Silicom Reports Above $10M In Sales, $2M Net Profit For Q1 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 first quarter ended March 31, 2012.

Financial Results

Silicom’s revenues for the first quarter of 2012 totalled $10.1 million, a 10% increase compared with $9.2 million in the first quarter of 2011.

On a GAAP basis, reported net income for the quarter totalled $2.0 million, or $0.28 per diluted share ($0.29 per basic share), up 12% from $1.8 million, or $0.25 per diluted share ($0.26 per basic share), in the first quarter of 2011. On a non-GAAP basis, which excludes non-cash share-based compensation, as described and reconciled below, net income for the quarter totalled $2.1 million, or $0.30 per diluted and basic share. This is up 10% compared with $1.9 million, or $0.27 per diluted and basic share, for the first quarter of 2011.

As of March 31, 2012, the Company’s cash, cash equivalents, bank deposits and marketable securities totalled $51.3 million, or $7.41 per outstanding share, up $2.1 million compared with the end of 2011.

Comments of Management

Commenting on the results, Shaike Orbach, President and CEO, said, “The first quarter was another period of solid top-line and bottom-line growth in line with our plans for building the Company to the next level. Our revenues are being driven by robust demand from our 85+ OEM customers who are supplying a variety of networking solutions, including state-of-the-art products that support the global migration to cloud computing and virtualized applications. With a 25-year reputation as a trusted ‘one-stop-shop’ provider of performance boosting networking and connectivity solutions, we are benefiting from their accelerating growth.

“During the first quarter, we were especially pleased to announce a major new SETAC design win, both because of the deal’s significant long-term potential and because it was to a customer outside of our primary target market. We believe this success, together with the other SETAC design wins that we have secured over the past few quarters and the new SETAC opportunities in the pipeline, demonstrates SETAC’s broad market appeal and its potential to become a potent future revenue driver in addition to our traditional product lines.”

Mr. Orbach concluded, “Taken as a whole, we are very pleased with our progress and motivated as we look to the future. With strong markets, an industry-leading product line and a growing base of loyal customers, we are well positioned and moving confidently to meet our long-term growth objectives.”

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Conference Call Details

Silicom’s Management will host an interactive conference today, April 23 rd, 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: 1 888 407 2553

UK: 0 800 917 5108

ISRAEL: 03 918 0610

INTERNATIONAL: +972 3 918 0610

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.

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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 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)

 
 

March 31, 2012
   

December 31,2011

Assets
 

Current assets
Cash and cash equivalents

$7,761
$11,483
Short-term bank deposits

6,527

5,010

Marketable securities

6,871
9,027
Accounts receivables: Trade, net

8,675
8,613
Accounts receivables: Other

1,201
1,597
Inventories

11,418
11,173
Deferred tax assets

49
48

Total current assets

42,502
46,951
 

Marketable securities

30,188
23,667

Assets held for employees’ severance benefits

1,328

1,275

Deferred tax assets

143
135

Property, plant and equipment, net

982
837
 

Total assets

$75,143
$72,865
 
 

Liabilities and shareholders' equity
 

Current liabilities

 
Trade accounts payable

$4,533

$3,978

Other accounts payable and accruedexpenses

1,967

2,460

Total current liabilities

6,500
6,438
 

Liability for employees’ severance benefits

2,277

2,153
 
Total liabilities

8,777
8,591
 

Shareholders' equity

Ordinary shares and additional paid-incapital

35,380

35,265
Treasury shares

(38)

(38)
Retained earnings

31,024
29,047

Total Shareholders' equity

66,366
64,274

Total liabilities and shareholders' equity

 

$75,143
$72,865

Silicom Ltd. Consolidated Statements of Operations

(US$ thousands, except for share and per share data)
 

Three-month period ended March 31,

 
2012     2011
Sales $10,101 $9,177
Cost of sales 5,938 5,197
Gross profit 4,163

3,980
 
Research and development expenses 1,091 1,038
Selling and marketing expenses 634 661
General and administrative expenses 532 512
Total operating expenses 2,257 2,211
 
Operating income 1,906 1,769
 
Financial income, net 240 182
Income before income taxes 2,146 1,951
Income taxes 169 186
Net income $1,977 $1,765
 
 

Basic income per ordinary share (US$)

$0.29

$0.26
 

Weighted average number of ordinaryshares used to compute basic income pershare (in thousands)

 

6,928

 

6,886
 

Diluted income per ordinary share (US$)

$0.28

$0.25
 

Weighted average number of ordinaryshares used to compute diluted income pershare (in thousands)

 

7,022

 

7,013

Silicom Ltd. Reconciliation of Non-GAAP Financial Results

(US$ thousands, except for share and per share data)
 

Three-month period ended March 31,

 
    2012       2011
GAAP

(as reported)
  Adjustments (*)   Non-GAAP Non-GAAP
Sales $10,101     $10,101 $9,177
Cost of sales 5,938   4   5,934 5,190
Gross profit 4,163       4,167 3,987
 
Research and development expenses 1,091 21 1,070 1,012
Selling and marketing expenses 634 30 604 625
General and administrative expenses 532   43   489 464
Total operating expenses 2,257       2,163 2,101
 
Operating income 1,906 2,004 1,886
 
Financial income, net 240       240 182
Income before income taxes 2,146 2,244 2,068
Income taxes 169       169 186
Net income $1,977       $2,075 $1,882
 
 

Basic income per ordinary share (US$)

$0.29
 

 
 

$0.30

$0.27
 

Weighted average number of ordinaryshares used to compute basic income pershare (in thousands)

 

6,928
     

 

6,928

 

6,886
 

Diluted income per ordinary share (US$)

$0.28
 

 
 

$0.30

$0.27
 

Weighted average number of ordinaryshares used to compute diluted income pershare (in thousands)

 

7,022
     

 

7,022

 

7,013
 

Total Adjustments
98
 

(*) Adjustments related to share-basedcompensation expenses according to ASCtopic 718 (SFAS 123 (R))

Copyright Business Wire 2010

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