplifies the application and administration of hedge accounting. The guidance amends the presentation and disclosure requirements and changes how companies assess effectiveness. The guidance is intended to more closely align hedge accounting with companies' risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The guidance is effective for the Company beginning in the first quarter of fiscal year 2020. Early adoption is permitted. The guidance will be applied to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements will be applied prospectively. The Company early adopted the standard in the third quarter of fiscal 2019. The adoption of this guidance did not have a significant effect on the Company's consolidated financial statements. In June 2018, the FASB issued an accounting standards update that substantially aligns the accounting for shared-based payments to non-employees and employees. The standard is required to be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company early adopted the standard in the second quarter of fiscal 2019. The adoption of this guidance did not have a significant effect on the Company's consolidated financial statements. Accounting Pronouncements Not Yet Effective In February 2016, the FASB issued a new standard on the accounting for leases, which requires a lessee to record a right-of-use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than twelve months. The standard also expands the required quantitative and qualitative disclosures for lease arrangements. The standard is effective for the Company beginning in the first quarter of fiscal year 2020. The Company will adopt the new lease accounting standard using a modified retrospective method and will not restate comparative periods. The Company currently estimates that the adoption of the new leasing standard will result in recognition of $135 million to $165 million in lease related right-of-use assets and liabilities on the company's condensed consolidated balance sheet, primarily related to real estate. The estimate could change as the Company finalizes estimates and proceeds towards implementation of the standard and will also fluctuate based on the lease portfolio, discount rates and foreign currency exchange rates as of the adoption date. The Company is in the process of implementing changes to its processes and systems to support the adoption of the new lease accounting standard. In June 2016, the FASB issued a new standard requiring financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard eliminates the threshold for initial recognition in current GAAP and reflects an entity’s current estimate of all expected credit losses. The measurement of expected credit losses is based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets. The standard is effective for the Company beginning in the first quarter of fiscal year 2021. The Company does not expect the adoption of this guidance will have a material effect on its consolidated financial statements. In August 2018, the FASB issued an accounting standards update to align the requirements for capitalizing implementation costs incurred in a software hosting arrangement that is a service contract and costs to develop or obtain internal-use software. The guidance is effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is evaluating the effect this new guidance will have on its consolidated financial statements. In August 2018, the FASB issued an accounting standards update that modifies the disclosure requirements on fair value measurements. The new guidance adds, modifies and removes certain fair value measurement disclosure requirements. The guidance is effective for the company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The Company is evaluating the effect this new guidance will have on its consolidated financial statements. In November 2018, the FASB issued an accounting standards update that clarifies when transactions between participants in a collaborative arrangement are within the scope of the new revenue recognition standard that the Company adopted at the beginning of fiscal 2019. The guidance is effective for the Company beginning in the first quarter of fiscal year 2021, with early adoption permitted. The guidance must be applied retrospectively as of the date of initial application of the revenue recognition standard. In addition, entities may elect to apply the guidance to all collaborative arrangements or only to collaborative arrangements that are not completed as of the date of initial application of the aforementioned revenue recognition standard. The Company is evaluating the effect this new guidance will have on its consolidated financial statements. |
Business Combination (Tables) |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Total Merger Consideration | The following table summarizes the total merger consideration (in thousands, except share and per share data):
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Purchase Price Allocation | The purchase price allocation is as follows, including adjustments to the purchase price allocation from the previously reported figures at August 4, 2018 (in thousands):
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Supplemental Pro Forma Financial Information | The supplemental pro forma financial information for the periods presented is as follows (in thousands):
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Goodwill and Acquired Intangible Assets, Net (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets by Major Class | As of the third quarter ended November 3, 2018, net carrying amounts are as follows (in thousands, except for weighted average remaining amortization period):
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Schedule of Indefinite-Lived Intangible Assets | As of the third quarter ended November 3, 2018, net carrying amounts are as follows (in thousands, except for weighted average remaining amortization period):
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table presents the estimated future amortization expense of acquired amortizable intangible assets as of November 3, 2018 (in thousands):
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Supplemental Financial Information (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories |
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Schedule of Property and Equipment, Net |
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Schedule of Current Accrued Liabilities | Current accrued liabilities are comprised of the following at November 3, 2018 and February 3, 2018, respectively:
(1) Accrued rebates are classified as part of contract liabilities beginning in fiscal year 2019 upon adoption of the new revenue recognition standard. (2) Unsettled investment trades represent amounts owed to third parties for investment purchases for which cash settlement has not yet occurred. |
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Changes in Accumulated Other Comprehensive Income (Loss) by Components | The changes in accumulated other comprehensive income (loss) by components are presented in the following tables:
(1) The amounts of gains (losses) associated with the Company's marketable securities reclassified from accumulated other comprehensive income (loss) are recorded in interest and other income, net. (2) The amounts of gains (losses) associated with the Company's derivative financial instruments reclassified from accumulated other comprehensive income (loss) are recorded in operating expenses. See "Note 8- Derivative Financial Instruments" for additional information on the affected line items in the condensed consolidated statements of operations. |
Restructuring and Other Related Charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Beginning and Ending Restructuring Liability Balances by Major Type of Costs | The following table sets forth a reconciliation of the beginning and ending restructuring liability balances by each major type of cost associated with the restructuring charges (in thousands):
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Investments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Investments | As of February 3, 2018, the following table summarizes the Company’s investments (in thousands):
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Gross Realized Gains and Losses on Sales of Available-for-Sale Securities | Gross realized gains and gross realized losses on sales of available-for-sale securities are presented in the following tables (in thousands):
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Available-for-sale Securities Classified by Contractual Maturities | The contractual maturities of available-for-sale and held-to-maturity securities are presented in the following tables (in thousands):
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Unrealized Loss Position Investments | Such securities are presented as follows for the fiscal year ended February 3, 2018:
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Derivative Financial Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information about Gains (Losses) Associated with Derivative Financial Instruments | The following table provides information about gains (losses) associated with the Company’s derivative financial instruments for the three and nine months ended October 28, 2017 (in thousands):
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Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) | The amounts of gains (losses) associated with the Company's derivative financial instruments reclassified from accumulated other comprehensive loss for the three and nine months ended October 28, 2017 are presented in the following table (in thousands):
|
Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 03, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | The tables below set forth, by level, the Company’s assets and liabilities that are measured at fair value on a recurring basis. The tables do not include assets and liabilities that are measured at historical cost or any basis other than fair value (in thousands):
|
Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 03, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Outstanding Debt | The following table summarizes the Company's outstanding debt at November 3, 2018 (in thousands):
|
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Aggregate Future Contractual Maturities of Debt | As of November 3, 2018, the aggregate future contractual maturities of the Company's outstanding debt, at face value, were as follows (in thousands):
|
Revenue (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 03, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Effect of Adoption of New Revenue Standard | The following table summarizes the effects of adopting the new revenue standard on the Company's financial statements for the fiscal year beginning February 4, 2018 as an adjustment to the opening balance. Such adjustments were of a non-cash nature.
The following tables summarize financial statement line items that are affected in the current reporting period by the application of the new revenue recognition policy as compared with the previous revenue recognition policy which was in effect in prior periods in accordance with ASC 605, Revenue Recognition:
|
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Disaggregation of Revenue | The following table summarizes net revenue disaggregated by product group (in thousands, except percentages):
The following table summarizes net revenue disaggregated by primary geographical market (in thousands, except percentages):
The following table summarizes net revenue disaggregated by customer type (in thousands, except percentages):
|
Net Income Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 03, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The computations of basic and diluted net income per share are presented in the following table (in thousands, except per share amounts):
|
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Schedule of Anti-dilutive Potential Shares | Anti-dilutive potential shares are presented in the following table (in thousands):
|
Recent Accounting Pronouncements (Details) - Accounting Standards Update 2018-11 - Scenario, Forecast $ in Millions |
May 04, 2019
USD ($)
|
---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Lease related right-of-use asset | $ 135 |
Lease liability | $ 165 |
Business Combination - Summary of Merger Consideration (Details) - Cavium $ / shares in Units, $ in Thousands |
Jul. 06, 2018
USD ($)
$ / shares
shares
|
---|---|
Business Acquisition [Line Items] | |
Cash consideration to Cavium common stockholders | $ 2,819,812 |
Common stock (153,376,408 shares of the Company's common stock at $21.34 per share) | 3,273,053 |
Cash consideration for intrinsic value of vested director stock options and employee accelerated awards attributable to pre-acquisition service | 10,642 |
Stock consideration for employee accelerated awards attributable to pre-acquisition service | 7,804 |
Fair value of the replacement equity awards attributable to pre-acquisition service | 50,485 |
Total merger consideration | $ 6,161,796 |
Number of shares issued in acquisition | shares | 153,376,408 |
Acquisition share price (in usd per share) | $ / shares | $ 21.34 |
Business Combination - Supplemental Pro Forma Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 03, 2018 |
Oct. 28, 2017 |
Nov. 03, 2018 |
Oct. 28, 2017 |
|
Business Acquisition [Line Items] | ||||
Interest expense | $ 22,370 | $ 262 | $ 38,409 | $ 393 |
Cavium | ||||
Business Acquisition [Line Items] | ||||
Share-based compensation expense | 37,800 | |||
Adjustment to inventories | 223,000 | |||
Interest expense | 6,100 | |||
Acquisition related costs | 121,800 | |||
Pro forma net revenue | 2,463,924 | 2,517,418 | ||
Pro forma net income (loss) | $ 71,994 | $ (151,793) |
Business Combination - Consolidated Statements of Cash Flows (Details) $ in Billions |
9 Months Ended |
---|---|
Nov. 03, 2018
USD ($)
| |
Cavium | |
Business Acquisition [Line Items] | |
Noncash consideration paid for the acquisition | $ 3.3 |
Goodwill and Acquired Intangible Assets, Net - Goodwill (Details) - USD ($) $ in Thousands |
Nov. 03, 2018 |
Feb. 03, 2018 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 5,499,145 | $ 1,993,310 |
Goodwill and Acquired Intangible Assets, Net - Acquired Intangible Assets, Net - Additional Information (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 06, 2018 |
Nov. 03, 2018 |
Nov. 03, 2018 |
Aug. 04, 2018 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Intangibles acquired | $ 0 | |||
Weighted average remaining amortization period (years) | 7 years 6 months 29 days | |||
Amortization expense of acquired intangible assets | $ 78,700,000 | $ 104,600,000 | ||
IPR&D | Minimum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average remaining amortization period (years) | 4 years | |||
IPR&D | Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average remaining amortization period (years) | 9 years | |||
Cavium | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Acquired intangible assets | $ 2,700,000,000 | $ 2,744,000,000 | $ 2,744,000,000 | $ 2,744,000,000 |
Goodwill and Acquired Intangible Assets, Net - Future Amortization (Details) $ in Thousands |
Nov. 03, 2018
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2019 | $ 78,688 |
2020 | 309,701 |
2021 | 301,580 |
2022 | 293,024 |
2023 | 285,596 |
Thereafter | 857,781 |
Net Carrying Amounts | $ 2,126,370 |
Supplemental Financial Information - Inventories (Details) - USD ($) $ in Thousands |
Nov. 03, 2018 |
Feb. 03, 2018 |
---|---|---|
Inventories: | ||
Work-in-process | $ 206,976 | $ 103,711 |
Finished goods | 169,234 | 66,328 |
Total inventories | 376,210 | $ 170,039 |
Cavium | ||
Inventories: | ||
Inventory step-up adjustment | $ 97,600 |
Supplemental Financial Information - Property and Equipment, Net (Details) - USD ($) $ in Thousands |
Nov. 03, 2018 |
Feb. 03, 2018 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,018,284 | $ 902,483 |
Less: Accumulated depreciation and amortization | (705,171) | (700,261) |
Total property and equipment, net | 313,113 | 202,222 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 610,541 | 535,416 |
Land, buildings, and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 279,975 | 247,675 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 102,897 | 98,253 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 24,871 | $ 21,139 |
Supplemental Financial Information - Accrued Liabilities (Details) - USD ($) $ in Thousands |
Nov. 03, 2018 |
Feb. 03, 2018 |
---|---|---|
Accrued liabilities: | ||
Contract liabilities | $ 121,669 | $ 0 |
Technology license obligations | 58,606 | 28,488 |
Accrued royalties | 16,315 | 11,860 |
Accrued rebates | 0 | 9,292 |
Accrued legal related expenses | 18,436 | 13,050 |
Unsettled investment trades | 0 | 4,497 |
Restructuring liabilities | 26,412 | 1,612 |
Accrued interest | 17,041 | 0 |
Accrued income tax payable | 18,483 | 959 |
Other | 25,133 | 17,200 |
Total accrued liabilities | $ 302,095 | $ 86,958 |
Supplemental Financial Information - Share Repurchase Program (Details) - USD ($) shares in Millions |
9 Months Ended | ||
---|---|---|---|
Nov. 03, 2018 |
Oct. 28, 2017 |
Oct. 16, 2018 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Authorized repurchase amount | $ 700,000,000 | ||
Remaining available for future share repurchases (in shares) | $ 1,000,000,000 | ||
Number of common shares repurchased and retired during period (in shares) | 2.9 | 31.5 | |
Value of common shares repurchased and retired during period | $ 54,000,000 | $ 527,600,000 | |
Total shares repurchased to date (in shares) | 289.3 | ||
Total amount of shares repurchased to date | $ 3,800,000,000 |
Investments - Gross Realized Gains and Losses on Sales of Available-for-Sale Securities (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 03, 2018 |
Oct. 28, 2017 |
Nov. 03, 2018 |
Oct. 28, 2017 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Gross realized gains | $ 0 | $ 92 | $ 371 | $ 177 |
Gross realized losses | 0 | (2,847) | (3,437) | (2,960) |
Total net realized gains (losses) | $ 0 | $ (2,755) | $ (3,066) | $ (2,783) |
Investments - Contractual Maturities of Available for Sale Securities (Details) - USD ($) $ in Thousands |
Nov. 03, 2018 |
Feb. 03, 2018 |
---|---|---|
Amortized Cost | ||
Due in one year or less | $ 0 | $ 554,247 |
Due between one and five years | 0 | 400,866 |
Due over five years | 0 | 0 |
Amortized Cost | 0 | 955,113 |
Estimated Fair Value | ||
Due in one year or less | 0 | 553,866 |
Due between one and five years | 0 | 398,924 |
Due over five years | 0 | 0 |
Estimated Fair Value | $ 0 | $ 952,790 |
Derivative Financial Instruments - Additional Information (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Nov. 03, 2018 |
Oct. 28, 2017 |
Nov. 03, 2018 |
Oct. 28, 2017 |
Feb. 03, 2018 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||
Derivative, notional amount | $ 0 | $ 0 | $ 0 | ||
Hedge ineffectiveness from derivative financial instruments | 0 | $ 0 | 0 | $ 0 | |
Cash flow hedges were terminated as a result of forecasted transactions that did not occur | $ 0 | $ 0 | $ 0 | $ 0 |
Derivative Financial Instruments - Information about Gains (Losses) Associated with Derivative Financial Instruments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Oct. 28, 2017 |
Oct. 28, 2017 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gains (Losses) in Statements of Operations | $ 1,826 | $ 3,946 |
Cash flow hedges | Forward contracts | Research and development | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gains (Losses) in Statements of Operations | 1,497 | 3,223 |
Cash flow hedges | Forward contracts | Selling, general and administrative | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gains (Losses) in Statements of Operations | $ 329 | $ 723 |
Derivative Financial Instruments - Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 03, 2018 |
Oct. 28, 2017 |
Nov. 03, 2018 |
Oct. 28, 2017 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Research and development | $ 264,888 | $ 165,477 | $ 657,907 | $ 534,444 |
Selling, general and administrative | $ 112,178 | 59,112 | $ 318,192 | 169,875 |
Reclassification out of accumulated other comprehensive income (loss) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Operating costs and expenses | 1,818 | 3,165 | ||
Reclassification out of accumulated other comprehensive income (loss) | Cash flow hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Research and development | 1,490 | 2,564 | ||
Selling, general and administrative | $ 328 | $ 601 |
Debt - Additional Information (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2018 |
Nov. 03, 2018 |
Nov. 03, 2018 |
Jun. 22, 2018 |
Jun. 13, 2018 |
|
Debt Instrument [Line Items] | |||||
Interest expense | $ 20,900,000 | $ 29,800,000 | |||
Bridge Loan | |||||
Debt Instrument [Line Items] | |||||
Amount of debt extinguished | $ 850,000,000 | ||||
Term Loan | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 900,000,000 | ||||
Line of Credit | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity | $ 500,000,000 | ||||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 1,000,000,000 |
Debt - Term Loan and Revolving Credit Facility (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 13, 2018
USD ($)
|
Nov. 03, 2018
USD ($)
|
Nov. 03, 2018
USD ($)
|
Oct. 28, 2017
USD ($)
|
|
Line of Credit Facility [Line Items] | ||||
Payment of principal | $ 681,128,000 | $ 0 | ||
Unused commitment fee percentage | 0.175% | |||
Leverage ratio | 3 | |||
Line of Credit | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Borrowing capacity | $ 500,000,000 | |||
Debt term | 5 years | |||
Amount available for draw | $ 500,000,000 | $ 500,000,000 | ||
Line of Credit | Revolving Credit Facility | LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.50% | |||
Term Loan | ||||
Line of Credit Facility [Line Items] | ||||
Borrowing capacity | $ 900,000,000 | |||
Debt term | 3 years | |||
Effective interest rate | 4.134% | 4.134% | ||
Payment of principal | $ 75,000,000 | |||
Write off of unamortized debt issuance costs | $ 900,000 | |||
Term Loan | LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.375% |
Debt - Senior Unsecured Notes (Details) - Senior Notes |
Jun. 22, 2018
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 1,000,000,000 |
Redemption price percentage | 101.00% |
2023 Notes | |
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 500,000,000 |
Stated interest rate | 4.20% |
Effective interest rate | 4.423% |
2028 Notes | |
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 500,000,000 |
Stated interest rate | 4.875% |
Effective interest rate | 5.012% |
Debt - Summary of Outstanding Debt (Details) - USD ($) $ in Thousands |
Nov. 03, 2018 |
Feb. 03, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
Total borrowings | $ 1,825,000 | |
Less: Unamortized debt discount and issuance cost | (19,266) | |
Net carrying amount of debt | 1,805,734 | |
Less: Current portion | 0 | |
Non-current portion | 1,805,734 | $ 0 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Total borrowings | 825,000 | |
Notes | 2023 Notes | ||
Debt Instrument [Line Items] | ||
Total borrowings | 500,000 | |
Notes | 2028 Notes | ||
Debt Instrument [Line Items] | ||
Total borrowings | $ 500,000 |
Debt - Future Maturities (Details) $ in Thousands |
Nov. 03, 2018
USD ($)
|
---|---|
Fiscal year | |
2019 | $ 0 |
2020 | 0 |
2021 | 0 |
2022 | 825,000 |
2023 | 0 |
Thereafter | $ 1,000,000 |
Debt - Repayment of Debt and Termination of Credit Facility of Cavium (Details) $ in Millions |
Jul. 06, 2018
USD ($)
|
---|---|
Cavium | |
Debt Instrument [Line Items] | |
Payment of debt and interest | $ 606.6 |
Commitments and Contingencies - Purchase Commitments (Details) $ in Millions |
Nov. 03, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Outstanding purchase orders | $ 149.1 |
Revenue - Effect of the Adoption of the New Revenue Standard, Additional Information (Details) - USD ($) $ in Thousands |
Nov. 03, 2018 |
Feb. 03, 2018 |
---|---|---|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Retained earnings | $ 1,416,682 | $ 1,409,452 |
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Retained earnings | $ (64,663) | $ 34,218 |
Revenue - New Revenue Recognition Policy Including Significant Judgments and Estimates (Details) |
9 Months Ended |
---|---|
Nov. 03, 2018 | |
Minimum | |
Inventory [Line Items] | |
Inventory turnover period | 60 days |
Maximum | |
Inventory [Line Items] | |
Inventory turnover period | 90 days |
Revenue - Net Revenue by Product Group (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 03, 2018 |
Oct. 28, 2017 |
Nov. 03, 2018 |
Oct. 28, 2017 |
|
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 851,051 | $ 616,302 | $ 2,120,992 | $ 1,793,761 |
Storage | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 406,822 | $ 1,059,655 | ||
Storage | Net revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
% of Total | 48.00% | 50.00% | ||
Networking | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 398,424 | $ 925,982 | ||
Networking | Net revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
% of Total | 47.00% | 44.00% | ||
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 45,805 | $ 135,355 | ||
Other | Net revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
% of Total | 5.00% | 6.00% |
Revenue - Net Revenue by Customer Type (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 03, 2018 |
Oct. 28, 2017 |
Nov. 03, 2018 |
Oct. 28, 2017 |
|
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 851,051 | $ 616,302 | $ 2,120,992 | $ 1,793,761 |
Direct customers | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 630,022 | $ 1,632,646 | ||
Direct customers | Net revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
% of Total | 74.00% | 77.00% | ||
Distributors | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 221,029 | $ 488,346 | ||
Distributors | Net revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
% of Total | 26.00% | 23.00% |
Revenue - Contract Liabilities (Details) $ in Millions |
9 Months Ended |
---|---|
Nov. 03, 2018
USD ($)
| |
Change in Contract with Customer, Asset and Liability [Abstract] | |
Beginning balance | $ 79.6 |
Estimates for additional shipments | 562.1 |
Credit memos issued | 520.0 |
Ending balance | $ 121.7 |
Net Income Per Share - Anti-dilutive Potential Shares (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 03, 2018 |
Oct. 28, 2017 |
Nov. 03, 2018 |
Oct. 28, 2017 |
|
Earnings Per Share [Abstract] | ||||
Share-based awards | 25,048 | 876 | 6,915 | 3,122 |
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