Exhibit 99.1
PLX Technology, Inc. Reports Fourth Quarter and Fiscal Year 2005
Financial Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--Jan. 31, 2006--PLX Technology,
Inc. (NASDAQ:PLXT):
-- 19 Percent Sequential Quarterly Revenue Growth
-- PCI Express Revenue Grows to More Than $2.2 Million
-- Twelfth Consecutive Year of Pro Forma Net Income
PLX Technology, Inc. (NASDAQ:PLXT) today announced financial
results for the fourth quarter and fiscal year ended December 31,
2005.
For the fourth quarter, PLX reported net revenues of $15.3
million, a 19 percent increase from the $12.9 million reported for the
third quarter of 2005, and a 15 percent increase from the $13.3
million reported for the prior-year fourth quarter. Net revenues for
the 2005 fiscal year were $54.6 million, a slight increase from the
$54.4 million reported for the 2004 fiscal year.
Net income for the fourth quarter of 2005, under U.S. generally
accepted accounting principles (GAAP), which included the effect of
acquisition-related costs, were $35,000, or $0.00 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 third quarter of 2005 and net
losses under GAAP of $0.7 million, or $0.03 per share (diluted), for
the prior-year fourth quarter. Net losses for the 2005 fiscal year
were $1.7 million, or a loss of $0.06 per share (diluted), compared to
net losses of $0.6 million, or a loss of $0.03 per share (diluted),
for the 2004 fiscal year.
Pro forma net income for the fourth quarter of 2005, which
excluded the effect of acquisition-related costs, was $0.8 million, or
$0.03 per share (diluted). This compared with pro forma net income of
$22,000, or $0.00 per share (diluted), for the third quarter of 2005
and with pro forma net losses of $0.2 million, or a loss of $0.01 per
share (diluted), for the prior-year fourth quarter. Pro forma net
income for the 2005 fiscal year was $0.7 million, or $0.02 per share
(diluted), compared with pro forma net income of $2.3 million, or
$0.09 per share (diluted), for the 2004 fiscal year. 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 fourth quarter of 2005 was 64
percent, compared with 66 percent for the prior quarter. The decrease
in gross margin as a percentage of sales was the result of a shift in
the Company's product and customer mix.
Operating expenses on a GAAP basis for the fourth quarter of 2005
were $9.9 million, compared with $9.2 million for the prior quarter.
On a pro forma basis, which excludes acquisition-related costs of
approximately $0.7 million and $0.5 million for the quarters ended
December 31, 2005 and September 30, 2005, respectively, operating
expenses were $9.2 million for the fourth quarter of 2005, compared
with $8.6 million for the prior quarter. The sequential increase in
operating expenses was due to higher compensation and benefit expenses
as a result of higher headcount, increases in sales commissions to
manufacturer's representatives as a result of higher revenues, and
increases in professional fees due in part to the Company's year-end
audit.
The Company's balance sheet remained strong. On December 31, 2005,
cash and total investments were $35.0 million, compared to $30.3
million at December 31, 2004. Additionally, there continues to be no
debt.
"In fiscal 2005 we achieved our twelfth consecutive year of pro
forma net profit and added nearly $5 million in cash," said Mike
Salameh, PLX Technology chief executive officer. "Fourth-quarter
revenues grew sequentially by 19 percent, driven primarily by the
growth of our PCI Express(TM) revenues, which surpassed $2.2 million.
We also continued to build our leadership position in the PCI Express
market by sampling our sixth PCI Express chip. Since we started
sampling PCI Express in late 2004, we have shipped samples or
development systems to more than 250 customers, up from the 200 in the
third quarter. By introducing innovative products early in the
industry-wide transition to PCI Express, we established a lead that we
anticipate will result in continued total Company revenue growth.
"We also grew our USB business by 14 percent over last quarter,
based on our success in winning designs in PC peripheral and consumer
electronics applications, and we expect continued growth in the first
quarter of 2006. Furthermore, our legacy PCI business grew by six
percent sequentially."
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 during today's
scheduled call.
-- Revenue for the first quarter of 2006 is expected to be
between $16.2 million and $17.2 million, with approximately 13
percent to 15 percent of total revenues attributable to USB
products and approximately 20 percent to 24 percent of total
revenues attributable to PCI Express products.
-- Gross margins are expected to be in the range of 62 percent to
65 percent.
-- Operating expenses on a pro forma basis, which excludes
acquisition-related costs and stock option expenses, are
expected to be between $9.2 million and $9.5 million.
Engineering expenses related to 0.13-micron chip development
comprise a significant portion of total anticipated
first-quarter expenses. 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. PST to discuss its fourth-quarter and 2005 fiscal-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
http://www.plxtech.com/investors until February 7, 2006. The Webcast
can also be accessed through www.ccbn.com.
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. 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, amortization and write-down of purchased
intangible assets and in-process research and development charges.
PLX's management believes that the presentation of pro forma financial
results are useful to investors and other interested persons because,
by excluding certain expenses the Company believes are not indicative
of our core operating results, the users of the financial statements
are provided with valuable insight into PLX's operating results.
Further, these non-GAAP results are one of the primary indicators
PLX's management uses for planning and forecasting future performance.
In addition, PLX has consistently provided these pro forma
measurements in previous earnings releases and believes that it is
important to provide investors and other interested persons with a
consistent basis for comparison between quarters. 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 PCI Express and other 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 first quarter of 2006,
which are set forth under the caption "Business Outlook," statements
regarding the PCI Express product line and statements about our future
gross margins. 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 September 30, 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 Twelve Months
Ended
December December September
31 31 30 December 31
-----------------
2005 2004 2005 2005 2004
-------- -------- --------- -------- --------
Net revenues $15,339 $13,334 $ 12,869 $54,615 $54,449
Cost of revenues 5,462 4,946 4,394 19,613 18,739
-------- -------- --------- -------- --------
Gross margin 9,877 8,388 8,475 35,002 35,710
Operating expenses:
Research and
development 4,843 4,470 4,849 18,469 17,686
Selling, general and
administrative 4,339 4,359 3,791 16,577 16,014
In-process research
and development - - - - 1,123
Amortization and
write-down of
purchased intangible
assets 726 512 512 2,262 1,718
-------- -------- --------- -------- --------
Total operating expenses 9,908 9,341 9,152 37,308 36,541
Loss from operations (31) (953) (677) (2,306) (831)
Interest income and
other, net 261 146 222 823 447
-------- -------- --------- -------- --------
Income (loss) before
provision (benefit) for
income taxes 230 (807) (455) (1,483) (384)
Provision (benefit) for
income taxes 195 (98) 55 265 258
-------- -------- --------- -------- --------
Net income (loss) $ 35 $ (709) $ (510) $(1,748) $ (642)
======== ======== ========= ======== ========
Basic net income (loss)
per share $ 0.00 $ (0.03) $ (0.02) $ (0.06) $ (0.03)
======== ======== ========= ======== ========
Shares used to compute
basic per share amounts 27,592 26,593 27,482 27,198 25,422
======== ======== ========= ======== ========
Diluted net income
(loss) per share $ 0.00 $ (0.03) $ (0.02) $ (0.06) $ (0.03)
======== ======== ========= ======== ========
Shares used to compute
diluted per share
amounts 28,237 26,593 27,482 27,198 25,422
======== ======== ========= ======== ========
PLX TECHNOLOGY, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Excluding Acquisition-Related Costs and Amortization and Write-down
of Purchased Intangible Assets)
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended Twelve Months
Ended
December December September December 31
31 31 30
-----------------
2005 2004 2005 2005 2004
-------- -------- --------- -------- --------
Net revenues $15,339 $13,334 $ 12,869 $54,615 $54,449
Cost of revenues 5,462 4,946 4,394 19,613 18,739
-------- -------- --------- -------- --------
Gross margin 9,877 8,388 8,475 35,002 35,710
Operating expenses:
Research and
development 4,829 4,456 4,835 18,347 17,614
Selling, general and
administrative 4,337 4,343 3,785 16,531 15,956
-------- -------- --------- -------- --------
Total operating expenses 9,166 8,799 8,620 34,878 33,570
Income (loss) from
operations 711 (411) (145) 124 2,140
Interest income and
other, net 261 146 222 823 447
-------- -------- --------- -------- --------
Income (loss) before
provision (benefit) for
income taxes 972 (265) 77 947 2,587
Provision (benefit) for
income taxes 195 (98) 55 265 258
-------- -------- --------- -------- --------
Net income (loss) $ 777 $ (167) $ 22 $ 682 $ 2,329
======== ======== ========= ======== ========
Basic net income (loss)
per share $ 0.03 $ (0.01) $ 0.00 $ 0.03 $ 0.09
======== ======== ========= ======== ========
Shares used to compute
basic per share amounts 27,592 26,593 27,482 27,198 25,422
======== ======== ========= ======== ========
Diluted net income
(loss) per share $ 0.03 $ (0.01) $ 0.00 $ 0.02 $ 0.09
======== ======== ========= ======== ========
Shares used to compute
diluted per share
amounts 28,237 26,593 28,121 27,961 26,473
======== ======== ========= ======== ========
A reconciliation between net income (loss) on a GAAP basis and pro
forma net income (loss) is as follows:
GAAP net income (loss) $ 35 $ (709) $ (510) $(1,748) $ (642)
In-process research and
development - - - - 1,123
Amortization of deferred
stock-based
compensation 16 30 20 168 130
Amortization and write-
down of purchased
intangible assets 726 512 512 2,262 1,718
-------- -------- --------- -------- --------
Pro forma net income
(loss) $ 777 $ (167) $ 22 $ 682 $ 2,329
======== ======== ========= ======== ========
PLX TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December December
31, 31,
2005 2004 (1)
----------- -----------
(unaudited)
ASSETS
Cash and investments $ 35,043 $ 30,276
Accounts receivable, net 6,203 5,084
Inventories 4,328 4,159
Property and equipment, net 29,535 30,860
Goodwill 35,818 30,965
Other intangible assets 4,730 6,991
Other assets 2,253 2,138
---------- ----------
Total assets $ 117,910 $ 110,473
=========== ===========
LIABILITIES
Accounts payable $ 4,530 $ 3,627
Accrued compensation and benefits 1,754 1,813
Deferred revenues 1,963 1,310
Accrued commissions 298 300
Other accrued expenses 1,876 1,264
----------- -----------
Total liabilities 10,421 8,314
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, par value 28 27
Additional paid-in capital 118,441 111,739
Deferred compensation (128) (406)
Accumulated other comprehensive loss (114) (211)
Accumulated deficit (10,738) (8,990)
----------- -----------
Total stockholders' equity 107,489 102,159
----------- -----------
Total liabilities and stockholders' equity $ 117,910 $ 110,473
=========== ===========
(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, CFO, 408-774-9060
rtorres@plxtech.com