KFAR SAVA, Israel, Oct. 25, 2017 /PRNewswire/ -- Silicom
Ltd. (NASDAQ: SILC), a leading provider of high-performance
networking and data infrastructure solutions, today reported record
results for the third quarter and nine months ended
September 30, 2017.
Financial Results
Third Quarter: Silicom's revenues for the
third quarter of 2017 totalled $32.3
million, up 31% from $24.7
million in the third quarter of 2016 and up 7% compared
sequentially with the second quarter of 2017. These are the
Company's highest-ever quarterly revenues, breaking the latest
record set just last quarter.
On a GAAP basis, net income for the quarter totalled
$4.6 million, or $0.60 per diluted share ($0.62 per basic share), up 44% compared with
$3.2 million, or $0.43 per share (basic and diluted), for the
third quarter of 2016.
On a non-GAAP basis (as described and reconciled below), net
income for the quarter totalled $5.7
million, or $0.75 per diluted
share ($0.76 per basic share), up 44%
compared with $4.0 million, or
$0.53 per diluted share ($0.54 per basic share), for the third quarter of
2016.
First Nine Months: Silicom's revenues for the
first nine months of 2017 totalled $87.9
million, up 22% compared with $72.0
million for the first nine months of 2016. These are the
Company's highest-ever revenues for a nine-month period.
On a GAAP basis, net income for the period totalled $11.4 million, or $1.51 per diluted share ($1.53 per basic share), up 32% compared with
$8.6 million, or $1.16 per diluted share ($1.18 per basic share), for the first nine months
of 2016.
On a non-GAAP basis (as described and reconciled below), net
income for the period totalled $14.8
million, or $1.96 per diluted
share ($2.00 per basic share), up 27%
compared with $11.7 million, or
$1.58 per diluted share ($1.59 per basic share), for the first nine months
of 2016.
Comments of Management
"The third quarter was another period of accelerating
momentum for Silicom, demonstrating the extraordinary growth of
Cloud-related markets and the unique fit of our technologies and
business strategy for their evolving needs," commented Mr.
Shaike Orbach, Silicom's President
& CEO.
"The three announcements that we made during the quarter,
including a new FPGA Design Win, a 'legacy cloud' win and a new
Tier 1 server manufacturer, together with an increase in volumes,
within the 'largest-ever win' that we announced in March,
demonstrate that we are positioned to benefit – and indeed that we
are benefiting – from multiple market trends and technologies
within the Cloud. While we continue to win business for today's
cloud and data center needs, the 'largest ever' win is for the
next-generation Cloud (our Switch-Fabric-on-a-NIC product), and our
FPGA technology is for the Future Cloud. As such, we have built
resilience and agility into our business model, with probable
growth paths no matter how the Cloud market eventually develops."
Mr. Orbach continued, "Most importantly, as we announced last
week, our 'largest-ever win' customer estimates that, once all
challenges are resolved, the new Cloud infrastructure achieves GA
(General Availability) status with availability for users and
deployments ramp up to their steady run rate, our revenues from
this Design Win will exceed $75
million per year beginning in 2019, more than double the
original estimate. With strong potential for these significant
revenues and the relationships that we are developing with the
customer and its Tier 1 server and infrastructure suppliers, this
win is clearly a key strategic success for us."
Mr. Orbach concluded, "In parallel, while pursuing all of these
Cloud and Data Center opportunities, we continue to leverage our
technology and products to address other growing markets, including
Cyber Security, SD-WAN and more. In short, with no end in sight to
the Cloud phenomenon, continuing momentum in additional markets and
growing relationships with the industry's giants, we have never
been more optimistic about our prospects."
Conference Call Details
Silicom's Management will host an interactive conference today,
October 25th, at
9am Eastern Time (6am Pacific Time, 4pm Israel Time) to review and discuss the
results. To participate, please call one of the following
teleconferencing numbers. Please begin placing your calls at least
10 minutes before the conference call commences. If you are unable
to connect using the toll-free numbers, try the international
dial-in number.
US: +1-888-668-9141
UK: +44-800-917-5108
ISRAEL: +972-3-918-0609
INTERNATIONAL: +972-3-918-0609
At: 9:00am Eastern Time,
6:00am Pacific Time, 4:00pm Israel Time
For those unable to listen to the live call, a replay of the
call will be available for three months from the day after the call
under the investor relations section of Silicom's website.
Non-GAAP Financial Measures
This release, including the financial tables below,
presents other financial information that may be considered
"non-GAAP financial measures" under Regulation G and related
reporting requirements promulgated by the Securities and Exchange
Commission as they apply to our company. These non-GAAP financial
measures exclude compensation expenses in respect of options and
RSUs granted to directors, officers and employees,
acquisition-related expenses, adjustment of inventory step up
related to acquisition, amortization of acquired intangible assets,
changes in the fair value of contingent consideration from a
business combination, as well as taxes on amortization of acquired
intangible assets. Non-GAAP financial measures should be evaluated
in conjunction with, and are not a substitute for, GAAP financial
measures. The tables also present the GAAP financial measures,
which are most comparable to the non-GAAP financial measures as
well as reconciliation between the non-GAAP financial measures and
the most comparable GAAP financial measures. The non-GAAP financial
information presented herein should not be considered in isolation
from or as a substitute for operating income, net income or per
share data prepared in accordance with GAAP.
About Silicom
Silicom Ltd. is an industry-leading provider of
high-performance networking and data infrastructure solutions.
Designed primarily to improve performance and efficiency in Cloud
and Data Center environments, Silicom's solutions increase
throughput, decrease latency and boost the performance of servers
and networking appliances, the infrastructure backbone that enables
advanced Cloud architectures and leading technologies like NFV,
SD-WAN and Cyber Security. Our innovative solutions for
high-density networking, high-speed fabric switching, offloading
and acceleration, which utilize a range of cutting-edge silicon
technologies as well as FPGA-based solutions, are ideal for
scaling-up and scaling-out cloud infrastructures.
Silicom products are used by major Cloud players, service
providers, telcos and OEMs as components of their infrastructure
offerings, including both add-on adapters in the Data Center and
stand-alone virtualized/universal CPE devices at the edge.
Silicom's long-term, trusted relationships with more than 150
customers throughout the world, its more than 400 active Design
Wins and more than 300 product SKUs have made Silicom a "go-to"
connectivity/performance partner of choice for technology leaders
around the globe.
For more information, please visit: www.silicom.co.il
Statements in this press release which are not historical data
are forward-looking statements which involve known and unknown
risks, uncertainties, or other factors not under the company's
control, which may cause actual results, performance, or
achievements of the company to be materially different from the
results, performance, or other expectations implied by these
forward-looking statements. These factors include, but are not
limited to, Silicom's increasing dependence for substantial revenue
growth on a limited number of customers in the evolving cloud-based
market, the speed and extent to which cloud-based and cloud-focused
solutions are adopted by the market, likelihood that it will rely
increasingly on customers which provide cloud-based and
cloud-focused solutions in this evolving market, resulting in an
increasing dependence on a smaller number of larger customers,
difficulty in commercializing and marketing of Silicom's products
and services, maintaining and protecting brand recognition,
protection of intellectual property, competition and other factors
detailed in the company's periodic filings with the Securities and
Exchange Commission. These forward-looking statements can generally
be identified as such because the context of the statement will
include words, such as "expects," "should," "believes,"
"anticipates" or words of similar import. Similarly, statements
that describe future plans, objectives or goals are also
forward-looking statements. In light of significant risks and
uncertainties inherent in forward-looking statements, the inclusion
of such statements should not be regarded as a representation by
the company that it will achieve such forward-looking statements.
The company disclaims any duty to update such statements, whether
as a result of new information, future events, or otherwise.
-- FINANCIAL TABLES FOLLOW –
Silicom Ltd.
Consolidated Balance Sheets
|
|
(US$
thousands)
|
|
|
September
30,
|
|
December
31,
|
|
2017
|
|
2016
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
29,188
|
|
$
|
11,917
|
Marketable
securities
|
|
7,757
|
|
|
16,263
|
Accounts receivables:
Trade, net
|
|
32,384
|
|
|
27,722
|
Accounts receivables:
Other
|
|
4,926
|
|
|
3,113
|
Inventories
|
|
53,183
|
|
|
44,280
|
Total current
assets
|
|
127,438
|
|
|
103,295
|
|
|
|
|
|
|
Marketable
securities
|
|
-
|
|
|
7,769
|
Assets held for
employees' severance benefits
|
|
1,575
|
|
|
1,436
|
Deferred tax
assets
|
|
1,568
|
|
|
1,537
|
Property, plant
and equipment, net
|
|
4,152
|
|
|
3,915
|
Intangible assets,
net
|
|
1,493
|
|
|
2,924
|
Goodwill
|
|
25,561
|
|
|
25,561
|
|
|
|
|
|
|
Total
assets
|
$
|
161,787
|
|
$
|
146,437
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Trade accounts
payable
|
$
|
15,964
|
|
$
|
10,480
|
Other accounts
payable and accrued expenses
|
|
8,830
|
|
|
7,484
|
|
|
|
|
|
|
Total current
liabilities
|
|
24,794
|
|
|
17,964
|
|
|
|
|
|
|
Contingent
consideration
|
|
4,821
|
|
|
4,642
|
Liability for
employees' severance benefits
|
|
2,709
|
|
|
2,439
|
|
|
|
|
|
|
Total
liabilities
|
|
32,324
|
|
|
25,045
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Ordinary shares and
additional paid-in capital
|
|
50,905
|
|
|
46,855
|
Treasury
shares
|
|
(38)
|
|
|
(38)
|
Retained
earnings
|
|
78,596
|
|
|
74,575
|
Total
shareholders' equity
|
|
129,463
|
|
|
121,392
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
|
161,787
|
|
$
|
146,437
|
Silicom Ltd.
Consolidated Statements of Operations
|
|
(US$ thousands,
except for share and per share data)
|
|
|
Three-month
period
|
|
Nine-month
period
|
|
ended September
30,
|
|
ended September
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Sales
|
$
|
32,301
|
|
$
|
24,661
|
|
$
|
87,909
|
|
$
|
72,019
|
Cost of
sales
|
|
20,605
|
|
|
15,119
|
|
|
55,504
|
|
|
44,694
|
Gross
profit
|
|
11,696
|
|
|
9,542
|
|
|
32,405
|
|
|
27,325
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
3,551
|
|
|
3,137
|
|
|
10,393
|
|
|
9,034
|
Selling and marketing
expenses
|
|
1,565
|
|
|
1,622
|
|
|
4,800
|
|
|
4,797
|
General and
administrative expenses
|
|
1,134
|
|
|
1,069
|
|
|
3,432
|
|
|
3,085
|
Total operating
expenses
|
|
6,250
|
|
|
5,828
|
|
|
18,625
|
|
|
16,916
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
5,446
|
|
|
3,714
|
|
|
13,780
|
|
|
10,409
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income
(expenses), net
|
|
81
|
|
|
(60)
|
|
|
124
|
|
|
(35)
|
Income before income
taxes
|
|
5,527
|
|
|
3,654
|
|
|
13,904
|
|
|
10,374
|
Income
taxes
|
|
914
|
|
|
458
|
|
|
2,501
|
|
|
1,737
|
Net income
|
$
|
4,613
|
|
$
|
3,196
|
|
$
|
11,403
|
|
$
|
8,637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
ordinary share (US$)
|
$
|
0.62
|
|
$
|
0.43
|
|
$
|
1.53
|
|
$
|
1.18
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used to compute basic income per share
(in thousands)
|
|
7,483
|
|
|
7,362
|
|
|
7,429
|
|
|
7,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per
ordinary share (US$)
|
$
|
0.60
|
|
$
|
0.43
|
|
$
|
1.51
|
|
$
|
1.16
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used to compute diluted income per share
(in thousands)
|
|
7,628
|
|
|
7,455
|
|
|
7,566
|
|
|
7,420
|
Silicom Ltd.
Reconciliation of Non-GAAP Financial Results
|
|
(US$ thousands,
except for share and per share data)
|
|
|
Three-month
period
|
|
Nine-month
period
|
|
ended September
30,
|
|
ended September
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
GAAP gross
profit
|
$
|
11,696
|
|
$
|
9,542
|
|
$
|
32,405
|
|
$
|
27,325
|
(1) Share-based
compensation (*)
|
|
74
|
|
|
52
|
|
|
250
|
|
|
129
|
(2)
Acquisition-related expenses
|
|
-
|
|
|
93
|
|
|
-
|
|
|
93
|
(3) Amortization of
acquired intangible assets
|
|
-
|
|
|
-
|
|
|
-
|
|
|
274
|
Non-GAAP gross
profit
|
$
|
11,770
|
|
$
|
9,687
|
|
$
|
32,655
|
|
$
|
27,821
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
|
5,446
|
|
$
|
3,714
|
|
$
|
13,780
|
|
$
|
10,409
|
Gross profit
adjustments
|
|
74
|
|
|
145
|
|
|
250
|
|
|
496
|
(1) Share-based
compensation (*)
|
|
513
|
|
|
287
|
|
|
1,638
|
|
|
1,074
|
(3) Amortization of
acquired intangible assets
|
|
479
|
|
|
493
|
|
|
1,434
|
|
|
1,480
|
(4) Changes in the
fair value of contingent consideration
|
|
61
|
|
|
63
|
|
|
179
|
|
|
78
|
Non-GAAP operating
income
|
$
|
6,573
|
|
$
|
4,702
|
|
$
|
17,281
|
|
$
|
13,537
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
|
4,613
|
|
$
|
3,196
|
|
$
|
11,403
|
|
$
|
8,637
|
Operating income
adjustments
|
|
1,127
|
|
|
988
|
|
|
3,501
|
|
|
3,128
|
(5) Taxes on
amortization of acquired intangible assets
|
|
(29)
|
|
|
(212)
|
|
|
(82)
|
|
|
(77)
|
Non-GAAP net
income
|
$
|
5,711
|
|
$
|
3,972
|
|
$
|
14,822
|
|
$
|
11,688
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
|
4,613
|
|
$
|
3,196
|
|
$
|
11,403
|
|
$
|
8,637
|
Adjustments for
Non-GAAP cost of sales
|
|
74
|
|
|
145
|
|
|
250
|
|
|
496
|
Adjustments for
Non-GAAP Research and development expenses
|
|
541
|
|
|
432
|
|
|
1,595
|
|
|
1,392
|
Adjustments for
Non-GAAP Selling and marketing expenses
|
|
281
|
|
|
237
|
|
|
901
|
|
|
774
|
Adjustments for
Non-GAAP General and administrative expenses
|
|
231
|
|
|
174
|
|
|
755
|
|
|
466
|
Adjustments for
Non-GAAP Income taxes
|
|
(29)
|
|
|
(212)
|
|
|
(82)
|
|
|
(77)
|
Non-GAAP net
income
|
$
|
5,711
|
|
$
|
3,972
|
|
$
|
14,822
|
|
$
|
11,688
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic income per
ordinary share (US$)
|
$
|
0.62
|
|
$
|
0.43
|
|
$
|
1.53
|
|
$
|
1.18
|
(1) Share-based
compensation (*)
|
|
0.08
|
|
|
0.05
|
|
|
0.26
|
|
|
0.16
|
(2-5)
Acquisition-related adjustments
|
|
0.06
|
|
|
0.06
|
|
|
0.21
|
|
|
0.25
|
Non-GAAP basic income
per ordinary share (US$)
|
$
|
0.76
|
|
$
|
0.54
|
|
$
|
2.00
|
|
$
|
1.59
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted income
per ordinary share (US$)
|
$
|
0.60
|
|
$
|
0.43
|
|
$
|
1.51
|
|
$
|
1.16
|
(1) Share-based
compensation (*)
|
|
0.08
|
|
|
0.05
|
|
|
0.25
|
|
|
0.16
|
(2-5)
Acquisition-related adjustments
|
|
0.07
|
|
|
0.05
|
|
|
0.20
|
|
|
0.26
|
Non-GAAP diluted
income per ordinary share (US$)
|
$
|
0.75
|
|
$
|
0.53
|
|
$
|
1.96
|
|
$
|
1.58
|
|
(*) Adjustments
related to share-based compensation expenses according to ASC topic
718 (SFAS 123 (R))
|
Company
Contact:
Eran Gilad,
CFO
Silicom
Ltd.
Tel:
+972-9-764-4555
E-mail:
erang@silicom.co.il
|
Investor Relations
Contact:
Ehud
Helft
GK Investor
Relations
Tel:
+1-646-201-9246
E-mail:
silicom@gkir.com
|
View original
content:http://www.prnewswire.com/news-releases/silicom-reports-record-revenues-323m-for-q3-2017-879m-for-first-9-months-2017-300542975.html
SOURCE Silicom Ltd.