Exhibit 99.1
PLX Technology, Inc. Reports First-Quarter 2007 Financial Results
-- Introduction of Five New PCI Express Chips Extends Leadership Position
-- Cost Reductions Yield Increase in Gross Margin
SUNNYVALE, Calif.--(BUSINESS WIRE)--April 23, 2007--PLX Technology, Inc.
(NASDAQ:PLXT) today announced financial results for the first quarter ended
March 31, 2007.
"In the first quarter, we continued to strengthen the foundation of our
main growth engine, PCI Express, through new product development, product
introductions, and customer design wins," said Mike Salameh, PLX(R) president
and chief executive officer. "Our focus on financial execution yielded cost
reductions that improved overall Company gross margin. Since January 2007, we
have announced five new PCI Express(R) switches and now have a total of 15 PCI
Express chips, covering a broad range of market requirements. These five new
chips were designed using our third-generation PCI Express architecture, which
extends our market lead in performance and power consumption.
"We now have several hundred customers designing products using our PCI
Express chips, many of whom use the devices in multiple programs concurrently
and only a fraction of which are yet in volume production. Among the customer
designs in production during the first quarter are products from four of the
leading server suppliers and five of the top storage-system makers, plus leading
suppliers of graphics, PC peripherals, embedded computing, and communications
systems."
For the first quarter ended March 31, 2007, PLX reported net revenues of
$18.6 million, a seven percent decrease from the $20.0 million reported in the
first quarter ended March 31, 2006, and an 11 percent decrease from the $21.0
million reported in the fourth quarter ended December 31, 2006. Net revenues for
the first three months of 2006 include the one-time pick-up in revenue of $2.8
million as a result of the Company's change from the sell-through method of
accounting for revenues to the sell-in method.
Net loss for the first quarter ended March 31, 2007, under U.S. generally
accepted accounting principles (GAAP), which included the effect of
acquisition-related amortization of $0.4 million and share-based compensation of
$1.2 million, was $0.3 million, or a loss of $0.01 per share (diluted). This
compared to GAAP net income of $1.5 million, or $0.05 per share (diluted), in
the first quarter ended March 31, 2006, and GAAP net income of $0.2 million, or
$0.01 per share (diluted), in the fourth quarter ended December 31, 2006.
The Company's gross margin for the first quarter ended March 31, 2007, was
61.0 percent, as compared with 62.5 percent for the first quarter ended March
31, 2006, and 55.9 percent for the fourth quarter ended December 31, 2006. In
the fourth quarter, the Company recorded an inventory reserve associated with
excess leaded product of $0.5 million, or 2.6 gross margin percentage points.
Most of the remaining 2.5 percentage point improvement was driven by cost
reductions in the PCI Express products.
Operating expenses under GAAP for the first quarter ended March 31, 2007,
were $12.4 million, as compared to $11.9 million for the fourth quarter ended
December 31, 2006. The sequential increase was due primarily to additional
tape-out-related expenses as we successfully completed product designs and
increased spending on external engineering tools.
The Company's balance sheet remained strong. At March 31, 2007, cash and
investments were $45.1 million, compared to $42.3 million at December 31, 2006.
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
second-quarter earnings release, although it may provide additional detail
regarding its guidance on today's scheduled conference call.
-- Net revenues for the second quarter ended June 30, 2007, are expected
to be between $19.5 million and $20.5 million, with approximately 32
percent of total net revenues attributable to PCI Express products.
-- Gross margins are expected to be in the range of 60 percent to 62
percent.
-- Operating expenses under GAAP are expected to be $13.0 million. The
increase in operating expenses is driven by our planned costs to
tape-out several new products as we successfully complete those
designs. Operating expenses can fluctuate from quarter to quarter
based on the timing of tape-outs for deep submicron products. Included
in operating expenses are share-based compensation and acquisition
related amortization which are expected to be approximately $1.6
million.
PLX management plans to conduct a conference call today at 2:00 p.m. PDT to
discuss its first-quarter financial results, as well as its second-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/investors. To dial into the live Webcast, please call
913-981-5525. A recorded replay of this Webcast will be available on the PLX
Website beginning 4:00 p.m. (PDT) on April 23, 2007, through 10:00 p.m. (PDT) on
April 30, 2007. To listen to the replay via telephone, call 719-457-0820, and
use access code 9884947. The Webcast can also be accessed through www.ccbn.com.
For the live Webcast, listeners should go to the PLX Investors page 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 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 second quarter of 2007, which are set forth under the caption
"Business Outlook," and statements regarding the PCI Express products. 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, 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
March 31 March 31 December 31
2007 2006 2006
----------- ----------- -----------
Net revenues $ 18,640 $ 20,005 $ 20,963
Cost of revenues 7,263 7,497 9,237
----------- ----------- -----------
Gross margin 11,377 12,508 11,726
Operating expenses:
Research and development 5,742 5,079 4,884
Selling, general and
administrative 6,170 5,675 6,582
Amortization of purchased
intangible assets 440 512 440
----------- ----------- -----------
Total operating expenses 12,352 11,266 11,906
Income (loss) from operations (975) 1,242 (180)
Interest income and other, net 574 342 556
----------- ----------- -----------
Income (loss) before provision for
income taxes (401) 1,584 376
Provision (benefit) for income
taxes (129) 43 214
----------- ----------- -----------
Net income (loss) $ (272) $ 1,541 $ 162
=========== =========== ===========
Basic net income (loss) per share $ (0.01) $ 0.06 $ 0.01
=========== =========== ===========
Shares used to compute basic per
share amounts 28,645 27,884 28,494
=========== =========== ===========
Diluted net income (loss) per share $ (0.01) $ 0.05 $ 0.01
=========== =========== ===========
Shares used to compute diluted per
share amounts 28,645 28,794 29,320
=========== =========== ===========
PLX TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31 December 31
2007 2006 (1)
----------- -----------
(unaudited)
ASSETS
Cash and investments $ 45,073 $ 42,323
Accounts receivable, net 8,909 8,491
Inventories 7,272 8,295
Property and equipment, net 28,397 28,744
Goodwill 34,976 34,976
Other intangible assets 2,416 2,856
Other assets 2,487 2,263
----------- -----------
Total assets $ 129,530 $ 127,948
=========== ===========
LIABILITIES
Accounts payable $ 4,727 $ 2,995
Accrued compensation and benefits 1,891 2,417
Accrued commissions 437 1,100
Other accrued expenses 533 500
----------- -----------
Total liabilities 7,588 7,012
STOCKHOLDERS' EQUITY
Common stock, par value 29 29
Additional paid-in capital 130,025 128,735
Accumulated other comprehensive loss (108) (96)
Accumulated deficit (8,004) (7,732)
----------- -----------
Total stockholders' equity 121,942 120,936
----------- -----------
Total liabilities and stockholders' equity $ 129,530 $ 127,948
=========== ===========
(1) Derived from audited financial statements
PLX TECHNOLOGY, INC.
SUPPLEMENTAL DATA
(Unaudited)
Percentage of Net
Revenues Q107 vs Q106 Q107 vs Q406
-------------------------
Q107 Q106 Q406 % %
------- ------- ------- ------------ ------------
Net Revenues by
Geography
Americas 32.9% 28.3% 31.2% 8% (6)%
Asia Pacific 54.6% 57.0% 57.3% (11%) (15%)
Europe 12.5% 14.7% 11.5% (20%) (3%)
Share-Based
Compensation
(in thousands)
Q107 Q106 Q406
------- ------- -------
Manufacturing $ 18 $ 10 $ 13
Research and
development 532 477 486
Selling, general and
administrative 602 577 732
------- ------- -------
$1,152 $1,064 $1,231
======= ======= =======
CONTACT: PLX Technology, Inc.
Company Contact:
Arthur O. Whipple, CFO, 408-774-9060
investor-relations@plxtech.com
or
CommonGround Communications (for PLX)
Editorial Contact:
Jerry Steach, 415-222-9996
jsteach@plxtech.com