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Marvell Technology Group Ltd. Reconciliations from GAAP to Non-GAAP (Unaudited) (In thousands, except per share amounts) | ||||||||||||
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Three Months Ended | ||||||||||
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May 5, 2018 |
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February 3,
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April 29,
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GAAP gross profit: |
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$ |
375,693 |
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$ |
373,482 |
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$ |
345,511 |
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Special items: |
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Share-based compensation |
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1,905 |
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1,662 |
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1,426 |
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Other cost of goods sold (a) |
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— |
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8,000 |
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— |
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Total special items |
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1,905 |
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9,662 |
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1,426 |
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Non-GAAP gross profit |
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$ |
377,598 |
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$ |
383,144 |
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$ |
346,937 |
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GAAP gross margin |
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62.1 |
% |
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60.7 |
% |
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60.3 |
% | |||
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Non-GAAP gross margin |
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62.5 |
% |
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62.3 |
% |
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60.6 |
% | |||
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Total GAAP operating expenses |
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$ |
250,614 |
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$ |
319,471 |
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$ |
244,086 |
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Special items: |
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Share-based compensation |
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(21,947) |
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(19,715) |
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(20,313) |
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Restructuring related (charges) gain (b) |
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(1,567) |
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3,205 |
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(886) |
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Amortization of and write-off acquired intangible assets |
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— |
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(358) |
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(1,071) |
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Litigation settlement (c) |
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— |
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(74,385) |
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— |
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Other operating expenses (d) |
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(15,252) |
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(10,579) |
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(2,303) |
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Total special items |
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(38,766) |
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(101,832) |
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(24,573) |
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Total non-GAAP operating expenses |
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$ |
211,848 |
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$ |
217,639 |
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$ |
219,513 |
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GAAP operating margin |
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20.7 |
% |
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8.8 |
% |
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17.7 |
% | |||
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Other cost of goods sold (a) |
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— |
% |
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1.3 |
% |
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— |
% | |||
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Share-based compensation |
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3.9 |
% |
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3.5 |
% |
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3.8 |
% | |||
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Restructuring related charges (gain) (b) |
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0.3 |
% |
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(0.5) |
% |
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0.2 |
% | |||
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Amortization and write-off of acquired intangible assets |
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— |
% |
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0.1 |
% |
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0.2 |
% | |||
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Litigation settlement (c) |
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— |
% |
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12.1 |
% |
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— |
% | |||
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Other operating expenses (d) |
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2.5 |
% |
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1.6 |
% |
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0.3 |
% | |||
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Non-GAAP operating margin |
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27.4 |
% |
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26.9 |
% |
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22.2 |
% | |||
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GAAP interest and other income, net |
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$ |
7,296 |
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$ |
4,788 |
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$ |
3,333 |
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Special items: |
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Restructuring related items (e) |
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(1,512) |
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1,355 |
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— |
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Total special items |
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(1,512) |
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1,355 |
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— |
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Total non-GAAP interest and other income, net |
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$ |
5,784 |
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$ |
6,143 |
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$ |
3,333 |
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GAAP net income |
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$ |
128,612 |
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$ |
48,763 |
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$ |
106,621 |
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Less: Income from discontinued operations, net of tax |
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— |
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— |
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7,029 |
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GAAP net income from continuing operations |
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128,612 |
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48,763 |
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99,592 |
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Special items: |
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Other cost of goods sold ( a ) |
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— |
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8,000 |
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— |
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Share-based compensation |
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23,852 |
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21,377 |
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21,739 |
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Restructuring related charges (gain) in operating expenses (b) |
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1,567 |
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(3,205) |
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886 |
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Restructuring related items in interest and other income, net (e) |
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(1,512) |
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1,355 |
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— |
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Amortization of and write-off acquired intangible assets |
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— |
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358 |
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1,071 |
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Litigation settlement (c) |
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— |
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74,385 |
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— |
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Other operating expenses (d) |
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15,252 |
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10,579 |
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2,303 |
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Pre-tax total special items |
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39,159 |
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112,849 |
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25,999 |
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Other income tax effects and adjustments (f) |
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(3,098) |
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3,170 |
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(64) |
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Non-GAAP net income from continuing operations |
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$ |
164,673 |
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$ |
164,782 |
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$ |
125,527 |
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Weighted average shares — diluted |
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508,716 |
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506,197 |
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517,592 |
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Non-GAAP adjustment |
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6,871 |
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6,026 |
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5,562 |
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Non-GAAP weighted average shares — diluted (g) |
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515,587 |
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512,223 |
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523,154 |
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GAAP diluted net income per share from continuing operations |
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$ |
0.25 |
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$ |
0.10 |
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$ |
0.20 |
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Non-GAAP diluted net income per share from continuing operations |
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$ |
0.32 |
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$ |
0.32 |
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$ |
0.24 |
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(a) |
Other costs of goods sold in the three months ended February 3, 2018 include charges for past intellectual property licensing matters. |
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(b) |
Restructuring related charges include employee severance, facilities related costs, and impairment of equipment. Restructuring related charges in the three months ended February 3, 2018 includes the gain on sale of a building that was the direct result of restructuring. |
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(c) |
Represents legal settlement and associated costs related to shareholder litigation matter. |
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(d) |
Other operating expenses primarily include Cavium merger costs and costs of retention bonuses offered to employees who remained through the ramp down of certain operations due to restructuring actions. |
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(e) |
Interest and other income, net includes restructuring related items such as foreign currency remeasurement associated with restructuring related accruals. |
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(f) |
Other income tax effects and adjustments relate to tax provision based on a non-GAAP income tax rate of 4%. |
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(g) |
Non-GAAP diluted share count excludes the impact of share-based compensation expense expected to be incurred in future periods and not yet recognized in the Company's financial statements, which would otherwise be assumed to be used to repurchase shares under the GAAP treasury stock method. |
