KFAR SAVA, Israel, Jan. 29, 2018 /PRNewswire/ -- Silicom
Ltd. (NASDAQ: SILC), a leading provider of high-performance
networking and data infrastructure solutions, today reported
all-time record revenues and net profit for the fourth quarter
and full year ended December 31,
2017.
Financial Results
Fourth Quarter: Revenues for the fourth quarter of
2017 totalled $37.8 million,
Silicom's highest-ever revenues for a quarterly period. This is up
33% compared with $28.3 million in
the fourth quarter of 2016, and up 17% compared sequentially with
Q3 2017.
On a GAAP basis, net income for the quarter totalled
$10.3 million, or $1.34 per diluted share ($1.37 per basic share), compared with
$4.5 million, or $0.60 per diluted share ($0.61 per basic share) for the fourth quarter of
2016. On a non-GAAP basis (as described and reconciled below), net
income for the quarter totalled $6.9
million, or $0.89 per diluted
share ($0.91 per basic share), up 39%
compared with $4.9 million, or
$0.66 per diluted share ($0.67 per basic share), for the fourth quarter of
2016.
Full Year: For the full year 2017, Silicom's
revenues totalled a record $125.7
million, up 25% compared with $100.3
million in 2016.
On a GAAP basis, net income for the year totalled $21.7 million, or $2.86 per diluted share ($2.91 per basic share), compared with
$13.1 million, or $1.77 per diluted share ($1.79 per basic share), in 2016. On a non-GAAP
basis (as described and reconciled below), net income for the year
totalled $21.7 million, or
$2.85 per diluted share ($2.91 per basic share), up 31% compared with
$16.6 million, or $2.24 per diluted share ($2.26 per basic share), for 2016.
Comments of Management
"The fourth quarter was an exceptionally strong end to our best
year yet," commented Mr. Shaike
Orbach, Silicom's President & CEO. "Our business is
being driven by today's massive infrastructure transition. Cloud
& Web 2.0 companies, telcos, service providers and end-users
are all scrambling to keep up with the data-avalanche, and
recognize that our products can give them a significant performance
and functionality edge.
"For example, we are proud to have been chosen by one of the
Cloud industry's leading innovators to design and supply its
next-generation Switch-Fabric-on-a-NIC product, a revolutionary
concept that could, once it reaches a steady state, give us
revenues of up to $75 million per
year. In parallel, we continue to secure important new design wins
for our cyber security, SD-WAN, NFV, fintech and other Cloud
solutions, from both new and existing customers."
Mr. Orbach concluded, "With so many of these trends at an early
stage, we feel exceptionally well positioned and are very excited
about our growth prospects. Our strategy is straightforward: we
will continue expanding our penetration into the Cloud, move deeper
into SD-WAN and NFV markets, grow our business with existing
customers and sell to a widening circle of new customers. Building
up from the best year in our history, and with market trends in our
favor, the future has never been brighter for Silicom."
Conference Call Details
Silicom's Management will host an interactive conference today,
January 29th, 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)
|
|
|
December
31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
Assets
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
17,021
|
|
$
|
11,917
|
Marketable
securities
|
|
7,752
|
|
|
16,263
|
Accounts receivables:
Trade, net
|
|
41,367
|
|
|
27,722
|
Accounts receivables:
Other
|
|
5,823
|
|
|
3,113
|
Inventories
|
|
51,487
|
|
|
44,280
|
Total current
assets
|
|
123,450
|
|
|
103,295
|
|
Marketable
securities
|
|
5,945
|
|
|
7,769
|
Assets held for
employees' severance benefits
|
|
1,591
|
|
|
1,436
|
Deferred tax
assets
|
|
899
|
|
|
1,537
|
Property, plant
and equipment, net
|
|
4,121
|
|
|
3,915
|
Intangible assets,
net
|
|
1,047
|
|
|
2,924
|
Goodwill
|
|
25,561
|
|
|
25,561
|
|
Total
assets
|
$
|
162,614
|
|
$
|
146,437
|
|
Liabilities and
shareholders' equity
|
|
Current
liabilities
|
Trade accounts
payable
|
$
|
12,629
|
|
$
|
10,480
|
Other accounts
payable and accrued expenses
|
|
6,420
|
|
|
7,484
|
|
Total current
liabilities
|
|
19,049
|
|
|
17,964
|
|
Contingent
consideration
|
|
-
|
|
|
4,642
|
Liability for
employees' severance benefits
|
|
2,765
|
|
|
2,439
|
|
Total
liabilities
|
|
21,814
|
|
|
25,045
|
|
Shareholders'
equity
|
Ordinary shares and
additional paid-in capital
|
|
51,931
|
|
|
46,855
|
Treasury
shares
|
|
(38)
|
|
|
(38)
|
Retained
earnings
|
|
88,907
|
|
|
74,575
|
Total
shareholders' equity
|
|
140,800
|
|
|
121,392
|
|
Total liabilities
and shareholders' equity
|
$
|
162,614
|
|
$
|
146,437
|
Silicom Ltd.
Consolidated Statements of Operations
|
|
(US$ thousands,
except for share and per share data)
|
|
|
Three-month
period
|
|
Twelve-month
period
|
|
ended December
31,
|
|
ended December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Sales
|
$
|
37,781
|
|
$
|
28,328
|
|
$
|
125,690
|
|
$
|
100,347
|
Cost of
sales
|
|
24,258
|
|
|
17,102
|
|
|
79,762
|
|
|
61,796
|
Gross
profit
|
|
13,523
|
|
|
11,226
|
|
|
45,928
|
|
|
38,551
|
|
Research and
development expenses
|
|
3,522
|
|
|
3,629
|
|
|
13,915
|
|
|
12,663
|
Selling and marketing
expenses
|
|
1,922
|
|
|
1,626
|
|
|
6,722
|
|
|
6,423
|
General and
administrative expenses
|
|
(3,567)
|
|
|
550
|
|
|
(135)
|
|
|
3,635
|
Total operating
expenses
|
|
1,877
|
|
|
5,805
|
|
|
20,502
|
|
|
22,721
|
|
Operating
income
|
|
11,646
|
|
|
5,421
|
|
|
25,426
|
|
|
15,830
|
|
Financial income
(expenses), net
|
|
32
|
|
|
70
|
|
|
156
|
|
|
35
|
Income before income
taxes
|
|
11,678
|
|
|
5,491
|
|
|
25,582
|
|
|
15,865
|
Income
taxes
|
|
1,367
|
|
|
991
|
|
|
3,868
|
|
|
2,728
|
Net income
|
$
|
10,311
|
|
$
|
4,500
|
|
$
|
21,714
|
|
$
|
13,137
|
|
|
Basic income per
ordinary share (US$)
|
$
|
1.37
|
|
$
|
0.61
|
|
$
|
2.91
|
|
$
|
1.79
|
|
Weighted average
number of ordinary shares used to
compute basic income
per share (in thousands)
|
|
7,535
|
|
|
7,380
|
|
|
7,456
|
|
|
7,344
|
|
Diluted income per
ordinary share (US$)
|
$
|
1.34
|
|
$
|
0.60
|
|
$
|
2.86
|
|
$
|
1.77
|
|
Weighted average
number of ordinary shares used to
compute diluted
income per share (in thousands)
|
|
7,710
|
|
|
7,483
|
|
|
7,602
|
|
|
7,435
|
Silicom Ltd.
Reconciliation of Non-GAAP Financial Results
|
|
(US$ thousands,
except for share and per share data)
|
|
|
Three-month
period
|
|
Twelve-month
period
|
|
ended December
31,
|
|
ended December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
GAAP gross
profit
|
$
|
13,523
|
|
$
|
11,226
|
|
$
|
45,928
|
|
$
|
38,551
|
(1) Share-based
compensation (*)
|
|
70
|
|
|
51
|
|
|
320
|
|
|
180
|
(2)
Acquisition-related expenses
|
|
-
|
|
|
-
|
|
|
-
|
|
|
93
|
(3)Amortization of
acquired intangible assets
|
|
-
|
|
|
-
|
|
|
-
|
|
|
274
|
Non-GAAP gross
profit
|
$
|
13,593
|
|
$
|
11,277
|
|
$
|
46,248
|
|
$
|
39,098
|
|
GAAP operating
income
|
$
|
11,646
|
|
$
|
5,421
|
|
$
|
25,426
|
|
$
|
15,830
|
Gross profit
adjustments
|
|
70
|
|
|
51
|
|
|
320
|
|
|
547
|
(1) Share-based
compensation (*)
|
|
466
|
|
|
295
|
|
|
2,104
|
|
|
1,369
|
(3) Amortization of
acquired intangible assets
|
|
442
|
|
|
480
|
|
|
1,876
|
|
|
1,960
|
(4) Changes in the
fair value of contingent consideration
|
|
(4,821)
|
|
|
(412)
|
|
|
(4,642)
|
|
|
(334)
|
Non-GAAP operating
income
|
$
|
7,803
|
|
$
|
5,835
|
|
$
|
25,084
|
|
$
|
19,372
|
|
GAAP net
income
|
$
|
10,311
|
|
$
|
4,500
|
|
$
|
21,714
|
|
$
|
13,137
|
Operating income
adjustments
|
|
(3,843)
|
|
|
414
|
|
|
(342)
|
|
|
3,542
|
(5) Taxes on
amortization of acquired intangible assets
|
|
405
|
|
|
20
|
|
|
324
|
|
|
(58)
|
Non-GAAP net
income
|
$
|
6,873
|
|
$
|
4,934
|
|
$
|
21,696
|
|
$
|
16,621
|
|
GAAP net
income
|
$
|
10,311
|
|
$
|
4,500
|
|
$
|
21,714
|
|
$
|
13,137
|
Adjustments for
Non-GAAP cost of sales
|
|
70
|
|
|
51
|
|
|
320
|
|
|
547
|
Adjustments for
Non-GAAP Research and development expenses
|
|
478
|
|
|
426
|
|
|
2,073
|
|
|
1,818
|
Adjustments for
Non-GAAP Selling and marketing expenses
|
|
271
|
|
|
238
|
|
|
1,172
|
|
|
1,012
|
Adjustments for
Non-GAAP General and administrative expenses
|
|
(4,662)
|
|
|
(301)
|
|
|
(3,907)
|
|
|
165
|
Adjustments for
Non-GAAP Income taxes
|
|
405
|
|
|
20
|
|
|
324
|
|
|
(58)
|
Non-GAAP net
income
|
$
|
6,873
|
|
$
|
4,934
|
|
$
|
21,696
|
|
$
|
16,621
|
|
GAAP basic income per
ordinary share (US$)
|
$
|
1.37
|
|
$
|
0.61
|
|
$
|
2.91
|
|
$
|
1.79
|
(1) Share-based
compensation (*)
|
|
0.07
|
|
|
0.05
|
|
|
0.33
|
|
|
0.21
|
(2-5)
Acquisition-related adjustments
|
|
(0.53)
|
|
|
0.01
|
|
|
(0.33)
|
|
|
0.26
|
Non-GAAP basic income
per ordinary share (US$)
|
$
|
0.91
|
|
$
|
0.67
|
|
$
|
2.91
|
|
$
|
2.26
|
|
GAAP diluted income
per ordinary share (US$)
|
$
|
1.34
|
|
$
|
0.60
|
|
$
|
2.86
|
|
$
|
1.77
|
(1) Share-based
compensation (*)
|
|
0.07
|
|
|
0.05
|
|
|
0.31
|
|
|
0.21
|
(2-5)
Acquisition-related adjustments
|
|
(0.52)
|
|
|
0.01
|
|
|
(0.32)
|
|
|
0.26
|
Non-GAAP diluted
income per ordinary share (US$)
|
$
|
0.89
|
|
$
|
0.66
|
|
$
|
2.85
|
|
$
|
2.24
|
|
(*) 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
|
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SOURCE Silicom Ltd.