PLX TECHNOLOGY, INC. REPORTS THIRD QUARTER 2010 FINANCIAL RESULTS
Third Quarter Results
| · | Record Revenue of $30.2M – 40 Percent Growth Year-on-Year |
| · | Record PCI Express Revenue of $14M – 89 Percent Growth Year-on-Year |
| · | Operating Income Improves to $2.6M – Up From a Loss of $2.0M Year-on-Year |
| · | Production Shipments on First USB 3.0 Storage Product |
| · | Teranetics Acquisition Significantly Increases Data Center Opportunity |
SUNNYVALE, Calif. – Oct. 25, 2010 – PLX Technology, Inc. (NASDAQ: PLXT) today announced revenues of $30.2 million and net income of $1.1 million, or $0.03 per share (diluted) for the third quarter, ended Sept. 30, 2010.
“Our quarterly revenue exceeded $30M for the first time in the company’s history, fueled by continued growth and record sales of PCI Express products,” said Ralph Schmitt, president and CEO of PLX Technology. “Market-leading data center customers drove PCI Express Gen 2 switch revenue up by 17 percent. We also saw our first production shipments of our new USB 3.0 storage and our 7800 family of network-attached storage products for use in the home.”
GAAP Financial Comparison
(in millions, except per share amount)
| | | Quarterly Results | | | Year to Date | |
| | | | Q3 2010 | | | | Q3 2009 | | | | Q2 2010 | | | | 2010 | | | | 2009 | |
| Net revenues | | $ | 30.2 | | | $ | 21.6 | | | $ | 29.7 | | | $ | 88.8 | | | $ | 56.2 | |
| Operating expense | | $ | 15.3 | | | $ | 14.2 | | | $ | 15.6 | | | $ | 45.6 | | | $ | 49.1 | |
| Operating income (loss) | | $ | 2.6 | | | $ | (2.0 | ) | | $ | 1.9 | | | $ | 6.2 | | | $ | (17.9 | ) |
| Net income (loss) | | $ | 1.1 | | | $ | (1.9 | ) | | $ | 1.7 | | | $ | 4.3 | | | $ | (21.4 | ) |
| Earnings (loss) per share (diluted) | | $ | 0.03 | | | $ | (0.05 | ) | | $ | 0.04 | | | $ | 0.11 | | | $ | (0.61 | ) |
Non-GAAP Financial Comparison
(in millions, except per share amount)
| | | Quarterly Results | | | Year to Date | |
| | | | Q3 2010 | | | | Q3 2009 | | | | Q2 2010 | | | | Q3 2010 | | | | Q3 2009 | |
| Net revenues | | $ | 30.2 | | | $ | 21.6 | | | $ | 29.7 | | | $ | 88.8 | | | $ | 56.2 | |
| Operating expense | | $ | 13.8 | | | $ | 13.0 | | | $ | 14.5 | | | $ | 42.0 | | | $ | 41.1 | |
| Operating income (loss) | | $ | 4.1 | | | $ | (0.8 | ) | | $ | 3.0 | | | $ | 9.8 | | | $ | (9.8 | ) |
| Net income (loss) | | $ | 2.7 | | | $ | (0.7 | ) | | $ | 2.8 | | | $ | 8.0 | | | $ | (13.3 | ) |
| Earnings (loss) per share (diluted) | | $ | 0.07 | | | $ | (0.03 | ) | | $ | 0.07 | | | $ | 0.20 | | | $ | (0.39 | ) |
Non-GAAP results exclude share-based compensation, including employee stock ownership plan (ESOP) expenses, amortization of acquired intangibles, and acquisition and restructuring related expenses.
Product Information and Strategic Direction
“We announced the strategic acquisition of a well-recognized 10GBase-T Ethernet PHY leader, Teranetics, during the third quarter, increasing our markets served, as well as our penetration into the data center,” said Schmitt. “This combination will allow us to leverage customer relationships and technology leadership in each company’s respective space to expand the reach as a combined organization. With the continued growth and convergence of interconnect technologies in the data center, we now have a significant position in what we believe will be the two dominant high-speed IO standards well into the future.”
This strategic acquisition and new partnerships broaden the revenue landscape for the company. The following significant events were publicly announced during the third quarter:
| · | Acquisition of Teranetics, 10GBase-T PHY leader |
| · | Demonstration of the world’s first PCI Express 3.0 switches running over optical cable at the Intel Developer Forum |
| · | Announcement of new USB 3.0 DAS devices passing the SuperSpeed USB compliance testing |
| · | Fujitsu’s selection of PLX’s USB Duet technology for its Lifebook personal computers |
| · | New partnerships with inXtron, Paragon Software and Tuxera Inc. that strengthen PLX’s high-performance NAS portfolio and software capabilities |
Business Outlook
The following statements are based on current expectations. The company does not intend to update, confirm or change this guidance until its fourth-quarter 2010 earnings release, although it may provide additional details regarding its guidance during today’s scheduled conference call.
| · | Net revenues for the fourth quarter ending Dec. 31, 2010, are expected to be between $28 million and $31 million. |
| · | Gross margins are expected to be approximately 57 percent. |
| · | Operating expense will include spending for R&D and SG&A of approximately $19.9 million, charges for stock-based compensation of approximately $400,000, acquisition-related costs of approximately $400,000 and amortization of acquired intangibles before Teranetics of approximately $650,000. The amortization of acquired intangibles for Teranetics is dependent upon acquisition accounting which will be completed during the fourth quarter. |
PLX management plans to conduct a conference call and webcast today at 3:00 p.m. (PDT) to discuss its third quarter 2010 financial results, as well as its fourth quarter 2010 outlook. A live webcast of the conference call will be available through the Investor Relations section of the PLX Website at www.plxtech.com/investors, which also can be heard live via telephone at 719.457.2644. A recorded replay of this webcast will be available on the PLX website beginning at 6:00 p.m. (PDT) on October 25, 2010, through 6:00 p.m. (PDT) on November 1, 2010. To listen to the replay via telephone, call 719.457.0820 and use access code 1145974.
For the live webcast, listeners should go to the PLX website at least 15 minutes before the event starts to download and install any necessary audio software.
About PLX
PLX Technology, Inc. (NASDAQ: PLXT), based in Sunnyvale, Calif., USA, is an industry-leading global provider of semiconductor-based connectivity solutions primarily targeting the enterprise and consumer markets. The Company provides manufacturers worldwide with innovative software-enriched silicon through feature differentiation, high-quality interoperability and superior performance. www.plxtech.com.
Use of Non-GAAP Financial Information
To supplement PLX’s financial statements presented on a GAAP basis, PLX has provided non-GAAP financial information, including non-GAAP net income (loss), non-GAAP earnings (loss) per share (diluted), non-GAAP operating income (loss) and non-GAAP operating expenses. These non-GAAP results exclude share-based compensation, including ESOP expenses, acquisition and restructuring-related charges, and amortization of acquired intangibles. A reconciliation of the adjustments to GAAP results is included in the tables below. Non-GAAP financial information is not meant as a substitute for GAAP results, but is included because management believes such information is useful to PLX investors for informational and comparative purposes. In addition, certain non-GAAP financial information is used intern ally by management to evaluate and manage the company. The non-GAAP financial information used by PLX may differ from that used by other companies. These non-GAAP measures should be considered in addition to, and not a substitute for, the results prepared in accordance with GAAP.
Safe Harbor Statement
This press release includes statements that qualify as forward-looking statements under the Private Securities Litigation Reform Act of 1995. These include statements about the Company’s estimated net revenues, estimated operating expenses and estimated gross margins, which are set forth under the heading “Business Outlook” and the statements regarding the Company’s expectations for the fourth quarter. Such statements involve risks and uncertainties, which may cause actual results to differ materially from those set forth in the statements. Factors that could cause actual results to differ materially include risks and uncertainties, such as reduced demand for products of electronic equipment manufacturers that use the Company’s products, adverse economic conditions in general or those specifically affecting the Company’s markets, technical difficulties and delays in the development process, errors in the products, reduced backlog for the Company’s customers and unexpected expenses. Please refer to the documents filed by the Company with the SEC from time to time, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2009, and PLX’s quarterly reports on Form-10Q for the quarters ended March 31, 2010, and June 30, 2010, which identifies important risk factors that could cause actual results to differ from those contained in the forward-looking statements. All forward-looking statements are made as of today, and the Company assumes no obligation to update such statements.
PLX and the PLX logo are trademarks of PLX Technology, Inc., which may be registered in some jurisdictions. All other product names that appear in this material are for identification purposes only and are acknowledged to be trademarks or registered trademarks of their respective companies.
