Marvell Technology Group Ltd. Reports Fiscal Second Quarter Results

Revenue: $640.6 Million, Up 23 Percent Sequentially

SANTA CLARA, Calif., Aug. 27 /PRNewswire-FirstCall/ -- Marvell Technology
Group Ltd. (Nasdaq: MRVL), a world leader in storage, communications and
consumer silicon solutions, today reported financial results for the second
quarter of fiscal 2010, ended August 1, 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20070411/SFW034LOGO)

Net revenue for the second quarter of fiscal 2010 was $640.6 million, a 23
percent sequential increase from $521.4 million in the first quarter of fiscal
2010, ended May 2, 2009 and a 24 percent decrease from $842.6 million in the
second quarter of fiscal 2009, ended August 2, 2008.

GAAP net income was $58.5 million, or $0.09 per share (diluted), for the
second quarter of fiscal 2010, as compared to a GAAP net loss of $111.5
million, or $0.18 per share (diluted), for the first quarter of fiscal 2010.
For the second quarter of fiscal 2009 GAAP net income was $71.4 million, or
$0.11 per share (diluted).

Non-GAAP net income was $118.7 million, or $0.18 per share (diluted), for the
second quarter of fiscal 2010, an increase of 272 percent from non-GAAP net
income of $31.9 million, or $0.05 per share (diluted), for the first quarter
of fiscal 2010, and a 23 percent decrease compared with non-GAAP net income of
$154.0 million, or $0.24 per share (diluted), for the second quarter of fiscal
2009.

"We are pleased with the results reported for the second quarter of fiscal
2010," said Dr. Sehat Sutardja, Marvell Chairman and Chief Executive Officer.
"Our sequential revenue growth reflects both an improving economy and the
acceptance by customers of our new and existing products. Additionally, the
financial discipline we have adopted continued to deliver positive benefits
during the second quarter, allowing us to achieve our long-term profitability
and cash flow targets well ahead of schedule."

Marvell reports net income or loss, basic and diluted net income or loss per
share in accordance with U.S. generally accepted accounting principles (GAAP)
and on a non-GAAP basis as outlined below. Reconciliations of GAAP net income
or loss to non-GAAP net income for the three months ended August 1, 2009, May
2, 2009 and August 2, 2008, respectively, appear in the financial statements
below.

GAAP gross margin for the second quarter of fiscal 2010 was 55.0 percent,
compared to 50.6 percent for the first quarter of fiscal 2010 and 51.8 percent
for the second quarter of fiscal 2009. Non-GAAP gross margin for the second
quarter of fiscal 2010 increased to 55.3 percent, compared to 51.6 percent for
the first quarter of fiscal 2010 and 52.3 percent for the second quarter of
fiscal 2009.

Shares used to compute GAAP net income per diluted share for the second
quarter of fiscal 2010 were 648 million shares, compared with 619 million
shares in the first quarter of fiscal 2010 and 638 million shares in the
second quarter of fiscal 2009. Shares used to compute non-GAAP net income per
diluted share for the second quarter of fiscal 2010 were 652 million shares,
compared with 637 million shares for the first quarter of fiscal 2010 and 640
million shares for the second quarter of fiscal 2009.

Cash flow from operations for the second quarter of fiscal 2010 was $182.3
million, up 26 percent sequentially from $144.5 million reported in the first
quarter of fiscal 2010 and down less than one percent from $182.9 million in
the second quarter of fiscal 2009. Free cash flow, defined as cash flow from
operations less capital expenditures and purchases of IP licenses, was $175.3
million, up 33 percent sequentially from $131.8 million in the first quarter
of fiscal 2010 and up 6 percent from $165.6 million in the second quarter of
fiscal 2009.

Conference Call
Marvell will be conducting a conference call on August 27, 2009 at 1:45 p.m.
PDT to discuss results for the second quarter ended August 1, 2009.
Interested parties may dial-in to the conference call at 1-800-510-9661,
pass-code 55940109. The call is being webcast by ThomsonReuters and can be
accessed at Marvell's website under the Investor Events section of the
Investor Relations page at http://www.marvell.com/investors/events.jsp.
Replay on the internet will be available following the call until September
24, 2009.

Discussion of Non-GAAP Financial Measures
Non-GAAP financial measures exclude stock-based compensation expense as well
as charges related to acquisitions, restructuring, gains and other charges
that are driven primarily by discrete events that management does not consider
to be directly related to Marvell's core operating performance. Non-GAAP
earnings per share is calculated by dividing non-GAAP net income by non-GAAP
weighted average shares outstanding (diluted). For purposes of calculating
non-GAAP earnings per share, the GAAP weighted average shares outstanding
(diluted) is adjusted to exclude the potential benefits of compensation costs
expected to be incurred in future periods, but not yet recognized in the
financial statements. The expected compensation costs are treated as proceeds
assumed to be used to repurchase shares under the GAAP treasury stock method.

Marvell believes that the presentation of non-GAAP financial measures provide
important supplemental information to management and investors regarding
financial and business trends relating to Marvell's financial condition and
results of operations. While Marvell uses non-GAAP financial measures as a
tool to enhance its understanding of certain aspects of its financial
performance, Marvell does not consider these measures to be a substitute for,
or superior to, the information provided by GAAP financial measures.
Consistent with this approach, Marvell believes that disclosing non-GAAP
financial measures to the readers of its financial statements provides such
readers with useful supplemental data that, while not a substitute for GAAP
financial measures, allows for greater transparency in the review of its
financial and operational performance. For further information regarding why
Marvell believes that these non-GAAP measures provide useful information to
investors, the specific manner in which management uses these measures, and
some of the limitations associated with the use of these measures, please
refer to Marvell's Current Report on Form 8-K filed today with the SEC. The
Form 8-K is available on the SEC's website at www.sec.gov as well as on the
Marvell website in the Investor Relations section at www.marvell.com.

About Marvell
Marvell Technology (NASDAQ: MRVL) is a global leader in the development of
storage, communications and consumer silicon solutions. Marvell's diverse
product portfolio includes switching, transceiver, communications controller,
wireless, and storage solutions that power the entire communications
infrastructure, including enterprise, metro, home, and storage networking. As
used in this release, the terms "Company" and "Marvell" refer to Marvell
Technology Group Ltd. and its subsidiaries. For more information visit
www.marvell.com

Forward-Looking Statements
This press release contains forward-looking statements that involve risks and
uncertainties, including statements regarding the Company's expectations
regarding the economy and acceptance by customers of the Company's new and
existing products; and statements concerning the Company's use of non-GAAP
financial measures as important supplemental information. These statements
are not guarantees of results and should not be considered as an indication of
future performance. Actual events or results may differ materially from those
described in this document due to a number of risks and uncertainties,
including, among others, the Company's reliance on major customers and
suppliers; market acceptance of new products; uncertainty in the worldwide
economic environment; successful execution of the Company's restructuring plan
and other risks detailed in Marvell's SEC filings. When Marvell files its
Form 10-Q for the second quarter of fiscal 2010, the financial statements may
differ from the results disclosed in this press release because judgments and
estimates that management used in preparing the financial results reported in
this press release may need to be updated to the date of the filing. The
Company's results also remain subject to review by the Company's independent
registered public accounting firm. For other factors that could cause
Marvell's results to vary from expectations, please see the risk factors
identified in Marvell's latest Annual Report on Form 10-K for the year end
January 31, 2009, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K, as filed with the SEC and other factors detailed from time to time in
Marvell's filings with the SEC. Marvell undertakes no obligation to revise or
update publicly any forward-looking statements.

Marvell Technology Group Ltd.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)

Three Months Ended Six Months Ended
------------------ ----------------
August 1, May 2, August 2, August 1, August 2,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----

Net revenue $640,620 $521,434 $842,575 $1,162,054 $1,646,650
Cost of goods
sold 288,059 257,630 405,913 545,689 794,755
------- ------- ------- ------- -------
Gross profit 352,561 263,804 436,662 616,365 851,895
Operating
expenses:
Research and
development 192,664 200,249 249,714 392,913 488,189
Selling and
marketing 32,384 32,646 41,834 65,030 87,922
General and
administrative 28,562 101,496 30,989 130,058 43,940
Amortization and
write-off of
acquired
intangible
assets 26,446 30,356 34,988 56,802 70,235
Restructuring 4,956 8,336 - 13,292 -
----- ----- - ------ ------
Total
operating
expenses 285,012 373,083 357,525 658,095 690,286
------- ------- ------- ------- -------
Operating income
(loss) 67,549 (109,279) 79,137 (41,730) 161,609
Interest and other
income (expense),
net 279 (160) (754) 119 (5,446)
--- ---- ---- --- ------
Income (loss)
before income
taxes 67,828 (109,439) 78,383 (41,611) 156,163
Provision for
income taxes 9,335 2,018 7,016 11,353 14,857
----- ----- ----- ------ ------
Net income (loss) $58,493 $(111,457) $71,367 (52,964) 141,306
======= ========= ======= ======= =======

Basic net income
(loss) per share $0.09 $(0.18) $0.12 $(0.09) $0.23
===== ====== ===== ====== =====
Diluted net income
(loss) per share $0.09 $(0.18) $0.11 $(0.09) $0.22
===== ====== ===== ====== =====

Shares used in
computing basic
earnings per
share 620,881 618,677 606,860 619,779 604,041
Shares used in
computing
diluted
earnings per
share 648,110 618,677 637,832 619,779 631,091

Marvell Technology Group Ltd.
Reconciliation of Non-GAAP Adjustments
(Unaudited)
(In thousands, except per share amounts)

Reconciliation of GAAP net income (loss) to non-GAAP net income:

Three Months Ended Six Months Ended
------------------ ----------------
August 1, May 2, August 2, August 1, August 2,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----

GAAP net
income
(loss) $58,493 $(111,457) $71,367 $(52,964) $141,306
Stock-based
compensation 30,015 31,648 47,627 61,663 92,853
Amortization
and write-
off of
acquired
intangible
assets 26,446 30,356 34,988 56,802 70,235
Restructuring 4,956 8,336 - 13,292 -
Legal/Tax
settlements
(a) (1,202) 72,000 - 70,798 -
Other (a) - 990 - 990 -
--- --- --- --- ---
Non-GAAP net
income $118,708 $31,873 $153,982 $150,581 $304,394
======== ======= ======== ======== ========

GAAP
weighted
average
shares -
diluted 648,110 618,677 637,832 619,779 631,091
Non-GAAP
adjustment 3,651 17,928 2,315 24,404 1,203
----- ------ ----- ------ -----
Non-GAAP
weighted
average
shares
diluted (b) 651,761 636,605 640,147 644,183 632,294
======= ======= ======= ======= =======

GAAP diluted
net income
(loss) per
share $0.09 $(0.18) $0.11 $(0.09) $0.22
===== ====== ===== ====== =====
Non-GAAP
diluted net
income per
share $0.18 $0.05 $0.24 $0.23 $0.48
===== ===== ===== ===== =====

GAAP gross
profit: $352,561 $263,804 $436,662 $616,365 $851,895
Stock-based
compensation 1,810 4,116 3,755 5,926 6,828
Other
(a) - 990 - 990 -
--- --- --- --- ---
Non-GAAP gross
profit $354,371 $268,910 $440,417 $623,281 $858,723
======== ======== ======== ======== ========

GAAP gross
profit as a
% of revenue 55.0% 50.6% 51.8% 53.0% 51.7%
Stock-based
compensation 0.3% 0.8% 0.5% 0.5% 0.4%
Other
(a) - 0.2% - 0.1% -
--- --- --- --- ---
Non-GAAP gross
profit 55.3% 51.6% 52.3% 53.6% 52.1%
==== ==== ==== ==== ====

GAAP research
and
development: $192,664 $200,249 $249,714 $392,913 $488,189
Stock-based
compensation (22,193) (21,737) (32,998) (43,930) (62,930)
Payroll
tax
penalty 1,820 - - 1,820 -
----- --- --- ----- ---
Non-GAAP
research
and
development $172,291 $178,512 $216,716 $350,803 $425,259
======== ======== ======== ======== ========

GAAP
selling
and
marketing: $32,384 $32,646 $41,834 $65,030 $87,922
Stock-based
compensation (3,659) (3,711) (6,159) (7,370) (13,507)
Payroll
tax
penalty 659 - - 659 -
--- --- --- --- ---
Non-GAAP
selling
and
marketing $29,384 $28,935 $35,675 $58,319 $74,415
======= ======= ======= ======= =======

GAAP general and
administrative: $28,562 $101,496 $30,989 $130,058 $43,940
Stock-based
compensation (2,353) (2,084) (4,715) (4,437) (9,588)
Legal
settlement - (72,000) - (72,000) -
Payroll
tax
penalty 158 - - 158 -
--- --- --- --- ---
Non-GAAP general
And
administrative $26,367 $27,412 $26,274 $53,779 $34,352
======= ======= ======= ======= =======

(a) Fiscal quarter ended August 1, 2009 includes the net impact of our
settlement with the IRS related to our historical stock option
granting practices. As the composition of the settlement was
different than the initial reserve, the net benefit includes a $2.6
million benefit to operating expense with an offset of $1.4 million
of interest expense. Fiscal quarter ended May 2, 2009 includes a
$72.0 million charge recorded in connection with the settlement of a
class action securities litigation and $990K of underutilization
charges recorded in connection with the rampdown of the Malaysia test
operations.

(b) For purposes of calculating non-GAAP diluted net income per share,
the GAAP diluted weighted average shares outstanding is adjusted to
exclude the benefits of SFAS 123R compensation costs attributable to
future services and not yet recognized in the financial statements
that are treated as proceeds assumed to be used to repurchase shares
under the GAAP treasury method.

Marvell Technology Group Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)

August 1, January 31,
Assets 2009 2009
---- ----
Current assets:
Cash, cash
equivalents, and short-
term investments $1,279,307 $951,909
Accounts receivable,
net 328,462 222,101
Inventories 211,383 310,654
Prepaid expenses,
deferred income taxes
and other current
assets 70,770 75,651
------ ------
Total current assets 1,889,922 1,560,315
Property and equipment,
net 352,719 390,853
Long-term investments 39,333 40,541
Goodwill and acquired
intangible assets, net 2,227,440 2,284,164
Other non-current assets 132,117 138,327
------- -------
Total assets $4,641,531 $4,414,200
========== ==========

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $268,541 $139,028
Accrued liabilities 248,122 175,135
Income taxes payable 48,554 35,803
Deferred income 42,027 57,895
Current portion of
capital lease
obligations 1,862 1,787
----- -----
Total current
liabilities 609,106 409,648
Capital lease
obligations, net of
current portion 1,501 2,451
Other long-term
liabilities 173,852 173,034
------- -------
Total liabilities 784,459 585,133
------- -------

Shareholders' equity:
Common stock 1,245 1,233
Additional paid-in
capital 4,453,177 4,372,265
Accumulated other
comprehensive income
(loss) (673) (718)
Accumulated deficit (596,677) (543,713)
-------- --------
Total shareholders'
equity 3,857,072 3,829,067
--------- ---------
Total liabilities
and shareholders'
equity $4,641,531 $4,414,200
========== ==========

Marvell Technology Group Ltd.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)

Three Months Ended Six Months Ended
------------------ ----------------
August 1, August 2, August 1, August 2,
2009 2008 2009 2008
---- ---- ---- ----
Cash flows from
operating activities:
Net income (loss) $58,493 $71,367 $(52,964) $141,306
Adjustments to
reconcile net
income (loss)
to net cash
provided by
operating
activities:
Depreciation
and
amortization 25,030 28,032 50,405 56,650
Stock-based
compensation 30,015 47,627 61,663 92,853
Amortization
and write-off
of acquired
intangible
assets 26,446 34,988 56,802 70,235
Fair market
value
adjustment to
Intel
inventory sold (1,733) (4,374) (3,076) (10,757)
Net impact of
derivative
contracts (1,302) - (827) -
Excess tax
benefits from
stock-based
compensation (40) (325) (69) (494)
Deferred
income taxes 5,868 - 5,868 -
Changes in assets
and liabilities,
net of assets
acquired and
liabilities
assumed in
acquisitions:
Restricted
cash - - - (24,500)
Accounts
receivable (43,095) (100,474) (106,361) (138,626)
Inventories (5,694) 47,409 100,587 103,327
Prepaid
expenses and
other assets (4,582) 10,344 9,748 42,810
Accounts
payable 103,043 68,954 133,781 5,878
Accrued
liabilities
and other 6,079 (15,192) 69,059 (33,999)
Accrued
employee
compensation (14,007) (6,968) (974) 9,995
Income taxes
payable 3,585 (842) 4,928 5,814
Deferred
income (5,773) 2,338 (1,708) (7,415)
------ ----- ------ ------
Net cash
provided
by
operating
activities 182,333 182,884 326,862 313,077
Cash flows from
Investing
activities:
Purchases of
investments - (46) - (10,172)
Sales and
maturities of
short-term and
long-term
investments 50 - 50 23,793
Purchases of
technology
licenses (3,250) (1,250) (12,550) (1,250)
Purchases of
property and
equipment (3,765) (16,010) (7,179) (46,532)
------ ------- ------ -------
Net cash
used in
investing
activities (6,965) (17,306) (19,679) (34,161)
Cash flows from
financing activities:
Proceeds from
the issuance
of common
shares 20,636 50,602 21,021 67,656
Principal
payments on
capital lease
and debt
obligations (442) (101,280) (875) (103,405)
Excess tax
benefits from
stock-based
compensation 40 325 69 494
-- --- -- ---
Net cash
provided
by (used
in)
financing
activities 20,234 (50,353) 20,215 (35,255)
------ ------- ------ -------
Net increase in
cash and cash
equivalents 195,602 115,225 327,398 243,661
------- ------- ------- -------
Cash and cash
equivalents at
beginning of
period 1,059,205 744,084 927,409 615,648
--------- ------- ------- -------
Cash and cash
equivalents at
end of period $1,254,807 $859,309 $1,254,807 $859,309
========== ======== ========== ========

For further information, contact:
Jeff Palmer Tom Hayes
Investor Relations Corporate Communications
408-222-8373 408-222-2815
jpalmer@marvell.com tom@marvell.com

SOURCE Marvell Technology Group Ltd.

Jeff Palmer, Investor Relations, +1-408-222-8373, jpalmer@marvell.com, or Tom
Hayes, Corporate Communications, +1-408-222-2815, tom@marvell.com, both of
Marvell Technology Group Ltd.