PLX Technology, Inc. Reports Second Quarter 2013 Financial Results
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PLX Technology, Inc. Reports Second Quarter 2013 Financial Results

SUNNYVALE, CA -- (Marketwired) -- Jul 22, 2013 -- PLX Technology, Inc. (NASDAQ: PLXT)

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 second quarter revenues of $26.8 million and net income of $1.7 million, or $0.04 per share (diluted).

"Our ongoing commitment to controlling costs and focusing on our growing leadership in PCI Express has resulted in consecutive profitable quarters," said David Raun, PLX president and CEO. "Although we still have much to do, these two quarters combined produced the most profitable first six months of any year in the company's history. PCI Express grew eight percent, led by Gen3 growth setting a new record and producing our first $20 million PCI Express quarter. PCI Express is now 75 percent of our sales, up from 67 percent one year ago."

                                                                            
                                                                            
Non-GAAP Financial Comparison                                               
(in millions, except per share amounts)                                     
                                                                            
                                   Quarterly Results         Year to Date   
                               Q2 2013  Q1 2013  Q2 2012    2013     2012   
                              -------- -------- --------  -------- -------- 
Net revenues                  $   26.9 $   26.2 $   25.4  $   53.1 $   50.0 
Operating expense             $   11.8 $   11.6 $   12.9  $   23.4 $   27.6 
Operating income from                                                       
 continuing operations        $    3.3 $    3.9 $    2.2  $    7.2 $    1.5 
Income from continuing                                                      
 operations                   $    3.1 $    3.8 $    2.6  $    6.9 $    1.9 
Income per share (diluted)                                                  
 from continuing operations   $   0.07 $   0.09 $   0.06  $   0.15 $   0.03 
                                                                            
                                                                            

The above non-GAAP financial information (other than net revenues, which are presented on a GAAP basis) excludes lawsuit verdict contingency accrual expense, 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         Year to Date   
                               Q2 2013  Q1 2013  Q2 2012    2013     2012   
                              -------- -------- --------  -------- -------- 
Net revenues                  $   26.9 $   26.2 $   25.4  $   53.1 $   50.0 
Operating expense             $   13.3 $   12.7 $   16.0  $   26.0 $   31.2 
Operating income (loss) from                                                
 continuing operations        $    1.8 $    2.9 $   (0.9) $    4.6 $   (2.1)
Income (loss) from continuing                                               
 operations                   $    1.7 $    2.7 $   (0.5) $    4.4 $   (1.7)
Income (loss) per share                                                     
 (diluted) from continuing                                                  
 operations                   $   0.04 $   0.06 $  (0.01) $   0.09 $  (0.04)
                                                                            
                                                                            

"Our leadership position in PCI Express, along with innovative products in development, is driving growth and new opportunities in the enterprise data center and cloud," said Raun. "Networking and enterprise storage are leading the way on the design win front with strong activity around PCIe SSD platforms. We believe PLX won every significant switch design opportunity this past quarter.

"We estimate that the PCI Express market will grow by 15 to 25 percent in 2013. As we discussed last quarter, our continued revenue increases in PCI Express are expected to be somewhat offset through this year by declines in sales of our legacy connectivity products. However, we expect to exit 2013 with less than 20 percent of revenue from connectivity. Market growth, market share gains, solid design activity, and declining impact from connectivity products, should position PLX for greater growth in future quarters."

Business Outlook
The following statements are based on current expectations. The company does not intend to update, confirm or change this guidance until its third quarter 2013 earnings release, although it may provide additional details regarding its guidance during today's scheduled conference call.

Conference Call
PLX management plans to conduct a conference call and webcast today at 1:30 p.m. (PT) to discuss its second quarter results, as well as its third 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) 515-2908, using access code 94187306. International callers may dial +1 (617) 399-5122. A recorded replay of this webcast will be available on the PLX Website beginning 3:30 p.m. (PT) on July 22, 2013, through 11:59 p.m. (PT) on July 29, 2013. To listen to the replay via telephone, call (888) 286-8010 and use access code 30028808. 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 lawsuit verdict contingency accrual expense, 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 and new opportunities, demand for PCI Express, PCI Express market growth, declines in Connectivity products, and continued cost controls. 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, and PLX's quarterly report on Form 10-Q for the quarter ended March 31, 2013, 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       Six Months Ended  
                           June 30   March 31   June 30        June 30      
                                                         ------------------ 
                            2013       2013      2012      2013      2012   
                          --------  ---------  --------  --------  -------- 
                                                                            
Net revenues              $ 26,850  $  26,218  $ 25,437  $ 53,068  $ 49,969 
Cost of revenues            11,777     10,693    10,370    22,470    20,925 
                          --------  ---------  --------  --------  -------- 
Gross margin                15,073     15,525    15,067    30,598    29,044 
                          --------  ---------  --------  --------  -------- 
Operating expenses:                                                         
  Research and                                                              
   development               6,480      5,961     5,993    12,441    12,538 
  Selling, general and                                                      
   administrative            6,804      6,419     7,588    13,223    16,109 
  Acquisition and                                                           
   restructuring related                                                    
   costs                         -        291     2,350       291     2,350 
  Amortization of                                                           
   purchased intangible                                                     
   assets                        -          -        78         -       159 
                          --------  ---------  --------  --------  -------- 
Total operating expenses    13,284     12,671    16,009    25,955    31,156 
                          --------  ---------  --------  --------  -------- 
Income (loss) from                                                          
 operations                  1,789      2,854      (942)    4,643    (2,112)
Interest income (expense)                                                   
 and other, net                (55)       (71)      (55)     (126)      (60)
                          --------  ---------  --------  --------  -------- 
Income (loss) from                                                          
 continuing operations                                                      
 before provision for                                                       
 income taxes                1,734      2,783      (997)    4,517    (2,172)
Provision (benefit) for                                                     
 income taxes                   61         84      (513)      145      (465)
                          --------  ---------  --------  --------  -------- 
Income (loss) from                                                          
 continuing operations,                                                     
 net of tax                  1,673      2,699      (484)    4,372    (1,707)
Loss from discontinued                                                      
 operations, net of tax          -        (57)  (17,734)      (57)  (23,952)
                          --------  ---------  --------  --------  -------- 
Net income (loss)         $  1,673  $   2,642  $(18,218) $  4,315  $(25,659)
                          ========  =========  ========  ========  ======== 
                                                                            
Basic net income (loss)                                                     
 per share:                                                                 
  Income (loss) from                                                        
   continuing operations  $   0.04  $    0.06  $  (0.01) $   0.10  $  (0.04)
                          ========  =========  ========  ========  ======== 
  Loss from discontinued                                                    
   operations             $      -  $       -  $  (0.40) $      -  $  (0.54)
                          ========  =========  ========  ========  ======== 
  Net income (loss)       $   0.04  $    0.06  $  (0.41) $   0.10  $  (0.58)
                          ========  =========  ========  ========  ======== 
                                                                            
Diluted net loss per                                                        
 share:                                                                     
  Income (loss) from                                                        
   continuing operations  $   0.04  $    0.06  $  (0.01) $   0.09  $  (0.04)
                          ========  =========  ========  ========  ======== 
  Loss from discontinued                                                    
   operations             $      -  $       -  $  (0.40) $      -  $  (0.54)
                          ========  =========  ========  ========  ======== 
  Net income (loss)       $   0.04  $    0.06  $  (0.41) $   0.09  $  (0.58)
                          ========  =========  ========  ========  ======== 
                                                                            
Shares used to compute                                                      
 per share amounts:                                                         
  Basic                     45,611     45,366    44,797    45,487    44,763 
                          ========  =========  ========  ========  ======== 
  Diluted                   46,299     46,096    44,797    46,195    44,763 
                          ========  =========  ========  ========  ======== 
                                                                            
                                                                            
                                                                            
                                                                            
                            PLX TECHNOLOGY, INC.                            
                   CONDENSED CONSOLIDATED BALANCE SHEETS                    
                                (Unaudited)                                 
                               (in thousands)                               
                                                                            
                                                                            
                                                                            
                                                                            
                                                                            
                                                  June 30      December 31  
                                                    2013           2012     
                                               -------------  ------------- 
ASSETS                                                                      
                                                                            
  Cash and investments                         $      15,534  $      16,711 
  Accounts receivable, net                            12,187         10,635 
  Inventories                                         10,600         10,560 
  Property and equipment, net                         10,632         11,267 
  Goodwill                                            20,461         20,461 
  Other assets                                         4,008          3,345 
                                               -------------  ------------- 
Total assets                                   $      73,422  $      72,979 
                                               =============  ============= 
                                                                            
LIABILITIES                                                                 
                                                                            
  Accounts payable                             $       5,890  $      10,738 
  Accrued compensation and benefits                    2,925          4,493 
  Accrued commissions                                    515            817 
  Other accrued expenses                               2,958          2,259 
  Short term borrowings against line of credit             -          8,000 
  Long term borrowings against line of credit          8,000              - 
                                               -------------  ------------- 
Total liabilities                                     20,288         26,307 
                                                                            
STOCKHOLDERS' EQUITY                                                        
                                                                            
  Common stock, par value                                 46             45 
  Additional paid-in capital                         191,619        189,444 
  Accumulated other comprehensive loss                  (255)          (226)
  Accumulated deficit                               (138,276)      (142,591)
                                               -------------  ------------- 
Total stockholders' equity                            53,134         46,672 
                                               -------------  ------------- 
Total liabilities and stockholders' equity     $      73,422  $      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       Six Months Ended  
                           June 30   March 31   June 30        June 30      
                                                         ------------------ 
                            2013       2013      2012      2013      2012   
                          --------  ---------  --------  --------  -------- 
Income From Continuing                                                      
 Operations                                                                 
 Reconciliation                                                             
  GAAP Income (Loss)      $  1,673  $   2,699  $   (484) $  4,372  $ (1,707)
  Acquisition and                                                           
   restructuring related                                                    
   costs                         -        291     2,350       291     2,350 
  Share-based                                                               
   compensation                567        765       694     1,332     1,092 
  Lawsuit verdict                                                           
   contingency accrual         903          -         -       903         - 
  Amortization of                                                           
   purchased intangible                                                     
   assets                        -          -        78         -       159 
                          --------  ---------  --------  --------  -------- 
  Non-GAAP Income         $  3,143  $   3,755  $  2,638  $  6,898  $  1,894 
                          ========  =========  ========  ========  ======== 
                                                                            
Income Per Share From                                                       
 Continuing Operations                                                      
 Reconciliation                                                             
  GAAP Diluted Income                                                       
   (Loss) Per Share       $   0.04  $    0.06  $  (0.01) $   0.09  $  (0.04)
  Effect of acquisition                                                     
   and restructuring                                                        
   related costs                 -       0.01      0.05      0.01      0.05 
  Effect of share-based                                                     
   compensation               0.01       0.02      0.02      0.03      0.02 
  Effect of lawsuit                                                         
   verdict contingency                                                      
   accrual                    0.02          -         -      0.02         - 
  Effect of amortization                                                    
   of purchased                                                             
   intangible assets             -          -         -         -         - 
                          --------  ---------  --------  --------  -------- 
  Non-GAAP Diluted Income                                                   
   Per Share              $   0.07  $    0.09  $   0.06  $   0.15  $   0.03 
                          ========  =========  ========  ========  ======== 
                                                                            
Operating Income From                                                       
 Continuing Operations                                                      
 Reconciliation                                                             
  GAAP Operating Income                                                     
   (Loss)                 $  1,789  $   2,854  $   (942) $  4,643  $ (2,112)
  Share-based                                                               
   compensation - COGS          14        (23)       36        (9)       49 
  Share-based                                                               
   compensation - R&D          191        225       228       416       369 
  Share-based                                                               
   compensation - SG&A         362        563       430       925       674 
  Lawsuit verdict                                                           
   contingency accrual         903          -         -       903         - 
  Acquisition and                                                           
   restructuring related                                                    
   costs                         -        291     2,350       291     2,350 
  Amortization of                                                           
   purchased intangible                                                     
   assets                        -          -        78         -       159 
                          --------  ---------  --------  --------  -------- 
  Non-GAAP Operating                                                        
   Income                 $  3,259  $   3,910  $  2,180  $  7,169  $  1,489 
                          ========  =========  ========  ========  ======== 
                                                                            
Operating Expense From                                                      
 Continuing Operations                                                      
 Reconciliation                                                             
  GAAP Operating Expenses $ 13,284  $  12,671  $ 16,009  $ 25,955  $ 31,156 
  Share-based                                                               
   compensation - R&D         (191)      (225)     (228)     (416)     (369)
  Share-based                                                               
   compensation - SG&A        (362)      (563)     (430)     (925)     (674)
  Lawsuit verdict                                                           
   contingency accrual        (903)         -         -      (903)        - 
  Acquisition and                                                           
   restructuring related                                                    
   costs                         -       (291)   (2,350)     (291)   (2,350)
  Amortization of                                                           
   purchased intangible                                                     
   assets                        -          -       (78)        -      (159)
                          --------  ---------  --------  --------  -------- 
  Non-GAAP Operating                                                        
   Expenses               $ 11,828  $  11,592  $ 12,923  $ 23,420  $ 27,604 
                          ========  =========  ========  ========  ======== 
                                                                            
  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      
                                                         -------------------
                              2013      2013      2012      2013      2012  
                           --------- --------- --------- --------- ---------
Net Revenues by Geography                                                   
Americas                      19%       23%       16%       21%       15%   
Asia Pacific                  71%       66%       73%       69%       71%   
Europe                        10%       11%       11%       10%       14%   
                                                                            
                                                                            
                                                                            
                                 Three Months Ended        Six Months Ended 
                            June 30   March 31  June 30        June 30      
                                                         -------------------
                              2013      2013      2012      2013      2012  
                           --------- --------- --------- --------- ---------
Net Revenues by Type                                                        
PCI Express Revenue           75%       71%       67%       73%       66%   
Connectivity Revenue          25%       29%       33%       27%       34%