Networked Computing Infrastructure for the Next Generation Data Center
Multiservice Switches Using InfiniBand Enable Grid Computing (188 KB)
InfiniBand for High Performance, Affordable Storage (427 KB)
2007
|August 08, 2007
194% Revenue Growth Year over Year
Herzeliya, Israel and Billerica, MA – August 8, 2007 – Voltaire Ltd. (NASDAQ: VOLT), a leading provider of grid backbone solutions, today announced financial results for the three-month period ended June 30, 2007.
Second Quarter Highlights (compared to second quarter 2006):
- Revenues increased by 194% to $11.7 million
- Gross margin increased to 39.6%, from 37.4%
- Steady decline in operating and net loss
- Continued penetration into key vertical markets including enterprise data centers
- New hardware and software product introductions improving margins
Revenue for the second quarter of 2007 totaled $11.7 million, an increase of 194% compared with $4.0 million in the second quarter 2006.
Gross profit for the second quarter of 2007 totaled $4.6 million, or 39.6% of revenues, an increase compared with $1.5 million gross profit in the second quarter 2006, or 37.4% of revenues.
Operating loss for the second quarter of 2007 totaled $1.3 million, a 59% improvement compared with $3.2 million loss in the second quarter of 2006. Net loss for the second quarter of 2007 was $1.5 million, or $0.10 per diluted share on a GAAP on an as converted basis, a 56% improvement compared with $3.3 million net loss, or $0.26 per diluted share, in the second quarter of 2006.
On a Non-GAAP basis: Excludes the impact of share-based compensation expenses under SFAS 123R and adjustment for fair valuation of warrants under FSP No.150-5
Non-GAAP operating loss for the second quarter of 2007 totaled $1.0 million, a 68% improvement compared with a $3.2 million non-GAAP operating loss in the second quarter of 2006.
Non-GAAP net loss for the second quarter of 2007 totaled $1.0 million, or $0.07 per diluted share, a 68% improvement compared with a non-GAAP net loss of $3.2 million, or $0.25 per diluted share, in the second quarter 2006.
“This has been another strong quarter for Voltaire, in which we generated continued growth in terms of revenues and gross margins, as well as narrowed our operating and net loss, remaining in line with our long term financial model,” said Ronnie Kenneth, Chairman and CEO. “During the quarter we shipped our new 20 Gigabits/second switch platform and continued to penetrate growth-oriented vertical markets, signing new customers in the energy, manufacturing and financial services segments. We also deployed our new resource provisioning and management software, GridVision Enterprise, in several test environments.”
“Toward the end of July we completed our initial public offering and listing on the NASDAQ Global Market and are very excited at the prospect of sharing our growth and performance with new investors and shareholders. The proceeds of the IPO will go towards further fueling our business and taking advantage of market opportunities,” Mr. Kenneth added. “We expect to experience continued revenue growth in the second half of 2007 both as a result of growth in our business and traditionally higher sales during the third and fourth quarters.”
Initial Public Offering
On July 25, 2007, Voltaire announced the pricing of its initial public offering of 5,770,000 ordinary shares at $9.00 per share. Voltaire’s ordinary shares are listed on the NASDAQ Global Market under the symbol “VOLT” and began trading on July 26, 2007. The closing of the offering took place on July 31, 2007. Voltaire received net proceeds from the offering, after deducting the underwriting discount and estimated offering expenses, of approximately $46.0 million. The underwriters were granted a 30-day option to purchase up to an additional 865,500 ordinary shares from Voltaire to cover over-allotments, if any.
Conference Call Details
The Company will be hosting a conference call later today, at 10:00 am EDT. On the call, management will review and discuss the results and will be available to answer questions. To participate, please either call one of the following teleconferencing numbers, or access the live webcast on the Company’s website. Please begin placing your calls at least 10 minutes before the conference call is due to commence. If you are unable to connect using the toll-free numbers, please try the international dial-in number.
US Dial-in Number: 1-888-407-2553 UK Dial-in Number: 0-800-917-9141
Israel Dial-in Number: 03-918-0650 International Dial-in Number: +972-3-918-0650
at: 10:00 am Eastern Time; 07:00 am Pacific Time; 03:00 pm UK Time; 05:00 pm Israel Time
The conference call will be broadcast live on the Company’s website. To participate, please access the investor relations section of Voltaire's website – www.voltaire.com, at least 10 minutes before the conference call is due to commence. A replay of the call will be available starting several hours following the call. The replay will be accessible under the Investor Relations section website at: www.voltaire.com for a period of 30 days.
Use of Non-GAAP Financial Measure
Voltaire reports its results of operations in accordance with GAAP and additionally, on a non-GAAP basis. Non-GAAP operating income (loss) and non-GAAP net income (loss) are calculated based on the operating income (loss) or net income (loss) in Voltaire's financial statements excluding non-cash equity-based compensation charges recorded in accordance with SFAS 123R. Reconciliation of this non-GAAP measure to operating income (loss) and net income (loss), the most comparable GAAP measures, is provided in the schedules attached to this release. Voltaire provides these non-GAAP financial measures because its management believes that they are useful in enhancing an understanding of the Voltaire’s ongoing performance. Voltaire uses internally the Non-GAAP information to evaluate the Company’s ongoing performance. Voltaire is providing this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results.
About Voltaire
Voltaire designs and develops server and storage switching and software solutions that enable high-performance grid computing within the data center. Voltaire refers to its server and storage switching and software solutions as the Voltaire Grid Backbone™. Voltaire’s products leverage InfiniBand technology and include director-class switches, multi-service switches, fixed-port configuration switches, Ethernet and Fibre Channel routers and standards-based driver and management software. Voltaire’s solutions have been sold to a wide range of end customers including governmental, research and educational organizations, as well as enterprises in the manufacturing, oil and gas, entertainment, life sciences and financial services industries.
Founded in 1997, Voltaire Ltd. is headquartered in Herzeliya, Israel, and has its U.S. headquarters in Billerica, Massachusetts.
Forward Looking Statements
Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to the Voltaire's plans, objectives and expectations for future operations and are based upon management's current estimates and projections of future results or trends. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. These factors include, but are not limited to, those discussed under the heading "Risk Factors" in Voltaire’s final prospectus for its IPO filed with the Securities and Exchange Commission on July 27, 2007. These forward-looking statements are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
VOLTAIRE LTD.
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
June 30, December 31,
----------- ------------
2007 2006
----------- ------------
(unaudited)
-----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $13,299 $10,237
Restricted deposit 271 267
Accounts receivable:
Trade 7,012 9,637
Other 2,079 835
Deferred cost 2,866 2,552
Inventories 9,287 3,937
----------- ------------
Total current assets 34,814 27,465
----------- ------------
NON CURRENT ASSETS:
Restricted long-term deposits 238 233
Long-term deposits 133 133
Funds in respect of employee rights upon
retirement 911 849
----------- ------------
1,282 1,215
----------- ------------
PROPERTY AND EQUIPMENT, net of accumulated
depreciation and amortization 2,186 1,377
DEFERRED CHARGES, net of accumulated
amortization 288 346
----------- ------------
Total assets $38,570 $30,403
=========== ============
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED
SHARES AND CAPITAL DEFICIENCY
CURRENT LIABILITIES:
Accounts payable and accruals:
Trade $5,446 $5,617
Other 4,250 3,665
Deferred revenues 6,673 6,855
----------- ------------
Total current liabilities 16,369 16,137
----------- ------------
LONG-TERM LIABILITIES:
Long-term loan 5,000 5,000
Warrant on redeemable convertible
preferred shares 1,021 695
Accrued severance pay 1,587 1,411
Deferred revenues 1,562 1,348
----------- ------------
Total long-term liabilities 9,170 8,454
----------- ------------
Total liabilities 25,539 24,591
----------- ------------
REDEEMABLE CONVERTIBLE PREFERRED SHARES of
NIS 0.01 par value; 81,515 63,590
----------- ------------
CAPITAL DEFICIENCY:
Ordinary shares of NIS 0.01 par value 2,739 2,365
Junior Liquidation Securities of NIS 0.01
par value 1,800 1,800
Accumulated deficit (73,023) (61,943)
----------- ------------
Total capital deficiency (68,484) (57,778)
----------- ------------
Total liabilities, redeemable
convertible preferred shares and
capital deficiency $38,570 $30,403
=========== ============
VOLTAIRE LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
(unaudited) (unaudited)
--------------------- ---------------------
REVENUES $11,666 $3,963 $20,246 $8,352
COST OF REVENUES 7,049 2,479 12,440 5,325
---------- ---------- ---------- ----------
GROSS PROFIT 4,617 1,484 7,806 3,027
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Research and
development, net 2,526 2,065 5,240 4,068
Sales and marketing 2,408 1,841 4,514 3,445
General and
administrative 1,002 824 1,981 1,535
---------- ---------- ---------- ----------
Total operating expenses 5,936 4,730 11,735 9,048
---------- ---------- ---------- ----------
LOSS FROM OPERATION (1,319) (3,246) (3,929) (6,021)
FINANCIAL INCOME
(EXPENSES), net (33) (23) (388) 79
---------- ---------- ---------- ----------
LOSS BEFORE INCOME TAX
EXPENSES (1,352) (3,269) (4,317) (5,942)
INCOME TAX EXPENSES (100) - (135) -
---------- ---------- ---------- ----------
NET LOSS, before accretion
of redeemable convertible
preferred shares $(1,452) $(3,269) $(4,452) $(5,942)
========== ========== ========== ==========
Accretion of redeemable
convertible preferred
shares (5,199) (893) (6,253) (1,786)
Charge for beneficial
conversion feature of
series D and D2
redeemable convertible
preferred shares (149) (134) (298) (268)
---------- ---------- ---------- ----------
NET LOSS ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS $(6,800) $(4,296) $(11,003) $(7,996)
========== ========== ========== ==========
Net loss per share
attributable to ordinary
shareholders - Basic and
diluted $(9.79) $(6.66) $(16.15) $(12.39)
========== ========== ========== ==========
Weighted average number of
ordinary shares - Basic
and diluted 694,735 645,419 681,258 645,419
========== ========== ========== ==========
Net loss, before accretion
of redeemable convertible
preferred shares, per
share -, on an as
converted basis - basic
and diluted (unaudited) $(0.10) $(0.26) $(0.31) $(0.46)
========== ========== ========== ==========
Weighted average number of
ordinary shares, on an
as-converted basis -
basic and diluted
(unaudited) 14,641,359 12,789,389 14,218,910 12,789,389
========== ========== ========== ==========
VOLTAIRE LTD.
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
(unaudited) (unaudited)
--------------------- ---------------------
REVENUES $11,666 $3,963 $20,246 $8,352
COST OF REVENUES 7,049 2,479 12,440 5,325
---------- ---------- ---------- ----------
GROSS PROFIT 4,617 1,484 7,806 3,027
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Research and
development, net 2,483 2,052 5,179 4,041
Sales and marketing 2,352 1,821 4,432 3,404
General and
administrative 799 782 1,705 1,459
---------- ---------- ---------- ----------
Total operating expenses 5,634 4,655 11,316 8,904
---------- ---------- ---------- ----------
LOSS FROM OPERATION (1,017) (3,171) (3,510) (5,877)
FINANCIAL INCOME
(EXPENSES), net 96 (23) (4) 79
---------- ---------- ---------- ----------
LOSS BEFORE INCOME TAX
EXPENSES (921) (3,194) (3,514) (5,798)
INCOME TAX EXPENSES (100) - (135) -
---------- ---------- ---------- ----------
NET LOSS ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS $(1,021) $(3,194) $(3,649) $(5,798)
========== ========== ========== ==========
Net loss per share on an
as-converted basis -
basic and diluted
(unaudited) $( 0.07) $(0.25) $(0.26) $(0.45)
========== ========== ========== ==========
Weighted average number of
ordinary shares on an as-
converted basis - basic
and diluted (unaudited) 14,641,359 12,789,389 14,218,910 12,789,389
========== ========== ========== ==========
VOLTAIRE LTD.
RECONCILIATION BETWEEN GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF
OPERATIONS
(U.S. dollars in thousands, except per share data)
Three months ended Six months ended
June 30, 2007 June 30, 2007
---------------------------- ----------------------------
GAAP Adj. NON-GAAP GAAP Adj. NON-GAAP
---------------------------- ----------------------------
(unaudited) (unaudited)
---------------------------- ----------------------------
REVENUES $11,666 - $11,666 $20,246 - $20,246
COST OF
REVENUES 7,049 - 7,049 12,440 - 12,440
---------------------------- ----------------------------
GROSS PROFIT 4,617 - 4,617 7,806 - 7,806
---------------------------- ----------------------------
OPERATING
EXPENSES:
Research and
develop-
ment, net
(1) 2,526 (43) 2,483 5,240 (61) 5,179
Sales and
marketing
(1) 2,408 (56) 2,352 4,514 (82) 4,432
General and
ad-
ministrative
(1) 1,002 (203) 799 1,981 (276) 1,705
---------------------------- ----------------------------
Total
operating
expenses 5,936 (302) 5,634 11,735 (419) 11,316
---------------------------- ----------------------------
LOSS FROM
OPERATION (1,319) 302 (1,017) (3,929) 419 (3,510)
FINANCIAL
INCOME
(EXPENSES),
net (2) (33) 129 96 (388) 384 (4)
---------------------------- ----------------------------
LOSS BEFORE
INCOME TAX
EXPENSES (1,352) (431) (921) (4,317) (803) (3,514)
INCOME TAX
EXPENSES (100) - (100) (135) - (135)
---------------------------- ----------------------------
NET LOSS,
before
accretion of
redeemable
convertible
preferred
shares (1,452) (431) (1,021) (4,452) (803) (3,649)
============================ ============================
Accretion of
redeemable
convertible
preferred
shares (5,199) 5,199 - (6,253) 6,253 -
Charge for
beneficial
conversion
feature of
series D and
D2
redeemable
convertible
preferred
shares (149) 149 - (298) 298 -
---------------------------- ----------------------------
NET LOSS
ATTRI-
BUTABLE TO
ORDINARY
SHARE-
HOLDERS $(6,800)$(5,779) $(1,021) $(11,003)$(7,354) $(3,649)
============================ ============================
Net loss per
share
attributable
to ordinary
shareholders
- Basic and
diluted $(9.79) $(1.47) $(16.15) (5.36)
========== ========== ========== ==========
Weighted
average
number of
ordinary
shares -
Basic and
diluted 694,735 694,735 681,258 681,258
========== ========== ========== ==========
Net loss per
share attri-
butable to
ordinary
share-
holders, on
an as-
converted
basis -
basic and
diluted
(unaudited) $(0.10) $( 0.07) $(0.31) $(0.26)
========== ========== ========== ==========
Weighted
average
number of
ordinary
shares, on
an
as-
converted
basis-
basic and
diluted
(unaudited) 14,641,359 14,641,359 14,218,910 14,218,910
========== ========== ========== ==========
(1) Adjustments related to share-based compensation expenses.
(2) Adjustments related to changes in fair value of outstanding
warrants and amortization of deferred charges on this warrants.
VOLTAIRE LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
Three months
ended Six months ended
June 30, June 30,
----------------- ----------------
2007 2006 2007 2006
-------- -------- ----------------
(unaudited) (unaudited)
----------------- ----------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss before accretion of
redeemable convertible preferred
shares $(1,452) $(3,269) $(4,452)$(5,942)
Adjustments required to reconcile
net loss before accretion of
redeemable convertible preferred
shares to net cash used in
operating activities:
Depreciation and
amortization 211 144 400 291
Change in accrued severance
pay 40 170 176 223
Non-cash share-based
compensation expenses 302 75 419 144
Amortization of deferred
charges 29 - 58 -
Revaluation of warrant
liabilities 100 - 326 -
Changes in operating asset
and liability items:
Decrease (increase) in
accounts receivable 3,070 1,099 1,058 (346)
Increase (decrease) in
accounts payable and
accruals (2,295) 2,639 225 2,403
Increase in inventories (3,258) (696) (5,350) (265)
-------- -------- ----------------
Net cash provided by (used in)
operating activities (3,253) 162 (7,140) (3,492)
-------- -------- ----------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and
equipment (741) (246) (1,209) (346)
Amounts funded in respect of
employee rights upon
retirement, net (19) (117) (62) (150)
Decrease (increase) in long-term
deposits 5 (8) - (21)
-------- -------- ----------------
Net cash used in investing
activities (755) (371) (1,271) (517)
-------- -------- ----------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from exercise of
warrants 86 - 99 -
Issuance of redeemable
convertible preferred shares,
net of issuance expenses - - 11,374 -
Long term-loan received - 2,500 - 2,500
-------- -------- ----------------
Net cash provided by financing
activities 86 2,500 11,473 2,500
-------- -------- ----------------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (3,922) 2,291 3,062 (1,509)
BALANCE OF CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD 17,221 8,046 10,237 11,846
-------- -------- ----------------
BALANCE OF CASH AND CASH
EQUIVALENTS AT END OF PERIOD 13,299 10,337 13,299 10,337
======== ======== ================
Supplemental disclosure of non-cash
activities:
Cumulative adjustment from adoption
of FIN 48 $- $- $221 $-
======== ======== ================