the 2009 Annual Report (pdf) - PLX Technology

Liquidity and Capital Resources
In summary, our cash flows were (in thousands):
Years Ended December 31,
2009 2008 2007
Net cash provided by (used in) operating activities…………………………………… $ (8,410) $ 7,625 $ 5,777
Net cash provided by (used in) investing activities…………………………………… 14,446 (14,246) (20,665)
Net cash used in financing activities…………………………………………………… (1,566) (5,646) (1,301)
Effect of exchange rate fluctuations on cash and cash equivalents…………………… (36) (43) (42)
We invest cash not needed for current operations predominantly in debt instruments that are highly liquid, of
high-quality investment grade and predominantly have maturities of less than one year with the intent to make such
funds readily available for operating purposes. As of December 31, 2009 cash, cash equivalents, short and long-term
marketable securities were $40.0 million, a decrease of $7.1 million from $47.1 million at December 31, 2008, and a
decrease of $6.6 million from $46.6 million at December 31, 2007.
Cash provided by (used in) operating activities primarily consists of net income (loss) adjusted for certain noncash
items including depreciation, amortization, share-based compensation expense, impairments, fair value
remeasurements, provisions for excess and obsolete inventories, changes in pre-acquisition deferred tax balances,
other non-cash items and the effect of changes in working capital and other activities. Cash used in operating
activities in 2009 of $8.4 million consisted primarily of a net loss of $18.8 million adjusted for non-cash items of
$13.4 million and an increase in accounts receivable of $1.9 million due to higher sales in the fourth quarter of 2009
compared to the same period of 2008 and a decrease in accrued compensation of $1.8 million, partially offset by a
decrease in other current assets of $2.3 million due to the amortization and decreased purchases of software and IP
licenses. Cash provided by operating activities in 2008 of $7.6 million consisted primarily of a net loss of $56.5
million adjusted for non-cash items of $60.9 million and a decrease in accounts receivable of $4.8 million due to
lower sales in the fourth quarter of 2008 compared to the same period of 2007, partially offset by increases in other
current assets and other assets of $1.2 million due to an increase in software and IP licenses and inventory of $0.5
million. Cash provided by operating activities in 2007 of $5.8 million consisted primarily of net income of $1.2
million adjusted for non-cash items of $8.7 million and an increase in accounts payable of $1.5 million due to timing
of vendor payments, partially offset by increases in other assets of $3.2 million due to an increase in software and IP
licenses and $2.0 million in accounts receivable due to timing of customer payments and higher sales in the fourth
quarter of 2007 compared to the fourth quarter of 2006.
Cash provided by investing activities in 2009 of $14.4 million was primarily due to sales and maturities of
investments (net of purchases of investments) of $11.2 million and cash acquired through the acquisition of Oxford of
$4.4 million, partially offset by capital expenditures of $1.2 million primarily to provide infrastructure for new
product designs. Cash used in investing activities in 2008 of $14.2 million was primarily due to purchases of
marketable securities (net of sales and maturities of investments) of $12.4 million and capital expenditures of $1.8
million. Cash used in investing activities in 2007 of $20.7 million was primarily due to purchases of marketable
securities (net of sales and maturities of investments) of $17.6 million and capital expenditures of $3.1 million.
Capital expenditures have been generally comprised of purchases of engineering equipment, computer hardware,
software, server equipment and furniture and fixtures.
Cash used in financing activities in 2009 of $1.6 million was due to the payments made to employees associated
with the tender offer of $0.9 million and on capital lease obligations of $0.7 million. Cash used in financing activities
in 2008 of $5.6 million was due to common stock repurchases of $6.5 million partially offset by proceeds from the
exercise of stock options of $0.9 million. Cash provided by financing activities in 2007 of $1.3 million were due to
proceeds from the exercise of stock options.
The negative effect of exchange rates on cash and cash equivalents during 2009, 2008 and 2007 was due to the
weakening of the U.S. dollar against other foreign currencies.
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