PLX: Fiscal 3Q13 Financial Results

PLX Technology, Inc. announced third quarter revenues of $25.7 million and net income of $2.0 million, or $0.04 per share (diluted).

“Our focus on key cost control measures has resulted in three consecutive profitable quarters and record profits year-to-date allowing us to build our cash position and pay down debt,” said David Raun, PLX president and CEO. “Record PCIe design wins dominated by higher ASP Gen3 products signal a healthy pipeline. Market share gains in PCIe, no significant design win losses over the past two quarters, and production of new higher lane count parts in Q4 highlights additional opportunities for the company.”

“Enterprise storage and networking markets continue to dominate design win activity, and our market-leading technology backed by strong customer relationships position us for continued design win success,” said Raun. “We also garnered significant industry interest in the quarter with the company’s first public demonstration of PLX’s ExpressFabric technology housed in a data center rack at the Intel Developer Forum.

“Our overall design activity pipe which measures the potential annual revenue for each program is in the hundreds of millions of dollars and is greater than three times the size that it was four years ago when our main focus was Gen2. All five of our PCIe end market segments produced greater design wins than last quarter, and we are confident about our growth potential for years to come.”

ExpressFabric PCIe is established as a standard that is already native on nearly all mainstream data center appliances. Facilitated by PLX’s next generation PCIe Gen3 fabric-enabling switch devices, ExpressFabric eliminates a large number of expensive ‘bridging’ devices like adapter cards that translate PCIe to IB, Ethernet or FC. This subsequently provides a high-performance, low-latency solution, while offering lower cost and power, with a reduced bill of materials.

ExpressFabric technology is focused on small to medium (20-1000 nodes) performance clusters that are cost and power sensitive, and the fabric seamlessly works with Ethernet and IB for larger scale out. PLX developed a market-seeding PCIe-based top-of-rack switch box to demonstrate rack-level consolidation and convergence into a single interconnect technology. To help prime this market, it has been selling internally developed PCIe-based server cards that appear to the software like Ethernet NICs, and in Q3 the company began shipping our top of rack switch boxes to early customers.

Business Outlook

• Net revenues for the fourth quarter ending Dec. 31, 2013 are expected to be between $25.0 million and $27.0 million;
• Non-GAAP gross margins are expected to be approximately 56% with GAAP margins at approximately 55%;
• Operating expenses are expected to be approximately $13.8 million. Included in operating expenses are share-based compensation related charges of approximately $0.8 million.