PLX TECHNOLOGY INC, 10-Q, 2000-11-14

PLX TECHNOLOGY INC
10-Q, 2000-11-14
SEMICONDUCTORS & RELATED DEVICES

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2000.

[ ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

0-25699
(Commission File Number)

PLX TECHNOLOGY, INC.
(Exact name of Registrant as specified in its charter)

Delaware
(State or Other Jurisdiction of
Incorporation or Organization)

94-3008334
(I.R.S. Employer
Identification No.)

390 Potrero Avenue
Sunnyvale, CA
(Address of Principal Executive Offices)

94086
(Zip Code)

(408) 774-9060
(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ]

As of October 31, 2000 there were 23,333,389 shares of common stock, par value $0.001 per share, outstanding.

PLX TECHNOLOGY, INC.
INDEX TO
REPORT ON FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 2000

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets at September 30, 2000 and December 31, 1999	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2000 and 1999	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2000 and 1999	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22

PART II.	OTHER INFORMATION
Item 6.	Exhibits and Reports on Form 8-K	23


SIGNATURE	24

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PLX TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

	September 30, 2000			December 31, 1999 (1)

	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	20,526		$	8,636
Short-term investments		19,429			20,075
Accounts receivable, net		9,043			5,439
Inventories		2,379			2,504
Deferred tax assets		1,379			1,379
Other current assets		1,590			447

Total current assets		54,346			38,480
Property and equipment, net		3,438			1,537
Goodwill		12,135			—
Other intangible assets		3,181			—
Long term investments		6,895			11,198
Other assets		672			840

Total assets	$	80,667		$	52,055


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	4,103		$	1,825
Accrued compensation and benefits		1,819			1,052
Accrued commissions		720			320
Deferred revenues		1,038			1,001
Other accrued expenses		983			608
Income tax payable		474			847

Total current liabilities		9,137			5,653
Stockholders’ Equity:
Common stock, par value		23			22
Additional paid in capital		79,779			36,828
Deferred compensation		(10,641	)		(192	)
Notes receivable for employee stock purchases		(50	)		—
Accumulated other comprehensive loss		(14	)		(66	)
Retained earnings		2,433			9,810

Total stockholders’ equity		71,530			46,402

Total liabilities and stockholders’ equity	$	80,667		$	52,055

______________

(1) The balance sheet at December 31, 1999 has been derived from the audited financial statements as of that date.

See notes to condensed consolidated financial statements.

PLX TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)

	Three Months Ended September 30,				Nine Months Ended September 30,

	2000		1999		2000			1999

Net revenues	$	18,409	$	10,597	$	49,041		$	28,918
Cost of revenues		5,246		3,006		14,218			9,480

Gross margin		13,163		7,591		34,823			19,438
Operating expenses:
Research and development		4,643		2,044		11,272			5,556
Selling, general and administrative		4,437		2,782		11,538			7,470
Amortization of goodwill and purchased intangible assets		1,044		—		1,493			—
In-process research and development		—		—		14,342			—

Total operating expenses		10,124		4,826		38,645			13,026

Income (loss) from operations		3,039		2,765		(3,822	)		6,412
Interest income and other, net		567		508		1,604			970

Income (loss) before income taxes		3,606		3,273		(2,218	)		7,382

Provision for income taxes		1,626		1,145		5,159			2,587

Net income (loss)	$	1,980	$	2,128	$	(7,377	)	$	4,795

Basic net income (loss) per share	$	0.09	$	0.10	$	(0.33	)	$	0.32

Shares used to compute basic share amounts		23,162		21,606		22,544			15,212

Diluted net income (loss) per share	$	0.08	$	0.09	$	(0.33	)	$	0.22

Shares used to compute diluted per share amounts		24,743		23,111		22,544			21,489

See notes to condensed consolidated financial statements.

PLX TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

	Nine Months Ended September 30,

	2000			1999

Cash flows from operating activities
Net income (loss)	$	(7,377	)	$	4,795
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		969			669
Compensation expense recognized		2,285			144
Amortization of unearned compensation		387			70
Amortization of goodwill and other purchased intangible assets		1,493			—
In-process research and development		14,342			—
Income taxes		(198	)		—
Changes in operating assets and liabilities:
Accounts receivable		(3,604	)		(3,125	)
Inventories		125			(323	)
Other current assets		(2,584	)		(51	)
Other assets		(1,011	)		(55	)
Accounts payable		1914			670
Accrued compensation and benefits		325			340
Accrued commissions		400			121
Deferred revenues		37			468
Other accrued expenses		124			(43	)
Income tax payable		(175	)		(156	)

Net cash provided by operating activities		7,452			3,524


Investing activities
Purchases of short term investments		(18,377	)		(14,897	)
Sales of short term investments		6,745			—
Maturities of short term investments		23,500			—
Purchases of long term investments		(6,867	)		(7,245	)
Purchases of property and equipment		(1,823	)		(735	)
Cash acquired in Sebring acquisition		33			—

Net cash provided by (used in) investing activities		3,211			(22,877	)

Financing activities
Proceeds from sale of common stock		1,189			31,007
Repayment of stockholder notes receivable		38			95

Net cash provided by financing activities		1,227			31,102


Increase in cash and cash equivalents		11,890			11,749
Cash and cash equivalents at beginning of the period		8,636			5,638

Cash and cash equivalents at end of the period	$	20,526		$	17,387

See notes to condensed consolidated financial statements.

PLX TECHNOLOGY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of PLX Technology, Inc. and its wholly-owned subsidiary (“PLX” or the “Company”) as of September 30, 2000 and for the three-month and nine-month periods ended September 30, 2000 and 1999 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the condensed consolidated financial statements include all adjustments (consisting only of normal recurring accruals) that management considers necessary for a fair presentation of our financial position, operating results and cash flows for the interim periods presented. Operating results and cash flows for interim periods are not necessarily indicative of results for the entire year.

This financial data should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 1999.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and such differences may be material to the financial statements.

Accumulated Other Comprehensive Income (Loss)

The Company has adopted Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive Income” (FAS 130). FAS 130 requires that all items required to be recognized under accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. The Company’s comprehensive net income (loss) for the three and nine months ended September 30, 2000 and September 30, 1999 was as follows:

The following are the components of comprehensive income (loss):

	Three Months Ended September 30,					Nine Months Ended September 30,

	2000		1999			2000			1999

	(in thousands)					(in thousands)
Net income (loss)	$	1,980	$	2,128		$	(7,377	)	$	4,795
Accumulated other comprehensive income (loss)		30		(21	)		52			(21	)

Comprehensive income (loss)	$	2,010	$	2,107		$	(7,325	)	$	4,774

Accumulated other comprehensive loss on the accompanying Consolidated Balance Sheets is comprised entirely of unrealized losses on investments.

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Financial Instruments and Hedging Activities” (SFAS 133”), which provides a comprehensive and consistent standard for the recognition and measurement of derivatives and hedging activities. SFAS 133, as amended, is required to be adopted by the Company effective January 1, 2001, and is not anticipated to have an impact on the Company’s results of operations or financial position when adopted, as the Company holds no derivative financial instruments and does not currently engage in hedging activities.

In December 1999, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 101 “SAB 101”, “ Revenue Recognition”, which provides guidance on the recognition, presentation and disclosure in the financial statements files with the SEC. SAB 101 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosures related to revenue recognition policies. Management believes that the Company’s revenue recognition policy is in compliance with the provisions of SAB 101 and the impact of SAB 101 will have no material affect on its financial position or results of operations.

2. Investments in Debt and Equity Securities

The Company invests its excess cash in high quality, short-term and long-term debt and equity instruments. The following is a summary of the Company’s investments by major security type at amortized cost which approximates fair value:

	September 30, 2000		December 31, 1999

	(in thousands)
Operating cash	$	905	$	274
Money market		1,921		1,070
Certificates of deposit		1,000		1,500
Commercial paper		1,900		14,759
Municipal bonds		37,140		18,814
Corporate debt securities		1,986		1,500
U.S government and agency securities		1,998		1,992

	$	46,850	$	39,909

Amounts included in cash and cash equivalents	$	20,526	$	8,636
Amounts included in short-term investments		19,429		20,075
Amounts included in long-term investments		6,895		11,198

	$	46,850	$	39,909

The Company classifies all securities as available for sale.

3. Inventories

Inventories are valued at the lower of cost (first-in, first-out method) or market (net realizable value). Inventories were as follows:

	September 30, 2000		December 31, 1999

	(in thousands)
Work in Process	$	481	$	193
Finished goods		1,898		2,311

Total		2,379	$	2,504

4. Net Income (Loss) Per Share

The following table sets forth the computation of basic and diluted net income (loss) per share:

	Three Months Ended September 30,				Nine Months Ended September 30,

	2000		1999		2000			1999

	(in thousands)				(in thousands)
Net income (loss) (numerator)	$	1,980	$	2,128	$	(7,377	)	$	4,795
Shares used in computing basic Net income (loss) per share
Weighted average number of common shares, net of unvested restricted stock		23,162		21,606		22,544			15,212

Basic net income (loss) per share	$	0.09	$	0.10	$	(0.33	)	$	0.32


Outstanding weighted average number of common shares		23,162		21,606		22,544			15,212
Effect of dilutive securities:
Employee stock options		1,443		963		—			964
Unvested restricted stock		138		542		—			583
Redeemable convertible preferred stock		—		—		—			4,730

Dilutive potential common shares		1,581		1,505		—			6,277


Denominator for diluted net income (loss) per share—adjusted
Weighted-average shares and assumed conversions		24,743		23,111		22,544			21,489

Diluted net income (loss) per share	$	0.08	$	0.09	$	(0.33	)	$	0.22

5. Segments of an Enterprise and Related Information

The Company has one operating segment, the sale of semiconductor devices. The President has been identified as the Chief Operating Decision Maker (CODM) because he has final authority over resource allocation decisions and performance assessment. The CODM does not receive discrete financial information about individual components of the Company’s business.

Revenues by geographic region were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,

	2000		1999		2000		1999

	(in thousands)				(in thousands)
Revenues:
North America	$	10,928	$	6,710	$	30,212	$	19,337
Europe		4,769		2,716		12,131		6,587
Asia		2,712		1,171		6,698		2,994

Total	$	18,409	$	10,597	$	49,041	$	28,918

6. Business Combination

In May 2000, the Company purchased Sebring Systems Inc., a development stage company, that is developing the SebringRing™, a silicon switch fabric interconnect solution, for an aggregate purchase price, including assumed liabilities of $32.3 million. The transaction was accounted for using purchase accounting. The financial results for the nine months ended September 30, 2000 reflect the acquisition from the date the transaction was closed.

The estimated purchase price of the Sebring Systems acquisition is summarized below:

(in thousands)
Prior consideration	$	681
Stock consideration		24,196
Converted options		4,672
Assumed liabilities		2,242
Acquisition costs		525

Total consideration	$	32,316

The Company issued an aggregate of 960,931 shares of its common stock valued at $24.2 million. The stock options were valued using the Black-Scholes valuation model. Additionally, the Company incurred $0.5 million in professional fees, including legal, valuation and accounting fees related to the acquisition, which were capitalized as part of the purchase price of the transaction.

The allocation of the Company’s purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed is summarized below.

The allocation was based on an independent appraisal and estimate of fair value.

(in thousands)

Net tangible assets	$	1,165
In-process technology		14,342
Goodwill and other intangible assets:
Goodwill		13,339
Acquired employees		983
Tradename		355
Patents		2,132

		16,809

Net assets acquired	$	32,316

The net tangible assets acquired were comprised primarily of property and equipment and accrued liabilities. The acquired in-process technology was written-off in the second quarter of fiscal 2000. The estimated weighted average useful life of the intangible assets for patents, tradenames, and the residual goodwill, created as a result of the acquisition of Sebring Systems is approximately four years.

Additionally, PLX recorded $12.3 million in deferred compensation on options granted to employees below fair market value related to the acquisition of Sebring. Deferred compensation is being amortized over the vesting period of three years.

The $14.3 million allocation of the purchase price to the acquired in-process technology was determined by identifying research projects in areas for which technological feasibility had not been established and no alternative future uses existed. PLX acquired technology consisting of silicon switch fabric interconnect solutions. The value was determined by estimating the expected cash flows from the project once commercially viable, discounting the net cash flows to their present value, and then applying a percentage of completion to the calculated value as defined below.

Net Cash Flows. The net cash flows from the identified project was based on estimates of revenues, cost of sales, research and development costs, selling, general and administrative costs, royalty costs and income taxes from the project. These estimates were based on the assumptions mentioned below. The research and development costs excluded costs to bring the acquired in-process project to technological feasibility.

The estimated revenues were based on management projections of the acquired in-process project. The business projections were compared with and found to be in line with industry analysts’ forecasts of growth in substantially all of the relevant markets. Estimated total revenues from the acquired in-process technology product are expected to peak in fiscal 2003 and decline in fiscal 2004 as other new products are expected to become available. These projections were based on estimates of market size and growth, expected trends in technology, and the nature and expected timing of new product introductions by the Company and its competitors.

Discount Rate. Discounting the net cash flows back to their present value was based on the cost of capital for well managed venture capital funds which typically have similar risks and returns on investments. The cost of capital used in discounting the net cash flows from acquired in-process technology was 25%.

Percentage of Completion. The percentage of completion was determined using costs incurred by Sebring prior to the acquisition date compared to the remaining research and development to be completed to bring the project to technological feasibility. The Company estimated, as of the acquisition date, the project was 85% complete.

The Company expects to complete the project within six months from the acquisition date. However, development of this project remains a significant risk to the Company due to the remaining effort to achieve technical feasibility, integration of Sebring and the Company, employee retention, rapidly changing customer markets and significant competitive threats from numerous companies. Failure to bring these products to market in a timely manner could adversely impact sales and profitability of the Company in the future. Additionally, the value of the intangible assets acquired may become impaired.

Unaudited Pro Forma Financial Results

The unaudited pro forma financial information combines the historical statements of operations of PLX Technology, Inc. and Sebring Systems, Inc. for the nine-months ended September 30, 2000 and 1999 and give effect to the transactions, including the amortization of goodwill and other intangible assets and the recognition of deferred compensation, as if they occurred at the beginning of each period presented. The amount of the aggregate purchase price allocated to purchased in-process research and development has been excluded from the pro forma information, as it is a non-recurring item.

The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have occurred if the transactions had been consummated at the dates indicated, nor is it necessarily indicative of future operating results of the combined companies and should not be construed as representative of these amounts for any future periods.

	Nine Months Ended September 30,

	2000		1999

	(unaudited)
	(in thousands, except per share amounts)
Net revenues	$	49,041	$	28,918
Net loss	$	1,570	$	(4,002	)
Net loss per share—basic and diluted	$	0.07	$	(0.26	)
Number of shares used in per share calculations—basic		22,544		15,212
Number of shares used in per share calculations—diluted		24,142		15,212

7. Subsequent Events

On October 25, 2000, the Company signed a promissory note to borrow $28.5 million in connection with its purchase of a facility. The loan is collaterized by cash, short-term and long-term investments of approximately $34 million. The loan agreement includes covenants regarding profitability and bears interest at the LIBOR rate plus 0.45%. The loan requires monthly interest payments with the outstanding principal balance due and payable on November 6, 2005.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Except for historical information, this Report on Form 10-Q contains forward-looking statements, within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our expectations, hopes, intentions, beliefs or strategies regarding the future. Such forward-looking statements include, but are not limited to, our anticipated expense levels for research and development, selling, general and administrative operations, and deferred compensation; the amount of and specific uses of anticipated capital expenditures; expectations regarding inventory balances, and adequacy of cash resources under the sub-headings “Results of Operations” and “Liquidity and Capital Resources.” Actual results could differ materially from those projected in any forward-looking statements for the reasons detailed below under the sub-heading “Factors That May Affect Future Operating Results” and in other sections of this Report on Form 10-Q. All forward-looking statements included in this Form 10-Q are based on information available to us on the date of this Report on Form 10-Q, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. See “ Factors That May Affect Future Operating Results” below, as well as such other risks and uncertainties as are detailed in our SEC reports and filings for a discussion of the factors that could cause actual results to differ materially from the forward-looking statements.

The following discussion should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 1999.

Overview

PLX established in May 1986, develops and supplies semiconductor devices and software that accelerate and manage the transfer of data in networking and telecommunications, enterprise storage, imaging and industrial equipment. This equipment is typically controlled by internal computers, commonly referred to as embedded systems. We offer a complete solution consisting of three related types of products: semiconductor devices, software development kits and hardware design kits. Our semiconductor devices simplify the development of data transfer circuits in high-performance embedded systems and are compatible with microprocessors such as IBM’ s PowerPC, Motorola’s PowerPC, Intel’s i960, IDT’s MIPs and Hitachi’s SH. Our software development kits and hardware design kits promote sales of our semiconductor devices by lowering customers’ development costs and by accelerating their ability to bring new products to market.

Demand for networking, telecommunications and other equipment that transmits, stores and processes information rapidly has dramatically increased due to:

growth of the Internet,

deployment of high-speed networking, and

proliferation of multimedia.

Suppliers of this equipment are changing the way they design their products to reduce product development time and to use their scarce engineering resources more efficiently. Until recently, these suppliers typically developed their own system components and the connections between the components. Now, however, they are increasingly building their equipment based on industry standard connection methods, and they are purchasing components supplied by other companies that comply with these standards. By doing so, they reduce the time and resources required for product development. Consequently, there is a growing demand for standards-based components that connect systems together, such as our semiconductor devices. The majority of our products are based on Peripheral Component Interconnect, or PCI, a standard that is widely used in our markets.

Our objective is to expand our advantages in data transfer technology by:

focusing on high-growth markets,

delivering comprehensive solutions, including semiconductor devices,

software development kits and hardware design kits,

extending our technology advantages by incorporating new functions and technologies,

driving industry standards, and

strengthening and expanding our industry relationships.

We utilize a “fabless” semiconductor business model whereby we purchase semiconductor devices from independent manufacturing foundries. This approach allows us to focus on defining, developing, and marketing our products and eliminates the need for us to invest large amounts of capital in manufacturing facilities and work-in-process inventory.

Our gross margins have fluctuated in the past and are expected to fluctuate in the future due to changes in product mix, the position of our products in their respective life cycles, and specific product manufacturing costs.

Results of Operations

The following table summarizes historical results of operations as a percentage of net revenues for the periods shown.

	Three Months Ended September 30,						Nine Months Ended September 30,

	2000			1999			2000			1999

Net revenues		100.0	%		100.0	%		100.0	%		100.0	%
Cost of revenues		28.5			28.4			29.0			32.8

Gross margin		71.5			71.6			71.0			67.2
Operating expenses:
Research and development		25.2			19.3			23.0			19.2
Selling, general and administrative		24.1			26.2			23.5			25.8
Amortization of goodwill and purchased intangible assets		5.7			—			3.0			—
In-process research and development		—			—			29.3			—

Total operating expenses		55.0			45.5			78.8			45.0

Income (loss) from operations		16.5			26.1			(7.8	)		22.2
Interest income and other, net		3.1			4.8			3.3			3.3

Income (loss) before income taxes		19.6			30.9			(4.5	)		25.5
Provision for income taxes		8.8			10.8			10.5			8.9

Net income (loss)		10.8	%		20.1	%		(15.0	)%		16.6	%

Net Revenues

Net revenues for the three months ended September 30, 2000 were $18.4 million, an increase of 74% from $10.6 million for the three months ended September 30, 1999. For the nine months ended September 30, 2000, net revenues were $49.0 million, a 70% increase over the $28.9 million recorded in the nine months ended September 30, 1999. The increase was primarily due to higher unit shipments resulting from increased market acceptance of our products. For the nine months ended September 30, 2000, net revenues derived from customers in the United States were 62%, with 26% of net revenues from sales to Unique Technologies, our U.S. distributor. For that period, Cisco Systems accounted for 16% of net revenues through purchases from our distributors as well as direct sales. No other individual customer represented greater than 10% of net revenues.

Gross Profit

Gross profit represents net revenues less the cost of revenues. Cost of revenues includes the cost of purchasing packaged semiconductor devices from our independent foundries, our operating costs associated with the procurement, storage, and shipment of products, as well as royalty expenses paid on some of our products. Gross profit for the three months ended September 30, 2000 was $13.2 million, an increase of 73% from $7.6 million for the three months ended September 30, 1999. For the nine months ended September 30, 2000, gross profit was $34.8 million, an increase of 79% from $19.4 million for the nine months ended September 30, 1999. The improvement in the Company’s gross profit is primarily due to higher unit shipments.

Research and Development Expenses

Research and development expenses consist primarily of salaries and related costs of employees engaged in research, design, and development activities. In addition, expenses for outside engineering consultants and non-recurring engineering at our independent foundries are included in research and development expenses. Research and development expenses for the three months ended September 30, 2000 were $4.6 million, an increase of 127% from $2.0 million for the three months ended September 30, 1999. For the nine months ended September 30, 2000, research and development expenses were $11.3 million, an increase of 103% from $5.6 million for the nine months ended September 30, 1999. The increases were primarily due to amortization of deferred compensation associated with the acquisition of Sebring Systems, a one-time compensation charge related to a severance agreement, increased headcount and higher costs to support the Company’s continuing efforts to develop new products. Research and development expenses as a percentage of net revenues were 25.2% for the three months ended September 30, 2000, as compared to 19.3% for the three months ended September 30, 1999. For the nine months ended September 30, 2000, research and development expenses were 23.0% as a percentage of net revenues compared to 19.2% for the nine months ended September 30, 1999. This percentage increase was primarily due to compensation charges and recognized deferred compensation associated with the acquisition of Sebring Systems. We expect that research and development expenses in absolute dollars will continue to increase in future periods.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of employee related expenses, professional fees, trade show and other promotional expenses, and sales commissions to manufacturers’ representatives. Selling, general and administrative expenses for the three months ended September 30, 2000 were $4.4 million, an increase of 59% from $2.8 million for the three months ended September 30, 1999. For the nine months ended September 30, 2000, selling, general and administrative expenses were $11.5 million, an increase of 54% from $7.5 million for the nine months ended September 30, 1999. Selling, general and administrative expenses as a percentage of net revenues were 24.1% for the three months ended September 30, 2000, as compared to 26.2% for the three months ended September 30, 1999. For the nine months ended September 30, 2000, selling, general and administrative expenses as a percentage of net revenues decreased to 23.5% compared to 25.8% for the nine months ended September 30, 1999. This percentage decrease was primarily due to higher net revenues. The first nine months of 1999 amounts include approximately $144,000 for compensation expense recognized related to stock options granted to non-employees. We expect that selling, general and administrative expenses in absolute dollars will continue to increase in future periods.

Amortization of goodwill and purchased intangible assets

Amortization of goodwill and purchased intangible assets increased by $1.0 million and $1.5 million for the three and nine months ended September 30, 2000, respectively. Amortization of goodwill and purchased intangible assets includes the amortization of goodwill and other purchased intangible assets relating to the acquisition of Sebring Systems.

In-process research and development

The amounts expensed to in-process research and development in the nine months ended September 30, 2000 is related to the acquisition of Sebring Systems.

Deferred Compensation

We recorded deferred compensation in connection with the grant of stock options and restricted stock to our employees during 1997 and 1998. We also recorded deferred compensation related to stock options granted below fair market value to employees in relation to the acquisition of Sebring Systems in May 2000. Additionally, we recorded deferred compensation in connection with the grant of stock options to our employees in September 2000. For the three months ended September 30, 2000 and 1999, we recorded amortization of deferred compensation of $936,000 and 24,000, respectively. For the nine months ended September 30, 2000 and 1999, we recorded amortization of deferred compensation of $1,296,000 and $70,000, respectively. The amount of deferred compensation is amortized ratably over the vesting period of the applicable stock grants. We expect to record expenses related to deferred compensation of approximately $1.0 million per quarter through September 30, 2003.

Interest Income and Other, Net

Interest income and other income, net reflects interest earned on average cash, cash equivalents, short-term and long-term investment balances. Interest income and other, net increased to $567,000 for the three months ended September 30, 2000 from $508,000 for the three months ended September 30, 1999. For the nine months ended September 30, 2000, interest income increased to $1,604,000 from $970,000 in the nine months ended September 30, 1999. The increase was primarily due to interest earned on higher levels of short-term investments and cash balances.

Provision for Income Taxes

We recorded a provision for income taxes of $5.2 million at an effective tax rate of (232.6)% and $2.6 million at an effective tax rate of 35% for the nine months ended September 30, 2000 and 1999, respectively. Our 2000 effective tax rate differs from the expected benefit by applying the applicable statutory rate to the loss from operations primarily due to certain non-deductible acquisition related charges partially offset by the benefit of research and development tax credits. Our 1999 effective tax rate differs from the applicable statutory rate primarily due to the benefit of research and development tax credits.

Liquidity and Capital Resources

At September 30, 2000, we had $45.2 million in working capital and $20.5 million in cash and cash equivalents. Our operating activities generated cash of $7.5 million for the nine months ended September 30, 2000, and provided cash of $3.5 million for the nine months ended September 30, 1999. The $7.5 million cash provided by operations was primarily attributable to non-cash charges of $18.2 million associated with the acquisition of Sebring Systems, partially offset by a net loss of $7.4 million, a decrease of $3.6 million in accounts receivable and a decrease of $2.6 million in other current assets.

Our investing activities provided cash of $3.2 million and used cash of $22.9 million for the nine months ended September 30, 2000 and 1999, respectively. The $3.2 million in cash provided by investing activities was primarily attributable to the sales and maturities of short term investments of $30.2 million, partially offset by purchases of short term and long term investments of $25.2 million. Cash provided by financing activities was $1.2 million and $31.1 million for the nine months ended September 30, 2000 and 1999, respectively. Cash provided by financing activities for the nine months ended September 30, 2000 is primarily related to exercise of employee stock options.

On April 9, 1999 we completed our initial public offering of common stock which generated approximately $31 million in net proceeds. We intend to use the net proceeds primarily for general corporate purposes, including working capital. Pending use of the net proceeds for such purposes, we invested the funds in interest-bearing, investment-grade securities. We believe that the proceeds from the public offering together with the cash generated from our operations will be sufficient to meet our capital requirements for at least the next twelve months. Our future capital requirements will depend on many factors, including the inventory levels we maintain, the level of investment we make in new technologies and improvements to existing technologies and the levels of monthly expenses required to launch new products.

Factors That May Affect Future Operating Results

This quarterly report on Form 10-Q contains forward-looking statements which involve risks and uncertainties. Our actual results could differ materially from those anticipated by such forward-looking statements as a result of certain factors, including those set forth below.

Results may fluctuate significantly due to factors which are not within our control

Our quarterly operating results have fluctuated significantly in the past and are expected to fluctuate significantly in the future based on a number of factors, many of which are not in our control. Our operating expenses, which include product development costs and selling, general and administrative expenses, are relatively fixed in the short-term. If our revenues are lower than we expect because we sell fewer semiconductor devices, delay the release of new products or the announcement of new features, or for other reasons, we may not be able to quickly reduce our spending in response.

Other circumstances that can affect our operating results include:

our ability to develop, introduce and market new products and technologies on a timely basis,

the timing of significant orders, order cancellations and reschedulings,

changes in our pricing policies or those of our competitors or suppliers, including decreases in unit average selling prices of our products,

introduction of products and technologies by our competitors,

shifts in our product mix toward lower margin products,

the availability of production capacity at the fabrication facilities that manufacture our products, and

the availability and cost of materials to our suppliers.

These factors are difficult to forecast, and these or other factors could adversely affect our business. Any shortfall in our revenues would have a direct impact on our business. In addition, fluctuations in our quarterly results could adversely affect the market price of our common stock in a manner unrelated to our long-term operating performance.

We may fail to adequately integrate Sebring or future acquired businesses into our business

In May 2000, we acquired Sebring Systems, a development stage company that is developing the SebringRing™, a silicon switch fabric interconnect solution, in a transaction accounted for as a purchase transaction. There can be no assurance that this acquisition will be effectively assimilated into our business. The integration of Sebring Systems will place a burden on our management and infrastructure. Such integrations are subject to risks commonly encountered in making such acquisitions, including, among others, loss of key personnel of the acquired company, loss of key customers and business relationships of the acquired company, the difficulty associated with assimilating and integrating the personnel, operations and technologies of the acquired company, the potential disruption of our ongoing business, the maintenance of uniform standards, controls, procedures, employees and clients. There can be no assurance that we will be successful in overcoming these risks or any other problems encountered in connections with our acquisition of Sebring Systems.

From time to time, in the ordinary course of business, we may evaluate potential acquisitions of other businesses, products or technologies. Future acquisitions may result in the issuance of dilutive equity securities, the incurrence of debt or contingent liabilities. There can be no assurance that any strategic acquisition of investment will succeed. Any future acquisition or investment could have a material adverse effect on our business, financial condition and results of operations.

Recently, the Financial Accounting Standards Board (“FASB”) voted to eliminate pooling of interests accounting for acquisitions and the ability to write-off in-process research and development has been limited by recent pronouncements. These changes could increase the portion of the purchase price for any future acquisitions that must be charged to our cost of revenues and operating expenses in the periods following any such acquisitions. As a consequence, our results of operations in periods following any such acquisitions could be materially adversely affected. Although these changes would not directly affect the purchase price for any of these acquisitions. These changes may make it more difficult for us to acquire other companies, product lines or technologies.

Sales cycle can result in uncertainty and delays with regard to our expected revenues

Our customers typically perform numerous tests and extensively evaluate our products before incorporating them into their systems. The time required for test, evaluation and design of our products into the customer’s equipment can range from six to twelve months or more. It can take an additional six to twelve months or more before a customer commences volume shipments of equipment that incorporates our products. Because of this lengthy sales cycle, we may experience a delay between the time when we increase expenses for research and development and sales and marketing efforts and the time when we generate higher revenues, if any, from these expenditures.

In addition, the delays inherent in our lengthy sales cycle raise additional risks of customer decisions to cancel or change product plans. When we achieve a design win, there can be no assurance that the customer will ultimately ship products incorporating our products. Our business could be materially adversely affected if a significant customer curtails, reduces or delays orders during our sales cycle or chooses not to release products incorporating our products.

Rapid technological change could make our products obsolete

We operate in an industry that is subject to evolving industry standards, rapid technological changes, rapid changes in customer demands and the rapid introduction of new, higher performance products with shorter product life cycles. As a result, we expect to continue to make significant investments in research and development. Although, historically, we have had adequate funds from operations to devote to research and development, there can be no assurance that such funds will be available in the future or, if available, that they will be adequate. Also, we must manage product transitions successfully, since announcements or introductions of new products by us or our competitors could adversely affect sales of our existing products because these existing products can become obsolete or unmarketable for specific purposes. There can be no assurance that we will be able to develop and introduce new products or enhancements to our existing products on a timely basis or in a manner which satisfies customer needs or achieves widespread market acceptance. Any significant delay in releasing new products could adversely affect our reputation, give a competitor a first-to-market advantage or allow a competitor to achieve greater market share. The failure to adjust to rapid technological change could harm our business, financial condition, results of operations and cash flows.

Failure of our products to gain market acceptance would adversely affect our financial condition

We believe that our growth prospects depend upon our ability to gain customer acceptance of our products and technology. Market acceptance of products depends upon numerous factors, including compatibility with existing manufacturing processes and products, perceived advantages over competing products and the level of customer service available to support such products. Moreover, manufacturers often rely on a limited number of equipment vendors to meet their manufacturing equipment needs. As a result, market acceptance of our products may be adversely affected to the extent potential customers utilize a competitor’s manufacturing equipment. There can be no assurance that growth in sales of new products will continue or that we will be successful in obtaining broad market acceptance of our products and technology.

We expect to spend a significant amount of time and resources to develop new products and refine existing products. In light of the long product development cycles inherent in our industry, these expenditures will be made well in advance of the prospect of deriving revenue from the sale of any new products. Our ability to commercially introduce and successfully market any new products is subject to a wide variety of challenges during this development cycle, including start-up bugs, design defects and other matters that could delay introduction of these products to the marketplace. In addition, since our customers are not obligated by long-term contracts to purchase our products, our anticipated product orders may not materialize, or orders that do materialize may be cancelled. As a result, if we do not achieve market acceptance of new products, we may not be able to realize sufficient sales of our products in order to recoup research and development expenditures. The failure of any of our new products to achieve market acceptance would harm our business, financial condition, results of operation and cash flows.

We must make significant research and development expenditures prior to generating revenues from products

To establish market acceptance of a new semiconductor device, we must dedicate significant resources to research and development, production and sales and marketing. We incur substantial costs in developing, manufacturing and selling a new product, which often significantly precede meaningful revenues from the sale of this product. Consequently, new products can require significant time and investment to achieve profitability. Prospective investors should note that our efforts to introduce new semiconductor devices or other products or services may not be successful or profitable. In addition, products or technologies developed by others may render our products or technologies obsolete or noncompetitive.

We record as expenses the costs related to the development of new semiconductor devices and other products as these expenses are incurred. As a result, our profitability from quarter to quarter and from year to year may be adversely affected by the number and timing of our new product launches in any period and the level of acceptance gained by these products.

Our independent manufacturers may not be able to meet our manufacturing requirements

We do not manufacture any of our semiconductor devices. Therefore, we are referred to in the semiconductor industry as a “fabless” producer of semiconductors. Consequently, we depend upon third party manufacturers to produce semiconductors that meet our specifications. We currently have third party manufacturers that can produce semiconductors which meet our needs. However, as the semiconductor industry continues to progress to smaller manufacturing and design geometries, the complexities of producing semiconductors will increase. Decreasing geometries may introduce new problems and delays that may affect product development and deliveries. Due to the nature of the semiconductor industry and our status as a “fabless” semiconductor company, we could encounter fabrication related problems that may affect the availability of our semiconductor devices, may delay our shipments or may increase our costs.

Our reliance on single source manufacturers of our semiconductor devices could delay shipments and increase our costs

None of our semiconductor devices is currently manufactured by more than one supplier. We place our orders on a purchase order basis and do not have a long term purchase agreement with any of our existing suppliers. In the event that the supplier of a semiconductor device was unable or unwilling to continue to manufacture this product in the required volume, we would have to identify and qualify a substitute supplier. Introducing new products or transferring existing products to a new third party manufacturer or process may result in unforeseen device specification and operating problems. These problems may affect product shipments and may be costly to correct. Silicon fabrication capacity may also change, or the costs per silicon wafer may increase. Manufacturing-related problems may have a material adverse effect on our business.

Intense competition in the markets in which we operate may reduce the demand for or prices of our products

Competition in the semiconductor industry is intense. If our main target market, the embedded systems market, continues to grow, the number of competitors may increase significantly. In addition, new semiconductor technology may lead to new products that can perform similar functions as our products. Some of our competitors and other semiconductor companies may develop and introduce products that integrate into a single semiconductor device the functions performed by our semiconductor devices. This would eliminate the need for our products in some applications.

In addition, competition in our markets comes from companies of various sizes, many of which are significantly larger and have greater financial and other resources than we do and thus can better withstand adverse economic or market conditions. Also, with our processor products, we compete with established embedded microprocessor companies and others. Many of these indirect competitors and microprocessor companies have significantly greater financial, technical, marketing and other resources than we. Therefore, we cannot assure you that we will be able to compete successfully in the future against existing or new competitors, and increased competition may adversely affect our business.

Failure to have our products designed into the products of electronic equipment manufacturers will result in reduced sales

Our future success depends on electronic equipment manufacturers that design our semiconductor devices into their systems. We must anticipate market trends and the price, performance and functionality requirements of current and potential future electronic equipment manufacturers and must successfully develop and manufacture products that meet these requirements. In addition, we must meet the timing requirements of these electronic equipment manufacturers and must make products available to them in sufficient quantities. These electronic equipment manufacturers could develop products that provide the same or similar functionality as one or more of our products and render these products obsolete in their applications.

We do not have purchase agreements with our customers that contain minimum purchase requirements. Instead, electronic equipment manufacturers purchase our products pursuant to short-term purchase orders that may be canceled without charge. We believe that in order to obtain broad penetration in the markets for our products, we must maintain and cultivate relationships, directly or through our distributors, with electronic equipment manufacturers that are leaders in the embedded systems markets. Accordingly, we will often incur significant expenditures in order to build relationships with electronic equipment manufacturers prior to volume sales of new products. If we fail to develop relationships with additional electronic equipment manufacturers, to have our products designed into new embedded systems or to develop sufficient new products to replace products that have become obsolete, our business would be materially adversely affected.

Lower demand for our customers’ products will result in lower demand for our products

Demand for our products depends in large part on the development and expansion of the high-performance embedded systems markets including networking and telecommunications, enterprise storage, imaging and industrial applications. The size and rate of growth of these embedded systems markets may in the future fluctuate significantly based on numerous factors. These factors include the adoption of alternative technologies, capital spending levels and general economic conditions. Demand for products that incorporate high-performance embedded systems may not grow.

Defects in our products could increase our costs and delay our product shipments

Our products are complex. While we test our products, these products may still have errors, defects or bugs that we find only after commercial production has begun. We have experienced errors, defects and bugs in the past in connection with new products.

Our customers may not purchase our products if the products have reliability, quality or compatibility problems. This delay in acceptance can make it more difficult to retain our existing customers and to attract new customers. Moreover, product errors, defects or bugs can result in additional development costs, diversion of technical and other resources from our other development efforts, claims by our customers or others against us, or the loss of credibility with our current and prospective customers. In the past, the additional time required to correct defects has caused delays in product shipments and resulted in lower revenues. We may have to spend significant amounts of capital and resources to address and fix problems in new products.

We must continuously develop our products using new process technology with smaller geometries to remain competitive on a cost and performance basis. Migrating to new technologies is a challenging task requiring new design skills, methods and tools and is difficult to achieve.

Failure to hire additional personnel and to improve our operations will limit our growth

We have experienced rapid growth which places a significant strain on our limited personnel and other resources. To manage our expanded operations effectively, we will need to further improve our operational, financial and management systems. We will also need to successfully hire, train, motivate and manage our employees. We may not be able to manage our growth effectively, which could have a material adverse effect on our business. Also, we are seeking to hire additional skilled development engineers, who are currently in short supply. Our business could be adversely affected if we encounter delays in hiring additional engineers.

We could lose key personnel due to competitive market conditions and attrition

Our success depends to a significant extent upon our senior management and key technical and sales personnel. The loss of one or more of these employees could have a material adverse effect on our business. We do not have employment contracts with any of our executive officers.

Our success also depends on our ability to attract and retain qualified technical, sales and marketing, customer support, financial and accounting, and managerial personnel. Competition for such personnel in the semiconductor industry is intense, and we may not be able to retain our key personnel or to attract, assimilate or retain other highly qualified personnel in the future. In addition, we may lose key personnel due to attrition, including health, family and other reasons. We have experienced, and may continue to experience, difficulty in hiring and retaining candidates with appropriate qualifications. If we do not succeed in hiring and retaining candidates with appropriate qualifications, our business could be materially adversely affected.

A large portion of our revenues is derived from sales to third-party distributors who may terminate their relationships with us at any time

We depend on distributors to sell a significant portion of our products. In the nine months ended September 30, 2000 and in 1999, net revenues through distributors accounted for approximately 65% and 57%, respectively, of our net revenues. Some of our distributors also market and sell competing products.

Distributors may terminate their relationships with us at any time. Our future performance will depend in part on our ability to attract additional distributors that will be able to market and support our products effectively, especially in markets in which we have not previously distributed our products. We may lose one or more of our current distributors or may not be able to recruit additional or replacement distributors. The loss of one or more of our major distributors could have a material adverse effect on our business.

The demand for our products depends upon our ability to support evolving industry standards

Substantially all of our revenues are derived from sales of products which rely on the PCI standard. If the embedded systems markets move away from this standard and begin using new standards, we may not be able to successfully design and manufacture new products that use these new standards. There is also the risk that new products we develop in response to new standards may not be accepted in the market. In addition, the PCI standard is continuously evolving, and we may not be able to modify our products to address new PCI specifications. Any of these events would have a material adverse effect on our business.

The successful marketing and sales of our products depend upon our third party relationships, which are not supported by written agreements

When marketing and selling our semiconductor devices, we believe we enjoy a competitive advantage based on the availability of development tools offered by third parties. These development tools are used principally for the design of other parts of the embedded system but also work with our products. We will lose this advantage if these third party tool vendors cease to provide these tools for existing products or do not offer them for our future products. This event could have a material adverse effect on our business. We generally have no written agreements with these third parties, and these parties could choose to stop providing these tools at any time.

Our limited ability to protect our intellectual property and proprietary rights could adversely affect our competitive position

Our future success and competitive position depend upon our ability to obtain and maintain proprietary technology used in our principal products. Currently, we have limited protection of our intellectual property in the form of patents and rely instead on trade secret protection. Our existing or future patents may be invalidated, circumvented, challenged or licensed to others. The rights granted thereunder may not provide competitive advantages to us. In addition, our future patent applications may not be issued with the scope of the claims sought by us, if at all. Furthermore, others may develop technologies that are similar or superior to our technology, duplicate our technology or design around the patents owned or licensed by us. In addition, effective patent, trademark, copyright and trade secret protection may be unavailable or limited in foreign countries where we may need protection. We cannot be sure that steps taken by us to protect our technology will prevent misappropriation of the technology.

We may from time to time receive notifications of claims that we may be infringing patents or other intellectual property rights owned by other third parties. While there is currently no intellectual property litigation pending against us, litigation could result in significant expenses to us, adversely affect sales of the challenged product or technology. This litigation could also divert the efforts of our technical and management personnel, whether or not the litigation is determined in our favor. In addition, we may not be able to develop or acquire non-infringing technology or procure licenses to the infringing technology under reasonable terms. This could require expenditures by us of substantial time and other resources. Any of these developments would have a material adverse effect on our business.

The cyclical nature of the semiconductor industry may lead to significant variances in the demand for our products

In the last two years, the semiconductor industry has been characterized by significant downturns and wide fluctuations in supply and demand. Also, during this time, the industry has experienced significant fluctuations in anticipation of changes in general economic conditions, including economic conditions in Asia. This cyclicality has led to significant variances in product demand and production capacity. It has also accelerated erosion of average selling prices per unit. We may experience periodic fluctuations in our future financial results because of industry-wide conditions.

Because we sell our products to customers outside of North America and because our products are incorporated with products of others that are sold outside of North America we face foreign business, political and economic risks

Sales outside of North America accounted for 41% of our revenues for the nine months ended September 30, 2000. In 1999, 1998, and 1997 sales outside of North America accounted for 33%, 34%, and 22% of our revenues, respectively. We anticipate that these sales may increase in future periods and may account for an increasing portion of our revenues. In addition, equipment manufacturers who incorporate our products into their products, sell their products outside of North America, thereby exposing us indirectly to foreign risks. Further, most of our semiconductor products are manufactured outside of North America. Accordingly, we are subject to international risks, including:

difficulties in managing distributors,

difficulties in staffing and managing foreign subsidiary and branch operations,

political and economic instability,

foreign currency exchange fluctuations,

difficulties in accounts receivable collections,

potentially adverse tax consequences,

timing and availability of export licenses,

changes in regulatory requirements, tariffs and other barriers,

difficulties in obtaining governmental approvals for telecommunications and other products, and

the burden of complying with complex foreign laws and treaties.

Because sales of our products have been denominated to date exclusively in United States dollars, increases in the value of the United States dollar will increase the price of our products so that they become relatively more expensive to customers in the local currency of a particular country, leading to a reduction in sales and profitability in that country.

Our principal stockholders have significant voting power and may take actions that may not be in the best interests of our other stockholders

Our executive officers, directors and other principal stockholders, in the aggregate, beneficially own approximately 40% of our outstanding common stoc k. Although these stockholders do not have majority control, they currently have, and likely will continue to have, significant influence with respect to the election of our directors and approval or disapproval of our significant corporate actions. This influence over our affairs might be adverse to the interests of other stockholders. In addition, the voting power of these stockholders could have the effect of delaying or preventing a change in control of PLX.

The anti-takeover provisions in our certificate of incorporation could adversely affect the rights of the holders of our common stock

Anti-takeover provisions of Delaware law and our Certificate of Incorporation may make a change in control of PLX more difficult, even if a change in control would be beneficial to the stockholders. These provisions may allow the Board of Directors to prevent changes in the management and control of PLX. Under Delaware law, our Board of Directors may adopt additional anti-takeover measures in the future.

One anti-takeover provision that we have is the ability of our Board of Directors to determine the terms of preferred stock and issue preferred stock without the approval of the holders of the common stock. Our Certificate of Incorporation allows the issuance of up to 5,000,000 shares of preferred stock. There are no shares of preferred stock outstanding. However, because the rights and preferences of any series of preferred stock may be set by the Board of Directors in its sole discretion without approval of the holders of the common stock, the rights and preferences of this preferred stock may be superior to those of the common stock. Accordingly, the rights of the holders of common stock may be adversely affected.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We have an investment portfolio of fixed income securities, including those classified as cash equivalents of approximately $44.9 million at September 30, 2000. These securities are subject to interest rate fluctuations and will decrease in market value if interest rates increase.

The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. We invest primarily in high-quality, short-term and long-term debt instruments. A hypothetical 100 basis point increase in interest rates would result in less than $0.5 million decrease (less than 2%) in the fair value of our available-for-sale securities.

PART II. OTHER INFORMATION

Item 6. Exhibits And Reports On Form 8-K

(a) Exhibits

	Exhibit Number		Description
	2.1#		Agreement and Plan of Merger dated April 19, 2000 by and among PLX Technology, Inc., OKW Technology Acquisition Corporation and Sebring Systems, Inc.
	3.1*		Amended and Restated Certificate of Incorporation of the Registrant.
	3.2*		Registrant’s Amended and Restated Bylaws.
	4.1		Reference is made to Exhibit 3.1.
	10.1*		Form of Indemnification Agreement between PLX and each of its Officers and Directors.
	10.2*+		1998 Stock Incentive Plan.
	10.3*+		1999 Stock Incentive Plan.
	10.4*		Lease Agreement dated December 20, 1995 by and between Aetna Life Insurance Company as Landlord and PLX as Tenant.
	10.5*		Lease Agreement dated October 17, 1997 between The Arrillaga Foundation and The Perry Foundation as Landlords and PLX as Tenant, as amended.
	10.6*+		Form of Restricted Stock Purchase Agreement used in connection with the 1986 Restricted Stock Purchase Program.
	10.7*+		Form of Pledge Agreement used in connection with the 1986 Restricted Stock Purchase Program.
	10.8*+		Form of Promissory Note used in connection with the 1986 Restricted Stock Purchase Program.
	10.9*		PLX Technology, Inc. Stock Restriction, Information Rights and Registration Rights Agreement dated April 19, 1989.
	10.10*		PLX Technology, Inc. Stock Restriction, Information Rights and Registration Rights Agreement dated July 3, 1991.
	10.11		Loan Agreement dated October 25, 2000 between Wells Capital Management and PLX.
	27.1		Financial Data Schedule.

______________

* Incorporated by reference to the same numbered exhibit previously filed with the Company’s Registration Statement on Form S-1 (Registration No. 333-71795).

# Incorporated by reference to Exhibit 2.1 to Form 8-K as filed May 30, 2000.

+ Management contract or compensatory plan or arrangement.

(b) Reports on Form 8-K. A report on Form 8-K/A was filed by the Company August 2, 2000 for the acquisition of Sebring Systems, Inc.

Items 1, 2, 3, 4 and 5 of Part II have been omitted, as they are not applicable.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		PLX TECHNOLOGY, INC. (Registrant)
Date: November 14, 2000	By:	/s/ Rafael Torres

		Rafael Torres Vice President, Finance and Chief Financial Officer (Authorized Officer and Principal Financial Officer)