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Silicom Ltd. (NASDAQ:SILC)(TASE:SILC), an industry-leading provider of high-performance server/appliances networking solutions,
today reported its financial results for the first quarter ended March 31, 2011.
Silicom’s Q1 revenues increased by 43% to $9.2 million from $6.4 million in the first quarter of 2010. The sales growth reflects new wins with major customers, continued strong sales of all products and rising demand in all target markets.
On a GAAP basis, reported net income totalled $1.8 million, or $0.25 per diluted share ($0.26 per basic share), up 88% from $0.9 million, or $0.13 per diluted share ($0.14 per basic share), in the first quarter of 2010.
On a non-GAAP basis, which excludes non-cash share-based compensation, as described and reconciled below, net income totalled $1.9 million, or $0.27 per diluted and basic share. This is up 87% compared with $1.0 million, or $0.14 per diluted share ($0.15 per basic share), in the first quarter of 2010.
As of March 31, 2011, the Company’s cash, cash equivalents, bank deposits and marketable securities totalled $46.9 million, or $6.81 per outstanding share, up $1.1 million from the $45.8 million recorded at the end of 2010.
Commenting on the results, Shaike Orbach, President and CEO, said, “The first quarter of 2011 was a great beginning to what we believe will be another strong year for Silicom. Our revenues continue to rise at a faster pace than our markets, demonstrating that we are gaining market share and creating new market niches. We are also proud to report an increase of 87% in our net income, an accomplishment which confirms the exceptional profit-generating potential of our business model.
“Throughout the quarter, we continued to generate strong sales of all our products to all major customers in all target markets. We were particularly excited by two milestone events which together demonstrate the essence of our strategy: pursuing aggressive growth in our traditional businesses while actualizing the dramatic potential of our SETAC business.
We secured two major Design Wins from existing major customers: an additional business unit of a Fortune-100 networking customer, and a leading Application Delivery customer. After they have reached their production run rate, these Design Wins will generate a total of $4 million per year. These wins are in addition to the new customers that we continue adding to our portfolio every quarter, each of which offers the potential for significant ongoing orders over time.
A Tier 1 server manufacturer has begun offering an appliance that combines our SETAC Server To Appliance Converter with one of its popular standard servers, thereby moving SETAC further into the industry spotlight. This is in line with our strategy for building SETAC into one of our most powerful growth engines.”
Mr. Orbach concluded, “Our growth demonstrates the importance of a sound, continuously growing platform of loyal customers who buy from us repeatedly, together with industry-leading technologies and a continuous flow of new families of products. Our reputation for innovation in high-growth areas such as 10Gbps, Re-Direction, Encryption, External bypass - and obviously SETAC – are leading both existing and new customers to select our solutions. With favorable markets, increasing success with top-tier customers and a fertile flow of innovative concepts, we believe that Silicom is on track for continued strong growth during 2011 and beyond.”