PLX Technology, Inc. (PLX®) (NASDAQ: PLXT)
- 12 Percent PCI Express Growth
- PCIe Gen3 Shipments Ramp
- Strategic Combination with IDT
Announced
PLX Technology, Inc. (PLX®) (NASDAQ: PLXT), a leading global
supplier of software-enriched silicon for the enterprise data
center, today announced first quarter revenues of $25.4 million and
a GAAP net loss of $7.4 million, or $0.17 per share (diluted).
"Our product revenue grew five percent in the quarter, driven by
a 12 percent growth rate in PCI Express. Our overall revenues were
within our guidance range, but toward the lower end as some IP
revenue slipped into Q2 due to ongoing strategic combination
activities," said Ralph Schmitt, PLX president and CEO. "Our
bookings strengthened progressively through the first quarter,
indicating that a market recovery is underway and providing a
higher level of backlog as we entered the second quarter. As a
result, we are optimistic that we will see growth in Q2."
PLX today announced in a separate press release that it has
entered into a definitive agreement to be acquired by Integrated
Device Technology, Inc. (IDT®) (NASDAQ: IDTI), and a summary of the
terms of the agreement can be found in a Form 8-K, which will be
filed by PLX and posted on the PLX Technology Website. Under the
terms of the agreement, PLX may solicit superior proposals from
third parties for a period of 30 calendar days continuing through
May 30, 2012. It is not anticipated that any developments will be
disclosed with regard to this process unless PLX's Board of
Directors makes a decision with respect to a potential superior
proposal. There are no guarantees that this process will result in
a superior proposal.
"This is an exciting new chapter for PLX," said Schmitt. "The
board's decision to move forward in combination with another
leading technology company will help reduce risk and accelerate
shareholder value. The announced combination with IDT strengthens
our position in data center interconnect solutions and offers
substantial business and technology synergies that will allow us to
better service our customers and leverage exciting growth
opportunities in our space."
Non-GAAP Financial Comparison
(in millions, except per share
amounts)
Quarterly Results
Q1 2012 Q4 2011 Q1 2011
----------- ----------- -----------
Net revenues $ 25.4 $ 25.9 $ 28.1
Operating expense $ 19.1 $ 18.7 $ 19.3
Operating loss $ (5.1) $ (3.4) $ (3.3)
Net loss $ (5.2) $ (3.3) $ (3.4)
Loss per share (diluted) $ (0.12) $ (0.08) $ (0.09)
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
Q1 2012 Q4 2011 Q1 2011
----------- ----------- -----------
Net revenues $ 25.4 $ 25.9 $ 28.1
Operating expense $ 21.4 $ 20.8 $ 25.1
Operating loss $ (7.4) $ (5.5) $ (9.0)
Net loss $ (7.4) $ (5.5) $ (9.1)
Loss per share (diluted) $ (0.17) $ (0.12) $ (0.21)
Product Highlights and Strategic Direction
"We were pleased to see the successful first quarter rollout of
Intel's Xeon Processor E5-2600 product family because it is a
significant milestone for the entire data center ecosystem and
directly impacts PLX's new product portfolio of PCI Express Gen3
switches and 10 Gigabit Ethernet transceivers," said Schmitt. "Xeon
E5 enables the long-awaited Gen3 standard, which translates to
numerous new design opportunities across the enterprise market as
well as consumer motherboards. Further, Intel's recent deployment
of the new X450 Ethernet controller that is based on 10GBase-T
technology is quite significant as it will fully enable the
emerging 10 Gigabit Ethernet Base-T infrastructure and ultimately
help drive the ramp of PLX design wins to market."
During the first quarter, PLX announced a new 10GBase-T physical
layer (PHY) device that is optimized for Top-of-Rack (ToR) network
switches. The TeraPHY® TN8045 10GBase-T transceiver, a quad-port
PHY, is housed in an industry-leading small 25mm-square package
that is space-optimized to allow for 12 devices to fit side-by-side
in a standard 48-port 10 Gigabit Ethernet ToR switch. 10 Gigabit
Ethernet is replacing the ubiquitous 1 Gigabit Ethernet standard.
Data centers are being enabled with this higher-speed connectivity
via PLX's 10GBase-T TeraPHY technology due to its 10-fold
performance increase, as well as its seamless use of low-cost
standard copper Ethernet cabling, EMI features, unique security
tools, and energy efficiency. 10GBase-T PHYs are a fundamental
building block of common data center hardware, including Ethernet
switches, network interface cards (NICs), and network adapters. PLX
innovation enabled the industry's first 10GBase-T equipment, and
its industry-leading 10GBase-T PHY portfolio is designed into
numerous platforms. Increasingly power-efficient and feature-rich
PLX PHYs designed on a 28-nanometer node are now in
development.
PLX's innovative ExpressLane™ PCIe Gen3 switch family, the
industry's first and designed on a 40nm process node, includes
broad lane counts ranging from 12 up to 48, and port counts of
three up to 12. The devices began sampling in November 2010 with
production shipments in Q1 2011, and are compliant with the PCI-SIG
Base Specification 3.0. Board and system designers can take full
advantage of the latest PCIe specification -- 8 gigabits in both
directions (Tx/Rx), per lane -- thus enabling one PLX 48-lane Gen3
switch to manage 768 gigabits of full peer-to-peer bandwidth.
High-performance PCIe Gen3 is enabling new markets due to its low
cost and extensive market adoption. PLX initiatives include the
rapidly expanding role of PCIe in enterprise storage using solid
state disk (SSD), and re-tooling data center architectures by
adopting small ExpressFabric® clusters to replace costly InfiniBand
and other.
Conference Call PLX management plans to
conduct a conference call and webcast today at 2:30 p.m. (PT) to
discuss its first quarter financial results. The Company will not
be announcing a second quarter 2012 outlook due to the pending
acquisition transaction and go-shop period. 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) 770-7129, using access
code 26049068. International callers may dial +1 (617) 213-8067. A
recorded replay of this webcast will be available on the PLX
Website beginning 4:30 p.m. (PT) on April 30, 2012, through 11:59
p.m. (PT) on May 7, 2012. To listen to the replay via telephone,
call (888) 286-8010 and use access code 75677989. 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 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 develops innovative software-enriched silicon that enables
product differentiation, reliable interoperability and superior
performance. Visit PLX on plxtech.com, Facebook, Twitter 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
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 forward-looking statements. These include statements
regarding: growth in the second quarter; that the proposed
combination with IDT will reduce risk and accelerate shareholder
value; that such combination will lead to substantial synergies;
and about future PLX design wins. 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 the reduced demand for products of
electronic equipment manufacturers that use PLX's products; adverse
economic conditions in general or those specifically affecting
PLX's markets; technical difficulties and delays in the development
process; errors in the products; reduced backlog for PLX's
customers and unexpected expenses; uncertainties as to the timing
of the proposed transaction with IDT; the risk that competing
offers or acquisition proposals will be made; the risk that the
transaction will not close because of a failure to satisfy one or
more of the offer closing conditions (including regulatory
approvals); the risk that the announcement and pendency of the
transaction may make it more difficult to establish or maintain
relationships with employees, suppliers and other business
partners; the risk that stockholder litigation in connection with
the transaction may result in significant costs of defense,
indemnification and liability; the risk that PLX's business will
have been adversely impacted during the pendency of the
transaction; the risk that the operations of PLX and IDT will not
be integrated successfully; the risk that the expected cost savings
and other synergies from the transaction may not be fully realized,
realized at all or take longer to realize than anticipated; and
other economic, business and competitive factors affecting the
businesses of IDT and PLX generally, including those set forth in
the filings of IDT and PLX with the SEC from time to time,. Please
also refer to the documents filed by PLX 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, 2011, and PLX's quarterly reports
on Forms10-Q, 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.
Additional Information The separately
announced cash and stock exchange offer by Integrated Device
Technology, Inc. (IDT) for the outstanding shares of PLX common
stock has not yet commenced. This communication 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 prospectus,
which is part of a registration statement on Form S-4, as well as a
Tender Offer Statement on Schedule TO, an offer to purchase, form
of letter of transmittal and other documents relating to the
exchange offer (collectively, the "Exchange Offer Materials"), each
to be filed with the U.S. Securities and Exchange Commission (the
"SEC") by IDT. In addition, PLX will file with the SEC a
solicitation/recommendation statement on Schedule 14D-9 with
respect to the exchange offer. IDT and PLX expect to mail the
Exchange Offer Materials, as well as the Schedule 14D-9, to PLX
stockholders. Investors and security holders are urged to carefully
read these documents and the other documents relating to the
transactions contemplated by the merger agreement when they become
available because these documents will contain important
information relating to the exchange offer and related
transactions. Investors and security holders may obtain a free copy
of these documents after they have been filed with the SEC, and
other annual, quarterly and special reports and other information
filed with the SEC by IDT or PLX at the SEC's website at
www.sec.gov. In addition, such materials will be available from IDT
or PLX, or by calling Innisfree M&A Incorporated, the
information agent for the exchange offer, toll-free at (877)
456-3463 (banks and brokers may call collect at (212)
750-5833).
Neither PLX nor IDT is asking for stockholders to vote or
soliciting proxies in connection with the exchange offer
transaction at this time. Upon consummation of the offer, PLX and
IDT may seek votes or proxies in connection with the proposed
back-end merger from holders of PLX shares not tendered in the
offer. PLX, IDT and their respective officers and directors
therefore may be deemed to be participants in the solicitation of
proxies from PLX's stockholders in connection with the proposed
merger. A description of certain interests of the directors and
executive officers of PLX is set forth in PLX's Form 10-K/A,
Amendment No. 1, in Part III thereof, which was filed with the SEC
on April 27, 2012. A description of certain interests of the
directors and executive officers of IDT is set forth in IDT's proxy
statement for its 2011 annual meeting, which was filed with the SEC
on August 1, 2011. To the extent holdings of either company's
securities by their respective directors and certain officers have
subsequently changed, such changes have been reflected on Forms 4
filed with the SEC
PLX, the PLX logo, ExpressFabric, and TeraPHY
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
March 31 December 31 March 31
2012 2011 2011
------------ ------------ ------------
Net revenues $ 25,417 $ 25,889 $ 28,079
Cost of revenues 11,404 10,594 12,074
------------ ------------ ------------
Gross margin 14,013 15,295 16,005
Operating expenses:
Research and development 11,063 11,141 12,860
Selling, general and
administrative 8,625 7,726 7,125
Acquisition and restructuring
related costs - (1,397) 2,621
Amortization of purchased
intangible assets 1,731 3,306 2,444
------------ ------------ ------------
Total operating expenses 21,419 20,776 25,050
Loss from operations (7,406) (5,481) (9,045)
Interest income (expense) and
other, net (5) 61 (66)
------------ ------------ ------------
Loss before provision for income
taxes (7,411) (5,420) (9,111)
Provision for income taxes 29 33 21
------------ ------------ ------------
Net loss $ (7,440) $ (5,453) $ (9,132)
============ ============ ============
Basic net loss per share $ (0.17) $ (0.12) $ (0.21)
============ ============ ============
Shares used to compute basic per
share amounts 44,729 44,660 44,511
============ ============ ============
Diluted net loss per share $ (0.17) $ (0.12) $ (0.21)
============ ============ ============
Shares used to compute diluted per
share amounts 44,729 44,660 44,511
============ ============ ============
PLX TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
March 31 December 31
2012 2011
------------- -------------
ASSETS
Cash and investments $ 16,235 $ 19,752
Accounts receivable, net 13,942 11,074
Inventories 8,192 8,896
Property and equipment, net 12,663 12,291
Goodwill 21,338 21,338
Other intangible assets 19,114 20,845
Other assets 3,592 2,622
------------- -------------
Total assets $ 95,076 $ 96,818
============= =============
LIABILITIES
Accounts payable $ 9,935 $ 7,134
Accrued compensation and benefits 3,914 3,586
Accrued commissions 700 632
Other accrued expenses 2,851 3,132
Short term note payable & capital lease
obligations 434 5,115
Long term borrowings against line of credit 9,000 2,000
------------- -------------
Total liabilities 26,834 21,599
STOCKHOLDERS' EQUITY
Common stock, par value 45 45
Additional paid-in capital 185,822 185,323
Accumulated other comprehensive loss (183) (147)
Accumulated deficit (117,442) (110,002)
------------- -------------
Total stockholders' equity 68,242 75,219
------------- -------------
Total liabilities and stockholders' equity $ 95,076 $ 96,818
============= =============
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
2012 2011 2011
------------ ------------ ------------
Net Loss Reconciliation
GAAP Net Loss $ (7,440) $ (5,453) $ (9,132)
Acquisition and restructuring
related costs - (1,397) 2,621
Share-based compensation 552 211 664
Amortization of purchased
intangible assets 1,731 3,306 2,444
------------ ------------ ------------
Non-GAAP Net Loss $ (5,157) $ (3,333) $ (3,403)
============ ============ ============
Loss Per Share Reconciliation
GAAP Diluted Loss Per Share $ (0.17) $ (0.12) $ (0.21)
Effect of acquisition and
restructuring related costs - (0.03) 0.06
Effect of share-based
compensation 0.01 - 0.01
Effect of amortization of
purchased intangible assets 0.04 0.07 0.05
------------ ------------ ------------
Non-GAAP Diluted Loss Per Share $ (0.12) $ (0.08) $ (0.09)
============ ============ ============
Operating Loss Reconciliation
GAAP Operating Loss $ (7,406) $ (5,481) $ (9,045)
Share-based compensation - COGS 13 13 11
Share-based compensation - R&D 279 (60) 358
Share-based compensation - SG&A 260 258 295
Acquisition and restructuring
related costs - (1,397) 2,621
Amortization of purchased
intangible assets 1,731 3,306 2,444
------------ ------------ ------------
Non-GAAP Operating Loss $ (5,123) $ (3,361) $ (3,316)
============ ============ ============
Operating Expense Reconciliation
GAAP Operating Expenses $ 21,419 $ 20,776 $ 25,050
Share-based compensation - R&D (279) 60 (358)
Share-based compensation - SG&A (260) (258) (295)
Acquisition and restructuring
related costs - 1,397 (2,621)
Amortization of purchased
intangible assets (1,731) (3,306) (2,444)
------------ ------------ ------------
Non-GAAP Operating Expenses $ 19,149 $ 18,669 $ 19,332
============ ============ ============
(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
2012 2011 2011
----------- ------------- -----------
Net Revenues by Geography
Americas 15% 29% 22%
Asia Pacific 69% 62% 63%
Europe 16% 9% 15%
Three Months Ended
March 31 December 31 March 31
2012 2011 2011
----------- ------------- -----------
Net Revenues by Type
PCI Express Revenue 63% 55% 51%
Network PHY Revenue 3% 4% 6%
Connectivity Revenue 34% 41% 43%
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