KFAR SAVA, Israel, Oct. 29, 2020 /PRNewswire/ -- Silicom Ltd.
(NASDAQ: SILC), a leading provider of high-performance networking
and data infrastructure solutions, today today reported its
financial results for the third quarter and nine months ended
September 30, 2020.
Financial Results
Third Quarter: Silicom's revenues for the third
quarter of 2020 totalled $28.4
million, a sequential increase of 23% compared with
$23.0 million for the second quarter
of 2020 and an 18% increase compared with Q3 2019.
On a GAAP basis, net income for the quarter totalled
$2.1 million, or $0.29 per diluted share ($0.30 per basic share), up 60% compared
sequentially with $1.3 million, or
$0.18 per share (basic and diluted),
for the second quarter of 2020, and up 10% compared with the third
quarter of 2019.
On a non-GAAP basis (as described and reconciled below), net
income for the quarter totalled $2.9
million, or $0.41 per share
(basic and diluted), a 59% sequential increase compared with
$1.8 million, or $0.26 per share (basic and diluted), for the
second quarter of 2020, and up 15% compared with the third quarter
of 2019.
First Nine Months: Silicom's revenues for the
first nine months of 2020 totalled $73.5
million compared with $79.7
million for the first nine months of 2019.
On a GAAP basis, net income for the period totalled $4.9 million, or $0.68 per share (basic and diluted), compared
with $7.8 million, or $1.03 per share (basic and diluted), for the
first nine months of 2019.
On a non-GAAP basis (as described and reconciled below), net
income for the period totalled $7.0
million, or $0.98 per share
(basic and diluted), compared with $9.5
million, or $1.24 per diluted
share ($1.25 per basic share), for
the first nine months of 2019.
Guidance for the Fourth Quarter
While remaining cautious due to the continued uncertainty of the
market environment, improved visibility leads Management to project
revenues of $30 to $31 million for the fourth quarter of 2020.
Comments of Management
Shaike Orbach, Silicom's
President and CEO, commented, "We are pleased to
report strong results for the third quarter, with revenues above
our original guidance and strong profits despite the Covid macro
environment. This demonstrates the ongoing power of our business
platform, including our significant SD-WAN design wins,
partnerships with software vendors, collaboration with Intel and
our extensive pipeline, to drive ongoing growth for our
company."
Mr. Orbach continued, "Our success in the SD-WAN market has been
driven by the disaggregation concept, which is based on the
decoupling of hardware and software in a variety of deployment
scenarios. Now that this concept has become a trend and
extended to the Mobile world, it has created a strategic tangent
market for us: disaggregation of the infrastructure of 4G and 5G
mobile operators. As such, we are extremely excited by our first
penetration into this new market - a Tier-1 mobile operator's
selection of our architecture for next-generation Distribution
Units (DUs) to use in its field trials of a network with decoupled
software and hardware components. These DUs will take advantage of
the full range of our related expertise, including in x86, Time
Synchronization, Offload Acceleration and FPGAs.
"This win demonstrates our unique ability to provide integrated
solutions for this complex market, thereby opening the door to huge
parallel opportunities. In fact, we have already been approached
for discovery discussions with many of the world's major telcos and
independent software manufacturers, as well as server manufacturers
exploring the potential of integrating our acceleration and time
synchronization cards into their new disaggregated products."
Mr. Orbach concluded, "While sales processes in this world are
very long, given the current level of interest, trials, evaluation
POs and other dynamics, we believe it is just a matter of time
until this Mobile market becomes a highly significant new growth
driver for Silicom. We are investing heavily and feel confident
that substantial rewards will follow."
Conference Call Details
Silicom's Management will host an interactive conference today,
October 29th, at 9am Eastern Time (6am
Pacific Time, 3pm Israel Time)
to review and discuss the results.
To participate, investors may either listen via a webcast link
hosted on Silicom's website or via the dial-in. The link is under
the investor relations' webcast section of Silicom's website at
https://www.silicom-usa.com/webcasts/
For those that wish to dial in via telephone, one of the
following teleconferencing numbers may be used:
US: 1 866 860 9642
ISRAEL: 03 918
0610
INTERNATIONAL: +972 3 918 0610
At: 9:00am Eastern
Time, 6:00am Pacific Time,
3:00pm Israel Time
It is advised to connect to the conference call a few minutes
before the start.
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 above-mentioned webcast 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, 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 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, disruptions to our manufacturing and development along
with general disruptions to the entire world economy relating to
the spread of the novel coronavirus (COVID-19) 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
GK Investor
Relations
Tel: +1 646 201
9246
E-mail:
silicom@gkir.com
|
-- FINANCIAL TABLES FOLLOW –
Silicom Ltd.
Consolidated Balance Sheets
|
|
|
|
|
|
|
(US$ thousands)
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2020
|
|
2019
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
23,337
|
|
$
|
16,469
|
Short-term bank
deposits
|
|
5,000
|
|
|
13,542
|
Marketable
securities
|
|
39,876
|
|
|
14,045
|
Accounts receivables:
Trade, net
|
|
16,733
|
|
|
24,936
|
Accounts receivables:
Other
|
|
9,399
|
|
|
4,964
|
Inventories
|
|
53,199
|
|
|
36,491
|
Total current
assets
|
|
147,544
|
|
|
110,447
|
|
|
|
|
|
|
Marketable
securities
|
|
18,399
|
|
|
46,542
|
Assets held for
employees' severance benefits
|
|
1,658
|
|
|
1,640
|
Deferred tax
assets
|
|
1,676
|
|
|
1,798
|
Property, plant
and equipment, net
|
|
3,818
|
|
|
3,574
|
Intangible assets,
net
|
|
2,651
|
|
|
1,718
|
Right of
Use
|
|
3,246
|
|
|
3,783
|
Goodwill
|
|
25,561
|
|
|
25,561
|
Total
assets
|
$
|
204,553
|
|
$
|
195,063
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Trade accounts
payable
|
$
|
22,381
|
|
$
|
16,419
|
Other accounts
payable and accrued expenses
|
|
18,296
|
|
|
8,823
|
Lease
Liabilities
|
|
1,159
|
|
|
1,090
|
|
|
|
|
|
|
Total current
liabilities
|
|
41,836
|
|
|
26,332
|
|
|
|
|
|
|
Lease
Liabilities
|
|
2,110
|
|
|
2,693
|
Liability for
employees' severance benefits
|
|
3,025
|
|
|
2,910
|
Deferred tax
liabilities
|
|
305
|
|
|
205
|
|
|
|
|
|
|
Total
liabilities
|
|
47,276
|
|
|
32,140
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Ordinary shares and
additional paid-in capital
|
|
59,221
|
|
|
57,152
|
Treasury
shares
|
|
(20,603)
|
|
|
(8,009)
|
Retained
earnings
|
|
118,659
|
|
|
113,780
|
Total
shareholders' equity
|
|
157,277
|
|
|
162,923
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
|
204,553
|
|
$
|
195,063
|
|
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,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Sales
|
$
|
28,385
|
|
$
|
24,104
|
|
$
|
73,500
|
|
$
|
79,733
|
Cost of
sales
|
|
19,071
|
|
|
15,720
|
|
|
49,343
|
|
|
52,495
|
Gross
profit
|
|
9,314
|
|
|
8,384
|
|
|
24,157
|
|
|
27,238
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
4,186
|
|
|
3,873
|
|
|
11,848
|
|
|
11,352
|
Selling and marketing
expenses
|
|
1,666
|
|
|
1,575
|
|
|
4,601
|
|
|
4,896
|
General and
administrative expenses
|
|
1,067
|
|
|
995
|
|
|
2,959
|
|
|
3,072
|
Total operating
expenses
|
|
6,919
|
|
|
6,443
|
|
|
19,408
|
|
|
19,320
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
2,395
|
|
|
1,941
|
|
|
4,749
|
|
|
7,918
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income,
net
|
|
369
|
|
|
361
|
|
|
1,609
|
|
|
1,086
|
Income (Loss) before
income taxes
|
|
2,764
|
|
|
2,302
|
|
|
6,358
|
|
|
9,004
|
Income
taxes
|
|
677
|
|
|
407
|
|
|
1,479
|
|
|
1,191
|
Net income
(loss)
|
$
|
2,087
|
|
$
|
1,895
|
|
$
|
4,879
|
|
$
|
7,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss)
per ordinary share (US$)
|
$
|
0.30
|
|
$
|
0.25
|
|
$
|
0.68
|
|
$
|
1.03
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used to compute basic income per share
(in thousands)
|
|
7,058
|
|
|
7,506
|
|
|
7,173
|
|
|
7,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss)
per ordinary share (US$)
|
$
|
0.29
|
|
$
|
0.25
|
|
$
|
0.68
|
|
$
|
1.03
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares used to compute diluted income per share
(in thousands)
|
|
7,088
|
|
|
7,551
|
|
|
7,205
|
|
|
7,614
|
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,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
$
|
9,314
|
|
$
|
8,384
|
|
$
|
24,157
|
|
$
|
27,238
|
(1) Share-based
compensation (*)
|
|
128
|
|
|
108
|
|
|
408
|
|
|
330
|
Non-GAAP gross
profit
|
$
|
9,442
|
|
$
|
8,492
|
|
$
|
24,565
|
|
$
|
27,568
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income
(loss)
|
$
|
2,395
|
|
$
|
1,941
|
|
$
|
4,749
|
|
$
|
7,918
|
Gross profit
adjustments
|
|
128
|
|
|
108
|
|
|
408
|
|
|
330
|
(1) Share-based
compensation (*)
|
|
635
|
|
|
462
|
|
|
1,543
|
|
|
1,457
|
Non-GAAP operating
income
|
$
|
3,158
|
|
$
|
2,511
|
|
$
|
6,700
|
|
$
|
9,705
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
2,087
|
|
$
|
1,895
|
|
$
|
4,879
|
|
$
|
7,813
|
Operating income
adjustments
|
|
763
|
|
|
570
|
|
|
1,951
|
|
|
1,787
|
(2) Taxes on
amortization of acquired intangible assets
|
|
68
|
|
|
69
|
|
|
202
|
|
|
(142)
|
Non-GAAP net
income
|
$
|
2,918
|
|
$
|
2,534
|
|
$
|
7,032
|
|
$
|
9,458
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
2,087
|
|
$
|
1,895
|
|
$
|
4,879
|
|
$
|
7,813
|
Adjustments for
Non-GAAP cost of sales
|
|
128
|
|
|
108
|
|
|
408
|
|
|
330
|
Adjustments for
Non-GAAP Research and development expenses
|
|
266
|
|
|
219
|
|
|
694
|
|
|
682
|
Adjustments for
Non-GAAP Selling and marketing expenses
|
|
186
|
|
|
119
|
|
|
416
|
|
|
375
|
Adjustments for
Non-GAAP General and administrative expenses
|
|
183
|
|
|
124
|
|
|
433
|
|
|
400
|
Adjustments for
Non-GAAP Income taxes
|
|
68
|
|
|
69
|
|
|
202
|
|
|
(142)
|
Non-GAAP net
income
|
$
|
2,918
|
|
$
|
2,534
|
|
$
|
7,032
|
|
$
|
9,458
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic income
(loss) per ordinary share (US$)
|
$
|
0.30
|
|
$
|
0.25
|
|
$
|
0.68
|
|
$
|
1.03
|
(1) Share-based
compensation (*)
|
|
0.10
|
|
|
0.08
|
|
|
0.27
|
|
|
0.24
|
(2)
Acquisition-related adjustments
|
|
0.01
|
|
|
0.01
|
|
|
0.03
|
|
|
(0.02)
|
Non-GAAP basic income
per ordinary share (US$)
|
$
|
0.41
|
|
$
|
0.34
|
|
$
|
0.98
|
|
$
|
1.25
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted income
(loss) per ordinary share (US$)
|
$
|
0.29
|
|
$
|
0.25
|
|
$
|
0.68
|
|
$
|
1.03
|
(1) Share-based
compensation (*)
|
|
0.11
|
|
|
0.08
|
|
|
0.27
|
|
|
0.23
|
(2)
Acquisition-related adjustments
|
|
0.01
|
|
|
0.01
|
|
|
0.03
|
|
|
(0.02)
|
Non-GAAP diluted
income per ordinary share (US$)
|
$
|
0.41
|
|
$
|
0.34
|
|
$
|
0.98
|
|
$
|
1.24
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Adjustments
related to share-based compensation expenses according to ASC topic
718 (SFAS 123 (R))
|
View original
content:http://www.prnewswire.com/news-releases/silicom-reports-q3-2020-financial-results-301162731.html
SOURCE Silicom Ltd