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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Marvell Technology Inc | NASDAQ:MRVL | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
1.82 | 2.73% | 68.49 | 67.60 | 70.99 | 69.38 | 67.58 | 69.02 | 9,011,550 | 05:00:04 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Bermuda
|
|
77-0481679
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
|
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common Stock, par value $0.002 per share
|
|
MRVL
|
|
Nasdaq Global Select Market
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
|
|
|
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☐
|
|
|
Page
|
Item 1.
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
||
|
|
August 3,
2019 |
|
February 2,
2019 |
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
573,496
|
|
|
$
|
582,410
|
|
Accounts receivable, net
|
452,746
|
|
|
493,122
|
|
||
Inventories
|
240,421
|
|
|
276,005
|
|
||
Prepaid expenses and other current assets
|
37,069
|
|
|
43,721
|
|
||
Assets held for sale
|
597,675
|
|
|
—
|
|
||
Total current assets
|
1,901,407
|
|
|
1,395,258
|
|
||
Property and equipment, net
|
319,761
|
|
|
318,978
|
|
||
Goodwill
|
4,933,719
|
|
|
5,494,505
|
|
||
Acquired intangible assets, net
|
2,399,975
|
|
|
2,560,682
|
|
||
Other non-current assets
|
426,278
|
|
|
247,329
|
|
||
Total assets
|
$
|
9,981,140
|
|
|
$
|
10,016,752
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
211,422
|
|
|
$
|
185,362
|
|
Accrued liabilities
|
312,987
|
|
|
335,509
|
|
||
Accrued employee compensation
|
90,659
|
|
|
115,925
|
|
||
Liabilities held for sale
|
5,604
|
|
|
—
|
|
||
Total current liabilities
|
620,672
|
|
|
636,796
|
|
||
Long-term debt
|
1,685,359
|
|
|
1,732,699
|
|
||
Non-current income taxes payable
|
49,881
|
|
|
59,221
|
|
||
Deferred tax liabilities
|
242,957
|
|
|
246,252
|
|
||
Other non-current liabilities
|
178,459
|
|
|
35,374
|
|
||
Total liabilities
|
2,777,328
|
|
|
2,710,342
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Common shares, $0.002 par value
|
1,334
|
|
|
1,317
|
|
||
Additional paid-in capital
|
6,271,120
|
|
|
6,188,598
|
|
||
Retained earnings
|
931,358
|
|
|
1,116,495
|
|
||
Total shareholders’ equity
|
7,203,812
|
|
|
7,306,410
|
|
||
Total liabilities and shareholders’ equity
|
$
|
9,981,140
|
|
|
$
|
10,016,752
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 3,
2019 |
|
August 4,
2018 |
|
August 3,
2019 |
|
August 4,
2018 |
||||||||
Net revenue
|
$
|
656,568
|
|
|
$
|
665,310
|
|
|
$
|
1,319,020
|
|
|
$
|
1,269,941
|
|
Cost of goods sold
|
305,866
|
|
|
288,200
|
|
|
606,890
|
|
|
517,138
|
|
||||
Gross profit
|
350,702
|
|
|
377,110
|
|
|
712,130
|
|
|
752,803
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
266,354
|
|
|
216,285
|
|
|
533,221
|
|
|
393,019
|
|
||||
Selling, general and administrative
|
113,990
|
|
|
133,701
|
|
|
223,995
|
|
|
206,014
|
|
||||
Restructuring related charges
|
16,586
|
|
|
35,415
|
|
|
22,268
|
|
|
36,982
|
|
||||
Total operating expenses
|
396,930
|
|
|
385,401
|
|
|
779,484
|
|
|
636,015
|
|
||||
Operating income (loss)
|
(46,228
|
)
|
|
(8,291
|
)
|
|
(67,354
|
)
|
|
116,788
|
|
||||
Interest income
|
1,077
|
|
|
3,575
|
|
|
2,345
|
|
|
9,644
|
|
||||
Interest expense
|
(20,531
|
)
|
|
(15,795
|
)
|
|
(41,734
|
)
|
|
(16,039
|
)
|
||||
Other income (loss), net
|
(2,197
|
)
|
|
(2,701
|
)
|
|
(2,313
|
)
|
|
(1,230
|
)
|
||||
Interest and other income (loss), net
|
(21,651
|
)
|
|
(14,921
|
)
|
|
(41,702
|
)
|
|
(7,625
|
)
|
||||
Income (loss) before income taxes
|
(67,879
|
)
|
|
(23,212
|
)
|
|
(109,056
|
)
|
|
109,163
|
|
||||
Provision for income taxes
|
(10,548
|
)
|
|
(29,971
|
)
|
|
(3,275
|
)
|
|
(26,208
|
)
|
||||
Net income (loss)
|
$
|
(57,331
|
)
|
|
$
|
6,759
|
|
|
$
|
(105,781
|
)
|
|
$
|
135,371
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share - Basic
|
$
|
(0.09
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.16
|
)
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share - Diluted
|
$
|
(0.09
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.16
|
)
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
663,603
|
|
|
552,238
|
|
|
661,280
|
|
|
524,787
|
|
||||
Diluted
|
663,603
|
|
|
562,149
|
|
|
661,280
|
|
|
535,433
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 3,
2019 |
|
August 4,
2018 |
|
August 3,
2019 |
|
August 4,
2018 |
||||||||
Net income (loss)
|
$
|
(57,331
|
)
|
|
$
|
6,759
|
|
|
$
|
(105,781
|
)
|
|
$
|
135,371
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Net change in unrealized gain (loss) on marketable securities
|
—
|
|
|
2,404
|
|
|
—
|
|
|
2,322
|
|
||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
2,404
|
|
|
—
|
|
|
2,322
|
|
||||
Comprehensive income (loss), net of tax
|
$
|
(57,331
|
)
|
|
$
|
9,163
|
|
|
$
|
(105,781
|
)
|
|
$
|
137,693
|
|
|
Common Stock
|
|
Additional Paid-in-Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
Retained Earnings
|
|
Total
|
|||||||||||||
Balance at February 2, 2019
|
658,514
|
|
|
$
|
1,317
|
|
|
$
|
6,188,598
|
|
|
$
|
—
|
|
|
$
|
1,116,495
|
|
|
$
|
7,306,410
|
|
Issuance of common shares in connection with equity incentive plans
|
5,120
|
|
|
11
|
|
|
30,985
|
|
|
—
|
|
|
—
|
|
|
30,996
|
|
|||||
Tax withholdings related to net share settlement of restricted stock units
|
—
|
|
|
—
|
|
|
(28,756
|
)
|
|
—
|
|
|
—
|
|
|
(28,756
|
)
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
59,422
|
|
|
—
|
|
|
—
|
|
|
59,422
|
|
|||||
Repurchase of common stock
|
(2,359
|
)
|
|
(5
|
)
|
|
(50,018
|
)
|
|
—
|
|
|
—
|
|
|
(50,023
|
)
|
|||||
Cash dividends declared and paid ($0.06 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39,467
|
)
|
|
(39,467
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48,450
|
)
|
|
(48,450
|
)
|
|||||
Balance at May 4, 2019
|
661,275
|
|
|
$
|
1,323
|
|
|
$
|
6,200,231
|
|
|
$
|
—
|
|
|
$
|
1,028,578
|
|
|
$
|
7,230,132
|
|
Issuance of common shares in connection with equity incentive plans
|
6,167
|
|
|
12
|
|
|
50,494
|
|
|
—
|
|
|
—
|
|
|
50,506
|
|
|||||
Tax withholdings related to net share settlement of restricted stock units
|
—
|
|
|
—
|
|
|
(32,881
|
)
|
|
—
|
|
|
—
|
|
|
(32,881
|
)
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
64,117
|
|
|
—
|
|
|
—
|
|
|
64,117
|
|
|||||
Issuance of warrant for common stock
|
—
|
|
|
—
|
|
|
3,407
|
|
|
—
|
|
|
—
|
|
|
3,407
|
|
|||||
Repurchase of common stock
|
(627
|
)
|
|
(1
|
)
|
|
(14,248
|
)
|
|
—
|
|
|
—
|
|
|
(14,249
|
)
|
|||||
Cash dividends declared and paid ($0.06 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39,889
|
)
|
|
(39,889
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57,331
|
)
|
|
(57,331
|
)
|
|||||
Balance at August 3, 2019
|
666,815
|
|
|
$
|
1,334
|
|
|
$
|
6,271,120
|
|
|
$
|
—
|
|
|
$
|
931,358
|
|
|
$
|
7,203,812
|
|
|
Common Stock
|
|
Additional Paid-in-Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
Retained Earnings
|
|
Total
|
|||||||||||||
Balance at February 3, 2018
|
495,913
|
|
|
$
|
991
|
|
|
$
|
2,733,292
|
|
|
$
|
(2,322
|
)
|
|
$
|
1,409,452
|
|
|
$
|
4,141,413
|
|
Effect of revenue recognition accounting change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,171
|
|
|
34,171
|
|
|||||
Issuance of common shares in connection with equity incentive plans
|
3,837
|
|
|
9
|
|
|
11,045
|
|
|
—
|
|
|
—
|
|
|
11,054
|
|
|||||
Tax withholdings related to net share settlement of restricted stock units
|
—
|
|
|
—
|
|
|
(23,892
|
)
|
|
—
|
|
|
—
|
|
|
(23,892
|
)
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
24,033
|
|
|
—
|
|
|
—
|
|
|
24,033
|
|
|||||
Cash dividends declared and paid ($0.06 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,798
|
)
|
|
(29,798
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
128,612
|
|
|
128,612
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(82
|
)
|
|
—
|
|
|
(82
|
)
|
|||||
Balance at May 5, 2018
|
499,750
|
|
|
$
|
1,000
|
|
|
$
|
2,744,478
|
|
|
$
|
(2,404
|
)
|
|
$
|
1,542,437
|
|
|
$
|
4,285,511
|
|
Issuance of common shares in connection with equity incentive plans
|
3,970
|
|
|
7
|
|
|
40,976
|
|
|
—
|
|
|
—
|
|
|
40,983
|
|
|||||
Tax withholdings related to net share settlement of restricted stock units
|
—
|
|
|
—
|
|
|
(12,881
|
)
|
|
—
|
|
|
—
|
|
|
(12,881
|
)
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
55,718
|
|
|
—
|
|
|
—
|
|
|
55,718
|
|
|||||
Common stock issued to Cavium common stockholders
|
153,376
|
|
|
307
|
|
|
3,272,746
|
|
|
—
|
|
|
—
|
|
|
3,273,053
|
|
|||||
Stock consideration for Cavium accelerated awards
|
1,102
|
|
|
2
|
|
|
7,802
|
|
|
—
|
|
|
—
|
|
|
7,804
|
|
|||||
Equity related issuance cost
|
—
|
|
|
—
|
|
|
(2,927
|
)
|
|
—
|
|
|
—
|
|
|
(2,927
|
)
|
|||||
Replacement equity awards attributable to preacquisition service
|
—
|
|
|
—
|
|
|
47,978
|
|
|
—
|
|
|
—
|
|
|
47,978
|
|
|||||
Cash dividends declared and paid ($0.06 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39,383
|
)
|
|
(39,383
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,759
|
|
|
6,759
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
2,404
|
|
|
—
|
|
|
2,404
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
47
|
|
|||||
Balance at August 4, 2018
|
658,198
|
|
|
$
|
1,316
|
|
|
$
|
6,153,890
|
|
|
$
|
—
|
|
|
$
|
1,509,860
|
|
|
$
|
7,665,066
|
|
|
Six Months Ended
|
||||||
|
August 3,
2019 |
|
August 4,
2018 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(105,781
|
)
|
|
$
|
135,371
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
86,239
|
|
|
47,097
|
|
||
Share-based compensation
|
122,274
|
|
|
83,244
|
|
||
Amortization of acquired intangible assets
|
160,707
|
|
|
25,939
|
|
||
Amortization of inventory fair value adjustment associated with acquisition of Cavium
|
—
|
|
|
22,933
|
|
||
Amortization of deferred debt issuance costs and debt discounts
|
2,859
|
|
|
7,073
|
|
||
Restructuring related impairment charges
|
10,097
|
|
|
1,993
|
|
||
Other expense, net
|
2,016
|
|
|
3,631
|
|
||
Deferred income taxes
|
2,374
|
|
|
(21,414
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
40,376
|
|
|
(48,749
|
)
|
||
Inventories
|
8,674
|
|
|
6,866
|
|
||
Prepaid expenses and other assets
|
(7,993
|
)
|
|
(19,504
|
)
|
||
Accounts payable
|
22,497
|
|
|
(271
|
)
|
||
Accrued liabilities and other non-current liabilities
|
(80,117
|
)
|
|
(11,961
|
)
|
||
Accrued employee compensation
|
(25,266
|
)
|
|
(41,539
|
)
|
||
Net cash provided by operating activities
|
238,956
|
|
|
190,709
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of available-for-sale securities
|
—
|
|
|
(14,956
|
)
|
||
Sales of available-for-sale securities
|
—
|
|
|
623,896
|
|
||
Maturities of available-for-sale securities
|
—
|
|
|
187,985
|
|
||
Purchases of time deposits
|
—
|
|
|
(25,000
|
)
|
||
Maturities of time deposits
|
—
|
|
|
150,000
|
|
||
Purchases of technology licenses
|
(1,522
|
)
|
|
(1,263
|
)
|
||
Purchases of property and equipment
|
(42,193
|
)
|
|
(34,389
|
)
|
||
Cash payment for acquisition of Cavium, net of cash and cash equivalents acquired
|
—
|
|
|
(2,649,465
|
)
|
||
Other, net
|
(389
|
)
|
|
(3,527
|
)
|
||
Net cash used in investing activities
|
(44,104
|
)
|
|
(1,766,719
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repurchases of common stock
|
(64,272
|
)
|
|
—
|
|
||
Proceeds from employee stock plans
|
81,314
|
|
|
44,580
|
|
||
Tax withholding paid on behalf of employees for net share settlement
|
(61,642
|
)
|
|
(36,776
|
)
|
||
Dividend payments to shareholders
|
(79,356
|
)
|
|
(69,181
|
)
|
||
Payments on technology license obligations
|
(28,324
|
)
|
|
(29,478
|
)
|
||
Proceeds from issuance of debt
|
—
|
|
|
1,892,605
|
|
||
Principal payments of debt
|
(50,000
|
)
|
|
(606,128
|
)
|
||
Payment of equity and debt financing costs
|
—
|
|
|
(9,435
|
)
|
||
Other, net
|
(1,486
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
(203,766
|
)
|
|
1,186,187
|
|
||
Net decrease in cash and cash equivalents
|
(8,914
|
)
|
|
(389,823
|
)
|
||
Cash and cash equivalents at beginning of period
|
582,410
|
|
|
888,482
|
|
||
Cash and cash equivalents at end of period
|
$
|
573,496
|
|
|
$
|
498,659
|
|
|
|
Three Months Ended August 3, 2019
|
|
Six Months Ended August 3, 2019
|
||||
Operating lease expenses
|
|
$
|
13,701
|
|
|
$
|
24,369
|
|
Cash paid for amounts included in the measurement of operating lease liabilities
|
|
$
|
8,043
|
|
|
$
|
15,287
|
|
Right-of-use assets obtained in exchange for lease obligation
|
|
$
|
10,107
|
|
|
$
|
11,244
|
|
|
|
Classification on the Condensed Consolidated Balance Sheet
|
|
August 3, 2019
|
||
Right-of-use assets
|
|
Other non-current assets
|
|
$
|
113,024
|
|
|
|
|
|
|
||
Current portion of lease liabilities
|
|
Accrued liabilities
|
|
26,874
|
|
|
Non-current portion of lease liabilities
|
|
Other non-current liabilities
|
|
116,379
|
|
|
Total lease liabilities
|
|
|
|
$
|
143,253
|
|
Fiscal Year
|
|
Operating Leases
|
||
Remainder of 2020
|
|
$
|
16,801
|
|
2021
|
|
33,157
|
|
|
2022
|
|
31,029
|
|
|
2023
|
|
24,304
|
|
|
2024
|
|
16,138
|
|
|
Thereafter
|
|
45,991
|
|
|
Total lease payments
|
|
167,420
|
|
|
Less: imputed interest
|
|
24,167
|
|
|
Present value of lease liabilities
|
|
$
|
143,253
|
|
Fiscal Year
|
|
Operating Leases
|
||
2020
|
|
$
|
43,286
|
|
2021
|
|
29,866
|
|
|
2022
|
|
26,612
|
|
|
2023
|
|
21,272
|
|
|
2024
|
|
13,690
|
|
|
Thereafter
|
|
40,100
|
|
|
Total
|
|
$
|
174,826
|
|
|
|
Six Months Ended August 3, 2019
|
|
Weighted-average remaining lease term (years)
|
|
6.04
|
|
Weighted-average discount rate
|
|
3.85
|
%
|
|
|
Previously Reported
February 2, 2019 (Provisional)
|
Measurement Period Adjustments
|
August 3, 2019
|
||||||
Cash and cash equivalents
|
|
$
|
180,989
|
|
$
|
—
|
|
$
|
180,989
|
|
Accounts receivable
|
|
112,270
|
|
—
|
|
112,270
|
|
|||
Inventories
|
|
330,778
|
|
—
|
|
330,778
|
|
|||
Prepaid expense and other current assets
|
|
19,890
|
|
—
|
|
19,890
|
|
|||
Assets held for sale
|
|
483
|
|
—
|
|
483
|
|
|||
Property and equipment
|
|
115,428
|
|
—
|
|
115,428
|
|
|||
Acquired intangible assets
|
|
2,744,000
|
|
—
|
|
2,744,000
|
|
|||
Other non-current assets
|
|
89,139
|
|
—
|
|
89,139
|
|
|||
Goodwill
|
|
3,501,195
|
|
(2,999
|
)
|
3,498,196
|
|
|||
Accounts payable
|
|
(52,383
|
)
|
—
|
|
(52,383
|
)
|
|||
Accrued liabilities
|
|
(126,007
|
)
|
—
|
|
(126,007
|
)
|
|||
Accrued employee compensation
|
|
(34,813
|
)
|
—
|
|
(34,813
|
)
|
|||
Deferred income
|
|
(2,466
|
)
|
—
|
|
(2,466
|
)
|
|||
Current portion of long-term debt
|
|
(6,123
|
)
|
—
|
|
(6,123
|
)
|
|||
Liabilities held for sale
|
|
(3,032
|
)
|
—
|
|
(3,032
|
)
|
|||
Long-term debt
|
|
(600,005
|
)
|
—
|
|
(600,005
|
)
|
|||
Non-current income taxes payable
|
|
(8,454
|
)
|
—
|
|
(8,454
|
)
|
|||
Deferred tax liabilities
|
|
(82,994
|
)
|
2,999
|
|
(79,995
|
)
|
|||
Other non-current liabilities
|
|
(16,099
|
)
|
—
|
|
(16,099
|
)
|
|||
Total merger consideration
|
|
$
|
6,161,796
|
|
$
|
—
|
|
$
|
6,161,796
|
|
|
|
Six Months Ended
|
||
|
|
August 4, 2018
|
||
Pro forma net revenue
|
|
$
|
1,612,873
|
|
Pro forma net income
|
|
$
|
57,453
|
|
|
August 3,
2019 |
|
February 2,
2019 |
||||
Inventories:
|
|
|
|
||||
Work-in-process
|
$
|
165,134
|
|
|
$
|
162,384
|
|
Finished goods
|
75,287
|
|
|
113,621
|
|
||
Total inventories
|
$
|
240,421
|
|
|
$
|
276,005
|
|
|
August 3,
2019 |
|
February 2,
2019 |
||||
Property and equipment, net:
|
|
|
|
||||
Machinery and equipment
|
$
|
589,903
|
|
|
$
|
615,329
|
|
Land, buildings, and leasehold improvements
|
310,684
|
|
|
287,047
|
|
||
Computer software
|
99,864
|
|
|
105,539
|
|
||
Furniture and fixtures
|
24,785
|
|
|
23,924
|
|
||
|
1,025,236
|
|
|
1,031,839
|
|
||
Less: Accumulated depreciation and amortization
|
(705,475
|
)
|
|
(712,861
|
)
|
||
Total property and equipment, net
|
$
|
319,761
|
|
|
$
|
318,978
|
|
|
August 3,
2019 |
|
February 2,
2019 |
||||
Accrued liabilities:
|
|
|
|
||||
Contract liabilities
|
$
|
123,023
|
|
|
$
|
142,378
|
|
Technology license obligations
|
67,652
|
|
|
48,018
|
|
||
Lease liabilities
|
26,874
|
|
|
—
|
|
||
Accrued income tax payable
|
17,238
|
|
|
47,079
|
|
||
Other
|
78,200
|
|
|
98,034
|
|
||
Total accrued liabilities
|
$
|
312,987
|
|
|
$
|
335,509
|
|
|
Unrealized Gain
(Loss) on
Marketable
Securities (1)
|
||
Balance at February 3, 2018
|
$
|
(2,322
|
)
|
Other comprehensive income (loss) before reclassifications
|
(733
|
)
|
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
3,055
|
|
|
Net current-period other comprehensive income (loss), net of tax
|
2,322
|
|
|
Balance at August 4, 2018
|
$
|
—
|
|
|
Fair Value Measurements at August 3, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Items measured at fair value on a recurring basis:
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
1,483
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,483
|
|
Time deposits
|
—
|
|
|
108,434
|
|
|
—
|
|
|
108,434
|
|
||||
Other non-current assets:
|
|
|
|
|
|
|
|
||||||||
Severance pay fund
|
—
|
|
|
657
|
|
|
—
|
|
|
657
|
|
||||
Total assets
|
$
|
1,483
|
|
|
$
|
109,091
|
|
|
$
|
—
|
|
|
$
|
110,574
|
|
|
Fair Value Measurements at February 2, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Items measured at fair value on a recurring basis:
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
16,829
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,829
|
|
Time deposits
|
—
|
|
|
73,935
|
|
|
—
|
|
|
73,935
|
|
||||
Other non-current assets:
|
|
|
|
|
|
|
|
||||||||
Severance pay fund
|
—
|
|
|
727
|
|
|
—
|
|
|
727
|
|
||||
Total assets
|
$
|
16,829
|
|
|
$
|
74,662
|
|
|
$
|
—
|
|
|
$
|
91,491
|
|
|
August 3, 2019
|
||||||||||||
|
Gross Carrying Amounts
|
|
Accumulated Amortization
|
|
Net Carrying Amounts
|
|
Weighted average remaining amortization period (years)
|
||||||
Developed technologies
|
$
|
1,868,000
|
|
|
$
|
(255,206
|
)
|
|
$
|
1,612,794
|
|
|
6.75
|
Customer contracts and related relationships
|
465,000
|
|
|
(82,850
|
)
|
|
382,150
|
|
|
7.92
|
|||
Trade names
|
23,000
|
|
|
(5,969
|
)
|
|
17,031
|
|
|
3.40
|
|||
Total acquired amortizable intangible assets
|
$
|
2,356,000
|
|
|
$
|
(344,025
|
)
|
|
$
|
2,011,975
|
|
|
6.95
|
IPR&D
|
388,000
|
|
|
—
|
|
|
388,000
|
|
|
n/a
|
|||
Total acquired intangible assets
|
$
|
2,744,000
|
|
|
$
|
(344,025
|
)
|
|
$
|
2,399,975
|
|
|
|
|
February 2, 2019
|
||||||||||||
|
Gross Carrying Amounts
|
|
Accumulated Amortization
|
|
Net Carrying Amounts
|
|
Weighted average remaining amortization period (years)
|
||||||
Developed technologies
|
$
|
1,743,000
|
|
|
$
|
(134,167
|
)
|
|
$
|
1,608,833
|
|
|
7.10
|
Customer contracts and related relationships
|
465,000
|
|
|
(45,939
|
)
|
|
419,061
|
|
|
8.42
|
|||
Trade names
|
23,000
|
|
|
(3,212
|
)
|
|
19,788
|
|
|
3.85
|
|||
Total acquired amortizable intangible assets
|
$
|
2,231,000
|
|
|
$
|
(183,318
|
)
|
|
$
|
2,047,682
|
|
|
7.34
|
IPR&D
|
513,000
|
|
|
—
|
|
|
513,000
|
|
|
n/a
|
|||
Total acquired intangible assets
|
$
|
2,744,000
|
|
|
$
|
(183,318
|
)
|
|
$
|
2,560,682
|
|
|
|
Fiscal Year
|
|
Amount
|
|
|
Remainder of 2020
|
|
$
|
161,772
|
|
2021
|
|
315,423
|
|
|
2022
|
|
306,867
|
|
|
2023
|
|
299,438
|
|
|
2024
|
|
281,091
|
|
|
Thereafter
|
|
647,384
|
|
|
|
|
$
|
2,011,975
|
|
|
|
August 3, 2019
|
|
February 2, 2019
|
||||
Face Value Outstanding:
|
|
|
|
|
||||
Term Loan
|
|
$
|
700,000
|
|
|
$
|
750,000
|
|
2023 Notes
|
|
500,000
|
|
|
500,000
|
|
||
2028 Notes
|
|
500,000
|
|
|
500,000
|
|
||
Total borrowings
|
|
$
|
1,700,000
|
|
|
$
|
1,750,000
|
|
Less: Unamortized debt discount and issuance cost
|
|
(14,641
|
)
|
|
(17,301
|
)
|
||
Net carrying amount of debt
|
|
$
|
1,685,359
|
|
|
$
|
1,732,699
|
|
Less: Current portion
|
|
—
|
|
|
—
|
|
||
Non-current portion
|
|
$
|
1,685,359
|
|
|
$
|
1,732,699
|
|
Fiscal year
|
|
Amount
|
||
Remainder of 2020
|
|
$
|
—
|
|
2021
|
|
—
|
|
|
2022
|
|
700,000
|
|
|
2023
|
|
—
|
|
|
2024
|
|
500,000
|
|
|
Thereafter
|
|
500,000
|
|
|
Total
|
|
$
|
1,700,000
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
August 3, 2019
|
|
August 4, 2018
|
||||||||
Severance and related costs
|
$
|
7,139
|
|
|
$
|
22,605
|
|
|
$
|
8,627
|
|
|
$
|
24,057
|
|
Facilities and related costs
|
1,078
|
|
|
11,029
|
|
|
1,556
|
|
|
11,057
|
|
||||
Other exit-related costs
|
2,632
|
|
|
174
|
|
|
2,823
|
|
|
262
|
|
||||
|
10,849
|
|
|
33,808
|
|
|
13,006
|
|
|
35,376
|
|
||||
Release of reserves:
|
|
|
|
|
|
|
|
||||||||
Severance
|
—
|
|
|
(307
|
)
|
|
—
|
|
|
(307
|
)
|
||||
Facilities and related costs
|
(544
|
)
|
|
—
|
|
|
(732
|
)
|
|
—
|
|
||||
Other exit-related costs
|
—
|
|
|
—
|
|
|
(127
|
)
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other restructuring charges
|
|
|
|
|
|
|
|
||||||||
Fixed assets write off
|
—
|
|
|
1,993
|
|
|
633
|
|
|
1,993
|
|
||||
Exchange rate adjustment
|
—
|
|
|
(79
|
)
|
|
—
|
|
|
(80
|
)
|
||||
Right-of-use asset amortization and impairment
|
7,675
|
|
|
—
|
|
|
10,882
|
|
|
—
|
|
||||
Release of facility lease liability
|
(1,394
|
)
|
|
—
|
|
|
(1,394
|
)
|
|
—
|
|
||||
|
$
|
16,586
|
|
|
$
|
35,415
|
|
|
$
|
22,268
|
|
|
$
|
36,982
|
|
|
Severance and related costs
|
|
Facilities and related costs
|
|
Other exit-related costs
|
|
Total
|
||||||||
Balance at February 2, 2019
|
$
|
12,403
|
|
|
$
|
26,904
|
|
|
$
|
1,049
|
|
|
$
|
40,356
|
|
Restructuring charges
|
8,627
|
|
|
1,556
|
|
|
2,823
|
|
|
13,006
|
|
||||
Net cash payments
|
(14,743
|
)
|
|
(1,643
|
)
|
|
(1,271
|
)
|
|
(17,657
|
)
|
||||
Release of reserves
|
—
|
|
|
(732
|
)
|
|
(127
|
)
|
|
(859
|
)
|
||||
Effect of adoption of ASC 842
|
—
|
|
|
(25,893
|
)
|
|
—
|
|
|
(25,893
|
)
|
||||
Balance at August 3, 2019
|
6,287
|
|
|
192
|
|
|
2,474
|
|
|
8,953
|
|
||||
Less: non-current portion
|
—
|
|
|
75
|
|
|
—
|
|
|
75
|
|
||||
Current portion
|
$
|
6,287
|
|
|
$
|
117
|
|
|
$
|
2,474
|
|
|
$
|
8,878
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||
|
|
August 3, 2019
|
|
% of Total
|
|
August 4, 2018
|
|
% of Total
|
|
August 3, 2019
|
|
% of Total
|
|
August 4, 2018
|
|
% of Total
|
||||||||||||
Net revenue by product group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Storage (1)
|
|
$
|
274,905
|
|
|
42
|
%
|
|
$
|
335,764
|
|
|
50
|
%
|
|
$
|
553,572
|
|
|
42
|
%
|
|
$
|
652,833
|
|
|
51
|
%
|
Networking (2)
|
|
329,605
|
|
|
50
|
%
|
|
283,330
|
|
|
43
|
%
|
|
670,949
|
|
|
51
|
%
|
|
527,558
|
|
|
42
|
%
|
||||
Other (3)
|
|
52,058
|
|
|
8
|
%
|
|
46,216
|
|
|
7
|
%
|
|
94,499
|
|
|
7
|
%
|
|
89,550
|
|
|
7
|
%
|
||||
|
|
$
|
656,568
|
|
|
|
|
$
|
665,310
|
|
|
|
|
$
|
1,319,020
|
|
|
|
|
$
|
1,269,941
|
|
|
|
1)
|
Storage products are comprised primarily of HDD, SSD Controllers, Fibre Channel Adapters and Data Center Storage Solutions.
|
2)
|
Networking products are comprised primarily of Ethernet Switches, Ethernet Transceivers, Ethernet NICs, Embedded Communications and Infrastructure Processors, Automotive Ethernet, Security Adapters and Processors as well as WiFi Connectivity products. In addition, this grouping includes a few legacy product lines in which the Company no longer invests, but will generate revenue for several years.
|
3)
|
Other products are comprised primarily of Printer Solutions, Application Processors and others.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||
|
|
August 3, 2019
|
|
% of Total
|
|
August 4, 2018
|
|
% of Total
|
|
August 3, 2019
|
|
% of Total
|
|
August 4, 2018
|
|
% of Total
|
||||||||||||
Net revenue based on destination of shipment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
China
|
|
$
|
286,310
|
|
|
44
|
%
|
|
$
|
292,033
|
|
|
44
|
%
|
|
$
|
532,444
|
|
|
40
|
%
|
|
$
|
566,542
|
|
|
45
|
%
|
United States
|
|
55,580
|
|
|
8
|
%
|
|
16,563
|
|
|
2
|
%
|
|
128,586
|
|
|
10
|
%
|
|
32,592
|
|
|
3
|
%
|
||||
Philippines
|
|
60,287
|
|
|
9
|
%
|
|
55,416
|
|
|
8
|
%
|
|
122,774
|
|
|
9
|
%
|
|
113,183
|
|
|
9
|
%
|
||||
Thailand
|
|
63,511
|
|
|
10
|
%
|
|
39,256
|
|
|
6
|
%
|
|
110,177
|
|
|
8
|
%
|
|
80,790
|
|
|
6
|
%
|
||||
Malaysia
|
|
36,019
|
|
|
5
|
%
|
|
96,127
|
|
|
14
|
%
|
|
99,339
|
|
|
8
|
%
|
|
186,750
|
|
|
15
|
%
|
||||
Japan
|
|
41,120
|
|
|
6
|
%
|
|
37,791
|
|
|
6
|
%
|
|
80,090
|
|
|
6
|
%
|
|
72,780
|
|
|
6
|
%
|
||||
Other
|
|
113,741
|
|
|
18
|
%
|
|
128,124
|
|
|
20
|
%
|
|
245,610
|
|
|
19
|
%
|
|
217,304
|
|
|
16
|
%
|
||||
|
|
$
|
656,568
|
|
|
|
|
$
|
665,310
|
|
|
|
|
$
|
1,319,020
|
|
|
|
|
$
|
1,269,941
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||
|
|
August 3, 2019
|
|
% of Total
|
|
August 4, 2018
|
|
% of Total
|
|
August 3, 2019
|
|
% of Total
|
|
August 4, 2018
|
|
% of Total
|
||||||||||||
Net revenue by customer type:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Direct customers
|
|
$
|
484,743
|
|
|
74
|
%
|
|
$
|
532,351
|
|
|
80
|
%
|
|
$
|
999,301
|
|
|
76
|
%
|
|
$
|
1,002,827
|
|
|
79
|
%
|
Distributors
|
|
171,825
|
|
|
26
|
%
|
|
132,959
|
|
|
20
|
%
|
|
319,719
|
|
|
24
|
%
|
|
267,114
|
|
|
21
|
%
|
||||
|
|
$
|
656,568
|
|
|
|
|
$
|
665,310
|
|
|
|
|
$
|
1,319,020
|
|
|
|
|
$
|
1,269,941
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
August 3,
2019 |
|
August 4,
2018 |
|
August 3,
2019 |
|
August 4,
2018 |
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(57,331
|
)
|
|
$
|
6,759
|
|
|
$
|
(105,781
|
)
|
|
$
|
135,371
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares — basic
|
663,603
|
|
|
552,238
|
|
|
661,280
|
|
|
524,787
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Share-based awards
|
—
|
|
|
9,911
|
|
|
—
|
|
|
10,646
|
|
||||
Weighted average shares — diluted
|
663,603
|
|
|
562,149
|
|
|
661,280
|
|
|
535,433
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.09
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.16
|
)
|
|
$
|
0.26
|
|
Diluted
|
$
|
(0.09
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.16
|
)
|
|
$
|
0.25
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
August 3,
2019 |
|
August 4,
2018 |
|
August 3,
2019 |
|
August 4,
2018 |
||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||
Share-based awards
|
13,209
|
|
|
5,718
|
|
|
12,812
|
|
|
5,604
|
|
•
|
our ability to complete pending acquisitions and successfully integrate acquired businesses with our business;
|
•
|
our ability to realize anticipated synergies in connection with acquired businesses;
|
•
|
the impact and costs associated with changes in international financial and regulatory conditions such as the addition of new trade tariffs or embargos;
|
•
|
the risks associated with manufacturing and selling a majority of our products and our customers’ products outside of the United States;
|
•
|
the impact of international conflict and continued economic volatility in either domestic or foreign markets;
|
•
|
our ability to define, design and develop products for the infrastructure and 5G market and market and sell those products to infrastructure customers;
|
•
|
the effects of any potential future acquisitions, strategic investments, divestitures, mergers or joint ventures;
|
•
|
risks associated with acquisition and consolidation activity in the semiconductor industry;
|
•
|
our ability and the ability of our customers to successfully compete in the markets in which we serve;
|
•
|
our dependence upon the storage market, which is highly cyclical and intensely competitive;
|
•
|
our ability and our customers’ ability to develop new and enhanced products and the adoption of those products in the market;
|
•
|
the impact of any changes in our application of the United States federal income tax laws and the loss of any beneficial treatment that we currently enjoy;
|
•
|
decreases in our gross margin and results of operations in the future due to a number of factors;
|
•
|
our reliance on independent foundries and subcontractors for the manufacture, assembly and testing of our products;
|
•
|
the effects of transitioning to smaller geometry process technologies;
|
•
|
our dependence on a small number of customers;
|
•
|
our ability to scale our operations in response to changes in demand for existing or new products and services;
|
•
|
our ability to limit costs related to defective products;
|
•
|
our ability to realize expected benefits from restructuring activities;
|
•
|
our ability to recruit and retain experienced executive management as well as highly skilled engineering and sales and marketing personnel;
|
•
|
our ability to mitigate risks related to our information technology systems;
|
•
|
our ability to protect our intellectual property;
|
•
|
our ability to estimate customer demand and future sales accurately;
|
•
|
our reliance on third-party distributors and manufacturers' representatives to sell our products;
|
•
|
our maintenance of an effective system of internal controls;
|
•
|
severe financial hardship or bankruptcy of one or more of our major customers; and
|
•
|
the outcome of pending or future litigation and legal and regulatory proceedings.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
August 3, 2019
|
|
August 4, 2018
|
||||
End Customer:
|
|
|
|
|
|
|
|
||||
Cisco Systems
|
11
|
%
|
|
11
|
%
|
|
11
|
%
|
|
*
|
|
Toshiba
|
*
|
|
|
13
|
%
|
|
10
|
%
|
|
13
|
%
|
Western Digital
|
*
|
|
|
15
|
%
|
|
10
|
%
|
|
15
|
%
|
Seagate
|
*
|
|
|
11
|
%
|
|
*
|
|
|
11
|
%
|
Distributor:
|
|
|
|
|
|
|
|
||||
Wintech
|
14
|
%
|
|
*
|
|
|
12
|
%
|
|
*
|
|
*
|
Less than 10% of net revenue
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
August 3, 2019
|
|
August 4, 2018
|
||||
Net revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
46.6
|
|
|
43.3
|
|
|
46.0
|
|
|
40.7
|
|
Gross profit
|
53.4
|
|
|
56.7
|
|
|
54.0
|
|
|
59.3
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Research and development
|
40.6
|
|
|
32.5
|
|
|
40.4
|
|
|
31.0
|
|
Selling, general and administrative
|
17.4
|
|
|
20.1
|
|
|
17.0
|
|
|
16.2
|
|
Restructuring related charges
|
2.5
|
|
|
5.3
|
|
|
1.7
|
|
|
2.9
|
|
Total operating expenses
|
60.5
|
|
|
57.9
|
|
|
59.1
|
|
|
50.1
|
|
Operating income (loss)
|
(7.1
|
)
|
|
(1.2
|
)
|
|
(5.1
|
)
|
|
9.2
|
|
Interest income
|
0.2
|
|
|
0.5
|
|
|
0.2
|
|
|
0.8
|
|
Interest expense
|
(3.1
|
)
|
|
(2.4
|
)
|
|
(3.2
|
)
|
|
(1.3
|
)
|
Other income (loss), net
|
(0.3
|
)
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|
(0.1
|
)
|
Income (loss) before income taxes
|
(10.3
|
)
|
|
(3.5
|
)
|
|
(8.3
|
)
|
|
8.6
|
|
Provision for income taxes
|
(1.6
|
)
|
|
(4.5
|
)
|
|
(0.2
|
)
|
|
(2.1
|
)
|
Income (loss), net of tax
|
(8.7
|
)%
|
|
1.0
|
%
|
|
(8.1
|
)%
|
|
10.7
|
%
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
||||||||||
|
(in thousands, except percentage)
|
||||||||||||||||||||
Net revenue
|
$
|
656,568
|
|
|
$
|
665,310
|
|
|
(1.3
|
)%
|
|
$
|
1,319,020
|
|
|
$
|
1,269,941
|
|
|
3.9
|
%
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change |
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
||||||||||
|
(in thousands, except percentage)
|
||||||||||||||||||||
Cost of goods sold
|
$
|
305,866
|
|
|
$
|
288,200
|
|
|
6.1
|
%
|
|
$
|
606,890
|
|
|
$
|
517,138
|
|
|
17.4
|
%
|
% of net revenue
|
46.6
|
%
|
|
43.3
|
%
|
|
|
|
46.0
|
%
|
|
40.7
|
%
|
|
|
||||||
Gross profit
|
$
|
350,702
|
|
|
$
|
377,110
|
|
|
(7.0
|
)%
|
|
$
|
712,130
|
|
|
$
|
752,803
|
|
|
(5.4
|
)%
|
% of net revenue
|
53.4
|
%
|
|
56.7
|
%
|
|
|
|
54.0
|
%
|
|
59.3
|
%
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
||||||||||
|
(in thousands, except percentage)
|
||||||||||||||||||||
Research and development
|
$
|
266,354
|
|
|
$
|
216,285
|
|
|
23.1
|
%
|
|
$
|
533,221
|
|
|
$
|
393,019
|
|
|
35.7
|
%
|
% of net revenue
|
40.6
|
%
|
|
32.5
|
%
|
|
|
|
40.4
|
%
|
|
31
|
%
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
||||||||||
|
(in thousands, except percentage)
|
||||||||||||||||||||
Selling, general and administrative
|
$
|
113,990
|
|
|
$
|
133,701
|
|
|
(14.7
|
)%
|
|
$
|
223,995
|
|
|
$
|
206,014
|
|
|
8.7
|
%
|
% of net revenue
|
17.4
|
%
|
|
20.1
|
%
|
|
|
|
17.0
|
%
|
|
16.2
|
%
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
||||||||||
|
(in thousands, except percentage)
|
||||||||||||||||||||
Restructuring related charges
|
$
|
16,586
|
|
|
$
|
35,415
|
|
|
(53.2
|
)%
|
|
$
|
22,268
|
|
|
$
|
36,982
|
|
|
(39.8
|
)%
|
% of net revenue
|
2.5
|
%
|
|
5.3
|
%
|
|
|
|
1.7
|
%
|
|
2.9
|
%
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
||||||||||
|
(in thousands, except percentage)
|
||||||||||||||||||||
Interest income
|
$
|
1,077
|
|
|
$
|
3,575
|
|
|
(69.9
|
)%
|
|
$
|
2,345
|
|
|
$
|
9,644
|
|
|
(75.7
|
)%
|
% of net revenue
|
0.2
|
%
|
|
0.5
|
%
|
|
|
|
0.2
|
%
|
|
0.8
|
%
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
||||||||||
|
(in thousands, except percentage)
|
||||||||||||||||||||
Interest expense
|
$
|
(20,531
|
)
|
|
$
|
(15,795
|
)
|
|
30.0
|
%
|
|
$
|
(41,734
|
)
|
|
$
|
(16,039
|
)
|
|
160.2
|
%
|
% of net revenue
|
(3.1
|
)%
|
|
(2.4
|
)%
|
|
|
|
(3.2
|
)%
|
|
(1.3
|
)%
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
||||||||||
|
(in thousands, except percentage)
|
||||||||||||||||||||
Other income (loss), net
|
$
|
(2,197
|
)
|
|
$
|
(2,701
|
)
|
|
(18.7
|
)%
|
|
$
|
(2,313
|
)
|
|
$
|
(1,230
|
)
|
|
88.0
|
%
|
% of net revenue
|
(0.3
|
)%
|
|
(0.4
|
)%
|
|
|
|
(0.2
|
)%
|
|
(0.1
|
)%
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
|
August 3, 2019
|
|
August 4, 2018
|
|
%
Change
|
||||||||||
|
(in thousands, except percentage)
|
||||||||||||||||||||
Provision (benefit) for income taxes
|
$
|
(10,548
|
)
|
|
$
|
(29,971
|
)
|
|
(64.8
|
)%
|
|
$
|
(3,275
|
)
|
|
$
|
(26,208
|
)
|
|
(87.5
|
)%
|
•
|
our ability to realize anticipated synergies in connection with our acquisitions and the loss of synergies in connection with our divestitures;
|
•
|
changes in general economic conditions, such as the impact of Brexit on the economy in the E.U., political conditions, such as the recent tariffs and trade bans, and specific conditions in the end markets we address, including the continuing volatility in the technology sector and semiconductor industry;
|
•
|
the effects of any acquisitions, divestitures or significant investments;
|
•
|
the highly competitive nature of the end markets we serve, particularly within the semiconductor and infrastructure industries;
|
•
|
our dependence on a few customers for a significant portion of our revenue;
|
•
|
our ability to maintain a competitive cost structure for our manufacturing and assembly and test processes and our reliance on third parties to produce our products;
|
•
|
any current and future litigation that could result in substantial costs and a diversion of management’s attention and resources that are needed to successfully maintain and grow our business;
|
•
|
cancellations, rescheduling or deferrals of significant customer orders or shipments, as well as the ability of our customers to manage inventory;
|
•
|
gain or loss of a design win or key customer;
|
•
|
seasonality or volatility related to sales into the infrastructure market;
|
•
|
failure to qualify our products or our suppliers’ manufacturing lines;
|
•
|
our ability to develop and introduce new and enhanced products in a timely and effective manner, as well as our ability to anticipate and adapt to changes in technology;
|
•
|
failure to protect our intellectual property;
|
•
|
impact of a significant natural disaster, including earthquakes, floods and tsunamis, particularly in certain regions in which we operate or own buildings, such as Santa Clara, California, and where our third party suppliers operate, such as Taiwan and elsewhere in the Pacific Rim;
|
•
|
our ability to attract, retain and motivate a highly skilled workforce, especially managerial, engineering, sales and marketing personnel;
|
•
|
severe financial hardship or bankruptcy of one or more of our major customers; and
|
•
|
failure of our customers to agree to pay for NRE (non-recurring engineering) costs or failure to pay enough to cover the costs we incur in connection with NREs.
|
•
|
diversion of management attention from running our existing business;
|
•
|
increased expenses, including, but not limited to, legal, administrative and compensation expenses related to newly hired or terminated employees;
|
•
|
key personnel of an acquired company may decide not to work for us;
|
•
|
increased costs to integrate or, in the case of a divestiture, separate the technology, personnel, customer base and business practices of the acquired or divested business or assets;
|
•
|
assuming the legal obligations of the acquired company, including potential exposure to material liabilities not discovered in the due diligence process or assuming indemnity obligations in connection with divestitures;
|
•
|
ineffective or inadequate control, procedures and policies at the acquired company may negatively impact our results of operations;
|
•
|
potential adverse effects on reported operating results due to possible write-down of goodwill and other intangible assets associated with acquisitions;
|
•
|
burdensome conditions required to obtain regulatory approvals;
|
•
|
potential damage to relationships with customers, suppliers, partners or employees;
|
•
|
loss of synergies, in the case of divestitures;
|
•
|
reduction of potential benefits of a transaction in the event of a long delay between signing and closing;
|
•
|
reduction of our cash in the case of acquisitions for which we are paying cash consideration and share dilution if we are using our shares as consideration; and
|
•
|
unavailability of acquisition financing on reasonable terms or at all.
|
•
|
failure to obtain regulatory or other approvals;
|
•
|
disputes or litigation; or
|
•
|
difficulties obtaining financing for the transaction.
|
•
|
difficulties in fully achieving anticipated cost savings, synergies, business opportunities and growth prospects from combining the businesses;
|
•
|
difficulties entering new markets or manufacturing in new geographies where we have no or limited direct prior experience;
|
•
|
difficulties in the integration of operations and systems;
|
•
|
difficulties in the assimilation or retention of employees; and
|
•
|
difficulties in managing the expanded operations of a significantly larger and more complex company.
|
•
|
a significant portion of our sales are made on a purchase order basis, which allows our customers to cancel, change or delay product purchase commitments with relatively short notice to us;
|
•
|
customers may purchase integrated circuits from our competitors;
|
•
|
customers may discontinue sales or lose market share in the markets for which they purchase our products;
|
•
|
customers, particularly in jurisdictions such as China that may be subject to trade bans or tariffs, may develop their own solutions or acquire fully developed solutions from third-parties;
|
•
|
customers may be subject to severe business disruptions, including, but not limited to, those driven by financial instability; or
|
•
|
customers may consolidate (for example, Western Digital acquired SanDisk in 2017, and Toshiba Corporation sold control of a portion of its semiconductor business in 2018), which could lead to changing demand for our products, replacement of our products by the merged entity with those of our competitors and cancellation of orders.
|
•
|
our customers usually require a comprehensive technical evaluation of our products before they incorporate them into their designs.
|
•
|
it can take from six months to three years from the time our products are selected to commence commercial shipments; and
|
•
|
our customers may experience changed market conditions or product development issues. The resources devoted to product development and sales and marketing may not generate material revenue for us, and from time to time, we may need to write off excess and obsolete inventory if we have produced product in anticipation of expected demand. We may spend resources on the development of products that our customers may not adopt. If we incur significant expenses and investments in inventory in the future that we are not able to recover, and we are not able to compensate for those expenses, our operating results could be adversely affected. In addition, if we sell our products at reduced prices in anticipation of cost reductions but still hold higher cost products in inventory, our operating results would be harmed.
|
•
|
loss of or delay in market acceptance of our products;
|
•
|
material recall and replacement costs;
|
•
|
delay in revenue recognition or loss of revenue;
|
•
|
writing down the inventory of defective products;
|
•
|
the diversion of the attention of our engineering personnel from product development efforts;
|
•
|
our having to defend against litigation related to defective products or related property damage or personal injury; and
|
•
|
damage to our reputation in the industry that could adversely affect our relationships with our customers.
|
•
|
increasing our vulnerability to adverse general economic and industry conditions;
|
•
|
requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness,
|
•
|
limiting our flexibility in planning for, or reacting to, changes in the economy and the semiconductor industry;
|
•
|
placing us at a competitive disadvantage compared to our competitors with less indebtedness;
|
•
|
exposing us to interest rate risk to the extent of our variable rate indebtedness; and
|
•
|
making it more difficult to borrow additional funds in the future to fund growth, acquisitions, working capital, capital expenditures and other purposes.
|
•
|
political, social and economic instability, including wars, terrorism, political unrest, boycotts, curtailment of trade and other business restrictions;
|
•
|
volatile global economic conditions, including downturns in which some competitors may become more aggressive in their pricing practices, which would adversely impact our gross margin;
|
•
|
compliance with domestic and foreign export and import regulations, including pending changes thereto, and difficulties in obtaining and complying with domestic and foreign export, import and other governmental approvals, permits and licenses;
|
•
|
local laws and practices that favor local companies, including business practices in which we are prohibited from engaging by the Foreign Corrupt Practices Act and other anti-corruption laws and regulations;
|
•
|
difficulties in staffing and managing foreign operations;
|
•
|
natural disasters, including earthquakes, tsunamis and floods;
|
•
|
trade restrictions, higher tariffs, worsening trade relationship between the United States and China, or changes in cross border taxation, particularly in light of the recently imposed tariffs announced by the Trump administration;
|
•
|
transportation delays;
|
•
|
difficulties of managing distributors;
|
•
|
less effective protection of intellectual property than is afforded to us in the United States or other developed countries;
|
•
|
inadequate local infrastructure; and
|
•
|
exposure to local banking, currency control and other financial-related risks.
|
•
|
stop selling, offering for sale, making, having made or exporting products or using technology that contains the allegedly infringing intellectual property;
|
•
|
limit or restrict the type of work that employees involved in such litigation may perform for us;
|
•
|
pay substantial damages and/or license fees and/or royalties to the party claiming infringement or other license violations that could adversely impact our liquidity or operating results;
|
•
|
attempt to obtain or renew licenses to the relevant intellectual property, which licenses may not be available on reasonable terms or at all; and
|
•
|
attempt to redesign those products that contain the allegedly infringing intellectual property.
|
•
|
the possibility of environmental contamination and the costs associated with remediating any environmental problems;
|
•
|
adverse changes in the value of these properties due to interest rate changes, changes in the neighborhood in which the property is located, or other factors;
|
•
|
the possible need for structural improvements in order to comply with zoning, seismic and other legal or regulatory requirements;
|
•
|
the potential disruption of our business and operations arising from or connected with a relocation due to moving to or renovating the facility;
|
•
|
increased cash commitments for improvements to the buildings or the property, or both;
|
•
|
increased operating expenses for the buildings or the property, or both;
|
•
|
possible disputes with tenants or other third parties related to the buildings or the property, or both;
|
•
|
failure to achieve expected cost savings due to extended non-occupancy of a vacated property intended to be leased; and
|
•
|
the risk of financial loss in excess of amounts covered by insurance, or uninsured risks, such as the loss caused by damage to the buildings as a result of earthquakes, floods and/or other natural disasters.
|
Period (1)
|
Total Number of
Shares Purchased
|
|
Average Price
Paid per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced Plans or
Programs
|
|
Approximate Dollar Value of
Shares that May Yet Be
Purchased Under the Plans or
Programs (2)
|
||||||
May 5, 2019 - June 1, 2019
|
627
|
|
|
$
|
22.72
|
|
|
14,249
|
|
|
$
|
889,710
|
|
June 2, 2019 - June 29, 2019
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
889,710
|
|
June 30, 2019 - August 3, 2019
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
889,710
|
|
Total
|
627
|
|
|
$
|
22.72
|
|
|
14,249
|
|
|
$
|
889,710
|
|
(1)
|
The monthly periods presented above for the three months ended August 3, 2019, are based on our fiscal accounting periods which follow a quarterly 4-4-5 week fiscal accounting period.
|
(2)
|
On November 17, 2016, we announced that our Board of Directors had authorized a $1 billion share repurchase program. On October 16, 2018, we announced that our Board of Directors authorized a $700 million addition to the balance of our existing share repurchase program. Our existing share repurchase program had approximately $304 million of repurchase authority remaining as of October 16, 2018 prior to the approved addition. We may effect share repurchases in accordance with the conditions of Rule 10b-18 under the Exchange Act, but may also make repurchases in the open market outside of Rule 10b-18 or in privately negotiated transactions. The share repurchase program will be subject to market conditions and other factors and does not obligate us to repurchase any dollar amount or number of our common shares and the repurchase program may be extended, modified, suspended or discontinued at any time.
|
#
|
Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.
|
*
|
The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
|
|
MARVELL TECHNOLOGY GROUP LTD.
|
|
|
||
Date: September 4, 2019
|
By:
|
/s/ JEAN HU
|
|
|
Jean Hu
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
1 Year Marvell Technology Chart |
1 Month Marvell Technology Chart |
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