PLX Technology Inc. (PLXT, Financial) filed Quarterly Report for the period ended 2012-06-30.
Plx Technology, Inc. has a market cap of $245 million; its shares were traded at around $5.78 with and P/S ratio of 2.1.
Gross profit for the six months ended June 30, 2012 decreased by 13.0%, or $4.3 million compared to the same period in 2011. Excluding the first quarter 2011 development service revenue of $1.6 million which was recorded at 100% margin, gross profit decreased 8.6% or $2.7 million compared to 2011. The adjusted gross margin for the six months ended June 30, 2011 was 55.4% and gross profit was $31.7 million. The increase in product gross margin was due primarily to increased sales and improved costs on our PCI Express Gen 3 builds as we move from our early revision products to our production revision products and into production volume builds and decreased sales of the low margin Storage products within the Connectivity product grouping. The decrease in absolute dollars was due to the decrease in overall product sales.
R&D expenses decreased by $2.6 million or 19.0% in the three months ended June 30, 2012 compared to the same period in 2011. In the three months ended June 30, 2011 expenses relating to the divested UK design team were $1.7 million. Excluding the impact of the UK design team divestiture in the fourth quarter of 2011, R&D expenses decreased by $0.9 million or 7.2%. The decrease in R&D in absolute dollars and as a percentage of revenue was primarily due to decreases in R&D spending on tape-out related activities and engineering tools of $1.9 million due to timing of projects taped-out, partially offset by increases in variable compensation of $0.5 million as a result of changes in the plan to tie payouts to personal and group performance objectives and compensation and benefit expenses of $0.2 million due to an increase in headcount.
R&D expenses decreased by $4.4 million or 16.5% in the six months ended June 30, 2012 compared to the same period in 2011. In the six months ended June 30, 2011 expenses relating to the divested UK design team were $3.9 million. Excluding the impact of the UK design team divestiture in the fourth quarter of 2011, R&D expenses decreased by $0.5 million or 2.0%. The decrease in R&D in absolute dollars and as a percentage of revenue was primarily due to decreases in R&D spending on tape-out related activities and engineering tools of $2.0 million due to timing of projects taped-out, partially offset by increases in variable compensation of $0.8 million and compensation and benefit expenses of $0.2 million.
Our investing activities are primarily driven by investment of our excess cash, sales of investments, business acquisitions and capital expenditures. Capital expenditures have generally been comprised of purchases of engineering equipment, computer hardware, software, server equipment and furniture and fixtures. The cash provided by investing activities for the six months ended June 30, 2012 of $0.4 million was due to the sales and maturities of investments (net of purchases) of $2.1 million, partially offset by capital expenditures of $1.7 million. Cash provided by investing activities for the six months ended June 30, 2011 of $6.4 million was due to the sales and maturities of investments (net of purchases) of $8.3 million, partially offset by capital expenditures of $2.0 million.
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Plx Technology, Inc. has a market cap of $245 million; its shares were traded at around $5.78 with and P/S ratio of 2.1.
Highlight of Business Operations:
In the first quarter of 2011, we recorded development service revenues of approximately $1.6 million primarily associated with our Network PHY technology, which was accounted for under the milestone method of revenue recognition. Net revenues for the six months ended June 30, 2012 decreased 12.5%, or $7.3 million compared to the same period in 2011. Excluding development service revenue, revenues decreased by 10.1%, or $5.7 million compared to 2011. The decrease was due to lower sales of our Connectivity products as a result of the hard disk drive shortage issue in the market, increased sales in the second quarter of 2011 in connection with the March 2011 Japan Tsunami and the customer transition from our legacy products to our PCI Express products, partially offset by higher sales of our PCI Express products due to the ramp of our Gen 2 and Gen 3 products and increased sales of our Network PHY products.Gross profit for the six months ended June 30, 2012 decreased by 13.0%, or $4.3 million compared to the same period in 2011. Excluding the first quarter 2011 development service revenue of $1.6 million which was recorded at 100% margin, gross profit decreased 8.6% or $2.7 million compared to 2011. The adjusted gross margin for the six months ended June 30, 2011 was 55.4% and gross profit was $31.7 million. The increase in product gross margin was due primarily to increased sales and improved costs on our PCI Express Gen 3 builds as we move from our early revision products to our production revision products and into production volume builds and decreased sales of the low margin Storage products within the Connectivity product grouping. The decrease in absolute dollars was due to the decrease in overall product sales.
R&D expenses decreased by $2.6 million or 19.0% in the three months ended June 30, 2012 compared to the same period in 2011. In the three months ended June 30, 2011 expenses relating to the divested UK design team were $1.7 million. Excluding the impact of the UK design team divestiture in the fourth quarter of 2011, R&D expenses decreased by $0.9 million or 7.2%. The decrease in R&D in absolute dollars and as a percentage of revenue was primarily due to decreases in R&D spending on tape-out related activities and engineering tools of $1.9 million due to timing of projects taped-out, partially offset by increases in variable compensation of $0.5 million as a result of changes in the plan to tie payouts to personal and group performance objectives and compensation and benefit expenses of $0.2 million due to an increase in headcount.
R&D expenses decreased by $4.4 million or 16.5% in the six months ended June 30, 2012 compared to the same period in 2011. In the six months ended June 30, 2011 expenses relating to the divested UK design team were $3.9 million. Excluding the impact of the UK design team divestiture in the fourth quarter of 2011, R&D expenses decreased by $0.5 million or 2.0%. The decrease in R&D in absolute dollars and as a percentage of revenue was primarily due to decreases in R&D spending on tape-out related activities and engineering tools of $2.0 million due to timing of projects taped-out, partially offset by increases in variable compensation of $0.8 million and compensation and benefit expenses of $0.2 million.
Our investing activities are primarily driven by investment of our excess cash, sales of investments, business acquisitions and capital expenditures. Capital expenditures have generally been comprised of purchases of engineering equipment, computer hardware, software, server equipment and furniture and fixtures. The cash provided by investing activities for the six months ended June 30, 2012 of $0.4 million was due to the sales and maturities of investments (net of purchases) of $2.1 million, partially offset by capital expenditures of $1.7 million. Cash provided by investing activities for the six months ended June 30, 2011 of $6.4 million was due to the sales and maturities of investments (net of purchases) of $8.3 million, partially offset by capital expenditures of $2.0 million.
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