Marvell: Fiscal 1Q14 Financial Results

Marvell Technology Group Ltd
. reported financial results for the first quarter of fiscal year 2014, ended May 4, 2013.

1Q FY2014 Financial Highlights

• Revenue: $734 million
• GAAP Net Income: $53 million
• GAAP EPS: $0.11
• Non-GAAP Net Income: $98 million
• Non-GAAP EPS: $0.19
• Free Cash Flow: $53 million

2Q FY2014 Financial Outlook

• Revenue is expected to be in the range of $770 to $810 million.
• Overall Storage revenue to be flat sequentially
• Continued HDD share gains offset by flat to slightly declining TAM
• Double digit percentage SSD growth sequentially
• GAAP Gross Margin is expected to be in the range of 52.2% 100
  bps. Non-GAAP Gross Margin is expected to be in the range of 52.5%
  100 bps.
• GAAP Operating Expenses are expected to be in the range of $370
  million $10 million. Non-GAAP Operating Expenses to be in the range
  of $315 million $10 Million.
• GAAP EPS expected to be in the range of $0.09 $0.02. Non-GAAP EPS expected to be in the range of $0.19 $0.02.

1Q FY2014 Summary
Revenue for the first quarter of fiscal 2014 was $734 million, a 5%
sequential decrease from $775 million in the fourth quarter of fiscal
2013, ended February 2, 2013, and a 8% decrease from revenue of $796
million in the first quarter of fiscal 2013, ended April 28, 2012.

GAAP net income for the first quarter of fiscal 2014 was $53 million, or
$0.11 per share (diluted), compared with GAAP net income of $50
million, or $0.09 per share (diluted), for the fourth quarter of fiscal
2013, and $95 million, or $0.16 per share (diluted), for the first
quarter of fiscal 2013.

Non-GAAP net income was $98 million, or $0.19 per share (diluted), for
the first quarter of fiscal 2014, compared with non-GAAP net income of
$104 million, or $0.19 per share (diluted), for the fourth quarter of
fiscal 2013, and $139 million, or $0.23 per share (diluted), for the
first quarter of fiscal 2013.

"Our results in the first quarter were at the high-end of our
guidance mainly due to better than normal seasonal demand and share
gains in our storage and networking end markets," said Dr. Sehat Sutardja, chairman and CEO. "Starting
in the second quarter of fiscal 2014, we expect many of our investments
and key initiatives across all of our end markets to produce tangible
results. More specifically, we expect growth to be driven by increased
traction in areas such as mobile handsets, tablets, connectivity and
SSDs."

GAAP gross margin for the first quarter of fiscal 2014 was 54.3%,
compared to 52.2% for the fourth quarter of fiscal 2013 and 54.0% for
the first quarter of fiscal 2013.

Non-GAAP gross margin for the first quarter of fiscal 2014 was 54.6%,
compared to 53.2% for the fourth quarter of fiscal 2013 and 54.5% for
the first quarter of fiscal 2013.

Shares used to compute GAAP net income per diluted share for the first
quarter of fiscal 2014 were 505 million shares, compared with 528
million shares in the fourth quarter of fiscal 2013 and 595 million
shares in the first quarter of fiscal 2013. Shares used to compute
non-GAAP net income per diluted share for the first quarter of fiscal
2014 were 522 million shares, compared with 544 million shares for the
fourth quarter of fiscal 2013 and 606 million shares for the first
quarter of fiscal 2013. The decrease in shares used to compute both
Marvell’s GAAP and non-GAAP net income per diluted share was primarily
due to Marvell’s share repurchase program.

Cash flow from operations for the first quarter of fiscal 2014 was $84
million, compared to the $205 million reported in the fourth quarter of
fiscal 2013 and the $199 million reported in the first quarter of fiscal
2013. Free cash flow for the first quarter of fiscal 2014 was $53
million, compared to the $161 million reported in the fourth quarter of
fiscal 2013 and the $178 million reported in the first quarter of fiscal
2013. Free cash flow as presented above is defined as cash flow from
operations, less capital expenditures and purchases of technology
licenses reported under investing and financing activities in the
consolidated statement of cash flows.

Under the share repurchase program, Marvell repurchased approximately 20
million shares for a total of $200 million in the first quarter of
fiscal 2014. Over the past eleven quarters, Marvell has repurchased and
retired approximately 204 million shares, or about 29%, of its
outstanding shares.

Marvell also paid a quarterly dividend of $0.06 per share on April 4,
2013 to all shareholders of record as of March 14, 2013. Marvell intends
to pay its next quarterly dividend of $0.06 per share on July 3, 2013
to all shareholders of record as of June 13, 2013.