Silicom .(SILC) - 2023 Q4 - Annual Report

Financial Performance - Total sales for 2023 were $124.1 million, a decrease of 17.6% compared to $150.6 million in 2022[20] - Gross profit for 2023 was $28.7 million, representing a gross margin of 23.1%, down from $51.9 million in 2022[20] - Operating loss for 2023 was $28.7 million, compared to an operating income of $19.9 million in 2022[20] - Net loss for 2023 was $26.4 million, compared to a net income of $18.3 million in 2022[20] - Cash flows from operating activities for 2023 were $31,925 thousand, a significant increase from a cash outflow of $4,090 thousand in 2022[24] - The income (loss) before income taxes for 2023 was a loss of US$ 27,302 thousand, compared to a profit of US$ 22,390 thousand in 2022[169] - The total income tax expense (benefit) for 2023 was a benefit of US$ (889) thousand, reflecting a significant decline from US$ 4,084 thousand in 2022[172] Assets and Liabilities - Total current assets decreased to $135.1 million in 2023 from $153.6 million in 2022, a decline of 12%[17] - Total assets decreased to $167.7 million in 2023 from $216.2 million in 2022, a decline of 22.4%[17] - Total liabilities decreased to $19.5 million in 2023 from $36.9 million in 2022, a decline of 47.2%[18] - Shareholders' equity decreased to $148.3 million in 2023 from $179.3 million in 2022, a decline of 17.3%[18] - Cash and cash equivalents at the end of 2023 were $46,972 thousand, up from $30,734 thousand at the end of 2022[24] - Inventory decreased from $87,985 thousand in 2022 to $51,507 thousand in 2023, with inventory write-downs recorded at $6,433 thousand for 2023[95] - Property, plant, and equipment net value decreased from $4,488 thousand in 2022 to $3,552 thousand in 2023, with accumulated depreciation increasing from $19,472 thousand to $21,684 thousand[96] - Intangible assets net value decreased from $6,710 thousand in 2022 to $2,253 thousand in 2023, with an impairment loss of $5,264 thousand recorded in 2023[97] Shareholder Information - The company purchased treasury shares totaling $9,320 thousand in 2023, following purchases of $3,428 thousand in 2022 and $14,291 thousand in 2021[24] - The company’s total ordinary shares outstanding decreased to 6,405,523 as of December 31, 2023, from 6,738,706 in 2022[21] - The weighted average number of ordinary shares used in the basic earnings per share calculation for 2023 was 6,699,813, a slight increase from 6,696,671 in 2022[74] - Basic earnings per ordinary share for 2023 was reported at (US$ 3.942), a decrease from US$ 2.733 in 2022[74] - The aggregate intrinsic value of Restricted Share Units (RSUs) outstanding as of December 31, 2023, is US$ 1,701 thousand, down from US$ 2,403 thousand in 2022[138] Research and Development - Research and development expenses for 2023 were $20.6 million, slightly up from $20.6 million in 2022[20] - The company’s research and development costs are expensed until technological feasibility is established, after which costs are capitalized until the product is ready for general release[65] Impairments and Write-downs - The company recorded an impairment loss of $5,264 thousand for intangible assets and a goodwill impairment loss of $25,561 thousand in 2023[52] - The company experienced a write-down of obsolete inventory amounting to $6,433 thousand in 2023, compared to $3,002 thousand in 2022[24] - The Company recorded a goodwill impairment charge of US$ 25,561 thousand for the year ended December 31, 2023, due to a decline in market capitalization[178] Taxation - The corporate tax rate in Israel is 23%, applicable to taxable income of Israeli companies[150] - As of December 31, 2023, approximately US$ 48,135 thousand of the Company's retained earnings are tax-exempt under the "Approved Enterprise" and "Benefited Enterprise" status[161] - The Company anticipates an income tax liability of up to approximately US$ 12,034 thousand if tax-exempt income is distributed as dividends[161] - The federal corporate income tax rate for Silicom Inc. is 21%, with an average state corporate tax rate of approximately 8%[164] Other Financial Information - The company recorded interest income of US$ 1,254 thousand for the year ended December 31, 2023, an increase from US$ 230 thousand in 2022[148] - The total deferred tax assets decreased from US$ 3,043 thousand in 2022 to US$ 2,959 thousand in 2023[170] - The unrecognized deferred tax liability associated with temporary differences was approximately US$ 2,083 thousand at December 31, 2023[165]