Attached files
| file | filename |
|---|---|
| 8-K - PLX TECHNOLOGY, INC. FORM 8-K - PLX TECHNOLOGY INC | plx_body8k092612.htm |
| EX-10.1 - PLX TECHNOLOGY, INC. EXHIBIT 10.1 - PLX TECHNOLOGY INC | plx_exhibit10-1092612.htm |
Exhibit 99.1
UNAUDITED PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On September 20, 2012, PLX Technology, Inc. (“PLX” or the “Company”) completed the sale of physical layer 10GBase-T integrated circuit (“PHY”) family of products pursuant to an Asset Purchase Agreement between the Company and Aquantia Corporation dated September 14, 2012 (the “Aquantia APA”).
On July 6, 2012, the Company had also entered into an Asset Purchase Agreement (the “Entropic APA”) with Entropic Communications, Inc., pursuant to which the Company completed the sale of digital channel stacking switch product line within the PHY product family, including certain assets exclusively related to the product line. Under the terms of the agreement, the Company continued to have an obligation to complete the development in process. In connection with the Transaction with Aquantia, the Company is in negotiations to modify the Agreement with Entropic and it is probable that the payment terms of certain milestone payments will be reduced and accelerated and the obligation of PLX to complete the development of the product will be assumed by Entropic.
The unaudited pro forma condensed consolidated financial statements give effect to the consummated Aquantia APA, the Entropic APA and the License Agreement (“the Transactions”) and probable amendment to the Entropic Agreement.
For the purpose of the unaudited pro forma condensed consolidated financial statements, the Transactions were assumed to have occurred as of January 1, 2010 with respect to the unaudited pro forma condensed consolidated statements of operations and as of June 30, 2012 with respect to the unaudited pro forma condensed consolidated balance sheet. Unaudited pro forma consolidated statements of operations for the year ended December 31, 2009 are not presented as the acquisition of the physical layer 10GBase-T integrated circuit family of products did not occur until October 1, 2010 so there were no operations related to this business component in 2009 and for the first nine months in 2010.
The unaudited pro forma consolidated condensed financial information is for informational purposes only and does not purport to represent what the Company’s actual results would have been if the Transactions had been completed as of the date indicated above, or that may be achieved in the future.
The unaudited pro forma consolidated condensed financial statements, including the notes thereto, should be read in conjunction with the Company’s historical financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2011 filed on March 13, 2012, as amended on April 27, 2012, and quarterly reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012 filed May 9, 2012 and August 8, 2012, respectively.
1
PLX TECHNOLOGY, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
(in thousands)
|
June 30, 2012
|
|||||||||||||
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Pro Forma
|
|||||||||||||
|
As Reported
|
Adjustments
|
Pro Forma
|
|||||||||||
|
ASSETS
|
|||||||||||||
|
Current Assets:
|
|||||||||||||
|
Cash and cash equivalents
|
$ | 4,740 | $ | 9,000 |
(a)
|
$ | 13,740 | ||||||
|
Short-term marketable securities
|
5,114 | - | 5,114 | ||||||||||
|
Accounts receivable, net
|
15,572 | - | 15,572 | ||||||||||
|
Inventories
|
10,787 | (944 | ) |
(b)
|
9,843 | ||||||||
|
Other current assets
|
2,354 | 3,000 |
(c)
|
5,354 | |||||||||
|
Total current assets
|
38,567 | 11,056 | 49,623 | ||||||||||
|
Property and equipment, net
|
12,090 | (572 | ) |
(b)
|
11,518 | ||||||||
|
Goodwill
|
21,338 | (862 | ) |
(d)
|
20,476 | ||||||||
|
Other acquired intangible assets, net
|
7,607 | (7,521 | ) |
(b)
|
86 | ||||||||
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Long-term marketable securities
|
385 | - | 385 | ||||||||||
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Other assets
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784 | - | 784 | ||||||||||
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Total assets
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$ | 80,771 | $ | 2,101 | $ | 82,872 | |||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current Liabilities:
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|||||||||||||
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Accounts payable
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$ | 12,071 | $ | - | $ | 12,071 | |||||||
|
Accrued compensation and benefits
|
5,148 | - | 5,148 | ||||||||||
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Accrued commissions
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795 | - | 795 | ||||||||||
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Income taxes payable
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- | - | - | ||||||||||
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Short term note payable and capital lease obligation
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235 | - | 235 | ||||||||||
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Other accrued expenses
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2,573 | - | 2,573 | ||||||||||
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Total current liabilities
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20,822 | - | 20,822 | ||||||||||
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Long term borrowing against line of credit
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8,500 | - | 8,500 | ||||||||||
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Total liabilities
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29,322 | - | 29,322 | ||||||||||
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Stockholders' Equity:
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|||||||||||||
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Common stock, par value
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45 | - | 45 | ||||||||||
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Additional paid-in capital
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187,286 | - | 187,286 | ||||||||||
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Accumulated other comprehensive loss
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(221 | ) | - | (221 | ) | ||||||||
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Accumulated deficit
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(135,661 | ) | 2,101 |
(e)
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(133,560 | ) | |||||||
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Total stockholders' equity
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51,449 | 2,101 | 53,550 | ||||||||||
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Total liabilities and stockholders' equity
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$ | 80,771 | $ | 2,101 | $ | 82,872 | |||||||
2
PLX TECHNOLOGY, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(in thousands)
|
For the Six Months ended June 30, 2012
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Pro Forma
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As Reported
|
Adjustments
|
Pro Forma
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|||||||||||
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Net revenues
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$ | 51,480 | $ | (1,512 | ) |
(f)
|
$ | 49,968 | |||||
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Cost of revenues
|
22,499 | (1,575 | ) |
(f)
|
20,924 | ||||||||
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Gross profit
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28,981 | 63 | 29,044 | ||||||||||
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Operating expenses
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|||||||||||||
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Research and development
|
22,062 | $ | (9,194 | ) |
(f)
|
12,868 | |||||||
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Selling, general and administrative
|
16,308 | (183 | ) |
(f)
|
16,125 | ||||||||
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Net acquisition and restructuring related costs
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2,350 | - | 2,350 | ||||||||||
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Amortization of purchased intangible assets
|
3,459 | (3,300 | ) |
(g)
|
159 | ||||||||
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Impairment of assets
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10,343 | (10,343 | ) |
(g)
|
- | ||||||||
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Total operating expenses
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54,522 | (23,020 | ) | 31,502 | |||||||||
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Operating loss
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(25,541 | ) | 23,083 | (2,458 | ) | ||||||||
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Interest income
|
18 | - | 18 | ||||||||||
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Interest expense
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(90 | ) | - | (90 | ) | ||||||||
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Other income (expense), net
|
12 | - | 12 | ||||||||||
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Loss before provision for (benefit from) income taxes
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(25,601 | ) | 23,083 | (2,518 | ) | ||||||||
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Provision for (benefit from) income taxes
|
58 | (524 | ) |
(h)
|
(466 | ) | |||||||
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Loss from continuing operations
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$ | (25,659 | ) | $ | 23,607 | $ | (2,052 | ) | |||||
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Basic loss per share from continuing operations
|
$ | (0.57 | ) | $ | (0.05 | ) | |||||||
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Shares used to compute basic per share amounts
|
44,763 | 44,763 | |||||||||||
|
Diluted loss per share from continuing operations
|
$ | (0.57 | ) | $ | (0.05 | ) | |||||||
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Shares used to compute diluted per share amounts
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44,763 | 44,763 | |||||||||||
3
PLX TECHNOLOGY, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(in thousands)
|
For the Six Months ended June 30, 2011
|
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|
Pro Forma
|
|||||||||||||
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As Reported
|
Adjustments
|
Pro Forma
|
|||||||||||
|
Net revenues
|
$ | 58,824 | $ | (2,331 | ) |
(f)
|
$ | 56,493 | |||||
|
Cost of revenues
|
25,519 | (1,061 | ) |
(f)
|
24,458 | ||||||||
|
Gross profit
|
33,305 | (1,270 | ) | 32,035 | |||||||||
|
Operating expenses
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|||||||||||||
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Research and development
|
26,434 | $ | (10,401 | ) |
(f)
|
16,033 | |||||||
|
Selling, general and administrative
|
13,803 | (145 | ) |
(f)
|
13,658 | ||||||||
|
Net acquisition and restructuring related costs
|
3,106 | (2,369 | ) |
(f)
|
737 | ||||||||
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Amortization of purchased intangible assets
|
4,888 | (4,125 | ) |
(g)
|
763 | ||||||||
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Total operating expenses
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48,231 | (17,040 | ) | 31,191 | |||||||||
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Operating income (loss)
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(14,926 | ) | 15,770 | 844 | |||||||||
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Interest income
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45 | - | 45 | ||||||||||
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Interest expense
|
(127 | ) | - | (127 | ) | ||||||||
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Other income (expense), net
|
(85 | ) | - | (85 | ) | ||||||||
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Income (loss) before provision for (benefit from) income taxes
|
(15,093 | ) | 15,770 | 677 | |||||||||
|
Provision for (benefit from) income taxes
|
51 | 632 |
(h)
|
683 | |||||||||
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Income (loss) from continuing operations
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$ | (15,144 | ) | $ | 15,138 | $ | (6 | ) | |||||
|
Basic income (loss) per share from continuing operations
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$ | (0.34 | ) | $ | 0.00 | ||||||||
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Shares used to compute basic per share amounts
|
44,519 | 44,519 | |||||||||||
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Dilutive income (loss) per share from continuing operations
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$ | (0.34 | ) | $ | 0.00 | ||||||||
|
Shares used to compute diluted per share amounts
|
44,519 | 45,048 | |||||||||||
4
PLX TECHNOLOGY, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(in thousands)
|
Year Ended December 31, 2011
|
|||||||||||||
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Pro Forma
|
|||||||||||||
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As Reported
|
Adjustments
|
Pro Forma
|
|||||||||||
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Net revenues
|
$ | 115,789 | $ | (4,637 | ) |
(f)
|
$ | 111,152 | |||||
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Cost of revenues
|
49,650 | (3,049 | ) |
(f)
|
46,601 | ||||||||
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Gross profit
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66,139 | (1,588 | ) | 64,551 | |||||||||
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Operating expenses
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|||||||||||||
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Research and development
|
49,236 | $ | (20,907 | ) |
(f)
|
28,329 | |||||||
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Selling, general and administrative
|
28,385 | (348 | ) |
(f)
|
28,037 | ||||||||
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Net acquisition and restructuring related costs
|
2,408 | (3,026 | ) |
(f)
|
(618 | ) | |||||||
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Amortization of purchased intangible assets
|
10,639 | (7,838 | ) |
(g)
|
2,801 | ||||||||
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Total operating expenses
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90,668 | (32,119 | ) | 58,549 | |||||||||
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Operating income (loss)
|
(24,529 | ) | 30,531 | 6,002 | |||||||||
|
Interest income
|
73 | - | 73 | ||||||||||
|
Interest expense
|
(165 | ) | - | (165 | ) | ||||||||
|
Other income (expense), net
|
(56 | ) | - | (56 | ) | ||||||||
|
Income (loss) before provision for (benefit from) income taxes
|
(24,677 | ) | 30,531 | 5,854 | |||||||||
|
Provision for (benefit from) income taxes
|
146 | 2,605 |
(h)
|
2,751 | |||||||||
|
Income (loss) from continuing operations
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$ | (24,823 | ) | $ | 27,926 | $ | 3,103 | ||||||
|
Basic income (loss) per share from continuing operations
|
$ | (0.56 | ) | $ | 0.07 | ||||||||
|
Shares used to compute basic per share amounts
|
44,559 | 44,559 | |||||||||||
|
Dilutive income (loss) per share from continuing operations
|
$ | (0.56 | ) | $ | 0.07 | ||||||||
|
Shares used to compute diluted per share amounts
|
44,559 | 45,016 | |||||||||||
5
PLX TECHNOLOGY, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(in thousands)
|
Year Ended December 31, 2010
|
|||||||||||||
|
Pro Forma
|
|||||||||||||
|
As Reported
|
Adjustments
|
Pro Forma
|
|||||||||||
|
Net revenues
|
$ | 116,560 | $ | (1,020 | ) |
(f)
|
$ | 115,540 | |||||
|
Cost of revenues
|
48,460 | (707 | ) |
(f)
|
47,753 | ||||||||
|
Gross profit
|
68,100 | (313 | ) | 67,787 | |||||||||
|
Operating expenses
|
|||||||||||||
|
Research and development
|
35,766 | $ | (4,831 | ) |
(f)
|
30,935 | |||||||
|
Selling, general and administrative
|
26,720 | - | 26,720 | ||||||||||
|
Net acquisition and restructuring related costs
|
3,870 | (3,152 | ) |
(f)
|
718 | ||||||||
|
Amortization of purchased intangible assets
|
4,656 | (2,063 | ) |
(g)
|
2,593 | ||||||||
|
Total operating expenses
|
71,012 | (10,046 | ) | 60,966 | |||||||||
|
Operating income (loss)
|
(2,912 | ) | 9,733 | 6,821 | |||||||||
|
Interest income
|
186 | - | 186 | ||||||||||
|
Interest expense
|
(117 | ) | - | (117 | ) | ||||||||
|
Other income (expense), net
|
(13 | ) | - | (13 | ) | ||||||||
|
Income (loss) before provision for (benefit from) income taxes
|
(2,856 | ) | 9,733 | 6,877 | |||||||||
|
Provision for (benefit from) income taxes
|
433 | 1,801 |
(h)
|
2,234 | |||||||||
|
Income (loss) from continuing operations
|
$ | (3,289 | ) | $ | 7,932 | $ | 4,643 | ||||||
|
Basic income (loss) per share from continuing operations
|
$ | (0.08 | ) | $ | 0.12 | ||||||||
|
Shares used to compute basic per share amounts
|
38,942 | 38,942 | |||||||||||
|
Dilutive income (loss) per share from continuing operations
|
$ | (0.08 | ) | $ | 0.12 | ||||||||
|
Shares used to compute diluted per share amounts
|
38,942 | 39,625 | |||||||||||
6
PLX TECHNOLOGY, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRO FORMA PRESENTATION
On September 20, 2012, PLX Technology, Inc. (“PLX” or the “Company”) completed the sale of physical layer 10GBase-T integrated circuit (“PHY”) family of products pursuant to an Asset Purchase Agreement between the Company and Aquantia Corporation dated September 14, 2012 (the “Aquantia APA”).
On July 6, 2012, the Company had also entered into an Asset Purchase Agreement (the “Entropic APA”) with Entropic Communications, Inc., pursuant to which the Company completed the sale of digital channel stacking switch product line within the PHY product family, including certain assets exclusively related to the product line. Under the terms of the agreement, the Company continued to have an obligation to complete the development in process. The agreement provided for $3 million upon closing and up to $5 million in future payments. Future payments consist of a milestone payment of $2 million in connection with product acceptance, a $2 million escrow payment relating to certain representations and warranties made by PLX and is due to be released to PLX twelve months after product acceptance and a $1 million milestone payment in the event a third party royalty arrangement is secured. In conjunction with the Entropic APA, the Company entered into an Intellectual Property License Agreement (the “License Agreement”) with Entropic which provided a fully paid, royalty free license to certain of the physical layer 10GBase-T integrated circuit technology which provided for a $4 million payment upon signing. In connection with the Transaction with Aquantia, the Company is in negotiations to modify the Agreement with Entropic and it is probable that the payment terms of certain milestone payments will be reduced and accelerated and the obligation of PLX to complete the development of the product will be assumed by Entropic.
The unaudited pro forma condensed consolidated financial statements give effect to the consummated Aquantia APA, the Entropic APA and the License Agreement (“the Transactions”) and probable amendment to the Entropic Agreement.
The unaudited pro forma financial consolidated condensed balance sheet as of June 30, 2012 is based on the historical financial statements of the Company after giving effect to the Transactions adjustments. The unaudited pro forma consolidated balance sheet as of June 30, 2012 is presented as if the Transaction had occurred on June 30, 2012.
The unaudited pro forma consolidated statements of operations for the years ended December 31, 2011 and 2010 and the six months ended June 30, 2012 and 2011 are based on the historical financial statements of the Company for the years and six months then ended after giving effect to the Transactions adjustments. The unaudited pro forma consolidated statements of operations are presented as if the Transactions had occurred on January 1, 2010. Unaudited pro forma consolidated statements of operations for the year ended December 31, 2009 are not presented as the acquisition of the physical layer 10GBase-T integrated circuit family of products did not occur until October 1, 2010 so there were no operations related to this business component in 2009 and the first nine months of 2010.
7
The unaudited pro forma condensed consolidated financial statements are based upon available information and assumptions that the Company believes are reasonable under the circumstances and are prepared to illustrate the estimated effects of the Transactions. The unaudited pro forma consolidated condensed financial statements, including the notes thereto, should be read in conjunction with the Company’s historical financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2011 filed on March 13, 2012, as amended on April 27, 2012 and quarterly reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012, filed on May 9, 2012 and August 8, 2012, respectively.
The unaudited pro forma condensed consolidated financial statements have been provided for illustrative purposes only and are not necessarily indicative of financial position or results of operations that would have been achieved had the Transactions occurred as of or for the periods presented, nor are they necessarily indicative of the Company’s future operating results or financial position.
The unaudited pro forma condensed consolidated financial statements do not include the anticipated effects of additional restructuring charges related to severance and certain contractual obligations because estimates of these potential costs cannot be quantified at this time.
2. PRO FORMA ADJUSTMENTS
The unaudited pro forma consolidated condensed balance sheet and statement of operations gives effect to the following adjustments:
|
(a)
|
To record payments received at closing in connection with the Aquantia APA of $2 million, the Entropic APA of $3 million and the License Agreement of $4 million.
|
|
(b)
|
To eliminate the book value of assets sold to Aquantia and Entropic, assuming the Transactions occurred on June 30, 2012.
|
|
(c)
|
To record the estimated fair value of the remaining payments under the Entropic APA. The estimated fair value of the remaining payments is based on assumptions made in connection with the current negotiations and potential claims against the escrow and are subject to change.
|
|
(d)
|
To adjust goodwill for the relative fair value of the business that was disposed.
|
|
(e)
|
To record the estimated pro forma gain on the Transactions. The actual gain on the Transactions is subject to adjustments.
|
|
(f)
|
To eliminate the revenues and expenses which are directly related to the disposed business component and which will not continue.
|
|
(g)
|
To eliminate amortization expense and impairment charges associated with intangibles acquired in the prior acquisition of the disposed business component.
|
|
(h)
|
To adjust income provision for income tax applying intra-period allocation rules for income taxes.
|
3. PRO FORMA NET LOSS PER SHARE
The pro forma basic and diluted net income per share amounts presented are based upon the weighted average number of common shares outstanding during the period presented. As the company incurred losses from continuing operations for certain of the periods presented, the effect of dilutive securities were excluded from the computation of diluted loss per share, as the impact would have been anti-dilutive. For other periods, the company has net income on a pro forma basis so the dilutive securities were included in the pro forma calculation of net income per share.
8