Silicom Reports Full Year 1999 and Q4 Operating Results; Initial Orders for Broadband Internet Access and Home Networking Products.Business Editors KFAR-SAVA, Israel--(BUSINESS WIRE)--Jan. 20, 2000 Company to Focus on Strategic OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and and Joint Development Opportunities SILICOM LTD LTD 1 Laron-type dwarfism 2 Leukotriene D 3 Long-term depression, see there 4. Long-term disability . (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :SILCF) today reported its full year 1999 and fourth quarter results. 1999 revenues were $5.7 million, as compared to $5.9 million for 1998. Net income for the year was $520,000, or $0.13 per share, an increase of 50% compared to $346,000, or $0.09 per share, for 1998. At the beginning of 1999, the Company adopted a new strategic plan to direct its efforts towards new rapidly growing market needs. During the quarter, the Company took important steps toward realizing its strategic goals: - To develop strategic relationships with technology and market leaders based on the Company's core technological expertise: A major European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. manufacturer of mobile networking products became the first OEM customer of the Company's new, cutting-edge home networking and broadband Internet access Broadband Internet access, often shortened to just "broadband", is high speed Internet access—typically contrasted with dial-up access over modem. Dial-up modems are generally only capable of a maximum bitrate of 56 kbit/s (kilobits per second) and require the full use of a products. The order was for an initial 2,000 units of the Company's USB USB in full Universal Serial Bus Type of serial bus that allows peripheral devices (disks, modems, printers, digitizers, data gloves, etc.) to be easily connected to a computer. Ethernet adapter The Ethernet hardware required to attach to an Ethernet network. It typically resides on an expansion board, but is sometimes built into the motherboard. An Ethernet adapter is required in each client and server. See Ethernet and network adapter. (U2E). - Possio AB (Sweden Sweden, Swed. Sverige, officially Kingdom of Sweden, constitutional monarchy (2005 est. pop. 9,002,000), 173,648 sq mi (449,750 sq km), N Europe, occupying the eastern part of the Scandinavian peninsula. ), a leading manufacturer of paper-based mobile communication products, chose a modified version of Silicom's Serial PC Card for use with its PM80 GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. mobile fax machines to enable users of Nokia Nokia (nō`kēä), town (1996 pop. 26,326), Western Finland prov., SW Finland, on Lake Näsijärvi. It is an industrial community where wood and rubber products are manufactured. 6090 GSM cellular car phones to send, receive and print faxes and SMS messages SMS message SMS n → (message m) SMS m &uot;on the go.&uot; - Consel Kofferloesungen GmbH, a manufacturer of integrated mobile office systems in Germany, received a first shipment, valued at over $100,000, of Silicom products designed for use in a system developed for Kabel Deutscheland GmbH, a subsidiary of Deutsche Telekom AG. - To extend its product offerings to address new markets with significant growth potential: The Company is leveraging its expertise to offer a wide range of operating system operating system (OS) Software that controls the operation of a computer, directs the input and output of data, keeps track of files, and controls the processing of computer programs. support for its comprehensive connectivity solutions and products. - During the quarter, the Company released a new Windows NT (Windows New Technology) A 32-bit operating system from Microsoft for Intel x86 CPUs. NT is the core technology in Windows 2000 and Windows XP (see Windows). Available in separate client and server versions, it includes built-in networking and preemptive multitasking. 4.0-compatible software driver to support its USB home networking and broadband Internet access products. Windows NT 4.0 does not incorporate native USB support. The layered structure of the software developed by Silicom, which contains Silicom's proprietary USB host controller drivers and modules, will allow easy implementation of Windows NT 4.0 support for more Silicom and third party USB products in the future. - The Company also announced that it will offer Linux support for its USB broadband Internet access products during the first quarter of 2000. Silicom was among the first companies to offer Linux support for its PC Card products. - The Company is already the provider of the industry's most comprehensive family of Windows CE (Windows Consumer Electronics) Microsoft's version of Windows for handheld devices and embedded systems that use x86, ARM, MIPS and SHx CPUs. Windows CE .NET superseded Windows CE 3.0. data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. adapters, enabling modem, serial, and Ethernet Ethernet Telecommunications networking protocol introduced by Xerox Corp. in 1979. It was developed as an inexpensive way of sending information quickly between office machines connected together in a single room or building, but it rapidly became a standard computer PC Card products to work with handheld PCs  An editor has expressed concern that this article or section is .Please help improve the article by adding information and sources on neglected viewpoints, or by summarizing and . The Company intends to extend its Windows CE support by developing special Windows CE software drivers for its home networking and broadband Internet access products. - To market its USB Intellectual Property to broadband Internet See broadband. access and home networking products manufacturers: A number of the industry's leading manufacturers have already shown interest in incorporating the Company's USB enabling technology into their xDSL, cable modem cable modem Modem used to convert analog data signals to digital form and vise versa, for transmission or receipt over cable television lines, especially for connecting to the Internet. , and satellite communication products. Silicom's USB technology enables the easy, plug &play connection of a wide variety of broadband Internet access products to home PCs. The Company plans to expand its Intellectual Property marketing efforts in the year ahead. - To leverage the Company's reputation for quality and flexibility in its profitable core business of mobile connectivity solutions: The Company is currently cooperating with one of Europe's largest manufacturers of modem/GSM PC Cards in the development of a new line of products which will integrate Fast Ethernet An earlier name for 100Mbps Ethernet. See 100Base-T. (networking) Fast Ethernet - A version of Ethernet developed in the 1990s(?) which can carry 100 Mbps compared with standard Ethernet's 10 Mbps. It requires upgraded network cards and hubs. , modem, GSM, PC Card, and CardBus technologies. The cooperation will contribute a minimum addition of $1 million to the Company's bottom line during the development process period and the first year of sales. Commenting on the results, Avi Eizenman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said, &uot;1999 was an important transitional year for Silicom. We are proud to report early progress in achieving all of our new strategic objectives, which we believe will positively impact our future results. &uot;Our original mobile connectivity solution business remains profitable. The Company's balance sheet, with cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. of approximately $7 million and excellent financial ratios, is sufficiently strong to finance our strategic plans. Our reputation for quality and innovative enabling technologies, especially in the areas of networking, USB and operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. , is paving the way for joint product development and OEM agreements with some of the industry's largest players. &uot;We are pleased with our decision to address the high-potential home office/small office (SOHO Soho (sōhō`, sə–), district of Westminster, London, England, known for its continental restaurants. Once a fashionable quarter, it became popular among writers and artists in the 19th cent. ) networking and broadband Internet access markets. USB functionality and broad operating system support (including Linux and Windows CE) are essential prerequisites for successful products in these markets. We also believe that our advanced core USB, networking and operating system enabling technologies, as highlighted in our products, will lead to significant OEM business and joint development opportunities in the future.&uot; Mr. Eizenman concluded, &uot;Overall, we are pleased with our strategic direction and optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op as we look ahead into the year 2000.&uot; Silicom Ltd. is a leading provider of high performance connectivity solutions and advanced enabling technology. The Company offers an extensive line of PC Card and USB products with support for Home Networking, Fast Ethernet, Token Ring A local area network (LAN) access method developed by IBM. Conforming to the IEEE 802.5 standard, Token Ring uses a token ring access method and connects up to 255 nodes in a star topology at 4, 16 or 100 Mbps. , Modems, and serial ports. Through joint partnerships and OEM agreements with some of the industry's largest players, the Company is a source of innovative technologies for networking, USB, and operating system support. Statements in this press release which are not historical data are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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. FINANCIAL TABLES FOLLOW
Silicom Ltd. Consolidated Summary of Results
(U.S. dollars, in thousands
-except for per share amounts)
Three-month Year ended
period December 31,
ended
December 31, (Audited)
(Unaudited)
1999 1998 1999 1998
======= ======= ====== =======
Sales $1,264 $1,731 $5,672 $ 5,933
Cost of sales 677 896 3,185 3,352
------- ------- ------ -------
Gross profit 587 835 2,487 2,581
------- ------- ------ -------
Research and
development costs, 283 239 1,078 1,170
gross
Less - royalty
bearing (91) (50) (417) (383)
participations
------- ------- ------ -------
Research and
development costs, 192 189 661 787
net
Selling and
marketing expenses 251 336 1,095 1,174
General and 111 109 433 421
administrative
------- ------- ------ -------
554 634 2,189 2,382
------- ------- ------ -------
Operating income 33 201 298 199
Other expense --- --- --- (16)
Financial income, 80 63 264 205
net
------- ------- ------ -------
Income before taxes 113 264 562 388
on income
Taxes on income 28 28 42 42
======= ======= ====== =======
Net income $85 $236 $520 $346
======= ======= ====== =======
Basic and diluted
earnings per share $ 0.02 $ 0.06 $0.13 $ 0.09
======= ======= ====== =======
Weighted average
number of shares
outstanding - Basic 3,989 3,985 3,986 3,985
EPS (in thousands)
======= ======= ====== =======
Weighted average
number of shares
outstanding - 4,096 3,985 4,014 3,991
Diluted EPS (in
thousands)
======= ======= ====== =======
Silicom Ltd. Consolidated Balance Sheets
(U.S. dollars, in thousands)
December 31, December 31,
1999 1998
============== ==============
(Audited) (Audited)
Assets
Current Assets
Cash and cash $4,630 $3,436
equivalents
Short term investments 1,848 1,575
Trade receivables 988 1,093
Other receivables 316 515
Inventories 1,089 1,463
---------- ----------
8,871 8,082
Long term investments 506 742
Severance pay fund 286 (a)236
Fixed assets, net 351 447
========== ==========
$10,014 $9,507
========== ==========
Liabilities and shareholder's equity
Current liabilities
Accounts payable and
accruals:
Trade 410 513
Other 512 593
---------- ----------
922 1,106
Liability for 569 (a)460
severance pay
---------- ----------
1,491 1,566
---------- ----------
Shareholders' Equity
Share capital and
additional paid in 5,304 5,242
capital
Treasury stock (38) (38)
Retained earnings 3,257 2,737
---------- ----------
8,523 7,941
========== ==========
$10,014 $9,507
========== ==========
(a) Reclassified
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