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EXHIBIT 99.1
NEWS RELEASE
MARVELL TECHNOLOGY GROUP LTD. REPORTS SECOND QUARTER FISCAL 2002 RESULTS
SUNNYVALE, CA. (AUGUST 16, 2001) - 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
July 28, 2001.
Net revenue for the second quarter of fiscal 2002 was $68.7 million, an increase
of 113% over net revenue of $32.2 million for the second quarter of fiscal 2001
and a 7% sequential increase from net revenue of $64.2 million for the first
quarter of fiscal 2002. Pro forma net income, which excludes the effect of
acquisition-related expenses and amortization of stock-based compensation, was
$3.4 million, or $0.03 per share (diluted), for the second quarter of fiscal
2002, compared with pro forma net income of $2.3 million, or $0.03 per share
(diluted), for the second quarter of fiscal 2001.
Net revenue for the first six months of fiscal 2002 was $132.9 million, an
increase of 115% over net revenue of $61.8 million for the first six months of
fiscal 2001. Pro forma net income was $7.9 million, or $0.06 per share
(diluted), for the first six months of fiscal 2002, compared with pro forma net
income of $6.1 million, or $0.07 per share (diluted), for the first six months
of fiscal 2001.
Net loss under generally accepted accounting principles (GAAP), which includes
the effect of acquisition-related expenses and amortization of stock-based
compensation, was $105.2 million, or $0.93 per share (diluted), for the second
quarter of fiscal 2002, compared with net income under GAAP of $624,000, or
$0.01 per share (diluted), for the second quarter of fiscal 2001. Net loss under
GAAP was $210.2 million, or $1.86 per share (diluted), for the first six months
of fiscal 2002, compared with net income under GAAP of $2.7 million, or $0.03
per share (diluted), for the first six months of fiscal 2001.
"We are pleased to announce that our second quarter revenue increased 7%
sequentially over the prior quarter in a challenging economic climate," stated
Dr. Sehat Sutardja, Marvell's President and CEO. "Also, during the quarter,
Marvell achieved significant product and technology milestones. We announced the
industry's first hardware implementation of Network Address Translation (NAT) in
commercial Ethernet switching devices and the industry's first hardware-based
Multiprotocol Label Switch (MPLS) solution for Ethernet switches, which operates
in conjunction with our GalNet(R)-3 family of Layer 3/4/5 switch processors.
Marvell also introduced several new members of its industry-leading
Discovery(TM) family of system controllers for MIPS(R) and PowerPC based
processors, which now completes a full line of system controller products that
offer superior performance and integration across a broad application range in
all market segments. In addition, our industry-leading Alaska(TM) Gigabit
Ethernet over copper solutions continue to become widely adopted by tier one
networking OEMs, enhancing the rapid deployment of Gigabit Ethernet to the
desktop."
Added Dr. Sutardja, "Marvell will continue to focus on expanding our broadband
communications product offerings and technology leadership, which will enable us
to further strengthen our position as the leader in providing complete
communications solutions to our networking and storage customers."
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Marvell will be conducting a conference call today at 2 p.m. PDT to discuss its
second quarter financial results. To listen to the conference call, investors
can access the webcast via www.StreetFusion.com by clicking on the Marvell
conference link. This audio webcast will be available on a replay basis until
September 16, 2001. To listen to the conference by phone, please dial
719/457-2649 approximately 10 minutes prior to the initiation of the
teleconference and refer to conference code 469507. Telephone replay of the
conference call will be available until August 24, 2001 at 10 p.m. PDT by
calling 719/457-0820.
ABOUT MARVELL
Marvell, a technology leader in the development of extreme broadband
system-level IC solutions for Internet connectivity and infrastructure,
comprises Marvell Technology Group Ltd. (MTGL) and its subsidiaries, Marvell
Semiconductor, Inc. (MSI), Marvell Asia Pte Ltd. (MAPL), Marvell Japan K.K.
(MJKK), and Galileo Technology Ltd. (GTL). On behalf of MTGL, MSI designs,
develops and markets integrated circuits utilizing proprietary Communications
Mixed-Signal Processing (CMSP) and digital signal processing technologies for
communications signal processing markets. MAPL is headquartered in Singapore and
is responsible for Marvell's production and distribution operations. GTL
develops high-performance communications Internetworking and Switching products
for the broadband communications market. As used in this release, the terms
"Company" and "Marvell" refer to the entire group of companies. The Company
applies its technology to the extreme broadband communications market where its
products are used in network access equipment to provide the interface between
communications systems and data transmission media. MSI is headquartered at 645
Almanor Ave., Sunnyvale, Calif., 94085; phone: (408) 222-2500, fax: (408)
328-0120. Marvell's common stock is traded on the NASDAQ under the symbol MRVL.
More information on Marvell is available on the Internet at
http://www.marvell.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:
This release may contain forward-looking statements based on our current
expectations, estimates and projections about our products, our industry, our
markets, management's beliefs, and certain assumptions made by us. Words such as
"anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates,"
"may," "will," "should," and variations of these words or similar expressions,
are intended to identify forward-looking statements. In addition, any statements
that refer to expectations, projections or other characterizations of future
events or circumstances, including any underlying assumptions, are
forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and assumptions that
are difficult to predict. Therefore, market results may differ materially and
adversely from those expressed in any forward-looking statements in this
release.
Important risks, uncertainties and assumptions that may cause such a difference
for Marvell in connection with our near term financial results include, but are
not limited to, the timing, cost and successful completion of technology and
product development through volume production; the timing, rescheduling and/or
cancellation of significant customer orders; general economic conditions and
specific conditions in the markets we address, including periodic downturns in
the integrated circuit industry; the rate at which our present and future
customers and end-users adopt our products; and the timing and results of
customer-industry qualification and certification of our products.
For other factors that could cause the Marvell's results to vary from
expectations, please see the section titled "Additional Factors That May Affect
Future Results" in Marvell's annual report on Form 10-K for the year ended
January 27, 2001 and Marvell's quarterly report on Form 10-Q for the quarter
ended April 28, 2001.
We undertake no obligation to revise or update publicly any forward-looking
statements for any reason.
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MARVELL TECHNOLOGY GROUP LTD.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------- -------------------------
JULY 28, JULY 29, JULY 28, JULY 29,
2001 2000 2001 2000
--------- --------- --------- ---------
Net revenue ...................................... $ 68,649 $ 32,175 $ 132,879 $ 61,839
Cost of goods sold ............................... 31,419 15,080 60,784 28,260
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Gross profit ..................................... 37,230 17,095 72,095 33,579
Operating expenses:
Research and development .................... 21,843 7,812 41,909 13,930
Selling and marketing ....................... 10,103 5,595 19,648 9,679
General and administrative .................. 3,734 1,427 6,719 2,931
--------- --------- --------- ---------
Total operating expenses ................ 35,680 14,834 68,276 26,540
--------- --------- --------- ---------
Operating income ................................. 1,550 2,261 3,819 7,039
Interest and other income, net ................... 2,459 794 5,426 1,034
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Income before income taxes ....................... 4,009 3,055 9,245 8,073
Provision for income taxes ....................... 603 764 1,388 2,018
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Pro forma net income ............................. $ 3,406 $ 2,291 $ 7,857 $ 6,055
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Basic pro forma net income per share ............. $ 0.03 $ 0.04 $ 0.07 $ 0.12
========= ========= ========= =========
Diluted pro forma net income per share ........... $ 0.03 $ 0.03 $ 0.06 $ 0.07
========= ========= ========= =========
Weighted average shares -- basic ................. 113,714 54,910 113,115 50,702
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Weighted average shares -- diluted ............... 127,444 90,056 126,300 87,426
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RECONCILIATION TO GAAP NET INCOME (LOSS):
Pro forma net income ............................. $ 3,406 $ 2,291 $ 7,857 $ 6,055
Amortization of stock-based compensation ......... (4,095) (2,223) (8,208) (4,484)
Amortization of goodwill and acquired
intangible assets ........................... (104,508) -- (209,016) --
Amortization of inventory fair value adjustment .. -- -- (796) --
Income tax effect ................................ -- 556 -- 1,121
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GAAP net income (loss) ........................... $(105,197) $ 624 $(210,163) $ 2,692
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The above pro forma statement of operations is for informational purposes only.
It is not prepared in accordance with GAAP and should not be considered a
substitute for our historical financial information prepared in accordance with
GAAP.
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MARVELL TECHNOLOGY GROUP LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------- -------------------------
JULY 28, JULY 29, JULY 28, JULY 29,
2001 2000 2001 2000
--------- --------- --------- ---------
Net revenue ........................................ $ 68,649 $ 32,175 $ 132,879 $ 61,839
Cost of goods sold ................................. 31,419 15,080 61,580 28,260
--------- --------- --------- ---------
Gross profit ....................................... 37,230 17,095 71,299 33,579
Operating expenses:
Research and development ...................... 21,843 7,812 41,909 13,930
Selling and marketing ......................... 10,103 5,595 19,648 9,679
General and administrative .................... 3,734 1,427 6,719 2,931
Amortization of stock-based compensation ...... 4,095 2,223 8,208 4,484
Amortization of goodwill and acquired
intangible assets ......................... 104,508 -- 209,016 --
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Total operating expenses .................. 144,283 17,057 285,500 31,024
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Operating income (loss) ............................ (107,053) 38 (214,201) 2,555
Interest and other income, net ..................... 2,459 794 5,426 1,034
--------- --------- --------- ---------
Income (loss) before income taxes .................. (104,594) 832 (208,775) 3,589
Provision for income taxes ......................... 603 208 1,388 897
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Net income (loss) .................................. $(105,197) $ 624 $(210,163) $ 2,692
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Basic net income (loss) per share .................. $ (0.93) $ 0.01 $ (1.86) $ 0.05
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Diluted net income (loss) per share ................ $ (0.93) $ 0.01 $ (1.86) $ 0.03
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Weighted average shares -- basic ................... 113,714 54,910 113,115 50,702
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Weighted average shares -- diluted ................. 113,714 90,056 113,115 87,426
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MARVELL TECHNOLOGY GROUP LTD.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
JULY 28, JANUARY 27,
ASSETS 2001 2001
----------- -----------
Current assets:
Cash and cash equivalents ........................ $ 174,203 $ 184,128
Short-term investments ........................... 41,176 39,935
Accounts receivable, net ......................... 38,016 37,543
Inventory, net ................................... 24,730 30,924
Prepaid expenses and other current assets ........ 14,553 11,479
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Total current assets ......................... 292,678 304,009
Property and equipment, net ........................... 33,892 31,184
Goodwill and acquired intangible assets ............... 1,891,823 2,100,839
Other noncurrent assets ............................... 15,408 11,454
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Total assets ................................. $ 2,233,801 $ 2,447,486
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ................................. $ 27,162 $ 24,818
Accrued liabilities .............................. 18,151 17,323
Accrued acquisition costs ........................ 204 29,530
Income taxes payable ............................. 11,731 9,998
Deferred revenue ................................. 5,142 6,516
Capital lease obligations ........................ -- 37
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Total current liabilities .................... 62,390 88,222
Long-term liabilities ................................. 5,902 2,598
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Total liabilities ............................ 68,292 90,820
----------- -----------
Shareholders' equity:
Common stock ..................................... 233 231
Additional paid-in capital ....................... 2,627,011 2,617,490
Deferred stock-based compensation ................ (19,905) (28,113)
Accumulated other comprehensive income ........... 1,294 19
Accumulated deficit .............................. (443,124) (232,961)
----------- -----------
Total shareholders' equity ................... 2,165,509 2,356,666
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Total liabilities and shareholders' equity ... $ 2,233,801 $ 2,447,486
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