For the fourth quarter ended December 31, 2008, the company reported net revenues of $14.2 million, a 32% decrease compared to the $20.8 million reported in the third quarter ended September 30, 2008, and a 36% decrease from the $22.1 million reported in the fourth quarter ended December 31, 2007.

“As with many companies in our industry, our revenue performance was directly impacted by our channel partner inventory reductions and broad-based decline in our customers’ demand,” said Ralph Schmitt, president and chief executive officer of PLX. “While the economic environment is unpredictable, PLX continues its focus on executing to deliver new products and have PLX technology designed into our customers’ products. With this focus we will come out of this downturn stronger and in a better position against the competition.”

Net loss for the fourth quarter ended December 31, 2008, was $58.3 million, or $2.08 per diluted share. This compares to net income of $798,000, or $0.03 per diluted share, for the third quarter ended September 30, 2008.

The company’s gross margin for the fourth quarter ended December 31, 2008, was 59.4%, as compared with 58.5% for the third quarter ended September 30, 2008. Gross margin for the 12 months ended December 31, 2008, was 59.6% as compared with 60.6% for the 12 months ended December 31, 2007.

Operating expenses for the fourth quarter ended December 31, 2008, were $67.4 million. Included in operating expenses were impairment charges of $54.3 million, Oxford-related acquisition costs of $756,000 and stock-based compensation and acquisition-related amortization expense of $905,000. Net of impairment and Oxford acquisition-related costs, operating expenses were $12.4 million. Operating expenses in the same quarter a year ago were $13.2 million and $11.6 million in the third quarter ended September 30, 2008. For the 12 months ended December 31, 2008, operating expenses, net of impairment and Oxford acquisition-related costs, were $51.2 million, as compared with $50.2 million for the 12 months ended December 31, 2007.

At December 31, 2008, cash and investments grew by $564,000, or one%, to $47.1 million, from $46.6 million at December 31, 2007. The company repurchased $6.5 million of company common stock during 2008. The company carries no debt.

The Oxford Semiconductor acquisition was announced on December 16, 2008, and closed on January 2, 2009. This enables PLX an adjacent vertical market growth vector into consumer storage which is synergistic with the platform PCI Express switching products. PLX has acquired all of the outstanding shares of capital stock of Oxford Semiconductor in exchange for 5,600,000 shares of common stock of PLX, and a promissory note in the aggregate principal amount of $14.2 million that will be satisfied by either the issuance of an additional 3,400,000 shares of common stock of PLX upon approval of the PLX stockholders, or the repayment of the principal amount of the note by June 30, 2009, if such stockholder approval is not obtained. PLX intends to hold a special meeting of stockholders to vote upon the issuance of PLX shares in satisfaction of the note. The registration statement for the shares was filed on Form S-3 on January 16, 2009.

Business Outlook:

There will be charges to operating expenses for deal costs, severance costs and other adjustments needed to record the acquisition. The company has just begun the valuation work for this acquisition and the effect on expenses in the first quarter is uncertain. The company expects all such costs to be recorded in the first quarter of 2009.

Based on customer and channel data, PLX believes that it will have revenues of at least $14 million. However, there are identified and estimated opportunities that may come into the first quarter that could increase this number to as much as $18 million.

The company expects that its gross margin will be in the 55-60% range in 2009 reflecting the slightly lower margins of the Oxford products. Through the Oxford acquisition, PLX has added design centers in the UK and Singapore. After obtaining significant synergies associated with the acquisition and additional cost reductions, the company’s consolidated operating expenses will increase by as much as 20% over its stand-alone 2008 levels.

“We are bullish in our long-term prospects for both the core PCI Express switching business and consumer based storage interconnect business,” Schmitt said. “We have industry-leading positions and products in both of these proprietary product areas. Our new products in 2009 will extend our lead in features that will allow our customers to differentiate their products and for us to gain market share. However, we are adjusting our cost model to align with a lower revenue base due to the economic environment, which we expect to persist for at least one or two more quarters. We have already taken actions to quickly reduce our combined operating expenses by 30 percent while maintaining R&D to deliver at least four platform products during 2009.”