5/30/08 - Marvell Technology Group Ltd. (Nasdaq: MRVL) reported financial results for the first fiscal quarter, ended May 3, 2008.

Net revenue for the first quarter of fiscal 2009 was $804 million, an increase of 27 percent over $635 million in the first quarter of fiscal 2008, ended April 28, 2007, and a 5 percent sequential decline from $845 million in the fourth quarter of fiscal 2008, ended February 2, 2008.

Net income under generally accepted accounting principles (GAAP) was $69.9 million, or $0.11 per share (diluted), for the first quarter of fiscal 2009, compared with a net loss under GAAP of $52.8 million, or $0.09 per share (diluted), for the first quarter of fiscal 2008. In the fourth quarter of fiscal 2008 net income under GAAP was $1.3 million, or $0.00 per share (diluted).

"We are pleased with our first quarter results," said Dr. Sehat Sutardja, Marvell chairman and chief executive. "We surpassed our revenue targets, despite an uncertain economic environment and continuing pricing pressures in our core markets. Cost cutting initiatives implemented in prior periods also paid off, improving Marvell's performance. We surpassed our long term gross margin goal of 50 percent and made significant progress toward our long term operating margin goal of 20 percent, on a recurring non-GAAP basis."

Despite normal seasonal declines in the hard-disk drive market, first quarter sales were flat sequentially. In the cellular and mobile device market, revenues were in-line with prior expectations, with strong demand for the Company's EDGE communication processors. Marvell achieved an important milestone as it began volume shipments of its next-generation 3G High Speed Download Packet Access (HSDPA) communications processor to a key smartphone supplier in the first fiscal quarter. Demand in the enterprise networking market reflected positive acceptance of Metro-Ethernet products, offset by normal seasonal declines in sales of enterprise system controller products.

Company-wide operating efficiencies, together with stronger than expected sales of 802.11N wireless connectivity devices, Network Attached Storage (NAS) processors and growth in demand for printer system-on-a chip products, led to higher than expected GAAP net income and revenues during the first fiscal quarter.

Shares used to compute GAAP net income per share (diluted), for the first quarter fiscal 2009 increased to 624 million shares, compared with 587 million shares in first quarter of fiscal 2008 and 627 million shares in the fourth quarter fiscal 2008.

Marvell reports net income (loss) and basic and diluted net income (loss) per share in accordance with GAAP and additionally on a non-GAAP basis. A discussion of Marvell's use of these non-GAAP financial measures is set forth below. Reconciliations of GAAP net income (loss) to non-GAAP net income for the three months ended May 3, 2008, February 2, 2008 and April 28, 2007, 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 and restructuring costs.

Non-GAAP gross margin for the first quarter of fiscal 2009 was 52 percent, compared to non-GAAP gross margin of 48.7 percent for the fourth quarter of fiscal 2008 and non-GAAP gross margin of 48.9 percent for the first quarter of fiscal 2008.

During the first fiscal quarter Marvell received a one-time payment of $24.5 million from its directors and officers liability insurers in connection with pending securities litigation related to Marvell's past stock option granting practices, including the previously disclosed tentative settlement of the shareholder derivative litigation. The payment was credited against the Company's fiscal first quarter 2009 operating expenses. This one-time payment offsets the previously disclosed $16 million accrual charge taken during the fourth fiscal quarter of 2008.

Separately, as previously disclosed, during the first fiscal quarter 2009 Marvell entered into a settlement with the Securities and Exchange Commission (SEC) in connection with the SEC's investigation into the Company's past stock option granting practices. Marvell agreed to pay a $10 million civil penalty in connection with the settlement, which was charged to operating expenses during the first fiscal quarter.

Non-GAAP net income increased to $150.4 million, or $0.24 per share (diluted) for the first quarter of fiscal 2009, a 381 percent increase as compared with non-GAAP net income of $31.3 million, or $0.05 per share (diluted), for the first quarter of fiscal 2008 and an increase of 22 percent over non-GAAP net income of $122.9 million, or $0.20 per share (diluted) for the fourth quarter of fiscal 2008.

Shares used to compute non-GAAP net income per diluted share for the first quarter of fiscal 2009 was 624 million shares, compared with 634 million shares for the first quarter of fiscal 2008 and 627 million shares for the fourth quarter of fiscal 2008.

Marvell will be conducting a conference call today at 1:45 p.m. PST to discuss its first quarter business. The call is being webcast by Thomson/CCBN and can be accessed at Marvell's web site at http://www.marvell.com .