SOURCE: PLX Technologies, Inc.

PLX Technologies, Inc.

July 21, 2014 21:52 ET

PLX Technology, Inc. Reports Second Quarter 2014 Financial Results

SUNNYVALE, CA--(Marketwired - July 21, 2014) -  PLX Technology, Inc. (NASDAQ: PLXT), the global leader in PCI Express® (PCIe®) silicon and software connectivity solutions enabling emerging data center architectures, today announced second quarter revenues of $28.5 million and GAAP net loss of $0.3 million, or $0.01 per share (diluted).

On June 23, 2014, PLX® entered into a definitive agreement with Avago Technologies Limited (NASDAQ: AVGO) under which Avago will acquire PLX in an all-cash transaction valued at approximately $309 million, or $293 million net of cash and debt acquired.  Under the terms of the agreement, which was approved by the Boards of Directors of both companies, a subsidiary of Avago commenced a tender offer for all of the outstanding shares of PLX common stock for $6.50 per share in cash.  It is expected that the transaction will close in the fourth quarter of Avago's fiscal year ending November 3, 2014.  PLX will not issue financial guidance for the upcoming quarter or conduct a second quarter results conference call.

                 
                 
Non-GAAP Financial Comparison                
(in millions, except per share amounts)                
   Quarterly Results  Year to Date
   Q2 2014   Q1 2014  Q2 2013  2014  2013
Net revenues  $28.5   $24.8  $26.9  $53.4  $53.1
Gross Margin  $17.0   $15.0  $15.1  $32.0  $30.6
Operating expense  $14.7   $11.9  $11.8  $26.6  $23.4
Operating income from continuing operations  $2.2   $3.1  $3.3  $5.4  $7.2
Income from continuing operations, net of tax  $2.2   $3.0  $3.1  $5.3  $6.9
Income per share (diluted) from continuing operations, net of tax  $0.05   $0.07  $0.07  $0.11  $0.15
                 
                 

The above non-GAAP financial information (other than net revenues, which are presented on a GAAP basis) excludes share-based compensation, royalty accruals associated with the Internet Machines litigation, acquisition and restructuring costs, and discontinued operations.  See "Use of Non-GAAP Financial Information" below.

                 
                      
GAAP Financial Comparison                
(in millions, except per share amounts)                
   Quarterly Results  Year to Date
   Q2 2014   Q1 2014  Q2 2013  2014  2013
Net revenues
 $28.5   $24.8  $26.9  $53.4  $53.1
Gross Margin  $16.7   $14.8  $15.1  $31.5  $30.6
Operating expense  $17.0   $12.5  $13.3  $29.5  $26.0
Operating income (loss) from continuing operations  $(0.3 ) $2.3  $1.8  $2.0  $4.6
Income (loss) from continuing operations, net of tax  $(0.3 ) $2.2  $1.7  $1.9  $4.4
Income (loss) per share (diluted) from continuing operations, net of tax  $(0.01 ) $0.05  $0.04  $0.04  $0.09
                 
                 

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.comLinkedIn and YouTube.

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, royalty accruals associated with the Internet Machines litigation, acquisition and restructuring costs, 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 expectation and timing of the closing of the transaction by which Avago will acquire PLX.  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, but are not limited to: the risk that the PLX/Avago transaction will not close because of a failure to satisfy one or more of the closing conditions (including regulatory approvals); litigation relating to the merger; unexpected costs, charges or expenses resulting from the merger; and adverse legislative, regulatory and economic developments. 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, 2013 and PLX's quarterly report on Form 10-Q, 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.

Additional Information

This press release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any offer will only be made through a Tender Offer Statement on Schedule TO (collectively, the "Offer Materials"), initially filed with the U.S. Securities and Exchange Commission (the "SEC") by Avago Technologies Limited ("Avago") on July 8, 2014.  In addition, PLX filed with the SEC on July 8, 2014, a solicitation/recommendation statement on Schedule 14D-9 (as amended and supplemented from time to time, the "Schedule 14D-9") with respect to the exchange offer. Investors and security holders are urged to carefully read these documents and the other documents relating to the transactions contemplated by the Merger Agreement because these documents contain important information relating to the Offer and related transactions. Investors and security holders may obtain a free copy of these documents, as filed with the SEC, and other annual, quarterly and special reports and other information filed with the SEC by Avago or PLX, at the SEC's website at www.sec.gov. In addition, such materials may be obtained from PLX or Avago by contacting PLX Investor Relations at (408) 774-9060 or investor-relations@plxtech.com or Avago Limited Investor Relations at (408)435-7400 or investor.relations@avagotech.com.

PLX is a trademark 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 organizations.

PLX TECHNOLOGY, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(Unaudited)  
(in thousands, except per share amounts)  
                      
                      
                      
                      
                      
       Three Months Ended       Six Months Ended  
   June 30   March 31   June 30   June 30  
   2014   2014   2013   2014   2013  
                      
Net revenues  $28,511   $24,839   $26,850   $53,350   $53,068  
Cost of revenues   11,808    10,084    11,777    21,892    22,470  
Gross margin   16,703    14,755    15,073    31,458    30,598  
Operating expenses:                          
Research and development   9,444    6,390    6,480    15,834    12,441  
Selling, general and administrative   5,844    6,097    6,804    11,941    13,223  
Acquisition and restructuring related costs   1,711    -    -    1,711    291  
Total operating expenses   16,999    12,487    13,284    29,486    25,955  
Income (loss) from operations   (296 )  2,268    1,789    1,972    4,643  
Interest income (expense) and other, net   (24 )  (29 )  (55 )  (53 )  (126 )
Income (loss) from continuing operations before provision for income taxes   (320 )  2,239    1,734    1,919    4,517  
Provision (benefit) for income taxes   (6 )  52    61    46    145  
Income (loss) from continuing operations, net of tax   (314 )  2,187    1,673    1,873    4,372  
Loss from discontinued operations, net of tax   -    -    -    -    (57 )
Net income (loss)  $(314 ) $2,187   $1,673   $1,873   $4,315  
                           
Basic net income (loss) per share:                          
Income (loss) from continuing operations  $(0.01 ) $0.05   $0.04   $0.04   $0.10  
Loss from discontinued operations  $-   $-   $-   $-   $-  
Net income (loss)  $(0.01 ) $0.05   $0.04   $0.04   $0.10  
                           
Diluted net income (loss) per share:                          
  Income (loss) from continuing operations  $(0.01 ) $0.05   $0.04   $0.04   $0.09  
  Loss from discontinued operations  $-   $-   $-   $-   $-  
  Net income (loss)  $(0.01 ) $0.05   $0.04   $0.04   $0.09  
                           
Shares used to compute per share amounts:                          
  Basic   45,922    45,841    45,611    45,882    45,487  
  Diluted   45,922    47,149    46,299    47,154    46,195  
                      
                      
                      
PLX TECHNOLOGY, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(Unaudited)  
(in thousands)  
          
          
          
          
          
   June 30   December 31  
   2014   2013  
ASSETS         
          
  Cash and investments  $25,670   $20,424  
  Accounts receivable, net   13,042    12,835  
  Inventories   11,998    10,289  
  Property and equipment, net   11,229    10,333  
  Goodwill   20,461    20,461  
  Other assets   3,098    2,818  
Total assets  $85,498   $77,160  
            
LIABILITIES           
            
  Accounts payable  $10,443   $6,511  
  Accrued compensation and benefits   3,270    4,050  
  Accrued commissions   492    480  
  Other accrued expenses   4,965    3,213  
  Long term borrowings against line of credit   5,000    5,000  
Total liabilities   24,170    19,254  
            
STOCKHOLDERS' EQUITY           
            
  Common stock, par value   46    46  
  Additional paid-in capital   194,940    193,391  
  Accumulated other comprehensive loss   (277 )  (277 )
  Accumulated deficit   (133,381 )  (135,254 )
Total stockholders' equity   61,328    57,906  
Total liabilities and stockholders' equity  $85,498   $77,160  
         
         
         
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       Six Months Ended
   June 30    March 31   June 30   June 30
   2014    2014   2013   2014  2013
Income (Loss) From Continuing Operations Reconciliation                   
  GAAP Income (Loss), Net of Tax $(314 )  $2,187   $1,673   $ 1,873  $ 4,372
  Acquisition and restructuring related costs  1,711     -    -   1,711  291
  Share-based compensation  535     586    567   1,121  1,332
  Lawsuit verdict contingency accrual  272     275    903   547  903
  Non-GAAP Income, Net of Tax $2,204    $3,048   $3,143   $ 5,252  $ 6,898
                      
Income (Loss) Per Share From Continuing Operations Reconciliation                    
  GAAP Diluted Income (Loss) Per Share, Net of Tax $(0.01 )  $0.05   $0.04   $ 0.04  $ 0.09
  Effect of acquisition and restructuring related costs  0.04     -    -   0.04  0.01
  Effect of share-based compensation  0.01     0.01    0.01   0.02  0.03
  Effect of lawsuit verdict contingency accrual  0.01     0.01    0.02   0.01  0.02
  Non-GAAP Diluted Income Per Share, Net of Tax $0.05    $0.07   $0.07   $ 0.11  $ 0.15
                      
Operating Income (Loss) From Continuing Operations Reconciliation                    
  GAAP Operating Income (Loss) $(296 )  $2,268   $1,789   $ 1,972  $ 4,643
  Share-based compensation - Cost of revenues  14     13    14   27  (9)
  Share-based compensation - R&D  219     221    191   440  416
  Share-based compensation - SG&A  302     352    362   654  925
  Lawsuit verdict contingency accrual  272     275    903   547  903
  Acquisition and restructuring related costs  1,711     -    -   1,711  291
  Non-GAAP Operating Income $2,222    $3,129   $3,259   $ 5,351  $ 7,169
                      
Gross Margin From Continuing Operations Reconciliation                     
 GAAP Gross Margin $16,703    $14,755   $15,073   $ 31,458  $ 30,598
 Share-based compensation - Cost of revenues  14     13    14   27  (9)
 Lawsuit verdict contingency accrual  250     254    -   504  -
 Non-GAAP Gross Margin $16,967    $15,022   $15,087   $ 31,989  $ 30,589
                      
Operating Expense From Continuing Operations Reconciliation                     
 GAAP Operating Expenses $16,999    $12,487   $13,284   $ 29,486  $ 25,955
 Share-based compensation - R&D  (219 )   (221 )  (191 ) (440)  (416)
 Share-based compensation - SG&A  (302 )   (352 )  (362 ) (654)  (925)
 Lawsuit verdict contingency accrual  (22 )   (21 )  (903 ) (43)  (903)
 Acquisition and restructuring related costs  (1,711 )   -    -   (1,711)  (291)
 Non-GAAP Operating Expenses $14,745    $11,893   $11,828   $ 26,638  $ 23,420
                      
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   Six Months Ended  
   June 30   March 31   June 30   June 30  
   2014   2014   2013   2014   2013  
Net Revenues by Geography                     
Americas  18 % 20 % 19 % 19 % 21 %
Asia Pacific  72 % 67 % 71 % 70 % 69 %
Europe  10 % 13 % 10 % 11 % 10 %
                      
                      
                      
   Three Months Ended   Six Months Ended  
   June 30   March 31   June 30   June 30  
   2014   2014   2013   2014   2013  
Net Revenues by Type                     
PCI Express Revenue  69 % 70 % 75 % 70 % 73 %
Connectivity Revenue  31 % 30 % 25 % 30 % 27 %

Contact Information

  • Contact Information: 
    David Hurd 
    PLX Technology, Inc. 
    Sr. Director, Corporate Communication 
    (408) 328-3594 
    dhurd@plxtech.com