Replies to post #34 on Silicom Ltd. (SILCF)

[midastouch017]

Hi Ddbl,

Usually i respond in a Jiffy.
Today i was dragged to some
errands i usually try to avoid.
:(

Regards

Dubi

[midastouch017]

Silicom Reports Record Q4 and 2005 Results: Best-Ever Quarter and Best-Ever Year

Monday January 30, 9:31 am ET


KFAR SAVA, Israel--(BUSINESS WIRE)--Jan. 30, 2006--Silicom Ltd. (NASDAQ and TASE: SILC):
After Rising for 8th Consecutive Quarters, Revenues Reach $3.1M for Q4 & $10.9M for 2005
4th Profitable Quarter in a Row Yields Record $0.11 EPS for Q4, $0.30 EPS for 2005
Silicom Ltd. (NASDAQ and TASE: SILC) today reported record financial results for the fourth quarter and year ended December 31, 2005.

Revenues for the fourth quarter of 2005 were $3,126,000, an increase of 98% compared with $1,581,000 for the fourth quarter of 2004, and an increase of 10% compared with $2,832,000 for the third quarter of 2005. These are the highest quarterly revenues in Silicom's history and the Company's eighth consecutive quarter of rising revenues.

Net income for the quarter was $473,000, or $0.11 per share (basic and diluted), a new record for the Company, compared with a net loss of ($87,000), or ($0.02) per share for the fourth quarter of 2004.

Revenues for the year ended December 31, 2005 rose to an all-time high of $10,876,000, an increase of 139% compared with $4,559,000 for 2004. The Company's net income from the year's four profitable quarters was $1,322,000, or $0.30 per diluted share, compared to a net loss of ($1,240,000), or ($0.30) per diluted share for 2004.

Commenting on the results, Shaike Orbach, President and CEO, said, "We are proud to report the best quarter in our history, a strong end for a successful 2005 with four quarters of rising revenues and profits. For the first time ever, our yearly sales have crossed the $10 million milestone and we have posted a 12% net margin.

"These satisfying results demonstrate the quantum leap forward that Silicom achieved in 2005. Throughout the year, our momentum intensified, with early customers ramping up their order volumes significantly and a growing number of new customers giving us new significant Design Wins, such as the two Design Wins with Fortune 100 companies announced during the fourth quarter alone. Now, with more than 30 Design Wins and more than 100 potential customers in the pipe line, we have established presence in the security, storage, load balancing, traffic management and other industries and are positioned to benefit from their growth."

Mr. Orbach continued, "In light of increased Israeli interest in our share, we have recently dual-listed the Company on the Tel Aviv Stock Exchange, a move we hope will expand our liquidity and trading volumes. In addition, we have recently completed an oversubscribed public offering of shares and options, raising approximately $6 million dollars. We are gratified by this vote of confidence and pledge to continue working to build the Company and shareholder value."

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.

http://biz.yahoo.com/bw/060130/20060130005635.html?.v=1

Dubi

[midastouch017]

Wed: If Silicom can
Companies such as MindCTI have every chance of emulating Silicom's stock market success.

Shlomo Greenberg

What makes an investment successful? What causes shares to rise the way Orckit Communications Ltd. (Nasdaq:ORCT; TASE:ORCT) and Silicom Ltd. (Nasdaq:SILC) have done? After all, the trio of Mind CTI Ltd. (Nasdaq: MNDO; TASE:MNDO), Eltek Ltd. (Nasdaq: ELTK), and Top Image Systems Ltd. (Nasdaq: TISA) have raised sales and become profitable the same way the other two did. Not on the scale of Orckit, it’s true, but definitely on the scale of Silicom.
On Monday, Silicom published its financial report for the fourth quarter of 2005 and the year as a whole. The results were astonishing, compared with the past, and with investors’ expectations at the low point in 2002. Silicom’s share justifiably rose 15% to give a market cap of $33 million. This small Kfar Saba-based company’s success in emerging from a crisis that threatened its very existence and turning into an apparently thriving business is amazing.

If Silicom is compared with the other shares mentioned above, the question arises, why haven’t they risen in the same way? Please understand, I’m not surprised that Silicom rose to a price better reflecting its value. I’m surprised that the others have not.

Mind CTI, for example, started out at $0.89 per share in October 2002, and is now worth $3.30. The company posted a profit of $330,000 on $10.8 million revenue in 2002, a profit of $3.6 million on $13 million revenue in 2003, and a net profit of $6.8 million on $17.8 million revenue in 2004. In 2005, it is expected to post a large profit on over $20 million.

True, Mind CTI’s profits and sales for the third quarter fell slightly, compared with the second, but that was corrected in the fourth quarter, at least according to the company’s guidance. How much is Mind CTI worth today on Wall Street? $71 million, including $41 million cash at the end of the third quarter (after acquiring US company Sentori Inc. for $5.1 million in cash).

In other words, the market cap for Mind CTI’s business is $30 million for a company with a net profit of $7 million. Why does this happen? After all, it is unimaginable that someone wanting to acquire this company would pay $71 million for it. That number might be alright on Wall Street, but not on Main Street.

Why do I expect Mind CTI’s share to do something like Silicom’s did? Because Mind CTI emerged from crisis with a lot of cash, and it’s in a business that has started to gather pace. Moreover, the company has begun to distribute dividends. But that's life. Silicom's stock market performance outdid Mind's in early 2006, and by a wide margin. Remember, in October 2002 Silicom was considered a corpse: no money, no product that we knew about, no market, and with nothing to interest the serious investor. I bought the share at the time, because I reckoned I couldn't lose much at $0.20 or $0.30 a share. If the technology exists, and management knows what it’s doing, the risk at that price is pretty small.

So what should one do in 2006? In terms of economic value, all the shares I’ve mentioned are in more or less the same situation. Let’s look at MER Telemanagement Solutions Ltd. (Nasdaq: MTSL), and see what it has to offer. The company has a lot of customers, a long history of technological development and accumulated know-how, and it’s under new management.

What is happening here resembles what happened to Attunity (Nasdaq: ATTU), Mind CTI, Top Image, BOS Better Online Solutions Ltd. (Nasdaq: BOSC; TASE:BOSC) and others companies that survived the crisis of 2001-02. They survived with enough strength to go on and find their places in their respective niches. All their niches are huge, so a large part of the companies’ potential depends on the current state of their management. The most interesting thing here is that even Silicom, which has provided a large percentage return since 2002, is still far from fulfilling its potential. Silicom, like the others, depends entirely on its management to lead it in 2006 the same way it led the company in 2004 and 2005.

What is the conclusion? There is no point in selling any of these shares at the moment, because nothing real has happened since October 2002, and if anything did, it was only for the better. Nevertheless, anyone who bought shares in the likes of Orckit, Aladdin Knowledge Systems Ltd. (Nasdaq: ALDN; TASE: ALDN) or Silicom in 2002, and has not yet sold some of them, either has nerves of steel or is an irredeemable optimist.

I now own about half the Silicom shares I held in 2002, despite my considered view that this company is only at the starting gate. Anyone who understood this logic could be a licensed investment advisor.

Published by Globes [online], Israel business news - www.globes.co.il - on February 1, 2006

http://www.globes.co.il/serveen/globes/docview.asp?did=1000057046&fid=1052

Dubi