For the month of January, 2006
(Translation of Registrants name into English)
(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:
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:
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 |
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)
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 Companys 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.
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.
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 | |||||
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 |
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. Silicoms 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 Silicoms 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.