Exhibit 99.1
NEWS RELEASE
MARVELL TECHNOLOGY GROUP LTD. REPORTS RECORD SECOND QUARTER FISCAL 2003 RESULTS
SUNNYVALE, CA. (AUGUST 22, 2002) - Marvell Technology Group Ltd. (NASDAQ: MRVL),
a technology leader in the development of extreme broadband communications
solutions, today reported financial results for its second fiscal quarter ended
August 3, 2002.
Net revenue for the second quarter of fiscal 2003 was a record $119.7 million,
an increase of 74% over net revenue of $68.7 million for the second quarter of
fiscal 2002 and a 21% sequential increase from net revenue of $98.8 million for
the first quarter of fiscal 2003. Net loss under generally accepted accounting
principles (GAAP), which includes the effect of acquisition-related expenses and
the amortization of stock-based compensation was $9.3 million, or $0.08 per
share (diluted), for the second quarter of fiscal 2003, compared with net loss
under GAAP of $105.2 million, or $0.93 per share (diluted), for the second
quarter of fiscal 2002.
Net revenue for the six months ended August 3, 2003 was $218.5 million, an
increase of 64% over net revenue of $132.9 million for six months ended July 28,
2001. Net loss under GAAP was $40.3 million, or $0.34 per share (diluted), for
the six months ended August 3, 2002, compared with net loss under GAAP of $210.2
million, or $1.86 per share (diluted), for the six months ended July 28, 2001.
Pro forma net income, which excludes the effect of acquisition-related expenses,
amortization of stock-based compensation and a special charge related to
facilities consolidation in the first quarter of fiscal 2003, was $14.2 million,
or $0.11 per share (diluted), for the second quarter of fiscal 2003, compared
with pro forma net income of $3.4 million, or $0.03 per share (diluted), for the
second quarter of fiscal 2002. Pro forma net income was $24.7 million, or $0.19
per share (diluted), for the six months ended August 3, 2002, compared with pro
forma net income of $7.9 million, or $0.06 per share (diluted), for the six
months ended July 28, 2001.
"We are experiencing strength across both our data storage and data
communications businesses," stated Dr. Sehat Sutardja, Marvell's President and
CEO. "The 21% sequential increase in our quarterly revenue was largely driven by
the continued adoption of Gigabit Ethernet to the desktop and our integrated
system-on-chip storage solutions. Bookings during the quarter continued to be
strong resulting in record backlog at the end of the quarter. We also continue
to experience strong design activity with our Serial ATA solutions, Libertas(TM)
wireless LAN products, and Prestera(TM) family of Gigabit Ethernet switches."
Marvell's Chief Executive Officer and Chief Financial Officer will certify the
Company's financial statements, as required by the Sarbanes-Oxley Act of 2002,
in connection with the filing of the Company's Form 10-Q on or before its due
date of September 17, 2002.
Marvell will be conducting a conference call today at 1:45 p.m. PDT to discuss
its second quarter fiscal 2003 financial results. To listen to the conference
call, investors can dial (719) 457-2634 approximately ten minutes prior to the
initiation of the teleconference and refer to conference code 428512. Replay of
the conference call will be available until August 30, 2002 at midnight by
calling (719) 457-0820. The conference call will also be available via the Web
at www.marvell.com until September 22, 2002.
ABOUT MARVELL
Marvell (NASDAQ: MRVL) is the leading global semiconductor provider of complete
broadband communications solutions for the data communications and storage
markets. 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), Galileo Technology
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. Statements
that refer to, or are based on projections, uncertain events or assumptions also
identify forward-looking statements. All such statements are not guarantees of
results and are subject to risks and uncertainties. Some risks and uncertainties
that may adversely impact the statements in this release include, but are not
limited to, the timing, cost and successful completion of development and volume
production, end-customer qualification and adoption, and the timing, pricing,
rescheduling, or cancellation of orders. For other factors that could cause
Marvell's results to vary from expectations, please see the sections titled
"Additional Factors That May Affect Future Results" in Marvell's annual report
on Form 10-K for the year ended February 2, 2002 and Marvell's subsequent
reports on Form 10-Q. We undertake no obligation to revise or update publicly
any forward-looking statements.
MARVELL TECHNOLOGY GROUP LTD.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
--------------------------- ---------------------------
AUGUST 3, JULY 28, AUGUST 3, JULY 28,
2002 2001 2002 2001
--------- --------- --------- ---------
Net revenue $ 119,694 $ 68,649 $ 218,494 $ 132,879
Cost of goods sold 56,033 31,419 99,813 61,580
--------- --------- --------- ---------
Gross profit 63,661 37,230 118,681 71,299
Operating expenses:
Research and development 33,599 21,843 64,208 41,909
Selling and marketing 12,321 10,103 23,333 19,648
General and administrative 3,523 3,734 7,165 6,719
Amortization of stock-based compensation 2,192 4,095 4,474 8,208
Amortization of goodwill and acquired
intangible assets 21,323 104,508 42,646 209,016
Facilities consolidation charge -- -- 17,799 --
--------- --------- --------- ---------
Total operating expenses 72,958 144,283 159,625 285,500
--------- --------- --------- ---------
Operating loss (9,297) (107,053) (40,944) (214,201)
Interest and other income, net 1,906 2,459 4,045 5,426
--------- --------- --------- ---------
Loss before income taxes (7,391) (104,594) (36,899) (208,775)
Provision for income taxes 1,935 603 3,361 1,388
--------- --------- --------- ---------
Net loss $ (9,326) $(105,197) $ (40,260) $(210,163)
========= ========= ========= =========
Basic net loss per share $ (0.08) $ (0.93) $ (0.34) $ (1.86)
========= ========= ========= =========
Diluted net loss per share $ (0.08) $ (0.93) $ (0.34) $ (1.86)
========= ========= ========= =========
Weighted average shares-- basic 118,886 113,714 118,487 113,115
--------- --------- --------- ---------
Weighted average shares-- diluted 118,886 113,714 118,487 113,115
--------- --------- --------- ---------
MARVELL TECHNOLOGY GROUP LTD.
Pro Forma Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
--------------------------- ---------------------------
AUGUST 3, JULY 28, AUGUST 3, JULY 28,
2002 2001 2002 2001
--------- --------- --------- ---------
Net revenue $ 119,694 $ 68,649 $ 218,494 $ 132,879
Cost of goods sold 56,033 31,419 99,813 60,784
--------- --------- --------- ---------
Gross profit 63,661 37,230 118,681 72,095
Operating expenses:
Research and development 33,599 21,843 64,208 41,909
Selling and marketing 12,321 10,103 23,333 19,648
General and administrative 3,523 3,734 7,165 6,719
--------- --------- --------- ---------
Total operating expenses 49,443 35,680 94,706 68,276
--------- --------- --------- ---------
Operating income 14,218 1,550 23,975 3,819
Interest and other income, net 1,906 2,459 4,045 5,426
--------- --------- --------- ---------
Income before income taxes 16,124 4,009 28,020 9,245
Provision for income taxes 1,935 603 3,361 1,388
--------- --------- --------- ---------
Pro forma net income $ 14,189 $ 3,406 $ 24,659 $ 7,857
========= ========= ========= =========
Basic pro forma net income per share $ 0.12 $ 0.03 $ 0.21 $ 0.07
========= ========= ========= =========
Diluted pro forma net income per share $ 0.11 $ 0.03 $ 0.19 $ 0.06
========= ========= ========= =========
Weighted average shares-- basic 118,886 113,714 118,487 113,115
--------- --------- --------- ---------
Weighted average shares-- diluted 129,634 127,444 131,042 126,300
--------- --------- --------- ---------
RECONCILIATION TO GAAP NET LOSS:
Pro forma net income $ 14,189 $ 3,406 $ 24,659 $ 7,857
Amortization of stock-based compensation (2,192) (4,095) (4,474) (8,208)
Amortization of goodwill and acquired
intangible assets (21,323) (104,508) (42,646) (209,016)
Facilities consolidation charge -- -- (17,799) --
Amortization of inventory fair value adjustment -- -- -- (796)
--------- --------- --------- ---------
GAAP net loss $ (9,326) $(105,197) $ (40,260) $(210,163)
========= ========= ========= =========
The above pro forma statements of operations are for informational purposes only
and are provided for understanding our operating results. The pro forma
statements of operations have not been prepared in accordance with GAAP, should
not be considered a substitute for our historical financial information prepared
in accordance with GAAP and may be different from pro forma measures used by
other companies. The pro forma income has been derived by adjusting the net loss
under generally accepted accounting principles with the impact of non cash
stock-based compensation charges, charges associated with purchase accounting,
and charges for facilities consolidation.
MARVELL TECHNOLOGY GROUP LTD.
Consolidated Balance Sheets
(Unaudited)
(In thousands)
AUGUST 3, FEBRUARY 2,
Assets 2002 2002
----------- -----------
Current assets:
Cash and cash equivalents $ 108,871 $ 114,483
Short-term investments 141,479 135,761
Accounts receivable, net 70,218 42,150
Inventory, net 49,478 23,600
Prepaid expenses and other current assets 22,126 23,422
----------- -----------
Total current assets 392,172 339,416
Property and equipment, net 60,445 52,924
Goodwill and acquired intangible assets 1,638,095 1,680,740
Other noncurrent assets 31,067 17,975
----------- -----------
Total assets $ 2,121,779 $ 2,091,055
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 63,055 $ 30,990
Accrued liabilities 38,683 25,838
Income taxes payable 19,223 17,744
Deferred revenue 13,563 8,907
Current portion of capital lease obligations 1,266 1,039
----------- -----------
Total current liabilities 135,790 84,518
Capital lease obligations 9,134 10,017
Other long-term liabilities 6,055 6,793
----------- -----------
Total liabilities 150,979 101,328
----------- -----------
Shareholders' equity:
Common stock 240 238
Additional paid-in capital 2,668,295 2,646,757
Deferred stock-based compensation (11,074) (10,099)
Accumulated other comprehensive income 1,714 946
Accumulated deficit (688,375) (648,115)
----------- -----------
Total shareholders' equity 1,970,800 1,989,727
----------- -----------
Total liabilities and shareholders' equity $ 2,121,779 $ 2,091,055
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