zk1110535.htm


 
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

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

THE SECURITIES EXCHANGE ACT OF 1934

For the month of October, 2011

________________


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
 
 
 

 
 
Attached hereto and incorporated by reference herein is Registrant's press release dated October 24th, 2011 announcing Registrant's third quarter financial results.
 
This report on Form 6-K is incorporated by reference into all effective registration statements filed by the Registrant under the Securities Act of 1933.
 
 
 

 
 
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:  October 24th, 2011

 
 

 



FOR IMMEDIATE RELEASE

EARNINGS RELEASE

SILICOM CONTINUES TO BREAK NEW GROUND IN
Q3 2011: ACHIEVES ALL-TIME RECORDS OF $10M IN
REVENUES, $0.32 NON-GAAP EPS AND $2.2M NET
PROFIT
 
KFAR SAVA, Israel, October 24, 2011 -- Silicom Ltd. (NASDAQ: SILC, TASE: SILC), an industry-leading provider of high-performance server/appliances networking solutions, today reported record financial results for the third quarter and first nine months ended September 30, 2011.
 
Financial Results
 
Financial results for Q3 2011: For the third quarter of 2011, Silicom’s financial results broke all previous records in terms of revenues, operating income, net income and earnings per share (EPS).
 
Revenues for the quarter reached $10.0 million, a 36% increase compared with $7.4 million in the third quarter of 2010.
 
On a GAAP basis, reported net income for the quarter totalled $2.1 million, or $0.30 per diluted share ($0.31 per basic share), up 46% from the $1.4 million, or $0.21 per basic and diluted share, recorded in the third quarter of 2010.
 
On a non-GAAP basis, which excludes non-cash share-based compensation, as described and reconciled below, net income for the period totalled $2.2 million, or $0.32 per diluted and basic share. This is up 48% compared with $1.5 million, or $0.21 per diluted share ($0.22 per basic share) in the third quarter of 2010.
 
Financial results for the first nine months of 2011: Silicom’s revenues for the first nine months of 2011 increased by 39% to $28.6 million from $20.5 million in the first nine months of 2010.
 
On a GAAP basis, the Company’s reported net income for the period totalled $5.8 million, or $0.83 per diluted share ($0.85 per basic share), up 55% from $3.8 million, or $0.54 per diluted share ($0.55 per basic share) in the first nine months of 2010.
 
 
 

 
 
On a non-GAAP basis, which excludes non-cash share-based compensation, as described and reconciled below, net income for the period totalled $6.2 million, or $0.88 per diluted share ($0.90 per basic share). This is up 57% compared with $3.9 million, or $0.57 per diluted share ($0.58 per basic share) in the first nine months of 2010.
 
As of September 30, 2011, the Company’s cash, cash equivalents, bank deposits and marketable securities totalled $47.4 million, or $6.87 per outstanding share, up $1.6 million from the $45.8 million recorded at the end of 2010.
 
Comments of Management
 
Commenting on the results, Shaike Orbach, President and CEO, said, “Our record performance during the third quarter reflects the continued strong growth of sales for both established and new product lines. We are proud to have broken through the $10 million revenue threshold, a milestone that puts us into a different league and positions us to achieve aggressive growth targets in the future.
 
“In addition, we are excited by the recent decision of a top-tier networking giant to standardize on our SETAC as a front-end connectivity solution for its network appliances. First, this deal in and of itself has the potential to become a multi-million dollar per year deal contributor. Equally important, the fact that such an industry giant has standardized on our SETAC concept is a sign that it is becoming an accepted market trend and a solution-of-choice for the building of next-generation appliances. In parallel, the fact that we achieved another major Design Win for our connectivity adapter cards from a Fortune-100 server manufacturer demonstrates the ongoing revenue-generating potential of our established product lines.”
 
Mr. Orbach continued, “This confirms the potential of our business model based on the provision of critical solutions for the pain-points of fast-growing industries, and the development of long-term relationships with the industry giants. Our reputation for excellence, speed, insight and service has succeeded in bringing us over 75 OEM customers so far, each of which continues to contribute to our long-term growth. With strong demand for all of our product lines, exciting strategic wins with some of the industry’s most important players, fruitful discussions in process and an extensive pipeline of potential sales, we have never been better positioned or more optimistic regarding the future.”
 
##
 
Conference Call Details
 
Silicom’s Management will host an interactive conference today, October 24th, at 9am Eastern Time (6am Pacific Time, 3pm Israel Time) to review and discuss the results.
 
To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, try the international dial-in number.
 
US: 1 888 407 2553
 
UK: 0 800 917 5108
 
ISRAEL: 03 918 0610
 
INTERNATIONAL:  +972 3 918 0610
 
At: 9:00am Eastern Time, 6:00am Pacific Time, 3:00pm Israel Time
 
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 investor relations 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 granted to directors, officers and employees. 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 solutions designed to increase the throughput and availability of networking appliances and server-based systems.
 
Silicom’s large and growing base of OEM customers includes most of the market-leading players in the areas of WAN Optimization, Security and other mission-critical gateway applications. Silicom’s products include a variety of multi-port 1/10 Gigabit Ethernet server adapters, innovative internal and external BYPASS solutions and advanced Smart adapters, including SSL encryption solutions and Redirector adapters.
 
In addition, Silicom's patent-pending new SETAC (Server To Appliance Converter) product family is a unique solution that enables standard servers to be configured as network appliances with high-density front networking ports and no-hassle port modularity.
 
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, those detailed in the Company's periodic filings with the Securities and Exchange Commission. The Company disclaims any duty to update such statements.
 
Company Contact:
Eran Gilad, CFO
Silicom Ltd.
Tel: +972-9-764-4555
E-mail: erang@silicom.co.il
Investor relations contact:
Kenny Green / Ehud Helft
CCG Israel Investor Relations
Tel: +1 646 201 9246
E-mail : silicom@ccgisrael.com
 
-- FINANCIAL TABLES FOLLOW --
 
 
 

 
 
Silicom Ltd. Consolidated Balance Sheets
 
(US$ thousands)
 
   
September 30, 
2011
   
December 31,
2010
 
Assets
           
             
Current assets
           
Cash and cash equivalents
  $ 5,212     $ 6,657  
Short-term bank deposits
    7,604       9,209  
Marketable securities
    9,099       8,162  
Accounts receivables: Trade, net
    8,270       6,762  
Accounts receivables: Other
    667       555  
Inventories
    11,902       8,140  
Deferred tax assets
    48       50  
Total current assets
    42,802       39,535  
                 
Marketable securities
    25,454       21,773  
Assets held for employees’ severance benefits
    1,296       1,302  
Deferred tax assets
    140       219  
Property, plant and equipment, net
    859       650  
                 
Total assets
  $ 70,551     $ 63,479  
                 
Liabilities and shareholders' equity
             
Current liabilities
           
Trade accounts payable
  $ 4,397     $ 3,753  
Other accounts payable and accrued expenses
    2,293       2,074  
Total current liabilities
    6,690       5,827  
                 
Liability for employees’ severance benefits
    2,209       2,222  
                 
Total liabilities
    8,899       8,049  
                 
Shareholders' equity
               
Ordinary shares and additional paid-in capital
    35,043       34,664  
Treasury shares
    (38 )     (38 )
Retained earnings
    26,647       20,804  
Total Shareholders' equity
    61,652       55,430  
Total liabilities and shareholders' equity
  $ 70,551     $ 63,479  

 
 

 
 
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,
 
   
2011
   
2010
   
2011
   
2010
 
Sales
  $ 10,019     $ 7,380     $ 28,553     $ 20,519  
Cost of sales
    5,649       4,155       16,061       11,631  
Gross profit
    4,370       3,225       12,492       8,888  
                                 
Research and development expenses
    1,036       805       3,094       2,335  
Selling and marketing expenses
    619       547       1,949       1,540  
General and administrative expenses
    473       322       1,447       1,054  
Total operating expenses
    2,128       1,674       6,490       4,929  
                                 
Operating income
    2,242       1,551       6,002       3,959  
                                 
Financial income, net
    19       128       352       494  
Income before income taxes
    2,261       1,679       6,354       4,453  
Income taxes
    157       239       511       692  
Net income
  $ 2,104     $ 1,440     $ 5,843     $ 3,761  
                                 
Basic income per ordinary share (US$)
  $ 0.31     $ 0.21     $ 0.85     $ 0.55  
                                 
Weighted average number of ordinary shares used to compute basic income per share (in thousands)
      6,892         6,810         6,889         6,810  
                                 
Diluted income per ordinary share (US$)
  $ 0.30     $ 0.21     $ 0.83     $ 0.54  
                                 
Weighted average number of ordinary shares used to compute diluted income per share (in thousands)
      7,012        6,972         7,013         6,965  

 
 

 
 
Silicom Ltd. Reconciliation of
Non-GAAP Financial Results

 (US$ thousands, except for share and per share data)
 
   
Three-month period
 
   
ended September 30,
 
   
2011
   
2010
 
   
GAAP
 (as reported)
   
Adjustments (*)
   
Non-GAAP
   
Non-GAAP
 
Sales
  $ 10,019           $ 10,019     $ 7,380  
Cost of sales
    5,649       6       5,643       4,147  
Gross profit
    4,370               4,376       3,233  
                                 
Research and development expenses
    1,036       24       1,012       787  
Selling and marketing expenses
    619       34       585       531  
General and administrative expenses
    473       46       427       308  
Total operating expenses
    2,128               2,024       1,626  
                                 
Operating income
    2,242               2,352       1,607  
                                 
Financial income, net
    19               19       128  
Income before income taxes
    2,261               2,371       1,735  
Income taxes
    157               157       239  
Net income
  $ 2,104             $ 2,214     $ 1,496  
                                 
Basic income per ordinary share (US$)
  $ 0.31             $ 0.32     $ 0.22  
                                 
Weighted average number of ordinary shares used to compute basic income per share (in thousands)
      6,892                 6,892         6,810  
                                 
Diluted income per ordinary share (US$)
  $ 0.30             $ 0.32     $ 0.21  
                                 
Weighted average number of ordinary shares used to compute diluted income per share (in thousands)
      7,012                 7,012         6,972  
                                 
Total Adjustments
            110                  
                                 
(*) Adjustments related to share-based compensation expenses according to ASC topic 718 (SFAS 123 (R))
                     

 
 

 
 
Silicom Ltd. Reconciliation of
Non-GAAP Financial Results

 (US$ thousands, except for share and per share data)
 
   
Nine-month period
 
   
ended September 30,
 
   
2011
   
2010
 
   
GAAP
 (as reported)
   
Adjustments (*)
   
Non-GAAP
   
Non-GAAP
 
Sales
  $ 28,553           $ 28,553     $ 20,519  
Cost of sales
    16,061       19       16,042       11,605  
Gross profit
    12,492               12,511       8,914  
                                 
Research and development expenses
    3,094       74       3,020       2,277  
Selling and marketing expenses
    1,949       103       1,846       1,488  
General and administrative expenses
    1,447       139       1,308       1,009  
Total operating expenses
    6,490               6,174       4,774  
                                 
Operating income
    6,002               6,337       4,140  
                                 
Financial income, net
    352               352       494  
Income before income taxes
    6,354               6,689       4,634  
Income taxes
    511               511       692  
Net income
  $ 5,843             $ 6,178     $ 3,942  
                                 
Basic income per ordinary share (US$)
  $ 0.85             $ 0.90     $ 0.58  
                                 
Weighted average number of ordinary shares used to compute basic income per share (in thousands)
      6,889                 6,889         6,810  
                                 
Diluted income per ordinary share (US$)
  $ 0.83             $ 0.88     $ 0.57  
                                 
Weighted average number of ordinary shares used to compute diluted income per share (in thousands)
      7,013                 7,013         6,965  
                                 
Total Adjustments
            335                  
                                 
(*) Adjustments related to share-based compensation expenses according to ASC topic 718 (SFAS 123 (R))