KFAR SAVA, Israel, Jan. 31, 2019 /PRNewswire/ -- Silicom Ltd.
(NASDAQ: SILC), a leading provider of high-performance
networking and data infrastructure solutions, today reported its
financial results for the fourth quarter and full year ended
December 31, 2018.
Financial Results
Full Year: For the full year 2018, Silicom's
revenues totalled $133.8 million, up
6% compared with $125.7 million in
2017. These are the Company's highest-ever revenues for a full-year
period.
On a GAAP basis, net income for the year totalled $14.6 million, or $1.91 per diluted share ($1.94 per basic share), compared with
$21.7 million, or $2.86 per diluted share ($2.91 per basic share), in 2017.
On a non-GAAP basis (as described and reconciled below), net
income for the year totalled $21.3
million, or $2.79 per diluted
share ($2.83 per basic share),
compared with $21.7 million, or
$2.85 per diluted share ($2.91 per basic share), for 2017.
Fourth Quarter: Revenues for the fourth quarter of
2018 totalled $45.5 million, the
Company's highest-ever revenues for a quarterly period. The
quarter's revenues represented a 20% increase compared with
$37.8 million in the fourth quarter
of 2017, and a 46% increase compared sequentially with Q3 2018.
On a GAAP basis, net income for the quarter totalled
$9.9 million, or $1.29 per diluted share ($1.31 per basic share), compared with
$10.3 million, or $1.34 per diluted share ($1.37 per basic share), for the fourth quarter of
2017.
On a non-GAAP basis (as described and reconciled below), net
income for the quarter totalled $8.9
million, or $1.17 per diluted
share ($1.18 per basic share), up 30%
compared with $6.9 million, or
$0.89 per diluted share ($0.91 per basic share), for the fourth quarter of
2017.
Guidance for the First Quarter of 2019
Management projects that revenues for the first quarter of 2019
will total $30 to $31 million.
Comments of Management
Shaike Orbach, Silicom's
President and CEO, commented, "We are excited to
report all-time high revenues, both for a quarterly period and for
a full year. This accomplishment is even more dramatic after
neutralizing the impact of the cancellation of our biggest-ever
project by our top-10 Cloud player customer in March 2018, all aspects of which are now
completely included in our reports. Since our revenues from the
cancelled project were about $10
million lower in 2018 than they were in 2017, excluding its
revenues from both years gives us over 15% year-over-year revenue
growth for 2018. This confirms – as we asserted immediately after
the cancelation of the project - that our sales engines remain
powerful and that our long-term prospects remain intact.
"This double-digit growth is being driven primarily by our
uCPE/EDGE product lines, which are benefitting from some of the
market's hottest trends, such as the transition to SD-WAN and NFV
and the powerful need that it is creating for our uniquely reliable
and innovative products. During the quarter, we announced that one
of the world's largest service providers selected our modular uCPE
units for its worldwide NFV implementation, with SD-WAN integrated
as one of its network functions. Earlier, we announced a win with a
major telco and other SD-WAN related wins, all of which - while
still in the early stages of deployment with many unknowns – have
begun contributing nicely to our revenues. While uncertainty
about our customers' product launch and ramp-up plans may affect
the timing of our Edge product revenues, we are increasingly
confident about their strong, long-term growth potential."
Mr. Orbach concluded, "These wins, including our recent
FPGA-related Design Win announcement and the numerous opportunities
that are moving forward in our pipeline, confirm our favorable
positioning and our overall growth potential. To serve these
customers, we continue to build out all aspects of our capabilities
and to expand our value-added support."
Conference Call Details
Silicom's Management will host an interactive conference today,
January 31st, 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, amortization of
acquired intangible assets, changes in the fair value of contingent
consideration from a business combination, taxes on amortization of
acquired intangible assets, as well as discontinued project-related
write-offs. 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.
Silicom Ltd.
Consolidated Balance Sheets
|
|
|
|
|
|
|
(US$
thousands)
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
2018
|
|
2017
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
26,808
|
|
$
|
17,021
|
Marketable
securities
|
|
1,600
|
|
|
7,752
|
Accounts receivables:
Trade, net
|
|
23,817
|
|
|
41,367
|
Accounts receivables:
Other
|
|
9,487
|
|
|
5,823
|
Inventories
|
|
42,369
|
|
|
51,487
|
Total current
assets
|
|
104,081
|
|
|
123,450
|
|
|
|
|
|
|
Marketable
securities
|
|
45,612
|
|
|
5,945
|
Assets held for
employees' severance benefits
|
|
1,517
|
|
|
1,591
|
Deferred tax
assets
|
|
1,113
|
|
|
899
|
Property, plant
and equipment, net
|
|
3,670
|
|
|
4,121
|
Intangible assets,
net
|
|
966
|
|
|
1,047
|
Goodwill
|
|
25,561
|
|
|
25,561
|
|
|
|
|
|
|
Total
assets
|
$
|
182,520
|
|
$
|
162,614
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Trade accounts
payable
|
$
|
15,407
|
|
$
|
12,629
|
Other accounts
payable and accrued expenses
|
|
6,133
|
|
|
6,420
|
|
|
|
|
|
|
Total current
liabilities
|
|
21,540
|
|
|
19,049
|
|
|
|
|
|
|
Liability for
employees' severance benefits
|
|
2,612
|
|
|
2,765
|
Deferred tax
liabilities
|
|
219
|
|
|
-
|
|
|
|
|
|
|
Total
liabilities
|
|
24,371
|
|
|
21,814
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Ordinary shares and
additional paid-in capital
|
|
54,643
|
|
|
51,931
|
Treasury
shares
|
|
(38)
|
|
|
(38)
|
Retained
earnings
|
|
103,544
|
|
|
88,907
|
Total
shareholders' equity
|
|
158,149
|
|
|
140,800
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
|
182,520
|
|
$
|
162,614
|
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,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Sales
|
$
|
45,524
|
|
$
|
37,781
|
|
$
|
133,753
|
|
$
|
125,690
|
Cost of
sales
|
|
27,428
|
|
|
24,258
|
|
|
91,697
|
|
|
79,762
|
Gross
profit
|
|
18,096
|
|
|
13,523
|
|
|
42,056
|
|
|
45,928
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
4,076
|
|
|
3,522
|
|
|
14,820
|
|
|
13,915
|
Selling and marketing
expenses
|
|
1,911
|
|
|
1,922
|
|
|
6,642
|
|
|
6,722
|
General and
administrative expenses
|
|
1,012
|
|
|
(3,567)
|
|
|
3,943
|
|
|
(135)
|
Total operating
expenses
|
|
6,999
|
|
|
1,877
|
|
|
25,405
|
|
|
20,502
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
11,097
|
|
|
11,646
|
|
|
16,651
|
|
|
25,426
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income,
net
|
|
204
|
|
|
32
|
|
|
923
|
|
|
156
|
Income (Loss) before
income taxes
|
|
11,301
|
|
|
11,678
|
|
|
17,574
|
|
|
25,582
|
Income
taxes
|
|
1,427
|
|
|
1,367
|
|
|
2,937
|
|
|
3,868
|
Net income
(loss)
|
$
|
9,874
|
|
$
|
10,311
|
|
$
|
14,637
|
|
$
|
21,714
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss)
per ordinary share (US$)
|
$
|
1.31
|
|
$
|
1.37
|
|
$
|
1.94
|
|
$
|
2.91
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used to
compute basic income per share (in thousands)
|
|
7,556
|
|
|
7,535
|
|
|
7,552
|
|
|
7,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss)
per ordinary share (US$)
|
$
|
1.29
|
|
$
|
1.34
|
|
$
|
1.91
|
|
$
|
2.86
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used to
compute diluted income per share (in thousands)
|
|
7,652
|
|
|
7,710
|
|
|
7,657
|
|
|
7,602
|
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,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
$
|
18,096
|
|
$
|
13,523
|
|
$
|
42,056
|
|
$
|
45,928
|
(1) Share-based
compensation (*)
|
|
135
|
|
|
70
|
|
|
372
|
|
|
320
|
(2) Discontinued
project-related write-offs
|
|
(1,772)
|
|
|
-
|
|
|
3,213
|
|
|
-
|
Non-GAAP gross
profit
|
$
|
16,459
|
|
$
|
13,593
|
|
$
|
45,641
|
|
$
|
46,248
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income
(loss)
|
$
|
11,097
|
|
$
|
11,646
|
|
$
|
16,651
|
|
$
|
25,426
|
Gross profit
adjustments
|
|
(1,637)
|
|
|
70
|
|
|
3,585
|
|
|
320
|
(1) Share-based
compensation (*)
|
|
582
|
|
|
466
|
|
|
2,052
|
|
|
2,104
|
(2) Discontinued
project-related write-offs
|
|
-
|
|
|
-
|
|
|
13
|
|
|
-
|
(3) Amortization of
acquired intangible assets
|
|
93
|
|
|
442
|
|
|
1,026
|
|
|
1,876
|
(4) Changes in the
fair value of contingent
consideration
|
|
-
|
|
|
(4,821)
|
|
|
-
|
|
|
(4,642)
|
Non-GAAP operating
income
|
$
|
10,135
|
|
$
|
7,803
|
|
$
|
23,327
|
|
$
|
25,084
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
9,874
|
|
$
|
10,311
|
|
$
|
14,637
|
|
$
|
21,714
|
Operating income
adjustments
|
|
(962)
|
|
|
(3,843)
|
|
|
6,676
|
|
|
(342)
|
(5) Taxes on
amortization of acquired
intangible assets
|
|
12
|
|
|
405
|
|
|
36
|
|
|
324
|
Non-GAAP net
income
|
$
|
8,924
|
|
$
|
6,873
|
|
$
|
21,349
|
|
$
|
21,696
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
9,874
|
|
$
|
10,311
|
|
$
|
14,637
|
|
$
|
21,714
|
Adjustments for
Non-GAAP cost of sales
|
|
(1,637)
|
|
|
70
|
|
|
3,585
|
|
|
320
|
Adjustments for
Non-GAAP Research and
development expenses
|
|
428
|
|
|
478
|
|
|
1,608
|
|
|
2,073
|
Adjustments for
Non-GAAP Selling and
marketing expenses
|
|
193
|
|
|
271
|
|
|
953
|
|
|
1,172
|
Adjustments for
Non-GAAP General and
administrative expenses
|
|
54
|
|
|
(4,662)
|
|
|
530
|
|
|
(3,907)
|
Adjustments for
Non-GAAP Income taxes
|
|
12
|
|
|
405
|
|
|
36
|
|
|
324
|
Non-GAAP net
income
|
$
|
8,924
|
|
$
|
6,873
|
|
$
|
21,349
|
|
$
|
21,696
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic income
(loss) per ordinary share (US$)
|
$
|
1.31
|
|
$
|
1.37
|
|
$
|
1.94
|
|
$
|
2.91
|
(1) Share-based
compensation (*)
|
|
0.09
|
|
|
0.07
|
|
|
0.32
|
|
|
0.33
|
(2) Discontinued
project-related write-offs
|
|
(0.23)
|
|
|
-
|
|
|
0.43
|
|
|
-
|
(3-5)
Acquisition-related adjustments
|
|
0.01
|
|
|
(0.53)
|
|
|
0.14
|
|
|
(0.33)
|
Non-GAAP basic income
per ordinary share (US$)
|
$
|
1.18
|
|
$
|
0.91
|
|
$
|
2.83
|
|
$
|
2.91
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted income
(loss) per ordinary share (US$)
|
$
|
1.29
|
|
$
|
1.34
|
|
$
|
1.91
|
|
$
|
2.86
|
(1) Share-based
compensation (*)
|
|
0.09
|
|
|
0.07
|
|
|
0.32
|
|
|
0.31
|
(2) Discontinued
project-related write-offs
|
|
(0.23)
|
|
|
-
|
|
|
0.42
|
|
|
-
|
(3-5)
Acquisition-related adjustments
|
|
0.02
|
|
|
(0.52)
|
|
|
0.14
|
|
|
(0.32)
|
Non-GAAP diluted
income per ordinary share (US$)
|
$
|
1.17
|
|
$
|
0.89
|
|
$
|
2.79
|
|
$
|
2.85
|
|
|
|
|
|
|
|
|
|
|
|
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(*) Adjustments
related to share-based compensation expenses according to ASC topic
718 (SFAS 123 (R))
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Company
Contact:
Eran Gilad,
CFO
Silicom
Ltd.
Tel:
+972-9-764-4555
E-mail:
erang@silicom.co.il
|
Investor Relations
Contact:
Ehud Helft /
Gavriel Frohwein
GK Investor
Relations
Tel: +1 646 668
3559
E-mail:
silicom@gkir.com
|
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SOURCE Silicom LTD.