Exhibit 99.1
PLX Technology, Inc. Reports Second-Quarter 2009 Financial Results
- Revenue Increased 10 Percent over Q1 ’09, to $18.2M
- Gross Margin Increased from 54.4 Percent, to 55.6 Percent
- Consumer Storage First End Market to Recover
SUNNYVALE, Calif.--(BUSINESS WIRE)--August 4, 2009--PLX Technology, Inc. (NASDAQ:PLXT) today announced financial results for the second quarter ended June 30, 2009.
“We have made excellent progress this quarter as we have seen a positive turnaround in the revenue trend,” said Ralph Schmitt, PLX® chief executive officer. “We also continue to drive cost reductions, improving both our gross margin and actual operating costs.”
For the second quarter ended June 30, 2009, PLX reported net revenues of $18.2 million, a 10 percent increase from the $16.5 million reported in the first quarter ended March 31, 2009, and a 22 percent decrease from the $23.4 million reported in the second quarter ended June 30, 2008.
The net loss for the second quarter ended June 30, 2009, was $9.1 million, or a loss of $0.26 per share (diluted). Included in the net loss for the quarter ended June 30, 2009, was $2.1 million for stock-based compensation, primarily driven by the Company’s tender offer to retire underwater employee stock options and $2.7 million related to the fair value of the Oxford Semiconductor note when it was converted to 3.4 million shares of PLX common stock. The net loss for the second quarter ended June 30, 2009, compares with a net loss of $10.5 million, or a loss of $0.31 per share (diluted), in the first quarter ended March 31, 2009, and a net loss of $75,000, or $0.00 per share (diluted), in the second quarter ended June 30, 2008.
The Company’s gross margin for the second quarter ended June 30, 2009, was 55.6 percent, as compared with 54.4 percent for the first quarter ended March 31, 2009, and 59.3 percent for the second quarter ended June 30, 2008.
Operating expenses were $16.6 million for the second quarter ended June 30, 2009, as compared with $18.3 million in the first quarter ended March 31, 2009, and $14.1 million in the second quarter ended June 30, 2008. Second quarter 2009 operating expenses included stock-based compensation expense of $2.1 million, amortization of acquired intangibles of $854,000 and acquisition-related costs of $99,000. The Company continues to reduce its recurring expenses.
“We continue to look for ways to improve shareholder value,” said Arthur Whipple, PLX chief financial officer. “On May 1, we completed our tender offer for underwater employee stock options and retired 2.1 million shares from our employee stock option pool, decreasing our issued option overhang by more than half, to seven percent. The purchase of the options resulted in a non-cash acceleration of compensation expense for many of the options tendered and stock compensation expense rose to $2.1 million. As a result of the lower number of options outstanding, we expect stock compensation for the next two quarters to be less than $200,000 per quarter.”
Cash and investments decreased by $2.8 million in the quarter ended June 30, 2009. The Company's $9.1 million quarterly loss included non-cash items totaling $6.5 million. At June 30, 2009, cash and investments were $38.8 million, a decrease of $8.3 million from $47.1 million at December 31, 2008.
“Actual consumer storage end-product demand has improved and is leading our revenue recovery,” said Schmitt. “PCI Express revenue was flat, but our mix changed with communications-based customers growing, thus adding a positive trend of greater and more diverse adoption. Based on bookings trends, our expectation is that we will see the entire enterprise business improve in Q3.”
PLX continued its lead in the PCI Express switch market by releasing two new devices that showcase industry-only features, including non-transparency ports, spread spectrum clock isolation and two virtual channels. The Company also announced its PCI Express Gen 2 switches will support the new Cavium OCTEON II processors, and disclosed key Gen 2 design wins at both National Instruments and One Stop Systems, thus reflecting growth in new and crucial markets. PLX also revealed the industry's first PCI Express-to-USB 2.0 host controller bridge and launched a major upgrade to its powerful Oxide software that supports its entire serial bridge product family.
Business Outlook
The following statements are based on current expectations. The Company does not intend to update, confirm or change this guidance until its third-quarter earnings release, although it may provide additional detail regarding its guidance during today’s scheduled conference call.
- Net revenues for the third quarter ended September 30, 2009, are expected to be between $19.0 million and $22.0 million.
- Gross margins are expected to be approximately 55 percent.
- Operating expenses are expected to be approximately $15.5 million. Included in operating expenses are share-based compensation, acquisition-related amortization and lease-impairment charges of approximately $1.3 million.
“Even with this improved climate, we are cautious and continue to look at cost reductions to achieve profitability,” said Whipple. “Our plan is to close our Singapore design center in Q3 to meet these objectives and impact Q4 operating expenses.”
PLX management plans to conduct a conference call today at 2:00 p.m. PDT to discuss its second-quarter financial results, as well as its third-quarter 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 719.457.2603. A recorded replay of this Webcast will be available on the PLX Website beginning 5:00 p.m. (PDT) on August 4, 2009, through 5:00 p.m. (PDT) on August 11, 2009. To listen to the replay via telephone, call 719.457.0820 and use access code 7481419.
For the live Webcast, listeners should go to the PLX Web site at least 15 minutes before the event starts to download and install any necessary audio software.
About PLX
PLX Technology, Inc. (www.plxtech.com), based in Sunnyvale, Calif., USA, is a leading global supplier of high-performance, feature-rich, system-interconnect semiconductors, SoCs and software solutions for the communications, storage, server, compute, embedded-control, and consumer markets. The Company provides a competitive advantage through an integrated combination of experience, innovative silicon, powerful design tools, and synergetic global partnerships. These unmatched PLX solutions are based on established technologies including PCI Express, USB, SATA, Ethernet, and FireWire that enable PLX customers to develop equipment with industry-leading performance, scalability, security, and reliability, and bring their designs to market faster.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
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 for the third quarter of 2009, which are set forth under the caption “Business Outlook,” statements that PLX will see the entire enterprise business improve in the third quarter and statements regarding the plan to close the Singapore design center. 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, 2008, and PLX’s quarterly report on Form 10-Q for the quarter ended March 31, 2009, 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.
| PLX TECHNOLOGY, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Unaudited) |
| (in thousands, except per share amounts) |
| | | | | | | | | | |
| | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | June 30 | | June 30 | | March 31 | | June 30 |
| | | 2009 | | | | 2008 | | | | 2009 | | | | 2009 | | | | 2008 |
| | | | | | | | | | |
| Net revenues | | $ | 18,178 | | | $ | 23,350 | | | $ | 16,457 | | | $ | 34,635 | | | $ | 46,105 |
| Cost of revenues | | | 8,076 | | | | 9,492 | | | | 7,511 | | | | 15,587 | | | | 18,404 |
| Gross margin | | | 10,102 | | | | 13,858 | | | | 8,946 | | | | 19,048 | | | | 27,701 |
| | | | | | | | | | |
| Operating expenses: | | | | | | | | | | |
| Research and development | | | 8,570 | | | | 7,791 | | | | 7,903 | | | | 16,473 | | | | 14,289 |
| Selling, general and administrative | | | 7,084 | | | | 6,063 | | | | 6,895 | | | | 13,979 | | | | 12,516 |
| Acquisition and related restructuring costs | | | 99 | | | | - | | | | 2,630 | | | | 2,729 | | | | - |
| Amortization of purchased intangible assets | | | 854 | | | | 202 | | | | 854 | | | | 1,708 | | | | 443 |
| Total operating expenses | | | 16,607 | | | | 14,056 | | | | 18,282 | | | | 34,889 | | | | 27,248 |
| | | | | | | | | | |
| Income (loss) from operations | | | (6,505 | ) | | | (198 | ) | | | (9,336 | ) | | | (15,841 | ) | | | 453 |
| Interest income and other, net | | | 117 | | | | 376 | | | | 48 | | | | 165 | | | | 864 |
Loss on fair value assessment | | | (2,652 | ) | | | - | | | | (1,190 | ) | | | (3,842 | ) | | | - |
| | | | | | | | | | |
| Income (loss) before provision for income taxes | | | (9,040 | ) | | | 178 | | | | (10,478 | ) | | | (19,518 | ) | | | 1,317 |
| Provision (benefit) for income taxes | | | 16 | | | | 253 | | | | 19 | | | | 35 | | | | 330 |
| | | | | | | | | | |
| Net income (loss) | | $ | (9,056 | ) | | $ | (75 | ) | | $ | (10,497 | ) | | $ | (19,553 | ) | | $ | 987 |
| | | | | | | | | | |
| Basic net income (loss) per share | | $ | (0.26 | ) | | $ | (0.00 | ) | | $ | (0.31 | ) | | $ | (0.57 | ) | | $ | 0.03 |
| Shares used to compute basic per share amounts | | | 35,061 | | | | 28,213 | | | | 33,604 | | | | 34,275 | | | | 28,402 |
| Diluted net income (loss) per share | | $ | (0.26 | ) | | $ | (0.00 | ) | | $ | (0.31 | ) | | $ | (0.57 | ) | | $ | 0.03 |
| Shares used to compute diluted per share amounts | | | 35,061 | | | | 28,213 | | | | 33,604 | | | | 34,275 | | | | 28,561 |
| | | | | | | | | | |
| PLX TECHNOLOGY, INC. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (in thousands) |
| | | | |
| | | | |
| | June 30
2009 | | December 31
2008 |
| | (unaudited) | | (unaudited) |
| ASSETS | | | | |
| | | | |
| Cash and investments | | $ | 38,753 | | | $ | 47,127 | |
| Accounts receivable, net | | | 8,124 | | | | 5,712 | |
| Inventories | | | 6,593 | | | | 7,257 | |
| Property and equipment, net | | | 11,480 | | | | 10,590 | |
| Goodwill | | | 1,367 | | | | - | |
| Other intangible assets | | | 7,348 | | | | - | |
| Other assets | | | 9,953 | | | | 6,574 | |
| Total assets | | $ | 83,618 | | | $ | 77,260 | |
| | | | |
| LIABILITIES | | | | |
| | | | |
| Accounts payable | | $ | 6,664 | | | $ | 4,003 | |
| Accrued compensation and benefits | | | 1,883 | | | | 2,360 | |
| Accrued commissions | | | 479 | | | | 475 | |
| Other accrued expenses | | | 1,137 | | | | 1,219 | |
| Short term note payable | | | 1,436 | | | | - | |
| Long term note payable | | | 997 | | | | - | |
| Total liabilities | | | 12,596 | | | | 8,057 | |
| | | | |
| STOCKHOLDERS' EQUITY | | | | |
| | | | |
| Common stock, par value | | | 37 | | | | 28 | |
| Additional paid-in capital | | | 153,665 | | | | 132,159 | |
| Accumulated other comprehensive loss | | | (39 | ) | | | 104 | |
| Accumulated deficit | | | (82,641 | ) | | | (63,088 | ) |
| Total stockholders' equity | | | 71,022 | | | | 69,203 | |
| Total liabilities and stockholders' equity | | $ | 83,618 | | | $ | 77,260 | |
| | | | |
| PLX TECHNOLOGY, INC. |
| SUPPLEMENTAL DATA (Unaudited) |
| (in thousands, expect for percent data) |
| | | | | | | | | | |
| | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | June 30 | | June 30 | | March 31 | | June 30 |
| | 2009 | | 2008 | | 2009 | | 2009 | | 2008 |
| Net Revenues by Geography | | | | | | | | | | |
| Americas | | | 17 | % | | | 35 | % | | | 23 | % | | | 20 | % | | | 31 | % |
| Asia Pacific | | | 74 | % | | | 54 | % | | | 64 | % | | | 69 | % | | | 57 | % |
| Europe | | | 9 | % | | | 11 | % | | | 13 | % | | | 11 | % | | | 12 | % |
| | | | | | | | | | |
| | | | | | | | | | |
| | Share-Based Compensation* |
| | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | June 30 | | June 30 | | March 31 | | June 30 |
| | 2009 | | 2008 | | 2009 | | 2009 | | 2008 |
| Manufacturing | | $ | 69 | | | $ | 15 | | | $ | 10 | | | $ | 79 | | | $ | 33 | |
| Research and development | | | 595 | | | | 351 | | | | 109 | | | | 704 | | | | 754 | |
| Selling, general and administrative | | | 1,456 | | | | 595 | | | | 221 | | | | 1,677 | | | | 1,059 | |
| | $ | 2,120 | | | $ | 961 | | | $ | 340 | | | $ | 2,460 | | | $ | 1,846 | |
| * includes FAS123R option expense and ESOP expense |
| | | | | | | | | | |
| | | | | | | | | | |
| | Acquisition Related Costs |
| | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | June 30 | | June 30 | | March 31 | | June 30 |
| | 2009 | | 2008 | | 2009 | | 2009 | | 2008 |
| Deal costs | | $ | 106 | | | $ | - | | | $ | 333 | | | $ | 439 | | | $ | - | |
| Severance costs | | | (7 | ) | | | - | | | | 2,020 | | | | 2,013 | | | | - | |
| Lease commitment accrual | | | - | | | | - | | | | 277 | | | | 277 | | | | - | |
| | $ | 99 | | | $ | - | | | $ | 2,630 | | | $ | 2,729 | | | $ | - | |
| | | | | | | | | | |
| | | | | | | | | | |
| | Components of Operating Expense
For the Six Months Ended June 30, 2009 | | | | |
| | | | | | | | | | |
| | Continuing
Expense | | Non-Continuing
Oxford Related | | Total as
Reported | | | | |
| Research and development | | $ | 15,532 | | | $ | 237 | | | $ | 15,769 | | | | | |
| Selling, general and administrative | | | 11,422 | | | | 880 | | | | 12,302 | | | | | |
| Share-based compensation | | | 2,381 | | | | - | | | | 2,381 | | | | | |
| Amortization of acquired intangibles | | | 1,708 | | | | - | | | | 1,708 | | | | | |
| Acquisition related costs | | | - | | | | 2,729 | | | | 2,729 | | | | | |
| | $ | 31,043 | | | $ | 3,846 | | | $ | 34,889 | | | | | |
CONTACT:
CommonGround Communications (for PLX)
Jerry Steach, 415-222-9996
jsteach@plxtech.com
or
PLX Technology, Inc.
Arthur O. Whipple, CFO, 408-774-9060
investor-relations@plxtech.com
