6-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K /A
AMENDMENT No. 1

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of January, 2006


SILICOM LTD.

(Translation of Registrant’s name into English)


8 Hanagar St., P.O.Box 2164, Kfar-Sava 44425, 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 x Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes o No x



Signature

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)


BY: /S/ Eran Gilad
——————————————
Eran Gilad
CFO

Dated: January 5th, 2006



Silicom Ltd.

(An Israeli Corporation)

and its Consolidated Subsidiary

Unaudited Interim Financial
Statements

September 30, 2005



Silicom Ltd. (An Israeli Corporation) and its Consolidated Subsidiary
 
Consolidated Unaudited Interim Financial Statements as of September 30, 2005


Contents

Page
Consolidated Unaudited Interim Financial Statements:  
Consolidated Unaudited Interim Balance Sheets 2-3
Consolidated Unaudited Interim Statements of Income 4
Consolidated Unaudited Interim Statements of Changes in Shareholders' Equity 5
Consolidated Unaudited Interim Statements of Cash Flows 6
Notes to the Condensed Unaudited Interim Consolidated Financial Statements 7-9



Silicom Ltd. (An Israeli Corporation) and its Consolidated Subsidiary
 
Consolidated Unaudited Interim Balance Sheets at September 30, 2005


September 30,
2005

December 31,
2004

U.S. dollars
in thousands

U.S. dollars
in thousands

Unaudited
Audited
 
Assets            
   
Current assets   
Cash and cash equivalents    1,707    1,086  
Investment securities    -    519  
Receivables:  
 Trade    1,566    741  
 Other    367    337  
Inventories    3,125    1,994  


   
Total current assets    6,765    4,677  


   
Investment securities     -    -  


   
Assets held for severance benefits     561    559  


   
Property, plant and equipment   
   
Cost    1,762    1,657  
Less - accumulated depreciation    1,533    1,425  


   
Net, property and equipment    229    232  


   
Other assets     50    57  


   
   
   
   
   
Total assets     7,605    5,525  





Silicom Ltd. (An Israeli Corporation) and its Consolidated Subsidiary
 
Consolidated Unaudited Interim Balance Sheets at September 30, 2005


September 30,
2005

December 31,
2004

U.S. dollars
in thousands

U.S. dollars
in thousands

Unaudited
Audited
Liabilities and shareholders' equity            
   
Current liabilities   
Trade accounts payable    1,677    1,008  
Other accounts payable and accrued expenses    892    522  


   
Total current liabilities    2,569    1,530  


   
Long-term liability   
   
Liability for employees severance benefits    963    957  


   
Total liabilities    3,532    2,487  


   
Commitments and contingencies   
   
   
Shareholders' equity   
 Share capital and additional paid in capital    5,838    5,652  
 Treasury shares    (38 )  (38 )
Retained deficit    (1,727 )  (2,576 )


   
Total shareholders' equity    4,073    3,038  


   
Total liabilities and shareholders' equity     7,605    5,525  





Silicom Ltd. (An Israeli Corporation) and its Consolidated Subsidiary
 
Consolidated Unaudited Interim Statements of Income for the Nine-month period Ended September 30, 2005


Three-month period
ended September 30,
Nine-month period
ended September 30,
2005
Unaudited

2004
Unaudited

2005
Unaudited

2004
Unaudited

 
Sales     $ 2,832   $ 1,235   $ 7,750   $ 2,978  
Cost of sales    1,688    770    4,652    2,045  




Gross profit    1,144    465    3,098    933  




   
Research and development costs,  
gross    395    414    1,163    1,222  
Less - royalty bearing participations    (27 )  (75 )  (71 )  (103 )




Research and development costs, net    368    339    1,092    1,119  
   
Selling and marketing expenses    216    182    662    513  
General and administrative    165    150    511    458  




     749    671    2,265    2,090  




   
Operating income (Loss)    395    (206 )  833    (1,157 )
   
Financial income (expenses), net    (11 )  (1 )  16    4  




Income (Loss) before taxes on income    384    (207 )  849    (1,153 )
Taxes on income    ---    ---    ---    ---  




Net income (Loss)   $ 384   $ (207 ) $ 849   $ (1,153 )




   
   
Basic income (Loss) per share   $ 0.09   $ (0.05 ) $ 0.20   $ (0.27 )




   
Weighted average number of shares  
outstanding - Basic EPS (in thousands)    4,276    4,199    4,241    4,199  




   
Diluted income (Loss) per share   $ 0.09   $ (0.05 ) $ 0.20   $ (0.27 )




   
Weighted average number of shares  
outstanding - Diluted EPS (in  
thousands)    4,402    4,199    4,349    4,199  







Silicom Ltd. (An Israeli Corporation) and its Consolidated Subsidiary
 
Consolidated Unaudited Interim Statements of Changes in Shareholders' Equity


Ordinary
shares

Share
capital

Additional
paid-in
capital

Cost of
Silicom
shares held
by its
subsidiary

Retained
earnings
(deficit)

Total
Numbers*
U.S. dollars in thousands
 
Balance at                            
 December 31, 2003     4,111,829    14    5,537    (38 )  (1,336 )  4,177  
   
Changes during 2004   
Ordinary shares issued  
 in connection with the  
 exercise of stock  
 options    86,750    -    101    -    -    101  
   
Net loss for the year    -    -    -    -    (1,240 )  (1,240 )






   
Balance at   
 December 31, 2004     4,198,579    14    5,638    (38 )  (2,576 )  3,038  






   
Changes during Nine-month   
period Ended September 30,   
2005     
Ordinary shares issued  
 in connection with the  
 exercise of stock  
 options       81,850     -     186     -     -     186  
   
Net Income for the Nine-month  
period Ended September 30, 2005       -     -     -     -     849     849  






   
Balance at   
 September 30, 2005, Unaudited       4,280,429     14     5,824     (38 )   (1,727 )   4,073  







* Net of 14,971 shares held by subsidiary.



Silicom Ltd. (An Israeli Corporation) and its Consolidated Subsidiary
 
Consolidated Unaudited Interim Statements of Cash Flows for the Nine-month period Ended September 30, 2005


Nine-month
period
ended
September
30,
2005

Nine-month
period
ended
September
30,
2004

Unaudited
Unaudited
Cash flows from operating activities            
Net Income (loss)    849    (1,153 )
Adjustments to reconcile net income to net cash   
 provided by operating activities:   
Depreciation and amortization of property, plant and  
 Equipment    115    117  
Severance, net    4    (6 )
Amortization of discounts or premium of  
 investment security and interest    (17 )  (11 )
   
Changes in operating assets and liabilities   
Decrease (increase) in trade receivables    (825 )  (295 )
Decrease (increase) in other receivables    (30 )  (51 )
Decrease (increase) in inventories    (1,131 )  (533 )
Increase (decrease) in trade payables and accruals    669    283  
Increase (decrease) in other payables and accruals    370    (20 )


Net cash used in operating activities    4    (1,669 )


   
Cash flows from investing activities   
Acquisition of property and equipment    (105 )  (72 )
Acquisition of other assets    -    -  
Proceeds from maturity of investment securities and deposits    536    1,460  
Purchase of investment securities and deposits    -    (1,165 )


Net cash provided by (used in) investing activities    431    223  


   
Cash flows from financing activities   
Issuance of ordinary shares in connection with the  
 exercise of stock options    186    101  


Net cash provided by financing activities    186    101  


   
Net increase (decrease) in cash and cash equivalents     621    (1,345 )
   
Cash and cash equivalents at beginning of year     1,086    1,811  


Cash and cash equivalents at end of year     1707    466  


   
Supplementary disclosure of cash flow information:   
 Cash paid during the year for:  
 Financing expenses    14    11  


Taxes on income    9    9  





Silicom Ltd. and its Consolidated Subsidiary
Notes to the Condensed Unaudited Interim Consolidated Financial Statements
(U.S.$ in thousands)

Note 1 – General

A. Description of Business

Silicom Ltd. (“Silicom”, “the Company”) was incorporated under the laws of Israel and commenced operations in 1987. Silicom is engaged in designing, manufacturing, marketing and supporting server networking solutions for manufacturers of security appliances, storage systems, internet traffic management systems, and other manufacturers providing a variety of server-based systems (“Server Networking Products”). Silicom also offers a broad range of customizable PC Cards, PCI cards and USB products.

B. Basis of Presentation

The accompanying condensed unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States for interim financial information [and contain all adjustments (consisting only of normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial information included therein]. It is suggested that these financial statements be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 20-F for the year ended December 31, 2004. Results for the interim period presented are not necessarily indicative of the results to be expected for the full year.

Note 2 – Significant Accounting Policies

A. Use of Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Note 3 – Inventories

September 30, 2005
December 31, 2004
(Unaudited) (Audited)
 
Raw materials and components     $ 1,102   $ 489  
Work in progress    1,947    1,442  
Finished goods    76    63  


    $ 3,125   $ 1,194  





Note 4 – Stock Compensation Plans

The Company applies the intrinsic value-based method of accounting prescribed by Accounting Principles Board (“APB”) Opinion No. 25 “Accounting for Stock Issued to Employees”, and related interpretations including FASB Interpretation No.44 “Accounting for certain transactions involving stock compensation an interpretation of APB Opinion No. 25" issued in March 2000, to account for its fixed plan stock options. Under this method, compensation expense is recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price.

The Company applies SFAS No. 123 with respect to options issued to persons other than employees. SFAS No. 123, “Accounting for Stock-Based Compensation,” established accounting and disclosure requirements using a fair value-based method of accounting for stock-based employee compensation plans. As allowed by SFAS No. 123, the Company has elected to continue to apply the intrinsic value-based method of accounting for grants to employees as described above, and has adopted the disclosure requirements of SFAS No. 123.

Pro forma information regarding net income and earnings per share is required by SFAS 123, and has been determined as if the Company had accounted for its employee stock options under the fair value method of this statement. Pro forma information is as follows:

Nine months ended
September 30,

2005
2004
(Unaudited) (Unaudited)
 
Net income (loss) as reported     $ 849   $ (1,153 )
Add: Compensation expense according to APB 25 included in  
reported net loss    -    -  
Deduct: Application of compensation expenses according to SFAS  
No. 123    (79 )  (142 )


Pro forma net income (loss)   $ 770   $ (1,295 )


Basic net income (loss) per share, As reported (US$)   $ 0.20   $ (0.27 )


Diluted net income (loss) per share, As reported (US$)   $ 0.20   $ (0.27 )


Pro forma Basic net income (loss) per share (US$)   $ 0.18   $ (0.31 )


Weighted average number of shares outstanding - Basic EPS (in  
thousands)    4,241    4,199  
 
Pro forma Diluted net income (loss) per share (US$)   $ 0.18   $ (0.31 )


Weighted average number of shares outstanding - Diluted EPS (in  
thousands)    4,349    4,199  



Note 5 – Subsequent Events

During December 2005, Silicom obtained approval to list its shares on the Tel Aviv Stock Exchange (TASE). Trading on the TASE commenced on December 27, 2005. Silicom’s shares continue to be listed on the Nasdaq and Silicom continues to be subject to all rules and regulations of Nasdaq and the U.S. Securities and Exchange Commission (SEC).

On January 3, 2006 the company filed a draft prospectus with the Israeli Securities Authority and the Tel Aviv Stock Exchange in connection with a contemplated underwritten offering to the public in Israel of Ordinary Shares or of a combination of Ordinary Shares and options convertible into Ordinary Shares. The offering would be made by Silicom only, and not by any selling shareholder. If the offering is completed, Silicom currently intends to raise up to a maximum amount of approximately $10 million from the offering, depending on market conditions. No final decision on an offering has been made and any offering is subject to the final approval of Silicom’s Board of Directors and to the publishing of a final prospectus with the approval of the Israeli Securities Authority.

The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States or to U.S. persons unless the securities are registered under the Act, or an exemption from the registration requirements of the Act is available.