FOR IMMEDIATE RELEASE
EARNINGS RELEASE
SILICOM REPORTS $10.4M REVENUES,
$0.34 NON-GAAP EPS IN Q2 2012
- Company Beginning To Benefit From “Big Data” Phenomenon;
SETAC Patent Widens Company’s Competitive Advantage -
KFAR SAVA, Israel, July 23, 2012 -- Silicom Ltd. (NASDAQ: SILC, TASE: SILC), an industry-leading provider of high-performance server/appliances networking solutions, today reported its financial results for the second quarter and first half ended June 30, 2012.
Financial Results
Q2 2012: Revenues for the second quarter increased by 11% to $10.4 million from $9.4 million in the second quarter of 2011.
On a GAAP basis, reported net income totalled $2.3 million, or $0.33 per basic and diluted share, up 16% from $2.0 million, or $0.28 per diluted share ($0.29 per basic share) in the second quarter of 2011.
On a non-GAAP basis, which excludes non-cash share-based compensation, as described and reconciled below, net income totalled $2.4 million, or $0.34 per diluted and basic share. This is up 14% compared with net income totalled $2.1 million, or $0.30 per diluted and basic share in the second quarter of 2011.
H1 2012: Revenues for the first half of 2012 increased by 11% to $20.5 million from $18.5 million in the first half of 2011.
On a GAAP basis, reported net income for the period totalled $4.3 million, $0.61 per basic and diluted share, up 14% from $3.7 million, or $0.53 per diluted share ($0.54 per basic share) in the first half of 2011.
On a non-GAAP basis, which excludes non-cash share-based compensation, as described and reconciled below, net income for the period totalled $4.5 million, or $0.63 per diluted share ($0.64 per basic share). This is up 12% compared with $4.0 million, or $0.56 per diluted share ($0.58 per basic share) in the first six months of 2011.
Cash Position: As of June 30, 2012, the Company’s cash, cash equivalents, bank deposits and marketable securities totalled $52.9 million, or $7.63 per outstanding share, up $1.6 million compared with the end of the first quarter, and up $3.7 million compared with the end of 2011.
Comments of Management
Commenting on the results, Shaike Orbach, President and CEO, said, “The second quarter was another period of steady financial growth and strategic progress that is broadening our leadership in all of our target markets. During the quarter, we announced our first big win with an emerging Big Data player, an important achievement that positions us ideally in this exploding market segment. Late in June, we received a patent for our SETAC concept, giving us exclusivity on a product line that is becoming increasingly recognized as a crucial component in the manufacture of next-generation network appliances.
“In general, we are benefiting from one of the IT industry’s strongest-ever forces: the phenomenal growth in the volume of data being stored, transported and used by business and consumers throughout the world. As storage and networking players struggle to keep on top of this tsunami of data, they need higher capacity, higher performance solutions, and they are turning increasingly to our ‘high-octane’ connectivity products as critical enablers, especially in ‘cloud’ and virtualized environments. Therefore, the growth in data is leading to the growth of all of our target markets, creating the possibility for more tenders, design wins, new applications and new implementations of existing applications. Since our history shows that we have consistently won more than our fair share of these opportunities, we believe that we are poised for continued strong growth in our sales and profits over the long term.”
##
Conference Call Details
Silicom’s Management will host an interactive conference today, July 23rd, 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 granted to directors, officers and employees. 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 solutions designed to increase the throughput and availability of networking appliances and server-based systems.
Silicom’s large and growing base of OEM customers includes most of the market-leading players in the areas of WAN Optimization, Security and other mission-critical gateway applications. Silicom’s products include a variety of multi-port 1/10 Gigabit Ethernet server adapters, innovative internal and external BYPASS solutions and advanced Smart adapters, including SSL encryption solutions and Redirector adapters.
In addition, Silicom's patented new SETAC (Server To Appliance Converter) product family is a unique solution that enables standard servers to be configured as network appliances with high-density front networking ports and no-hassle port modularity.
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, those detailed in the Company's periodic filings with the Securities and Exchange Commission. The Company disclaims any duty to update such statements.
Company Contact:
Eran Gilad, CFO
Silicom Ltd.
Tel: +972-9-764-4555
E-mail: erang@silicom.co.il
|
Investor relations contact:
Kenny Green / Ehud Helft
CCG Israel Investor Relations
Tel: +1 646 201 9246
E-mail : silicom@ccgisrael.com
|
-- FINANCIAL TABLES FOLLOW --
Silicom Ltd. Consolidated Balance Sheets
(US$ thousands)
|
|
June 30,
2012
|
|
|
December 31,
2011
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ |
7,200 |
|
|
$ |
11,483 |
|
Short-term bank deposits
|
|
|
6,527 |
|
|
|
5,010 |
|
Marketable securities
|
|
|
5,782 |
|
|
|
9,027 |
|
Accounts receivables: Trade, net
|
|
|
9,116 |
|
|
|
8,613 |
|
Accounts receivables: Other
|
|
|
1,234 |
|
|
|
1,597 |
|
Inventories
|
|
|
11,605 |
|
|
|
11,173 |
|
Deferred tax assets
|
|
|
47 |
|
|
|
48 |
|
Total current assets
|
|
|
41,511 |
|
|
|
46,951 |
|
|
|
|
|
|
|
|
|
|
Marketable securities
|
|
|
33,347 |
|
|
|
23,667 |
|
Assets held for employees’ severance benefits
|
|
|
1,280 |
|
|
|
1,275 |
|
Deferred tax assets
|
|
|
134 |
|
|
|
135 |
|
Property, plant and equipment, net
|
|
|
1,026 |
|
|
|
837 |
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$ |
77,298 |
|
|
$ |
72,865 |
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Trade accounts payable
|
|
$ |
4,054 |
|
|
$ |
3,978 |
|
Other accounts payable and accrued expenses
|
|
|
2,339 |
|
|
|
2,460 |
|
Total current liabilities
|
|
|
6,393 |
|
|
|
6,438 |
|
|
|
|
|
|
|
|
|
|
Liability for employees’ severance benefits
|
|
|
2,158 |
|
|
|
2,153 |
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
8,551 |
|
|
|
8,591 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
|
Ordinary shares and additional paid-in capital
|
|
|
35,479 |
|
|
|
35,265 |
|
Treasury shares
|
|
|
(38 |
) |
|
|
(38 |
) |
Retained earnings
|
|
|
33,306 |
|
|
|
29,047 |
|
Total Shareholders' equity
|
|
|
68,747 |
|
|
|
64,274 |
|
Total liabilities and shareholders' equity
|
|
$ |
77,298 |
|
|
$ |
72,865 |
|
Silicom Ltd. Consolidated
Statements of Operations
(US$ thousands, except for share and per share data)
|
|
Three-month period
|
|
|
Six-month period
|
|
|
|
ended June 30,
|
|
|
ended June 30,
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
Sales
|
|
$ |
10,413 |
|
|
$ |
9,357 |
|
|
$ |
20,514 |
|
|
$ |
18,534 |
|
Cost of sales
|
|
|
5,989 |
|
|
|
5,215 |
|
|
|
11,927 |
|
|
|
10,412 |
|
Gross profit
|
|
|
4,424 |
|
|
|
4,142 |
|
|
|
8,587 |
|
|
|
8,122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
|
992 |
|
|
|
1,020 |
|
|
|
2,083 |
|
|
|
2,058 |
|
Selling and marketing expenses
|
|
|
646 |
|
|
|
669 |
|
|
|
1,280 |
|
|
|
1,330 |
|
General and administrative expenses
|
|
|
530 |
|
|
|
462 |
|
|
|
1,062 |
|
|
|
974 |
|
Total operating expenses
|
|
|
2,168 |
|
|
|
2,151 |
|
|
|
4,425 |
|
|
|
4,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
2,256 |
|
|
|
1,991 |
|
|
|
4,162 |
|
|
|
3,760 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income, net
|
|
|
212 |
|
|
|
151 |
|
|
|
452 |
|
|
|
333 |
|
Income before income taxes
|
|
|
2,468 |
|
|
|
2,142 |
|
|
|
4,614 |
|
|
|
4,093 |
|
Income taxes
|
|
|
186 |
|
|
|
168 |
|
|
|
355 |
|
|
|
354 |
|
Net income
|
|
$ |
2,282 |
|
|
$ |
1,974 |
|
|
$ |
4,259 |
|
|
$ |
3,739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per ordinary share (US$)
|
|
$ |
0.33 |
|
|
$ |
0.29 |
|
|
$ |
0.61 |
|
|
$ |
0.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary
shares used to compute basic income per
share (in thousands)
|
|
|
6,930 |
|
|
|
6,890 |
|
|
|
6,929 |
|
|
|
6,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per ordinary share (US$)
|
|
$ |
0.33 |
|
|
$ |
0.28 |
|
|
$ |
0.61 |
|
|
$ |
0.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary
shares used to compute diluted income per
share (in thousands)
|
|
|
7,020 |
|
|
|
7,026 |
|
|
|
7,021 |
|
|
|
7,019 |
|
Silicom Ltd. Reconciliation of
Non-GAAP Financial Results
(US$ thousands, except for share and per share data)
|
|
Three-month period
|
|
|
|
ended June 30,
|
|
|
|
2012 |
|
|
2011 |
|
|
|
GAAP
(as reported)
|
|
|
Adjustments (*)
|
|
|
Non-GAAP
|
|
|
Non-GAAP
|
|
Sales
|
|
$ |
10,413 |
|
|
|
|
|
$ |
10,413 |
|
|
$ |
9,357 |
|
Cost of sales
|
|
|
5,989 |
|
|
|
4 |
|
|
|
5,985 |
|
|
|
5,209 |
|
Gross profit
|
|
|
4,424 |
|
|
|
|
|
|
|
4,428 |
|
|
|
4,148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
|
992 |
|
|
|
21 |
|
|
|
971 |
|
|
|
996 |
|
Selling and marketing expenses
|
|
|
646 |
|
|
|
30 |
|
|
|
616 |
|
|
|
636 |
|
General and administrative expenses
|
|
|
530 |
|
|
|
43 |
|
|
|
487 |
|
|
|
417 |
|
Total operating expenses
|
|
|
2,168 |
|
|
|
|
|
|
|
2,074 |
|
|
|
2,049 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
2,256 |
|
|
|
|
|
|
|
2,354 |
|
|
|
2,099 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income, net
|
|
|
212 |
|
|
|
|
|
|
|
212 |
|
|
|
151 |
|
Income before income taxes
|
|
|
2,468 |
|
|
|
|
|
|
|
2,566 |
|
|
|
2,250 |
|
Income taxes
|
|
|
186 |
|
|
|
|
|
|
|
186 |
|
|
|
168 |
|
Net income
|
|
$ |
2,282 |
|
|
|
|
|
|
$ |
2,380 |
|
|
$ |
2,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per ordinary share (US$)
|
|
$ |
0.33 |
|
|
|
|
|
|
$ |
0.34 |
|
|
$ |
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary
shares used to compute basic income per
share (in thousands)
|
|
|
6,930 |
|
|
|
|
|
|
|
6,930 |
|
|
|
6,890 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per ordinary share (US$)
|
|
$ |
0.33 |
|
|
|
|
|
|
$ |
0.34 |
|
|
$ |
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary
shares used to compute diluted income per
share (in thousands)
|
|
|
7,020 |
|
|
|
|
|
|
|
7,020 |
|
|
|
7,026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Adjustments
|
|
|
|
|
|
|
98 |
|
|
|
|
|
|
|
|
|
(*) Adjustments related to share-based compensation expenses according to ASC topic 718 (SFAS 123 (R))
Silicom Ltd. Reconciliation of
Non-GAAP Financial Results
(US$ thousands, except for share and per share data)
|
|
Six-month period
|
|
|
|
ended June 30,
|
|
|
|
2012 |
|
|
2011 |
|
|
|
GAAP
(as reported)
|
|
|
Adjustments (*)
|
|
|
Non-GAAP
|
|
|
Non-GAAP
|
|
Sales
|
|
$ |
20,514 |
|
|
|
|
|
$ |
20,514 |
|
|
$ |
18,534 |
|
Cost of sales
|
|
|
11,927 |
|
|
|
8 |
|
|
|
11,919 |
|
|
|
10,399 |
|
Gross profit
|
|
|
8,587 |
|
|
|
|
|
|
|
8,595 |
|
|
|
8,135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
|
2,083 |
|
|
|
42 |
|
|
|
2,041 |
|
|
|
2,008 |
|
Selling and marketing expenses
|
|
|
1,280 |
|
|
|
60 |
|
|
|
1,220 |
|
|
|
1,261 |
|
General and administrative expenses
|
|
|
1,062 |
|
|
|
86 |
|
|
|
976 |
|
|
|
881 |
|
Total operating expenses
|
|
|
4,425 |
|
|
|
|
|
|
|
4,237 |
|
|
|
4,150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
4,162 |
|
|
|
|
|
|
|
4,358 |
|
|
|
3,985 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income, net
|
|
|
452 |
|
|
|
|
|
|
|
452 |
|
|
|
333 |
|
Income before income taxes
|
|
|
4,614 |
|
|
|
|
|
|
|
4,810 |
|
|
|
4,318 |
|
Income taxes
|
|
|
355 |
|
|
|
|
|
|
|
355 |
|
|
|
354 |
|
Net income
|
|
$ |
4,259 |
|
|
|
|
|
|
$ |
4,455 |
|
|
$ |
3,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per ordinary share (US$)
|
|
$ |
0.61 |
|
|
|
|
|
|
$ |
0.64 |
|
|
$ |
0.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary
shares used to compute basic income per
share (in thousands)
|
|
|
6,929 |
|
|
|
|
|
|
|
6,929 |
|
|
|
6,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per ordinary share (US$)
|
|
$ |
0.61 |
|
|
|
|
|
|
$ |
0.63 |
|
|
$ |
0.56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary
shares used to compute diluted income per
share (in thousands)
|
|
|
7,021 |
|
|
|
|
|
|
|
7,021 |
|
|
|
7,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Adjustments
|
|
|
|
|
|
|
196 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Adjustments related to share-based compensation expenses according to ASC topic 718 (SFAS 123 (R))