Liquidity and Capital Resources for Marvell_Technology

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Marvell Technology Group (MRVL)

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MRVL » Topics » Liquidity and Capital Resources

This excerpt taken from the MRVL 10-Q filed Jun 11, 2009.

Liquidity and Capital Resources

Our principal source of liquidity as of May 2, 2009 consisted of $1,083.7 million of cash, cash equivalents, restricted cash and short-term investments of which $24.5 million is restricted for use in a legal settlement. Since our inception, we have financed our operations through a combination of sales of equity securities, debt financing and cash generated by operations.

Net Cash Provided by Operating Activities

Net cash provided by operating activities was $144.5 million for the three months ended May 2, 2009 compared to net cash provided by operating activities of $130.2 million for the three months ended May 3, 2008. The increase in cash from operations in the three months ended May 2, 2009 was primarily due to significant improvements in working capital, including a decrease in inventories of $106.3 million primarily due to our efforts to control our inventory levels as a result of the current economic environment. Accrued liabilities and other increased primarily due to a legal settlement in connection with the class action securities litigation. In addition, accounts payable increased by $30.7 million due to efforts to extend payment periods to vendors. Finally, accrued employee compensation increased $13.0 million due primarily to an increase in employee stock purchase plan contributions and prepaid and other assets decreased $14.3 million due to a decrease in the receivable from one of our foundries and amortization of CAD licenses.

Significant working capital changes offsetting positive cash flows for the three months ended May 2, 2009 related to an increase in accounts receivable of $63.3 million due primarily to the timing of revenue recorded as we experience much of the increase in revenue late in the quarter.

Significant working capital change contributing to positive cash flow in the three months ended May 3, 2008 was the decrease in inventories of $55.9 million. The decrease in inventories was primarily due to the completion of contractual obligations under the original supply agreement with Intel as well as concentrated efforts to reduce inventory levels. Also contributing to the increase in cash flows was a decrease in prepaid expenses and other assets of $32.5 million primarily due to the utilization of prepaid foundry capacity and prepaid wafers. In addition, accrued employee compensation increased $16.9 million due primarily to an increase in employee stock purchase plan contributions and the timing of accrued salary.

Significant working capital changes offsetting positive cash flows in the three months ended May 3, 2008 included a decrease in accounts payable of $63.1 million due to the timing of payments and a decrease in accrued liabilities and other of $18.8 million attributable to decreased in accrued sales rebates and accrued legal fees. Accounts receivable increased $38.2 million due primarily to higher revenues in the period. Restricted cash increased $24.5 million due to proceeds from settlement with our directors’ and officers’ insurance carriers with the settlement requiring the proceeds to be used towards the consolidated derivative actions settlement and any future class action securities litigation settlement.

Net Cash Used in Investing Activities

Net cash used in investing activities was $12.7 million for the three months ended May 2, 2009 compared to $16.9 million for the three months ended May 3, 2008. The net cash used in investing activities for the three months ended May 2, 2009 was due to purchases of property and equipment of $3.4 million and purchases of technology licenses for $9.3 million. The net cash used in investing activities for the three months ended May 3, 2008 was due to purchases of property and equipment of $30.5 million and purchases of investments of $10.1 million, partially offset by sales and maturities of investments of $23.8 million.

Net Cash Provided by (Used in) Financing Activities

Net cash used in financing activities was $19,000 for the three months ended May 2, 2009 compared to net cash provided by financing activities of $15.1 million for the three months ended May 3, 2008. For the three months ended May 2, 2009 and May 3, 2008, net cash used in financing activities was attributable to principal payments on debt obligations and capital leases partially offset by proceeds from the issuance of common shares under our stock option plans.

These excerpts taken from the MRVL 10-K filed Apr 1, 2009.

Liquidity and Capital Resources

Our principal source of liquidity as of January 31, 2009 consisted of $951.9 million of cash, cash equivalents, and restricted cash. Since our inception, we have financed our operations through a combination of sales of equity securities, debt financing and cash generated by operations.

Liquidity and Capital Resources

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Our principal source of liquidity as of January 31, 2009 consisted of $951.9 million of cash, cash equivalents, and restricted cash. Since our
inception, we have financed our operations through a combination of sales of equity securities, debt financing and cash generated by operations.

SIZE="2">Net Cash Provided by Operating Activities

Net cash provided by operating activities was $680.7 million for
fiscal 2009 compared to $177.4 million for fiscal 2008 and $337.3 million for fiscal 2007. The cash inflows from operations in fiscal 2009 were primarily due to net income of $147.2 million adjusted for non-cash items and changes in
working capital. Non-cash

charges in fiscal 2009 included $153.3 million related to amortization and write-off of purchased intangibles, $112.8 million of depreciation and
amortization and $177.1 million of stock-based compensation.

Significant working capital changes contributing to positive cash flows in
fiscal 2009 included a decrease in inventories of $126.9 million primarily due to the completion of contractual obligations under the original supply agreement with Intel in connection with our acquisition of the ICAP Business as well as
concentrated efforts to reduce inventory levels. The number of days in inventory increased at the end of fiscal 2009 to 112 days from 94 days at the end of fiscal 2008 due to the lower revenue levels at the end of the respective fiscal years.
Also contributing to positive cash flow was a decrease in accounts receivable of $109.9 million due primarily to lower revenue recorded toward the end of the quarter as well as the timing of payments received from customers. Days sales outstanding,
or DSO, increased to 39 days at the end of fiscal 2009 compared to 36 days at the end of fiscal 2008. Many of our larger customers have regularly scheduled payment dates that fall immediately before or after our fiscal quarter ends. As a result, our
DSO may fluctuate depending on the timing of large payments made by our customers. Significant working capital changes offsetting positive cash flow in fiscal 2009 included a decrease in accounts payable of $88.8 million due to lower manufacturing
volumes and overall activity at year end as we tried to control inventory levels due to lower revenue levels. Also contributing to the use of cash in operating activities was a decrease in accrued liabilities and other of $36.7 million. The decrease
in other accrued liabilities and other was primarily attributable to the payment of accrued contingent consideration as certain milestones were met related to various acquisitions. Accrued employee compensation also decreased by $27.0 million
due to lower bonus accruals for comparable periods.

Net cash provided by operating activities was $177.4 million for fiscal 2008
compared to $337.3 million for fiscal 2007 and $402.3 million for fiscal 2006. The cash inflows from operations in fiscal 2008 were primarily due to net loss adjusted for non-cash items and changes in working capital. Non-cash charges in
fiscal 2007 included $155.7 million related to amortization of acquired intangible assets and other, $105.8 million of depreciation and amortization expense and $231.0 million of stock-based compensation. Offsetting positive non-cash
charges was $109.3 million of fair market value adjustments to Intel inventory sold.

Significant working capital changes contributing
to positive cash flows in fiscal 2008 included a decrease in prepaid expenses and other assets primarily due to the utilization of prepaid foundry capacity and prepaid wafers. Also contributing to positive cash flow was an increase in deferred
income due to the increased levels of inventory at distributors due to the increase in revenue. Significant working capital changes offsetting positive cash flows in fiscal 2008 included an increase inventories of $202.3 million to support
increased revenue levels and from purchases of inventory under the supply agreement for which we plan to sell over periods in excess of one year. The number of days in inventory increased at the end of fiscal 2008 to 94 days from 69 days
at the end of fiscal 2007 due to the higher comparable inventory balance at the end of each respective fiscal year.

During fiscal 2007,
net cash provided by operating activities was $337.3 million for fiscal 2007 compared to $402.3 million for fiscal 2006 and $221.5 million for fiscal 2005. The cash inflows from operations in fiscal 2007 were primarily the result of
our generation of income during the period and changes in working capital. Non-cash charges in fiscal 2007 included $110.0 million related to amortization of acquired intangible assets and other, $77.2 million of depreciation and
amortization expense, $192.1 million of stock-based compensation, and $77.8 million of acquired IPRD. Significant working capital changes contributing to positive cash flows in fiscal 2007 included an increase of $43.9 million in
accounts payable resulting primarily from amounts due to our suppliers relating to increased inventory purchases during fiscal 2007 as well as higher overall spending activity related to our expanding operations, an increase of $33.5 million in
accrued employee compensation resulting from the increase in number of employees and related benefit accruals, an increase of $30.2 million in income tax payable resulting from taxable income for fiscal 2007 and an increase of
$16.7 million in deferred income resulting from an increase in the number of distributors as well as increased shipments of product to our distributors.

Significant working capital changes offsetting positive cash flows in fiscal 2007 included an increase in
prepaid and other assets of $113.2 million due primarily to $68.2 million in payments in connection with a capacity reservation agreement with a foundry and a $19.3 million receivable from a foundry for reimbursements under a capacity
reservation agreement. Also contributing to working capital changes offsetting positive cash flow in the fiscal 2007 was an increase in accounts receivable of $83.1 million primarily due to higher net revenue in fiscal 2007 as compared to
fiscal 2006. Accounts receivable increased and the days sales outstanding, or DSO, metric, which is calculated on a quarterly basis, increased to 48 days at the end of fiscal 2007 as compared to 45 days at the end of fiscal 2006. Many of
our larger customers have regularly scheduled payment dates with some of the dates falling immediately before or after our fiscal year-end. As a result, our accounts receivable balance and DSO may fluctuate depending on the timing of large payments
by our customers. Accrued liabilities and other also increased by $22.8 million in fiscal 2007 due to higher accruals for legal fees, royalties, interest expense and an accrual for contingent acquisition payment.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Due to the nature of our business, we experience working capital needs for accounts receivable and inventory. We typically bill customers on an open
account basis with net thirty to sixty day payment terms. If our sales levels were to increase as they have in prior fiscal years, it is likely that our levels of accounts receivable would also increase. Our levels of accounts receivable would also
increase if customers delayed their payments or if we offered extended payment terms to our customers. Additionally, in order to maintain an adequate supply of product for our customers, we must carry a certain level of inventory. Our inventory
level may vary based primarily upon orders received from our customers and our forecast of demand for these products, as well as the initial production ramp for significant design wins. Other considerations in determining inventory levels may
include the product life cycle stage of our products, foundry lead times and available capacity and competitive situations in the marketplace. These considerations are balanced against risk of obsolescence or potentially excess inventory levels.

This excerpt taken from the MRVL 10-Q filed Dec 11, 2008.

Liquidity and Capital Resources

Our principal source of liquidity as of November 1, 2008 consisted of $1,044.5 million of cash, cash equivalents, restricted cash and short-term investments of which $24.5 million is restricted for use in a legal settlement. Since our inception, we have financed our operations through a combination of sales of equity securities, debt financing and cash generated by operations.

This excerpt taken from the MRVL 10-Q filed Sep 10, 2008.

Liquidity and Capital Resources

Our principal source of liquidity as of August 2, 2008 consisted of $888.9 million of cash, cash equivalents, restricted cash and short-term investments of which $24.5 million is restricted for use in a legal settlement. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

This excerpt taken from the MRVL 10-Q filed Jun 6, 2008.

Liquidity and Capital Resources

Our principal source of liquidity as of May 3, 2008 consisted of $773.6 million of cash, cash equivalents, restricted cash and short-term investments of which $24.5 million will be used in a legal settlement. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

These excerpts taken from the MRVL 10-K filed Mar 28, 2008.

Liquidity and Capital Resources

Our principal source of liquidity as of February 2, 2008 consisted of $630.9 million of cash, cash equivalents and short-term investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

Liquidity and Capital Resources

Our principal source of liquidity as of February 2, 2008 consisted of $630.9 million of cash, cash equivalents and short-term
investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

This excerpt taken from the MRVL 10-Q filed Dec 6, 2007.

Liquidity and Capital Resources

Our principal source of liquidity as of October 27, 2007 consisted of $529.5 million of cash, cash equivalents and short-term investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

This excerpt taken from the MRVL 10-Q filed Sep 6, 2007.

Liquidity and Capital Resources

Our principal source of liquidity as of July 28, 2007 consisted of $496.4 million of cash, cash equivalents and short-term investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

This excerpt taken from the MRVL 10-Q filed Jul 9, 2007.

Liquidity and Capital Resources

Our principal source of liquidity as of April 28, 2007 consisted of $592.9 million of cash, cash equivalents and short-term investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

This excerpt taken from the MRVL 10-K filed Jul 2, 2007.

Liquidity and Capital Resources

Our principal source of liquidity as of January 27, 2007 consisted of $596.4 million of cash, cash equivalents and short-term investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

This excerpt taken from the MRVL 10-Q filed Jul 2, 2007.

Liquidity and Capital Resources

Our principal source of liquidity as of July 29, 2006 consisted of $797.7 million of cash, cash equivalents and short-term investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

This excerpt taken from the MRVL 10-Q filed Jul 2, 2007.

Liquidity and Capital Resources

Our principal source of liquidity as of October 28, 2006 consisted of $875.7 million of cash, cash equivalents and short-term investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

This excerpt taken from the MRVL 10-Q filed Jul 2, 2007.

Liquidity and Capital Resources

Our principal source of liquidity as of April 29, 2006 consisted of $921.4 million of cash, cash equivalents and short-term investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

This excerpt taken from the MRVL 10-Q filed Jun 8, 2006.

Liquidity and Capital Resources

Our principal source of liquidity as of April 30, 2006 consisted of $921.4 million of cash, cash equivalents and short-term investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

This excerpt taken from the MRVL 10-K filed Apr 13, 2006.

Liquidity and Capital Resources

Our principal source of liquidity as of January 31, 2006 consisted of $921.0 million of cash, cash equivalents and short-term investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

This excerpt taken from the MRVL 10-Q filed Dec 7, 2005.

Liquidity and Capital Resources

Our principal source of liquidity as of October 31, 2005 consisted of $914.9 million of cash, cash equivalents and short-term investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

This excerpt taken from the MRVL 10-Q filed Sep 8, 2005.

Liquidity and Capital Resources

Our principal source of liquidity as of July 31, 2005 consisted of $847.1 million of cash, cash equivalents and short-term investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

This excerpt taken from the MRVL 10-Q filed Jun 9, 2005.

Liquidity and Capital Resources

Our principal source of liquidity as of April 30, 2005 consisted of $726.7 million of cash, cash equivalents and short-term investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

This excerpt taken from the MRVL 10-K filed Apr 14, 2005.

Liquidity and Capital Resources

Our principal source of liquidity as of January 31, 2005 consisted of $660.0 million of cash, cash equivalents and short-term investments. Since our inception, we have financed our operations through a combination of sales of equity securities, cash generated by operations and cash assumed in acquisitions.

Marvell Technology Group (MRVL)

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