Voltaire: Fiscal 1Q8 Financial Results

Voltaire Ltd. announced financial results for the three month period ended March 31, 2008.

First Quarter Highlights (compared to first quarter 2007)

• Achieved non-GAAP net income of $0.4 million; GAAP net loss of $2.1 million
• Gross margin, on non-GAAP basis, increased to 48.6%, up from 36.4%
• Gross Margin, on GAAP basis, including one-time $2.1 million repayment to Israeli OCS, 36.1%
• Revenues grew by 94% to $16.6 million
• Strong order generation from main commercial vertical markets
• Introduce second quarter revenue guidance of $17–$18 million; non-GAAP EPS $0.03 – $0.05

Revenue for the first quarter of 2008 totaled $16.6 million, an increase of 94% compared to $8.6 million in the first quarter 2007.

GAAP gross profit for the first quarter of 2008 totaled $6.0 million, an increase of 93% compared to $3.1 million in the first quarter 2007. GAAP gross profit for the quarter included a one-time charge of $2.1 million following the Company’s decision to prepay its outstanding financial commitments to the OCS.

GAAP operating loss for the first quarter of 2008, including the said OCS related charge, totaled $2.4 million, an improvement from the GAAP operating loss of $2.6 million in the first quarter of 2007. GAAP Net loss for the first quarter of 2008, including the said OCS charge, totaled $2.1 million, or $0.10 per diluted share, compared to a net loss, after non-cash accretion of redeemable preferred shares, of $4.2 million, or $6.30 loss per diluted share, in the first quarter of 2007.

Gross profit, on a non-GAAP basis, for the first quarter of 2008 totaled $8.1 million, or 48.6% of revenues, compared to a non-GAAP gross profit for the first quarter of 2007 of $3.1 million, or 36.4% of revenues.

Operating profit, on a non-GAAP basis, for the first quarter of 2008 totaled $84 thousand, a substantial improvement compared to the non-GAAP operating loss of $2.5 million in the first quarter of 2007.

Net income, on a non-GAAP basis, for the first quarter of 2008 totaled $0.4 million, or $0.02 per diluted share, compared to a non-GAAP net loss of $2.6 million, or $0.19 loss per diluted share, in the first quarter 2007.

“The first quarter of 2008 was another strong quarter for Voltaire in terms of business and financial execution. We continued to see strong order generation in all our main verticals, primarily the higher education vertical as well as the financial services and manufacturing commercial verticals. In terms of business progress, this quarter we began shipping the 96-port version of our 20 Gigabits per second switching platform, and our new SR4G High-Performance Storage Router, that connects InfiniBand fabrics to Fibre Channel storage, also became generally available,” said Ronnie Kenneth, Chairman and CEO of Voltaire.

“In terms of financial performance, this quarter we almost doubled our revenues over the first quarter of last year. On a non-GAAP basis we continued to expand our gross margins nearing the 49% mark while presenting, once again, a net profit. Our revenue level and cash balance, paired with our growth forecast for the coming year, enabled us to terminate our participation in the Israeli OCS grant program — a decision that is expected to contribute to our gross and operating margins moving forward,” added Mr. Kenneth. “Looking ahead, we will continue to leverage our vertical solutions, premier server OEM partnerships, and leading differentiated products, to drive continued growth and execution.”

Outlook
Revenues for the second quarter of 2008 are expected to be in the range of $17 – $18 million, with revenues for the first half of 2008 being in the range of $33.5 – $34.5 million, an increase of 65% over the first six months 2007. Earnings per share, on a non-GAAP basis, are expected to be $0.03 to $0.05 per share. Revenues in the second half of the year are expected to be seasonally stronger than the first half of the year.