EXHIBIT 99.1
NEWS RELEASE
MARVELL(R) TECHNOLOGY GROUP LTD. REPORTS
RECORD FOURTH QUARTER FISCAL 2004 RESULTS
MARVELL'S BOARD APPROVES A 2 FOR 1 STOCK SPLIT
Sunnyvale, CA. (February 26, 2004) - Marvell(R) Technology Group Ltd. (NASDAQ:
MRVL), the technology leader in the development of extreme broadband
communications and storage solutions, today reported financial results for its
fourth fiscal quarter and year ended January 31, 2004.
Net revenue for the fourth quarter of fiscal 2004 was a record $243.3 million,
an increase of 61% over net revenue of $150.8 million for the fourth quarter of
fiscal 2003 and a 13% sequential increase from net revenue of $215.3 million for
the third quarter of fiscal 2004. Net income under generally accepted accounting
principles (GAAP) was $19.8 million, or $0.14 per share (diluted), for the
fourth quarter of fiscal 2004, compared with a net loss under GAAP of $24.2
million, or $0.20 per share (diluted), for the fourth quarter of fiscal 2003.
Net revenue for the year ended January 31, 2004 was $819.8 million, an increase
of 62% over net revenue of $505.3 million for the year ended February 1, 2003.
Net income under GAAP was $45.5 million, or $0.33 per share (diluted), for the
year ended January 31, 2004, compared with a net loss under GAAP of $72.2
million, or $0.61 per share (diluted), for the year ended February 1, 2003.
Marvell reports net income (loss) and basic and diluted net income (loss) per
share in accordance with GAAP and additionally on a non-GAAP basis, referred to
as pro forma. Pro forma net income, where applicable, excludes the effect of
acquisition-related expenses, amortization of stock-based compensation and
charges related to facilities consolidation. Pro forma net income was $41.3
million, or $0.29 per share (diluted), for the fourth quarter of fiscal 2004,
compared with pro forma net income of $20.3 million, or $0.16 per share
(diluted), for the fourth quarter of fiscal 2003. Shares used in computing pro
forma net income per share for the fourth quarter of fiscal 2004 increased to
144.2 million, compared with 129.3 million for the fourth quarter of fiscal
2003.
Pro forma net income was $130.8 million, or $0.95 per share (diluted), for the
year ended January 31, 2004, compared with pro forma net income of $62.5
million, or $0.48 per share (diluted), for the year ended February 1, 2003.
Shares used in computing pro forma net income per share for the year ended
January 31, 2004 were 138.2 million, compared to 129.8 million for the year
ended February 1, 2003. These non-GAAP measures should be considered in addition
to, and not as a substitute for, the results prepared in accordance with GAAP. A
reconciliation of GAAP net income (loss) to pro forma net income is included in
the financial statements portion of this release as well as on our website in
the Investors section at www.marvell.com.
Marvell's management believes the non-GAAP information is useful because it can
enhance the understanding of the Company's ongoing economic performance and
Marvell therefore uses pro forma reporting internally to evaluate and manage the
Company's operations. Marvell has chosen to provide this information to
investors to enable them to perform comparisons of operating results in a manner
similar to how the Company analyzes its operating results.
"We are pleased to announce the results of another outstanding year and fourth
quarter for Marvell," stated Dr. Sehat Sutardja, Marvell's President and CEO.
"We finished the year with strong momentum and solid positioning in our markets.
Our strong revenue growth in Q4 was largely fueled by the continued adoption of
our Gigabit, Wireless and Storage products. Fiscal 2005 promises to be an
exciting year as our products and new technologies are expected to reach many
new large volume markets and applications such as consumer electronics and power
management."
Revenue for the fourth quarter was a record for Marvell and represented our 25th
consecutive quarter of sequential revenue growth. Also, the 13% sequential
increase in Marvell's fourth quarter revenue was Marvell's 9th consecutive
quarter where sequential revenue growth was greater than 10%. The following is a
review of some of the highlights that occurred during the fourth quarter:
o In January, Marvell announced its entrance into the power management
market with revolutionary Digital Signal Processing (DSP) based
mixed-signal solutions. Marvell developed a breakthrough in power
management technology using an innovative DSP based solution that
allows for the use of extremely small passive components. The
introduction of this innovative technology comes at a time when
conventional solutions are struggling to handle the critical issues
arising in wide range of electronic devices including PCs, Consumer
and Portable products.
o Marvell is driving widespread adoption of WLAN into consumer
electronic devices by offering the highest performance, lowest power
and smallest form factor products allowing for the most cost effective
designs. Marvell is winning numerous designs with large consumer
electronics OEMs for such applications as cellular handsets, gaming
devices, PDA's, and emerging home entertainment multimedia client
devices.
o Marvell continues to ramp its Gigabit Ethernet networking
infrastructure revenues with the continued strong adoption of its
technology proven Prestera(TM) product family. The Prestera Switch
family is now in volume production across all market segments of
Gigabit Ethernet infrastructure switching. Marvell's Prestera can now
be found in products ranging from high-end chassis metro systems, to
enterprise class fully managed layer 3 switches, and all the way to
high-volume unmanaged layer 2 Gigabit desktop switches.
o During the fourth quarter, Marvell commenced shipment of Yukon(TM)-EC
Gigabit Ethernet controllers for use in PCI Express platforms. The
Yukon-EC is the world's smallest Gigabit Ethernet controller available
today for desktops, notebooks and servers. Marvell also announced that
leading motherboard companies Asustek, ECS, Gigabyte and Micro Star
International all have selected Yukon-EC for their PCI-Express
motherboards.
o Marvell is proud to have been added to the NASDAQ-100 during the
quarter. The NASDAQ-100 Index is comprised of the 100 largest
non-financial stocks listed on the NASDAQ Stock Market based on market
capitalization.
MARVELL'S BOARD APPROVES A 2 FOR 1 STOCK SPLIT
Additionally, Marvell's Board of Directors has approved a 2 for 1 stock split of
the Company's common stock, to be effected pursuant to the issuance of
additional shares. The stock split is subject to shareholder approval of an
increase in the Company's authorized share capital at the Company's 2004 Annual
General Meeting tentatively scheduled for late May 2004. If approved by
Marvell's shareholders, Marvell expects the declaration and payment of the
additional shares to occur within 30 days following the Annual General Meeting.
Marvell will be conducting a conference call today at 1:45 p.m. PT to discuss
its fourth quarter and fiscal 2004 financial results. To listen to the
conference call, investors can dial (706) 679-0800 approximately ten minutes
prior to the initiation of the teleconference and refer to conference code
5249189. Replay of the conference call will be available until March 23, 2004 at
midnight by dialing (706) 645-9291. The conference call will also be available
via the web at www.marvell.com until March 23, 2004. Please visit the Investor
Events section. Replay on the Internet will be available until February 26,
2005.
ABOUT MARVELL
Marvell (NASDAQ: MRVL) is the leading global semiconductor provider of complete
broadband communications and storage 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 continued growth being fueled by the
continued adoption of our Gigabit, Wireless and Storage products, our
expectation regarding fiscal 2005, our products and new technology reaching many
new large volume markets and applications such as consumer electronics and power
management, our continued ability to drive the adoption of WLAN, the continued
strong adoption of our Prestera product family and our anticipated stock
dividend. 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. 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 fiscal year ended February 1, 2003 and
Marvell's subsequent reports on Form 10-Q. We undertake no obligation to revise
or update publicly any forward-looking statements.
MARVELL(R) AND THE MARVELL LOGO ARE TRADEMARKS OF MARVELL. ALL OTHER TRADEMARKS
ARE THE PROPERTY OF THEIR RESPECTIVE OWNERS.
MARVELL TECHNOLOGY GROUP LTD.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
THREE MONTHS ENDED YEAR ENDED
-------------------------- -------------------------
JANUARY 31, FEBRUARY 1, JANUARY 31, FEBRUARY 1,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Net revenue ........................................... $243,294 $ 150,847 $ 819,762 $505,285
Cost of goods sold .................................... 116,312 70,301 382,206 233,039
-------- --------- --------- --------
Gross profit .......................................... 126,982 80,546 437,556 272,246
Operating expenses:
Research and development ......................... 59,702 42,697 213,740 145,722
Selling and marketing ............................ 16,366 12,860 62,350 48,491
General and administrative ....................... 5,653 3,556 19,004 14,303
Amortization of stock-based compensation ......... 1,737 830 4,943 7,491
Amortization of acquired intangible assets
and other ...................................... 19,741 43,676 80,390 107,645
Facilities consolidation charge .................. -- -- -- 19,562
Total operating expenses .................... 103,199 103,619 380,427 343,214
-------- --------- --------- --------
Operating income (loss) ............................... 23,783 (23,073) 57,129 (70,968)
Interest and other income, net ........................ 1,617 1,603 6,223 7,318
-------- --------- --------- --------
Income (loss) before income taxes ..................... 25,400 (21,470) 63,352 (63,650)
Provision for income taxes ............................ 5,625 2,764 17,842 8,524
-------- --------- --------- --------
Net income (loss) ..................................... $ 19,775 $ (24,234) $ 45,510 $ (72,174)
======== ========= ======== =========
Basic net income (loss) per share ..................... $ 0.15 $ (0.20) $ 0.36 $ (0.61)
======== ========= ======== =========
Diluted net income (loss) per share ................... $ 0.14 $ (0.20) $ 0.33 $ (0.61)
======== ========= ======== =========
Weighted average shares-- basic ....................... 130,648 120,410 125,777 119,240
-------- --------- --------- --------
Weighted average shares-- diluted ..................... 144,171 120,410 138,241 119,240
-------- --------- --------- --------
MARVELL TECHNOLOGY GROUP LTD.
Pro Forma Consolidated Statements of Operations
(Unaudited)
(In Thousands, Except Per Share Amounts)
THREE MONTHS ENDED YEAR ENDED
------------------------ -------------------------
JANUARY 31, FEBRUARY 1, JANUARY 31, FEBRUARY 1,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Net revenue ........................................ $ 243,294 $150,847 $ 819,762 $ 505,285
Cost of goods sold ................................. 116,312 70,301 382,206 233,039
--------- -------- --------- ---------
Gross profit ....................................... 126,982 80,546 437,556 272,246
Operating expenses:
Research and development ...................... 59,702 42,697 213,740 145,722
Selling and marketing ......................... 16,366 12,860 62,350 48,491
General and administrative .................... 5,653 3,556 19,004 14,303
--------- -------- --------- ---------
Total operating expenses .................. 81,721 59,113 295,094 208,516
--------- -------- --------- ---------
Operating income ................................... 45,261 21,433 142,462 63,730
Interest and other income, net 1,617 1,603 6,223 7,318
--------- -------- --------- ---------
Income before income taxes ......................... 46,878 23,036 148,685 71,048
Provision for income taxes ......................... 5,625 2,764 17,842 8,524
--------- -------- --------- ---------
Pro forma net income ............................... $ 41,253 $ 20,272 $ 130,843 $ 62,524
========= ======== ========= =========
Basic pro forma net income per share ............... $ 0.32 $ 0.17 $ 1.04 $ 0.52
========= ======== ========= =========
Diluted pro forma net income per share ............. $ 0.29 $ 0.16 $ 0.95 $ 0.48
========= ======== ========= =========
Weighted average shares -- basic ................... 130,648 120,410 125,777 119,240
--------- -------- --------- ---------
Weighted average shares -- diluted ................. 144,171 129,327 138,241 129,750
--------- -------- --------- ---------
RECONCILIATION OF GAAP NET INCOME (LOSS)
TO PRO FORMA NET INCOME:
GAAP net income (loss) ............................. $ 19,775 $(24,234) $ 45,510 $ (72,174)
Amortization of stock-based compensation ........... 1,737 830 4,943 7,491
Amortization of acquired intangible assets
and other ..................................... 19,741 43,676 80,390 107,645
Facilities consolidation charge .................... -- -- -- 19,562
--------- -------- --------- ---------
Pro forma net income ............................... $ 41,253 $ 20,272 $ 130,843 $ 62,524
========= ======== ========= =========
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
income (loss) under generally accepted accounting principles for the impact of
non cash stock-based compensation charges, non-cash charges associated with
purchase accounting and charges for facilities consolidation.
MARVELL TECHNOLOGY GROUP LTD.
Consolidated Balance Sheets
(Unaudited)
(In thousands)
JANUARY 31, FEBRUARY 1,
2004 2003
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents ..................... $ 224,399 $ 125,316
Short-term investments ........................ 161,872 139,912
Accounts receivable, net ...................... 136,513 86,175
Inventory, net ................................ 91,785 39,712
Prepaid expenses and other current assets ..... 18,713 19,979
---------- ----------
Total current assets ........................ 633,282 411,094
Property and equipment, net ........................ 150,711 64,207
Goodwill and acquired intangible assets ............ 1,615,084 1,570,643
Other noncurrent assets ............................ 37,394 49,313
---------- ----------
Total assets ............................... $2,436,471 $2,095,257
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................. $ 121,190 $ 47,672
Accrued liabilities .......................... 36,823 25,881
Income taxes payable ......................... 2,155 2,247
Deferred income .............................. 12,996 12,481
Current portion of capital lease obligations . 10,747 5,019
---------- ----------
Total current liabilities .................. 183,911 93,300
Capital lease obligations .......................... 20,950 13,755
Other long-term liabilities ........................ 40,769 38,064
---------- ----------
Total liabilities .......................... 245,630 145,119
---------- ----------
Shareholders' equity:
Common stock ................................. 263 243
Additional paid-in capital ................... 2,872,545 2,674,095
Deferred stock-based compensation ............ (7,945) (5,899)
Accumulated other comprehensive income ....... 757 1,988
Accumulated deficit .......................... (674,779) (720,289)
---------- ----------
Total shareholders' equity ................. 2,190,841 1,950,138
---------- ----------
Total liabilities and shareholders' equity . $2,436,471 $2,095,257
========== ==========