Silicom Hits It out of the Ballpark with Best Quarter & Year on Record - Q4 Sales of $16.7M Yield $0

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Silicom Hits It out of the Ballpark with Best Quarter & Year on Record - Q4 Sales of $16.7M Yield $0.49 EPS (Non-GAAP); 2012 Sales of $48.7M Yield $1.52 EPS (non-GAAP)

- Addition of Massive New Projects With Existing Customers Together With Virtually Unlimited Expansion of Target Markets Give Visibility for Continued Accelerated Growth in 2013 and Beyond -

KFAR SAVA, Israel--(BUSINESS WIRE)-- Silicom Ltd. (Nasdaq: SILC) (TASE:SILC), an industry-leading provider of high-performance networking and data infrastructure solutions,today reported its strongest-ever revenues, operating profit, net income and EPS (earnings per share) for both the fourth quarter and full year ended December 31, 2012.


Financial Results

Financial results for Q4 2012: In the fourth quarter of 2012, Silicom generated record revenues of $16.7 million, a 51% increase compared with $11.1 million in the fourth quarter of 2011. This represents 45% sequential growth compared with sales of $11.5 million in the third quarter of 2012.

On a GAAP basis, net income for the quarter increased 26% to a record $3.0 million, or $0.43 per diluted share ($0.44 per basic share), compared with $2.4 million, or $0.34 per diluted share ($0.35 per basic share), in the fourth quarter of 2011.

On a non-GAAP basis, net income for the quarter increased 37% to a record $3.4 million, or $0.49 per diluted and basic share, compared with $2.5 million, or $0.36 per diluted and basic share, for the fourth quarter of 2011.

Financial results for 2012: For the full year, Silicom's revenues increased by 23% to a record $48.7 million from $39.6 million in 2011.

On a GAAP basis, the Company's net income for the year increased by 20% to a record $9.9 million, or $1.42 per diluted and basic share, compared with $8.2 million, or $1.18 per diluted share ($1.20 per basic share) for 2011.

On a non-GAAP basis, net income for the period increased by 22% to a record $10.6 million, or $1.52 per diluted share ($1.53 per ordinary share), compared with $8.7 million, or $1.24 per diluted share ($1.26 per basic share) for 2011.

Cash Position: As of December 31, 2012, the Company's cash, cash equivalents, bank deposits and marketable securities totalled $56.9 million, or $8.12 per outstanding share, up $2.1 million compared with the end of the third quarter, and up $7.7 million compared with the end of 2011.

Comments of Management

Commenting on the results, Shaike Orbach, President and CEO, said, "We are extremely excited to report our best quarter and year so far - blowout results that demonstrate the extraordinary fit between Silicom's strategy and some of the Networking and Data Infrastructure industry's strongest forces. Our success with the world's most respected suppliers of appliance solutions to major cloud/Internet, virtualization and other players continues to increase demand for all of our products, bringing us new strategic customers as well as new, high-volume, long-term deals with existing customers. With no end in sight to the growth of this demand, and with continued strong loyalty from our 90+ OEM customers throughout the world, we believe we are positioned to continue growing strongly in the years ahead."

Mr. Orbach continued, "As a concrete demonstration of our confidence, and in light of our significant cash reserves, we were pleased to have recently announced a dividend policy to further enhance the value of our shares for our shareholders."

Mr. Orbach concluded, "As our strong momentum continues, we feel more empowered than ever to continue building Silicom to a whole new level. With a superb and growing product portfolio, an unmatched customer platform, a sterling reputation and virtually endless markets, we are positioned to deliver on our promises and to continue generating strong growth, profits and value for our shareholders in the years ahead."

##

Conference Call Details

Silicom's Management will host an interactive conference today, January 23rd, at 9:00am Eastern Time (6:00am Pacific Time, 16:00 Israel Time). On the call, management will review and discuss the results, and will also be available to answer investors' questions.

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, 16:00 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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About Silicom

Silicom Ltd. is an industry-leading provider of high-performance networking and data infrastructure solutions. Designed primarily to increase data center efficiency, Silicom's solutions dramatically improve the throughput and availability of networking appliances and other server-based systems.

Silicom's products are used by a large and growing base of OEM customers, many of whom are market leaders, as performance-boosting solutions for their offerings in the Application Delivery,

WAN Optimization, Security and other mission-critical segments within the fast-growing virtualization, cloud computing and big data markets. Silicom's product portfolio includes multi-port 1/10 Gigabit Ethernet server adapters, Intelligent Bypass solutions, Encryption accelerators and a variety of innovative Smart adapters. These products are available for incorporation directly into our OEM customers' systems, or provided as part of Silicom's patented SETAC (Server To Appliance Converter), a unique approach to the provision of high quality standard platforms with modular front connectivity.

For more information, please visit: www.silicom.co.il.

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, as well as aborted acquisition related expenses. 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.

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.

- FINANCIAL TABLES FOLLOW -

Silicom Ltd. Consolidated Balance Sheets

(US$ thousands)

 

December 31,
2012

 

 

December 31,
2011

Assets
 
Current assets
Cash and cash equivalents$13,306$11,483
Short-term bank deposits2,5275,010
Marketable securities11,0839,027
Accounts receivables: Trade, net12,3918,613
Accounts receivables: Other2,2341,597
Inventories14,79511,173
Deferred tax assets4748
Total current assets56,38346,951
 
Marketable securities29,96923,667
Assets held for employees' severance benefits

1,377

1,275

Deferred tax assets114135
Property, plant and equipment, net1,190837
 
Total assets$89,033$72,865
 
Liabilities and shareholders' equity
 
Current liabilities
Trade accounts payable$7,875$3,978
Other accounts payable and accrued expenses

3,914

2,460

Total current liabilities11,7896,438
 
Liability for employees' severance benefits

2,278

2,153

 
Total liabilities14,0678,591
 
Shareholders' equity
Ordinary shares and additional paid-in capital

36,086

35,265

Treasury shares(38)(38)
Retained earnings38,91829,047
Total Shareholders' equity74,96664,274

Total liabilities and shareholders' equity

$89,033

$72,865

Silicom Ltd. Consolidated
Statements of Operations

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

Three-month period Twelve-month period
ended December 31,ended December 31,
2012 20112012 2011
Sales$16,693$11,080$48,729$39,633
Cost of sales10,4076,36928,84922,430
Gross profit6,2864,71119,88017,203
 
Research and development expenses1,2901,0714,4014,165
Selling and marketing expenses1,0027283,0812,677
General and administrative expenses8054432,3691,890
Total operating expenses3,0972,2429,8518,732
 
Operating income3,1892,46910,0298,471
 
Financial income, net12887752439
Income before income taxes3,3172,55610,7818,910
Income taxes286156910667
Net income$3,031$2,400$9,871$8,243
 
 

Basic income per ordinary share (US$)

$0.44

$0.35

$1.42

$1.20

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

 

6,947

 

6,917

 

6,934

 

6,896

 

Diluted income per ordinary share (US$)

$0.43

$0.34

$1.42

$1.18

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

 

7,006

 

7,014

 

6,968

 

6,995

Silicom Ltd. Reconciliation of
Non-GAAP Financial Results

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

Three-month period Twelve-month period
ended December 31,ended December 31,
2012 20112012 2011

GAAP gross profit

$6,286

$4,711

$19,880

$17,203

(1) Share-based compensation (*)2854524
Non-GAAP gross profit$6,314$4,716$19,925$17,227
 

GAAP operating income

$3,189

$2,469

$10,029

$8,471

(1) Share-based compensation (*)224102544437
(2) Aborted acquisition related expenses165-165-
Non-GAAP operating income$3,578$2,571$10,738$8,908
 

GAAP net income

$3,031

$2,400

$9,871

$8,243

(1) Share-based compensation (*)224102544437
(2) Aborted acquisition related expenses165-165-
Non-GAAP net income$3,420$2,502$10,580$8,680
 

 

GAAP basic income per ordinary share (US$)

 

$0.44

 

$0.35

 

$1.42

 

$1.20

(1) Share-based compensation (*)0.030.010.080.06
(2) Aborted acquisition related expenses0.02-0.03-
 

Non-GAAP basic income per ordinary share (US$)

$0.49

$0.36

$1.53

$1.26

 
GAAP diluted income per ordinary share (US$)

 

$0.43

 

$0.34

 

$1.42

 

$1.18

(1) Share-based compensation (*)0.030.020.080.06
(2) Aborted acquisition related expenses0.03-0.02-
 

Non-GAAP diluted income per ordinary share (US$)

$0.49

$0.36

$1.52

$1.24

 
(*) Adjustments related to share-based compensation expenses according to ASC topic 718 (SFAS 123 (R))



Company Contact:
Eran Gilad, CFO
Silicom Ltd.
Tel: +972-9-764-4555
E-mail:erang@silicom.co.il
or
Investor relations contact:
Kenny Green / Ehud Helft
CCG Israel Investor Relations
Tel: +1 646 201 9246
E-mail :silicom@ccgisrael.com

KEYWORDS:   Middle East  Israel

INDUSTRY KEYWORDS:

The article Silicom Hits It out of the Ballpark with Best Quarter & Year on Record - Q4 Sales of $16.7M Yield $0.49 EPS (Non-GAAP); 2012 Sales of $48.7M Yield $1.52 EPS (non-GAAP) originally appeared on Fool.com.

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