EXHIBIT 99.1
PLX Technology, Inc. Reports Fourth-Quarter and Fiscal Year 2004
Financial Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--Jan. 25, 2005--PLX Technology,
Inc. (Nasdaq:PLXT) today announced financial results for the fourth
quarter and fiscal year ended December 31, 2004.
For the fourth quarter, PLX reported net revenues of $13.3
million, a 14 percent decrease from the $15.5 million reported for the
third quarter of 2004 and a 26 percent increase from the $10.6 million
reported for the fourth quarter of 2003. Net revenues for fiscal year
2004 were $54.4 million, a 43 percent increase from the $38.0 million
reported for 2003.
Net loss for the fourth quarter of 2004, under U.S. generally
accepted accounting principles (GAAP), which included the effect of
acquisition-related costs, was $0.7 million, or a loss of $0.03 per
share (diluted). This compared with net income under GAAP of $0.3
million, or $0.01 per share (diluted), for the prior-year fourth
quarter and net income under GAAP of $0.3 million, or $0.01 per share
(diluted), for the third quarter of 2004.
Pro forma net loss for the fourth quarter of 2004, which excluded
the effect of acquisition-related costs, was $0.2 million, or a loss
of $0.01 per share (diluted). This compared with pro forma net income
of $0.6 million, or $0.03 per share (diluted), for the prior year's
fourth quarter and $0.8 million, or $0.03 per share (diluted), for the
third quarter of 2004. 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.
Net loss under GAAP for the full year was $0.6 million, or a loss
of $0.03 per share (diluted), compared with a net loss of $2.3
million, or a loss of $0.10 per share (diluted), for the prior year.
Pro forma net income for 2004 was $2.3 million, or $0.09 per share
(diluted), compared with pro forma net income of $0.5 million, or
$0.02 per share (diluted), for 2003.
The Company's gross margin for the fourth quarter of 2004 was 63
percent, compared with 64 percent for the prior quarter. The
sequential decrease in gross margin was due primarily to a benefit
realized in the third quarter from the sale of previously written-down
inventory related to the acquisition of NetChip Technology.
Operating expenses on a GAAP basis for the fourth quarter of 2004
were $9.3 million, as compared with $9.4 million for the third quarter
of 2004. On a pro forma basis, which excludes acquisition-related
costs of approximately $0.5 million, operating expenses for the fourth
quarter of 2004 were $8.8 million, as compared with $8.9 million for
the third quarter of 2004.
The Company's balance sheet remained strong. At December 31, 2004,
cash, cash equivalents and total investments increased to $30.3
million from $23.1 million at year-end 2003, and there was no debt.
"In 2004, we achieved 43 percent growth in revenues and more than
four times improvement in pro-forma net income," said Mike Salameh,
chief executive officer of PLX Technology. "2004 marked our 11th
consecutive year of pro forma profitability. We also laid the
groundwork for the future by launching our new PCI Express product
line and acquiring NetChip, a step that added a leading USB 2.0
product line and enhanced our PCI Express product offering.
"In the fourth quarter, we made tremendous progress in our PCI
Express initiative, including sampling three new switches and bridges
to more than 25 customers and realizing more than $100,000 in revenue
on samples and development boards. Our own execution and customer
design activity was at the top of our expectations and reinforces our
belief that PCI Express will be a growth engine for PLX."
Business Outlook
The following statements are based on current expectations. The
Company does not intend to update, confirm or change this guidance
until its first-quarter earnings conference call, although it may
provide additional detail regarding its guidance on today's scheduled
call.
-- Revenue for the first quarter of 2005 is expected to be
between $13.5 million and $14.5 million, with 20 percent to 25
percent of total revenues attributable to USB products.
-- Gross margins are expected to be in the range of 60 percent to
64 percent.
-- Operating expenses on a GAAP basis are expected to be between
$9.2 million and $ 9.4 million. On a pro forma basis, which
excludes acquisition-related costs of approximately $0.6
million, expenses are expected to be between $8.6 million and
$8.8 million. Engineering expenses related to 0.13-micron chip
development, Sarbanes-Oxley compliance and year-end audit
comprise a significant portion of total anticipated
first-quarter expenses. The timing of the development expenses
will depend on when the actual mask and prototype fabrication
work is performed.
PLX management plans to conduct a conference call today at 2:00
p.m. PST to discuss its fourth-quarter and full-year financial
results, as well as its first-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
February 1, 2005. The Webcast can also be accessed through
www.ccbn.com.
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 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 and earnings (loss) per share exclude
acquisition-related charges, such as amortization of deferred
compensation and other intangibles and in-process research and
development charges. PLX's management believes these pro forma
measures are useful to investors because they provide supplemental
information that facilitates comparisons to 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 is 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. These innovative
solutions enable customers to develop products with industry-leading
performance and functionality. Furthermore, the combination of PLX
product features, supporting development tools and partnerships allows
customers to bring their designs to market faster. PLX PCI, PCI
Express and USB interconnect chips are designed into a wide variety of
communications, server, storage, embedded-control, and consumer
products.
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, and estimated gross margins for the first quarter
of 2005, which are set forth under the caption "Business Outlook," and
statements regarding the PCI Express product line and that it will be
a growth engine for the Company. 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, 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 September
30, 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 Twelve Months
Ended
Dec. 31, Dec. 31, Sept. 30, December 31
2004 2003 2004 2004 2003
-------- -------- -------- -------- --------
Net revenues $13,334 $10,592 $15,457 $54,449 $38,038
Cost of revenues 4,946 2,988 5,639 18,739 10,867
-------- -------- -------- -------- --------
Gross margin 8,388 7,604 9,818 35,710 27,171
Operating expenses:
Research and
development 4,470 3,626 4,765 17,686 15,048
Selling, general and
administrative 4,359 3,562 4,209 16,014 13,114
In-process research and
development - - - 1,123 875
Amortization of
purchased intangible
assets 512 297 467 1,718 931
-------- -------- -------- -------- --------
Total operating expenses 9,341 7,485 9,441 36,541 29,968
Income (loss) from
operations (953) 119 377 (831) (2,797)
Interest income and
other, net 146 219 134 447 567
-------- -------- -------- -------- --------
Income (loss) before
provision (benefit) for
income taxes (807) 338 511 (384) (2,230)
Provision (benefit) for
income taxes (98) 13 184 258 29
-------- -------- -------- -------- --------
Net income (loss) $(709) $325 $327 $(642) $(2,259)
======== ======== ======== ======== ========
Basic net income (loss)
per share $(0.03) $0.01 $0.01 $(0.03) $(0.10)
======== ======== ======== ======== ========
Shares used to compute
basic per share amounts 26,593 23,833 26,342 25,422 22,755
======== ======== ======== ======== ========
Diluted net income (loss)
per share $(0.03) $0.01 $0.01 $(0.03) $(0.10)
======== ======== ======== ======== ========
Shares used to compute
diluted per share
amounts 26,593 24,929 27,129 25,422 22,755
======== ======== ======== ======== ========
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 Twelve Months
Ended
Dec. 31, Dec. 31, Sept. 30, December 31
2004 2003 2004 2004 2003
-------- -------- -------- -------- --------
Net revenues $13,334 $10,592 $15,457 $54,449 $38,038
Cost of revenues 4,946 2,988 5,639 18,739 10,867
-------- -------- -------- -------- --------
Gross margin 8,388 7,604 9,818 35,710 27,171
Operating expenses:
Research and
development 4,456 3,615 4,745 17,614 14,118
Selling, general and
administrative 4,343 3,548 4,175 15,956 13,077
-------- -------- -------- -------- --------
Total operating expenses 8,799 7,163 8,920 33,570 27,195
Income (loss) from
operations (411) 441 898 2,140 (24)
Interest income and
other, net 146 219 134 447 567
-------- -------- -------- -------- --------
Income (loss) before
provision (benefit) for
income taxes (265) 660 1,032 2,587 543
Provision (benefit) for
income taxes (98) 13 184 258 29
-------- -------- -------- -------- --------
Net income (loss) $(167) $647 $848 $2,329 $514
======== ======== ======== ======== ========
Basic net income (loss)
per share $(0.01) $0.03 $0.03 $0.09 $0.02
======== ======== ======== ======== ========
Shares used to compute
basic per share amounts 26,593 23,833 26,342 25,422 22,755
======== ======== ======== ======== ========
Diluted net income (loss)
per share $(0.01) $0.03 $0.03 $0.09 $0.02
======== ======== ======== ======== ========
Shares used to compute
diluted per share
amounts 26,593 24,929 27,129 26,473 23,272
======== ======== ======== ======== ========
A reconciliation between net income (loss) on a GAAP
basis and pro forma net income (loss) is as follows:
GAAP net income (loss) $(709) $325 $327 $(642) $(2,259)
In-process research and
development - - - 1,123 875
Amortization of deferred
stock-based compensation 30 25 54 130 967
Amortization of purchased
intangible assets 512 297 467 1,718 931
-------- -------- -------- -------- --------
Pro forma net income
(loss) $(167) $647 $848 $2,329 $514
======== ======== ======== ======== ========
PLX TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Dec. 31, Dec. 31,
2004 2003(1)
----------- --------
(unaudited)
ASSETS
Cash and investments $30,276 $23,056
Accounts receivable, net 5,084 4,998
Inventories 4,159 1,893
Property and equipment, net 30,860 31,068
Goodwill 30,965 15,998
Other intangible assets 6,991 2,730
Other assets 2,138 2,060
----------- --------
Total assets $110,473 $81,803
=========== ========
LIABILITIES
Accounts payable $3,627 $1,768
Accrued compensation and benefits 1,813 1,427
Deferred revenues 1,310 991
Accrued commissions 300 368
Other accrued expenses 1,264 1,228
----------- --------
Total liabilities 8,314 5,782
----------- --------
STOCKHOLDERS' EQUITY
Common stock, par value 27 24
Additional paid-in capital 112,111 84,508
Deferred compensation (778) (44)
Notes receivable for employee stock purchases - (70)
Accumulated other comprehensive income (211) (49)
Accumulated deficit (8,990) (8,348)
----------- --------
Total stockholders' equity 102,159 76,021
----------- --------
Total liabilities and stockholders' equity $110,473 $81,803
=========== ========
(1) Derived from audited financial statements
CONTACT: PLX Technology, Inc.
Rafael Torres, 408-774-9060
rtorres@plxtech.com
or
CommonGround Communications (for PLX)
Jerry Steach, 415-222-9996
jsteach@plxtech.com