Silicom, a provider of high-performance networking and data infrastructure solutions, provides a business update considering the current COVID-19 pandemic and its impact on Silicom’s operations. The company has taken steps, including work from home where possible, minimizing face-to-face meetings, and utilizing video conferences to protect its workforce all over the world.
To continue to make progress
Due to the global disruption caused by Coronavirus, management’s expectations for first-quarter revenues ending March 31, 2020, are $21-22 million. This shows approximately a 15% fall in earlier estimates, which were provided in late January. However, the company is still expecting that Q1/2020 will be profitable.
It is estimated that Silicom’s year-end net cash position amounted to $91 million. This will support enough working capital and significant financial flexibility to weather the current environment. At the same time, Silicom’s ongoing share buy-back program, which was announced in May 2019, rises up to $15 million in share repurchases.
Shaike Orbach, CEO of Silicom said,
“First, I do wish all those unwell and in hospital, a speedy recovery and I thank our health workers globally for their tireless efforts. 2020 was off to an excellent start, before the global effects of the pandemic began. Like many of our peers, we are currently experiencing very low visibility.
While it is impossible to predict the extent of the effect on Silicom in 2020 as a whole which will relate to the duration and span of the pandemic, we now expect that the growth we had planned for this year will, unfortunately, be impacted. However, we are still very optimistic about the mid and longer-term, post-COVID-19.
We continue to make progress on new design wins, and the underlying fundamentals of our target markets continue to be very attractive with high growth potential. Post pandemic, a few of these markets may become even more important and attractive. Thus, we are optimistic that once the impact of the pandemic is behind us, we will benefit from a few years of solid double-digit Compound Annual Growth Rate.”