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

Volterra Reports Record Quarterly Revenue and Income
and Ninth Consecutive Year of Growth

FREMONT, Calif., January 25, 2010

— 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, 2009.

Net revenue for the fourth quarter of 2009 was $34.2 million, a 56% increase over net revenue of $21.9 million for the fourth quarter of 2008, and up 15% from net revenue of $29.7 million for the third quarter of 2009. GAAP net income was $7.0 million, or $0.28 per share (diluted), for the fourth quarter of 2009, up 536% from GAAP net income of $1.1 million, or $0.04 per share (diluted), for the fourth quarter of 2008 and up 103% from GAAP net income $3.4 million, or $0.14 per share (diluted), for the third quarter of 2009.

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 $8.4 million, or $0.34 per share (diluted), for the fourth quarter of 2009, up 282% from non-GAAP net income of $2.2 million, or $0.09 per share (diluted), for the fourth quarter of 2008 and up 76% from non-GAAP net income of $4.8 million, or $0.19 per share (diluted), for the third quarter of 2009.

For the full year 2009, Volterra reported a record $104.9 million annual net revenue. It was Volterra’s ninth consecutive year of revenue growth and its sixth consecutive profitable year. GAAP net income was $10.9 million, or $0.45 per share (diluted), for the fiscal year ended December 31, 2009, compared to GAAP net income of $14.3 million, or $0.57 per share (diluted), for the fiscal year ended December 31, 2008. Non-GAAP net income was $16.3 million, or $0.67 per share (diluted), for the fiscal year ended December 31, 2009, compared to non-GAAP net income of $18.4 million, or $0.73 per share (diluted), for the fiscal year ended December 31, 2008.

“I am pleased to report that we had another strong quarter to finish out what has been a very positive year for Volterra,” said Volterra President and CEO Jeff Staszak. “Despite challenging economic times in the earlier part of 2009, our performance in the latter half of the year helped to produce the highest annual revenues in Volterra’s history, and our fourth quarter results included record quarterly revenues, margins and profitability.”

Earnings Conference Call

Volterra will be conducting a conference call today at 5:30 p.m. (EST). To access the conference call, investors can dial (800) 762-8795 approximately ten minutes prior to the initiation of the teleconference. International and local participants can dial (480) 629-9773. Investors should reference Volterra. A digital replay of the conference call will be available until midnight on Monday, February 1, 2010. To access the replay, investors should dial (800) 406-7325 or (303) 590-3030 and enter access code 4199059#. 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, February 22, 2010.

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 fiscal year and quarter ended December 31, 2009 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 4, 2009 and the Form 10-Q filed on November 4, 2009. 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,
    2009   2008   2009   2008
    (Unaudited)   (Unaudited)   (Unaudited)   (Audited)
Net revenue
  $ 34,186   $ 21,865   $ 104,937   $ 104,155
Cost of revenue *
  12,634   9,617   42,250   45,217
 
                               
Gross margin
  21,552   12,248   62,687   58,938
Operating expenses:
                               
Research and development *
  7,444   6,306   26,557   26,090
Selling, general and administrative *
  5,628   4,564   19,731   18,560
Litigation **
  1,631   332   5,225   332
 
                               
Total operating expenses
  14,703   11,202   51,513   44,982
 
                               
Income from operations
  6,849   1,046   11,174   13,956
Interest and other income
  13   112   135   1,073
Interest and other expense
  (49 )   (42 )   (140 )   (214 )
 
                               
Income before income taxes
  6,813   1,116   11,169   14,815
Income tax (benefit) expense
  (145 )   22   229   557
 
                               
Net income
  $ 6,958   $ 1,094   $ 10,940   $ 14,258
 
                               
Net income per share:
                               
Basic
  $ 0.30   $ 0.05   $ 0.48   $ 0.60
 
                               
Diluted
  $ 0.28   $ 0.04   $ 0.45   $ 0.57
 
                               
Weighted average shares outstanding:
                               
Basic
  23,267   23,519   22,968   23,750
 
                               
Diluted
  24,977   24,574   24,383   25,201
 
                               
* Includes stock-based compensation expense as follows:
                       
Cost of revenue
  $ 126   $ 54   $ 425   $ 232
Research and development
  776   555   2,705   1,965
Selling, general, and administrative
  620   475   2,303   1,925
 
                               
Total stock-based compensation expense
  $ 1,522   $ 1,084   $ 5,433   $ 4,122
 
                               
** Litigation expenses were previously included in Selling, general and administrative
       
expenses.
                               

2

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

SEPARATE PRESENTATION OF LITIGATION AND SALES, GENERAL AND ADMINISTRATIVE EXPENSE
(In thousands, except per share amounts)
(Unaudited)

                                         
    Three Months Ended
    December 31,   September 30,   June 30,   March 31,   December 31,
    2009   2009   2009   2009   2008
GAAP
                                       
Selling, general and
  $ 7,259   $ 7,090   $ 5,835   $ 4,772   $ 4,896
administrative with litigation
                                       
Litigation *
  1,631   1,688   1,256   650   332
 
                                       
Selling, general and
  $ 5,628   $ 5,402   $ 4,579   $ 4,122   $ 4,564
administrative without litigation
                                       
            Three Months Ended                
     
 
  December 31,   September 30,   June 30,   March 31,   December 31,
 
    2009       2009       2009       2009       2008  
 
                                       
Non-GAAP (excluding effect of stock-based
                               
compensation)
                                       
Selling, general and
  $ 6,639     $ 6,506     $ 5,252     $ 4,256     $ 4,421  
administrative with litigation
                                       
Litigation *
    1,631       1,688       1,256       650       332  
 
                                       
Selling, general and
  $ 5,008     $ 4,818     $ 3,996     $ 3,606     $ 4,089  
administrative without litigation
                                       
    Twelve Months Ended                        
    December 31,                        
                             
 
    2009       2008                          
 
                                       
GAAP
                                       
Selling, general and
  $ 24,956   $ 18,892                        
administrative with litigation
                                       
Litigation *
  5,225   332                        
 
                                       
Selling, general and
  $ 19,731   $ 18,560                        
administrative without litigation
                                       
    Twelve Months Ended                        
    December 31,                        
                             
 
    2009       2008                          
 
                                       
Non-GAAP (excluding effect of stock-based
                               
compensation)
                                       
Selling, general and
  $ 22,653     $ 16,967                          
administrative with litigation
                                       
Litigation *
    5,225       332                          
 
                                       
Selling, general and
  $ 17,428     $ 16,635                          
administrative without litigation
                                       
* Litigation expenses were previously included in Selling, general and administrative expenses.
               

3

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, 2009
            Effect of    
            Stock-based    
      GAAP       Compensation       Non-GAAP  
Gross margin
  $ 21,552   $ (126 )   $ 21,678
Gross margin %
  63.0 %   -0.4 %   63.4 %
Operating expenses:
                       
Research and development
  $ 7,444   $ 776   $ 6,668
Selling, general and administrative
  5,628   620   5,008
Litigation
  1,631     1,631
 
                       
 
           
Total operating expenses
  $ 14,703   $ 1,396   $ 13,307
Income from operations
  $ 6,849   $ (1,522 )   $ 8,371
Operating margin %
  20.0 %   -4.5 %   24.5 %
Annual effective tax rate
  2.1 %   0.2 %   1.9 %
Income tax (benefit) expense
  $ (145 )   $ 41   $ (104 )
Net income
  $ 6,958   $ (1,481 )   $ 8,439
Diluted net income per share
  $ 0.28   $ (0.06 )   $ 0.34
                         
    Three Months Ended December 31, 2008
            Effect of    
            Stock-based    
      GAAP       Compensation       Non-GAAP  
Gross margin
  $ 12,248   $ (54 )   $ 12,302
Gross margin %
  56.0 %   -0.3 %   56.3 %
Operating expenses:
                       
Research and development
  $ 6,306   $ 555   $ 5,751
Selling, general and administrative
  4,564   475   4,089
Litigation
  332     332
 
                       
 
           
Total operating expenses
  $ 11,202   $ 1,030   $ 10,172
Income from operations
  $ 1,046   $ (1,084 )   $ 2,130
Operating margin %
  4.8 %   -4.9 %   9.7 %
Annual effective tax rate
  3.8 %   0.9 %   2.9 %
Income tax (benefit) expense
  $ 22   $ (30 )   $ (8 )
Net income
  $ 1,094   $ (1,114 )   $ 2,208
Diluted net income per share
  $ 0.04   $ (0.05 )   $ 0.09

4

VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

                         
    December 31,   September 30,   December 31,
    2009   2009   2008
    (Unaudited)   (Audited)
Assets
                       
Current assets:
                       
Cash and cash equivalents
  $ 69,227   $ 61,592   $ 46,893
Short-term investments
  4,549   10,545   10,461
Accounts receivable, net
  15,534   14,153   12,073
Inventory
  10,284   8,485   13,668
Prepaid expenses and other current assets
  1,829   1,949   2,507
 
                       
Total current assets
  101,423   96,724   85,602
Property and equipment, net
  4,656   4,899   5,285
Other assets
  363   113   405
 
                       
Total assets
  $ 106,442   $ 101,736   $ 91,292
 
                       
                         
Liabilities and Stockholders’ Equity                        
Current liabilities:
                       
Accounts payable
  $ 3,591     $ 6,663     $ 5,834  
Accrued liabilities
    9,506       10,078       8,073  
 
                       
Total current liabilities
    13,097       16,741       13,907  
Lease incentives
    445       506       688  
Other long-term liabilities
    1,097       990       784  
 
                       
Total liabilities
    14,639       18,237       15,379  
 
                       
Commitments and contingencies
                       
Stockholders’ equity:
                       
Common stock
    26       25       24  
Additional paid-in capital
    115,035       111,310       102,612  
Accumulated deficit
    (5,878 )     (12,836 )     (16,818 )
Treasury Stock
    (17,380 )     (15,000 )     (9,905 )
 
                       
Total stockholders’ equity
    91,803       83,499       75,913  
 
                       
Total liabilities and stockholders’ equity
  $ 106,442     $ 101,736     $ 91,292  
 
                       

5


The following information was filed by Volterra Semiconductor Corp (VLTR) on Monday, January 25, 2010 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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