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PLX Technology Inc. Reports Operating Results (10-Q)

November 04, 2010 | About:
10qk

10qk

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PLX Technology Inc. (PLXT) filed Quarterly Report for the period ended 2010-09-30.

Plx Technology Inc. has a market cap of $126.9 million; its shares were traded at around $3.44 with a P/E ratio of 28.6 and P/S ratio of 1.6. PLXT is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Net revenues consist of product revenues generated principally by sales of our semiconductor devices. Net revenues for the three months ended September 30, 2010 were $30.2 million, an increase of 40.2% from $21.6 million for the same period in 2009. The increase was due to higher sales of our PCI Express and connectivity products as a result of increased enterprise and consumer spending as market conditions have improved compared to third quarter of 2009 and the adoption of PCI Express in newer applications, partially offset by a decrease in sales of our storage products.

R&D expenses increased by $0.1 million or 0.7% in the three months ended September 30, 2010 compared to the same period in 2009. The increase in R&D in absolute dollars was primarily due to increased R&D spending on tape-out related activities of $0.2 million due to timing of projects taped-out and variable compensation expenses of $0.2 million which was a result of increased profitability in the current quarter, partially offset by decreased spending on engineering tools of $0.2 million and consulting expenses of $0.1 million. The decrease in R&D as a percentage was primarily due to increased revenues.

R&D expenses decreased by $0.6 million or 2.6% in the nine months ended September 30, 2010 compared to the same period in 2009. The decrease in R&D in absolute dollars was primarily due to decreased R&D spending on tape-out related activities and engineering tools of $0.7 million due to the timing of projects taped-out, share-based compensation expenses of $0.3 million related to the 2009 tender offer and salaries and related costs of $0.1 million as a result of the employee terminations in the first quarter of 2009 due to the redundancy issue associated with the acquisition of Oxford, partially offset by an increase in variable compensation expenses of $0.6 million, which was a result of increased profitability in the current year to date. The decrease in R&D as a percentage was primarily due to increased revenues.

SG&A expenses increased by $1.0 million or 17.2% in the three months ended September 30, 2010 compared to the same period in 2009. The increase in SG&A in absolute dollars is due primarily to an increase in variable compensation expenses of $0.4 million, which was a result of increased profitability, commissions to manufacturers representatives of $0.3 million resulting from increased revenues, share-based compensation expenses of $0.1 million and new product samples expense of $0.1 million, partially offset by a decrease in employee commissions of $0.2 million. The decrease in SG&A as a percentage was primarily due to increased revenues.

SG&A expenses increased by $0.1 million or 0.8% in the nine months ended September 30, 2010 compared to the same period in 2009. The increase in SG&A in absolute dollars is due primarily to an increase in variable compensation expenses of $1.0 million, which was a result of increased profitability in the current year to date and commissions to manufacturers representatives of $0.9 million resulting from increased revenues, partially offset by decreases in share-based compensation expenses of $1.0 million related to the 2009 tender offer, salaries and related costs of $0.6 million as a result of the employee terminations in the first quarter of 2009 due to the redundancy issue associated with the acquisition of Oxford and employees commissions of $0.3 million. The decrease in SG&A as a percentage was primarily due to increased revenues.

In the nine months ended September 30, 2010, we recorded $0.5 million in acquisition related costs associated with the October 1, 2010 acquisition of Teranetics. During the same period in 2009, we recorded $2.9 million in acquisition related costs associated with the January 2, 2009 acquisition of Oxford. Deal costs related primarily to outside legal and accounting costs. Severance costs were the result of layoffs due to the redundancy issue that arose as a result of the acquisition and the downsizing of our Singapore R&D facility. In addition, we assumed a building lease in Milpitas, California which was vacated upon the acquisition. As a result, we recorded a lease commitment charge on the

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