Blow-out Record Quarter For Silicom: $9.9m Revenues, $2.0m Net Income, $0.28 Diluted EPS

Silicom Ltd. (NASDAQ and TASE: SILC) today reported financial results for the fourth quarter and twelve months ended December 31, 2010.

Financial Results

Silicom’s Q4 revenues reached $9.9 million, a new record for the Company. This is an increase of 45% compared with $6.8 million in the fourth quarter of 2009 and 34% compared with $7.4 million in the third quarter of 2010.

Net income was a record $2.0 million or $0.28 per diluted share ($0.29 per basic share), up 45% compared with $1.4 million, or $0.19 per diluted share ($0.20 per basic share), for the fourth quarter of 2009, and 36% compared with $1.4 million or $0.21 per basic and diluted share for the third quarter of 2010.

For the twelve-month period, revenues were a record $30.4 million, up 48% compared with $20.5 million in 2009. Net income for the year increased by 103% to $5.7 million, or $0.82 per diluted share ($0.84 per basic share) compared with $2.8 million, or $0.41 per diluted share ($0.42 per basic share), for 2009.

As of December 31, 2010, the Company’s cash, cash equivalents, bank deposits and marketable securities totaled $45.8 million, or $6.66 per outstanding share.

Comments of Management

Commenting on the results, Shaike Orbach, President and CEO, said, “We are extremely excited to announce our fourth quarter results - our best ever from every perspective. Q4 revenues rose 45% year-over-year and 34% on a sequential basis, capping off a fantastic 48% increase for the year as a whole, a much faster growth than our markets. Our performance demonstrates the power of a winning combination: our strong base of 70+ OEM customers (many of them industry leaders that offer virtually unlimited potential for additional growth), industry-leading products, and our reputation for out-of-the-box innovation.

“As they have throughout the year, all of our growth engines delivered spectacularly. We continued to secure new customers and succeeded in penetrating new divisions of existing customers. We introduced and sold new products to both current and new customers, and achieved major wins with our SETAC product line. In addition, we enjoyed increased demand from all of our target market segments, which are growing faster than ever due to increased demand for bandwidth-hungry cloud computing and virtualization environments.”

Mr. Orbach concluded, “All indications point toward a continued strengthening of these positive trends in 2011. With strong markets, growing demand for our products, and the exciting momentum of our new SETAC product line, we are confident that we will continue growing Silicom in 2011 and beyond.”

Conference Call Details:

Silicom’s Management will host an interactive conference today, January 24 th, 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, at: www.silicom.co.il

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 patent-pending 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)

December 31, 2010
 

December 31, 2009

Assets
 

Current assets
Cash and cash equivalents $6,657 $7,253
Short-term bank deposits 9,209 7,253
Marketable securities 8,162 10,425
Accounts receivables: Trade, net 6,762 5,172
Accounts receivables: Other 555 371
Inventories 8,140 4,677
Deferred tax assets 50 233
Total current assets 39,535 35,384
 
Marketable securities 21,773 18,308
Assets held for employees’ severance benefits

1,302

1,105
Deferred tax assets 219 192
Property, plant and equipment, net 650 602
 
Total assets $63,479 $55,591
 
 

Liabilities and shareholder's equity
 
Current liabilities
Trade accounts payable $3,753 $2,261
Other accounts payable and accrued expenses

2,074
 

2,138
Total current liabilities 5,827 4,399
 
Liability for employees’ severance benefits

2,222
 

1,967
 
Total liabilities 8,049   6,366
 
Shareholders' equity
Ordinary shares and additional paid-in capital

34,664

34,174
Treasury shares (38) (38)
Retained earnings 20,804   15,089
Total Shareholders' equity 55,430   49,225
Total liabilities and shareholders equity

$63,479
 

$55,591

Silicom Ltd. Consolidated Statements of Income (US$ thousands, except for share and per share data)
 

Three-month period ended December 31,
   

Twelve-month period ended December 31,
2010   2009 2010   2009
Sales $9,880 $6,822 $30,399 $20,526
Cost of sales 5,859 4,121 17,490 12,461
Gross profit 4,021 2,701 12,909 8,065
 
Research and development expenses 945 754 3,280 2,716
Selling and marketing expenses 667 521 2,207 1,821
General and administrative expenses 469 345 1,523 1,313
Total operating expenses 2,081 1,620 7,010 5,850
 
Operating income 1,940 1,081 5,899 2,215
 
Financial income, net 123 182 617 909
Income before income taxes 2,063 1,263 6,516 3,124
Income taxes 109 (87) 801 305
Net income $1,954 $1,350 $5,715 2,819
 
 

Basic income per ordinary share

$0.29

$0.20

$0.84

$0.42
 
Weighted average number of ordinary shares used to compute basic income per share (in thousands)

 

6,853

 

6,791

 

6,821

 

6,720
 

Diluted income per ordinary share

$0.28

$0.19

$0.82

$0.41
 
Weighted average number of ordinary shares used to compute diluted income per share (in thousands)

 

6,985

 

6,930

 

6,938

 

6,843

Copyright Business Wire 2010

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