Marvell Technology Group Ltd. Reports Second Quarter of Fiscal Year 2015 Financial Results
Key Second Quarter of Fiscal 2015 Financial Highlights
- Revenue: Q2 FY 2015,
$962 Million - GAAP Net Income: Q2 FY 2015,
$139 Million - GAAP Diluted EPS: Q2 FY 2015,
$0.27 - Non-GAAP Net Income: Q2 FY 2015,
$181 Million - Non-GAAP Diluted EPS: Q2 FY 2015,
$0.34 - Free Cash Flow: Q2 FY 2015,
$137 Million
Third Quarter of Fiscal 2015 Financial Outlook
- Revenue is expected to be in the range of
$960 Million to $1 Billion . - GAAP Gross Margin is expected to be in the range of 49.7% +/- 100 bps. Non-GAAP Gross Margin is expected to be in the range of 50.0% +/- 100 bps.
- GAAP Operating Expenses are expected to be in the range of
$370 Million +/-$10 Million . Non-GAAP Operating Expenses to be in the range of$330 Million +/-$10 Million . - GAAP Diluted EPS expected to be in the range of
$0.21 +/-$0.02 . Non-GAAP Diluted EPS expected to be in the range of$0.29 +/-$0.02 .
Second Quarter of Fiscal 2015 Summary
Revenue for the second quarter of fiscal 2015 was
GAAP net income for the second quarter of fiscal 2015 was
Non-GAAP net income was
GAAP gross margin for the second quarter of fiscal 2015 was 50.3 percent, compared to 48.4 percent for the first quarter of fiscal 2015 and 52.2 percent for the second quarter of fiscal 2014.
Non-GAAP gross margin for the second quarter of fiscal 2015 was 50.6 percent, compared to 48.8 percent for the first quarter of fiscal 2015 and 53.0 percent for the second quarter of fiscal 2014.
Shares used to compute GAAP net income per diluted share for the second quarter of fiscal 2015 were 520 million shares, compared with 521 million shares in the first quarter of fiscal 2015 and 501 million shares in the second quarter of fiscal 2014.
Shares used to compute non-GAAP net income per diluted share for the second quarter of fiscal 2015 were 533 million shares, compared with 530 million shares for the first quarter of fiscal 2015 and 516 million shares for the second quarter of fiscal 2014.
Cash flow from operations for the second quarter of fiscal 2015 was
The payment of future quarterly cash dividends on
Conference Call
Discussion of Non-GAAP Financial Measures
Non-GAAP financial measures exclude the effect of share-based compensation expense, amortization and write-off of acquired intangible assets, acquisition-related costs, restructuring and other exit-related costs, litigation settlement, and certain one-time expenses and benefits that are driven primarily by discrete events that management does not consider to be directly related to
Forward-Looking Statements under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the meaning of the federal securities laws that involve risks and uncertainties, including:
About Marvell
As used in this release, the term "
Marvell® and the
For further information, contact: |
|
John Spencer Ahn |
Sue Kim |
Investor Relations |
Media Relations |
408-222-7544 |
408-222-1942 |
Marvell Technology Group Ltd. |
|||||||||||
Condensed Consolidated Statements of Operations |
|||||||||||
(Unaudited) |
|||||||||||
(In thousands, except per share amounts) |
|||||||||||
Three Months Ended |
Six Months Ended |
||||||||||
August 2, |
May 3, |
August 3, |
August 2, |
August 3, |
|||||||
2014 |
2014 |
2013 |
2014 |
2013 |
|||||||
Net revenue |
$ 961,545 |
$ 957,830 |
$ 807,056 |
$ 1,919,375 |
$ 1,541,425 |
||||||
Cost of goods sold |
477,741 |
493,860 |
386,059 |
971,601 |
721,497 |
||||||
Gross profit |
483,804 |
463,970 |
420,997 |
947,774 |
819,928 |
||||||
Operating expenses: |
|||||||||||
Research and development |
294,764 |
295,363 |
292,642 |
590,127 |
571,694 |
||||||
Selling and marketing |
33,949 |
38,358 |
38,548 |
72,307 |
78,537 |
||||||
General and administrative |
31,333 |
30,573 |
27,192 |
61,906 |
53,515 |
||||||
Amortization and write-off of acquired intangible assets |
3,304 |
6,689 |
10,638 |
9,993 |
21,324 |
||||||
Total operating expenses |
363,350 |
370,983 |
369,020 |
734,333 |
725,070 |
||||||
Operating income |
120,454 |
92,987 |
51,977 |
213,441 |
94,858 |
||||||
Interest and other income, net |
12,263 |
1,925 |
8,253 |
14,188 |
11,413 |
||||||
Income before income taxes |
132,717 |
94,912 |
60,230 |
227,629 |
106,271 |
||||||
Benefit for income taxes |
(6,153) |
(4,567) |
(1,596) |
(10,720) |
(8,764) |
||||||
Net income |
$ 138,870 |
$ 99,479 |
$ 61,826 |
$ 238,349 |
$ 115,035 |
||||||
Basic net income per share |
$ 0.27 |
$ 0.20 |
$ 0.13 |
$ 0.47 |
$ 0.23 |
||||||
Diluted net income per share |
$ 0.27 |
$ 0.19 |
$ 0.12 |
$ 0.46 |
$ 0.23 |
||||||
Shares used in computing basic earnings per share |
511,821 |
505,105 |
494,293 |
508,463 |
498,237 |
||||||
Shares used in computing diluted earnings per share |
520,269 |
520,751 |
500,625 |
520,510 |
503,006 |
||||||
Marvell Technology Group Ltd. |
|||||
Condensed Consolidated Balance Sheets |
|||||
(Unaudited) |
|||||
(In thousands) |
|||||
August 2, |
February 1, |
||||
Assets |
2014 |
2014 |
|||
Current assets: |
|||||
Cash, cash equivalents and short-term investments |
$ 2,300,004 |
$ 1,969,405 |
|||
Accounts receivable, net |
498,484 |
453,496 |
|||
Inventories |
393,957 |
347,861 |
|||
Prepaid expenses and other current assets |
96,561 |
68,458 |
|||
Total current assets |
3,289,006 |
2,839,220 |
|||
Property and equipment, net |
344,836 |
356,165 |
|||
Long-term investments |
13,422 |
16,279 |
|||
Goodwill and acquired intangible assets, net |
2,068,017 |
2,078,980 |
|||
Other non-current assets |
150,413 |
160,366 |
|||
Total assets |
$ 5,865,694 |
$ 5,451,010 |
|||
Liabilities and Shareholders' Equity |
|||||
Current liabilities: |
|||||
Accounts payable |
$ 415,718 |
$ 316,389 |
|||
Accrued liabilities |
293,378 |
273,170 |
|||
Deferred income |
82,887 |
61,747 |
|||
Total current liabilities |
791,983 |
651,306 |
|||
Other non-current liabilities |
112,177 |
123,794 |
|||
Total liabilities |
904,160 |
775,100 |
|||
Shareholders' equity: |
|||||
Common stock |
1,028 |
1,005 |
|||
Additional paid-in capital |
3,049,864 |
2,941,650 |
|||
Accumulated other comprehensive income |
627 |
597 |
|||
Retained earnings |
1,910,015 |
1,732,658 |
|||
Total shareholders' equity |
4,961,534 |
4,675,910 |
|||
Total liabilities and shareholders' equity |
$ 5,865,694 |
$ 5,451,010 |
|||
Marvell Technology Group Ltd. |
|||||||||||
Condensed Consolidated Statements of Cash Flows |
|||||||||||
(Unaudited) |
|||||||||||
(in thousands) |
|||||||||||
Three Months Ended |
Six Months Ended |
||||||||||
August 2, |
August 3, |
August 2, |
August 3, |
||||||||
2014 |
2013 |
2014 |
2013 |
||||||||
Cash flows from operating activities: |
|||||||||||
Net income |
$ 138,870 |
$ 61,826 |
$ 238,349 |
$ 115,035 |
|||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||
Depreciation and amortization |
26,263 |
25,697 |
53,269 |
50,663 |
|||||||
Share-based compensation |
35,020 |
41,091 |
64,989 |
74,604 |
|||||||
Amortization and write-off of acquired intangible assets |
3,789 |
10,638 |
10,963 |
21,324 |
|||||||
Other expense (income), net |
(7,596) |
1,816 |
(6,126) |
4,339 |
|||||||
Excess tax benefits from share-based compensation |
(32) |
(25) |
(76) |
(32) |
|||||||
Changes in assets and liabilities: |
|||||||||||
Accounts receivable |
33,419 |
(60,524) |
(30,159) |
(100,636) |
|||||||
Inventories |
(43,194) |
(64,170) |
(46,299) |
(84,293) |
|||||||
Prepaid expenses and other assets |
(24,996) |
12,503 |
(27,157) |
19,305 |
|||||||
Accounts payable |
2,558 |
54,933 |
87,686 |
83,869 |
|||||||
Accrued liabilities and other non-current liabilities |
10,096 |
(13,013) |
2,962 |
(33,094) |
|||||||
Accrued employee compensation |
(7,451) |
(471) |
22,550 |
3,952 |
|||||||
Deferred income |
(9,792) |
16,195 |
21,140 |
15,315 |
|||||||
Net cash provided by operating activities |
156,954 |
86,496 |
392,091 |
170,351 |
|||||||
Cash flows from investing activities: |
|||||||||||
Purchases of available-for-sale securities |
(153,881) |
(164,631) |
(335,770) |
(471,469) |
|||||||
Sales and maturities of available-for-sale securities |
190,099 |
162,909 |
372,410 |
498,680 |
|||||||
Investments in privately-held companies |
— |
(750) |
(441) |
(750) |
|||||||
Cash paid for acquisitions, net |
— |
— |
— |
(2,551) |
|||||||
Purchases of technology licenses |
(1,298) |
(1,750) |
(9,409) |
(7,610) |
|||||||
Purchases of property and equipment |
(15,823) |
(18,981) |
(31,954) |
(39,061) |
|||||||
Net cash provided by (used in) investing activities |
19,097 |
(23,203) |
(5,164) |
(22,761) |
|||||||
Cash flows from financing activities: |
|||||||||||
Repurchase of common stock (a) |
— |
(88,114) |
— |
(304,808) |
|||||||
Proceeds from employee stock plans |
49,282 |
53,316 |
68,374 |
73,121 |
|||||||
Minimum tax withholding paid on behalf of employees |
|||||||||||
for net share settlement |
(637) |
(510) |
(24,923) |
(9,888) |
|||||||
Dividend payments to shareholders |
(30,820) |
(29,791) |
(60,992) |
(60,044) |
|||||||
Payments on technology license obligations |
(2,677) |
(984) |
(2,677) |
(6,301) |
|||||||
Excess tax benefits from share-based compensation |
32 |
25 |
76 |
32 |
|||||||
Net cash provided by (used in) financing activities |
15,180 |
(66,058) |
(20,142) |
(307,888) |
|||||||
Net increase (decrease) in cash and cash equivalents |
191,231 |
(2,765) |
366,785 |
(160,298) |
|||||||
Cash and cash equivalents at beginning of period |
1,141,304 |
594,420 |
965,750 |
751,953 |
|||||||
Cash and cash equivalents at end of period |
$ 1,332,535 |
$ 591,655 |
$ 1,332,535 |
$ 591,655 |
|||||||
(a) |
Marvell records all repurchases as well as investment purchases and sales, based on trade date in accordance with U.S. GAAP. There were no repurchases of common stock in the three and six months ended August 2, 2014. |
Marvell Technology Group Ltd. |
||||||||||
Reconciliations from GAAP to Non-GAAP |
||||||||||
(Unaudited) |
||||||||||
(In thousands, except per share amounts) |
||||||||||
Three Months Ended |
Six Months Ended |
|||||||||
August 2, |
May 3, |
August 3, |
August 2, |
August 3, |
||||||
2014 |
2014 |
2013 |
2014 |
2013 |
||||||
GAAP net income |
$ 138,870 |
$ 99,479 |
$ 61,826 |
$ 238,349 |
$ 115,035 |
|||||
Share-based compensation |
35,020 |
29,969 |
41,091 |
64,989 |
74,604 |
|||||
Amortization and write-off of acquired intangible assets |
4,229 |
7,614 |
10,638 |
11,843 |
21,324 |
|||||
Acquisition-related costs (a) |
- |
- |
(1,081) |
- |
(616) |
|||||
Restructuring and other exit-related costs (b) |
735 |
5,088 |
178 |
5,823 |
406 |
|||||
Litigation settlement (c) |
475 |
2,000 |
5,228 |
2,475 |
5,228 |
|||||
Other (d) |
2,155 |
- |
- |
2,155 |
||||||
Non-GAAP net income |
$ 181,484 |
$ 144,150 |
$ 117,880 |
$ 325,634 |
$ 215,981 |
|||||
GAAP weighted average shares - diluted |
520,269 |
520,751 |
500,625 |
520,510 |
503,006 |
|||||
Non-GAAP adjustment |
13,201 |
9,625 |
15,021 |
11,413 |
16,058 |
|||||
Non-GAAP weighted average shares diluted (e) |
533,470 |
530,376 |
515,646 |
531,923 |
519,064 |
|||||
GAAP diluted net income per share |
$ 0.27 |
$ 0.19 |
$ 0.12 |
$ 0.46 |
$ 0.23 |
|||||
Non-GAAP diluted net income per share |
$ 0.34 |
$ 0.27 |
$ 0.23 |
$ 0.61 |
$ 0.42 |
|||||
GAAP gross profit: |
$ 483,804 |
$ 463,970 |
$ 420,997 |
$ 947,774 |
$ 819,928 |
|||||
Share-based compensation |
1,733 |
2,299 |
1,868 |
4,032 |
3,735 |
|||||
Amortization of acquired intangible assets |
925 |
925 |
- |
1,850 |
- |
|||||
Litigation settlement (c) |
- |
- |
4,728 |
- |
4,728 |
|||||
Non-GAAP gross profit |
$ 486,462 |
$ 467,194 |
$ 427,593 |
$ 953,656 |
$ 828,391 |
|||||
GAAP gross margin |
50.3% |
48.4% |
52.2% |
49.4% |
53.2% |
|||||
Share-based compensation |
0.2% |
0.3% |
0.2% |
0.2% |
0.2% |
|||||
Amortization of acquired intangible assets |
0.1% |
0.1% |
- |
0.1% |
- |
|||||
Litigation settlement (c) |
- |
- |
0.6% |
- |
0.3% |
|||||
Non-GAAP gross margin |
50.6% |
48.8% |
53.0% |
49.7% |
53.7% |
|||||
GAAP research and development: |
$ 294,764 |
$ 295,363 |
$ 292,642 |
$ 590,127 |
$ 571,694 |
|||||
Share-based compensation |
(24,276) |
(20,368) |
(28,982) |
(44,644) |
(52,261) |
|||||
Acquisition-related costs (a) |
- |
- |
1,135 |
- |
735 |
|||||
Restructuring and other exit-related costs (b) |
(412) |
(4,682) |
- |
(5,094) |
- |
|||||
Non-GAAP research and development |
$ 270,076 |
$ 270,313 |
$ 264,795 |
$ 540,389 |
$ 520,168 |
|||||
GAAP selling and marketing: |
$ 33,949 |
$ 38,358 |
$ 38,548 |
$ 72,307 |
$ 78,537 |
|||||
Share-based compensation |
(2,617) |
(2,928) |
(3,648) |
(5,545) |
(7,040) |
|||||
Acquisition-related costs (a) |
- |
- |
(34) |
- |
(79) |
|||||
Restructuring and other exit-related costs (b) |
48 |
(48) |
- |
- |
- |
|||||
Non-GAAP selling and marketing |
$ 31,380 |
$ 35,382 |
$ 34,866 |
$ 66,762 |
$ 71,418 |
|||||
GAAP general and administrative: |
$ 31,333 |
$ 30,573 |
$ 27,192 |
$ 61,906 |
$ 53,515 |
|||||
Share-based compensation |
(6,394) |
(4,374) |
(6,593) |
(10,768) |
(11,568) |
|||||
Acquisition-related costs (a) |
- |
- |
(20) |
- |
(40) |
|||||
Restructuring and other exit-related costs (b) |
(371) |
(358) |
(178) |
(729) |
(406) |
|||||
Litigation settlement (c) |
(475) |
(2,000) |
(500) |
(2,475) |
(500) |
|||||
Other (d) |
(2,155) |
(2,155) |
||||||||
Non-GAAP general and administrative |
$ 21,938 |
$ 23,841 |
$ 19,901 |
$ 45,779 |
$ 41,001 |
|||||
(a) |
Acquisition-related costs include the amortization of retention bonuses required by the terms of an acquisition. |
|||||||||
(b) |
Restructuring and other exit-related costs include costs that qualify under U.S. GAAP as restructuring costs, as well as operating expenses related to assets classified as held-for-sale that did not qualify as discontinued operations. |
|||||||||
(c) |
The amounts recorded do not relate to Marvell's litigation with Carnegie Mellon University. |
|||||||||
(d) |
Costs associated with the surety bond to appeal the Carnegie Mellon University judgment. |
|||||||||
(e) |
For purposes of calculating non-GAAP diluted net income per share, the GAAP diluted weighted average shares outstanding is adjusted to exclude the potential benefits of share-based compensation costs expected to be incurred in future periods but not yet recognized in the financial statements. |
Marvell Technology Group Ltd. |
|||
Reconciliations from GAAP to Non-GAAP Outlook |
|||
(Unaudited) |
|||
(In millions, except per share amounts) |
|||
Q3 FY2015 |
|||
Note : Amounts represent the midpoint of the expected range |
Outlook |
||
GAAP gross margin |
49.7% |
||
Share-based compensation, amortization of intangible assets and other |
0.3% |
||
Non-GAAP gross margin |
50.0% |
||
Q3 FY2015 |
|||
Outlook |
|||
GAAP operating expenses |
$ 370 |
||
Share-based compensation, restructuring, |
|||
amortization of intangible assets and other |
(40) |
||
Non-GAAP operating expenses |
$ 330 |
||
Q3 FY2015 |
|||
Outlook |
|||
GAAP diluted earnings per share |
$ 0.21 |
||
Share-based compensation, restructuring, |
|||
amortization of intangible assets and other |
0.08 |
||
Non-GAAP diluted earnings per share |
$ 0.29 |
||
Logo - http://photos.prnewswire.com/prnh/20100719/SF36559LOGO-b
SOURCE