PLX Technology, Inc. Reports Third Quarter 2011 Financial Results
Record Quarterly Revenue; Record Design Wins in PCI Express; Reduced Expenses
Tweet
Share
E-mailGet Alerts PLXT Hot Sheet
Join SI Premium – FREE
SUNNYVALE, CA -- (MARKET WIRE) -- 10/24/11 -- PLX Technology, Inc. (NASDAQ: PLXT), a leading global supplier of software-enriched silicon for the enterprise data center, today announced record third quarter revenues of $31.1 million and a GAAP net loss of $4.2 million, or $0.09 per share (diluted).
"While the business environment was challenging during the quarter, continued healthy demand for our differentiated product portfolio allowed us to once again achieve record revenue levels," said Ralph Schmitt, PLX® president and CEO. "10 Gigabit Ethernet had a strong quarter and PCI Express Gen3 had record design wins as customers are starting to gear up for the Intel Romley launch. We also saw some seasonal strength in our storage business driven by the uptake of FireWire products used in Apple-based systems."
Non-GAAP Financial Comparison
(in millions, except per share amounts)
Quarterly Results
Q3 2011 Q3 2010 Q2 2011
----------- ----------- -----------
Net revenues $ 31.1 $ 30.2 $ 30.7
Operating expense $ 17.9 $ 13.8 $ 19.5
Operating income (loss) $ (0.3) $ 4.1 $ (2.2)
Net income (loss) $ (0.4) $ 2.7 $ (2.3)
Earnings (loss) per share (diluted) $ (0.00) $ 0.07 $ (0.06)
The above non-GAAP financial information (other than net revenues, which are presented on a GAAP basis) excludes share-based compensation, acquisition, restructuring and impairment charges, and amortization of acquired intangibles. See "Use of Non-GAAP Financial Information" below.
GAAP Financial Comparison
(in millions, except per share amounts)
Quarterly Results
Q3 2011 Q3 2010 Q2 2011
----------- ----------- -----------
Net revenues $ 31.1 $ 30.2 $ 30.7
Operating expense $ 21.7 $ 15.3 $ 23.2
Operating income (loss) $ (4.1) $ 2.6 $ (5.9)
Net income (loss) $ (4.2) $ 1.1 $ (6.0)
Earnings (loss) per share (diluted) $ (0.09) $ 0.03 $ (0.14)
"This quarter we took steps to reduce operational costs, including announcing the divesture of our Abingdon, UK Design Center shortly after the close of the quarter," said Schmitt. "Further streamlining our business and focusing on PLX leadership in PCI Express and 10 Gigabit Ethernet allows us to concentrate more on the fast-growing data center and cloud services markets."
Product Highlights and Strategic Direction During the third quarter, PLX released its third-generation 10 Gigabit Ethernet family into full production. This milestone ushers in a fundamental shift in the global transformation of data center connectivity, from Gigabit Ethernet to 10 Gigabit Ethernet performance over standard, low-cost cabling. The family is fabricated on a 40-nanometer process node and consists of single-, dual- and quad-port integrated 10GBase-T transceivers. Multiple PLX customers have tested and qualified these products as they prepare for production. With the market's broadest 10GBase-T physical layer (PHY) portfolio in production, followed by next-generation 28nm products, PLX is well positioned to support this market as it develops.
The company also expanded its PCI Express Gen3 switch family during the quarter to eleven products with five new high-performance, feature-packed devices, compliant with the PCI Express Gen3 r1.0 Specification. The new switches blend valuable innovation and high port counts to enable new, more powerful designs in servers, storage and communications platforms. With the debut of these five new switches, PLX now offers Gen3 devices ranging from 12 to 48 lanes, and three to 18 ports.
"PLX was the industry's first vendor to launch PCI Express Gen3 silicon more than one year ago and this leadership position has placed PLX at the forefront of Gen3 reference designs by worldwide CPU, GPU and endpoint vendors who have been validating their own silicon and systems using PLX Gen3 devices," said Schmitt. "Numerous Tier-One server and storage OEMs have multiple designs underway in products that will ramp into production the first half of 2012."
In its commitment to superior quality and reliability, which assures designer confidence, PLX announced the inclusion of four more unique PCIe Gen2 devices on the PCI Special Interest Group's (PCI-SIG) PCI Express 2.0 Integrators List, fully passing all key rigorous compliance testing required by leading global OEMs. These PLX devices are ideal for cost-conscious, energy-sensitive, form-factor-restrictive markets, including digital televisions, set-top boxes, home gateways, security systems, cable modems, multi-function printers, video surveillance and numerous other control-plane and embedded applications. The entire PLX portfolio of 26 PCIe Gen2 devices is listed as compliant and includes the industry's deepest and most robust selection of switches.
PLX also announced its latest direct attached storage (DAS) USB 3.0-to-SATA controller has successfully passed compliance with the USB Implementers Forum (USB-IF) and is now listed on the forum's SuperSpeed USB integrators list. PLX has an industry-leading six devices listed on the USB-IF's USB 3.0 integrators list and a total of 40 USB-compliant devices therein, reflecting the company's vast experience in this globally used technology and a deep commitment to best-in-class quality that designers can trust.
PLX teamed with industry leaders, including Avago and Marvell, at the Intel Developer Forum to showcase expertise in PCIe Gen3, optical and SSD (solid-state drive) performance. The first demonstration highlighted the data center readiness and ubiquity of PCIe. Breaching PCIe's dominant inner-box connectivity, PLX PCIe Gen3 switches, together with Avago's fiber optic modules, extended traffic box-to-box for 30 meters over optical cable with amazing x8 connectivity at 64Gbps. This performance alone challenges all other connectivity choices by eliminating the complicated, latency-ridden conversion of standards. The second demonstration focused on the performance of Marvell's SSD controllers, enabled by PLX PCIe switches, in an enterprise storage application. Aggregate performance of four SSD cards reached an astounding 2.5 million IOPs.
Business Outlook The following statements are based on current expectations. The company does not intend to update, confirm or change this guidance until its fourth quarter 2011 earnings release, although it may provide additional details regarding its guidance during today's scheduled conference call.
- Net revenues for the fourth quarter ending December 31, 2011, are expected to be between $28 million and $32 million
- Gross margins are expected to be approximately 58 percent
- Operating expenses are expected to be approximately $22.2 million. Included in operating expenses are share-based compensation and acquisition-related amortization charges of approximately $3.9 million
Conference Call PLX management plans to conduct a conference call and webcast today at 2:00 p.m. (PDT) to discuss its third quarter financial results, as well as its fourth quarter 2011 outlook. A live webcast of the conference call will be available through the Investor Relations section of the PLX website at www.plxtech.com/investors, which also can be heard live via telephone at (800) 798-2796, using access code 36936895. International callers may dial +1 (617) 614-6204. A recorded replay of this webcast will be available on the PLX Website beginning 5:00 p.m. (PDT) on October 24, 2011, through 11:59 p.m. (PDT) on October 31, 2011. To listen to the replay via telephone, call (888) 286-8010 and use access code 66138463. International callers may dial +1 (617) 801-6888.
For the live webcast, listeners should go to the PLX Website at least 15 minutes before the event starts to download and install any necessary software.
About PLX Technology, Inc. PLX Technology, Inc. (NASDAQ: PLXT), based in Sunnyvale, Calif., USA, is an industry-leading global provider of semiconductor-based connectivity solutions primarily targeting the enterprise and consumer markets. The company provides manufacturers worldwide with innovative software-enriched silicon through feature differentiation, high-quality interoperability and superior performance. www.plxtech.com.
Use of Non-GAAP Financial Information To supplement PLX's financial statements presented on a GAAP basis, PLX has provided non-GAAP financial information, including non-GAAP net income (loss), non-GAAP earnings (loss) per share (diluted), non-GAAP operating income (loss) and non-GAAP operating expenses. These non-GAAP results exclude share-based compensation, including ESOP expenses, acquisition, restructuring and impairment related charges and amortization of acquired intangibles. A reconciliation of the adjustments to GAAP results is included in the tables below. Non-GAAP financial information is not meant as a substitute for GAAP results, but is included because management believes such information is useful to PLX investors for informational and comparative purposes. In addition, certain non-GAAP financial information is used internally by management to evaluate and manage the company. The non-GAAP financial information used by PLX may differ from that used by other companies. These non-GAAP measures should be considered in addition to, and not a substitute for, the results prepared in accordance with GAAP.
Safe Harbor Statement This press 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 net revenues, estimated operating expenses and estimated gross margins, which are set forth under the caption "Business Outlook," and our expectations for data center, cloud services and 10GBase-T physical layer (PHY) portfolio markets and server and storage production in the first half of 2012. 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 that use 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, 2010, and PLX's quarterly reports on Forms10-Q for the quarters ended March 31, 2011 and June 30, 2011, 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.
PLX TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended
September 30 September 30 June 30
2011 2010 2011
------------- ------------- -------------
Net revenues $ 31,076 $ 30,234 $ 30,745
Cost of revenues 13,537 12,307 13,445
------------- ------------- -------------
Gross margin 17,539 17,927 17,300
Operating expenses:
Research and development 11,661 7,605 13,574
Selling, general and
administrative 6,856 6,570 6,678
Acquisition and restructuring
related costs 699 510 485
Amortization of purchased
intangible assets 2,445 648 2,444
------------- ------------- -------------
Total operating expenses 21,661 15,333 23,181
Income (loss) from operations (4,122) 2,594 (5,881)
Interest income and other, net (42) (1) (101)
------------- ------------- -------------
Income (loss) before provision
for income taxes (4,164) 2,593 (5,982)
Provision for income taxes 62 1,445 30
------------- ------------- -------------
Net income (loss) $ (4,226) $ 1,148 $ (6,012)
============= ============= =============
Basic net income (loss) per
share $ (0.09) $ 0.03 $ (0.14)
============= ============= =============
Shares used to compute basic
per share amounts 44,537 37,098 44,526
============= ============= =============
Diluted net income (loss) per
share $ (0.09) $ 0.03 $ (0.14)
============= ============= =============
Shares used to compute diluted
per share amounts 44,537 37,683 44,526
============= ============= =============
PLX TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
September 30 December 31
2011 2010
---------------- ----------------
ASSETS
Cash and investments $ 18,259 $ 23,579
Accounts receivable, net 12,822 13,555
Inventories 13,078 13,318
Property and equipment, net 12,965 12,554
Goodwill 21,412 21,412
Other intangible assets 24,151 31,484
Other assets 3,255 6,069
---------------- ----------------
Total assets $ 105,942 $ 121,971
================ ================
LIABILITIES
Accounts payable $ 7,454 $ 8,783
Accrued compensation and benefits 5,900 5,266
Accrued commissions 660 514
Other accrued expenses 2,424 1,803
Short term note payable & capital
lease obligations 5,810 6,066
Long term borrowings against line of
credit 2,000 -
Long term note payable & capital lease
obligations 1,397 1,731
---------------- ----------------
Total liabilities 25,645 24,163
STOCKHOLDERS' EQUITY
Common stock, par value 45 45
Additional paid-in capital 184,928 183,090
Accumulated other comprehensive loss (127) (148)
Accumulated deficit (104,549) (85,179)
---------------- ----------------
Total stockholders' equity 80,297 97,808
---------------- ----------------
Total liabilities and stockholders'
equity $ 105,942 $ 121,971
================ ================
PLX TECHNOLOGY, INC.
RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL INFORMATION 1
(unaudited, in thousands, except for per share data)
(not prepared in accordance with GAAP)
Three Months Ended
September 30 September 30 June 30
2011 2010 2011
------------- ------------- -------------
Net Income (Loss)
Reconciliation
GAAP Net Income (Loss) $ (4,226) $ 1,148 $ (6,012)
Acquisition and
restructuring related costs 699 510 485
Share-based compensation 671 386 784
Amortization of purchased
intangible assets 2,445 648 2,444
------------- ------------- -------------
Non-GAAP Net Income (Loss) $ (411) $ 2,692 $ (2,299)
============= ============= =============
Earnings (Loss) Per Share
Reconciliation
GAAP Diluted Income (Loss)
Per Share $ (0.09) $ 0.03 $ (0.14)
Effect of acquisition and
restructuring related costs 0.02 0.01 0.01
Effect of share-based
compensation 0.02 0.01 0.02
Effect of amortization of
purchased intangible assets 0.05 0.02 0.05
------------- ------------- -------------
Non-GAAP Diluted Income
(Loss) Per Share $ (0.00) $ 0.07 $ (0.06)
============= ============= =============
Operating Income (Loss)
Reconciliation
GAAP Operating Income (Loss) $ (4,122) $ 2,594 $ (5,881)
Share-based compensation -
COGS 11 8 12
Share-based compensation -
R&D 406 155 381
Share-based compensation -
SG&A 254 223 391
Acquisition and
restructuring related costs 699 510 485
Amortization of purchased
intangible assets 2,445 648 2,444
------------- ------------- -------------
Non-GAAP Operating Income
(Loss) $ (307) $ 4,138 $ (2,168)
============= ============= =============
Operating Expense
Reconciliation
GAAP Operating Expenses $ 21,661 $ 15,333 $ 23,181
Share-based compensation -
R&D (406) (155) (381)
Share-based compensation -
SG&A (254) (223) (391)
Acquisition and
restructuring related costs (699) (510) (485)
Amortization of purchased
intangible assets (2,445) (648) (2,444)
------------- ------------- -------------
Non-GAAP Operating Expenses $ 17,857 $ 13,797 $ 19,480
============= ============= =============
1 Refer to "Use of Non-GAAP Financial Information" in the press release for
a discussion of management's use of non-GAAP financial measures.
PLX TECHNOLOGY, INC.
SUPPLEMENTAL DATA (Unaudited)
Three Months Ended
September 30 September 30 June 30
2011 2010 2011
------------ ------------ -----------
Net Revenues by Geography
Americas 17% 20% 17%
Asia Pacific 73% 68% 70%
Europe 10% 12% 13%
Three Months Ended
September 30 September 30 June 30
2011 2010 2011
------------ ------------ -----------
Net Revenues by Type
PCI Express Revenue 53% 48% 55%
Storage Revenue 14% 12% 11%
Network PHY Revenue 4% * 2%
Connectivity Revenue 29% 40% 32%
Add to Digg Bookmark with del.icio.us Add to Newsvine
Source: PLX Technology
Are you missing key trading opportunities? Upgrade to StreetInsider Premium and get a step ahead of the market - FREE TRIAL!
Create E-mail Alert Related Categories
Press ReleasesRelated Entities
EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
