PLX Technology, Inc. Reports First Quarter 2013 Financial Results

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SUNNYVALE, CA--(Marketwired - Apr 22, 2013) -  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   $ 24.5  
Operating expense   $ 11.6   $ 11.5   $ 14.7  
Operating 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     $ 24.5  
Operating expense   $ 12.7   $ 14.1     $ 15.1  
Operating 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     $ 24,532  
Cost 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       26,307  
                 
STOCKHOLDERS' 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 Geography            
Americas   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 Type            
PCI Express Revenue   71%   69%   65%
Connectivity Revenue   29%   31%   35%
             

 

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