Exhibit 99.1
FOR IMMEDIATE RELEASE
EARNINGS RELEASE
Silicom Reports Q4 2020 & Full Year 2020 Financial Results
- $33.9M Q4 Revenues Demonstrate Growing Momentum of Company’s New Product Lines -
KFAR SAVA, Israel, January 28, 2021 -
Silicom Ltd. (NASDAQ: SILC), a leading provider of high-performance networking and data infrastructure solutions, today reported its financial results for the fourth quarter and full year ended December 31, 2020.
Financial Results
Fourth Quarter: Silicom’s
revenues for the fourth quarter of 2020 totalled $33.9 million, up 33% compared with $25.5 million for the fourth quarter of 2019, and up 19% compared with $28.4 million for the third quarter of 2020.
On a GAAP basis, net income for the quarter totalled $0.8 million, or $0.12 per share (basic and diluted), compared with $2.4 million,
or $0.33 per share (basic and diluted), for the fourth quarter of 2019.
On a non-GAAP basis (as described and reconciled below), net income for the quarter totalled $4.0 million, or $0.56 per diluted share
($0.57 per basic share), compared with $3.1 million, or $0.41 per share (basic and diluted).
Full Year: Silicom’s
revenues for the twelve months ended December 31, 2020 totalled $107.4 million compared with $105.2 million for 2019.
On a GAAP basis, net income for the year totalled $5.7 million, or $0.80 per share (basic and diluted), compared with $10.2 million, or
$1.35 per diluted share ($1.36 per basic share), for 2019.
On a non-GAAP basis (as described and reconciled below), net income for the year totalled $11.0 million, or $1.54 per share (basic and
diluted), compared with $12.5 million, or $1.65 per diluted share ($1.66 per basic share), for 2019.
Guidance for the First Quarter
While remaining cautious due to the continued uncertainty of the macro environment, Management projects revenues of $28 to $29 million
for the first quarter of 2021. The midpoint of this range represents approximately 30% growth over the first quarter of 2020.
Comments of Management
Shaike Orbach, Silicom’s President and CEO, commented, “We
are pleased to report another strong quarter, with above-guidance revenues driven primarily by our Smart Platforms and Smart Cards, the focus of our strategy for capitalizing on the industry’s powerful Decoupling and Disaggregation trends.
These are the trends we foresaw already a few years ago, and for which we have been building our strategy, capabilities and new product lines: advanced offerings that leverage our unique integrated expertise in networking, acceleration, FPGAs and
platforms.”
Mr. Orbach continued, “Today, the Decoupling and Disaggregation trends have become a reality in many market segments, including O-RAN
for mobile 5G infrastructure deployments, and we believe they will grow according to a strong, multi-year trajectory. These trends were the drivers behind our most recent 4G/5G related strategic announcements, our sale of SD-WAN and NFV Smart
Platforms to a variety of customers, and our sale of Smart Cards to a significant Cloud player. In parallel, with more and more telcos choosing the disaggregated/decoupled O-RAN approach for their new 4G/5G infrastructure deployments, there has been
an explosion of interest and demand for our differentiated solutions, which are recognized as key enablers. Both our recent FEC card win with a major telco and the Distributed Unit field trial that we are carrying out with another major telco confirm
the soundness of our strategy and the huge future potential of this emerging market.”
Mr. Orbach concluded, “We are extremely well positioned to take advantage of these opportunities. With a growing range of best-of-breed
products, close cooperations with Intel and leading software vendors, strong relationships with key industry players and excellent initial traction, we feel confident that
the Cloud, the Telco market for SD-WAN and NFV solutions, and the overall O-RAN-based mobile infrastructure market will be driving our growth throughout 2021 and far beyond.”
Conference Call Details
Silicom’s Management will host an interactive conference today, January 28th, 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: 1 866 860 9642
ISRAEL: 03 918 0609
INTERNATIONAL: +972 3 918 0609
At: 9:00am Eastern Time, 6:00am Pacific Time, 4:00pm Israel Time
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.
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, lease liabilities - financial expenses (income), as well as impairment of 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.
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
|
-- FINANCIAL TABLES FOLLOW –
|
Silicom Ltd. Consolidated Balance Sheets
|
|
(US$ thousands)
|
|
December 31,
|
December 31,
|
|||||||
|
2020
|
2019
|
|||||||
|
Assets
|
||||||||
|
Current assets
|
||||||||
|
Cash and cash equivalents
|
$
|
20,676
|
$
|
16,469
|
||||
|
Short-term bank deposits
|
5,000
|
13,542
|
||||||
|
Marketable securities
|
35,117
|
14,045
|
||||||
|
Accounts receivables: Trade, net
|
21,660
|
24,936
|
||||||
|
Accounts receivables: Other
|
6,126
|
4,964
|
||||||
|
Inventories
|
47,650
|
36,491
|
||||||
|
Total current assets
|
136,229
|
110,447
|
||||||
|
Marketable securities
|
15,281
|
46,542
|
||||||
|
Assets held for employees’ severance benefits
|
1,833
|
1,640
|
||||||
|
Deferred tax assets
|
1,790
|
1,798
|
||||||
|
Property, plant and equipment, net
|
4,110
|
3,574
|
||||||
|
Intangible assets, net
|
1,170
|
1,718
|
||||||
|
Right of Use
|
9,913
|
3,783
|
||||||
|
Goodwill
|
25,561
|
25,561
|
||||||
|
Total assets
|
$
|
195,887
|
$
|
195,063
|
||||
|
Liabilities and shareholders' equity
|
||||||||
|
Current liabilities
|
||||||||
|
Trade accounts payable
|
$
|
14,610
|
$
|
16,419
|
||||
|
Other accounts payable and accrued expenses
|
13,076
|
8,823
|
||||||
|
Lease Liabilities
|
1,813
|
1,090
|
||||||
|
Total current liabilities
|
29,499
|
26,332
|
||||||
|
Lease Liabilities
|
8,282
|
2,693
|
||||||
|
Liability for employees’ severance benefits
|
3,256
|
2,910
|
||||||
|
Deferred tax liabilities
|
13
|
205
|
||||||
|
Total liabilities
|
41,050
|
32,140
|
||||||
|
Shareholders' equity
|
||||||||
|
Ordinary shares and additional paid-in capital
|
60,139
|
57,152
|
||||||
|
Treasury shares
|
(24,807
|
)
|
(8,009
|
)
|
||||
|
Retained earnings
|
119,505
|
113,780
|
||||||
|
Total shareholders' equity
|
154,837
|
162,923
|
||||||
|
Total liabilities and shareholders' equity
|
$
|
195,887
|
$
|
195,063
|
||||
|
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,
|
|||||||||||||||
|
2020
|
2019
|
2020
|
2019
|
|||||||||||||
|
Sales
|
$
|
33,898
|
$
|
25,507
|
$
|
107,398
|
$
|
105,240
|
||||||||
|
Cost of sales
|
24,289
|
16,651
|
73,632
|
69,146
|
||||||||||||
|
Gross profit
|
9,609
|
8,856
|
33,766
|
36,094
|
||||||||||||
|
Research and development expenses
|
5,396
|
3,723
|
17,244
|
15,075
|
||||||||||||
|
Selling and marketing expenses
|
1,608
|
1,751
|
6,209
|
6,647
|
||||||||||||
|
General and administrative expenses
|
1,106
|
1,087
|
4,065
|
4,159
|
||||||||||||
|
Total operating expenses
|
8,110
|
6,561
|
27,518
|
25,881
|
||||||||||||
|
Operating income
|
1,499
|
2,295
|
6,248
|
10,213
|
||||||||||||
|
Financial income (loss), net
|
(575
|
)
|
560
|
1,034
|
1,646
|
|||||||||||
|
Income before income taxes
|
924
|
2,855
|
7,282
|
11,859
|
||||||||||||
|
Income taxes
|
78
|
432
|
1,557
|
1,623
|
||||||||||||
|
Net income
|
$
|
846
|
$
|
2,423
|
$
|
5,725
|
$
|
10,236
|
||||||||
|
Basic income per ordinary share (US$)
|
$
|
0.12
|
$
|
0.33
|
$
|
0.80
|
$
|
1.36
|
||||||||
|
Weighted average number of ordinary shares used to compute basic income per share (in thousands)
|
6,955
|
7,400
|
7,118
|
7,520
|
||||||||||||
|
Diluted income per ordinary share (US$)
|
$
|
0.12
|
$
|
0.33
|
$
|
0.80
|
$
|
1.35
|
||||||||
|
Weighted average number of ordinary shares used to compute diluted income per share (in thousands)
|
7,013
|
7,452
|
7,157
|
7,573
|
||||||||||||
|
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,
|
|||||||||||||||
|
2020
|
2019
|
2020
|
2019
|
|||||||||||||
|
GAAP gross profit
|
$
|
9,609
|
$
|
8,856
|
$
|
33,766
|
$
|
36,094
|
||||||||
|
(1) Share-based compensation (*)
|
127
|
107
|
535
|
437
|
||||||||||||
|
(2) Impairment of intangible assets
|
1,657
|
-
|
1,657
|
-
|
||||||||||||
|
Non-GAAP gross profit
|
$
|
11,393
|
$
|
8,963
|
$
|
35,958
|
$
|
36,531
|
||||||||
|
GAAP operating income
|
$
|
1,499
|
$
|
2,295
|
$
|
6,248
|
$
|
10,213
|
||||||||
|
Gross profit adjustments
|
1,784
|
107
|
2,192
|
437
|
||||||||||||
|
(1) Share-based compensation (*)
|
633
|
461
|
2,176
|
1,918
|
||||||||||||
|
Non-GAAP operating income
|
$
|
3,916
|
$
|
2,863
|
$
|
10,616
|
$
|
12,568
|
||||||||
|
GAAP net income
|
$
|
846
|
$
|
2,423
|
$
|
5,725
|
$
|
10,236
|
||||||||
|
Operating income adjustments
|
2,417
|
568
|
4,368
|
2,355
|
||||||||||||
|
(3) Lease liabilities - financial expenses (income)
|
625
|
-
|
625
|
-
|
||||||||||||
|
(4) Taxes on amortization of acquired intangible assets
|
68
|
68
|
270
|
(74
|
)
|
|||||||||||
|
Non-GAAP net income
|
$
|
3,956
|
$
|
3,059
|
$
|
10,988
|
$
|
12,517
|
||||||||
|
GAAP net income
|
$
|
846
|
$
|
2,423
|
$
|
5,725
|
$
|
10,236
|
||||||||
|
Adjustments for Non-GAAP Cost of sales
|
1,784
|
107
|
2,192
|
437
|
||||||||||||
|
Adjustments for Non-GAAP Research and development expenses
|
265
|
218
|
959
|
900
|
||||||||||||
|
Adjustments for Non-GAAP Selling and marketing expenses
|
186
|
118
|
602
|
493
|
||||||||||||
|
Adjustments for Non-GAAP General and administrative expenses
|
182
|
125
|
615
|
525
|
||||||||||||
|
Adjustments for Non-GAAP Financial income (loss), net
|
625
|
-
|
625
|
-
|
||||||||||||
|
Adjustments for Non-GAAP Income taxes
|
68
|
68
|
270
|
(74
|
)
|
|||||||||||
|
Non-GAAP net income
|
$
|
3,956
|
$
|
3,059
|
$
|
10,988
|
$
|
12,517
|
||||||||
|
GAAP basic income per ordinary share (US$)
|
$
|
0.12
|
$
|
0.33
|
$
|
0.80
|
$
|
1.36
|
||||||||
|
(1) Share-based compensation (*)
|
0.11
|
0.07
|
0.38
|
0.31
|
||||||||||||
|
(2) Impairment of intangible assets
|
0.24
|
-
|
0.23
|
-
|
||||||||||||
|
(3) Lease liabilities - financial expenses (income)
|
0.09
|
-
|
0.09
|
-
|
||||||||||||
|
(4) Acquisition-related adjustments
|
0.01
|
0.01
|
0.04
|
(0.01
|
)
|
|||||||||||
|
Non-GAAP basic income per ordinary share (US$)
|
$
|
0.57
|
$
|
0.41
|
$
|
1.54
|
$
|
1.66
|
||||||||
|
GAAP diluted income per ordinary share (US$)
|
$
|
0.12
|
$
|
0.33
|
$
|
0.80
|
$
|
1.35
|
||||||||
|
(1) Share-based compensation (*)
|
0.11
|
0.07
|
0.38
|
0.31
|
||||||||||||
|
(2) Impairment of intangible assets
|
0.23
|
-
|
0.23
|
-
|
||||||||||||
|
(3) Lease liabilities - financial expenses (income)
|
0.09
|
-
|
0.09
|
-
|
||||||||||||
|
(4) Acquisition-related adjustments
|
0.01
|
0.01
|
0.04
|
(0.01
|
)
|
|||||||||||
|
Non-GAAP diluted income per ordinary share (US$)
|
$
|
0.56
|
$
|
0.41
|
$
|
1.54
|
$
|
1.65
|
||||||||
|
(*) Adjustments related to share-based compensation expenses according to ASC topic 718 (SFAS 123 (R))
|
||||||||||||