Marvell Technology Group Ltd. Reports Second Quarter Fiscal 2008 Results
Santa Clara, California (August 23, 2007) – arvell Technology Group Ltd. (NASDAQ: MRVL), a leader in storage, communications, and consumer silicon solutions, today reported financial results for its second quarter ended July 28, 2007.
Net revenue for the second quarter of fiscal 2008 was a record $656.7 million, an increase of 14% over net revenue of $574.0 million for the second quarter of fiscal 2007 and a 3% sequential increase from net revenue of $635.1 million for the first quarter of fiscal 2008. Net loss under generally accepted accounting principles (GAAP) was $56.5 million, or $0.10 per share (diluted), for the second quarter of fiscal 2008, compared with net income under GAAP of $44.9 million, or $0.07 per share (diluted), for the second quarter of fiscal 2007. Shares used to compute GAAP net loss per diluted share for the second quarter ended July 28, 2007 decreased to 587.5 million shares compared with 633.5 million shares for the second quarter ended July 29, 2006.
Net revenue for the six months ended July 28, 2007 was $1,291.8 million, an increase of 18% over net revenue of $1,095.2 million for the six months ended July 29, 2006. Net loss under GAAP was $109.3 million or $0.19 per share (diluted) for the six months ended July 28, 2007, compared with net income under GAAP of $122.4 million or $0.19 per share (diluted) for the six months ended July 29, 2006.
Marvell reports net (loss) income and basic and diluted net (loss) income per share in accordance with GAAP and additionally on a non-GAAP basis. A discussion of Marvell’s use of these non-GAAP financial measures is set forth below, and reconciliations of GAAP net (loss) income to non-GAAP net income for the three and six months ended July 28, 2007 and July 29, 2006, respectively, appear in the financial statements portion of this release. Non-GAAP net income, where applicable, excludes the effect of stock-based compensation, amortization of acquired intangible assets and cumulative effect of change in accounting principle. Non-GAAP net income was $39.7 million, or $0.06 per share (diluted) for the second quarter of fiscal 2008, compared with non-GAAP net income of $127.9 million, or $0.20 per share (diluted), for the second quarter of fiscal 2007. Shares used to compute non-GAAP net income per diluted share for the second quarter ended July 28, 2007 decreased to 630.3 million shares, compared with 638.1 million shares for the second quarter ended July 29, 2006.
Non-GAAP net income was $71.0 million, or $0.11 per share (diluted), for the six months ended July 28, 2007, compared with non-GAAP net income of $262.7 million, or $0.41 per share (diluted) for the six months ended July 29, 2006. Shares used in computing non-GAAP net income per share for the six months ended July 28, 2007 decreased to 632.0 million shares, compared with 642.6 million shares for the six months ended July 29, 2006.
“Our Q2 revenue was greater than expected as a result of strong sales for our communications and applications processors, and our wireless LAN products,” stated Dr. Sehat Sutardja, Marvell’s President and CEO. “We currently believe this growth trend will continue in Q3.”
Marvell will be conducting a conference call today at 1:45 p.m. PDT to discuss its second quarter business. The call is being webcast by Thomson/CCBN and can be accessed at Marvell’s web site at www.marvell.com. The webcast is also being distributed through Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson’s individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents (www.streetevents.com), a password-protected event management site. The conference call will also be available via the web at www.marvell.com. Please visit the Investor Events section. Replay on the Internet will be available until August 23, 2008.
Discussion of Non-GAAP Financial Measures
Non-GAAP net income consists of net income excluding stock-based compensation expense as well as charges related to acquisitions and other charges and gains that are driven primarily by discrete events that management does not consider to be directly related to the company’s core operating performance. Non-GAAP net income per share is calculated by dividing non-GAAP net income by adjusted GAAP weighted average shares outstanding (diluted). For purposes of calculating non-GAAP net income per share, the calculation of GAAP weighted average shares outstanding (diluted) is adjusted to exclude the benefits of compensation costs attributable to future services and not yet recognized in the financial statements that are treated as proceeds assumed to be used to repurchase shares under the GAAP treasury stock method and also includes the antidilutive effects of warrants, common stock options and restricted stock.
Marvell believes that the presentation of non-GAAP net income and non-GAAP net income per share provides important supplemental information to management and investors regarding financial and business trends relating to the company’s financial condition and results of operations. For further information regarding why Marvell believes that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the company’s Current Report on Form 8-K filed today with the SEC. The Form 8-K is available on the SEC’s website at www.sec.gov as well as on the Marvell website in the Investors Relations section at www.marvell.com.
Marvell (NASDAQ: MRVL) is a 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), Marvell Software Solutions Israel, Ltd., and Marvell Semiconductor Germany GmbH. MSI is headquartered in Santa Clara, 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. Statements that refer to, or are based on projections, uncertain events or assumptions also identify forward-looking statements. These statements include statements regarding our current beliefs regarding continued growth in sales of our communications and applications processors, and our wireless LAN products for our third fiscal quarter of 2008. 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. When Marvell files its Form 10-Q for the second quarter of fiscal 2008, the financial statements may differ from the results disclosed in this press release because judgments and estimates that management used in preparing the financial results reported in this press release may need to be updated to the date of the filing. The Company's results also remain subject to review by the Company's independent registered public accounting firm. For other factors that could cause Marvell's results to vary from expectations, please see the risk factors identified in the Marvell’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as filed with the Securities and Exchange Commission and other factors detailed from time to time in Marvell’s filings with the Securities and Exchange Commission. Marvell undertakes no obligation to revise or update publicly any forward-looking statements.
Marvell® and the Marvell logo are trademarks of Marvell.