updated 4/25/2011 4:17:19 PM ET 2011-04-25T20:17:19

FREMONT, Calif., April 25, 2011 (GLOBE NEWSWIRE) -- Volterra Semiconductor Corporation (Nasdaq:VLTR), a leading provider of high-performance analog and mixed-signal power management semiconductors, today reported financial results for its first quarter ended March 31, 2011.

Net revenue for the first quarter of 2011 was $34.2 million, a 6% decrease from $36.3 million in the first quarter of 2010, and a 4% decrease from $35.5 million in the fourth quarter of 2010. GAAP net income was $2.7 million, or $0.10 per share (diluted), as compared to $7.7 million, or $0.30 per share (diluted) in the first quarter of 2010, and $3.4 million, or $0.13 per share (diluted), in the fourth quarter of 2010.

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 $4.6 million, or $0.18 per share (diluted), for the first quarter of 2011, as compared to $8.9 million, or $0.35 per share (diluted), in the first quarter of 2010, and $5.4 million, or $0.21 per share (diluted), in the fourth quarter of 2010.

"We continued gaining share in enterprise notebooks this quarter," said Volterra President and CEO Jeff Staszak. "Our strong product-cycle growth in notebook offset seasonality in servers and a temporary correction in networking. Going forward, we are now poised to resume sequential growth in each of our three strategic market segments."

Earnings Conference Call

Volterra will be conducting a conference call today at 2:30 p.m. (PDT). To access the conference call, investors can dial (877) 941-6010 approximately ten minutes prior to the initiation of the teleconference. International and local participants can dial (480) 629-9772. Investors should reference Volterra. A digital replay of the conference call will be available until midnight on Monday, May 2, 2011. To access the replay, investors should dial (800) 406-7325 or (303) 590-3030 and enter access code 4432100#. 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, May 23, 2011.

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 financial results may be difficult if limited to reviewing only GAAP financial measures. Volterra's management believes the non-GAAP information provided is useful to investors and other users of its financial information and its inclusion with our financial results is warranted for several reasons:

* it can enhance the understanding of Volterra's financial performance by adjusting for special, non-recurring items that may obscure results and trends in our core operating performance, particularly in reconciling differences between reported income and actual cash flows;

* it can provide consistency in reviewing Volterra's historical performance between periods, as well as allowing for better comparisons of Volterra's performance with similar companies in Volterra's industry;

* it allows users to evaluate the results of the business using the same financial measures that management uses to evaluate and manage Volterra's internal planning, budgeting and operations; and

* it provides investors with additional information used by management, its board of directors and committees thereof, to determine management compensation.

Volterra's management reports and uses calculations of (i) non-GAAP gross margin and non-GAAP gross margin as a percent of revenue, which represents gross margin excluding the effect of stock-based compensation; (ii) non-GAAP income from operations (and its components, non-GAAP research and development expense, non-GAAP selling, general, and administrative expense, non-GAAP total operating expenses, and including non-GAAP gross margin as indicated above) as well as non-GAAP operating margin as a percent of revenue which represent income from operations and its components excluding the effect of stock-based compensation and special items such as restructuring charges, net of tax; (iii) non-GAAP annual effective tax rate and the associated non-GAAP income tax expense, which represents the effective tax rate without the effect of stock-based compensation and income tax expense recalculated excluding the effect of stock-based compensation and special items on non-GAAP income before tax; and (iv) non-GAAP net income (and its components listed above), non-GAAP net margin as a percent of revenue, and non-GAAP diluted net income per share, which represents net income and diluted net income per share excluding the effect of stock-based compensation expense and special items such as restructuring charges, net of tax.

Investors should note 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 is included in the financial statements portion of this release and at the Investors section of our website at www.volterra.com . 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. Volterra does not provide a non-GAAP reconciliation for non-GAAP estimates on a forward-looking basis, as it believes it is unable to provide a meaningful or accurate calculation or estimation of stock-based compensation or income tax expenses or other special items without unreasonable effort.

Forward-Looking Statements:

This press release regarding financial results for the quarter ended March 31, 2011 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 related to our ability to maintain revenue growth or other financial results; risks related to our dependence on a limited number of customers; risks related to the limited markets we operate in and the limited number of products we sell; risks related to the quality of our products or the management of our inventory; risks related to our relationship with our vendors and contractors; intellectual property litigation risk; and other factors detailed in our filings with the Securities and Exchange Commission, including the annual report on Form 10-K filed on March 8, 2011. 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 Ended

March 31,
  2011 2010
     
Net revenue  $ 34,157  $ 36,293
Cost of revenue *  14,479  13,982
     
Gross margin  19,678  22,311
     
Operating expenses:    
Research and development *  9,114  7,337
Selling, general and administrative *  6,564  5,659
Litigation  1,273  1,535
     
Total operating expenses  16,951  14,531
     
Income from operations  2,727  7,780
Non-operating expense, net  11  5
     
Income before income taxes  2,716  7,775
Income tax expense  36  111
     
Net income  $ 2,680  $ 7,664
     
Net income per share:    
Basic  $ 0.11  $ 0.32
     
Diluted  $ 0.10  $ 0.30
     
Weighted average shares outstanding:    
Basic  24,454  23,609
     
Diluted  26,075  25,648
     
     
* Includes stock-based compensation expense as follows:    
Cost of revenue  $ 165  $ 148
Research and development  763  676
Selling, general, and administrative  991  590
     
Total stock-based compensation expense  $ 1,919  $ 1,414
 
VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
 
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
       
  Three Months Ended March 31, 2011
 



GAAP
Effect of

Stock-based 

Compensation




Non-GAAP
       
Gross margin  $ 19,678  $ (165)  $ 19,843
Gross margin % 57.6% -0.5% 58.1%
       
Operating expenses:      
Research and development  $ 9,114  $ 763  $ 8,351
Selling, general and administrative  6,564  991  5,573
Litigation  1,273  --   1,273
       
Total operating expenses  $ 16,951  $ 1,754  $ 15,197
       
Income from operations  $ 2,727  $ (1,919)  $ 4,646
Operating margin % 8.0% -5.6% 13.6%
       
Annual effective tax rate 1.3% 0.2% 1.1%
Income tax expense  $ 36  $ 14  $ 50
       
Net income  $ 2,680  $ (1,905)  $ 4,585
Diluted net income per share  $ 0.10  $ (0.08)  $ 0.18
       
       
  Three Months Ended March 31, 2010
 



GAAP
Effect of

Stock-based

Compensation




Non-GAAP
       
Gross margin  $ 22,311  $ (148)  $ 22,459
Gross margin % 61.5% -0.4% 61.9%
       
Operating expenses:      
Research and development  $ 7,337  $ 676  $ 6,661
Selling, general and administrative  5,659  590  5,069
Litigation  1,535  --   1,535
       
Total operating expenses  $ 14,531  $ 1,266  $ 13,265
       
Income from operations  $ 7,780  $ (1,414)  $ 9,194
Operating margin % 21.4% -3.9% 25.3%
       
Annual effective tax rate 1.4% -1.6% 3.0%
Income tax expense  $ 111  $ 161  $ 272
       
Net income  $ 7,664  $ (1,253)  $ 8,917
Diluted net income per share  $ 0.30  $ (0.05)  $ 0.35
     
VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
     
  March 31,

2011
December 31,

2010
Assets    
Current assets:    
Cash, cash equivalents and short-term investments  $ 105,587  $ 99,827
Accounts receivable, net  18,237  19,437
Inventories  14,486  15,391
Prepaid expenses and other current assets  2,683  2,693
     
Total current assets  140,993  137,348
Property and equipment, net  7,178  7,125
Other assets  1,659  1,734
     
Total assets  $ 149,830  $ 146,207
     
Liabilities and Stockholders' Equity     
Current liabilities:    
Accounts payable  $ 4,786  $ 4,107
Accrued liabilities  8,272  11,826
     
Total current liabilities  13,058  15,933
     
Lease incentives  481  528
Other long-term liabilities  1,370  1,337
     
Total liabilities  14,909  17,798
Stockholders' equity:    
Common stock  27  27
Additional paid-in capital  138,488  134,656
Retained earnings  25,242  22,562
Treasury stock  (28,836)  (28,836)
     
Total stockholders' equity  134,921  128,409
     
Total liabilities and stockholders' equity  $ 149,830  $ 146,207
CONTACT: Heidi Flannery, Investor Relations
         (510) 743-1718
         investor@volterra.com

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