Silicom Reports Q1 2019 Financial Results

Date : 04/29/2019 @ 1:15PM
Source : PR Newswire (US)
Stock : Silicom Ltd (SILC)
Quote : 31.45  -0.45 (-1.41%) @ 9:30PM

Silicom Reports Q1 2019 Financial Results

Silicom (NASDAQ:SILC)
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KFAR SAVA, Israel, April 29, 2019 /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, 2019.

Silicom_Ltd

Financial Results

Revenues for the first quarter of 2019 totalled $30.2 million compared with $29.5 million for the first quarter of 2018.

On a GAAP basis, net income for the quarter totalled $3.6 million, or $0.48 per share (basic and diluted), compared with a net loss of $(1.4) million, or $(0.19) per share (basic and diluted), for the first quarter of 2018.

On a non-GAAP basis (as described and reconciled below), non-GAAP net income for the period totalled $4.0 million, or $0.52 per diluted share ($0.53 per basic share), compared with $4.3 million, or $0.56 per diluted share ($0.57 per basic share), for the first quarter of 2018.

Guidance for the Second Quarter of 2019

Management projects that revenues for the second quarter of 2019 will total $25 million to $26 million.    

Comments of Management

Shaike Orbach, Silicom's President and CEO, commented, "We are pleased to report a solid first quarter demonstrating the continued power of our business to generate revenues and a continuous stream of cash. Our growth engines remain Edge uCPE devices and FPGA-based solutions, both of which are markets at the beginning of their growth curves.

"In the Edge space, while the many wins that we have already secured, together with our fat pipeline of potential wins, make us pleased with our strategic positioning, we continue to see delays in our customer's Edge deployments and growing uncertainty about their ramp-up timelines. This timing issue – which we believe is short-term in nature - is reflected in our moderate guidance for the second quarter and our limited visibility for the remainder of 2019. At the same time, we remain confident and enthusiastic about Edge's long-term potential and continue to build out our portfolio of products and platforms to help transform its promise to reality. We expect to secure many additional significant Edge wins over time, like the one we announced today."

Mr. Orbach continued, "In the FPGA space, during the quarter we announced two important new wins: one from a leading cloud player for a potentially massive network-wide implementation, and another from a global communications leader who will be deploying our FPGA-based smart NICs in data centers throughout the world. Besides promising significant multi-year revenues, these showcase wins demonstrate the advantage of our technology, the key to generating further interest from additional Cloud, Service Providers and other players. We continue to invest significantly in developing our FPGA technology and predict that it will become a major revenue driver for our business in the years ahead."

Conference Call Details
Silicom's Management will host an interactive conference today, April 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, amortization of acquired intangible assets, 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, SD-WAN, NFV and Edge markets, the speed and extent to which solutions are adopted by these markets, likelihood that Silicom will rely increasingly on customers which provide solutions in these evolving markets, 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,


2019


2018







Assets












Current assets






Cash and cash equivalents

$

18,396


$

26,808

Short-term bank deposits


4,000



-

Marketable securities


4,242



1,600

Accounts receivables: Trade, net


26,174



23,817

Accounts receivables: Other


3,920



9,487

Inventories


36,638



42,369

Total current assets


93,370



104,081







Marketable securities


54,915



45,612

Assets held for employees' severance benefits


1,568



1,517

Deferred tax assets


1,526



894

Property, plant and equipment, net


3,695



3,670

Intangible assets, net


1,166



966

Right of Use


3,728



-

Goodwill


25,561



25,561

Total assets

$

185,529


$

182,301







Liabilities and shareholders' equity












Current liabilities






Trade accounts payable

$

9,531


$

15,407

Other accounts payable and accrued expenses


7,077



6,133

Lease Liabilities


1,487



-







Total current liabilities


18,095



21,540







Lease Liabilities


2,133



-

Liability for employees' severance benefits


2,803



2,612







Total liabilities


23,031



24,152







Shareholders' equity






Ordinary shares and additional paid-in capital


55,352



54,643

Treasury shares


(38)



(38)

Retained earnings


107,184



103,544

Total shareholders' equity


162,498



158,149







Total liabilities and shareholders' equity

$

185,529


$

182,301

 

 

Silicom Ltd. Consolidated Statements of Operations

























(US$ thousands, except for share and per share data)
















Three-month period




ended March 31,






2019


2018

Sales







$

30,227


$

29,522

Cost of sales








20,047



24,972

Gross profit








10,180



4,550













Research and development expenses








3,820



3,431

Selling and marketing expenses








1,629



1,536

General and administrative expenses








1,023



907

Total operating expenses








6,472



5,874













Operating income (loss)








3,708



(1,324)













Financial income, net








295



284

Income (Loss) before income taxes








4,003



(1,040)

Income taxes








363



399

Net income (loss)







$

3,640


$

(1,439)





































Basic income (loss) per ordinary share (US$)







$

0.48


$

(0.19)













Weighted average number of ordinary shares used to compute basic income per share (in thousands)








7,586



7,550

























Diluted income (loss) per ordinary share (US$)







$

0.48


$

(0.19)













Weighted average number of ordinary shares used to compute diluted income per share (in thousands)








7,654



7,703

 

 

Silicom Ltd. Reconciliation of Non-GAAP Financial Results



























(US$ thousands, except for share and per share data)





















Three-month period









ended March 31,









2019


2018















GAAP gross profit







$

10,180


$

4,550


(1) Share-based compensation (*)








116



59


(2) Discontinued project-related write-offs








-



4,985


Non-GAAP gross profit







$

10,296


$

9,594















GAAP operating income (loss)







$

3,708


$

(1,324)


Gross profit adjustments








116



5,044


(1) Share-based compensation (*)








538



401


(2) Discontinued project-related write-offs








-



13


(3) Amortization of acquired intangible assets








-



303


Non-GAAP operating income







$

4,362


$

4,437















GAAP net income (loss)







$

3,640


$

(1,439)


Operating income adjustments








654



5,761


(4) Taxes on amortization of acquired intangible assets








(278)



8


Non-GAAP net income







$

4,016


$

4,330















GAAP net income (loss)







$

3,640


$

(1,439)


Adjustments for Non-GAAP cost of sales








116



5,044


Adjustments for Non-GAAP Research and development expenses








246



350


Adjustments for Non-GAAP Selling and marketing expenses








139



228


Adjustments for Non-GAAP General and administrative expenses








153



139


Adjustments for Non-GAAP Income taxes








(278)



8


Non-GAAP net income







$

4,016


$

4,330















GAAP basic income (loss) per ordinary share (US$)







$

0.48


$

(0.19)


(1) Share-based compensation (*)








0.09



0.06


(2) Discontinued project-related write-offs








-



0.66


(3-4) Acquisition-related adjustments








(0.04)



0.04


Non-GAAP basic income per ordinary share (US$)







$

0.53


$

0.57















GAAP diluted income (loss) per ordinary share (US$)







$

0.48


$

(0.19)


(1) Share-based compensation (*)








0.08



0.06


(2) Discontinued project-related write-offs








-



0.65


(3-4) Acquisition-related adjustments








(0.04)



0.04


Non-GAAP diluted income per ordinary share (US$)







$

0.52


$

0.56















(*) 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 / Gavriel Frohwein

GK Investor Relations

Tel: +1-646-668-3559

E-mail: silicom@gkir.com 

 

Cision View original content:http://www.prnewswire.com/news-releases/silicom-reports-q1-2019-financial-results-300839661.html

SOURCE Silicom Ltd.

Copyright 2019 PR Newswire

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