- ~$13M positive operating
cash flow for the quarter
- Company announces new one-year $15m share buyback program
KFAR SAVA, Israel, May 2, 2024
/PRNewswire/ -- 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, 2024,
together with its progress to date executing the 5-Year Strategic
Plan announced on February
1st.
Financial Results
Silicom's revenues for the first quarter of 2024 totalled
$14.4 million compared with
$37.2 million for the first quarter
of 2023.
On a GAAP basis, the company's net loss for the quarter totalled
$(3.4) million, or $(0.55) per ordinary share (basic and diluted),
compared with net income of $3.5
million, or $0.52 per ordinary
share (basic and diluted), for the first quarter of 2023.
On a non-GAAP basis (as described and reconciled below), net
loss for the quarter totalled $(2.4)
million, or $(0.38) per
ordinary share (basic and diluted), compared with net income of
$4.2 million, or $0.61 per diluted share ($0.62 per basic share), for the first quarter of
2023.
Guidance
Management projects that revenues for the second quarter of 2024
will range from $15 million to
$17 million. We believe that excess
customer inventories and global economy headwinds will ease moving
forward through 2024, resulting in second half revenues that are
higher than those of the first half, and full-year revenues of
approximately $70 million.
Share Repurchase Plan
In addition, the Company today announced that its Board of
Directors has authorized a new one-year share buyback plan allowing
the Company to invest up to $15
million to repurchase its ordinary shares. This plan will
take effect as soon as the previously-announced $15 million one-year plan is completed. The
timing and actual number of shares repurchased will depend upon a
variety of factors, including share market price and general
business and market conditions. The plan authorizes management to
repurchase ordinary shares using a variety of methods, including
open market transactions in compliance with the rules of the US
Securities and Exchange Commission and other applicable legal
requirements. Repurchases will be funded from available working
capital. The 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. Management notes that its cash
balance provides sufficient working capital and financial
flexibility to weather the current environment while completing the
Company's current share buyback program and carrying out this new
one.
Comments of Management
Liron Eizenman, Silicom's
President and CEO, commented, "During the past three months,
execution of the first phase of our 5-Year Strategic Plan has
stabilized our operating expenses and strengthened our core
business platform. By discontinuing non-core programs and carrying
out a company-wide efficiency initiative, our operating expenses
are now at a level that will fully support our future growth
drivers and return us to profitability at projected revenue levels.
We are proud to have delivered an impressive $13 million positive operating cash flow during
this challenging quarter, demonstrating the strength and quality of
our working capital. We continue to aim for 20% compound average
annual growth from 2024 as a baseline, with Earnings Per Share
(EPS) increasing gradually to above $3 in 2028."
Mr. Eizenman continued, "At the same time, as part of our
re-focus on our Server Adapter and Edge solution portfolios, we are
investing significantly to develop two strategic new product
families aimed at expanding our leadership and revenues from some
of the market's highest growth segments. We have also implemented a
new sales compensation plan that has positively impacted our Design
Win pipeline, already bringing us an initial flow of new
small-to-medium Design Wins."
Mr. Eizenman concluded, "As a concrete indication of our
confidence, we continue to execute on our aggressive share buyback
program, and the Board has just approved a new repurchase plan for
the coming year. During the first quarter, we repurchased
approximately 250,000 shares, well ahead of our original schedule
for repurchasing 1.6 million shares by the end of 2025. We believe
this effort, coupled with our focus on the core and continued
strict discipline with expenses, will return us to growth and
profitability, creating significant shareholder value over the long
term."
Conference Call Details
Silicom's Management will host an interactive conference today,
May 2nd, 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, impairment of
goodwill, taxes on amortization and impairment of acquired
intangible assets, impairment of intangible assets and related
write-offs, 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 (loss), net income
(loss) 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, the speed and
extent to which Silicom's solutions are adopted by the relevant
markets, difficulty in commercializing and marketing of Silicom's
products and services, maintaining and protecting brand
recognition, protection of intellectual property, competition,
disruptions to its manufacturing, sales and marketing, development
and customer support activities, the impact of the wars in
Gaza and in the Ukraine, attacks on shipping by Huthis in the
Red Sea, rising inflation, rising interest rates and volatile
exchange rates, as well as any continuing or new effects resulting
from the COVID-19 pandemic, and the global economic
uncertainty, which may impact customer demand by encouraging
them to exercise greater caution and selectivity with their
short-term IT investment plans. The factors noted above are not
exhaustive.
Further information about the company's businesses, including
information about factors that could materially affect Silicom's
results of operations and financial condition, are 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 "expect," "should," "believe," "anticipate"
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.
Logo:
https://mma.prnewswire.com/media/733229/Silicom_Ltd_Logo.jpg
Company Contact:
Eran Gilad, CFO
Silicom Ltd.
+972-9-764-4555
erang@silicom.co.il
Investor Relations
Contact:
Ehud Helft
EK Global Investor Relations +1 212 378 8040
silicom@ekgir.com
- FINANCIAL TABLES FOLLOW -
Silicom Ltd.
Consolidated Balance Sheets
|
(US$
thousands)
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
2024
|
|
2023
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
61,148
|
|
$
|
46,972
|
Marketable
securities
|
|
4,978
|
|
|
7,957
|
Accounts receivables:
Trade, net
|
|
11,902
|
|
|
25,004
|
Accounts receivables:
Other
|
|
5,050
|
|
|
3,688
|
Inventories
|
|
46,292
|
|
|
51,507
|
Total current
assets
|
|
129,370
|
|
|
135,128
|
|
|
|
|
|
|
Marketable
securities
|
|
14,583
|
|
|
16,619
|
Assets held for
employees' severance benefits
|
|
1,294
|
|
|
1,357
|
Deferred tax
assets
|
|
2,290
|
|
|
2,359
|
Property, plant and
equipment, net
|
|
3,310
|
|
|
3,552
|
Intangible assets,
net
|
|
2,255
|
|
|
2,253
|
Right of
Use
|
|
6,121
|
|
|
6,466
|
Total
assets
|
$
|
159,223
|
|
$
|
167,734
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Trade accounts
payable
|
$
|
3,032
|
|
$
|
4,139
|
Other accounts payable
and accrued expenses
|
|
6,522
|
|
|
6,668
|
Lease
liabilities
|
|
1,792
|
|
|
2,070
|
|
|
|
|
|
|
Total current
liabilities
|
|
11,346
|
|
|
12,877
|
|
|
|
|
|
|
Lease
liabilities
|
|
3,648
|
|
|
3,877
|
Liability for
employees' severance benefits
|
|
2,616
|
|
|
2,672
|
Deferred tax
liabilities
|
|
130
|
|
|
46
|
|
|
|
|
|
|
Total
liabilities
|
|
17,740
|
|
|
19,472
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Ordinary shares and
additional paid-in capital
|
|
71,443
|
|
|
70,693
|
Treasury
shares
|
|
(47,728)
|
|
|
(43,631)
|
Retained
earnings
|
|
117,768
|
|
|
121,200
|
Total shareholders'
equity
|
|
141,483
|
|
|
148,262
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
|
159,223
|
|
$
|
167,734
|
Silicom Ltd.
Consolidated Statements of Operations
|
(US$ thousands, except
for share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-month
period
|
|
|
|
ended March
31,
|
|
|
|
|
|
2024
|
|
2023
|
Sales
|
|
|
|
|
|
|
$
|
14,365
|
|
$
|
37,181
|
Cost of
sales
|
|
|
|
|
|
|
|
10,326
|
|
|
25,396
|
Gross profit
|
|
|
|
|
|
|
|
4,039
|
|
|
11,785
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
|
|
|
|
|
|
4,921
|
|
|
5,138
|
Selling and marketing
expenses
|
|
|
|
|
|
|
|
1,520
|
|
|
1,503
|
General and
administrative expenses
|
|
|
|
|
|
|
|
1,061
|
|
|
1,093
|
Total operating
expenses
|
|
|
|
|
|
|
|
7,502
|
|
|
7,734
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
|
|
|
|
|
|
(3,463)
|
|
|
4,051
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income
(expenses), net
|
|
|
|
|
|
|
|
399
|
|
|
299
|
Income (loss) before
income taxes
|
|
|
|
|
|
|
|
(3,064)
|
|
|
4,350
|
Income taxes
|
|
|
|
|
|
|
|
368
|
|
|
813
|
Net income
(loss)
|
|
|
|
|
|
|
$
|
(3,432)
|
|
$
|
3,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per
ordinary share (US$)
|
|
|
|
|
|
|
$
|
(0.55)
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of ordinary shares used to
compute basic income (loss) per share (in thousands)
|
|
|
|
|
|
|
|
6,274
|
|
|
6,747
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss)
per ordinary share (US$)
|
|
|
|
|
|
|
$
|
(0.55)
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of ordinary shares used to
compute diluted income (loss) per share (in thousands)
|
|
|
|
|
|
|
|
6,274
|
|
|
6,848
|
Silicom Ltd.
Reconciliation of Non-GAAP Financial Results
|
(US$ thousands, except
for share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-month
period
|
|
|
|
|
|
|
|
|
ended March
31,
|
|
|
|
|
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
|
|
|
|
|
$
|
4,039
|
|
$
|
11,785
|
|
(1) Share-based
compensation (*)
|
|
|
|
|
|
|
|
61
|
|
|
114
|
|
Non-GAAP gross
profit
|
|
|
|
|
|
|
$
|
4,100
|
|
$
|
11,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income
(loss)
|
|
|
|
|
|
|
$
|
(3,463)
|
|
$
|
4,051
|
|
Gross profit
adjustments
|
|
|
|
|
|
|
|
61
|
|
|
114
|
|
(1) Share-based
compensation (*)
|
|
|
|
|
|
|
|
689
|
|
|
610
|
|
Non-GAAP operating
income (loss)
|
|
|
|
|
|
|
$
|
(2,713)
|
|
$
|
4,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
|
|
|
|
|
|
$
|
(3,432)
|
|
$
|
3,537
|
|
Operating income (loss)
adjustments
|
|
|
|
|
|
|
|
750
|
|
|
724
|
|
(2) Lease liabilities -
Financial expenses (income)
|
|
|
|
|
|
|
|
(43)
|
|
|
(168)
|
|
(3) Taxes on
amortization and impairment of acquired intangible
assets
|
|
|
|
|
|
|
|
353
|
|
|
68
|
|
Non-GAAP net income
(loss)
|
|
|
|
|
|
|
$
|
(2,372)
|
|
$
|
4,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
|
|
|
|
|
|
$
|
(3,432)
|
|
$
|
3,537
|
|
Adjustments for
Non-GAAP Cost of sales
|
|
|
|
|
|
|
|
61
|
|
|
114
|
|
Adjustments for
Non-GAAP Research and development expenses
|
|
|
|
|
|
|
|
313
|
|
|
306
|
|
Adjustments for
Non-GAAP Selling and marketing expenses
|
|
|
|
|
|
|
|
176
|
|
|
153
|
|
Adjustments for
Non-GAAP General and administrative expenses
|
|
|
|
|
|
|
|
200
|
|
|
151
|
|
Adjustments for
Non-GAAP Financial income (loss), net
|
|
|
|
|
|
|
|
(43)
|
|
|
(168)
|
|
Adjustments for
Non-GAAP Income taxes
|
|
|
|
|
|
|
|
353
|
|
|
68
|
|
Non-GAAP net income
(loss)
|
|
|
|
|
|
|
$
|
(2,372)
|
|
$
|
4,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic income
(loss) per ordinary share (US$)
|
|
|
|
|
|
|
$
|
(0.55)
|
|
$
|
0.52
|
|
(1) Share-based
compensation (*)
|
|
|
|
|
|
|
|
0.12
|
|
|
0.11
|
|
(2) Lease liabilities -
Financial expenses (income)
|
|
|
|
|
|
|
|
(0.01)
|
|
|
(0.02)
|
|
(3) Taxes on
amortization and impairment of acquired intangible
assets
|
|
|
|
|
|
|
|
0.06
|
|
|
0.01
|
|
Non-GAAP basic income
(loss) per ordinary share (US$)
|
|
|
|
|
|
|
$
|
(0.38)
|
|
$
|
0.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted income
(loss) per ordinary share (US$)
|
|
|
|
|
|
|
$
|
(0.55)
|
|
$
|
0.52
|
|
(1) Share-based
compensation (*)
|
|
|
|
|
|
|
|
0.12
|
|
|
0.11
|
|
(2) Lease liabilities -
Financial expenses (income)
|
|
|
|
|
|
|
|
(0.01)
|
|
|
(0.03)
|
|
(3) Taxes on
amortization and impairment of acquired intangible
assets
|
|
|
|
|
|
|
|
0.06
|
|
|
0.01
|
|
Non-GAAP diluted income
(loss) per ordinary share (US$)
|
|
|
|
|
|
|
$
|
(0.38)
|
|
$
|
0.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Adjustments related
to share-based compensation expenses according to ASC topic 718
(SFAS 123 (R))
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:https://www.prnewswire.com/news-releases/silicom-reports-q1-2024-results-and-progress-of-strategic-5-year-plan-302134376.html
SOURCE Silicom Ltd.