Voltaire: Fiscal 3Q10 Financial Results

Voltaire Ltd. announced financial results for the three month period ended September 30, 2010.

Third Quarter 2010 Main Highlights

• Year-over-year revenue growth of 25% and sequential revenue growth of 9%, reaching $18.1 million;
• GAAP net loss reduced to $0.8 million compared with $1.5 million in the third quarter of last year; non-GAAP net loss at $49 thousand;
• GAAP operating loss reduced to $0.6 million compared with $1.5 million in the third quarter of last year; Non-GAAP operating profit at $101 thousand;
• Positive operating cash flow of $3.6 million contributed to cash, cash equivalents and marketable securities as of September 30, 2010, which totaled $44.7 million; and
• Management expects revenues at the top end of the previously provided full year 2010 guidance range $67-70 million.

Third Quarter Results
Revenues for the third quarter of 2010 totaled $18.1 million, an increase of 25% compared to $14.5 million reported in the third quarter of 2009.

Gross profit for the third quarter of 2010 totaled $9.4 million, an increase of 27% compared to $7.4 million in the third quarter of 2009.

Gross margin for the third quarter of 2010 totaled 51.9%, an improvement compared to 51% for the third quarter of 2009.

Operating loss on a GAAP basis, for the third quarter of 2010 totaled $618 thousand, an improvement compared to the operating loss of $1.5 million reported in the third quarter of 2009. Operating income on a non-GAAP basis, for the third quarter of 2010 totaled $101 thousand, a substantial improvement compared to the operating loss of $895 thousand reported in the third quarter of 2009.

Net loss on a GAAP basis, for the third quarter of 2010 totaled $768 thousand, or $0.04 loss per share. This represents an improvement from a net loss of $1.5 million, or $0.07 loss per share, in the third quarter of 2009. Net loss on a non-GAAP basis, for the third quarter of 2010 totaled $49 thousand, compared to a net loss, on a non-GAAP basis, of $949 thousand, or $0.05 loss per share, in the third quarter of 2009.

The company generated a positive operating cash flow of $3.6 million in the quarter. Cash, cash equivalents and marketable securities as of September 30, 2010, totaled $44.7 million with no debt, compared to $41.8 million as of June 30, 2010.

Mr. Ronnie Kenneth, Chairman and CEO of Voltaire commented: "We are very pleased with our business performance and strong financial results in the quarter. In the third quarter, we achieved a major financial milestone. We significantly improved our bottom line and generated positive cash flow, while increasing sales of our software and Ethernet solutions – our top two long-term growth engines for the business. Time and again, our software proves to be a major differentiator for both our Ethernet and InfiniBand products and enhances our competitive edge. Through effective execution of a well-defined strategy, we are experiencing strong channel development and a growing customer roster. I look forward to enjoying the continuing fruits of our efforts for the coming quarters and years ahead."

Outlook
Management updates its outlook for the year, expecting 2010 revenues to come in at the top end of its formerly provided full year guidance range, which was between $67 – 70 million with full year gross margins to be approximately 52%. Management improves its outlook for full year expenses, with operating expenses for 2010 to be in the range of $37.0 to 37.5 million, updated from an earlier estimate of between $38.0 to 39.5 million.

Third Quarter Press Release Highlights

• Sept. 20 – Voltaire Introduces New Software for Ultra-Fast Storage Access
• Aug. 30 – Voltaire Announces High Density 10 GbE Switch for Efficient Scaling of Cloud Networks
• Aug. 27 – Voltaire Offers Expertise on Improving Advanced Trading