FREMONT, Calif., Oct. 25, 2010 (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 third quarter ended September 30, 2010.

Net revenue for the third quarter of 2010 was $41.6 million, a 40% increase from $29.7 million in the third quarter of 2009, and a 3% increase from $40.2 million in the second quarter of 2010. GAAP net income was $8.4 million, or $0.32 per share (diluted), a 144% increase from $3.4 million, or $0.14 per share (diluted) in the third quarter of 2009, and a 7% decrease from $9.0 million, or $0.34 per share (diluted), in the second 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 $10.2 million, or $0.39 per share (diluted), for the third quarter of 2010, a 112% increase from $4.8 million, or $0.19 per share (diluted), in the third quarter of 2009, and a 4% decrease from $10.5 million, or $0.40 per share (diluted), in the second quarter of 2010.

"We were pleased to achieve record revenue led by our notebook business, and to deliver revenue and earnings within our guidance," said Volterra President and CEO Jeff Staszak. 

Volterra also announced that its Board of Directors recently approved an expansion of its previously authorized share repurchase plan by an additional $15 million.

Repurchases under Volterra's repurchase plan may 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.

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 (877) 941-8631 approximately ten minutes prior to the initiation of the teleconference. International and local participants can dial (480) 629-9822. Investors should reference Volterra. A digital replay of the conference call will be available until midnight on Monday, November 1, 2010. To access the replay, investors should dial (800) 406-7325 or (303) 590-3030 and enter access code 4372994#. 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, November 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 quarter ended September 30, 2010 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 3, 2010 and quarterly report on Form 10-Q filed on August 2, 2010. 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 September 30, Nine Months Ended September 30,
  2010 2009 2010 2009
         
Net revenue  $ 41,556  $ 29,687  $ 118,091  $ 70,751
Cost of revenue *  16,053  12,097  44,923  29,616
         
Gross margin  25,503  17,590  73,168  41,135
         
Operating expenses:        
Research and development *  9,116  6,816  25,265  19,113
Selling, general and administrative *  6,489  5,402  18,161  14,103
Litigation **  1,483  1,688  4,527  3,594
         
Total operating expenses  17,088  13,906  47,953  36,810
         
Income from operations  8,415  3,684  25,215  4,325
Non-operating income (expense), net  79  (27)  51  31
         
Income before income taxes  8,494  3,657  25,266  4,356
Income tax expense  127  230  233  374
         
Net income  $ 8,367  $ 3,427  $ 25,033  $ 3,982
         
Net income per share:        
Basic  $ 0.34  $ 0.15  $ 1.04  $ 0.17
         
Diluted  $ 0.32  $ 0.14  $ 0.97  $ 0.16
         
Weighted average shares outstanding:        
Basic  24,469  22,973  24,163  22,868
         
Diluted  25,980  24,770  25,915  24,185
         
         
* Includes stock-based compensation expense as follows:        
Cost of revenue  $ 123  $ 131  $ 436  $ 299
Research and development  1,008  669  2,419  1,929
Selling, general, and administrative  675  584  1,857  1,683
         
Total stock-based compensation expense  $ 1,806  $ 1,384  $ 4,712  $ 3,911
         
** Litigation expenses were previously included in Selling, general and administrative expenses in 2009.
 
 
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  September 30, Nine Months Ended  September 30,
  2010 2009 2010 2009
GAAP        
Selling, general and administrative with litigation  $ 7,972  $ 7,090  $ 22,688  $ 17,697
Litigation *  1,483  1,688  4,527  3,594
Selling, general and administrative without litigation  $ 6,489  $ 5,402  $ 18,161  $ 14,103
         
         
         
  September 30, September 30,
  2010 2009 2010 2009
Non-GAAP (excluding effect of stock-based compensation)        
Selling, general and administrative with litigation  $ 7,297  $ 6,506  $ 20,831  $ 16,014
Litigation *  1,483  1,688  4,527  3,594
Selling, general and administrative without litigation  $ 5,814  $ 4,818  $ 16,304  $ 12,420
         
* Litigation expenses were previously included in Selling, general and administrative expenses in 2009.
 
 
VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
       
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
       
  Three Months Ended September 30, 2010
  GAAP Effect of Stock-based  Compensation Non-GAAP
       
Gross margin  $ 25,503  $ (123)  $ 25,626
Gross margin % 61.4% -0.3% 61.7%
       
Operating expenses:      
Research and development  $ 9,116  $ 1,008  $ 8,108
Selling, general and administrative  6,489  675  5,814
Litigation  1,483  --   1,483
       
Total operating expenses  $ 17,088  $ 1,683  $ 15,405
       
Income from operations  $ 8,415  $ (1,806)  $ 10,221
Operating margin % 20.2% -4.4% 24.6%
       
Annual effective tax rate 0.9% -0.3% 1.2%
Income tax expense  $ 127  $ 18  $ 145
       
Net income  $ 8,367  $ (1,788)  $ 10,155
Diluted net income per share  $ 0.32  $ (0.07)  $ 0.39
       
       
  Three Months Ended September 30, 2009
  GAAP Effect of Stock-based  Compensation Non-GAAP
       
Gross margin  $ 17,590  $ (131)  $ 17,721
Gross margin % 59.3% -0.4% 59.7%
       
Operating expenses:      
Research and development  $ 6,816  $ 669  $ 6,147
Selling, general and administrative  5,402  584  4,818
Litigation *  1,688  --   1,688
       
Total operating expenses  $ 13,906  $ 1,253  $ 12,653
       
Income from operations  $ 3,684  $ (1,384)  $ 5,068
Operating margin % 12.4% -4.7% 17.1%
       
Annual effective tax rate 8.6% 3.5% 5.1%
Income tax expense  $ 230  $ 21  $ 251
       
Net income  $ 3,427  $ (1,363)  $ 4,790
Diluted net income per share  $ 0.14  $ (0.05)  $ 0.19
       
* Litigation expenses were previously included in Selling, general and administrative expenses in 2009.
 
 
VOLTERRA SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
       
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
       
  September 30, 2010 June 30, 2010 December 31, 2009
  (Unaudited) (Audited)
Assets      
Current assets:      
Cash, cash equivalents and short-term investments  $ 96,928  $ 91,790  $ 73,776
Accounts receivable, net  21,599  18,859  15,534
Inventory  12,750  13,279  10,284
Prepaid expenses and other current assets  2,388  2,174  1,829
       
Total current assets  133,665  126,102  101,423
Property and equipment, net  7,274  6,793  4,656
Other assets  1,883  1,926  363
       
Total assets  $ 142,822  $ 134,821  $ 106,442
       
 Liabilities and Stockholders' Equity       
Current liabilities:      
Accounts payable  $ 4,546  $ 5,752  $ 3,591
Accrued liabilities  11,543  9,403  9,506
       
Total current liabilities  16,089  15,155  13,097
       
Lease incentives  576  623  445
Other long-term liabilities  1,288  1,231  1,097
       
Total liabilities  17,953  17,009  14,639
Stockholders' equity:      
Common stock  27  27  26
Additional paid-in capital  129,781  126,996  115,035
Retained earnings (accumulated deficit)  19,155  10,788  (5,878)
Treasury stock  (24,094)  (19,999)  (17,380)
       
Total stockholders' equity  124,869  117,812  91,803
       
Total liabilities and stockholders' equity  $ 142,822  $ 134,821  $ 106,442
CONTACT:  Volterra Semiconductor Corporation          Investor Relations          Heidi Flannery          (510) 743-1718          investor@volterra.com