Exhibit 99.1
FOR IMMEDIATE RELEASE
EARNINGS RELEASE
Silicom Reports Q1’23 Results:
$37.2M Revenues with $0.61 Non-GAAP EPS
$37.2M Revenues with $0.61 Non-GAAP EPS
- Leveraged business model continues to prove itself:
non-GAAP EPS up 38% on 16% revenue growth –
non-GAAP EPS up 38% on 16% revenue growth –
- Company announces share buyback of up to $15 million -
KFAR SAVA, Israel, May 1, 2023 - Silicom Ltd.
(NASDAQ: SILC), a leading provider of high-performance networking and data infrastructure solutions, today reported its financial results for the first quarter ended
March 31, 2023.
Financial Results
Silicom’s revenues for the first quarter of 2023 totalled $37.2 million, up 16% compared with $32.1 million for the first quarter of
2022.
On a GAAP basis, net income for the quarter totalled $3.5 million, or $0.52 per share (basic and diluted), up 63% compared with $2.2
million, or $0.32 per diluted share ($0.33 per basic share), for the first quarter of 2022.
On a non-GAAP basis (as described and reconciled below), net income for the quarter totalled $4.2 million, or $0.61 per diluted share
($0.62 per basic share), up 38% compared with $3.0 million, or $0.44 per diluted share ($0.45 per basic share), for the first quarter of 2022.
Guidance
Management projects that the Company’s revenues for the second quarter of 2023 will range between $38 million and $39 million. The midpoint of this range
represents 13% year-over-year growth compared with the second quarter of 2022 and solid double-digit year-over-year growth for the first half of 2023.
Share Repurchase Plan
The Company’s Board of Directors today announced that it has authorized a new one year share repurchase plan that will allow the
Company to invest up to $15 million in the repurchase of its ordinary shares. The timing and actual number of shares repurchased will be determined in consideration of share’s current price, general business/market conditions and other factors. The
plan authorizes management to repurchase its ordinary shares using open market purchases or other methods that are compliant with the rules of the US Securities and Exchange Commission and other applicable legal requirements. Repurchases will be
funded from the Company’s available working capital. The share repurchase plan does not obligate Silicom to buy back any specific number of shares and may be suspended or terminated at any time at management’s discretion.
Comments of Management
Liron Eizenman, Silicom’s President and CEO, commented, “We are pleased to report a strong Q1 with 16% growth in revenues and 38% growth in our EPS
demonstrating the benefit of our leveraged business model. With ongoing profitability and strong cash flow, we have renewed our share buyback program, a clear demonstration of our confidence in our business strategy and our commitment to create
shareholder value.”
Mr. Eizenman continued, “In fact, we continue to experience high demand for our unique Edge Networking solutions. During the quarter, we announced three
strategic new Edge design wins from leading SD-WAN, SASE and Unified Communication players, each confirming our positioning as the market’s Edge Platform Provider of Choice. Our full-service value proposition, including best-in-class products, rapid
customization/delivery capabilities and uncompromising support, are bringing us a broad range of customers, many of which turn to us to help them overcome the challenges of transitioning to the Edge Platform paradigm. With each new win and product
enhancement, our reputation strengthens, positioning us to benefit strongly from the continued growth of Edge Networking demand, which we expect to serve as our primary growth driver for the next several years.
“At the same time, the two recent NIC design wins from a cyber security giant that we announced just last week, both of which are critical to the performance
of the customer’s solutions, demonstrate the ongoing power of our traditional product lines to continue playing an important role in our growth.”
Mr. Eizenman concluded, “Given the strong growth of our target markets, our expanding total addressable market, our proven design win momentum and the
leverage inherent in our business model, we believe we are positioned for continued growth in both revenues and profits.”
***
Conference Call Details
Silicom’s Management will host an interactive conference today, May 1st, at 9am Eastern Time (6am Pacific Time, 4pm Israel Time) to review and discuss the results.
Silicom’s Management will host an interactive conference today, May 1st, 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
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 (the "SEC") 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, sales & marketing, development and customer support activities, the impact of the war in Ukraine, rising inflation, rising interest rates, volatile exchange rates and commodities’ prices, as well as any continuing or new effects
resulting from the COVID-19 pandemic, and the global economy uncertainty which may impact customer demand through their exercising greater caution and selectivity with their short-term IT investment plans, as well as those other factors discussed
in our Annual Report on Form 20-F and other documents filed by the Company and that may be subsequently filed by the company from time to time with the SEC. 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)
|
|
March 31,
|
December 31,
|
|||||||
|
2023
|
2022
|
|||||||
|
Assets
|
||||||||
|
Current assets
|
||||||||
|
Cash and cash equivalents
|
$
|
28,523
|
$
|
30,734
|
||||
|
Marketable securities
|
8,213
|
4,020
|
||||||
|
Accounts receivables: Trade, net
|
30,280
|
27,258
|
||||||
|
Accounts receivables: Other
|
3,687
|
3,620
|
||||||
|
Inventories
|
83,417
|
87,985
|
||||||
|
Total current assets
|
154,120
|
153,617
|
||||||
|
Marketable securities
|
16,742
|
15,163
|
||||||
|
Assets held for employees’ severance benefits
|
1,674
|
1,715
|
||||||
|
Deferred tax assets
|
317
|
502
|
||||||
|
Property, plant and equipment, net
|
4,234
|
4,488
|
||||||
|
Intangible assets, net
|
6,914
|
6,710
|
||||||
|
Right of Use
|
8,063
|
8,441
|
||||||
|
Goodwill
|
25,561
|
25,561
|
||||||
|
Total assets
|
$
|
217,625
|
$
|
216,197
|
||||
|
Liabilities and shareholders' equity
|
||||||||
|
Current liabilities
|
||||||||
|
Trade accounts payable
|
$
|
16,108
|
$
|
15,922
|
||||
|
Other accounts payable and accrued expenses
|
6,610
|
9,641
|
||||||
|
Lease Liabilities
|
2,148
|
1,549
|
||||||
|
Total current liabilities
|
24,866
|
27,112
|
||||||
|
Lease Liabilities
|
5,177
|
6,291
|
||||||
|
Liability for employees’ severance benefits
|
3,369
|
3,425
|
||||||
|
Deferred tax liabilities
|
82
|
74
|
||||||
|
Total liabilities
|
33,494
|
36,902
|
||||||
|
Shareholders' equity
|
||||||||
|
Ordinary shares and additional paid-in capital
|
67,279
|
66,578
|
||||||
|
Treasury shares
|
(34,298
|
)
|
(34,896
|
)
|
||||
|
Retained earnings
|
151,150
|
147,613
|
||||||
|
Total shareholders' equity
|
184,131
|
179,295
|
||||||
|
Total liabilities and shareholders' equity
|
$
|
217,625
|
$
|
216,197
|
||||
|
Silicom Ltd. Consolidated Statements of Operations
|
|||||||||||
|
(US$ thousands, except for share and per share data)
|
|
Three-month period
|
||||||||
|
ended March 31,
|
||||||||
|
2023
|
2022
|
|||||||
|
Sales
|
$
|
37,181
|
$
|
32,070
|
||||
|
Cost of sales
|
25,396
|
21,180
|
||||||
|
Gross profit
|
11,785
|
10,890
|
||||||
|
Research and development expenses
|
5,138
|
5,478
|
||||||
|
Selling and marketing expenses
|
1,503
|
1,783
|
||||||
|
General and administrative expenses
|
1,093
|
1,197
|
||||||
|
Total operating expenses
|
7,734
|
8,458
|
||||||
|
Operating income
|
4,051
|
2,432
|
||||||
|
Financial income (loss), net
|
299
|
341
|
||||||
|
Income before income taxes
|
4,350
|
2,773
|
||||||
|
Income taxes
|
813
|
600
|
||||||
|
Net income
|
$
|
3,537
|
$
|
2,173
|
||||
|
Basic income per ordinary share (US$)
|
$
|
0.52
|
$
|
0.33
|
||||
|
Weighted average number of ordinary shares used to compute basic income per share (in thousands)
|
6,747
|
6,682
|
||||||
|
Diluted income per ordinary share (US$)
|
$
|
0.52
|
$
|
0.32
|
||||
|
Weighted average number of ordinary shares used to compute diluted income per share (in thousands)
|
6,848
|
6,829
|
||||||
|
Silicom Ltd. Reconciliation of Non-GAAP Financial Results
|
||||||||||||
|
(US$ thousands, except for share and per share data)
|
|
Three-month period
|
||||||||
|
ended March 31,
|
||||||||
|
2023
|
2022
|
|||||||
|
GAAP gross profit
|
$
|
11,785
|
$
|
10,890
|
||||
|
(1) Share-based compensation (*)
|
114
|
161
|
||||||
|
Non-GAAP gross profit
|
$
|
11,899
|
$
|
11,051
|
||||
|
GAAP operating income
|
$
|
4,051
|
$
|
2,432
|
||||
|
Gross profit adjustments
|
114
|
161
|
||||||
|
(1) Share-based compensation (*)
|
610
|
785
|
||||||
|
Non-GAAP operating income
|
$
|
4,775
|
$
|
3,378
|
||||
|
GAAP net income
|
$
|
3,537
|
$
|
2,173
|
||||
|
Operating income adjustments
|
724
|
946
|
||||||
|
(2) Lease liabilities - financial expenses (income)
|
(168
|
)
|
(186
|
)
|
||||
|
(3) Taxes on amortization of acquired intangible assets
|
68
|
68
|
||||||
|
Non-GAAP net income
|
$
|
4,161
|
$
|
3,001
|
||||
|
GAAP net income
|
$
|
3,537
|
$
|
2,173
|
||||
|
Adjustments for Non-GAAP Cost of sales
|
114
|
161
|
||||||
|
Adjustments for Non-GAAP Research and development expenses
|
306
|
375
|
||||||
|
Adjustments for Non-GAAP Selling and marketing expenses
|
153
|
208
|
||||||
|
Adjustments for Non-GAAP General and administrative expenses
|
151
|
202
|
||||||
|
Adjustments for Non-GAAP Financial income (loss), net
|
(168
|
)
|
(186
|
)
|
||||
|
Adjustments for Non-GAAP Income taxes
|
68
|
68
|
||||||
|
Non-GAAP net income
|
$
|
4,161
|
$
|
3,001
|
||||
|
GAAP basic income per ordinary share (US$)
|
$
|
0.52
|
$
|
0.33
|
||||
|
(1) Share-based compensation (*)
|
0.11
|
0.14
|
||||||
|
(2) Lease liabilities - financial expenses (income)
|
(0.02
|
)
|
(0.03
|
)
|
||||
|
(3) Taxes on amortization of acquired intangible assets
|
0.01
|
0.01
|
||||||
|
Non-GAAP basic income per ordinary share (US$)
|
$
|
0.62
|
$
|
0.45
|
||||
|
GAAP diluted income per ordinary share (US$)
|
$
|
0.52
|
$
|
0.32
|
||||
|
(1) Share-based compensation (*)
|
0.11
|
0.14
|
||||||
|
(2) Lease liabilities - financial expenses (income)
|
(0.03
|
)
|
(0.03
|
)
|
||||
|
(3) Taxes on amortization of acquired intangible assets
|
0.01
|
0.01
|
||||||
|
Non-GAAP diluted income per ordinary share (US$)
|
$
|
0.61
|
$
|
0.44
|
||||
(*) Adjustments related to share-based compensation expenses according to ASC topic 718 (SFAS 123 (R))