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posted on 04 April 2008 10:10

BILLERICA, Mass. & HERZELIYA, Israel--(BUSINESS WIRE)--Voltaire Ltd. (NASDAQ: VOLT - News), a leading provider of grid backbone solutions for data centers, today announced that it has made an early payment to the Office of the Chief Scientist of the Israeli Ministry of Industry, Trade and Labor (OCS) to conclude the Company’s participation in OCS’s sponsored research and development grant program.

Voltaire has paid the OCS approximately $2.7 million, which will be recorded in the Company’s first quarter results as a one-time payment, and has terminated its outstanding financial commitments to the OCS.

Under the OCS sponsored grant programs, participating companies are required to pay the OCS royalties on the sale of products developed through sponsored research and development. These payments are accounted for as cost of goods sold, and, as such, by repaying the commitment up front, will have a positive impact on the company’s gross margin in future quarters. The company chose to terminate its participation following a cost-benefit analysis of the program, taking into account its accelerated revenue growth in recent quarters, strong cash generation and internal forecasts for the coming quarters.

“We are very pleased to reach this milestone in the company’s maturity process,” said Ronnie Kenneth, Chairman and CEO of Voltaire. “Our strong cash balance of close to $60 million at the end of 2007, as well as our growth forecast for the coming year, have enabled the early termination of our participation in the program. This decision is expected to contribute to our gross and operating margins moving forward.”

About Voltaire

Voltaire (NASDAQ: VOLT - News) 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. More information about Voltaire is available at http://www.voltaire.com or by calling 1-800-865-8247.

^{[Formatted by Paul Warren.]}