Marvell Technology Group Ltd. Reports Fourth Fiscal Quarter and Fiscal Year 2016 Financial Results

(PRNewswire) — Marvell Technology Group Ltd. (NASDAQ: MRVL), a global leader in integrated silicon solutions, today reported financial results for the fourth fiscal quarter and fiscal year 2016, ended January 30, 2016, and reported updated financial results for the second and third quarters of fiscal 2016, ended August 1, 2015 and October 31, 2015, respectively.  

Key Fourth Quarter of Fiscal 2016 and Fiscal Year 2016 Financial Highlights               

  • Revenue: Q4 FY 2016, $616 Million; FY 2016, $2.7 Billion
  • GAAP Net Earnings (Loss): Q4 FY 2016, $4 Million; FY 2016, ($811) Million (includes the settlement with CMU described below)
  • GAAP Diluted Earnings (Loss) Per Share: Q4 FY 2016, $0.01; FY 2016, ($1.59)
  • Non-GAAP Net Income: Q4 FY 2016, $55 Million; FY 2016 $194 Million
  • Non-GAAP Diluted EPS: Q4 FY 2016, $0.11; FY 2016 $0.37
  • Cash Flow from Operations: Q4 FY 2016, $53 Million; FY 2016 $205 Million
  • Cash and ST Investments: $2.3 Billion (prior to giving effect to the settlement with CMU described below)

Fourth Quarter of Fiscal 2016 and Fiscal Year 2016 Summary

Revenues for the fourth quarter of fiscal 2016 were $616 million, down approximately 9 percent from $675 million in the third quarter of fiscal 2016, ended October 31, 2015, and down approximately 28 percent from $857 million in the fourth quarter of fiscal 2015, ended January 31, 2015.

In the fourth quarter of fiscal 2016, storage revenue increased 12 percent sequentially, reflecting improved demand from HDD customers but was partially offset by slightly lower SSD controller sales.  Networking revenue in the fourth quarter of fiscal 2016 grew 8 percent sequentially due to broad-based demand improvement across most of our product areas.  Mobile and wireless revenue decreased 34 percent sequentially, mainly driven by the previously anticipated declines in revenue resulting from Marvell's exit of the mobile handset business. The Company anticipates mobile handset platform-related revenue to decline through fiscal year 2017 due to the restructuring actions announced on September 24, 2015. 

For the fiscal year end January 30, 2016, revenue was $2.7 billion, a decrease of 26 percent from $3.7 billion for the fiscal year ended January 31, 2015.  For the fiscal year 2016, storage revenues declined 31 percent from fiscal year 2015 mainly due to soft PC demand compounded by lower SSD controller shipments.  Networking revenue in fiscal 2016 declined 18 percent due to weak enterprise switching/routing demand.  Mobile and wireless revenue in fiscal 2016 declined 27 percent mainly due to lower mobile handset platform-related revenue resulting from Marvell's exit of the mobile handset business. 

GAAP net earnings for the fourth quarter of fiscal 2016 was $4 million, or $0.01 per share (diluted) compared with a GAAP net loss of ($58) million, or ($0.11) loss per share (diluted), for the third quarter of fiscal 2016, and GAAP net income of $82 million, or $0.16 per share (diluted), for the fourth quarter of fiscal 2015.

For the fiscal year ended January 30, 2016, GAAP net loss was ($811) million, or ($1.59) per share (diluted), compared with GAAP net income of $435 million, or $0.84 per share (diluted), for the fiscal year ended January 31, 2015.  The GAAP net loss in fiscal year 2016 was largely due to the payment of $750 million related to the Carnegie Mellon University litigation settlement.

Non-GAAP net income for the fourth quarter of fiscal 2016 was $55 million, or $0.11 per share (diluted), which included adjustments of approximately $50 million including: $4 million for restructuring related to the mobile handset platform business, $32 million for share-based compensation, $4 million for litigation reserves and settlements, and $10 million for other items. By comparison, non-GAAP net income for the third quarter of fiscal 2016 was $29 million, or $0.06 per share (diluted), which included adjustments of $87 million including: $46 million for restructuring related to the mobile handset platform business, $31 million for share-based compensation, $1 million for litigation reserves and settlements, and $9 million for other items. Non-GAAP net income for the fourth quarter of fiscal 2015 was $131 million, or $0.25 per share (diluted), which included adjustments of $49 million including: $38 million for share-based compensation and $11 million for other items. Refer to the GAAP to Non-GAAP reconciliation table and related footnotes contained in this press release for more details.

For the fiscal year ended January 30, 2016, non-GAAP net income was $194 million, or $0.37 per share (diluted), compared with non-GAAP net income of $611 million, or $1.15 per share (diluted) for the fiscal year ended January 31, 2015.

Marvell reports net income, basic and diluted net income per share, in accordance with generally accepted accounting principles (GAAP) and on a non-GAAP basis as outlined below. Reconciliations of GAAP net income to non-GAAP net income for the three months ended January 30, 2016, October 31, 2015, and August 31, 2015, as well as the fiscal years ended January 30, 2016 and January 31, 2015 , appear in the financial statements below.  Non-GAAP net income, where applicable, excludes the effect of share-based compensation, amortization and write-off of acquired intangible assets, acquisition-related costs, restructuring and other related charges, estimated litigation reserves and settlements, and certain one-time expenses and benefits that are driven by discrete events that management does not consider to be directly related to Marvell's core operating performance. 

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