Marvell Technology Group Ltd. Reports Fourth Quarter and Fiscal 2008 Results

About Marvell

Marvell (NASDAQ: MRVL) is a leader in storage, communications and consumer silicon 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), Marvell Software Solutions Israel, Ltd., and Marvell Semiconductor Germany GmbH. MSI is headquartered in Santa Clara, Calif., and designs, develops and markets products on behalf of MIL and MAPL. MSI may be contacted at (408) 222-2500 or at http://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. These statements include statements regarding our annual run rate, our ability to monetize our investments, our ability to efficiently integrate technologies, and our anticipated settlement with the plaintiffs in the previously disclosed federal derivative lawsuits related to historical stock option practices. These statements are not guarantees of results and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. When Marvell files its Form 10-K for the fourth quarter of fiscal 2008, the financial statements may differ from the results disclosed in this press release because judgments and estimates that management used in preparing the financial results reported in this press release may need to be updated to the date of the filing. The Company's results also remain subject to review by the Company's independent registered public accounting firm. For other factors that could cause Marvell's results to vary from expectations, please see the risk factors identified in the Marvell's latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as filed with the Securities and Exchange Commission and other factors detailed from time to time in Marvell's filings with the Securities and Exchange Commission. Marvell undertakes no obligation to revise or update publicly any forward-looking statements.

    Marvell(R) and the Marvell logo are trademarks of Marvell.



                        Marvell Technology Group Ltd.
               Condensed Consolidated Statements of Operations
                                 (Unaudited)
                   (In thousands, except per share amounts)


                            Three Months Ended              Year Ended
                    February     October     January   February    January
                        2,         27,         27,         2,        27,
                      2008        2007        2007       2008       2007

    Net revenue     $844,686    $758,246    $621,974 $2,894,693 $2,237,553
    Cost of
     goods sold      438,640     396,209     324,843  1,497,796  1,100,241
    Gross profit     406,046     362,037     297,131  1,396,897  1,137,312
    Operating
     expenses:
      Research and
       development
       and other     266,464     252,205     223,399    988,996    658,211
      Selling and
       marketing      60,504      46,423      60,099    211,261    176,103
      General and
       admini-
       strative       48,340      32,537      35,480    138,640    114,154
      Amortization
       and
       write-off
       of acquired
       intangible
       assets (a)     43,810      37,311      37,826    155,734    109,987
      Acquired
       in-process
       research and
       development         -           -      77,800          -     77,800
      Restructuring    7,856           -           -      7,856          -

        Total
         operating
         expenses    426,974     368,476     434,604  1,502,487  1,136,255
    Operating
     (loss)
     income          (20,928)     (6,439)   (137,473)  (105,590)     1,057
    Interest and
     other income
     (expense),
     net (b)          18,864      (6,048)     (2,003)    (2,654)    13,549
    (Loss) income
     before income
     taxes            (2,064)    (12,487)   (139,476)  (108,244)    14,606
    (Benefit)
     provision
     benefit for
     income
     taxes            (3,357)     (6,051)      1,109      6,183     35,547
    Income (loss)
     before change
     in accounting
     principle         1,293      (6,436)   (140,585)  (114,427)   (20,941)
    Cumulative
     effect of
     change in
     accounting
     principle, net
     of tax effect         -           -                     -                    -            8,846
        Net  income
          (loss)                      $1,293          $(6,436)    $(140,585)  $(114,427)    $(12,095)

        Basic  net
          income  (loss)
          per  share:
                Income
                  (loss)
                  before
                  change  in
                  accounting
                  principle,
                  net  of  tax
                  effect                $0.00            $(0.01)          $(0.24)        $(0.19)        $(0.04)
                Cumulative
                  effect  of
                  change  in
                  accounting
                  principle,
                  net  of  tax
                  effect                        -                      -                      -                    -              0.02
        Basic  net  income
          (loss)  per
          share                          $0.00            $(0.01)          $(0.24)        $(0.19)        $(0.02)
        Shares  used  in
          basic  per
          share
          computation          595,512          590,759          587,424        590,308        586,152

        Diluted  net
          income  (loss)
          per  share:
                Income
                  (loss)
                  before
                  change  in
                  accounting
                  principle,
                  net  of  tax
                  effect                $0.00            $(0.01)          $(0.24)        $(0.19)        $(0.04)
                Cumulative
                  effect  of
                  change  in
                  accounting
                  principle,
                  net  of  tax
                  effect                        -                      -                      -                    -              0.02
        Diluted  net
          income  (loss)
          per  share                  $0.00            $(0.01)          $(0.24)        $(0.19)        $(0.02)
        Shares  used  in
          diluted  per
          share
          computation          626,699          590,759          587,424        590,308        586,152

        (a)  Write-off
                of  acquired
                intangible
                assets                $7,232                    $-                    $-          $7,232                  $-

        (b)  Consists  of:
                Interest
                  expense
                  on  term
                  loan  and
                  capital
                  lease              $(8,898)        $(8,873)        $(8,253)    $(34,666)    $(10,207)
                Interest
                  expense
                  on  supply
                  agreement        (1,165)          (1,645)                    -          (5,833)                  -
                Interest
                  income,
                  foreign
                  exchange
                  and  other        28,927              4,470              6,250          37,845          23,756
                                          $18,864          $(6,048)        $(2,003)      $(2,654)      $13,549



                                                Marvell  Technology  Group  Ltd.
                                        Reconciliation  of  Non-GAAP  Adjustments
                                                                  (Unaudited)
                                      (In  thousands,  except  per  share  amounts)

        Reconciliation  of  GAAP  net  income  (loss)  to  non-GAAP  net  income:

                                                                Three  Months  Ended                      Year  Ended
                                                      February    October      January      February      January
                                                            2,              27,              27,                2,                  27,
                                                          2008          2007            2007              2008              2007

        GAAP  net  income  (loss)      $1,293    $(6,436)  $(140,585)  $(114,427)  $(12,095)
        Stock-based
          compensation  included
          in:
            Cost  of  goods  sold            4,911        4,326            2,842          15,530        11,339
            Research  and
              development  and
              other                                  45,627      39,989          28,478        152,249      121,481
            Selling  and
              marketing                          13,925        6,949            7,254          39,022        30,452
            General  and
              administrative                  5,497        4,092            7,053          24,179        28,849
        Amortization  and
          write-off  of  acquired
          intangible  assets              43,810      37,311          37,826        155,734      109,987
        Acquired  in-process
          research  and
          development                                -                -              77,800                -            77,800
        Restructuring                          7,856            -                    -                7,856              -
        Cumulative  effect  of
          change  in  accounting
            principle                                  -                -                    -                    -            (8,846)
        Non-GAAP  net  income        $122,919    $86,231        $20,668      $280,143    $358,967

        GAAP  weighted  average
          shares  -  diluted              626,699    590,759        587,424        590,308      586,152
            Non-GAAP  adjustment              542      39,854          46,506          40,160        51,507
        Non-GAAP  weighted
          average  shares
          diluted  (b)                        627,241    630,613        633,930        630,468      637,659

        GAAP  diluted  net
          income  (loss)  per
          share                                        $0.00      $(0.01)        $(0.24)        $(0.19)      $(0.02)
        Non-GAAP  diluted  net
          income  per  share  (a)          $0.20        $0.14            $0.03            $0.44          $0.56


            GAAP  gross  margin              48.1%        47.7%            47.8%            48.3%          50.8%
            Non-GAAP  gross
              margin                                  48.7%        48.3%            48.2%            48.8%          51.3%


        (a)  Non  GAAP  net  income  per  share  is  calculated  by  dividing  non-GAAP  net
                income  by  non-GAAP  weighted  average  shares  diluted.

        (b)  For  purposes  of  calculating  non-GAAP  net  income  per  share,  the  GAAP
                diluted  weighted  average  shares  outstanding  is  adjusted  to  exclude  the
                benefits  of  SFAS  123R  compensation  costs  attributable  to  future
                services  and  not  yet  recognized  in  the  financial  that  are  treated  as
                proceeds  assumed  to  be  used  to  repurchase  shares  under  the  GAAP
                treasury  method  and  also  includes  the  dilutive/antidilutive  effects  of
                warrants,  common  stock  options  and  restricted  stock.



                                                Marvell  Technology  Group  Ltd.
                                        Condensed  Consolidated  Balance  Sheets
                                                                  (Unaudited)
                                                                (In  thousands)



                                                                                                  February  2,              January  27,
        Assets                                                                                    2008                            2007
        Current  assets:
            Cash,  cash  equivalents  and  short-
              term  investments                                                      $630,903                    $596,380
            Accounts  receivable,  net                                          332,020                      328,283
            Inventory                                                                        419,493                      247,403
            Prepaid  expenses  and  other  current
              assets                                                                            121,325                      175,969
                Total  current  assets                                          1,503,741                  1,348,035
        Property  and  equipment,  net                                        416,241                      440,943
        Long-term  investments                                                      45,628                              -
        Goodwill  and  acquired  intangible
          assets                                                                            2,427,877                  2,558,363
        Other  non  current  assets                                              157,107                      180,359
                Total  assets                                                        $4,550,594                $4,527,700

        Liabilities  and  Shareholders'  Equity
        Current  liabilities:
            Accounts  payable                                                        $231,135                    $240,497
            Accrued  liabilities                                                    241,062                      377,744
            Income  taxes  payable                                                    39,132                        29,078
            Deferred  income                                                              69,420                        46,459
            Current  portion  of  capital  lease
              obligations                                                                      2,463                        17,408
                Total  current  liabilities                                    583,212                      711,186
        Capital  lease  obligations                                                4,238                        17,096
        Term  loan  obligations                                                    390,750                      394,750
        Other  long-term  liabilities                                        160,875                      177,484
                Total  liabilities                                                1,139,075                  1,300,516

        Shareholders'  equity:
            Common  stock                                                                      1,200                          1,175
            Additional  paid-in  capital                                  4,100,659                  3,802,509
            Accumulated  other  comprehensive
              income                                                                                    615                                28
            Accumulated  deficit                                                  (690,955)                  (576,528)
                Total  shareholders'  equity                              3,411,519                  3,227,184
                Total  liabilities  and
                  shareholders'  equity                                      $4,550,594                $4,527,700



                                                Marvell  Technology  Group  Ltd.
                              Condensed  Consolidated  Statements  of  Cash  Flows
                                                                  (Unaudited)
                                                                (in  thousands)

                                                                  Three  Months  Ended                        Year  Ended
                                                        February      October      January        February      January
                                                              2,                27,                27,                2,                  27,
                                                            2008            2007              2007              2008              2007
        Cash  flows  from
          operating  activities:
        Net  income  (loss)                $1,293      $(6,436)  $(140,585)  $(114,427)  $(12,095)
        Adjustments  to
          reconcile  net  income
          (loss)  to  net  cash
          provided  by  operating
          activities:
            Cumulative  effect  of
              change  in
              accounting
              principle,  net                      -                  -                    -                    -            (8,846)
            Depreciation  and
              amortization                    27,008        26,384          24,641        105,812        77,160
            Stock-based
              compensation                    69,960        55,356          45,627        230,980      192,121
            Amortization  and
              write-off  of
              acquired  intangible
              assets                                43,810        37,311          37,826        155,734      109,987
            Acquired  in-process
              research  and
              development                            -                  -              77,800                -            77,800
            Loss  (gain)  from
              disposal  of  assets          3,300              -                    -              (1,822)            -
            Fair  market  value
              adjustment  to  cost
              of  goods  sold  from
              supply  contract              (5,348)    (26,273)      (37,593)    (109,262)    (37,593)
            Termination  of
              supply  agreement          (22,069)            -                    -            (22,069)            -
            Interest  expense
              related  to  supply
              contract                              1,165          1,645                -                5,833              -
            Deferred  tax
              provision                        (16,778)            -              (2,224)      (16,778)      (2,224)
            Excess  tax  benefits
              from  stock-based
              compensation                        (199)            (65)              -                  (499)          (889)
            Changes  in  assets
              and  liabilities,
              net  of
              acquisitions:                                                                                                            -
                Accounts
                  receivable                    55,169      (28,230)      (34,048)        (1,763)    (83,100)
                Inventories                  (43,441)    (70,086)      (26,214)    (202,275)    (15,908)
                Prepaid  expenses
                  and  other  asset            8,798        45,531        (61,369)      108,321    (113,159)
                Accounts  payable          22,920      (53,441)        40,820          (8,187)      43,891
                Accrued
                  liabilities  and
                  other                              17,134        19,945          16,603          10,880        30,375
                Accrued  employee
                  compensation                (1,645)        9,642          34,251            8,852        33,484
                Accrued  facilities
                  charge                                  -                  -                  (571)              -                (571)
                Income  taxes
                  payable                            9,032        (8,120)          1,100            4,840        30,192
                Deferred  income            (6,872)      21,515          14,787          22,961        16,686
                  Net  cash  provided
                    by  (used  in)
                    operating
                    activities                163,237        24,678          (9,149)      177,131      337,311
        Cash  flows  from
          investing  activities:
            Cash  paid  in
              acquisitions,  net        (12,846)            -          (609,889)      (19,987)  (892,867)
            Purchases  of  short-
              term  and  long-term
              investments                    (96,979)    (52,256)              -          (262,886)  (266,938)
            Sales  and  maturities
              of  short-term  and
              long-term
              investments                    110,390        70,495            7,929        230,906      812,831
            Acquisition  costs                (132)            (70)        (4,799)        (1,340)      (9,032)
            Purchases  of
              investments                            -                (323)              -                  (323)            -
            Purchases  of
              property  and
              equipment                        (32,327)    (16,622)      (59,284)    (113,462)  (180,696)
            Proceeds  from  sale
              of  asset  under
              construction                          -                  -                    -                5,122              -
            Purchases  of
              technology  licenses      (3,650)      (2,675)              -            (23,175)      (8,029)
                  Net  cash  used  in
                    investing
                    activities                (35,544)      (1,451)    (666,043)    (185,145)  (544,731)
        Cash  flows  from
          financing  activities:
            Proceeds  from  the
              issuance  of  common
              stock  and  other              33,614        29,608            9,609          65,903        45,645
            Proceeds  from  term
              loan  obligations                  -                  -            400,000                -          400,000
            Principal  payments
              on  capital  lease
              and  debt
              obligations                      (1,159)      (1,778)        (5,850)      (10,748)    (19,537)
            Excess  tax  benefits
              from  stock-based
              compensation                          199                65                -                    499              889
                  Net  cash  provided
                    by  financing
                    activities                  32,654        27,895        403,759          55,654      426,997
        Net  increase
          (decrease)  in  cash
          and  cash  equivalents      160,347        51,122      (271,433)        47,640      219,577
        Cash  and  cash
          equivalents  at
          beginning  of  period        455,301      404,179        839,441        568,008      348,431
        Cash  and  cash
          equivalents  at  end  of
          period                                $615,648    $455,301      $568,008      $615,648    $568,008



          For  further  information,  contact:
          Jeff  Palmer                                                Diane  Vanasse
          Investor  Relations                                  Public  Relations
          408-222-8373                                              408-242-0027
          
  Email  Contact                                  
  Email  Contact  
 

Web site: http://www.marvell.com/



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