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PLX Technology, Inc. Reports First Quarter 2013 Financial Results

Apr 22 2013 12:00AM

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SUNNYVALE, CA -- (Marketwired) -- 04/22/13 -- PLX Technology, Inc. (PLX®) (NASDAQ: PLXT)

•12 Percent Growth over Q4 2012 •Return to Profitability •Record PCI Express Revenues

PLX Technology, Inc. (PLX®) (NASDAQ: PLXT), the global leader in PCI Express® (PCIe®) silicon and software connectivity solutions enabling emerging data center architectures, today announced first quarter revenues of $26.2 million and net income of $2.6 million, or $0.06 per share (diluted).

"Our successful return to profitability is centered on a company-wide commitment to controlling costs and focusing entirely on our leadership in innovative PCI Express products," said David Raun, PLX president and CEO. "Our record PCI Express sales, lower expenses and higher margins produced one of the most profitable quarters in years."


Non-GAAP Financial Comparison(in millions, except per share amounts) Quarterly Results Q1 2013 Q4 2012 Q1 2012 ---------- ---------- ----------Net revenues $ 26.2 $ 23.4 $ 24.5Operating expense $ 11.6 $ 11.5 $ 14.7Operating income (loss) from continuing operations $ 3.9 $ 2.2 $ (0.7)Net income (loss) from continuing operations $ 3.8 $ 2.4 $ (0.7)Income (loss) per share (diluted) from continuing operations $ 0.09 $ 0.06 $ (0.02)




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, amortization of acquired intangibles and discontinued operations. See "Use of Non-GAAP Financial Information" below.


GAAP Financial Comparison(in millions, except per share amounts) Quarterly Results Q1 2013 Q4 2012 Q1 2012 ---------- ---------- ----------Net revenues $ 26.2 $ 23.4 $ 24.5Operating expense $ 12.7 $ 14.1 $ 15.1Operating income (loss) from continuing operations $ 2.9 $ (0.4) $ (1.2)Net income (loss) from continuing operations $ 2.7 $ (0.2) $ (1.2)Income (loss) per share (diluted) from continuing operations $ 0.06 $ - $ (0.03)




"As we look ahead, demand for our flagship PCI Express products remains strong and is projected to grow in Q2, driven mostly by enterprise data center equipment. Our much smaller legacy connectivity product line will continue to decrease over time," said Raun. "Overall, our business model continues to strengthen. We paid down $6 million in liabilities in Q1 and expect continued tight cost controls combined with revenue increases in PCI Express products to allow solid results throughout 2013."

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 2013 earnings release, although it may provide additional details regarding its guidance during today's scheduled conference call.

•Net revenues for the second quarter ending June 30, 2013, are expected to be between $25.5 million and $27.5 million •Gross margins are expected to be approximately 58 percent •Operating expenses are expected to be approximately $13.4 million. Included in operating expenses are share-based compensation related charges of approximately $0.6 million.

Conference Call
PLX management plans to conduct a conference call and webcast today at 2:00 p.m. (PT) to discuss its first quarter results, as well as its second quarter 2013 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 (866) 318-8612, using access code 29370619. International callers may dial +1 (617) 399-5131. A recorded replay of this webcast will be available on the PLX Website beginning 4:00 p.m. (PT) on April 22, 2013, through 11:59 p.m. (PT) on April 29, 2013. To listen to the replay via telephone, call (888) 286-8010 and use access code 89523400. International callers may dial +1 (617) 801-6888.

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 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, amortization of acquired intangibles and discontinued operations. 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 statements regarding PLX's future growth potential, demand for PCI Express, declines in Connectivity products, the strengthening of our business model, continued cost controls and expected solid results for 2013.. 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, 2012 which identifies 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.

About PLX
PLX Technology, Inc. (NASDAQ: PLXT), based in Sunnyvale, Calif., USA, is the industry-leading global provider of semiconductor-based PCI Express connectivity solutions primarily targeting enterprise data center markets. The company develops innovative software-enriched silicon that enables product differentiation, reliable interoperability and superior performance. Visit PLX on plxtech.com, LinkedIn, Facebook, Twitter and YouTube.

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 December 31 March 31 2013 2012 2012 ---------- ------------- ----------Net revenues $ 26,218 $ 23,413 $ 24,532Cost of revenues 10,693 9,729 10,555 ---------- ------------- ----------Gross margin 15,525 13,684 13,977 ---------- ------------- ----------Operating expenses: Research and development 5,961 6,170 6,545 Selling, general and administrative 6,419 6,163 8,522 Acquisition and restructuring related costs 291 1,719 - Amortization of purchased intangible assets - 22 81 ---------- ------------- ----------Total operating expenses 12,671 14,074 15,148 ---------- ------------- ----------Income (loss) from operations 2,854 (390) (1,171)Interest income (expense) and other, net (71) (30) (5) ---------- ------------- ----------Income (loss) from continuing operations before provision for income taxes 2,783 (420) (1,176)Provision (benefit) for income taxes 84 (230) 48 ---------- ------------- ----------Income (loss) from continuing operations, net of tax 2,699 (190) (1,224)Loss from discontinued operations, net of tax(1) (57) (423) (6,216) ---------- ------------- ----------Net income (loss) $ 2,642 $ (613) $ (7,440) ========== ============= ==========Basic net income (loss) per share: Income (loss) from continuing operations $ 0.06 $ - $ (0.03) ========== ============= ========== Loss from discontinued operations $ - $ (0.01) $ (0.14) ========== ============= ========== Net income (loss) $ 0.06 $ (0.01) $ (0.17) ========== ============= ==========Diluted net loss per share: Income (loss) from continuing operations $ 0.06 $ - $ (0.03) ========== ============= ========== Loss from discontinued operations $ - $ (0.01) $ (0.14) ========== ============= ========== Net income (loss) $ 0.06 $ (0.01) $ (0.17) ========== ============= ==========Shares used to compute per share amounts: Basic 45,366 45,053 44,729 ========== ============= ========== Diluted 46,096 45,053 44,729 ---------- ------------- ----------(1) Loss on discontinued operations includes gain on disposal of $1,353 for the three months ended December 31, 2012 PLX TECHNOLOGY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands) March 31 December 31 2013 2012 ------------- -------------ASSETS Cash and investments $ 13,588 $ 16,711 Accounts receivable, net 13,003 10,635 Inventories 9,630 10,560 Property and equipment, net 10,878 11,267 Goodwill 20,461 20,461 Other assets 3,420 3,345 ------------- -------------Total assets $ 70,980 $ 72,979 ============= =============LIABILITIES Accounts payable $ 7,305 $ 10,738 Accrued compensation and benefits 2,407 4,493 Accrued commissions 502 817 Other accrued expenses 2,074 2,259 Short term borrowings against line of credit 8,000 8,000 ------------- -------------Total liabilities 20,288 26,307STOCKHOLDERS' EQUITY Common stock, par value 46 45 Additional paid-in capital 190,824 189,444 Accumulated other comprehensive loss (229) (226) Accumulated deficit (139,949) (142,591) ------------- -------------Total stockholders' equity 50,692 46,672 ------------- -------------Total liabilities and stockholders' equity $ 70,980 $ 72,979 ------------- ------------- 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 March 31 December 31 March 31 2013 2012 2012 ---------- ------------- ----------Income (Loss) From Continuing Operations Reconciliation GAAP Income (Loss) $ 2,699 $ (190) $ (1,224) Acquisition and restructuring related costs 291 1,719 - Share-based compensation 765 887 398 Amortization of purchased intangible assets - 22 81 ---------- ------------- ---------- Non-GAAP Income (Loss) $ 3,755 $ 2,438 $ (745) ========== ============= ==========Income (Loss) Per Share From Continuing Operations Reconciliation GAAP Diluted Income (Loss) Per Share $ 0.06 $ - $ (0.03) Effect of acquisition and restructuring related costs 0.01 0.04 - Effect of share-based compensation 0.02 0.02 0.01 Effect of amortization of purchased intangible assets - - - ---------- ------------- ---------- Non-GAAP Diluted Income (Loss) Per Share $ 0.09 $ 0.06 $ (0.02) ========== ============= ==========Operating Income (Loss) From Continuing Operations Reconciliation GAAP Operating Income (Loss) $ 2,854 $ (390) $ (1,171) Share-based compensation - COGS (23) 49 13 Share-based compensation - R&D 225 288 141 Share-based compensation - SG&A 563 550 244 Acquisition and restructuring related costs 291 1,719 - Amortization of purchased intangible assets - 22 81 ---------- ------------- ---------- Non-GAAP Operating Income (Loss) $ 3,910 $ 2,238 $ (692) ========== ============= ==========Operating Expense From Continuing Operations Reconciliation GAAP Operating Expenses $ 12,671 $ 14,074 $ 15,148 Share-based compensation - R&D (225) (288) (141) Share-based compensation - SG&A (563) (550) (244) Acquisition and restructuring related costs (291) (1,719) - Amortization of purchased intangible assets - (22) (81) ---------- ------------- ---------- Non-GAAP Operating Expenses $ 11,592 $ 11,495 $ 14,682 ========== ============= ==========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 March 31 December 31 March 31 2013 2012 2012 --------- ------------ ---------Net Revenues by GeographyAmericas 23% 15% 15%Asia Pacific 66% 70% 68%Europe 11% 15% 17% Three Months Ended March 31 December 31 March 31 2013 2012 2012 --------- ------------ ---------Net Revenues by TypePCI Express Revenue 71% 69% 65%Connectivity Revenue 29% 31% 35%









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Source: Marketwire