Silicom Q1 Revenues up 26% to $19M; Operating Profit up 37% to $4.8M

  Silicom Q1 Revenues up 26% to $19M; Operating Profit up 37% to $4.8M  Business Wire  KFAR SAVA, Israel -- April 24, 2014  Silicom Ltd. (NASDAQ:SILC) (TASE:SILC), an industry-leading provider of high-performance networking and data infrastructure solutions,  today reported its financial results for the first quarter ended March 31, 2014.  Silicom’s revenues for the first quarter of 2014 were $19.0 million, a 26% increase compared with $15.0 million in the first quarter of 2013.  On a GAAP basis, operating income for the quarter increased by 39% to $4.6 million, compared with $3.3 million, in the first quarter of 2013. Net income increased by 30% to $4.0 million, or $0.55 per diluted ordinary share ($0.56 per basic share), compared with $3.1 million, or $0.43 per diluted ordinary share ($0.44 per basic share), in the first quarter of 2013.  On a non-GAAP basis, operating income for the quarter increased by 37% to $4.8 million, compared with $3.5 million, for the first quarter of 2013. Net income increased by 28% to $4.2 million, or $0.57 per diluted ordinary share ($0.58 per basic share), compared with $3.3 million, or $0.46 per diluted and basic share, for the first quarter of 2013.  Comments of Management Commenting on the results, Mr. Shaike Orbach, Silicom’s President and CEO, said, “We are very pleased to report another quarter of solid growth and strategic progress in line with our long-term plan for the Company’s future development. During the quarter, all of our existing revenue streams continued to deliver as planned, reflecting steady shipments made to many of our over 90+ OEM customers.  “In addition, we were very excited to launch the first offering of our new SmartSilc VHIO product line, a family of totally unique solutions that we have planned for the growing virtualized data center market segment. Incorporating the advanced patent-pending technology that we acquired last October, the first SmartSilc VHIO product is an OpenStack-supporting offload solution that enables more VMs to fit onto each cluster, helping data centers boost network performance while reducing power consumption, space and cost. Discussions currently underway with key virtualized market players give us confidence regarding the potential for SmartSilc VHIO to develop into an important new revenue stream over time.”  Mr. Orbach concluded, “In addition, we have recently distributed our second yearly dividend in line with a policy aimed at sharing our success more directly with our shareholders. We are confident that the combination of a strong existing platform and exciting new products for fast-growing markets will enable us to continue creating shareholder value over the long-term.”                                        ##  Conference Call Details  Silicom’s Management will host an interactive conference today, April 24^th, at 9:00am Eastern Time (6:00am Pacific Time, 16:00 Israel Time). On the call, management will review and discuss the results, and will also be available to answer investors’ questions.  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: 1 888 668 9141                                UK: 0 800 917 5108                               ISRAEL: 03 918 0609                          INTERNATIONAL: +972 3 918 0609         At: 9:00am Eastern Time, 6:00am Pacific Time, 16:00 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.                                        ##  About Silicom  Silicom Ltd. is an industry-leading provider of high-performance networking and data infrastructure solutions. Designed primarily to increase data center efficiency, Silicom’s solutions dramatically improve the throughput and availability of networking appliances and other server-based systems.  Silicom’s products are used by a large and growing base of OEM customers, many of whom are market leaders, as performance-boosting solutions for their offerings in the Application Delivery,  WAN Optimization, Security and other mission-critical segments within the fast-growing virtualization, cloud computing and big data markets. Silicom’s product portfolio includes multi-port 1/10 Gigabit Ethernet server adapters, Intelligent Bypass solutions, Encryption accelerators and a variety of innovative Smart adapters. These products are available for incorporation directly into our OEM customers' systems, or provided as part of Silicom’s patented SETAC (Server To Appliance Converter), a unique approach to the provision of high quality standard platforms with modular front connectivity.  For more information, please visit: www.silicom.co.il.  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, as well as amortization of intangible assets. 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.  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.                           -- FINANCIAL TABLES FOLLOW –  Silicom Ltd. Consolidated Balance Sheets    (US$ thousands)                                                                                                             March 31,   December 31,                                                  2014        2013                                                                   Assets                                                                   Current assets Cash and cash equivalents                        $ 15,663    $   12,997 Short-term bank deposits                           -             3,000 Marketable securities                              18,320        14,871 Accounts receivables: Trade, net                   16,020        14,866 Accounts receivables: Other                        2,581         2,460 Inventories                                        30,188        28,778 Deferred tax assets                               432          274 Total current assets                               83,204        77,246                                                                   Marketable securities                              20,912        24,370 Assets held for employees’ severance benefits      1,537         1,543 Deferred tax assets                                363           439 Property, plant and equipment, net                 1,906         1,479 Intangible assets, net                            164          180                                                                   Total assets                                     $ 108,086   $   105,257                                                                   Liabilities and shareholders' equity                                                                   Current liabilities Trade accounts payable                           $ 4,846     $   6,814 Other accounts payable and accrued expenses       4,930        5,134 Total current liabilities                          9,776         11,948                                                                   Liability for employees’ severance benefits       2,643        2,618                                                                   Total liabilities                                 12,419       14,566                                                                   Shareholders' equity Ordinary shares and additional paid-in capital     39,575        38,647 Treasury shares                                    (38)          (38) Retained earnings                                 56,130       52,082 Total Shareholders' equity                        95,667       90,691                                                                   Total liabilities and shareholders' equity       $ 108,086   $   105,257  Silicom Ltd. Consolidated Statements of Operations                                                           (US$ thousands, except for share and per share data)                                                            Three-month period                                                            ended March 31,                                                            2014      2013 Sales                                                      $ 19,004   $ 15,030 Cost of sales                                               11,266    9,001 Gross profit                                                7,738     6,029 Research and development expenses                            1,458      1,244 Selling and marketing expenses                               980        849 General and administrative expenses                         666       614 Total operating expenses                                    3,104     2,707 Operating income                                             4,634      3,322 Financial income, net                                       105       118 Income before income taxes                                   4,739      3,440 Income taxes                                                691       337 Net income                                                 $ 4,048    $ 3,103 Basic income per ordinary share (US$)                      $ 0.56     $ 0.44 Weighted average number of ordinary shares used to          7,176     7,063 compute basic income per share (in thousands) Diluted income per ordinary share (US$)                    $ 0.55     $ 0.43 Weighted average number of ordinary shares used to          7,343     7,166 compute diluted income per share (in thousands)  Silicom Ltd. Reconciliation of Non-GAAP Financial Results                                                         (US$ thousands, except for share and per share data)                                                                                                            Three-month period                                      ended March 31,                                      2014                     2013                                                                       GAAP gross profit                    $      7,738             $      6,029 (1) Share-based compensation (*)           24                      25 Non-GAAP gross profit                $      7,762             $      6,054                                                                       GAAP operating income                $      4,634             $      3,322 (1) Share-based compensation (*)            128                      165 (2) Amortization of intangible             17                      - assets Non-GAAP operating income            $      4,779             $      3,487                                                                       GAAP net income                      $      4,048             $      3,103 (1) Share-based compensation (*)            128                      165 (2) Amortization of intangible             17                      - assets Non-GAAP net income                  $      4,193             $      3,268                                                                                                                                             GAAP basic income per ordinary share $      0.56              $      0.44 (US$) (1) Share-based compensation (*)            0.02                     0.02 (2) Amortization of intangible              -                        - assets                                                                    Non-GAAP basic income per ordinary   $      0.58              $      0.46 share (US$)                                                                                                                                             GAAP diluted income per ordinary     $      0.55              $      0.43 share (US$) (1) Share-based compensation (*)            0.02                     0.03 (2) Amortization of intangible              -                        - assets                                                                    Non-GAAP diluted income per ordinary $      0.57              $      0.46 share (US$)                                                                       (*) Adjustments related to share-based compensation expenses according to ASC topic 718 (SFAS 123 (R))  Contact:  Company Contact: Eran Gilad, CFO Silicom Ltd. Tel: +972-9-764-4555 E-mail: erang@silicom.co.il or Investor relations contact: Kenny Green / Ehud Helft CCG Israel Investor Relations Tel: +1 646 201 9246 E-mail : silicom@ccgisrael.com  
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