Exhibit 99.1
PLX Technology, Inc. Reports Fourth Quarter and Fiscal Year 2006
Financial Results
For the Fiscal Year:
-- 49 Percent Net Revenue Growth
-- PCI Express Revenues Increase Fourfold
-- GAAP EPS of $0.10 vs. loss of ($0.06) for Fiscal Year 2005
-- Generated $7.3 million in cash
For the Fourth Quarter:
-- 37 Percent Net Revenue Growth Year over Year
-- PCI Express Revenues Double Year over Year
Business Editors/High-Tech Editors
SUNNYVALE, Calif.--(BUSINESS WIRE)--Jan. 25, 2007--PLX Technology,
Inc. (NASDAQ:PLXT) today announced financial results for the fourth
quarter and fiscal year ended December 31, 2006.
"Our performance in 2006 confirmed the success of our long-term
growth strategy," said Michael Salameh, PLX Technology's chief
executive officer. "Compared to 2005, full-year revenues increased by
49 percent, accompanied by a $7.3 million growth in cash and
investments and substantial growth in net income. While our PCI I/O
and USB product lines recorded healthy growth, the main driver of our
overall growth was the revenue ramp of our focus PCI Express(R)
product line, which finished 2006 with $18 million in revenues, more
than four times revenues of the prior year. Included in the customer
designs in production in the fourth quarter were products of three of
the leading server suppliers, four of the leading storage suppliers
plus leading suppliers of graphics, PC peripherals, embedded computing
and communications systems.
"During 2006, we continued to invest in PCI Express. Including the
new 24-, 32- and 48-lane switches we announced last week, over the
last twelve months we nearly doubled the number of PCI Express
products now available. To date, we have shipped samples or
development systems to nearly 600 different customers, which confirms
the breadth of the market and the interest in our products.
"We believe that our 2006 PCI Express revenue is just the tip of
the iceberg of the long term potential, because of the growth of the
market and our leadership position. We expect a broad mix of new
customer products to enter production throughout 2007, the largest
being new server, storage and PC peripheral products that are in late
stages of the design cycle. We also expect an increasing contribution
to revenue from new communications and embedded systems designs. We
believe that the success of our PCI Express product line will continue
to drive total Company revenue growth."
Net revenues for the full twelve months of 2006 were $81.4
million, a 49 percent increase from the $54.6 million reported for the
full twelve months of 2005. Full-year 2006 net revenues include the
$2.8 million one-time pick-up as a result of the Company's change in
the first quarter of 2006 from the sell-through method of accounting
for distributor revenues to the sell-in method.
For the fourth quarter ended December 31, 2006, PLX reported net
revenues of $21.0 million. This was 37 percent higher than the $15.4
million reported in the fourth quarter ended December 31, 2005, and
flat compared to the $21.0 million reported in the third quarter ended
September 30, 2006.
Net income for the full twelve months of 2006, under U.S.
generally accepted accounting principles (GAAP), which included the
effect of acquisition-related amortization of $1,873,000 and
share-based compensation of $4,903,000, was $3,006,000, or $0.10 per
share (diluted), compared to GAAP net losses of $1,748,000, or a loss
of $0.06 per share (diluted), for the full twelve months of 2005. The
full-year net loss for 2005 included the effect of acquisition-related
amortization of $2,262,000 but does not include the effect of
share-based compensation pursuant to Statement of Financial Accounting
Standards No. 123R (FAS 123R).
GAAP net income for the fourth quarter ended December 31, 2006,
which included the effect of acquisition-related amortization of
$440,000 and share-based compensation of $1,231,000, was $162,000, or
$0.01 per share (diluted). This compares with GAAP net income for the
third quarter ended September 30, 2006, of $1,022,000, or $0.04 per
share (diluted), which included the effect of acquisition-related
amortization of $440,000 and share-based compensation of $1,172,000.
This also compares to GAAP net income for the fourth quarter ended
December 31, 2005, of $35,000, or $0.00 per share (diluted), which
included the effect of acquisition-related amortization of $726,000
but does not include the effect of share-based compensation pursuant
to FAS 123R.
The Company's gross margin for the fourth quarter ended December
31, 2006, which included the effect of share-based compensation of
$13,000, was 56 percent. This compared with 58 percent for the third
quarter ended September 30, 2006, which included the effect of
share-based compensation of $13,000 and 64 percent for the fourth
quarter ended December 31, 2005, which did not include the effect of
share-based compensation. The Company recorded an inventory reserve of
approximately $549,000, or 2.6 gross margin percentage points in the
fourth quarter ended December 31, 2006. The primary reason for the
inventory reserve was because certain customers migrated from PCI I/O
leaded to lead-free devices much quicker than the Company had
expected. The decrease in the year-over-year quarterly gross margin
percentage was due primarily to the inventory reserved recorded in the
fourth quarter of 2006 and the expected change in the Company's
product mix.
Operating expenses under GAAP for the fourth quarter ended
December 31, 2006, of $11.9 million included $440,000 of
acquisition-related amortization and $1,218,000 in share-based
compensation of which $732,000 was related to sales, general and
administrative expenses and $486,000 was related to research and
development expenses. This compares with operating expenses under GAAP
of $11.4 million in the third quarter ended September 30, 2006, which
included $440,000 of acquisition-related amortization and $1,159,000
of share-based compensation of which $674,000 was related to sales,
general and administrative expenses and $485,000 was related to
research and development expenses.
The Company's balance sheet remained strong. At December 31, 2006,
cash and investments grew by $7.3 million, or 21 percent, to $42.3
million from $35.0 million at December 31, 2005. Additionally, there
continues to be no debt.
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 release, although it may provide
additional detail regarding its guidance on today's scheduled
conference call.
-- Net revenues for the first quarter ended March 31, 2007, are
expected to be between $18 million and $19 million, with
approximately 27 percent of total revenues attributable to PCI
Express products and approximately 11 percent of total
revenues attributable to USB products.
-- Gross margins are expected to be in the range of 59 percent to
61 percent.
-- Operating expenses under GAAP basis are expected to be between
$11.6 million and $12.0 million. GAAP operating expenses
include the effect of share-based compensation, which is
expected to be between $1.0 million and $1.3 million and
acquisition-related amortization of approximately $0.4
million.
PLX(R) management plans to conduct a conference call today at 2:00
p.m. PST to discuss its fourth-quarter and fiscal year financial
results, as well as its first-quarter outlook. The conference call
dial-in number is 913-981-4912. 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 1, 2007. 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.
About PLX
PLX Technology, Inc. (www.plxtech.com), based in Sunnyvale,
Calif., USA, is the world's leading supplier of PCI Express and other
standard I/O interconnect semiconductors to the communications,
server, storage, embedded-control, and consumer markets. The company
provides a competitive advantage through an integrated combination of
experience, high-performance silicon, hardware and software design
tools, and global partnerships. These innovative solutions enable our
customers to develop equipment with industry-leading performance,
scalability and reliability that allows them to bring designs to
market faster.
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 2007,
which are set forth under the caption "Business Outlook," statements
regarding the PCI Express and USB product lines and statements about
achieving continued growth. 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, reduced acceptance of the Company's PCI Express products,
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, 2005,
and our quarterly report on Form 10-Q for the quarter ended September
30, 2006, 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 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 Twelve Months
Ended
Dec. 31, Dec. 31, Sept. 30, December 31
-------------------
2006 2005 2006 2006 (1) 2005
--------- --------- --------- --------- ---------
Net revenues $20,963 $15,339 $21,046 $81,425 $54,615
Cost of revenues 9,237 5,462 8,836 33,795 19,613
--------- --------- --------- --------- ---------
Gross margin 11,726 9,877 12,210 47,630 35,002
Operating expenses:
Research and
development 4,884 4,843 5,396 20,194 18,469
Selling, general
and administrative 6,582 4,339 5,609 23,848 16,577
Amortization of
purchased
intangible assets 440 726 440 1,873 2,262
--------- --------- --------- --------- ---------
Total operating
expenses 11,906 9,908 11,445 45,915 37,308
Income (loss) from
operations (180) (31) 765 1,715 (2,306)
Interest income and
other, net 556 261 484 1,803 823
--------- --------- --------- --------- ---------
Income (loss) before
provision for income
taxes 376 230 1,249 3,518 (1,483)
Provision for income
taxes 214 195 227 512 265
--------- --------- --------- --------- ---------
Net income (loss) $162 $35 $1,022 $3,006 $(1,748)
========= ========= ========= ========= =========
Basic net income
(loss) per share $0.01 $0.00 $0.04 $0.11 $(0.06)
========= ========= ========= ========= =========
Shares used to
compute basic per
share amounts 28,494 27,592 28,241 28,177 27,198
========= ========= ========= ========= =========
Diluted net income
(loss) per share $0.01 $0.00 $0.04 $0.10 $(0.06)
========= ========= ========= ========= =========
Shares used to
compute diluted per
share amounts 29,320 28,237 28,783 29,050 27,198
========= ========= ========= ========= =========
(1) The above amounts for the twelve months ended December 31, 2006,
include a pick-up in net revenues and cost of revenues of $2,766,076
and $891,009, respectively as a result of the Company's change from
the sell-through method of accounting for revenues to the sell-in
method whereby revenues are recognized at the time of shipment to a
distributor.
PLX TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31 December 31
2006 2005 (1)
----------- -----------
(unaudited)
ASSETS
Cash and investments $42,323 $35,043
Accounts receivable, net 8,491 6,203
Inventories 8,295 4,328
Property and equipment, net 28,744 29,535
Goodwill 35,818 35,818
Other intangible assets 2,856 4,729
Other assets 2,263 2,255
----------- -----------
Total assets $128,790 $ 117,911
=========== ===========
LIABILITIES
Accounts payable $2,995 $4,530
Accrued compensation and benefits 2,417 1,754
Deferred revenues - 1,963
Accrued commissions 1,100 298
Other accrued expenses 1,342 1,877
----------- -----------
Total liabilities 7,854 10,422
STOCKHOLDERS' EQUITY
Common stock, par value 29 28
Additional paid-in capital 128,735 118,313
Accumulated other comprehensive loss (96) (114)
Accumulated deficit (7,732) (10,738)
----------- -----------
Total stockholders' equity 120,936 107,489
----------- -----------
Total liabilities and stockholders' equity $128,790 $ 117,911
=========== ===========
(1) Derived from audited financial statements
CONTACT: PLX Technology, Inc.
Stephen Loh, Interim CFO, 408-774-9060
sloh@plxtech.com
or
CommonGround Communications (for PLX)
Jerry Steach, 415-222-9996 (Editorial)
jsteach@plxtech.com