ANDOVER, MA -- (MARKET WIRE) -- February 22, 2007 -- Vicor Corporation (
NASDAQ:
VICR) today reported
its financial results for the fourth quarter and fiscal year ended December
31, 2006.
Revenues for the quarter increased to $48,033,000 compared to $46,294,000
for the corresponding period a year ago. Net loss for Q4 was $38,150,000,
or $.92 per diluted share compared to net income of $2,080,000, or $.05 per
diluted share, in Q4 2005. The net loss in Q4 2006 was primarily due to a
loss from a litigation-related settlement described below.
For the year ended December 31, 2006 revenues increased by 7.1% to
$192,047,000 from $179,351,000 for the same period of 2005. The Company
reported a net loss for 2006 of $29,738,000, or $.71 per diluted share
compared to net income of $3,916,000 or $.09 per diluted share in 2005.
Gross margin declined to 41.0% in Q4 2006 from 42.7% in Q4 2005 and
decreased on a sequential basis from 42.5% in Q3 2006. The book-to-bill
ratio for Q4 2006 was 0.94:1 as compared to 1.00:1 in Q3 2006. Backlog at
the end of 2006 was $36.4 million as compared to $38.6 million at the end
of 2005.
In Q4 2006, the Company recorded $200,000 for expensing stock-based
compensation in accordance with Statement of Financial Accounting Standards
No. 123 (revised 2004) (FAS 123R).
Commenting on the fourth quarter, Vicor's CEO Patrizio Vinciarelli noted:
"Demand fell short of expectations as we continued to experience delays in
significant orders projected to be booked in Q4. As in Q3, these delays
caused disappointing book-to-bill and revenue levels. While demand for
Vicor bricks was relatively soft, there was progress with key V-I Chip
engagements, leading to record bookings and shipment of V-I Chips. Margins
were lower than expected because of non-recurring factors."
"For 2007, we are anticipating revenue growth at a rate slightly higher
than 2006 with a small expansion in operating margins. Revenues for 2007
will largely consist of bricks experiencing low year-over-year growth and
expanding V-I Chip sales. Given the low starting point, V-I Chip's
contribution to total revenues should become significant to overall revenue
growth in 2008. Picor product introductions slated for 2007 should begin
to make a significant contribution to top line growth in 2009."
The Company announced that it has reached an agreement in principle with
Ericsson, Inc., to settle a lawsuit brought by Ericsson against the Company
in California state court. Under the terms of the settlement
agreement, reached on February 16 after a Court ordered mediation, the
Company will pay $50 million to Ericsson, of which $12.8 million will be
paid by the Company's insurance carriers. The Company's decision to enter
into the settlement followed an adverse ruling by the court in January in
connection with a settlement between Ericsson and co-defendants Exar
Corporation and Rohm Device USA, LLC, two of the Company's component
suppliers prior to 2002. The Company strongly disagrees with the ruling,
which it is appealing. Although a successful appeal would enable the
Company to seek recoveries from Exar and Rohm, there is no assurance that
it will be successful in the appeal. In light of this ruling and after
taking into consideration the possibility of further recoveries from the
insurance carriers, the Company decided to settle the Ericsson case at this
time. Accordingly, the Company recorded a net loss of $37.2 million from
litigation-related settlement in the fourth quarter of 2006.
Within the quarter, the Company recorded a loss of $1.0 million for a
decline in the value of an investment judged to be other than temporary,
which was charged to other income (expense), net.
Depreciation and amortization in Q4 was $3.5 million and capital additions
were $1.3 million. In 2006, depreciation and amortization was $14.2
million and capital additions were $5.5 million. This compares to $17.1
million and $8.9 million, respectively for 2005. Prior to any payment
related to the aforementioned settlement which is anticipated to occur in
2007, cash and short and long-term investments increased by $2.3 million to
approximately $118.6 million at the end of Q4 2006 from $116.3 million at
the end of Q3 2006. For the year, cash and short and long-term investments
decreased by $7.5 million from $126.1 million at the end of 2005. During
2006 the Company has paid approximately $11.3 million in dividends and
repurchased 825,700 shares, for approximately $10.8 million. There were no
share repurchases during Q4 2006. At the end of 2006 there was
approximately $8.5 million remaining in the authorized stock buy-back plan.
In 2006, the tax provision included estimated income taxes for federal and
state taxes for certain minority-owned subsidiaries that are not part of
the Company's consolidated income tax returns, for the Federal alternative
minimum tax and for estimated income taxes due in various state and
international taxing jurisdictions. In the third quarter of 2006, the
Company reduced its tax reserves by $468,000 due to closing tax periods in
certain jurisdictions.
Vicor's Board of Directors has approved a cash dividend of $.15 per share
payable on March 27, 2007 to shareholders of record at the close of
business on March 9, 2007. The Board of Directors anticipates reviewing
its dividend policy on a semi-annual basis. Dividends are declared at the
discretion of the Board and depend on actual cash from operations, the
Company's financial condition, capital requirements and any other factors
the Company's Board of Directors may consider relevant.
For more information on Vicor and its products, please visit the Company's
website at
www.vicorpower.com.
Earnings Conference Call
Vicor will be holding its investor conference call, today, Thursday,
February 22, 2007 at 5:00 p.m. Eastern Time. Shareholders interested in
participating in the call, should call 866-800-8648 at approximately 4:50
p.m. and use the Passcode 57814111. Internet users can listen to a
real-time audio broadcast of the conference call on the Investor Relations
section of Vicor's website at
www.vicorpower.com/irwebcast. Please go to
the website at least 15 minutes prior to the call to register, download and
install any necessary software. For those who cannot participate a replay
will be available, shortly after the conclusion of the call, through March
8, 2007. The replay dial-in number is 888-286-8010 and the Passcode is
53235272. In addition, a webcast replay of the conference call will also
be available on the Investor Relations section of Vicor's website at
www.vicorpower.com/irwebcast beginning shortly after the conclusion of the
call.
This press release contains certain forward-looking statements as that term
is defined in the Private Securities Litigation Reform Act of 1995. You
can identify these statements by our use of the words "may," "will,"
"would," "should," "plans," "expects," "anticipates," "believes,"
"continue," "estimate," "prospective," "project," "intend," and similar
expressions. These forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from
those projected or anticipated. These risks and uncertainties include our
ability to develop and market new products and technologies
cost-effectively, to leverage design wins into increased product sales, to
continue to make progress with key customers and prospects, to decrease
manufacturing costs, to enter into licensing agreements that amplify the
market opportunity and accelerate market penetration, to realize
significant royalties under license agreements, to achieve a sustainable
increased bookings rate over a longer period, to hire key personnel and to
continue to build our three business units, and to successfully leverage
the V-I Chips in standard products to promote market acceptance of
Factorized Power, factors impacting the company's various end markets, as
well as those risks and uncertainties identified in the Company's Annual
Report on Form 10-K. The risk factors contained in the Annual Report on
Form 10-K may not be exhaustive. Therefore, the information contained in
that Form 10-K should be read together with other reports and documents
that the Company files with the SEC from time to time, which may
supplement, modify, supersede or update those risk factors.
Vicor Corporation designs, develops, manufactures and markets modular power
components and complete power systems based upon a portfolio of patented
technologies. Headquartered in Andover, Massachusetts, Vicor sells its
products primarily to the communications, information technology,
industrial control and military electronics markets.
VICOR CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Thousands except for per share amounts)
QUARTER ENDED TWELVE MONTHS ENDED
(Unaudited) (Unaudited)
--------- ---------- --------- ---------
DEC 31, DEC 31, DEC 31, DEC 31,
2006 2005 2006 2005
--------- ---------- --------- ---------
Net revenues $ 48,033 $ 46,294 $ 192,047 $ 179,351
Cost of revenues 28,359 26,525 110,211 107,944
--------- ---------- --------- ---------
Gross margin 19,674 19,769 81,836 71,407
Operating expenses:
Sales &
administration 12,641 10,426 46,437 40,811
Research &
development 7,850 7,400 31,381 29,466
Loss (gain) from
litigation-related
settlement, net 37,200 0 37,200 (2,250)
--------- ---------- --------- ---------
Total operating
expenses 57,691 17,826 115,018 68,027
(Loss) income from operations (38,017) 1,943 (33,182) 3,380
--------- ---------- --------- ---------
Other income (expense), net 305 562 4,092 1,500
--------- ---------- --------- ---------
Income (loss) before income
taxes (37,712) 2,505 (29,090) 4,880
Provision for income taxes 438 425 648 964
--------- ---------- --------- ---------
Net income (loss) ($ 38,150) $ 2,080 ($ 29,738) $ 3,916
========= ========== ========= =========
Net income (loss) per share:
Basic ($ 0.92) $ 0.05 ($ 0.71) $ 0.09
Diluted ($ 0.92) $ 0.05 ($ 0.71) $ 0.09
Shares outstanding:
Basic 41,563 42,004 41,839 41,923
Diluted 41,563 42,211 41,839 42,089
VICOR CORPORATION
CONSOLIDATED BALANCE SHEET
(Thousands)
DEC 31, DEC 31,
2006 2005
(Unaudited) (Unaudited)
============ ============
Assets
Current assets:
Cash and cash equivalents $ 36,185 $ 34,024
Short-term investments 82,401 88,692
Accounts receivable, net 30,399 28,072
Insurance receivable for litigation 12,800 0
Inventories, net 22,001 17,168
Deferred tax assets 3,702 2,673
Other current assets 2,181 2,518
------------ ------------
Total current assets 189,669 173,147
Long-term investments 0 3,348
Property and equipment, net 51,573 59,114
Other assets 6,865 10,146
------------ ------------
$ 248,107 $ 245,755
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 7,273 $ 8,741
Accrued compensation and benefits 5,192 4,583
Other accrued liabilities 6,314 9,438
Accrual for litigation settlement 50,000 0
------------ ------------
Total current liabilities 68,779 22,762
Deferred income taxes 4,389 3,172
Minority interests 3,593 3,031
Stockholders' equity:
Capital stock 158,594 152,122
Retained earnings 134,579 175,660
Treasury stock (121,827) (110,992)
------------ ------------
Total stockholders' equity 171,346 216,790
------------ ------------
$ 248,107 $ 245,755
============ ============
Contact Information: For further information contact:
Mark A. Glazer
Chief Financial Officer
Vicor Corporation
Tel: 978-470-2900
Fax: 978-749-3439