Marvell: Fiscal 1Q10 Financial Results

Marvell Technology Group Ltd. reported financial results for the first quarter of fiscal 2010, ended May 2, 2009.

Net revenue for the first quarter of fiscal 2010 was $521.4 million, a 2 percent sequential increase from $512.9 million in the fourth quarter of fiscal 2009, ended January 31, 2009 and a 35 percent decrease from $804.1 million in the first quarter of fiscal 2009, ended May 3, 2008.

GAAP net loss was $39.5 million, or $0.06 per share (diluted), for the first quarter of fiscal 2010, as compared to a GAAP net loss of $65.0 million, or $0.11 per share (diluted), for the fourth quarter of fiscal 2009. For the first quarter of fiscal 2009 GAAP net income was $69.9 million, or $0.11 per share (diluted).

Non-GAAP net income was $31.9 million, or $0.05 per share (diluted), for the first quarter of fiscal 2010, a decrease of 2 percent from non-GAAP net income of $32.4 million, or $0.05 per share (diluted), for the fourth quarter of fiscal 2009, and a 79 percent decrease compared with non-GAAP net income of $150.4 million, or $0.24 per share (diluted), for the first quarter of fiscal 2009.

"We are pleased with the sequential improvement in revenue during our first fiscal quarter of 2010," said Dr. Sehat Sutardja, Marvell Chairman and Chief Executive Officer. "We also delivered improved profitability and cash flow during the first quarter, a positive reflection of the actions we undertook in recent quarters to control costs and expenses as well as tightly managing our working capital. We are continuing to monitor the changing economic environment and will manage our business accordingly. However, recent trends indicate an improvement in near term order patterns."

Marvell reports net income (loss), basic and diluted net income (loss) per share in accordance with U.S. generally accepted accounting principles (GAAP) and on a non-GAAP basis as outlined below. Reconciliations of GAAP net income (loss) to non-GAAP net income for the three months ended May 2, 2009, January 31, 2009 and May 3, 2008, respectively, appear in the financial statements below. Non-GAAP net income, where applicable, excludes the effect of stock-based compensation, amortization and write-offs of acquired intangible assets, restructuring costs and certain one-time expenses or benefits.

GAAP gross margin for the first quarter of fiscal 2010 was 50.6 percent, compared to 50.7 percent for the fourth quarter of fiscal 2009 and 51.6 percent for the first quarter of fiscal 2009. GAAP gross margin for the first quarter of fiscal 2010 included costs of $1.0 million associated with the ramp-down of the test operations in Malaysia.

Non-GAAP gross margin for the first quarter of fiscal 2010 increased to 51.6 percent, compared to 51.3 percent for the fourth quarter of fiscal 2009 and 52.0 percent for the first quarter of fiscal 2009.

Shares used to compute GAAP net loss per diluted share, for the first quarter of fiscal 2010 were 619 million shares, compared with 615 million shares in the fourth quarter of fiscal 2009 and 624 million shares in the first quarter of fiscal 2009. Shares used to compute non-GAAP net income per diluted share for the first quarter of fiscal 2010 were 637 million shares, compared with 629 million shares for the fourth quarter of fiscal 2009 and 624 million shares for the first quarter of fiscal 2009.

Cash flow from operations for the first quarter of fiscal 2010 was $144.5 million, up 32 percent sequentially from $109.1 million reported in the fourth quarter of fiscal 2009 and up 11 percent from $130.2 million in the first quarter of fiscal 2009. Free cash flow, defined as cash flow from operations less capital expenditures and purchases of IP licenses, was $131.8 million, up 42 percent sequentially from $92.7 million in the fourth quarter of fiscal 2009 and up 32 percent from $99.7 million in the first quarter of fiscal 2009.