PLX Technology Posts First-Quarter 2009 Financial Results

PLX Technology, Inc. has announced financial results for the first quarter ended March 31.

"We continue to see signs of improvement in our business," said Ralph Schmitt, PLX chief executive officer. "After a period of inventory reduction at customers and in the channel, we are seeing an increase in orders in some of our end markets. The end customer demand continues to be stronger than the channel order pattern. As the overall economic climate improves, we expect to see a more broad-based increase in our business. The fundamentals of these markets continue to be sound and are still expected to grow faster than the rest of the semiconductor industry. Our connectivity product line was down mostly due to its concentration in a distribution-based industrial and communications customer base."

In a release on May 5, the company noted: the first quarter ended March 31, PLX reported net revenues of $16.5 million, a 28 percent decrease from the $22.8 million reported in the first quarter ended March 31, 2008, and a 16 percent increase from the $14.2 million reported in the fourth quarter ended December 31, 2008.

The net loss for the first quarter ended March 31, was $10.5 million, or a loss of $0.31 per share (diluted). This compares with a net income of $1.1 million, or $0.04 per share (diluted), in the first quarter ended March 31, 2008, and a net loss of $58.3 million, or a loss of $2.08 per share (diluted), in the fourth quarter ended December 31, 2008.

The Company's gross margin for the first quarter ended March 31, including the Oxford Semiconductor products, was 54.4 percent, as compared with 60.8 percent for the first quarter ended March 31, 2008, and 59.4 percent for the fourth quarter ended December 31, 2008.

Operating expenses were $18.3 million for the first quarter ended March 31, as compared with $13.2 million in the first quarter ended March 31, 2008, and $67.4 million in the fourth quarter ended December 31, 2008.

At March 31, cash and investments decreased by $5.5 million to $41.6 million, from $47.1 million at December 31, 2008.

The Oxford Semiconductor transaction was closed at the start of the quarter and the integration activities were largely completed in the quarter. All actions were taken to achieve PLX's cost-reduction goals for the combined entities by the second quarter. During the first quarter, the Company executed a smooth customer transition and saw the fruition of several key Network Attached Storage (NAS) design wins at tier-1 customers.

PLX continues to maintain its leadership position in PCI Express. During the quarter, the Company introduced its fourth Gen 2 switch family, bringing the total number to more than 40 devices. This family adds Multicast and multi-root capabilities used extensively in the communications, storage and server markets. This family also includes the world's largest PCI Express switch at 96 lanes.

In addition, the Company sampled the industry's first PCI Express switch with direct memory access (DMA) capability, which is fast becoming a requirement in high-performance systems in a variety of end markets.

"Even in these difficult times, PLX continued to dominate the PCI Express market during the first quarter, receiving a partnership award from Intel and announcing a relationship with Fusion-io in the high-growth solid state drive (SSD) storage market," said David Raun, PLX vice president of marketing and business development. "Although the market contracted, our PCI Express revenue remained flat and increased our market share."

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

- Net revenues for the second quarter ended June 30, are expected to be between $16.5 million and $19.0 million.

- Gross margins are expected to be approximately 55 percent.

- Operating expense will include spending for R&D and SG&A of approximately $14 million, amortization of acquired intangibles of approximately $900,000, and charges for stock-based compensation. The stock-based compensation charge will be significant as we accelerated the future expense associated with underwater stock options that were tendered to the Company on May 1.

PLX Technology, Inc., based in Sunnyvale, Calif., USA, is a global supplier of high-performance, feature-rich, system-interconnect semiconductors, SoC and software solutions for the communications, storage, server, compute, embedded-control, and consumer markets.

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