KFAR SAVA, Israel, Jan. 29, 2020 /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, 2019.
Financial Results
Fourth Quarter: Silicom's revenues for the fourth
quarter of 2019 totalled $25.5
million compared with $24.1
million in the third quarter of 2019 and $45.5 million for the fourth quarter of 2018.
On a GAAP basis, net income for the quarter totalled
$2.4 million, or $0.33 per share (basic and diluted), compared
with $1.9 million, or $0.25 per share (basic and diluted) for the third
quarter of 2019, and $9.9 million, or
$1.29 per diluted share ($1.31 per basic share), for the fourth quarter of
2018.
On a non-GAAP basis (as described and reconciled below), net
income for the quarter totalled $3.1
million, or $0.41 per share
(basic and diluted), compared with $2.5
million, or $0.34 per share
(basic and diluted), for the third quarter of 2019, and
$8.9 million, or $1.17 per diluted share ($1.18 per basic share), for the fourth quarter of
2018.
Full Year: Silicom's revenues for the twelve
months ended December 31, 2019
totalled $105.2 million compared with
$133.8 million for 2018.
On a GAAP basis, net income for the year totalled $10.2 million, or $1.35 per diluted share ($1.36 per basic share), compared with
$14.6 million, or $1.91 per diluted share ($1.94 per basic share), for 2018.
On a non-GAAP basis (as described and reconciled below), net
income for the year totalled and $12.5
million, or $1.65 per diluted
share ($1.66 per basic share),
compared with $21.3 million, or
$2.79 per diluted share ($2.83 per basic share), for 2018.
Guidance for the First Quarter
Management projects that revenues for the first quarter of 2020
will total $25 to $26 million.
Comments of Management
Shaike Orbach, Silicom's
President and CEO, commented, "The fourth quarter's
solid results and 2019 as a whole represent the successful
transition that we have been carrying out during the last five
years. As the market is moving to Cloud Data Centers, Virtualized
Edge Computing and decoupling of software and hardware, we have
shifted our focus from networking appliances for on-premise data
centers to Cloud data centers and Edge computing.
"Our significant investments in R&D and sales efforts during
these years, together with our targeted IP and technology
acquisitions, positioned us correctly to address the global
transitioning's derivative markets - primarily, SD-WAN, Cloud data
centers, Cyber Security, NFV and 5G. Our Edge products are crucial
components within the Virtualized Edge and the software and
hardware decoupling trends, and our FPGA smart cards are key
elements in Cloud and Edge computing acceleration."
Mr. Orbach continued, "We have been able to secure numerous
significant Design Wins in these markets that we now expect to
drive double-digit growth for us in 2020 and beyond. The recent
selection of our uCPEs by one of the US's largest healthcare chains
for its SD-WAN deployment is a demonstration of our growth
potential in the Enterprise market, over and beyond our earlier
Telco-related wins.
"Affirmations such as these, coupled with strong market
tailwinds, confirm the bold decision we took in 2015 to invest so
heavily in Edge computing and FPGA-based solutions in order to
remain ahead of the curve. Now, as our early design wins in these
markets mature into revenues and an increasing number of
opportunities appear on the horizon, we are ready to harvest
the fruits of these efforts. We look forward to a strong 2020,
followed by even sharper growth in 2021 and beyond."
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, 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 170
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.
Silicom Ltd.
Consolidated Balance Sheets
|
|
|
|
|
|
|
(US$
thousands)
|
|
December
31,
|
|
December
31,
|
|
2019
|
|
2018
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
16,469
|
|
$
|
26,808
|
Short-term bank
deposits
|
|
13,542
|
|
|
-
|
Marketable
securities
|
|
14,045
|
|
|
1,600
|
Accounts receivables:
Trade, net
|
|
24,936
|
|
|
23,817
|
Accounts receivables:
Other
|
|
5,159
|
|
|
9,487
|
Inventories
|
|
36,491
|
|
|
42,369
|
Total current
assets
|
|
110,642
|
|
|
104,081
|
|
|
|
|
|
|
Marketable
securities
|
|
46,542
|
|
|
45,612
|
Assets held for
employees' severance benefits
|
|
1,640
|
|
|
1,517
|
Deferred tax
assets
|
|
1,798
|
|
|
894
|
Property, plant
and equipment, net
|
|
3,574
|
|
|
3,670
|
Intangible assets,
net
|
|
1,718
|
|
|
966
|
Right of
Use
|
|
3,783
|
|
|
-
|
Goodwill
|
|
25,561
|
|
|
25,561
|
Total
assets
|
$
|
195,258
|
|
$
|
182,301
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Trade accounts
payable
|
$
|
16,419
|
|
$
|
15,407
|
Other accounts
payable and accrued expenses
|
|
8,823
|
|
|
6,133
|
Lease
Liabilities
|
|
1,090
|
|
|
-
|
|
|
|
|
|
|
Total current
liabilities
|
|
26,332
|
|
|
21,540
|
|
|
|
|
|
|
Lease
Liabilities
|
|
2,693
|
|
|
-
|
Liability for
employees' severance benefits
|
|
2,910
|
|
|
2,612
|
Deferred tax
liabilities
|
|
400
|
|
|
-
|
|
|
|
|
|
|
Total
liabilities
|
|
32,335
|
|
|
24,152
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Ordinary shares and
additional paid-in capital
|
|
57,152
|
|
|
54,643
|
Treasury
shares
|
|
(8,009)
|
|
|
(38)
|
Retained
earnings
|
|
113,780
|
|
|
103,544
|
Total
shareholders' equity
|
|
162,923
|
|
|
158,149
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
|
195,258
|
|
$
|
182,301
|
|
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,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Sales
|
$
|
25,507
|
|
$
|
45,524
|
|
$
|
105,240
|
|
$
|
133,753
|
Cost of
sales
|
|
16,651
|
|
|
27,428
|
|
|
69,146
|
|
|
91,697
|
Gross
profit
|
|
8,856
|
|
|
18,096
|
|
|
36,094
|
|
|
42,056
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
3,723
|
|
|
4,076
|
|
|
15,075
|
|
|
14,820
|
Selling and marketing
expenses
|
|
1,751
|
|
|
1,911
|
|
|
6,647
|
|
|
6,642
|
General and
administrative expenses
|
|
1,087
|
|
|
1,012
|
|
|
4,159
|
|
|
3,943
|
Total operating
expenses
|
|
6,561
|
|
|
6,999
|
|
|
25,881
|
|
|
25,405
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
2,295
|
|
|
11,097
|
|
|
10,213
|
|
|
16,651
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income,
net
|
|
560
|
|
|
204
|
|
|
1,646
|
|
|
923
|
Income (Loss) before
income taxes
|
|
2,855
|
|
|
11,301
|
|
|
11,859
|
|
|
17,574
|
Income
taxes
|
|
432
|
|
|
1,427
|
|
|
1,623
|
|
|
2,937
|
Net income
(loss)
|
$
|
2,423
|
|
$
|
9,874
|
|
$
|
10,236
|
|
$
|
14,637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss)
per ordinary share (US$)
|
$
|
0.33
|
|
$
|
1.31
|
|
$
|
1.36
|
|
$
|
1.94
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used to
compute basic income per share (in thousands)
|
|
7,400
|
|
|
7,556
|
|
|
7,520
|
|
|
7,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss)
per ordinary share (US$)
|
$
|
0.33
|
|
$
|
1.29
|
|
$
|
1.35
|
|
$
|
1.91
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used to
compute diluted income per share (in thousands)
|
|
7,452
|
|
|
7,652
|
|
|
7,573
|
|
|
7,657
|
|
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,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
$
|
8,856
|
|
$
|
18,096
|
|
$
|
36,094
|
|
$
|
42,056
|
(1) Share-based
compensation (*)
|
|
107
|
|
|
135
|
|
|
437
|
|
|
372
|
(2) Discontinued
project-related write-offs
|
|
-
|
|
|
(1,772)
|
|
|
-
|
|
|
3,213
|
Non-GAAP gross
profit
|
$
|
8,963
|
|
$
|
16,459
|
|
$
|
36,531
|
|
$
|
45,641
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income
(loss)
|
$
|
2,295
|
|
$
|
11,097
|
|
$
|
10,213
|
|
$
|
16,651
|
Gross profit
adjustments
|
|
107
|
|
|
(1,637)
|
|
|
437
|
|
|
3,585
|
(1) Share-based
compensation (*)
|
|
461
|
|
|
582
|
|
|
1,918
|
|
|
2,052
|
(2) Discontinued
project-related write-offs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
13
|
(3) Amortization of
acquired intangible assets
|
|
-
|
|
|
93
|
|
|
-
|
|
|
1,026
|
Non-GAAP operating
income
|
$
|
2,863
|
|
$
|
10,135
|
|
$
|
12,568
|
|
$
|
23,327
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
2,423
|
|
$
|
9,874
|
|
$
|
10,236
|
|
$
|
14,637
|
Operating income
adjustments
|
|
568
|
|
|
(962)
|
|
|
2,355
|
|
|
6,676
|
(4) Taxes on
amortization of acquired intangible assets
|
|
68
|
|
|
12
|
|
|
(74)
|
|
|
36
|
Non-GAAP net
income
|
$
|
3,059
|
|
$
|
8,924
|
|
$
|
12,517
|
|
$
|
21,349
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
2,423
|
|
$
|
9,874
|
|
$
|
10,236
|
|
$
|
14,637
|
Adjustments for
Non-GAAP cost of sales
|
|
107
|
|
|
(1,637)
|
|
|
437
|
|
|
3,585
|
Adjustments for
Non-GAAP Research and development expenses
|
|
218
|
|
|
428
|
|
|
900
|
|
|
1,608
|
Adjustments for
Non-GAAP Selling and marketing expenses
|
|
118
|
|
|
193
|
|
|
493
|
|
|
953
|
Adjustments for
Non-GAAP General and administrative expenses
|
|
125
|
|
|
54
|
|
|
525
|
|
|
530
|
Adjustments for
Non-GAAP Income taxes
|
|
68
|
|
|
12
|
|
|
(74)
|
|
|
36
|
Non-GAAP net
income
|
$
|
3,059
|
|
$
|
8,924
|
|
$
|
12,517
|
|
$
|
21,349
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic income
(loss) per ordinary share (US$)
|
$
|
0.33
|
|
$
|
1.31
|
|
$
|
1.36
|
|
$
|
1.94
|
(1) Share-based
compensation (*)
|
|
0.07
|
|
|
0.09
|
|
|
0.31
|
|
|
0.32
|
(2) Discontinued
project-related write-offs
|
|
-
|
|
|
(0.23)
|
|
|
-
|
|
|
0.43
|
(3-4)
Acquisition-related adjustments
|
|
0.01
|
|
|
0.01
|
|
|
(0.01)
|
|
|
0.14
|
Non-GAAP basic income
per ordinary share (US$)
|
$
|
0.41
|
|
$
|
1.18
|
|
$
|
1.66
|
|
$
|
2.83
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted income
(loss) per ordinary share (US$)
|
$
|
0.32
|
|
$
|
1.29
|
|
$
|
1.35
|
|
$
|
1.91
|
(1) Share-based
compensation (*)
|
|
0.08
|
|
|
0.09
|
|
|
0.31
|
|
|
0.32
|
(2) Discontinued
project-related write-offs
|
|
-
|
|
|
(0.23)
|
|
|
-
|
|
|
0.42
|
(3-4)
Acquisition-related adjustments
|
|
0.01
|
|
|
0.02
|
|
|
(0.01)
|
|
|
0.14
|
Non-GAAP diluted
income per ordinary share (US$)
|
$
|
0.41
|
|
$
|
1.17
|
|
$
|
1.65
|
|
$
|
2.79
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) 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
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SOURCE Silicom Ltd.