Silicom Reports Q2 2021 Financial Results

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    <br /> Silicom Reports Q2 2021 Financial Results<br />

    H1 Revenues Up 31% YoY With 47% Increase in Non-GAAP EPS

    PR Newswire

    KFAR SAVA,

    Israel

    ,

    July 29, 2021

    /PRNewswire/ —

    Silicom Ltd.

    (NASDAQ: SILC), a leading provider of high-performance networking and data infrastructure solutions, today reported its financial results for the second quarter and six months ended

    June 30, 2021

    .


    Financial Results



    Second Quarter:


    Silicom’s revenues for the second quarter of 2021 totalled

    $30.3 million

    , up 31% compared with

    $23.0 million

    for the second quarter of 2020.

    On a GAAP basis, net income for the quarter totalled

    $2.0 million

    , or

    $0.29

    per ordinary share (

    $0.30

    per basic share), up 56% compared with

    $1.3 million

    , or

    $0.18

    per share (basic and diluted), for the second quarter of 2020.

    On a non-GAAP basis (as described and reconciled below), net income for the quarter totalled

    $2.9 million

    , or

    $0.42

    per diluted share (

    $0.43

    per basic share), up 59% compared with

    $1.8 million

    , or

    $0.26

    per share (basic and diluted), for the second quarter of 2020.



    First Six Months:


    Silicom’s revenues for the first half of 2021 totalled

    $59.3 million

    , up 31% compared with

    $45.1 million

    for the first half of 2020.

    On a GAAP basis, net income for the period totalled

    $4.6 million

    , or

    $0.66

    per diluted share (

    $0.67

    per basic share), up 66% compared with

    $2.8 million

    , or

    $0.38

    per diluted share (

    $0.39

    per basic share), for the first half of

    2020

    .

    On a non-GAAP basis (as described and reconciled below), net income for the period totalled

    $5.9 million

    , or

    $0.84

    per diluted share (

    $0.86

    per basic share), up 44% compared with

    $4.1 million

    , or

    $0.57

    per share (basic and diluted), for the first half of 2020.


    Guidance for the Third Quarter

    Management projects revenues of

    $32 million

    to

    $33 million

    for the third quarter of 2021. The midpoint of this range represents 24% year-over-year revenue growth for the first nine months of 2021.


    Comments of Management


    Shaike Orbach

    , Silicom’s President and CEO

    ,

    commented, “We are very pleased to report another quarter of strong growth in both revenues and profits, demonstrating the importance of our performance-boosting smart platforms and smart cards for the market’s strategic shift to the cloud and adoption of open/disaggregated fixed and mobile network infrastructures. Our growth is being driven by increased traction with all types of SD-WAN and NFV players, who have a strong need for our smart platforms, as well as by 4G/5G O-RAN players, who need our acceleration and offloading solutions to overcome the performance challenges of their decoupled/disaggregated infrastructures.”

    Mr. Orbach continued, “For example, during the second quarter we announced that Telefonica, one of the world’s leading telcos, selected our SD-Branch Smart Platform as a decoupled/disaggregated SD-WAN solution for the SME segment, with at-scale deployments expected to begin already in 2022. In parallel, we closed a major 5G design win with a global 5G equipment vendor – our third 5G win in a single six-month period – who chose our Smart 5G acceleration card for its Distributed Unit (DU) solutions, cementing our leadership of the 5G DU-performance accelerator niche. These and other wins are building interest in our offerings to an even higher level, giving us a healthy pipeline of near-term and long-term opportunities.”

    Mr. Orbach concluded, “While the industry-wide component shortage crisis continues to pose a significant threat, given the fundamental strength of our market drivers, the recognized leadership of our products, our strong base of design wins and our significant pipeline of opportunities, we believe we will continue – with careful planning – to proceed on-track in accordance with our projections for accelerated growth.”


    Conference Call Details


    Silicom’s Management will host an interactive conference today,

    July 29th

    , at

    9am Eastern Time

    (

    6am Pacific Time

    ,

    4pm

    Israel Time) to review and discuss the results.

    To participate, investors may either listen via a webcast link hosted on Silicom’s website or via the dial-in. The link is under the investor relations’ webcast section of Silicom’s website at

    Webcasts


    For those that wish to dial in via telephone, one of the following teleconferencing numbers may be used:

    US: 1 866 860 9642


    ISRAEL

    : 03 918 0609

    INTERNATIONAL:  +972 3 918 0609

    At:

    9:00am Eastern Time

    ,

    6:00am Pacific Time

    ,

    4:00pm

    Israel Time

    It is advised to connect to the conference call a few minutes before the start.

    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 above-mentioned webcast 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 and RSUs granted to directors, officers and employees, taxes on amortization of acquired intangible assets, as well as lease liabilities – financial expenses (income). 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 and data infrastructure solutions. Designed primarily to improve performance and efficiency in Cloud and Data Center environments, Silicom’s solutions increase throughput, decrease latency and boost the performance of servers and networking appliances, the infrastructure backbone that enables advanced Cloud architectures and leading technologies like NFV, SD-WAN and Cyber Security. Our innovative solutions for high-density networking, high-speed fabric switching, offloading and acceleration, which utilize a range of cutting-edge silicon technologies as well as FPGA-based solutions, are ideal for scaling-up and scaling-out cloud infrastructures.

    Silicom products are used by major Cloud players, service providers, telcos and OEMs as components of their infrastructure offerings, including both add-on adapters in the Data Center and stand-alone virtualized/universal CPE devices at the edge.

    Silicom’s long-term, trusted relationships with more than 200 customers throughout the world, its more than 400 active Design Wins and more than 300 product SKUs have made Silicom a “go-to” connectivity/performance partner of choice for technology leaders around the globe.

    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, Silicom’s increasing dependence for substantial revenue growth on a limited number of customers in the evolving cloud-based, SD-WAN, NFV and Edge markets, the speed and extent to which solutions are adopted by these markets, likelihood that Silicom will rely increasingly on customers which provide solutions in these evolving markets, resulting in an increasing dependence on a smaller number of larger customers, difficulty in commercializing and marketing of Silicom’s products and services, maintaining and protecting brand recognition, protection of intellectual property, competition, disruptions to our manufacturing and development along with general disruptions to the entire world economy relating to the spread of the novel coronavirus (COVID-19) and other factors detailed in the company’s periodic filings with the Securities and Exchange Commission. These forward-looking statements can generally be identified as such because the context of the statement will include words, such as “expects,” “should,” “believes,” “anticipates” or words of similar import. Similarly, statements that describe future plans, objectives or goals are also forward-looking statements. In light of significant risks and uncertainties inherent in forward-looking statements, the inclusion of such statements should not be regarded as a representation by the company that it will achieve such forward-looking statements. The company disclaims any duty to update such statements, whether as a result of new information, future events, or otherwise.




    Company Contact:



    Eran Gilad, CFO



    Silicom Ltd.



    Tel: +972-9-764-4555



    E-mail:


    [email protected]




    Investor Relations Contact:



    Ehud Helft



    GK Investor Relations



    Tel: +1 646 201 9246



    E-mail:




    [email protected]




    Silicom Ltd. Consolidated Balance Sheets


    (US$ thousands)



    June 30,



    December 31,



    2021



    2020



    Assets



    Current assets


    Cash and cash equivalents



    $



    27,460


    $


    20,676


    Short-term bank deposits



    –


    5,000


    Marketable securities



    18,354


    35,117


    Accounts receivables: Trade, net



    21,799


    21,660


    Accounts receivables: Other



    9,428


    6,126


    Inventories



    60,769


    47,650



    Total current assets



    137,810


    136,229



    Marketable securities



    28,485


    15,281



    Assets held for employees’ severance benefits



    1,793


    1,833



    Deferred tax assets



    1,724


    1,790



    Property, plant and equipment, net



    4,395


    4,110



    Intangible assets, net



    2,984


    1,170



    Right of Use



    9,522


    9,913



    Goodwill



    25,561


    25,561



    Total assets



    $



    212,274


    $


    195,887



    Liabilities and shareholders’ equity



    Current liabilities


    Trade accounts payable



    $



    27,111


    $


    14,610


    Other accounts payable and accrued expenses



    15,617


    12,953


    Lease Liabilities



    1,844


    1,813



    Total current liabilities



    44,572


    29,376



    Lease Liabilities



    7,712


    8,282



    Liability for employees’ severance benefits



    3,255


    3,256



    Deferred tax liabilities



    –


    136



    Total liabilities



    55,539


    41,050



    Shareholders’ equity


    Ordinary shares and additional paid-in capital



    61,898


    60,139


    Treasury shares



    (29,297)


    (24,807)


    Retained earnings



    124,134


    119,505



    Total shareholders’ equity



    156,735


    154,837



    Total liabilities and shareholders’ equity



    $



    212,274


    $


    195,887



    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,



    2021


    2020



    2021


    2020


    Sales


    $



    30,277


    $


    23,045


    $



    59,279


    $


    45,115


    Cost of sales



    19,524


    15,321



    38,595


    30,272


    Gross profit



    10,753


    7,724



    20,684


    14,843


    Research and development expenses



    4,970


    3,862



    9,990


    7,662


    Selling and marketing expenses



    1,614


    1,396



    3,169


    2,935


    General and administrative expenses



    1,186


    979



    2,249


    1,892


    Total operating expenses



    7,770


    6,237



    15,408


    12,489


    Operating income



    2,983


    1,487



    5,276


    2,354


    Financial income (loss), net



    (283)


    209



    534


    1,240


    Income before income taxes



    2,700


    1,696



    5,810


    3,594


    Income taxes



    666


    392



    1,181


    802


    Net income


    $



    2,034


    $


    1,304


    $



    4,629


    $


    2,792


    Basic income per ordinary share (US$)


    $



    0.30


    $


    0.18


    $



    0.67


    $


    0.39


    Weighted average number of ordinary shares used to

    compute basic income per share (in thousands)



    6,868


    7,153



    6,889


    7,231


    Diluted income per ordinary share (US$)


    $



    0.29


    $


    0.18


    $



    0.66


    $


    0.38


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



    6,992


    7,168



    7,030


    7,265



    Silicom Ltd. Reconciliation of Non-GAAP Financial Results


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



    Three-month period



    Six-month period



    ended June 30,



    ended June 30,



    2021


    2020



    2021


    2020


    GAAP gross profit



    $



    10,753


    $


    7,724



    $



    20,684


    $


    14,843


    (1) Share-based compensation (*)



    91


    109



    238


    280


    Non-GAAP gross profit



    $



    10,844


    $


    7,833



    $



    20,922


    $


    15,123


    GAAP operating income



    $



    2,983


    $


    1,487



    $



    5,276


    $


    2,354


    Gross profit adjustments



    91


    109



    238


    280


    (1) Share-based compensation (*)



    508


    357



    1,085


    908


    Non-GAAP operating income



    $



    3,582


    $


    1,953



    $



    6,599


    $


    3,542


    GAAP net income



    $



    2,034


    $


    1,304



    $



    4,629


    $


    2,792


    Operating income adjustments



    599


    466



    1,323


    1,188


    (2) Lease liabilities – financial expenses (income)



    230


    –



    (174)


    –


    (3) Taxes on amortization of acquired intangible assets



    67


    67



    133


    134


    Non-GAAP net income



    $



    2,930


    $


    1,837



    $



    5,911


    $


    4,114


    GAAP net income



    $



    2,034


    $


    1,304



    $



    4,629


    $


    2,792


    Adjustments for Non-GAAP Cost of sales



    91


    109



    238


    280


    Adjustments for Non-GAAP Research and development expenses



    195


    181



    461


    428


    Adjustments for Non-GAAP Selling and marketing expenses



    158


    86



    315


    230


    Adjustments for Non-GAAP General and administrative expenses



    155


    90



    309


    250


    Adjustments for Non-GAAP Financial income (loss), net



    230


    –



    (174)


    –


    Adjustments for Non-GAAP Income taxes



    67


    67



    133


    134


    Non-GAAP net income



    $



    2,930


    $


    1,837



    $



    5,911


    $


    4,114


    GAAP basic income per ordinary share (US$)



    $



    0.30


    $


    0.18



    $



    0.67


    $


    0.39


    (1) Share-based compensation (*)



    0.09


    0.07



    0.19


    0.16


    (2) Lease liabilities – financial expenses (income)



    0.03


    –



    (0.02)


    –


    (3) Taxes on amortization of acquired intangible assets



    0.01


    0.01



    0.02


    0.02


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



    $



    0.43


    $


    0.26



    $



    0.86


    $


    0.57


    GAAP diluted income per ordinary share (US$)



    $



    0.29


    $


    0.18



    $



    0.66


    $


    0.38


    (1) Share-based compensation (*)



    0.09


    0.07



    0.18


    0.17


    (2) Lease liabilities – financial expenses (income)



    0.03


    –



    (0.02)


    –


    (3) Taxes on amortization of acquired intangible assets



    0.01


    0.01



    0.02


    0.02


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



    $



    0.42


    $


    0.26



    $



    0.84


    $


    0.57


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

    Cision
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    SOURCE Silicom Ltd.

    PR Newswire
    July 29, 2021 – 5:15 AM PDT