Exhibit 99.1
PLX Technology, Inc. Reports Second Quarter 2005 Financial Results; Company
Continues To Capitalize on Leadership Position in Emerging PCI Express Market
SUNNYVALE, Calif.--(BUSINESS WIRE)--July 19, 2005--PLX Technology, Inc.
(NASDAQ:PLXT) today announced financial results for the second quarter ended
June 30, 2005.
For the second quarter, PLX reported net revenues of $13.2 million, a six
percent decrease from the $14.0 million reported for the second quarter of 2004,
and flat compared to the $13.2 million reported for the first quarter of 2005.
Net revenues for the first six months of 2005 were $26.4 million, a three
percent increase from the $25.7 million reported for the first six months of
2004.
Net losses for the second quarter of 2005, under U.S. generally accepted
accounting principles (GAAP), which included the effect of acquisition-related
costs, were $0.7 million, or a loss of $0.03 per share (diluted). This compared
with net losses under GAAP of $0.5 million, or a loss of $0.02 per share
(diluted), for the prior-year second quarter and net losses under GAAP of $0.5
million, or a loss of $0.02 per share (diluted), for the first quarter of 2005.
Net losses for the first six months of 2005 were $1.3 million, or a loss of
$0.05 per share (diluted), compared to net losses of $0.3 million, or a loss of
$0.01 per share (diluted), for the first six months of 2004.
Pro forma net losses for the second quarter of 2005, which excluded the
effect of acquisition-related costs, were $0.2 million, or a loss of $0.01 per
share (diluted). This compared with pro forma net income of $1.1 million, or
$0.04 per share (diluted), for the prior year's second quarter and pro forma net
income of $0.1 million, or $0.00 per share (diluted), for the first quarter of
2005. Pro forma net losses for the first six months of 2005 were $0.1 million,
or a loss of $0.00 per share (diluted), compared with pro forma net income of
$1.6 million, or $0.06 per share (diluted), for the first six months of 2004. A
reconciliation between net 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 2005 was 63 percent,
as compared with 63 percent for the prior quarter.
Operating expenses on a GAAP basis for the second quarter of 2005 were $9.2
million, compared with $9.1 million for the prior quarter. On a pro forma basis,
which excludes acquisition-related costs of approximately $0.5 million and $0.6
million for the quarters ended June 30, 2005 and March 31, 2005, respectively,
operating expenses were $8.7 million, compared with $8.4 million.
The company's balance sheet remained strong. At June 30, 2005, cash, cash
equivalents and total investments were $32.4 million, compared to $30.3 million
at December 31, 2004. Additionally, there continues to be no debt.
"In the second quarter, we continued to make significant progress in our
PCI Express initiative," said Mike Salameh, PLX Technology chief executive
officer. "Our revenues in this product line, which at this early stage of
introduction consist of samples and initial production units, grew from more
than two percent of revenues in the first quarter of 2005 to more than four
percent of revenues in the second quarter of 2005. We also continued to expand
our customer list, having shipped samples or development systems to more than
150 customers since we started sampling in late 2004.
"On the product development front, in the second quarter we qualified three
PCI Express chips for production and introduced a fifth, a 24-lane PCI Express
switch. Furthermore, we are building on the successful launch of our first wave
of PCI Express products by developing a second generation, and we are close to
completing design of the initial second-generation products.
"These results indicate that the market for these products is large and
diverse, that we have improved our leadership position and that we are uniquely
positioned to capitalize on the large market for PCI Express interconnect
silicon."
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 conference call, although it may provide additional
detail regarding its guidance on today's scheduled call.
-- Revenue for the third quarter of 2005 is expected to be between $13.0
million and $14.0 million, with approximately 14 percent to 16 percent
of total revenues attributable to USB products and approximately six
percent to eight percent of total revenues attributable to PCI Express
products.
-- Gross margins are expected to be in the range of 62 percent to 66
percent.
-- Operating expenses on a GAAP basis are expected to be between $9.8
million and $10.1 million. On a pro forma basis, which excludes
acquisition-related costs of approximately $0.5 million, expenses are
expected to be between $9.3 million and $9.6 million. Engineering
expenses related to 0.13-micron chip development comprise a
significant portion of total anticipated third-quarter expenses. The
expected sequential growth in operating expenses is due primarily to
mask charges and other variable external engineering expenses related
to PCI Express chips. Assuming that most of the added external
engineering expenses for these tape-outs occur in the third quarter,
the Company expects fourth-quarter tape-out-related expenses to
decline on a sequential basis bringing total pro forma operating
expenses down for the fourth quarter to approximately $9.0 million.
The actual timing of the expenses will 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
business 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
http://www.plxtech.com/investors until July 26, 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 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 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. All PLX I/O
interconnect products are available in lead-free packaging. 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, estimates of revenues
attributable to certain products, estimated expenses, and estimated gross
margins for the third quarter of 2005, which are set forth under the caption
"Business Outlook," statements regarding the PCI Express product line and the
development of a second generation of the product line. 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, 2004, and our quarterly report on Form 10-Q
for the quarter ended March 31, 2005, 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 is a trademark 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 June 30
2005 2004 2005 2005 2004
-------- -------- -------- -------- --------
Net revenues $13,185 $14,016 $13,222 $26,407 $25,658
Cost of revenues 4,900 4,925 4,857 9,757 8,154
-------- -------- -------- -------- --------
Gross margin 8,285 9,091 8,365 16,650 17,504
Operating expenses:
Research and
development 4,665 4,394 4,112 8,777 8,451
Selling, general and
administrative 4,021 3,768 4,426 8,447 7,446
In-process research and
development - 1,123 - - 1,123
Amortization of
purchased intangible
assets 512 442 512 1,024 739
-------- -------- -------- -------- --------
Total operating expenses 9,198 9,727 9,050 18,248 17,759
Loss from operations (913) (636) (685) (1,598) (255)
Interest income and
other, net 185 99 155 340 167
-------- -------- -------- -------- --------
Loss before provision for
income taxes (728) (537) (530) (1,258) (88)
Provision for income
taxes 4 - 11 15 172
-------- -------- -------- -------- --------
Net loss $(732) $(537) $(541) $(1,273) $(260)
======== ======== ======== ======== ========
Basic net loss per share $(0.03) $(0.02) $(0.02) $(0.05) $(0.01)
======== ======== ======== ======== ========
Shares used to compute
basic per share amounts 26,932 24,850 26,786 26,857 24,363
======== ======== ======== ======== ========
Diluted net loss per
share $(0.03) $(0.02) $(0.02) $(0.05) $(0.01)
======== ======== ======== ======== ========
Shares used to compute
diluted per share
amounts 26,932 24,850 26,786 26,857 24,363
======== ======== ======== ======== ========
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
-----------------
2005 2004 2005 2005 2004
-------- -------- -------- -------- --------
Net revenues $13,185 $14,016 $13,222 $26,407 $25,658
Cost of revenues 4,900 4,925 4,857 9,757 8,154
-------- -------- -------- -------- --------
Gross margin 8,285 9,091 8,365 16,650 17,504
Operating expenses:
Research and
development 4,649 4,379 4,034 8,683 8,427
Selling, general and
administrative 4,004 3,755 4,405 8,409 7,424
-------- -------- -------- -------- --------
Total operating expenses 8,653 8,134 8,439 17,092 15,851
Income (loss) from
operations (368) 957 (74) (442) 1,653
Interest income and
other, net 185 99 155 340 167
-------- -------- -------- -------- --------
Income (loss) before
provision for income
taxes (183) 1,056 81 (102) 1,820
Provision for income
taxes 4 - 11 15 172
-------- -------- -------- -------- --------
Net income (loss) $(187) $1,056 $70 $(117) $1,648
======== ======== ======== ======== ========
Basic net income (loss)
per share $(0.01) $0.04 $0.00 $(0.00) $0.07
======== ======== ======== ======== ========
Shares used to compute
basic per share amounts 26,932 24,850 26,786 26,857 24,363
======== ======== ======== ======== ========
Diluted net income (loss)
per share $(0.01) $0.04 $0.00 $(0.00) $0.06
======== ======== ======== ======== ========
Shares used to compute
diluted per share
amounts 26,932 26,678 27,592 26,857 25,975
======== ======== ======== ======== ========
A reconciliation between net loss on a GAAP basis
and pro forma net income (loss) is as follows:
GAAP net loss $(732) $(537) $(541) $(1,273) $(260)
In-process research and
development - 1,123 - - 1,123
Amortization of deferred
stock-based compensation 33 28 99 132 46
Amortization of purchased
intangible assets 512 442 512 1,024 739
-------- -------- -------- -------- --------
Pro forma net income
(loss) $(187) $1,056 $70 $(117) $1,648
======== ======== ======== ======== ========
PLX TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30 Dec. 31,
2005 2004 (1)
--------- ---------
ASSETS
Cash and investments $32,424 $30,276
Accounts receivable, net 5,470 5,084
Inventories 2,522 4,159
Property and equipment, net 30,177 30,860
Goodwill 36,085 30,965
Other intangible assets 5,968 6,991
Other assets 2,002 2,138
--------- ---------
Total assets $114,648 $110,473
========= =========
LIABILITIES
Accounts payable $3,095 $3,627
Accrued compensation and benefits 1,698 1,813
Deferred revenues 1,486 1,310
Accrued commissions 314 300
Other accrued expenses 1,232 1,264
--------- ---------
Total liabilities 7,825 8,314
--------- ---------
STOCKHOLDERS' EQUITY
Common stock, par value 27 27
Additional paid-in capital 117,516 111,739
Deferred compensation (263) (406)
Accumulated other comprehensive income (194) (211)
Accumulated deficit (10,263) (8,990)
--------- ---------
Total stockholders' equity 106,823 102,159
--------- ---------
Total liabilities and stockholders' equity $114,648 $110,473
========= =========
(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