SILCF Silicom Ltd (MM)

Silicom Ltd. (NASDAQ:SILCF) today reported financial results for the third quarter and nine months ended September 30, 2005. Revenues for the third quarter of 2005 were $2,832,000, an increase of 129% compared with $1,235,000 for the third quarter of 2004. This is Silicom's seventh consecutive quarter of rising revenues and represents sequential growth of 7% compared with the sales for the second quarter of 2005. Net income for the quarter was $384,000, or $0.09 per share (basic and diluted), compared with a net loss of ($207,000), or ($0.05) per share (basic and diluted), for the third quarter of 2004. This is the Company's third consecutive profitable quarter and represents 22% sequential growth compared with net income for the second quarter of 2005. Revenues for the nine months ended September 30, 2005 rose to an all-time high of $7,750,000, an increase of 160% compared with $2,978,000 for the first nine months of 2004. These are the highest revenues ever recorded by the Company for any 3-quarter period. Net profit for the nine-month period was $849,000, or $0.20 per share (basic and diluted), compared to a net loss of ($1,153,000), or ($0.27) per share (basic and diluted) for the first nine months of 2004. Commenting on the results, Shaike Orbach, President and CEO, said, "We are very pleased with the Company's continued strong momentum as demonstrated by seven consecutive quarters of top-line growth accompanied by improvement in the bottom line. For the nine-month period, our revenues are the highest they have been in our history, while our quarterly revenues are at their strongest level since 1997. This performance demonstrates the revenue-generating power of an increasing number of continuously maturing Design Wins for our multi-port and BYPASS adapters, which have accumulated to 30 over the last two years, each with the potential to generate an ongoing flow of orders over the next few years. "With a sales pipeline consisting of many additional potential customers, we continue to focus on achieving Design Wins from developers and manufacturers operating in the fast-growing market segments of security appliances, data storage and other applications. In this fertile niche, we have established a strong presence which is helping us close additional Design Wins, each of which with the potential to contribute revenues on top of those generated by our current Design Wins. Overall, we are very satisfied by our progress and optimistic as we look towards the future." Silicom Ltd. is an industry-leading provider of high-performance server/appliances networking solutions. The Company's flagship products include a variety of multi-port Gigabit Ethernet, copper and fiber-optic, server adapters and innovative BYPASS adapters designed to increase throughput and availability of server-based systems, security appliances and other mission-critical gateway applications. Silicom also offers a broad range of its traditional PC Cards, PCI cards and USB products. 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. -0- *T Silicom Ltd. Consolidated Summary of Results (Unaudited) U.S. dollars, in thousands, except for per share amounts Three-month period Nine-month period ended September 30, ended September 30, 2005 2004 2005 2004 ========== ========== ========== =========== 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. Consolidated Balance Sheets (U.S. dollars, in thousands) September 30, December 31, 2005 2004 (Unaudited) (Audited) =============== =============== Assets Current assets Cash and cash equivalents $1,707 $1,086 Short term investments - 519 Trade receivables 1,566 741 Other receivables 367 337 Inventories 3,125 1,994 --------------- --------------- 6,765 4,677 Severance pay fund 561 559 Property and equipment, net 229 232 Other assets 50 57 --------------- --------------- Total assets $7,605 $5,525 =============== =============== Liabilities and shareholder's equity Current liabilities Trade payables 1,677 1,008 Other payables and accrued liabilities 892 522 --------------- --------------- Total current liabilities 2,569 1,530 Liability for severance pay 963 957 --------------- --------------- Total liabilities 3,532 2,487 --------------- --------------- Shareholders' Equity Share capital and additional paid in capital 5,838 5,652 Treasury stock (38) (38) Retained earnings (deficit) (1,727) (2,576) --------------- --------------- 4,073 3,038 --------------- --------------- Total liabilities and shareholders equity $7,605 $5,525 =============== =============== *T