SUNNYVALE, Calif. -- May 25, 2004 -- PLX Technology, Inc. (NASDAQ:PLXT), the leading supplier of standard I/O interconnect silicon to the communications, server, storage and embedded-control industries, today announced that its acquisition of NetChip Technology, Inc. has been approved by PLX stockholders at the company's annual meeting. NetChip (www.netchip.com) is a privately held, fabless supplier of high-performance semiconductors based on the Universal Serial Bus (USB) and Peripheral Component Interconnect (PCI) standards.
Pursuant to stockholder approval, PLX completed the acquisition of NetChip Technology. PLX will issue approximately two million shares of common stock to NetChip stockholders and assume approximately 126,000 options to purchase common stock, with an aggregate value of approximately $22.0 million. Additional consideration of PLX common stock with a maximum aggregate value of approximately $10 million may be paid out under certain provisions approximately one year following the close of the transaction.
"The acquisition of NetChip enables PLX to expand its position of strength in the market for PCI, PCI-X and PCI Express™ interconnect chips to include the USB segment, where NetChip offers an industry-leading product line offering high-performance and low-power products for the USB 2.0 market," said Mike Salameh, president and chief executive officer of PLX. "We believe that with NetChip's product portfolio and highly skilled team, the combined company can leverage its customer base and broader set of interconnect solutions to pursue additional design wins."
For the year ended December 31, 2003, NetChip recorded revenues of $9.6 million, which included $5.7 million in the fourth quarter. For the first quarter ended March 31, 2004, NetChip's unaudited results included revenues of slightly more than $6.0 million, gross margin of approximately 35 percent, operating expenses of approximately $1.1 million, and operating profit of about $1.0 million. PLX cautions that the estimates for NetChip's first-quarter results are preliminary, based on the best information currently available, and subject to the closing of financial records and customary quarterly accounting procedures.
In conjunction with the acquisition, PLX has offered employment to NetChip's 18 employees, including 11 in research and development. Also, NetChip's founder and president, Wei-Ti Liu, who was also a founder of PLX, will join PLX's board of directors.
Second-Quarter Business Outlook
With the addition of NetChip revenues expected for the remainder of the current quarter, PLX currently anticipates total second-quarter net revenues for the combined company of $14 million to $15 million.
In the second quarter, PLX expects to take a one-time charge for in-process research and development related to the acquisition. PLX believes that its acquisition of NetChip will be accretive to earnings, exclusive of acquisition-related charges, for the remainder of 2004.
About PLX Technology
PLX Technology, Inc. (www.plxtech.com), based in Sunnyvale, Calif., USA, is the leading supplier of standard I/O interconnect silicon to the communications, server, storage and embedded-control industries. PLX has been developing I/O interconnect solutions since 1986. The PLX solution provides a competitive edge to our customers through an integrated combination of high-performance silicon, hardware and software design tools, and partnerships. These innovative solutions enable our customers to develop equipment with industry-leading performance, scalability and reliability.