KFAR SAVA, Israel, April 30, 2018 /PRNewswire/ -- Silicom
Ltd. (NASDAQ: SILC), a leading provider of high-performance
networking and data infrastructure solutions, today reported its
financial results for the first quarter ended March 31, 2018.
Financial Results
Revenues for the first quarter of 2018 totalled $29.5 million, up 16% compared with $25.3 million in the first quarter of 2017.
On a GAAP basis, net loss for the quarter totalled $1.4 million, or $(0.19) per share (basic and diluted), compared
with net income of $2.6 million, or
$0.35 per share (basic and diluted),
for the first quarter of 2017. The loss derives from the Company's
recording of a $5 million write-off
related to the program aborted by its top-10 cloud customer.
On a non-GAAP basis (as described and reconciled below),
non-GAAP net income for the period totalled $4.3 million, or $0.56 per diluted share ($0.57 per basic share), up 12% compared with
$3.9 million, or $0.52 per share (basic and diluted), in the first
quarter of 2017.
Guidance for the Second Quarter
Management projects that revenues for the second quarter of 2018
will total $27 to $28 million.
Comments of Management
Mr. Shaike Orbach, Silicom's
President and CEO, commented, "During the first quarter, we were
disappointed that our top-10 Cloud client aborted the massive
program that promised to be such a large revenue generator for us.
While this reality presents us with short-term operational and
growth-related challenges, our growth strategy remains intact. This
is well demonstrated by the major win that we announced today with
a Tier 1 US telco. We believe that this strategy will continue to
generate more design wins and lead to new engagements which, over
time, will compensate for the loss of the Cloud deal."
Mr. Orbach continued, "In fact, we are very excited by this new
SD-WAN-related win, which, together with other important new
developments, demonstrates the fundamental resilience of our growth
model. In addition to this new win, during the quarter, we also
achieved a new Cyber Security Design Win, another major NFV-related
Virtual CPE (vCPE) Design Win from another major telco is around
the corner and additional similar opportunities are accumulating.
Since each of these telco-related deals is expected to ramp to tens
of millions of dollars per year, winning any combination will have
a significant positive impact on our revenues and profits. The
response that we are receiving from these global giants confirms
that they view us as a strategic 'performance partner' that brings
the products, development capabilities and support they need to
cope with today's challenging high-speed, high-volume, connectivity
demands."
Mr. Orbach concluded, "Our sales generation engine is running
smoothly and our pipeline is becoming deeper and longer by the day.
With a winning value proposition, major new wins expected for both
the near-term and the long-term and endless opportunities, we
expect to return to strong growth once the new wins that we project
outpace the cancelled Cloud deal."
Conference Call Details
Silicom's Management will host an interactive conference today,
April 30th, 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: 0-800-917-5108
ISRAEL: 03-918-0609
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)
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
2018
|
|
2017
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
28,465
|
|
$
|
17,021
|
Marketable
securities
|
|
-
|
|
|
7,752
|
Accounts receivables:
Trade, net
|
|
37,376
|
|
|
41,367
|
Accounts receivables:
Other
|
|
4,198
|
|
|
5,823
|
Inventories
|
|
49,502
|
|
|
51,487
|
Total current
assets
|
|
119,541
|
|
|
123,450
|
|
|
|
|
|
|
Marketable
securities
|
|
12,037
|
|
|
5,945
|
Assets held for
employees' severance benefits
|
|
1,570
|
|
|
1,591
|
Deferred tax
assets
|
|
950
|
|
|
899
|
Property, plant
and equipment, net
|
|
3,697
|
|
|
4,121
|
Intangible assets,
net
|
|
906
|
|
|
1,047
|
Goodwill
|
|
25,561
|
|
|
25,561
|
|
|
|
|
|
|
Total
assets
|
$
|
164,262
|
|
$
|
162,614
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Trade accounts
payable
|
$
|
15,293
|
|
$
|
12,629
|
Other accounts
payable and accrued expenses
|
|
6,428
|
|
|
6,420
|
|
|
|
|
|
|
Total current
liabilities
|
|
21,721
|
|
|
19,049
|
|
|
|
|
|
|
Liability for
employees' severance benefits
|
|
2,702
|
|
|
2,765
|
|
|
|
|
|
|
Total
liabilities
|
|
24,423
|
|
|
21,814
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Ordinary shares and
additional paid-in capital
|
|
52,409
|
|
|
51,931
|
Treasury
shares
|
|
(38)
|
|
|
(38)
|
Retained
earnings
|
|
87,468
|
|
|
88,907
|
Total
shareholders' equity
|
|
139,839
|
|
|
140,800
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
|
164,262
|
|
$
|
162,614
|
Silicom Ltd.
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ thousands,
except for share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-month
period
|
|
|
|
ended March
31,
|
|
|
|
|
|
2018
|
|
2017
|
Sales
|
|
|
|
|
|
|
$
|
29,522
|
|
$
|
25,342
|
Cost of
sales
|
|
|
|
|
|
|
|
24,972
|
|
|
15,757
|
Gross
profit
|
|
|
|
|
|
|
|
4,550
|
|
|
9,585
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
|
|
|
|
|
|
3,431
|
|
|
3,514
|
Selling and marketing
expenses
|
|
|
|
|
|
|
|
1,536
|
|
|
1,642
|
General and
administrative expenses
|
|
|
|
|
|
|
|
907
|
|
|
1,189
|
Total operating
expenses
|
|
|
|
|
|
|
|
5,874
|
|
|
6,345
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
(1,324)
|
|
|
3,240
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income,
net
|
|
|
|
|
|
|
|
284
|
|
|
30
|
Income (Loss) before
income taxes
|
|
|
|
|
|
|
|
(1,040)
|
|
|
3,270
|
Income
taxes
|
|
|
|
|
|
|
|
399
|
|
|
673
|
Net income
(loss)
|
|
|
|
|
|
|
$
|
(1,439)
|
|
$
|
2,597
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss)
per ordinary share (US$)
|
|
|
|
|
|
|
$
|
(0.19)
|
|
$
|
0.35
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used to compute basic income per share
(in thousands)
|
|
|
|
|
|
|
|
7,550
|
|
|
7,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss)
per ordinary share (US$)
|
|
|
|
|
|
|
$
|
(0.19)
|
|
$
|
0.35
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used to compute diluted income per share
(in thousands)
|
|
|
|
|
|
|
|
7,703
|
|
|
7,499
|
Silicom Ltd.
Reconciliation of Non-GAAP Financial Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ thousands,
except for share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-month
period
|
|
|
|
|
|
|
|
|
ended March
31,
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
|
|
|
|
|
$
|
4,550
|
|
$
|
9,585
|
|
(1) Share-based
compensation (*)
|
|
|
|
|
|
|
|
59
|
|
|
93
|
|
(2) Discontinued
project-related write-offs
|
|
|
|
|
|
|
|
4,985
|
|
|
-
|
|
Non-GAAP gross
profit
|
|
|
|
|
|
|
$
|
9,594
|
|
$
|
9,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income
(loss)
|
|
|
|
|
|
|
$
|
(1,324)
|
|
$
|
3,240
|
|
Gross profit
adjustments
|
|
|
|
|
|
|
|
5,044
|
|
|
93
|
|
(1) Share-based
compensation (*)
|
|
|
|
|
|
|
|
401
|
|
|
668
|
|
(2) Discontinued
project-related write-offs
|
|
|
|
|
|
|
|
13
|
|
|
-
|
|
(3) Amortization of
acquired intangible assets
|
|
|
|
|
|
|
|
303
|
|
|
476
|
|
(4) Changes in the
fair value of contingent consideration
|
|
|
|
|
|
|
|
-
|
|
|
58
|
|
Non-GAAP operating
income
|
|
|
|
|
|
|
$
|
4,437
|
|
$
|
4,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
|
|
|
|
|
|
$
|
(1,439)
|
|
$
|
2,597
|
|
Operating income
adjustments
|
|
|
|
|
|
|
|
5,761
|
|
|
1,295
|
|
(5) Taxes on
amortization of acquired intangible assets
|
|
|
|
|
|
|
|
8
|
|
|
(26)
|
|
Non-GAAP net
income
|
|
|
|
|
|
|
$
|
4,330
|
|
$
|
3,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
|
|
|
|
|
|
$
|
(1,439)
|
|
$
|
2,597
|
|
Adjustments for
Non-GAAP cost of sales
|
|
|
|
|
|
|
|
5,044
|
|
|
93
|
|
Adjustments for
Non-GAAP Research and development expenses
|
|
|
|
|
|
|
|
350
|
|
|
542
|
|
Adjustments for
Non-GAAP Selling and marketing expenses
|
|
|
|
|
|
|
|
228
|
|
|
348
|
|
Adjustments for
Non-GAAP General and administrative expenses
|
|
|
|
|
|
|
|
139
|
|
|
312
|
|
Adjustments for
Non-GAAP Income taxes
|
|
|
|
|
|
|
|
8
|
|
|
(26)
|
|
Non-GAAP net
income
|
|
|
|
|
|
|
$
|
4,330
|
|
$
|
3,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic income
(loss) per ordinary share (US$)
|
|
|
|
|
|
|
$
|
(0.19)
|
|
$
|
0.35
|
|
(1) Share-based
compensation (*)
|
|
|
|
|
|
|
|
0.06
|
|
|
0.10
|
|
(2) Discontinued
project-related write-offs
|
|
|
|
|
|
|
|
0.66
|
|
|
-
|
|
(3-5)
Acquisition-related adjustments
|
|
|
|
|
|
|
|
0.04
|
|
|
0.07
|
|
Non-GAAP basic income
per ordinary share (US$)
|
|
|
|
|
|
|
$
|
0.57
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted income
(loss) per ordinary share (US$)
|
|
|
|
|
|
|
$
|
(0.19)
|
|
$
|
0.35
|
|
(1) Share-based
compensation (*)
|
|
|
|
|
|
|
|
0.06
|
|
|
0.10
|
|
(2) Discontinued
project-related write-offs
|
|
|
|
|
|
|
|
0.65
|
|
|
-
|
|
(3-5)
Acquisition-related adjustments
|
|
|
|
|
|
|
|
0.04
|
|
|
0.07
|
|
Non-GAAP diluted
income per ordinary share (US$)
|
|
|
|
|
|
|
$
|
0.56
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) 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-q1-2018-financial-results-300638880.html
SOURCE Silicom LTD.