EXHIBIT 99.1
PLX Technology, Inc. Reports Second-Quarter 2004 Financial Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--July 15, 2004--PLX Technology,
Inc. (Nasdaq:PLXT) today announced financial results for the second
quarter ended June 30, 2004.
For the second quarter, PLX reported net revenues of $14.0
million, a 20 percent increase from the $11.6 million reported for the
first quarter of 2004 and a 62 percent increase from the $8.7 million
reported for the second quarter of 2003. Net revenues for the first
six months of 2004 were $25.7 million, a 49 percent increase from the
$17.2 million reported for the first six months of 2003.
During the second quarter, PLX completed the acquisition of
NetChip Technology, Inc. for a purchase price of approximately $22.2
million. PLX took an acquisition-related charge of $1.1 million, or
approximately $0.05 per share (diluted), for the write-off of
purchased in-process research and development in the second quarter.
Net loss under U.S. generally accepted accounting principles
(GAAP), which included the effect of acquisition-related costs, was
$0.5 million, or a loss of $0.02 per share (diluted), for the second
quarter of 2004. This compared with a net loss under GAAP of $1.9
million, or a loss of $0.09 per share (diluted), for the second
quarter of 2003 and net income under GAAP of $0.3 million, or $0.01
per share (diluted), for the prior quarter. Net losses for the first
six months of 2004 were $0.3 million, or a loss of $0.01 per share
(diluted), compared to net losses of $2.7 million, or a loss of $0.13
per share (diluted), for the first six months of 2003.
Pro forma net income for the second quarter of 2004, which
excluded the effect of acquisition-related costs, was $1.1 million, or
$0.04 per share (diluted). This compared with pro forma net loss of
$0.5 million, or a loss of $0.02 per share (diluted), for the same
quarter a year ago, and with pro forma net income of $0.6 million, or
$0.02 per share (diluted), for the prior quarter. Pro forma net income
for the first six months of 2004 were $1.6 million, or $0.06 per share
(diluted), compared to pro forma net losses of $0.7 million, or a loss
of $0.03 per share (diluted), for the first six months of 2003. A
reconciliation between net income (loss) under GAAP and pro forma net
income (loss) is provided in a table immediately below the Pro Forma
Consolidated Statements of Operations.
The company's gross margin for the second quarter of 2004 was 65
percent, as compared with 72 percent for the prior quarter. The
sequential decrease in gross margin was due primarily to an expected
change in the company's product and customer mix associated with the
acquisition of NetChip.
Pro forma operating expenses for the second quarter of 2004 were
$8.1 million, as compared with $7.7 million for the prior quarter. The
sequential increase was due primarily to an increase in engineering
staff associated with the acquisition of NetChip, as well as an
increase in mask fabrication, prototyping and other external
engineering expenses associated with the development of PCI
Express(TM) and PCI Bridge products.
At June 30, 2004, cash, cash equivalents and total investments
increased to $31.3 million, from $25.1 million at March 31, 2004.
"Since the first quarter, PLX achieved important milestones in its
program to expand its interconnect silicon leadership," said Mike
Salameh, president and chief executive officer of PLX Technology. "We
taped out our first products for the emerging PCI Express standard,
sampled the production versions of our PCI-X bridges and completed the
acquisition of NetChip. NetChip provides the company with a leadership
position in the USB market and we believe that NetChip's PCI Express
products currently in development will enhance PLX's PCI Express
market opportunity.
"We estimate that third quarter revenues will be between $15
million and $16 million. We expect gross margins to be between 60
percent and 64 percent.
"We anticipate that third quarter operating expenses on a GAAP
basis will be between $9.9 million and $10.4 million. On a pro forma
basis, which would exclude acquisition-related costs estimated to be
approximately $0.7 million, we expect operating expenses to be between
$9.2 million and $9.7 million. The expected sequential growth in
expenses would be due to mask charges and other variable external
engineering expenses related to PCI Express chips plus the additional
operating expenses of NetChip. Assuming that most of the added
external engineering expenses for these tapeouts occur in the third
quarter, we expect fourth quarter tapeout-related expenses to decline
on a sequential basis, resulting in lower total pro forma operating
expenses. The timing of the expenses would depend on the timing of
actual mask and prototype fabrication."
PLX(R) 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. There will also be a live Webcast and a
replay of the conference call available through the Investors section
of the PLX Web site at www.plxtech.com until July 22, 2004.
For the live Webcast, listeners should go to the Web site at least
15 minutes before the event starts to download and install any
necessary audio software. The archived Webcast is typically available
one to two hours after the end of the live conference call.
USE OF PRO FORMA FINANCIAL INFORMATION: In addition to reporting
financial results in accordance with generally accepted accounting
principles, or GAAP, PLX reports pro forma financial results. Pro
forma net income (loss) and earnings (loss) per share exclude
acquisition-related charges, such as amortization of purchased
intangible assets and deferred compensation. PLX's management believes
these pro forma measures are useful to investors because they provide
supplemental information that facilitates comparisons with prior
periods. Management uses these pro forma measures to evaluate its
financial results, develop budgets and manage expenditures. The method
PLX uses to produce pro forma results is not computed according to
GAAP, is likely to differ from the methods used by other companies and
should not be regarded as a replacement for corresponding GAAP
measures. Investors are encouraged to review the reconciliation of
these pro forma financial measures to the comparable GAAP results,
which are provided in a table immediately below the Pro Forma
Consolidated Statements of Operations.
About PLX
PLX Technology, Inc. (www.plxtech.com), based in Sunnyvale,
Calif., USA, is the leading supplier of standard I/O interconnect
silicon to the communications, server, storage, embedded-control, and
consumer industries. The PLX solution provides a competitive edge to
customers through an integrated combination of high-performance
silicon, hardware and software design tools, and partnerships. These
innovative solutions are designed to enable customers to develop
communications equipment with industry-leading performance,
scalability and reliability. Furthermore, the combination of PLX
product features, supporting development tools and partnerships allows
customers to bring their designs to market faster. PLX PCI I/O
Accelerator and HyperTransport Tunnel-to-Dual PCI-X devices are
designed into a wide variety of embedded PCI communication systems,
including switches, routers, line cards, media gateways, base
stations, access multiplexors and remote access concentrators.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This 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 revenues,
estimated expenses, estimated gross margins, and estimated ongoing
acquisition-related costs for the third quarter of 2004. 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 which include the company's
products, due to 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, 2003 and our quarterly report on Form
10-Q for the quarter ended March 31, 2004, which identify 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 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
-------
2004 2003 2004 2004 2003
---- ---- ---- ---- ----
Net revenues $14,016 $8,660 $11,642 $25,658 $17,163
Cost of revenues 4,925 2,518 3,229 8,154 5,033
------ ------ ------ ------ ------
Gross margin 9,091 6,142 8,413 17,504 12,130
Operating expenses:
Research and
development 4,394 3,893 4,057 8,451 7,606
Selling, general and
administrative 3,768 3,193 3,678 7,446 6,251
In-process research
and development 1,123 875 - 1,123 875
Amortization of
purchased intangible
assets 442 204 297 739 337
------ ------ ------ ------ ------
Total operating
expenses 9,727 8,165 8,032 17,759 15,069
Income (loss)
from operations (636) (2,023) 381 (255) (2,939)
Interest income
and other, net 99 102 68 167 210
------ ------ ------ ------ ------
Income (loss)
before provision
for income taxes (537) (1,921) 449 (88) (2,729)
Provision
(benefit) for
income taxes - (24) 172 172 (16)
------ ------ ------ ------ ------
Net income (loss) $(537) $(1,897) $277 $(260) $(2,713)
====== ====== ====== ====== ======
Basic net income
(loss) per share $(0.02) $(0.09) $0.01 $(0.01) $(0.13)
====== ====== ====== ====== ======
Shares used to
compute basic
per share
amounts 24,850 22,214 23,876 24,363 21,678
====== ====== ====== ====== ======
Diluted net
income (loss)
per share $(0.02) $(0.09) $0.01 $(0.01) $(0.13)
====== ====== ====== ====== ======
Shares used to
compute diluted
per share
amounts 24,850 22,214 25,181 24,363 21,678
====== ====== ====== ====== ======
PLX TECHNOLOGY, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Excluding Acquisition-Related Costs
and Amortization of Intangible Assets)
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended Six Month Ended
June 30 June 30 March 31 June 30
-------
2004 2003 2004 2004 2003
---- ---- ---- ---- ----
Net revenues $14,016 $8,660 $11,642 $25,658 $17,163
Cost of revenues 4,925 2,518 3,229 8,154 5,033
-------- -------- -------- -------- --------
Gross margin 9,091 6,142 8,413 17,504 12,130
Operating expenses:
Research and
development 4,379 3,534 4,048 8,427 6,790
Selling, general and
administrative 3,755 3,184 3,669 7,424 6,242
-------- -------- -------- -------- --------
Total operating
expenses 8,134 6,718 7,717 15,851 13,032
Income (loss) from
operations 957 (576) 696 1,653 (902)
Interest income and
other, net 99 102 68 167 210
-------- -------- -------- -------- --------
Income (loss) before
provision for income
taxes 1,056 (474) 764 1,820 (692)
Provision for income
taxes - 4 172 172 12
-------- -------- -------- -------- --------
Net income (loss) $1,056 $(478) $592 $1,648 $(704)
======== ======== ======== ======== ========
Basic net income (loss)
per share $0.04 $(0.02) $0.02 $0.07 $(0.03)
======== ======== ======== ======== ========
Shares used to compute
basic per share
amounts 24,850 22,214 23,876 24,363 21,678
======== ======== ======== ======== ========
Diluted net income
(loss) per share $0.04 $(0.02) $0.02 $0.06 $(0.03)
======== ======== ======== ======== ========
Shares used to compute
diluted per share
amounts 26,678 22,214 25,181 25,975 21,678
======== ======== ======== ======== ========
A reconciliation between net income (loss) on a GAAP basis
and pro forma net income (loss) is as follows:
GAAP net income (loss) $(537) $(1,897) $277 $(260) $(2,713)
In-process research and
development 1,123 875 - 1,123 875
Amortization of
deferred stock-based
compensation 28 368 18 46 825
Amortization of
purchased intangible
assets 442 204 297 739 337
Income tax effect - (28) - - (28)
-------- -------- -------- -------- --------
Pro forma net income
(loss) $1,056 $(478) $592 $1,648 $(704)
======== ======== ======== ======== ========
PLX TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
June 30, December 31,
2004 2003 (1)
---- -------
(unaudited)
ASSETS
Cash and investments $31,335 $23,056
Accounts receivable, net 6,192 4,998
Inventories 3,487 1,893
Property and equipment, net 30,477 31,068
Goodwill 27,840 15,998
Other intangible assets 7,970 2,730
Other assets 1,949 2,060
----------- --------
Total assets $109,250 $81,803
=========== ========
LIABILITIES
Accounts payable $4,005 $1,768
Accrued compensation and benefits 2,003 1,427
Deferred revenues 1,290 991
Accrued commissions 354 368
Other accrued expenses 2,853 1,228
----------- ---------
Total liabilities 10,505 5,782
----------- ---------
STOCKHOLDERS' EQUITY
Common stock, par value 26 24
Additional paid-in capital 108,410 84,508
Deferred compensation (868) (44)
Notes receivable for
employee stock purchases - (70)
Accumulated other
comprehensive income (215) (49)
Accumulated
deficit (8,608) (8,348)
----------- ---------
Total stockholders'
equity 98,745 76,021
----------- ---------
Total liabilities and
stockholders' equity $109,250 $81,803
=========== =========
(1) Derived from audited financial statements
CONTACT: CommonGround Communications (for PLX)
Jerry Steach, 415-222-9996
jsteach@plxtech.com
or
PLX Technology, Inc.
Rafael Torres, 408-774-9060
rtorres@plxtech.com