6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16

OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of July, 2020

Commission File Number 000-23288

SILICOM LTD.

(Translation of Registrant’s name into English)

14 Atir Yeda St., P.O.Box 2164, Kfar-Sava 4464323, Israel

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒     Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):___

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):___

On July 29, 2020, the Registrant issued a press release announcing the Registrant's second quarter 2020 financial results. Attached hereto are the following exhibits:

Exhibit 99.1 Press Release

The US GAAP information set forth on the Consolidated Balance Sheet and Consolidated Statement of Operations in the financial tables on Pages _5_ and _6_ of Exhibit 99.1 is hereby incorporated by reference into all effective registration statements filed by the registrant under the Securities Act of 1933.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SILICOM LTD. (Registrant)
Date: July 29, 2020	By	/s/ Eran Gilad
	Eran Gilad
	Chief Financial Officer

EX-99.1

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

EARNINGS RELEASE

Silicom Reports Q2 2020 Financial Results

KFAR SAVA, Israel, July 29, 2020 - Silicom Ltd. (NASDAQ: SILC), a leading provider of high-performance networking and data infrastructure solutions, today today reported its financial results for the second quarter and six months ended June 30, 2020.

Financial Results

Second Quarter: Silicom’s revenues for the second quarter of 2020 totalled $23.0 million compared with $25.4 million compared for the second quarter of 2019.

On a GAAP basis, net income for the quarter totalled $1.3 million, or $0.18 per share (basic and diluted), compared with $2.3 million, or $0.30 per share (basic and diluted), for the second quarter of 2019.

On a non-GAAP basis (as described and reconciled below), net income for the quarter totalled $1.8 million, or $0.26 per share (basic and diluted), compared with $2.9 million, or $0.38 per share (basic and diluted), for the second quarter of 2019.

First Six Months: Silicom’s revenues for the first half of 2020 totalled $45.1 million compared with $55.6 million for the first half of 2019.

On a GAAP basis, net income for the period totalled $2.8 million, or $0.38 per diluted share ($0.39 per basic share), compared with $5.9 million, or $0.77 per diluted share ($0.78 per basic share), for the first half of 2019.

On a non-GAAP basis (as described and reconciled below), net income for the period totalled $4.1 million, or $0.57 per share (basic and diluted), compared with $6.9 million, or $0.91 per share (basic and diluted), for the first half of 2019.

Guidance for the Third Quarter

While remaining cautious due to the continued uncertainty of the market environment, improved visibility leads Management to project sequential double digit growth in revenues for the third quarter of 2020 as compared with the second quarter of 2020, totaling approximately $26 to $27 million.

Comments of Management

Shaike Orbach, Silicom’s President and CEO, commented, “The second quarter was another period of solid revenues and profits despite the ongoing COVID-19 disruptions to our supply chain and logistics. While the uncertainty of the situation may still lead to short-term delays in telco and cloud infrastructure investments, the booming demand for network capacity is leading to long-term acceleration of their SD-WAN, NFV, Security and 5G network build-out plans. We believe that this is a fundamental market change that will increase long-term demand for our innovative enabling solutions, which increase network flexibility and capacity while reducing network costs.

“The increased demand for capacity is already having an impact on our target markets, both new and traditional. For example, our Intelligent Bypass solutions were selected in April to maximize the throughput of a massive governmental broadband network, resulting in a $15 million Design Win. The fact that the project’s integrator expects additional similar projects over time is just one demonstration of the continuous pipeline of opportunities that we see in each of our target markets.”

Mr. Orbach concluded, “While the environment remains uncertain, with a long list of design wins, a healthy cash balance, solid baseline activities and strong market fundamentals, we are well positioned and optimistic about our long-term prospects. As such, we continue to project that we will achieve a double-digit CAGR (Compound Annual Growth Rate) for several years ahead - once our markets return to normal.”

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 https://www.silicom-usa.com/webcasts/

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

US: 1 888 407 2553

ISRAEL: 03 918 0610

  INTERNATIONAL:  +972 3 918 0610

  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, as well as taxes on amortization of acquired intangible assets. 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.

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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 170 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: erang@silicom.co.il Investor Relations Contact: Ehud Helft GK Investor Relations Tel: +1 646 201 9246 E-mail: silicom@gkir.com

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-- FINANCIAL TABLES FOLLOW –

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Silicom Ltd. Consolidated Balance Sheets
(US$ thousands)
	June 30,			December 31,
	2020			2019
Assets
Current assets
Cash and cash equivalents	$	27,689		$	16,469
Short-term bank deposits		5,000			13,542
Marketable securities		34,715			14,045
Accounts receivables: Trade, net		16,650			24,936
Accounts receivables: Other		8,910			4,964
Inventories		45,684			36,491
Total current assets		138,648			110,447
Marketable securities		25,798			46,542
Assets held for employees’ severance benefits		1,638			1,640
Deferred tax assets		1,784			1,798
Property, plant and equipment, net		3,645			3,574
Intangible assets, net		2,548			1,718
Right of Use		3,484			3,783
Goodwill		25,561			25,561
Total assets	$	203,106		$	195,063
Liabilities and shareholders' equity
Current liabilities
Trade accounts payable	$	13,751		$	16,419
Other accounts payable and accrued expenses		24,700			8,823
Lease Liabilities		1,247			1,090
Total current liabilities		39,698			26,332
Lease Liabilities		2,202			2,693
Liability for employees’ severance benefits		2,992			2,910
Deferred tax liabilities		272			205
Total liabilities		45,164			32,140
Shareholders' equity
Ordinary shares and additional paid-in capital		58,387			57,152
Treasury shares		(17,017	)		(8,009	)
Retained earnings		116,572			113,780
Total shareholders' equity		157,942			162,923
Total liabilities and shareholders' equity	$	203,106		$	195,063

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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,
	2020		2019		2020		2019
Sales	$	23,045	$	25,402	$	45,115	$	55,629
Cost of sales		15,321		16,728		30,272		36,775
Gross profit		7,724		8,674		14,843		18,854
Research and development expenses		3,862		3,659		7,662		7,479
Selling and marketing expenses		1,396		1,692		2,935		3,321
General and administrative expenses		979		1,054		1,892		2,077
Total operating expenses		6,237		6,405		12,489		12,877
Operating income (loss)		1,487		2,269		2,354		5,977
Financial income, net		209		430		1,240		725
Income (Loss) before income taxes		1,696		2,699		3,594		6,702
Income taxes		392		421		802		784
Net income (loss)	$	1,304	$	2,278	$	2,792	$	5,918
Basic income (loss) per ordinary share (US$)	$	0.18	$	0.30	$	0.39	$	0.78
Weighted average number of ordinary shares used to compute basic income per share (in thousands)		7,153		7,587		7,231		7,587
Diluted income (loss) per ordinary share (US$)	$	0.18	$	0.30	$	0.38	$	0.77
Weighted average number of ordinary shares used to compute diluted income per share (in thousands)		7,168		7,635		7,265		7,644

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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,
	2020		2019		2020		2019
GAAP gross profit	$	7,724	$	8,674	$	14,843	$	18,854
(1) Share-based compensation (*)		109		106		280		222
Non-GAAP gross profit	$	7,833	$	8,780	$	15,123	$	19,076
GAAP operating income (loss)	$	1,487	$	2,269	$	2,354	$	5,977
Gross profit adjustments		109		106		280		222
(1) Share-based compensation (*)		357		457		908		995
Non-GAAP operating income	$	1,953	$	2,832	$	3,542	$	7,194
GAAP net income (loss)	$	1,304	$	2,278	$	2,792	$	5,918
Operating income adjustments		466		563		1,188		1,217
(2) Taxes on amortization of acquired intangible assets		67		67		134		(211	)
Non-GAAP net income	$	1,837	$	2,908	$	4,114	$	6,924
GAAP net income (loss)	$	1,304	$	2,278	$	2,792	$	5,918
Adjustments for Non-GAAP cost of sales		109		106		280		222
Adjustments for Non-GAAP Research and development expenses		181		217		428		463
Adjustments for Non-GAAP Selling and marketing expenses		86		117		230		256
Adjustments for Non-GAAP General and administrative expenses		90		123		250		276
Adjustments for Non-GAAP Income taxes		67		67		134		(211	)
Non-GAAP net income	$	1,837	$	2,908	$	4,114	$	6,924
GAAP basic income (loss) per ordinary share (US$)	$	0.18	$	0.30	$	0.39	$	0.78
(1) Share-based compensation (*)		0.07		0.07		0.16		0.16
(2) Acquisition-related adjustments		0.01		0.01		0.02		(0.03	)
Non-GAAP basic income per ordinary share (US$)	$	0.26	$	0.38	$	0.57	$	0.91
GAAP diluted income (loss) per ordinary share (US$)	$	0.18	$	0.30	$	0.38	$	0.77
(1) Share-based compensation (*)		0.07		0.07		0.17		0.16
(2) Acquisition-related adjustments		0.01		0.01		0.02		(0.02	)
Non-GAAP diluted income per ordinary share (US$)	$	0.26	$	0.38	$	0.57	$	0.91
(*) Adjustments related to share-based compensation expenses according to ASC topic 718 (SFAS 123 (R))

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