PLX: Fiscal 4Q12 Financial Results

PLX Technology, Inc. announced fourth quarter revenues of $23.4 million for the period ended December 31, 2012 and a GAAP loss from continuing operations of $0.2 million, or $0.00 per share (diluted).

For 2012, PLX reported revenue from continuing operations of $100.2 million and a GAAP loss from continuing operations of $5.2 million or $0.12 per share (diluted), which reflects $6.9 million of non-recurring costs associated with the terminated IDT transaction and divested businesses.

"Our continuing steps to focus efforts on our successful PCIe product line have allowed us to dramatically reduce expenses and achieve bottom line results that are just short of GAAP breakeven," said David Raun, PLX president and CEO. "As we look out to 2013, we see healthy growth potential, driven by the rapid adoption of our Gen3 technology, solid PCIe market share gains and a record number of PCIe design wins using products from our portfolio. We believe that our continued growth and tight expense control position us well for GAAP profitability this year. Further, our employees are energized by the termination of the acquisition process and the uncertainty that it caused, and are firmly committed to our PCIe product roadmap and the opportunity to proceed as a focused, growing and profitable company."

"Although PCIe demand was up at most of our market leading enterprise storage customers, we saw softer demand for some of the other markets we serve including high-end consumer motherboards and graphics products," said Raun. "Our guidance for Q1 takes into consideration continued softness in some of these areas but growth in our larger enterprise storage and communications markets."

Products: 2012 Year in Review
"The company now offers an industry-leading 18 PCIe Gen3 switches, 11 of which are in production, with the remaining readily sampling to key customers," said Raun. "Many more PCIe products are in development with planned releases later this year. The developing products offer new features to support emerging designs including SSD storage applications as well as the enablement of the ExpressFabric where PCIe will be used outside the box and expand the total available market for PLX significantly in the coming years."

In July, PLX announced a new trio of ultra-high-lane-count PCIe Gen3 switches developed for markets like storage systems, high-end graphics, and communications platforms. The high-performance ExpressLane PCIe Gen3 switches include the PEX8796 (96 lanes, 24 ports), PEX8780 (80 lanes, 20 ports) and PEX8764 (64 lanes, 16 ports). To illustrate the potential of PCIe, designers choosing the PEX8796 switch – touting bandwidth of 8 Gigatransfers per second, per lane, in full duplex mode – are rewarded with amazing throughput of 192GB/s), delivering performance that challenges all other interconnect technologies.

During 2012, PLX delivered several industry event presentations on its ExpressFabric initiative. ExpressFabric is a PLX-engineered solution for extending the PCIe standard from its current dominant presence inside servers, switches and storage appliances to a central position as a fabric. An ExpressFabric based on PCIe Gen3 and, eventually, Gen4 is complementary to IB and Ethernet in next-generation cloud-driven data centers. PCIe does not replace the existing network itself, but instead extends the benefits of PCIe outside the box by moving network interface cards to the top of the rack – or edge of the cluster – thereby reducing cost and power while maintaining features offered by other legacy network fabrics. When fully developed, ExpressFabric will be the lowest-power, lowest-cost solution, and will negate the cumbersome need to translate multiple interconnects, thus resulting in lower latency and higher performance.

PLX presented on and demonstrated ExpressFabric technology to broad audiences at important annual events such as the Linley Tech Data Center Conference, multiple PCI-SIG Developers Conferences, the Intel Developers Forum, the SC12 Supercomputing Conference, and the Server Design Summit.

IDT acquisition transaction terminated
In April 2012, Integrated Device Technology (IDT) and PLX entered into a definitive agreement pursuant to which IDT was to acquire PLX in order to broaden IDT’s solutions for data center interconnects in cloud computing. In December, after nearly eight months of review, the Federal Trade Commission  issued an administrative complaint seeking to block the proposed merger between PLX and IDT, and was authorized to pursue a preliminary injunction in federal district court or other relief necessary to stop the deal pending a full administrative trial. In December, IDT and PLX mutually agreed to terminate their merger agreement due to the FTC decision, scaling legal costs, and the absence of a clear path for the parties to complete the proposed transaction.

While reducing overall expenses associated with the divested networking and satellite products, PLX’s core R&D center in its Sunnyvale headquarters have remained focused on the expanding opportunities in the fast-growing data center and cloud services markets with its industry-leading PCIe portfolio.

Business Outlook

• Net revenues for the first quarter ending March 31, 2013, are expected to be between $25 million and $27 million

• Gross margins are expected to be approximately 58%
• Operating expenses are expected to be approximately $13.9 million.Included in operating expenses are share-based compensation and acquisition and restructuring related charges of approximately $0.9
• million. For the year, operating expenses net of share-based compensation and acquisition and restructuring related charges are expected to be about $52 million.