Volterra Reports Third Quarter 2006 Financial Results24 October 2006
Volterra Semiconductor Corporation (Nasdaq: VLTR), a leading provider of high-performance analog and mixed-signal power management semiconductors, today reported financial results for its third quarter ended September 30, 2006.
Net revenue for the third quarter of 2006 was $20.1 million, a 61% increase over net revenue of $12.5 million for the third quarter of 2005, and a 14% increase over net revenue of $17.6 million for the second quarter of 2006. Net income was $1.8 million, or $0.07 per share (diluted), for the third quarter of 2006, compared with net income of $0.6 million, or $0.02 per share (diluted), for the third quarter of 2005 and net income of $1.2 million, or $0.05 per share (diluted), for the second quarter of 2006.
Volterra also reported net income and basic and diluted net income per share on a non-GAAP basis. Non-GAAP net income excludes the effect of stock-based compensation expense, net of tax. Non-GAAP net income was $2.9 million, or $0.11 per share (diluted), for the third quarter of 2006, compared to non-GAAP net income of $0.7 million, or $0.03 per share (diluted), for the third quarter of 2005 and non-GAAP net income of $2.2 million, or $0.09 per share (diluted), for the second quarter of 2006.
"We continue to be pleased with the Company's performance and financial results in the third quarter, with both revenue and earnings in line with the guidance we gave in July," said Volterra President and CEO Jeff Staszak. "For the third consecutive quarter, we have experienced record sales, driven by continued strength in the server and storage market where our customer's new product ramps continue to grow. As this ramp continues, we believe that we can continue to achieve strong revenue growth for the remainder of the year."
Earnings Conference Call
Volterra will be conducting a conference call today at 5:30 p.m. (Eastern). To access the conference call, investors can dial 800-218-0530 approximately ten minutes prior to the initiation of the teleconference. International and local participants can dial 303-262-2137. Investors should reference Volterra or reservation number 11073594#. A webcast of the conference call also will be available from the Investors section of the Company's website at: http://www.volterra.com/ .
A digital replay of the conference call will be available until midnight on Monday, October 30, 2006. To access the replay, investors should dial 800-405-2236 or 303-590-3000 and enter reservation number 11073594#. A webcast of the conference call also will be available from the Investors section of the Company's website at: http://www.volterra.com , until midnight on Monday, November 20, 2006.
About Volterra Semiconductor Corporation
Volterra Semiconductor Corporation, headquartered in Fremont, CA, designs, develops, and markets leading edge silicon solutions for low-voltage power delivery. The Company's product portfolio is focused on advanced switching regulators for the computer, datacom, storage, and portable markets. Volterra operates as a fabless semiconductor company utilizing world-class foundries for silicon supply. The company is focused on creating products with high intellectual property content that match specific customer needs. For more information, please visit http://www.volterra.com/ .
Non-GAAP Financial Measures
Volterra provides all information required in accordance with generally accepted accounting principles (GAAP), but it believes that evaluating its ongoing operating results and in particular, making comparisons to similar companies, may be difficult to understand if limited to reviewing only GAAP financial measures. Internally, Volterra uses calculations of (i) non-GAAP net income, which represents net income excluding the effect of stock-based compensation expense and special items such as restructuring charges, net of tax; (ii) non-GAAP basic and diluted net income per share, which represents basic and diluted net income per share excluding the effect of stock-based compensation expense and special items such as restructuring charges, net of tax; (iii) non-GAAP operating margin, which represents income from operations excluding the effect of stock-based compensation expense and special items such as restructuring charges, as a percentage of revenue and (iv) non-GAAP gross margin, which represents gross margin excluding the effect of stock-based compensation expense, as a percent of revenue. Volterra's management believes the non-GAAP information is useful because it can enhance the understanding of the Company's ongoing performance as a business and Volterra therefore uses both GAAP and non-GAAP reporting internally to evaluate and manage Volterra's operations.
Volterra has chosen to provide this information to investors to enable them to perform considerations of operating results in a manner similar to how the Company analyzes its operating results. However, Volterra's management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Volterra presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Volterra's operating results and financial condition in a manner that focuses on what management believes to be Volterra's ongoing business operations. Management also believes that the inclusion of the non-GAAP net income, basic and diluted net income per share, and operating margin provide consistency and comparability with similar companies in Volterra's industry. Investors should note, however, that the non-GAAP financial measures used by Volterra may not be the same non-GAAP financial measures, and may not be calculated in the same manner as that of other companies. Whenever Volterra discloses such a non-GAAP financial measure, it provides a reconciliation of non-GAAP financial measures to what it believes to be the most closely applicable GAAP financial measure. A reconciliation of GAAP net income to non-GAAP net income (loss) is included in the financial statements portion of this release. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure.
Forward-Looking Statements:
This press release regarding financial results for the quarter ended September 30, 2006 contains forward-looking statements based on current expectations of Volterra. The words "expect," "will," "should," "would," "anticipate," "project," "outlook," "believe," "intend," and similar phrases as they relate to future events are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of Volterra but are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are the following: risks that Volterra may not be able to maintain revenue growth or gross margin levels; risks that Volterra's new products may not be able to be completed in a timely fashion or gain market acceptance; dependence on a limited number of products; risks that one or more of Volterra's concentrated group of customers may reduce demand or price for Volterra's products or a particular product; risks that Volterra may not be able to manage its growth; risks with managing its small number of distributors; intellectual property litigation risk; the semiconductor industry's cyclical nature; the seasonality in our business; geographic concentration of foundries, assembly and test facilities and customers in the Pacific Rim, subjecting Volterra to risks of natural disasters, epidemics and political unrest; and other factors detailed in our filings with the Securities and Exchange Commission, including the Form 10-Q filed on August 9, 2006. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and Volterra undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof, except as required by law.
VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Nine Months
Ended Sept. 30, Ended Sept. 30,
2006 2005 2006 2005
Net revenue $20,113 $12,509 $53,345 $40,325
Cost of revenue* 9,678 5,885 26,222 17,643
Gross margin 10,435 6,624 27,123 22,682
Operating expenses:
Research and development* 6,122 4,031 17,266 11,666
Selling, general and
administrative* 2,921 2,035 8,328 6,840
Total operating expenses 9,043 6,066 25,594 18,506
Income from operations 1,392 558 1,529 4,176
Interest and other income 541 331 1,509 872
Interest and other expense (13) (4) (52) (13)
Income before income taxes 1,920 885 2,986 5,035
Income tax expense / (benefit) 158 247 (537) 957
Net income $1,762 $638 $3,523 $4,078
Basic net income per share $0.07 $0.03 $0.15 $0.17
Shares used in computing basic net
income per share 24,171 23,675 24,013 23,538
Diluted net income per share $0.07 $0.02 $0.13 $0.16
Shares used in computing diluted
net income per share 26,001 26,159 26,122 26,189
* Includes stock-based compensation
expense as follows:
Cost of revenue $79 $7 $212 $22
Research and development 454 11 1,686 98
Selling, general and
administrative 516 82 1,280 244
Total stock-based compensation
expense $1,049 $100 $3,178 $364
VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
September 30, 2006
GAAP Adjustments Non-GAAP
Net revenue $20,113 - $20,113
Cost of revenue 9,678 (79) 9,599
Gross margin 10,435 79 10,514
Gross margin % 52% - 52%
Operating expenses:
Research and development 6,122 (454) 5,668
Selling, general and
administrative 2,921 (516) 2,405
Total operating expenses 9,043 (970) 8,073
Income from operations 1,392 1,049 2,441
Operating margin % 7% 5% 12%
Interest and other, net 528 - 528
Income tax expense (158) 99 (59)
Net income $1,762 $1,148 $2,910
Basic net income per share $0.07 $0.05 $0.12
Shares used in computing basic net
income per share 24,171 24,171 24,171
Diluted net income per share $0.07 $0.04 $0.11
Shares used in computing diluted
net income per share 26,001 26,001 26,001
Three Months Ended
September 30, 2005
GAAP Adjustments Non-GAAP
Net revenue $12,509 - $12,509
Cost of revenue 5,885 (7) 5,878
Gross margin 6,624 7 6,631
Gross margin % 53% - 53%
Operating expenses:
Research and development 4,031 (11) 4,020
Selling, general and
administrative 2,035 (82) 1,953
Total operating expenses 6,066 (93) 5,973
Income from operations 558 100 658
Operating margin % 4% 1% 5%
Interest and other income 327 - 327
Income tax expense (247) - (247)
Net income $638 $100 $738
Basic net income per share $0.03 $ - $0.03
Shares used in computing basic net
income per share 23,675 23,675 23,675
Diluted net income per share $0.02 $ - $0.03
Shares used in computing diluted
net income per share 26,159 26,159 26,159
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $36,954 $32,955
Short-term investments 9,947 14,952
Accounts receivable, net 13,247 8,711
Inventory 9,419 4,283
Prepaid expenses and other current
assets 1,244 1,091
Total current assets 70,811 61,992
Property and equipment, net 4,220 3,477
Other assets 70 34
Total assets $75,101 $65,503
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable $5,327 $4,267
Accrued liabilities 3,594 3,476
Total current liabilities 8,921 7,743
Commitments
Stockholders' equity:
Common stock 26 24
Additional paid-in capital 100,933 96,227
Deferred stock-based compensation - (189)
Accumulated deficit (34,779) (38,302)
Total stockholders' equity 66,180 57,760
Total liabilities and stockholders'
equity $75,101 $65,503
Source: prnewswire
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