- Q3 Revenues Up 19% to $39.2M with $1.01
Non-GAAP EPS –
KFAR SAVA, Israel, Oct. 31,
2022 /PRNewswire/ -- Silicom Ltd. (NASDAQ:
SILC), a leading provider of high-performance server/appliance
networking solutions, today reported its financial results for the
third quarter and nine months ended September 30, 2022.
Financial Results
Third Quarter: Silicom's revenues for the third
quarter of 2022 totalled $39.2
million, up 19% compared with $32.9
million for the third quarter of 2021.
On a GAAP basis, net income for the quarter totalled
$6.0 million, or $0.88 per diluted share ($0.89 per basic share), up 129% compared with
$2.6 million, or $0.38 per diluted share ($0.39 per basic share), for the third quarter of
2021.
On a non-GAAP basis (as described and reconciled below), net
income for the quarter totalled $6.9
million, or $1.01 per diluted
share ($1.02 per basic share), up 91%
compared with $3.6 million, or
$0.52 per diluted share ($0.53 per basic share), for the third quarter of
2021.
First Nine Months: Silicom's revenues for the
first nine months of 2022 totalled $105.4
million, up 14% compared with $92.2
million for the first nine months of 2021.
On a GAAP basis, net income for the period totalled $12.7 million, or $1.87 per diluted share ($1.90 per basic share), up 75% compared with
$7.2 million, or $1.04 per diluted share ($1.06 per basic share) for the first nine months
of 2021.
On a non-GAAP basis (as described and reconciled below), net
income for the period totalled $14.6
million, or $2.15 per diluted
share ($2.18 per basic share), up 53%
compared with $9.5 million, or
$1.36 per diluted share ($1.39 per basic share) for the first nine months
of 2021.
Guidance
While multiple design wins continue to drive high demand for our
products, our ability to deliver continues to be impacted to some
extent by the global components crisis, which, despite signs of
some lessening, is still expected to continue into 2023. We
therefore project revenues for the fourth quarter of 2022 to range
between $43 million and $45 million. The midpoint of this range
represents 21% year-over-year revenue growth over the fourth
quarter of 2021.
Comments of Management
Liron Eizenman, Silicom's
President and CEO, commented, "We are very pleased to
report another quarter of strong revenues, margins and profit
growth, a clear demonstration of the power of our business model.
The significant leverage inherent in the model pushed our operating
margin to an impressive 18.4% for the quarter, and boosted our EPS
to above $1, a 45% increase over Q2.
While the ongoing components crisis has impacted our revenues to
some extent, our ability to maintain a relatively high delivery
rate worked to our benefit with both existing and new
customers."
Mr. Eizenman continued, "In fact, we have never experienced
demand at this level, or from such a broad variety of market
players, resulting in a significant increase in our total
addressable market. Once our Edge products, which we developed
initially for the SD-WAN market, became a clear growth driver for
us, we realized that the same products are attractive for many more
applications and markets, with performance, cost and flexibility
advantages that they too need to actualize their roadmap. Now,
telcos, service providers, appliance vendors and cloud players are
using Silicom Edge products for applications as disparate as
Virtual CPE (uCPE), telco-dedicated routing, Secure Access Services
Edge (SASE) services and more.
"As a result, we now have a record pipeline of Design Wins and
opportunities, and interest from potential new customers continues
to grow. For example, during the quarter we closed an initial order
with a leading SASE cybersecurity solution provider, who tells us
that the 'package' we offer - the combination of product
functionality, price, rapid customization capabilities and support
– is exactly what they need for their next-generation systems and
applications."
Mr. Eizenman concluded, "With our total addressable market
larger than ever, a record pipeline and stronger-than-ever
momentum, we have never been better positioned and look forward to
multi-year expansion."
***
Conference Call Details
Silicom's Management will host an interactive conference today,
October 31st, at
9am Eastern Time (6am Pacific Time, 3pm 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, 3:00pm 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 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:
erang@silicom.co.il
|
Investor Relations
Contact:
Ehud
Helft
EK Global Investor
Relations
Tel: +1 212 378
8040
E-mail:
silicom@ekgir.com
|
-- FINANCIAL TABLES FOLLOW –
Silicom Ltd.
Consolidated Balance Sheets
|
(US$
thousands)
|
|
|
September
30,
|
|
December
31,
|
|
2022
|
|
2021
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
21,233
|
|
$
|
29,285
|
Marketable
securities
|
|
6,786
|
|
|
8,266
|
Accounts receivables:
Trade, net
|
|
25,575
|
|
|
31,120
|
Accounts receivables:
Other
|
|
6,465
|
|
|
4,693
|
Inventories
|
|
92,505
|
|
|
75,753
|
Total current
assets
|
|
152,564
|
|
|
149,117
|
|
|
|
|
|
|
Marketable
securities
|
|
15,231
|
|
|
23,773
|
Assets held for
employees' severance benefits
|
|
1,803
|
|
|
1,882
|
Deferred tax
assets
|
|
1,325
|
|
|
1,616
|
Property, plant and
equipment, net
|
|
4,582
|
|
|
4,576
|
Intangible assets,
net
|
|
6,485
|
|
|
4,314
|
Right of
Use
|
|
8,816
|
|
|
8,765
|
Goodwill
|
|
25,561
|
|
|
25,561
|
Total
assets
|
$
|
216,367
|
|
$
|
219,604
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Trade accounts
payable
|
$
|
19,496
|
|
$
|
29,918
|
Other accounts payable
and accrued expenses
|
|
13,330
|
|
|
18,582
|
Lease
Liabilities
|
|
1,576
|
|
|
1,811
|
|
|
|
|
|
|
Total current
liabilities
|
|
34,402
|
|
|
50,311
|
|
|
|
|
|
|
Lease
Liabilities
|
|
6,554
|
|
|
7,377
|
Liability for
employees' severance benefits
|
|
3,169
|
|
|
3,443
|
Deferred tax
liabilities
|
|
71
|
|
|
10
|
|
|
|
|
|
|
Total
liabilities
|
|
44,196
|
|
|
61,141
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Ordinary shares and
additional paid-in capital
|
|
64,951
|
|
|
63,412
|
Treasury
shares
|
|
(35,511)
|
|
|
(34,995)
|
Retained
earnings
|
|
142,731
|
|
|
130,046
|
Total shareholders'
equity
|
|
172,171
|
|
|
158,463
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
|
216,367
|
|
$
|
219,604
|
Silicom Ltd.
Consolidated Statements of Operations
|
(US$ thousands, except
for share and per share data)
|
|
Three-month
period
|
|
Nine-month
period
|
|
ended September
30,
|
|
ended September
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Sales
|
$
|
39,165
|
|
$
|
32,878
|
|
$
|
105,389
|
|
$
|
92,157
|
Cost of
sales
|
|
25,210
|
|
|
21,720
|
|
|
68,422
|
|
|
60,315
|
Gross profit
|
|
13,955
|
|
|
11,158
|
|
|
36,967
|
|
|
31,842
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
4,752
|
|
|
4,999
|
|
|
15,487
|
|
|
14,989
|
Selling and marketing
expenses
|
|
1,799
|
|
|
1,580
|
|
|
5,181
|
|
|
4,749
|
General and
administrative expenses
|
|
1,107
|
|
|
1,152
|
|
|
3,435
|
|
|
3,401
|
Total operating
expenses
|
|
7,658
|
|
|
7,731
|
|
|
24,103
|
|
|
23,139
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
6,297
|
|
|
3,427
|
|
|
12,864
|
|
|
8,703
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income
(loss), net
|
|
525
|
|
|
(130)
|
|
|
2,025
|
|
|
404
|
Income before income
taxes
|
|
6,822
|
|
|
3,297
|
|
|
14,889
|
|
|
9,107
|
Income taxes
|
|
834
|
|
|
679
|
|
|
2,204
|
|
|
1,860
|
Net income
|
$
|
5,988
|
|
$
|
2,618
|
|
$
|
12,685
|
|
$
|
7,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
ordinary share (US$)
|
$
|
0.89
|
|
$
|
0.39
|
|
$
|
1.90
|
|
$
|
1.06
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of ordinary shares used to
compute basic income per share (in thousands)
|
|
6,711
|
|
|
6,795
|
|
|
6,686
|
|
|
6,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per
ordinary share (US$)
|
$
|
0.88
|
|
$
|
0.38
|
|
$
|
1.87
|
|
$
|
1.04
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of ordinary shares used to
compute diluted income per share (in thousands)
|
|
6,793
|
|
|
6,931
|
|
|
6,790
|
|
|
6,996
|
Silicom Ltd.
Reconciliation of Non-GAAP Financial Results
|
(US$ thousands, except
for share and per share data)
|
|
Three-month
period
|
|
Nine-month
period
|
|
ended September
30,
|
|
ended September
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
$
|
13,955
|
|
$
|
11,158
|
|
$
|
36,967
|
|
$
|
31,842
|
(1) Share-based
compensation (*)
|
|
145
|
|
|
120
|
|
|
479
|
|
|
358
|
Non-GAAP gross
profit
|
$
|
14,100
|
|
$
|
11,278
|
|
$
|
37,446
|
|
$
|
32,200
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
|
6,297
|
|
$
|
3,427
|
|
$
|
12,864
|
|
$
|
8,703
|
Gross profit
adjustments
|
|
145
|
|
|
120
|
|
|
479
|
|
|
358
|
(1) Share-based
compensation (*)
|
|
756
|
|
|
649
|
|
|
2,224
|
|
|
1,734
|
Non-GAAP operating
income
|
$
|
7,198
|
|
$
|
4,196
|
|
$
|
15,567
|
|
$
|
10,795
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
|
5,988
|
|
$
|
2,618
|
|
$
|
12,685
|
|
$
|
7,247
|
Operating income
adjustments
|
|
901
|
|
|
769
|
|
|
2,703
|
|
|
2,092
|
(2) Lease liabilities -
financial expenses (income)
|
|
(95)
|
|
|
132
|
|
|
(1,015)
|
|
|
(42)
|
(3) Taxes on
amortization of acquired intangible assets
|
|
68
|
|
|
67
|
|
|
203
|
|
|
200
|
Non-GAAP net
income
|
$
|
6,862
|
|
$
|
3,586
|
|
$
|
14,576
|
|
$
|
9,497
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
|
5,988
|
|
$
|
2,618
|
|
$
|
12,685
|
|
$
|
7,247
|
Adjustments for
Non-GAAP Cost of sales
|
|
145
|
|
|
120
|
|
|
479
|
|
|
358
|
Adjustments for
Non-GAAP Research and development expenses
|
|
344
|
|
|
275
|
|
|
1,092
|
|
|
736
|
Adjustments for
Non-GAAP Selling and marketing expenses
|
|
203
|
|
|
191
|
|
|
574
|
|
|
506
|
Adjustments for
Non-GAAP General and administrative expenses
|
|
209
|
|
|
183
|
|
|
558
|
|
|
492
|
Adjustments for
Non-GAAP Financial income (loss), net
|
|
(95)
|
|
|
132
|
|
|
(1,015)
|
|
|
(42)
|
Adjustments for
Non-GAAP Income taxes
|
|
68
|
|
|
67
|
|
|
203
|
|
|
200
|
Non-GAAP net
income
|
$
|
6,862
|
|
$
|
3,586
|
|
$
|
14,576
|
|
$
|
9,497
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic income per
ordinary share (US$)
|
$
|
0.89
|
|
$
|
0.39
|
|
$
|
1.90
|
|
$
|
1.06
|
(1) Share-based
compensation (*)
|
|
0.13
|
|
|
0.11
|
|
|
0.40
|
|
|
0.30
|
(2) Lease liabilities -
financial expenses (income)
|
|
(0.01)
|
|
|
0.02
|
|
|
(0.15)
|
|
|
-
|
(3) Taxes on
amortization of acquired intangible assets
|
|
0.01
|
|
|
0.01
|
|
|
0.03
|
|
|
0.03
|
Non-GAAP basic income
per ordinary share (US$)
|
$
|
1.02
|
|
$
|
0.53
|
|
$
|
2.18
|
|
$
|
1.39
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted income per
ordinary share (US$)
|
$
|
0.88
|
|
$
|
0.38
|
|
$
|
1.87
|
|
$
|
1.04
|
(1) Share-based
compensation (*)
|
|
0.13
|
|
|
0.11
|
|
|
0.40
|
|
|
0.30
|
(2) Lease liabilities -
financial expenses (income)
|
|
(0.01)
|
|
|
0.02
|
|
|
(0.15)
|
|
|
(0.01)
|
(3) Taxes on
amortization of acquired intangible assets
|
|
0.01
|
|
|
0.01
|
|
|
0.03
|
|
|
0.03
|
Non-GAAP diluted income
per ordinary share (US$)
|
$
|
1.01
|
|
$
|
0.52
|
|
$
|
2.15
|
|
$
|
1.36
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Adjustments related
to share-based compensation expenses according to ASC topic 718
(SFAS 123 (R))
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content:https://www.prnewswire.com/news-releases/silicom-reports-q3-2022-financial-results-301663245.html
SOURCE Silicom Ltd.