Marvell Technology Group Ltd. Reconciliations from GAAP to Non-GAAP (Unaudited) (In thousands, except per share amounts) | ||||||||||||||||||||
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| Three Months Ended |
| Six Months Ended | ||||||||||||||||
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| August 3,
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| May 4,
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| August 4,
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| August 3,
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| August 4,
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GAAP gross profit: |
| $ | 350,702 |
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| $ | 361,428 |
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| $ | 377,110 |
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| $ | 712,130 |
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| $ | 752,803 |
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Special items: |
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Share-based compensation |
| 3,662 |
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| 2,926 |
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| 4,748 |
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| 6,588 |
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| 6,653 |
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Amortization of acquired intangible assets |
| 61,132 |
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| 59,906 |
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| 18,984 |
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| 121,038 |
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| 18,984 |
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Other cost of goods sold (a) |
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| 450 |
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| 22,933 |
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| 450 |
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| 22,933 |
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Total special items |
| 64,794 |
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| 63,282 |
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| 46,665 |
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| 128,076 |
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| 48,570 |
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Non-GAAP gross profit |
| $ | 415,496 |
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| $ | 424,710 |
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| $ | 423,775 |
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| $ | 840,206 |
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| $ | 801,373 |
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GAAP gross margin |
| 53.4 | % |
| 54.6 | % |
| 56.7 | % |
| 54.0 | % |
| 59.3 | % | |||||
Non-GAAP gross margin |
| 63.3 | % |
| 64.1 | % |
| 63.7 | % |
| 63.7 | % |
| 63.1 | % | |||||
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Total GAAP operating expenses |
| $ | 396,930 |
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| $ | 382,554 |
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| $ | 385,401 |
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| $ | 779,484 |
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| $ | 636,015 |
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Special items: |
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Share-based compensation |
| (60,014) |
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| (55,672) |
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| (68,675) |
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| (115,686) |
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| (90,622) |
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Restructuring related charges (b) |
| (16,585) |
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| (5,682) |
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| (35,415) |
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| (22,267) |
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| (36,982) |
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Amortization of acquired intangible assets |
| (19,835) |
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| (19,834) |
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| (6,955) |
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| (39,669) |
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| (6,955) |
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Other operating expenses (c) |
| (20,676) |
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| (6,569) |
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| (28,229) |
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| (27,245) |
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| (43,481) |
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Total special items |
| (117,110) |
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| (87,757) |
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| (139,274) |
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| (204,867) |
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| (178,040) |
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Total non-GAAP operating expenses |
| $ | 279,820 |
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| $ | 294,797 |
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| $ | 246,127 |
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| $ | 574,617 |
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| $ | 457,975 |
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GAAP operating margin |
| (7.0) | % |
| (3.2) | % |
| (1.2) | % |
| (5.1) | % |
| 9.2 | % | |||||
Other cost of goods sold (a) |
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| 0.1 | % |
| 3.5 | % |
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| 1.9 | % | |||||
Share-based compensation |
| 9.7 | % |
| 8.8 | % |
| 11.0 | % |
| 9.3 | % |
| 7.7 | % | |||||
Restructuring related charges (b) |
| 2.5 | % |
| 0.9 | % |
| 5.3 | % |
| 1.7 | % |
| 2.9 | % | |||||
Amortization of acquired intangible assets |
| 12.3 | % |
| 12.0 | % |
| 3.9 | % |
| 12.2 | % |
| 2.0 | % | |||||
Other operating expenses (c) |
| 3.2 | % |
| 1.0 | % |
| 4.2 | % |
| 2.0 | % |
| 3.3 | % | |||||
Non-GAAP operating margin |
| 20.7 | % |
| 19.6 | % |
| 26.7 | % |
| 20.1 | % |
| 27.0 | % | |||||
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GAAP interest and other income (loss), net |
| $ | (21,651) |
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| $ | (20,051) |
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| $ | (14,921) |
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| $ | (41,702) |
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| $ | (7,625) |
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Special items: |
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Restructuring related items (d) |
| 75 |
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| (338) |
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| (121) |
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| (263) |
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| (1,633) |
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Write-off of debt issuance costs (e) |
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| 458 |
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| 6,104 |
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| 458 |
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| 6,104 |
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Deal costs (f) |
| 1,009 |
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| 1,009 |
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Total special items |
| 1,084 |
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| 120 |
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| 5,983 |
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| 1,204 |
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| 4,471 |
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Total non-GAAP interest and other income (loss), net |
| $ | (20,567) |
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| $ | (19,931) |
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| $ | (8,938) |
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| $ | (40,498) |
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| $ | (3,154) |
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GAAP net income (loss) |
| $ | (57,331) |
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| $ | (48,450) |
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| $ | 6,759 |
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| $ | (105,781) |
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| $ | 135,371 |
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Special items: |
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Other cost of goods sold (a) |
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| 450 |
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| 22,933 |
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| 450 |
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| 22,933 |
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Share-based compensation |
| 63,676 |
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| 58,598 |
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| 73,423 |
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| 122,274 |
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| 97,275 |
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Restructuring related charges in operating expenses (b) |
| 16,585 |
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| 5,682 |
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| 35,415 |
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| 22,267 |
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| 36,982 |
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Restructuring related items in interest and other income, net (d) |
| 75 |
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| (338) |
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| (121) |
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| (263) |
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| (1,633) |
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Amortization of acquired intangible assets |
| 80,967 |
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| 79,740 |
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| 25,939 |
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| 160,707 |
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| 25,939 |
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Write-off of debt issuance costs (e) |
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| 458 |
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| 6,104 |
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| 458 |
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| 6,104 |
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Deal costs in interest and other income, net (f) |
| 1,009 |
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| 1,009 |
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Other operating expenses (c) |
| 20,676 |
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| 6,569 |
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| 28,229 |
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| 27,245 |
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| 43,481 |
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Pre-tax total special items |
| 182,988 |
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| 151,159 |
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| 191,922 |
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| 334,147 |
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| 231,081 |
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Other income tax effects and adjustments (g) |
| (15,728) |
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| 2,324 |
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| (36,720) |
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| (13,404) |
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| (39,818) |
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Non-GAAP net income |
| $ | 109,929 |
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| $ | 105,033 |
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| $ | 161,961 |
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| $ | 214,962 |
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| $ | 326,634 |
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Weighted average shares basic |
| 663,603 |
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| 658,963 |
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| 552,238 |
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| 661,280 |
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| 524,787 |
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Weighted average shares diluted |
| 663,603 |
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| 658,963 |
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| 562,149 |
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| 661,280 |
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| 535,433 |
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GAAP diluted net income (loss) per share |
| $ | (0.09) |
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| $ | (0.07) |
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| $ | 0.01 |
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| $ | (0.16) |
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| $ | 0.25 |
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Non-GAAP diluted net income per share (h) |
| $ | 0.16 |
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| $ | 0.16 |
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| $ | 0.28 |
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| $ | 0.32 |
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| $ | 0.60 |
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(a) | Other costs of goods sold includes amortization of the Cavium inventory fair value step up in 2018 as well as charges for past intellectual property licensing matters in 2019. |
(b) | Restructuring related charges include employee severance, facilities related costs, and impairment of equipment and other assets. |
(c) | Other operating expenses include Cavium, Aquantia, and Avera merger costs. |
(d) | Interest and other income, net, includes restructuring related items such as foreign currency remeasurement associated with restructuring related accruals. |
(e) | Write-off of debt issuance costs is associated with the partial term loan repayment during the three months ended May 4, 2019, as well as during the three and six months ended August 4, 2018. |
(f) | Deal costs include transaction costs incurred in connection with the divestiture of the Wi-Fi Connectivity business. |
(g) | Other income tax effects and adjustments relate to tax provision based on a non-GAAP income tax rate of 4.5% for the three months ended May 4, 2019 and the three and six months ended August 3, 2019, and based on a non-GAAP income tax rate of 4% for the three and six months ended August 4, 2018. |
(h) | Non-GAAP diluted net income per share for the three months ended August 3, 2019 and May 4, 2019 was calculated by dividing non-GAAP net income by weighted average shares outstanding (diluted) of 675,755 shares and 671,048 shares, respectively, due to the non-GAAP net income reported in the respective period. Non-GAAP diluted net income per share for the six months ended August 3, 2019 was calculated by dividing non-GAAP net income by weighted average shares outstanding (diluted) of 673,399 shares due to the non-GAAP net income reported in the period. |