This summary is based on the fourth quarter fiscal 2008 earnings conducted by Marvell Technology Group (MRVL) on March 6, 2008.
Management:
Chairman, President and CEO: Dr. Sehat Sutardja
Interim CFO: George A de Urioste
IR: Jeff Palmer
Key Investor Issues:
- Quarter GAAP net income was $1.3 million versus GAAP net loss of $140.6 million last year quarter.
- Non-GAAP net income per share of 44 cents versus 56 cents in the fiscal year 2007.
- For fiscal 2009, the company guides non-GAAP gross margin range of 48.7% to 49.3%.
Full Year Highlights:
- GAAP full year net loss of $114.4 million, or 19 cents per diluted share versus GAAP net loss of $12.1 million, or 2 cents per diluted share for the year ended January 27, 2007.
- Non-GAAP net income was $280.1 million, or 44 cents per diluted share for the year ended February 2, 2008 compared with non-GAAP net income of $359 million, or 56 cents per diluted share for the year ended January 27, 2007.
- The decline in non-GAAP net income during fiscal 2008 and fiscal 2007 is due to the integration of the Intel Communication-Applications Processor group into Marvell.
- Non-GAAP gross margin for fiscal 2008 was 48.8% compared with non-GAAP gross margin of 51.3% for fiscal 2007.
Fourth Quarter Fiscal 2008 Highlights:
The fourth quarter net revenues were 11% higher from third quarter fiscal 2008 figure of $758 million.
This was due to strong demand for the system-on-a-chip products for the storage market, better than expected demand for enterprise-class communication products and improved demand for the cellular products. The results demonstrate the successful investment in a broad range of technologies and management’s ability to integrate the technologies into superior products across markets.
- The fourth quarter guidance of $780 million was exceeded.
- The storage product revenues grew by more than 20% sequentially and 30% on a year-over-year basis.
- The mobile hard drive business recorded 39% sequential increase in unit shipments.
- Western Digital exceeded 10% of company storage products revenue contribution during the quarter.
- The sales of enterprise connectivity products gained by more than 20% sequentially, helped by strong demand from the PC industry.
- Quarterly sales of the printer products were flat on a sequential basis.
The non-GAAP net income increased to $122.9 million, or 20 cents per diluted share for the fourth quarter of fiscal 2008.
- This represents a 495% increased compared with non-GAAP net income of $20.7 million, or 3 cents per diluted share for the fourth quarter fiscal 2007.
- The sequential increase is 43% from non-GAAP net income of $86.2 million, or 14 cents per diluted share for the third quarter fiscal 2008.
- The non-GAAP net income quarter increase was a result of better than anticipated revenue growth of storage and Ethernet connectivity products.
- The shares used for computing non-GAAP net income were $627 million compared with $631 million in the previous quarter.
The management reported non-GAAP gross margin for the fourth quarter fiscal 2008 of 48.7%.
- The third quarter fiscal 2008 recorded non-GAAP gross margin was 48.3%.
- A non-GAAP gross margin of 48.2% was recorded for the fourth quarter of fiscal 2007.
The cash and short term investments increased $100 million over the sequential quarter to $631 million, primarily due to better total sales.
- This is in comparison to $596 million in the last year quarter.
- Accounts receivables were $332 million, a decrease of $55 million from last quarter. The decline was a result of improved collections and strong order linearity.
- The fourth quarter fiscal 2007 accounts receivables were $328 million.
The inventory levels at the end of the quarter were recorded at $420 million, an increase of $38 million from third quarter fiscal 2008.
- The increase was a result of the receipt of wafers under the now completed Intel supply agreement, new product ramps of wireless products and continued strong demand for storage products.
- The fiscal 2007 fourth quarter closing inventory level was valued at $247 million.
- Accounts payable increased by $22 million from third quarter fiscal 2008 to fourth quarter level of $231 million and the company generated $163 million in cash from operations, $32 million of which was used as capital expenditure.
- The free cash flow amount of $131 million was a major improvement on a sequential and year-on-year basis. The company recorded $8 million free cash flow in the third quarter and had negative cash flow in the year ago period.
The company has reached a provisional settlement with plaintiffs on federal derivative lawsuits related to historical stock option practices.
