Marvell Technology Group Ltd. Revises its Q3 Fiscal 2007 Outlook
Santa Clara, California (October 2, 2006) –
Marvell Technology Group Ltd. (NASDAQ: MRVL) today announced that it now anticipates that its net revenue for the third quarter of fiscal 2007 will be down approximately 10% from the $574.0 million of net revenue reported for second quarter of fiscal 2007.
The anticipated decline in net revenue is largely due to lower than expected demand from a number of the Company’s hard disk drive customers. The Company believes the shortfall of demand is primarily due to a combination of weaker than normal seasonal shipments in the personal computer market as well as excess inventory held by some of its significant storage customers.
Additionally, the Company also expects a significant increase in its general and administrative expenses in its third quarter of fiscal 2007 due to higher than expected costs related to its previously announced and ongoing internal review by a special committee of its Board of Directors relating to the Company’s historical stock option practices and related accounting matters.
“Although we are disappointed to lower our revenue projections, we remain very confident with our growth strategies and our strong leadership position in our markets” stated Dr. Sehat Sutardja, Marvell’s President and CEO. “We view this decline in our revenues as a short term event and we remain focused on continuing to aggressively invest in our business and to expand the reach of our technology into a growing number of high volume markets.”
Marvell (NASDAQ: MRVL) is the leader in storage, communications and consumer silicon solutions. The Company’s diverse product portfolio includes switching, transceiver, communications controller, wireless, and storage solutions that power the entire communications infrastructure, including enterprise, metro, home, and storage networking. As used in this release, the terms “Company” and “Marvell” refer to Marvell Technology Group Ltd. and its subsidiaries, including Marvell Semiconductor, Inc. (MSI), Marvell Asia Pte Ltd (MAPL), Marvell Japan K.K., Marvell Taiwan Ltd., Marvell International Ltd. (MIL), Marvell U.K. Limited, Marvell Semiconductor Israel Ltd. (MSIL), RADLAN Computer Communications Ltd., and SysKonnect GmbH. MSI is headquartered in Sunnyvale, Calif., and designs, develops and markets products on behalf of MIL and MAPL. MSI may be contacted at (408) 222-2500 or at www.marvell.com.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:
This release contains forward-looking statements based on projections and assumptions about our products and our markets. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will," "should," and their variations identify forward-looking statements. These statements include those relating to our anticipated decline in net revenue and the believed reasons therefor, the expected increase in general and administrative expenses and the reasons therefore, and the short-term nature of the revenue decline. Statements that refer to, or are based on projections, uncertain events or assumptions also identify forward-looking statements. These statements are not guarantees of results and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. These risks and uncertainties include, but are not limited to, adjustments in the Company’s accounts as the result of the closing of the Company’s books, demand and competition for the Company’s products, general market conditions and market developments affecting the hard disk drive market and other markets for the Company’s products, and the timing, pricing, rescheduling, or cancellation of orders. For other factors that could cause Marvell's results to vary from expectations, please see the sections titled “Risk Factors ” in Marvell's quarterly report on Form 10-Q for the fiscal quarter ended April 29, 2006 and other factors detailed from time to time in Marvell’s filings with the Securities and Exchange Commission. We undertake no obligation to revise or update publicly any forward-looking statements.
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