KFAR SAVA, Israel, Oct. 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 third quarter and first nine months ended
September 30, 2019.
Financial Results
Third Quarter: Silicom's revenues for the third
quarter of 2019 totalled $24.1
million compared with $31.1
million for the third quarter of 2018.
On a GAAP basis, net income for the quarter totalled
$1.9 million, or $0.25 per share (basic and diluted), compared
with $3.8 million, or $0.49 per diluted share ($0.50 per basic share), for the third quarter of
2018.
On a non-GAAP basis (as described and reconciled below), net
income for the quarter totalled $2.5
million, or $0.34 per share
(basic and diluted), compared with $4.7
million, or $0.62 per diluted
share ($0.63 per basic share), for
the third quarter of 2018.
First Nine Months: Silicom's revenues for the
first nine months of 2019 totalled $79.7
million compared with $88.2
million for the first nine months of 2018.
On a GAAP basis, net income for the period totalled $7.8 million, or $1.03 per share (basic and diluted), compared
with $4.8 million, or $0.62 per diluted share ($0.63 per diluted share), for the first nine
months of 2018.
On a non-GAAP basis (as described and reconciled below), net
income for the period totalled $9.5
million, or $1.24 per diluted
share ($1.25 per diluted share),
compared with $12.4 million, or
$1.62 per diluted share ($1.65 per basic share), for the first nine months
of 2018.
Guidance for the Fourth Quarter
Management projects that revenues for the fourth quarter of 2019
will total $25 to $26 million.
Comments of Management
Shaike Orbach, Silicom's
President and CEO, commented, "The third quarter was
another profitable period with revenues in line with our guidance
and positive cash flow. While still not reflected in our top line
results, we believe that both of our strategic growth drivers –
including Edge for SDWAN/NFV and networking-related FPGAs – are
closer than ever to ramp-up. We expect both to increase their
contribution to our top line in the year ahead, supporting
significant growth in 2020 with further acceleration in 2021. We
see that some of our customers are already beginning to ramp up
deployment quantities, and others are finalizing their deployment
plans for these markets. This process confirms the indications
provided by market reports, which project significant growth for
both markets in the coming years."
Mr. Orbach continued, "In fact, the Edge/SDWAN/NFV market is now
growing in both the Telco space, the segment on which we focused
initially, and the Enterprise space, which we believe, as
demonstrated by the Design Win we announced earlier this week, will
also become a significant growth vector for us within this
market. We also see an increased interest in LTE-supported SDWAN
activity, a market in which we have strong positioning due to the
heavy investments we have made in this technology.
"We are excited by all of these trends as they are in line with
our positioning for our current customers and wins, confirming the
soundness of our growth strategy. We believe that the ramp-up of
our major Edge-related wins will finally begin during 2020, and
that the FPGA-related wins secured during the past year will begin
making a real contribution in 2020, followed by accelerated growth
during 2021."
Mr. Orbach concluded, "We plan to continue and invest in both
the Edge and the FPGA spaces, building more products and solutions,
further deepening our pipeline and transforming opportunities
currently in the pipeline into Design Wins. With superior products
and technologies, Design Wins with larger and larger companies,
significant loyal customers, a strong balance sheet and an
excellent cash position, we are ideally positioned to benefit from
the long-term development of the industry's strongest trends and
remain strongly confident about our prospects."
Conference Call Details
Silicom's Management will host an interactive conference today,
October 31st, at
9am Eastern Time (6am Pacific Time, 3pm 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,
3:00pm 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.
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
|
-- FINANCIAL TABLES FOLLOW –
Silicom Ltd.
Consolidated Balance Sheets
|
|
(US$
thousands)
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2019
|
|
2018
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
15,938
|
|
$
|
26,808
|
Short-term bank
deposits
|
|
13,542
|
|
|
-
|
Marketable
securities
|
|
8,817
|
|
|
1,600
|
Accounts receivables:
Trade, net
|
|
22,446
|
|
|
23,817
|
Accounts receivables:
Other
|
|
4,027
|
|
|
9,487
|
Inventories
|
|
32,378
|
|
|
42,369
|
Total current
assets
|
|
97,148
|
|
|
104,081
|
|
|
|
|
|
|
Marketable
securities
|
|
50,735
|
|
|
45,612
|
Assets held for
employees' severance benefits
|
|
1,666
|
|
|
1,517
|
Deferred tax
assets
|
|
1,813
|
|
|
894
|
Property, plant
and equipment, net
|
|
3,556
|
|
|
3,670
|
Intangible assets,
net
|
|
1,600
|
|
|
966
|
Right of
Use
|
|
3,374
|
|
|
-
|
Goodwill
|
|
25,561
|
|
|
25,561
|
Total
assets
|
$
|
185,453
|
|
$
|
182,301
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Trade accounts
payable
|
$
|
9,235
|
|
$
|
15,407
|
Other accounts
payable and accrued expenses
|
|
6,512
|
|
|
6,133
|
Lease
Liabilities
|
|
1,289
|
|
|
-
|
|
|
|
|
|
|
Total current
liabilities
|
|
17,036
|
|
|
21,540
|
|
|
|
|
|
|
Lease
Liabilities
|
|
2,148
|
|
|
-
|
Liability for
employees' severance benefits
|
|
2,951
|
|
|
2,612
|
|
|
|
|
|
|
Total
liabilities
|
|
22,135
|
|
|
24,152
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Ordinary shares and
additional paid-in capital
|
|
56,488
|
|
|
54,643
|
Treasury
shares
|
|
(4,527)
|
|
|
(38)
|
Retained
earnings
|
|
111,357
|
|
|
103,544
|
Total
shareholders' equity
|
|
163,318
|
|
|
158,149
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
|
185,453
|
|
$
|
182,301
|
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,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Sales
|
$
|
24,104
|
|
$
|
31,104
|
|
$
|
79,733
|
|
$
|
88,229
|
Cost of
sales
|
|
15,720
|
|
|
20,583
|
|
|
52,495
|
|
|
64,269
|
Gross
profit
|
|
8,384
|
|
|
10,521
|
|
|
27,238
|
|
|
23,960
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
3,873
|
|
|
3,666
|
|
|
11,352
|
|
|
10,744
|
Selling and marketing
expenses
|
|
1,575
|
|
|
1,599
|
|
|
4,896
|
|
|
4,731
|
General and
administrative expenses
|
|
995
|
|
|
956
|
|
|
3,072
|
|
|
2,931
|
Total operating
expenses
|
|
6,443
|
|
|
6,221
|
|
|
19,320
|
|
|
18,406
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
1,941
|
|
|
4,300
|
|
|
7,918
|
|
|
5,554
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income,
net
|
|
361
|
|
|
235
|
|
|
1,086
|
|
|
719
|
Income (Loss) before
income taxes
|
|
2,302
|
|
|
4,535
|
|
|
9,004
|
|
|
6,273
|
Income
taxes
|
|
407
|
|
|
769
|
|
|
1,191
|
|
|
1,510
|
Net income
(loss)
|
$
|
1,895
|
|
$
|
3,766
|
|
$
|
7,813
|
|
$
|
4,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss)
per ordinary share (US$)
|
$
|
0.25
|
|
$
|
0.50
|
|
$
|
1.03
|
|
$
|
0.63
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used to compute basic income per share
(in thousands)
|
|
7,506
|
|
|
7,553
|
|
|
7,561
|
|
|
7,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss)
per ordinary share (US$)
|
$
|
0.25
|
|
$
|
0.49
|
|
$
|
1.03
|
|
$
|
0.62
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used to compute diluted income per share
(in thousands)
|
|
7,551
|
|
|
7,641
|
|
|
7,614
|
|
|
7,660
|
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,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
$
|
8,384
|
|
$
|
10,521
|
|
$
|
27,238
|
|
$
|
23,960
|
(1) Share-based
compensation (*)
|
|
108
|
|
|
91
|
|
|
330
|
|
|
237
|
(2) Discontinued
project-related write-offs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
4,985
|
Non-GAAP gross
profit
|
$
|
8,492
|
|
$
|
10,612
|
|
$
|
27,568
|
|
$
|
29,182
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income
(loss)
|
$
|
1,941
|
|
$
|
4,300
|
|
$
|
7,918
|
|
$
|
5,554
|
Gross profit
adjustments
|
|
108
|
|
|
91
|
|
|
330
|
|
|
5,222
|
(1) Share-based
compensation (*)
|
|
462
|
|
|
547
|
|
|
1,457
|
|
|
1,470
|
(2) Discontinued
project-related write-offs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
13
|
(3) Amortization of
acquired intangible assets
|
|
-
|
|
|
316
|
|
|
-
|
|
|
933
|
Non-GAAP operating
income
|
$
|
2,511
|
|
$
|
5,254
|
|
$
|
9,705
|
|
$
|
13,192
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
1,895
|
|
$
|
3,766
|
|
$
|
7,813
|
|
$
|
4,763
|
Operating income
adjustments
|
|
570
|
|
|
954
|
|
|
1,787
|
|
|
7,638
|
(4) Taxes on
amortization of acquired intangible assets
|
|
69
|
|
|
8
|
|
|
(142)
|
|
|
24
|
Non-GAAP net
income
|
$
|
2,534
|
|
$
|
4,728
|
|
$
|
9,458
|
|
$
|
12,425
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
1,895
|
|
$
|
3,766
|
|
$
|
7,813
|
|
$
|
4,763
|
Adjustments for
Non-GAAP cost of sales
|
|
108
|
|
|
91
|
|
|
330
|
|
|
5,222
|
Adjustments for
Non-GAAP Research and development expenses
|
|
219
|
|
|
410
|
|
|
682
|
|
|
1,180
|
Adjustments for
Non-GAAP Selling and marketing expenses
|
|
119
|
|
|
280
|
|
|
375
|
|
|
760
|
Adjustments for
Non-GAAP General and administrative expenses
|
|
124
|
|
|
173
|
|
|
400
|
|
|
476
|
Adjustments for
Non-GAAP Income taxes
|
|
69
|
|
|
8
|
|
|
(142)
|
|
|
24
|
Non-GAAP net
income
|
$
|
2,534
|
|
$
|
4,728
|
|
$
|
9,458
|
|
$
|
12,425
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic income
(loss) per ordinary share (US$)
|
$
|
0.25
|
|
$
|
0.50
|
|
$
|
1.03
|
|
$
|
0.63
|
(1) Share-based
compensation (*)
|
|
0.08
|
|
|
0.08
|
|
|
0.24
|
|
|
0.23
|
(2) Discontinued
project-related write-offs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0.66
|
(3-4)
Acquisition-related adjustments
|
|
0.01
|
|
|
0.05
|
|
|
(0.02)
|
|
|
0.13
|
Non-GAAP basic income
per ordinary share (US$)
|
$
|
0.34
|
|
$
|
0.63
|
|
$
|
1.25
|
|
$
|
1.65
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted income
(loss) per ordinary share (US$)
|
$
|
0.25
|
|
$
|
0.49
|
|
$
|
1.03
|
|
$
|
0.62
|
(1) Share-based
compensation (*)
|
|
0.08
|
|
|
0.08
|
|
|
0.23
|
|
|
0.22
|
(2) Discontinued
project-related write-offs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0.65
|
(3-4)
Acquisition-related adjustments
|
|
0.01
|
|
|
0.05
|
|
|
(0.02)
|
|
|
0.13
|
Non-GAAP diluted
income per ordinary share (US$)
|
$
|
0.34
|
|
$
|
0.62
|
|
$
|
1.24
|
|
$
|
1.62
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Adjustments
related to share-based compensation expenses according to ASC topic
718 (SFAS 123 (R))
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content:http://www.prnewswire.com/news-releases/silicom-reports-q3-2019-financial-results-300949018.html
SOURCE Silicom Ltd.