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Marvell Technology Group Ltd. | ||||||||||||||
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Reconciliations from GAAP to Non-GAAP | ||||||||||||||
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(Unaudited) | ||||||||||||||
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(In thousands, except per share amounts) | ||||||||||||||
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Three Months Ended |
Nine Months Ended | |||||||
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October 29, |
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July 30, |
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October 31, |
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October 29, |
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October 31, |
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2016 |
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2016(e) |
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2015 |
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2016 |
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2015 |
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GAAP gross profit: |
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$ 368,359 |
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$ 338,796 |
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$ 295,636 |
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$ 988,767 |
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$ 917,544 | ||
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Special items: |
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Share-based compensation |
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2,225 |
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2,832 |
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2,495 |
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6,859 |
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6,054 | ||
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Restructuring and other related charges (a) |
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- |
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- |
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10,285 |
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- |
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10,285 |
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Amortization of acquired intangible assets |
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485 |
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485 |
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485 |
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1,455 |
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2,188 |
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Other cost of good sold (b) |
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- |
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- |
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1,158 |
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- |
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80,848 | ||
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Total special items |
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2,710 |
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3,317 |
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14,423 |
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8,314 |
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99,375 | ||
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Non-GAAP gross profit |
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$ 371,069 |
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$ 342,113 |
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$ 310,059 |
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$ 997,081 |
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$ 1,016,919 | |||
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GAAP gross margin |
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56.3% |
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54.1% |
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43.8% |
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54.3% |
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43.5% | ||
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Non-GAAP gross margin |
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56.7% |
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54.6% |
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45.9% |
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54.7% |
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48.2% | |||
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Total GAAP operating expenses |
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$ 285,406 |
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$ 299,290 |
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$ 354,710 |
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$ 895,430 |
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$ 1,736,553 | |||
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Special items: |
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Share-based compensation |
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(26,038) |
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(34,364) |
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(28,970) |
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(83,053) |
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(95,306) | ||
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Restructuring and other related charges (a) |
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(1,164) |
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(721) |
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(35,270) |
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(6,326) |
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(48,862) | ||
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Amortization of and write-off acquired intangible assets |
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(2,299) |
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(2,461) |
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(3,150) |
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(7,221) |
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(8,286) | |||
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Other operating expenses (c) |
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- |
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12 |
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(3,834) |
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(1,229) |
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(691,745) | ||
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Total special items |
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(29,501) |
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(37,534) |
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(71,224) |
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(97,829) |
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(844,199) | ||
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Total non-GAAP operating expenses |
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$ 255,905 |
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$ 261,756 |
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$ 283,486 |
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$ 797,601 |
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$ 892,354 | |||
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GAAP net income (loss) |
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$ 72,616 |
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$ 51,305 |
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$ (57,750) |
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$ 101,242 |
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$ (815,600) | |||
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Special items: |
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Share-based compensation |
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28,263 |
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37,196 |
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31,465 |
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89,912 |
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101,360 | ||
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Restructuring and other related charges (a) |
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1,164 |
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721 |
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45,555 |
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6,326 |
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59,147 | ||
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Amortization of and write-off acquired intangible assets |
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2,784 |
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2,946 |
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3,635 |
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8,676 |
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10,474 | |||
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Other operating expenses (c) |
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- |
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(12) |
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4,992 |
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1,229 |
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772,593 | ||
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Pre-tax total special items |
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32,211 |
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40,851 |
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85,647 |
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106,143 |
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943,574 | |||
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Non-GAAP income before income taxes |
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104,827 |
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92,156 |
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27,897 |
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207,385 |
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127,974 | |||
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Tax effect of special items (d) |
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- |
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- |
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1,108 |
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(1,071) |
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11,511 | |||
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Non-GAAP net income |
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$ 104,827 |
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$ 92,156 |
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$ 29,005 |
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$ 206,314 |
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$ 139,485 | |||
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Weighted average shares - basic |
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511,090 |
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511,235 |
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504,831 |
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510,373 |
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512,476 | |||
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Weighted average shares - diluted |
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522,091 |
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514,314 |
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504,831 |
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516,476 |
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512,476 | |||
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Non-GAAP weighted average shares - diluted |
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531,831 |
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526,453 |
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518,505 |
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526,883 |
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528,869 | |||
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GAAP diluted net income per share |
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$ 0.14 |
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$ 0.10 |
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$ (0.11) |
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$ 0.20 |
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$ (1.59) | |
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Non-GAAP diluted net income per share |
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$ 0.20 |
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$ 0.18 |
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$ 0.06 |
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$ 0.39 |
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$ 0.26 | |
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(a) |
Restructuring and other related charges include costs that qualify under U.S. GAAP as restructuring costs and other incremental charges that are a direct result of restructuring. Examples of other incremental charges include impairment of equipment specifically identified as part of the restructuring action and the write down of inventories. | |||||||||||||
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(b) |
Other COGS include charges recognized for pending and settled litigation proceedings in three and nine months ended October 31, 2015. | |||||||||||||
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(c) |
Other operating expenses include charges recognized for pending and settled litigation proceedings of $747.6 million ($666.7 million of which was reported in operating expenses) in the nine months ended October 31, 2015. Other operating expenses for the nine months ended October 29, 2016, and the three and nine months ended October 31, 2015 also include costs of $0.9 million, $2.9 million and $8.5 million, respectively, for the surety bonds related to the litigation with CMU that was settled in February 2016. Other operating expenses for the nine months ended October 29, 2016, and the three and nine months ended October 31, 2015 also include expenses of $0.3 million, $1.0 million and $1.1 million, respectively, related to retention bonuses offered to employees expected to remain through the ramp down of certain operations related to the mobile business, as well as the closure of certain design center operations in Europe. In addition, other operating expenses for the nine months ended October 31, 2015 include a charge for the payment of $15.4 million due to our former Chief Executive Officer (see "Note 14 – Related Party Transactions" in the Notes to the Consolidated Financial Statements set forth in the Company's Annual Report on Form 10-K for fiscal 2016). | |||||||||||||
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(d) |
Tax effect of special items includes the related tax effect of the payment to our former Chief Executive Officer in the nine months ended October 29, 2016 and October 31, 2015. Tax effect of special items also includes the tax effect of certain restructuring charges in three and nine months ended October 31, 2015. | |||||||||||||
