For investor information contact:
Heidi Flannery, Investor Relations
(510) 743-1718
investor@volterra.com

Volterra Reports Fourth Quarter and Fiscal Year 2007 Financial Results

FREMONT, Calif., January 28, 2008

— Volterra Semiconductor Corporation (Nasdaq: VLTR), a leading provider of high-performance analog and mixed-signal power management semiconductors, today reported financial results for its fourth quarter and fiscal year ended December 31, 2007.

Net revenue for the fourth quarter of 2007 was $19.8 million, a 5% increase over net revenue of $18.9 million for the third quarter of 2007, and compared with net revenue of $21.2 million for the fourth quarter of 2006. Net income was $2.0 million, or $0.08 per share (diluted), for the fourth quarter of 2007, an increase over net income of $0.5 million, or $0.02 per share (diluted) for the third quarter of 2007, and compared with net income of $3.4 million, or $0.13 per share (diluted), for the fourth 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 $2.4 million, or $0.09 per share (diluted), for the fourth quarter of 2007, a 16% increase over non-GAAP net income of $2.1 million, or $0.08 per share (diluted), for the third quarter of 2007, and compared to non-GAAP net income of $4.5 million, or $0.17 per share (diluted), for the fourth quarter of 2006.

“We’re pleased with our execution in the fourth quarter. Our revenues were at the upper end of the guidance, and our earning per share exceeded expectations,” said Volterra President and Chief Executive Officer Jeff Staszak. “As our blue-chip customers continue to adopt our integrated power management solutions, we believe we are well-positioned to continue growing our business and improving our financial results in 2008.”

Volterra also announced that it completed its $15 million stock repurchase program authorized by its Board of Directors last year. Based on its positive outlook for operating cash flow and current cash balance position, Volterra’s Board of Directors has authorized the Company to repurchase an additional $10 million of its common stock. The new repurchase program is expected to begin in February, and the repurchases will be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market. The repurchases shall be made in compliance with applicable rules and regulations and may be made under a plan that complies with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

For the full year 2007, Volterra reported a record $74.7 million annual net revenue and its fourth consecutive year of annual profitability. GAAP net income was $0.3 million or $0.01 per share (diluted), for the fiscal year ended December 31, 2007, compared to $6.9 million or $0.26 per share (diluted), for the fiscal year ended December 31, 2006. Non-GAAP net income was $4.5 million, or $0.17 per share (diluted), for the fiscal year ended December 31, 2007, compared to non-GAAP net income of $11.2 million, or $0.43 per share (diluted), for the fiscal year ended December 31, 2006.

Earnings Conference Call

Volterra will be conducting a conference call today at 5:30 p.m. (EDT). 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) 262-2138. Investors should reference Volterra. A digital replay of the conference call will be available until midnight on Monday, February 4, 2008. To access the replay, investors should dial (800) 405-2236 or (303) 590-3000 and enter reservation number 11107099#. A webcast of the conference call also will be available from the Investor section of the Company’s website at: http://www.volterra.com until midnight on Monday, February 25, 2008.

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 the cumulative effect of accounting changes and 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 (loss) 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 fiscal year and quarter ended December 31, 2007 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 Form 10-K filed on March 8, 2007 and the Form 10-Q filed November 1, 2007. 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.

1

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

                                 
    Three Months Ended   Twelve Months Ended
    December 31,   December 31,
    2007   2006   2007   2006
    (Unaudited)   (Unaudited)   (Unaudited)   (Audited)
Net revenue
  $ 19,781     $ 21,243     $ 74,689     $ 74,588  
Cost of revenue *
    8,830       9,272       37,906       35,494  
 
                               
Gross margin
    10,951       11,971       36,783       39,094  
 
                               
Operating expenses:
                               
Research and development *
    6,045       5,741       23,285       23,007  
Selling, general and administrative *
    3,541       3,336       15,081       11,664  
 
                               
Total operating expenses
    9,586       9,077       38,366       34,671  
 
                               
Income (loss) from operations
    1,365       2,894       (1,583 )     4,423  
Interest and other income
    584       559       2,482       2,067  
Interest and other expense
    (11 )     (7 )     (95 )     (58 )
 
                               
Income before income taxes
    1,938       3,446       804       6,432  
Income tax (benefit) expense
    (58 )     56       236       (481 )
 
                               
Income before cumulative effect of accounting change
    1,996       3,390       568       6,913  
Cumulative effect of accounting change, net
                255        
Net income
  $ 1,996     $ 3,390     $ 313     $ 6,913  
 
                               
Net income per share:
                               
Basic:
                               
Net income per share before cumulative effect of
                               
accounting change
  $ 0.08     $ 0.14     $ 0.02     $ 0.29  
Cumulative effect of accounting change
                (0.01 )      
 
                               
Net income per share
  $ 0.08     $ 0.14     $ 0.01     $ 0.29  
 
                               
Diluted:
                               
Net income per share before cumulative effect of
                               
accounting change
  $ 0.08     $ 0.13     $ 0.02     $ 0.26  
Cumulative effect of accounting change
                (0.01 )      
 
                               
 
                               
Net income per share
  $ 0.08     $ 0.13     $ 0.01     $ 0.26  
 
                               
Weighted average shares outstanding:
                               
Basic
    23,753       24,255       24,332       24,074  
 
                               
Diluted
    25,597       26,287       26,302       26,164  
 
                               
* Includes stock-based compensation expense as follows:
                               
Cost of revenue
  $ (50 )   $ 62     $ 190     $ 275  
Research and development
    456       690       2,242       2,376  
Selling, general, and administrative
    186       373       1,548       1,653  
 
                               
Total stock-based compensation expense
  $ 592     $ 1,125     $ 3,980     $ 4,304  
 
                               

2

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)

                         
    Three Months Ended December 31, 2007
            Effect of    
            Stock-Based    
    GAAP   Compensation   Non-GAAP
Gross margin
  $ 10,951   $ 50   $ 10,901
Gross margin %
  55.4 %   0.3 %   55.1 %
Operating expenses:
                       
Research and development
  $ 6,045   $ 456   $ 5,589
Selling, general and administrative
  3,541   186   3,355
 
           
Total operating expenses
  $ 9,586   $ 642   $ 8,944
Income from operations
  $ 1,365   $ (592 )   $ 1,957
Operating margin %
  6.9 %   -3.0 %   9.9 %
Annual effective tax rate
  29.4 %   24.1 %   5.2 %
Income tax expense
  $ (58 )   $ 190   $ 132
Net income
  $ 1,996   $ (402 )   $ 2,398
Diluted net income per share
  $ 0.08   $ (0.02 )   $ 0.09
                         
    Three Months Ended December 31, 2006
            Effect of    
            Stock-Based    
    GAAP   Compensation   Non-GAAP
Gross margin
  $ 11,971   $ (62 )   $ 12,033
Gross margin %
  56.4 %   -0.3 %   56.6 %
Operating expenses:
                       
Research and development
  $ 5,741   $ 690   $ 5,051
Selling, general and administrative
  3,336   373   2,963
 
           
Total operating expenses
  $ 9,077   $ 1,063   $ 8,014
Income from operations
  $ 2,894   $ (1,125 )   $ 4,019
Operating margin %
  13.6 %   -5.3 %   18.9 %
Annual effective tax rate
  -7.5 %   -9.0 %   1.6 %
Income tax expense
  $ 56   $ 15   $ 71
Net income
  $ 3,390   $ (1,110 )   $ 4,500
Diluted net income per share
  $ 0.13   $ (0.04 )   $ 0.17

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

                         
    December 31,   September 30,   December 31,
    2007   2007   2006
    (Unaudited)   (Audited)
Assets
                       
Current assets:
                       
Cash and cash equivalents
  $ 47,414   $ 51,300   $ 41,814
Short-term investments
      9,977
Accounts receivable, net
  12,318   14,299   13,294
Inventory
  6,185   6,779   12,589
Prepaid expenses and other current assets
  1,764   1,111   1,461
 
           
Total current assets
  67,681   73,489   79,135
Property and equipment, net
  5,647   6,050   4,514
Other assets
  767   79   54
 
           
Total assets
  $ 74,095   $ 79,618   $ 83,703
 
                       
Liabilities and Stockholders’ Equity
                       
Current liabilities:
                       
Accounts payable
  $ 5,127   $ 3,920   $ 8,510
Accrued liabilities
  4,680   5,201   3,377
 
           
Total current liabilities
  9,807   9,121   11,887
Lease incentives
  930   991  
Commitments and contingencies
                       
Stockholders’ equity:
                       
Common stock
  24   24   24
Additional paid-in capital
  94,410   102,554   103,181
Accumulated deficit
  (31,076 )   (33,072 )   (31,389 )
 
           
Total stockholders’ equity
  63,358   69,506   71,816
 
           
Total liabilities and stockholders’ equity
  $ 74,095   $ 79,618   $ 83,703
 
                       

3


The following information was filed by Volterra Semiconductor Corp (VLTR) on Monday, January 28, 2008 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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