PLX Technology: Fiscal 2Q11 Financial Results

PLX Technology, Inc. announced second quarter revenues of $30.7 million and a GAAP net loss of $6.0 million, or $0.14 per share (diluted).

"We continue to see excellent growth in our business, achieving records in both PCI Express revenue and new design wins with PCI Express and 10 Gigabit Ethernet products," said Ralph Schmitt, president and CEO of PLX. "We are the innovation leader and continue to drive PCI Express and 10 Gigabit Ethernet as the connectivity solutions of choice for cloud-based network infrastructures, such as high-performance clustering, SSDs and remote optical PCI Express distribution, as well as new Ethernet home-networking architectures. The PLX team has done an outstanding job driving revenue through the adoption of our technologies into new applications."

"We continue to make progress on our plan to bring the company back to profitability," said Schmitt. "Through tight expense control, strong gross margin performance and more than seven percent sequential revenue growth, we posted meaningful improvements to our bottom line. We expect to see continued revenue growth moving forward, with a broader contribution across our product categories. This expectation is supported by strong bookings in the second quarter, which are positioning us well for growth in Q3."

Product Highlights and Strategic Direction
"The upcoming launch of the Intel Sandy Bridge platform is a major enabler for PLX solutions because it leverages next-generation, high-speed, high-bandwidth connectivity solutions for the mobile Internet," said Schmitt. "This includes the adoption of long-awaited PCI Express Gen 3, and 10 Gigabit Ethernet, which represents the next plateau in the copper Ethernet ecosystem.

"As a market leader, PLX is continuing to drive multiple new initiatives to expand our total addressable market. This includes our introduction of small, low-power PCI Express switches for non-enterprise applications, partnering with optical leaders like Avago to help build the PCI Express ecosystem outside the box, and demonstrating fresh scenarios where 10GBase-T performance can be carried over 300 meters for IT managers creating new office campus infrastructures."

PLX announced two PCIe Gen2 switches in the market’s smallest packaging, including the industry’s only three-lane switch and a new four-lane device, both of which feature very low power requirements. These new devices are for energy-sensitive, form-factor-restrictive, cost-conscious markets, including digital televisions, set-top boxes, home gateways, security systems, cable modems, DVRs, multi-function printers, digital media servers, video surveillance, and numerous other control-plane and embedded applications.

HP selected two configurations of PLX PCIe switches for the devices’ x16-lane support for enabling the high-performance CPU-GPU flexible scale-out in HP’s latest ProLiant SL390s G7 4U server platform. The SL390s servers enabled by PLX PCIe technology deliver an architecture designed to optimize a GPU platform to achieve power efficiency.

Advantech chose PLX PCIe switches for connectivity based on the Texas Instruments TMS320C6678 multi-core DSP, allowing cross-functionality into multiple new market segments. PCIe-native DSP beneficiaries include developers in the wireless and core network infrastructures, digital media, test and measurement, communications, DSP farms, mission critical, high-performance computing, medical imaging and industrial automation.

Avago and PLX teamed up to showcase high-performance PCIe over fiber optics at 64Gbps. This collaboration uses optics to demonstrate PCIe extending beyond its dominant role within the box to a cabled box-to-box solution. This effort is paving the road to next-generation data center applications in which lower latency and cost, extended cabling distances, and I/O conversion minimization create simpler architectures for cleaner PCIe end-to-end environments such as those using PCIe as a fabric for clustering servers.

PLX announced it has demonstrated 10Gbps Ethernet data and electrical transfer, by means of its 10GBase-T transceivers, over a distance of 300 meters using typical, widely installed Cat6A unshielded twisted pair copper cable. The  networking demonstration, enabled by PLX-designed Power-over-Ethernet (PoE) repeaters, utilized PLX’s 40nm-based dual-port 10GBase-T PHY. This breakthrough distance achievement with low-cost Ethernet cabling brings new capabilities to IT managers seeking high-performance networking between multiple server rooms, which, for example, may be located on different floors of a high-rise building or in a large campus environment.

For the consumer storage market, PLX announced a pair of  high-performance, low-power DAS USB 3.0-to-SATA controllers – devices that are essential elements of wired external consumer storage drives. The new DAS controllers are for OEM storage designers seeking product differentiation matched with performance, a tiny footprint, and low power. The devices are compliant with the USB Implementers Forum’s SuperSpeed specification and published on that organization’s exclusive integrators list.

Business Outlook

• Net revenues for the third quarter ending September 30, 2011, are expected to be between $31 million and $33 million
• Gross margins are expected to be approximately 56 percent
• Operating expenses are expected to be approximately $22.9 million. Included in operating expenses are share-based compensation and acquisition-related amortization charges of approximately $3.2 million and other acquisition related charges of $0.5 million