Marvell Revises, Restates
The anticipated decline in net revenue is largely due to lower than expected demand from a number of the Company's hard disk drive customers. The Company believes the shortfall of demand is primarily due to a combination of weaker than normal seasonal shipments in the personal computer market as well as excess inventory held by some of its significant storage customers.
Additionally, the Company also expects a significant increase in its general and administrative expenses in its third quarter of fiscal 2007 due to higher than expected costs related to its previously announced and ongoing internal review by a special committee of its Board of Directors relating to the Company's historical stock option practices and related accounting matters.
"Although we are disappointed to lower our revenue projections, we remain very confident with our growth strategies and our strong leadership position in our markets" stated Dr. Sehat Sutardja, Marvell's President and CEO. "We view this decline in our revenues as a short term event and we remain focused on continuing to aggressively invest in our business and to expand the reach of our technology into a growing number of high volume markets."
In a separate release:
SANTA CLARA, Calif. -- Marvell Technology Group Ltd. (Nasdaq: MRVL) today announced an update in its internal review of stock option grant practices and related accounting matters.
As previously announced, a special committee of the Board of Directors has been conducting an internal review relating to the Company's historical stock option practices and related accounting matters. Although the committee is continuing its review of these matters, the committee has reached a preliminary conclusion that the actual measurement dates for financial accounting purposes of certain stock option grants awarded in the past likely differ from the recorded grant dates for such awards.
Based on the report of the special committee, the Board of Directors has concluded that the Company will need to restate historical financial statements to record additional non-cash charges for stock-based compensation expense related to certain past option grants. Marvell has not yet been able to determine the amount of these charges, the resulting tax and accounting impact of these actions, or which specific reporting periods require restatement. Accordingly, the financial statements and all earnings press releases and similar communications issued by the Company relating to periods beginning on or after its initial public offering in June 2000 should no longer be relied upon. Marvell intends to file its restated financial statements as soon as practicable after the completion of the special committee's review.
Marvell Technology Group Ltd. (Nasdaq: MRVL)