Three Months Ended May 1, 2021 | ||||||
Combined GAAP | Combined Non-GAAP | Marvell Stand-alone Non-GAAP | ||||
Net revenue | $ | 832,279 | $ | 832,279 | $ | 810,496 |
Gross margin | 50.2 | % | 64.3 | % | 64.3 | % |
Operating margin | (9.9) | % | 27.5 | % | 27.7 | % |
Net income (loss) | $ | (88,242) | $ | 201,799 | $ | 200,937 |
Diluted net income (loss) per share | $ | (0.13) | $ | 0.29 | $ | 0.29 |
This press release contains forward-looking statements within the meaning of the federal securities laws that involve risks and uncertainties. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'projects,' 'believes,' 'seeks,' 'estimates,' 'can,' 'may,' 'will,' 'would' and similar expressions identify such forward-looking statements. These statements are not guarantees of results and should not be considered as an indication of future activity or future performance. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Actual events or results may differ materially from those described in this press release due to a number of risks and uncertainties, including, but not limited to: failure to realize the anticipated benefits of the transaction with Inphi Corporation on a timely basis or at all, including as a result of our ability to successfully integrate the businesses of Marvell and Inphi or due to unexpected costs, liabilities, delays or other factors impacting the semiconductor industry; the risk that disruptions from the transaction with Inphi will harm our business, including current plans and operations; our ability to retain and hire key personnel; potential adverse reactions or changes to business relationships resulting from the transaction with Inphi; risks associated with third party contracts containing consent and/or other provisions that may be triggered by the transaction with Inphi; risks related to the impact of the COVID-19 pandemic which have impacted, and may continue to impact our business, workforce and operations, the transportation and manufacturing of our products, and the operations of our customers, distributors, vendors, suppliers, and partners; increased disruption and volatility in the capital markets and credit markets as a result of COVID-19, which could adversely affect our liquidity and capital resources; the impact of COVID-19, or other future pandemics, on the U.S. and global economies; disruptions caused by COVID-19 resulting in worker absenteeism, quarantines and restrictions on our employees' ability to work, innovate, collaborate, and travel; the effects that the current credit and market conditions caused by, or resulting from, COVID-19 could have on the liquidity and financial condition of our customers and suppliers, including any impact on their ability to meet their contractual obligations; supply chain disruptions or component shortages that may impact the production of our products or may impact the price of components which in turn may impact our margins on any impacted products and any constrained availability from other electronic suppliers impacting our customers' ability to ship their products, which in turn may adversely impact our sales to those customers; our reliance on our manufacturing partners for the manufacture, assembly and testing of our products; the impact of international conflict and economic volatility in either domestic or foreign markets including risks related to trade conflicts, regulations, and tariffs, including but not limited to, restrictions imposed on our Chinese customers; the risks associated with manufacturing and selling products and customers' products outside of the United States; our ability to define, design and develop products for the Cloud and 5G markets; our ability to market our 5G products to Tier 1 infrastructure customers; cancellations, rescheduling or deferrals of significant customer orders or shipments, as well as the ability of our customers to manage inventory; our ability to estimate customer demand and future sales accurately; our ability to realize the expected benefits from restructuring activities; the effects of transitioning to smaller geometry process technologies; the impact of any change in the income tax laws in jurisdictions where we operate and the loss of any beneficial tax treatment that we currently enjoy; the risk of downturns in the semiconductor industry; risks related to our debt obligations; the outcome of pending or future litigation and legal and regulatory proceedings; our dependence on a small number of customers; the impact and costs associated with changes in international financial and regulatory conditions; our ability and the ability of our customers to successfully compete in the markets in which we serve; our ability and our customers' ability to develop new and enhanced products and the adoption of those products in the market; decreases in gross margin and results of operations in the future due to a number of factors; our ability to scale our operations in response to changes in demand for existing or new products and services; risks associated with acquisition and consolidation activity in the semiconductor industry; the effects of any other potential acquisitions, divestitures or investments; our ability to protect our intellectual property; our maintenance of an effective system of internal controls; severe financial hardship or bankruptcy of one or more of our major customers; and other risks detailed in our SEC filings from time to time. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect our business described in the 'Risk Factors' section of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed by us from time to time with the SEC. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
Three Months Ended | ||||||
May 1, 2021 |
January 30, 2021 |
May 2, 2020 | ||||
Net revenue
| $ | 832,279 | $ | 797,819 | $ | 693,641 |
Cost of goods sold
| 414,138 | 376,687 | 366,739 | |||
Gross profit
| 418,141 | 421,132 | 326,902 | |||
Operating expenses:
| ||||||
Research and development
| 286,100 | 260,380 | 279,584 | |||
Selling, general and administrative
| 201,466 | 116,918 | 122,027 | |||
Legal settlement (a) | - | 36,000 | - | |||
Restructuring related charges
| 12,886 | 9,570 | 21,287 | |||
Total operating expenses
| 500,452 | 422,868 | 422,898 | |||
Operating loss
| (82,311) | (1,736) | (95,996) | |||
Interest income
| 222 | 356 | 1,058 | |||
Interest expense
| (35,141) | (20,733) | (16,830) | |||
Other income (loss), net
| 1,223 | (727) | 3,754 | |||
Interest and other income (loss), net
| (33,696) | (21,104) | (12,018) | |||
Loss before income taxes
| (116,007) | (22,840) | (108,014) | |||
Provision (benefit) for income taxes
| (27,765) | (39,376) | 5,019 | |||
Net income (loss) | $ | (88,242) | $ | 16,536 | $ | (113,033) |
Net income (loss) per share - basic: | $ | (0.13) | $ | 0.02 | $ | (0.17) |
Net income (loss) per share - diluted: | $ | (0.13) | $ | 0.02 | $ | (0.17) |
Weighted average shares:
| ||||||
Basic
| 693,378 | 673,529 | 663,547 | |||
Diluted
| 693,378 | 687,959 | 663,547 |
May 1, 2021 |
January 30, 2021 | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ | 522,512 | $ | 748,467 |
Accounts receivable, net | 694,395 | 536,668 | ||
Inventories | 538,117 | 268,228 | ||
Prepaid expenses and other current assets | 132,787 | 63,782 | ||
Total current assets | 1,887,811 | 1,617,145 | ||
Property and equipment, net | 424,733 | 326,125 | ||
Goodwill | 10,965,666 | 5,336,961 | ||
Acquired intangible assets, net | 6,562,061 | 2,270,700 | ||
Deferred tax assets | 725,636 | 672,424 | ||
Other non-current assets | 664,030 | 541,569 | ||
Total assets | $ | 21,229,937 | $ | 10,764,924 |
Liabilities and Stockholders' Equity | ||||
Current liabilities: | ||||
Accounts payable | $ | 304,425 | $ | 252,419 |
Accrued liabilities | 478,158 | 435,616 | ||
Accrued employee compensation | 153,943 | 189,421 | ||
Short-term convertible debt | 193,269 | - | ||
Short-term debt | 30,308 | 199,641 | ||
Total current liabilities | 1,160,103 | 1,077,097 | ||
Long-term convertible debt | 1,146 | - | ||
Long-term debt | 4,673,707 | 993,170 | ||
Other non-current liabilities | 539,611 | 258,853 | ||
Total liabilities | 6,374,567 | 2,329,120 | ||
Stockholders' equity: | ||||
Common shares | 1,633 | 1,350 | ||
Additional paid-in capital | 12,879,095 | 6,331,013 | ||
Retained earnings | 1,974,642 | 2,103,441 | ||
Total stockholders' equity | 14,855,370 | 8,435,804 | ||
Total liabilities and stockholders' equity | $ | 21,229,937 | $ | 10,764,924 |
Marvell Technology, Inc. | ||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||
(In thousands) | ||||
Three Months Ended | ||||
May 1, 2021 |
May 2, 2020 | |||
Cash flows from operating activities: | ||||
Net loss | $ | (88,242) | $ | (113,033) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Depreciation and amortization | 51,837 | 50,483 | ||
Share-based compensation | 92,727 | 59,687 | ||
Amortization of acquired intangible assets | 128,639 | 112,922 | ||
Amortization of inventory fair value adjustment associated with acquisitions | 13,720 | 17,284 | ||
Other expense, net | 31,309 | 11,451 | ||
Deferred income taxes | (22,581) | 2,372 | ||
Changes in assets and liabilities, net of acquisition: | ||||
Accounts receivable | (57,999) | 23,586 | ||
Inventories | (13,249) | 35,834 | ||
Prepaid expenses and other assets | 4,413 | (6,694) | ||
Accounts payable | (51,609) | (3,557) | ||
Accrued liabilities and other non-current liabilities | (46,999) | 10,796 | ||
Accrued employee compensation | (55,693) | (25,503) | ||
Net cash provided by (used in) operating activities | (13,727) | 175,628 | ||
Cash flows from investing activities: | ||||
Purchases of technology licenses | (3,443) | (3,684) | ||
Purchases of property and equipment | (21,444) | (35,343) | ||
Cash payment for acquisition, net of cash and cash equivalents acquired | (3,600,165) | - | ||
Other, net | 447 | 665 | ||
Net cash used in investing activities | (3,624,605) | (38,362) | ||
Cash flows from financing activities: | ||||
Repurchases of common stock | - | (25,202) | ||
Proceeds from employee stock plans | 549 | 5,458 | ||
Tax withholding paid on behalf of employees for net share settlement | (73,175) | (31,501) | ||
Dividend payments to stockholders | (40,557) | (39,763) | ||
Payments on technology license obligations | (44,132) | (23,807) | ||
Proceeds from issuance of debt | 3,731,096 | - | ||
Principal payments of debt | (200,000) | - | ||
Payment for repurchases and settlement of convertible notes | (71,079) | - | ||
Proceeds from capped calls | 111,154 | - | ||
Payment of equity and debt financing costs | (1,479) | - | ||
Other, net | - | (2,507) | ||
Net cash provided by (used in) financing activities | 3,412,377 | (117,322) | ||
Net increase (decrease) in cash and cash equivalents
| (225,955) | 19,944 | ||
Cash and cash equivalents at beginning of period
| 748,467 | 647,604 | ||
Cash and cash equivalents at end of period
| $ | 522,512 | $ | 667,548 |
Marvell Technology, Inc. | ||||||
Reconciliations from GAAP to Non-GAAP (Unaudited) | ||||||
(In thousands, except per share amounts) | ||||||
Three Months Ended | ||||||
May 1, 2021 |
January 30, 2021 |
May 2, 2020 | ||||
GAAP gross profit: | $ | 418,141 | $ | 421,132 | $ | 326,902 |
Special items: | ||||||
Share-based compensation | 9,803 | 4,265 | 3,538 | |||
Amortization of acquired intangible assets | 93,812 | 83,327 | 86,567 | |||
Other cost of goods sold (a) | 13,723 | 796 | 18,562 | |||
Total special items | 117,338 | 88,388 | 108,667 | |||
Non-GAAP gross profit | $ | 535,479 | $ | 509,520 | $ | 435,569 |
GAAP gross margin | 50.2 | % | 52.8 | % | 47.1 | % |
Non-GAAP gross margin | 64.3 | % | 63.9 | % | 62.8 | % |
Total GAAP operating expenses | $ | 500,452 | $ | 422,868 | $ | 422,898 |
Special items: | ||||||
Share-based compensation | (99,790) | (55,214) | (56,149) | |||
Restructuring related charges (b) | (12,886) | (9,570) | (21,287) | |||
Amortization of acquired intangible assets | (34,827) | (26,355) | (26,355) | |||
Legal settlement (c) | - | (36,000) | - | |||
Other operating expenses (d) | (46,684) | (12,480) | (19,403) | |||
Total special items | (194,187) | (139,619) | (123,194) | |||
Total non-GAAP operating expenses | $ | 306,265 | $ | 283,249 | $ | 299,704 |
GAAP operating margin | (9.9) | % | (0.2) | % | (13.8) | % |
Other cost of goods sold (a) | 1.6 | % | 0.1 | % | 2.7 | % |
Share-based compensation | 13.2 | % | 7.5 | % | 8.6 | % |
Restructuring related charges (b) | 1.5 | % | 1.2 | % | 3.1 | % |
Amortization of acquired intangible assets | 15.5 | % | 13.7 | % | 16.3 | % |
Legal settlement (c) | - | % | 4.5 | % | - | % |
Other operating expenses (d) | 5.6 | % | 1.6 | % | 2.7 | % |
Non-GAAP operating margin | 27.5 | % | 28.4 | % | 19.6 | % |
Marvell Technology, Inc. | ||||||
Reconciliations from GAAP to Non-GAAP (Unaudited) | ||||||
(In thousands, except per share amounts) | ||||||
Three Months Ended | ||||||
May 1, 2021 |
January 30, 2021 |
May 2, 2020 | ||||
GAAP interest and other income (loss), net | $ | (33,696) | $ | (21,104) | $ | (12,018) |
Special items: | ||||||
Restructuring and other related items (b) | - | (28) | 434 | |||
Debt issuance related costs (e) | 16,901 | 6,045 | - | |||
Total special items | 16,901 | 6,017 | 434 | |||
Total non-GAAP interest and other income (loss), net | $ | (16,795) | $ | (15,087) | $ | (11,584) |
GAAP net loss | $ | (88,242) | $ | 16,536 | $ | (113,033) |
Special items: | ||||||
Other cost of goods sold (a) | 13,723 | 796 | 18,562 | |||
Share-based compensation | 109,593 | 59,479 | 59,687 | |||
Restructuring related charges (b) | 12,886 | 9,542 | 21,721 | |||
Legal settlement (c) | - | 36,000 | - | |||
Other operating expenses (d) | 46,684 | 12,480 | 19,403 | |||
Amortization of acquired intangible assets | 128,639 | 109,682 | 112,922 | |||
Debt issuance related costs (e) | 16,901 | 6,045 | - | |||
Pre-tax total special items | 328,426 | 234,024 | 232,295 | |||
Other income tax effects and adjustments (f) | (38,385) | (49,936) | (1,229) | |||
Non-GAAP net income | $ | 201,799 | $ | 200,624 | $ | 118,033 |
GAAP weighted average shares - basic | 693,378 | 673,529 | 663,547 | |||
GAAP weighted average shares - diluted | 693,378 | 687,959 | 663,547 | |||
Non-GAAP weighted average shares - diluted (g) | 707,488 | 687,959 | 670,841 | |||
GAAP diluted net loss per share | $ | (0.13) | $ | 0.02 | $ | (0.17) |
Non-GAAP diluted net income per share | $ | 0.29 | $ | 0.29 | $ | 0.18 |
(a) | Other costs of goods sold includes amortization of acquired inventory fair value adjustments. |
(b) | Restructuring related charges include employee severance costs, facilities related charges, and other. |
(c) | Represents a legal settlement relating to a commercial agreement. |
(d) | Other operating expenses include integration and merger costs associated with acquisitions. |
(e) | Debt issuance related costs is associated with partial term loan repayment and bridge financing. |
(f) | Other income tax effects and adjustments relate to tax provision based on a non-GAAP income tax rate of 5.0%. |
(g) | Non-GAAP diluted weighted average shares differs from GAAP diluted weighted average shares due to the non-GAAP net income reported. |
Marvell Technology, Inc. | ||||||
Reconciliations from Combined Non-GAAP to Marvell Stand-alone Non-GAAP (Unaudited) | ||||||
(In millions, except per share amounts) | ||||||
Three Months Ended May 1, 2021 | ||||||
Combined Non-GAAP* | Less: Non-GAAP Results Attributable to Inphi Acquisition | Marvell Stand-alone Non-GAAP* | ||||
Net revenue | $ | 832,279 | $ | 21,783 | $ | 810,496 |
Gross profit | $ | 535,479 | $ | 14,166 | $ | 521,313 |
Total operating expenses | $ | 306,265 | $ | 9,485 | $ | 296,780 |
Interest and other income (loss), net | $ | (16,795) | $ | (29,764) | $ | 12,969 |
Net income | $ | 201,799 | $ | 862 | $ | 200,937 |
Diluted net income per share | $ | 0.29 | $ | - | $ | 0.29 |
Diluted weighted-average shares | 707,488 | 18,465 | 689,023 |
Marvell Technology, Inc. | |
Outlook for the Second Quarter of Fiscal Year 2022 | |
Reconciliations from GAAP to Non-GAAP (Unaudited) | |
(In millions, except per share amounts) | |
Outlook for Three Months Ended July 31, 2021 | |
GAAP net revenue |
$1,065 +/- 3%
|
Special items: | - |
Non-GAAP net revenue |
$1,065 +/- 3%
|
GAAP gross margin |
34.8% - 37.5%
|
Special items: | |
Share-based compensation
| 0.9% |
Amortization of acquired intangible assets
| 16.0% |
Other costs of goods sold
| 10.9% |
Non-GAAP gross margin |
~64%
|
Total GAAP operating expenses |
$633 - $643
|
Special items: | |
Share-based compensation
| 111 |
Amortization of acquired intangible assets
| 109 |
Restructuring related charges | 30 |
Other operating expenses
| 15 |
Total non-GAAP operating expenses |
$370 - $375
|
GAAP diluted net loss per share |
$(0.37) +/- $0.04
|
Special items: | |
Share-based compensation
| 0.14 |
Amortization of acquired intangible assets
| 0.48 |
Restructuring related charges | 0.04 |
Other operating expenses
| 0.02 |
Non-GAAP diluted net income per share |
$0.31 +/- $0.03
|
Three Months Ended | % Change | |||||||||
May 1, 2021* |
January 30, 2021 |
May 2, 2020 | YoY | QoQ | ||||||
Networking (1)
| $ | 498,250 | $ | 438,610 | $ | 393,920 | 26 | % | 14 | % |
Storage (2)
| 302,918 | 326,412 | 258,688 | 17 | % | (7) | % | |||
Total Core | 801,168 | 765,022 | 652,608 | 23 | % | 5 | % | |||
Other (3)
| 31,111 | 32,797 | 41,033 | (24) | % | (5) | % | |||
Total Net Revenue | $ | 832,279 | $ | 797,819 | $ | 693,641 | 20 | % | 4 | % |
Three Months Ended | ||||||
% of Total |
May 1, 2021 |
January 30, 2021 |
May 2, 2020 | |||
Networking (1)
| 60 | % | 55 | % | 57 | % |
Storage (2)
| 36 | % | 41 | % | 37 | % |
Total Core | 96 | % | 96 | % | 94 | % |
Other (3)
| 4 | % | 4 | % | 6 | % |
Total Net Revenue | 100 | % | 100 | % | 100 | % |
(1) Networking products are comprised primarily of ethernet solutions, embedded processors, custom ASICs and electro-optics solutions.
|
(2) Storage products are comprised primarily of storage controllers and fibre channel adapters.
|
(3) Other products are comprised primarily of printer solutions.
|
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Marvell Technology Inc. published this content on 07 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 June 2021 20:10:03 UTC.