Voltaire: Fiscal 3Q08 Financial Results

Voltaire Ltd. announced financial results for the three-month period ended September 30, 2008.

Financial Highlights

• Revenues total $14.7 million; Nine-month revenues increase 35% YoY to $48.4 million
• Gross margin for third quarter of 2008 increases to 54.5%, compared to 43.6% in third quarter 2007
• Non-GAAP third quarter of 2008 net loss totals $443 thousand; GAAP quarterly net loss totals $918 thousand
• Cash and equivalents at September 30, 2008 reach $58.0 million, up from $56.6 million at June 30, 2008

Revenues for the third quarter of 2008 totaled $14.7 million, compared to $15.5 million in the third quarter of 2007, in line with the preliminary results issued by the Company on October 7, 2008.

Gross profit for the third quarter of 2008 totaled $8.0 million, an increase of 18% compared to $6.8 million in the third quarter of 2007. Gross margin for the third quarter of 2008 reached 54.5%, a substantial improvement from the 43.6% gross margin for the third quarter of 2007.

Operating loss for the third quarter of 2008 totaled $1.2 million, compared to operating profit of $0.2 million in the third quarter of 2007. Net loss for the third quarter of 2008 totaled $0.9 million, or a $0.04 loss per share, compared to a net loss, after non-cash accretion of redeemable preferred shares, of $18.3 million, or a $1.25 loss per share, in the third quarter of 2007.

Operating loss, on a non-GAAP basis, for the third quarter of 2008 totaled $0.7 million, compared to a non-GAAP operating profit of $0.5 million in the third quarter of 2007. Net loss, on a non-GAAP basis, for the third quarter of 2008 totaled $0.4 million, or a $0.02 loss per share, compared to a non-GAAP net profit of $0.8 million, or $0.04 per share, in the third quarter of 2007.

Cash, cash equivalents, and marketable bonds and securities as of September 30, 2008 totaled $58.0 million, compared to $56.6 million as of June 30, 2008.

Mr. Ronnie Kenneth, Chairman and CEO of Voltaire commented; "The third quarter was characterized by important business achievements, confounded by the impact of the turbulent capital markets on certain of our customers. We are disappointed with the lower than anticipated revenues and the resulting loss, however continue to be encouraged by our business progress in terms of new partnerships and product launches."

"Several weeks ago Oracle and HP launched their new Database Machine based on Voltaire InfiniBand, which provides unprecedented performance for large Oracle database environments. This is a major achievement for us as Oracle is now selling Voltaire hardware as part of their solution and every system that ships will include Voltaire switches. Furthermore, this quarter we continued to broaden our product portfolio with the launch of the 40 Gbps QDR InfiniBand switching platform,” added Mr. Kenneth. "Moving ahead, as we enter these challenging times, we intend to continue to leverage our three pronged growth strategy – our vertical market approach, OEM partnerships, and leading and differentiated products – paired with our strong cash position, to identify and meet new growth opportunities."

Outlook
In light of the current operating environment, management expects revenues for the fourth quarter of 2008 to be in the range of $14.0 – $16.0 million, resulting in expected revenues for full year 2008 in the range of $62.4 – $64.4 million, an increase of 17% – 21% over full year 2007. Loss per share, on a non-GAAP basis, in the fourth quarter 2008 is expected to be in the range of $0.08 – $0.02 per share.