ANDOVER, MA--(Marketwire - November 6, 2008) - Vicor Corporation (
NASDAQ:
VICR) today reported
its financial results for the third quarter of 2008 ended September 30,
2008.
Revenues for the third quarter increased by 7.5% to $51,278,000, compared
to $47,693,000 for the corresponding period a year ago, and increased 4.0%
on a sequential basis from $49,297,000 for the second quarter of 2008.
Gross margin increased to $21,903,000 for the third quarter of 2008,
compared to $17,904,000 for the corresponding period a year ago, and
increased on a sequential basis from $21,113,000 for the second quarter of
2008. Gross margin, as a percentage of revenue, increased to 42.7% for the
third quarter of 2008 compared to 37.5% for the third quarter of 2007, and
decreased slightly on a sequential basis from 42.8% for the second quarter
of 2008. Net income for the third quarter was $609,000, or $0.01 per
diluted share, compared to net income of $543,000, or $0.01 per diluted
share, for the corresponding period a year ago and a net loss of
$(1,323,000), or $(0.03) per diluted share, for the second quarter of 2008.
For the nine months ended September 30, 2008, revenues increased by 8.6% to
$154,044,000 from $141,880,000 for the corresponding period a year ago.
Net loss for the nine month period was $(94,000), or $(0.00) per diluted
share, compared to net income of $3,838,000 or $0.09 per diluted share, for
the corresponding period a year ago.
The book-to-bill ratio for the third quarter of 2008 was 1.20:1, as
compared to 1.01:1 for the second quarter of 2008. Backlog at the end of
the third quarter of 2008 was $56.4 million, as compared to $46.3 million
at the end of the second quarter of 2008.
Commenting on the third quarter, Patrizio Vinciarelli, Chief Executive
Officer, noted, "Vicor's third quarter bookings were firm despite the
weakening global economy. Our consolidated gross margin as a percentage of
sales reflects our continued commitment to operational efficiency and state
of the art manufacturing. Revenue from our brick business unit increased
sequentially and relative to the third quarter of 2007."
"We are encouraged by the progress of our V-I Chip business unit, despite
previously discussed delays in higher volume shipments. V-I Chip's third
quarter product revenue increased over 38% sequentially and, on a year to
date basis, is 157% ahead of the revenue generated through the third
quarter of 2007. Picor continued to make progress on the execution of its
synergistic strategy. While still in the early stages of its evolution to
a merchant model, Picor has recently achieved a significant design win with
an early adopter of factorized power."
Dr. Vinciarelli concluded, "Our high expense levels have reflected major
investments in the development of our products and markets. Going forward,
we intend to make these investments more productive and our operations more
efficient. We are concerned by the challenges likely to develop as a
result of a weakening global economy. Our ability to return to robust
profitability as quickly as we'd like may be constrained by softened demand
in many of our markets. However, because Vicor remains well-capitalized, we
believe the Company is well-positioned to weather the global downturn.
Also, with our efficient brick business model and the momentum we are
seeing in disruptive technology products pioneered by V-I Chip and Picor,
we believe we are well-positioned for longer term growth and improved
profitability."
Depreciation and amortization for the third quarter of 2008 was
approximately $2.6 million, and capital additions totaled $2.4 million.
For the first nine months of 2008 depreciation and amortization was $7.8
million and capital additions were $6.6 million. This compares to $8.9
million and $7.4 million, respectively, for the first nine months of 2007.
Cash, restricted cash and cash equivalents and short-term investments
decreased by $8.1 million to approximately $27.6 million at the end of the
third quarter of 2008 from $35.7 million at the end of the second quarter
of 2008. The sequential decrease in cash, restricted cash and cash
equivalents and short-term investments was attributable to the payment of
dividends of approximately $6.9 million during the third quarter. There
were no share repurchases during the first nine months of 2008, and
approximately $8.5 million remains authorized for additional purchases
under the Company's stock repurchase plan.
As of September 30, 2008, the Company held approximately $38.4 million, at
par value, of auction rate securities, down from $55.2 million, at par
value, of such holdings as of December 31, 2007. As previously disclosed,
conditions in the market for auction rate securities and the repeated
failure of auctions by which such securities are priced led the Company to
reclassify its holdings as long-term investments as of March 31, 2008.
Further, the Company determined the fair value of its holdings at September
30, 2008, was approximately $36.1 million. This approximately $2.3 million
decline in value is considered temporary and is recorded as an unrealized
loss, net of taxes, in accumulated other comprehensive (loss) income on the
Company's consolidated balance sheet.
UBS AG announced that on August 8, 2008, UBS AG and certain of its
affiliates entered into settlements in principle with certain regulatory
authorities, including the Massachusetts Securities Division, with respect
to UBS's sale and marketing of auction rate securities. Pursuant to the
settlements, UBS agreed to offer to purchase certain auction rate
securities from certain holders. On October 8, 2008, the Company received
a settlement offer from UBS regarding $18,300,000 of auction rate
securities held by the Company with a broker-dealer affiliate of UBS.
Pursuant to the settlement offer, the Company may be eligible to sell its
auction rate securities held with UBS to UBS at par during the period of
June 30, 2010 through July 2, 2012. Until then, the Company would be
entitled to continued interest payments on its auction rate securities in
accordance with their terms. If the Company accepts the settlement offer
from UBS, until June 30, 2010 the Company also may be eligible to borrow at
"no net cost" from UBS an amount up to 75% of the market value of the
auction rate securities held with UBS. The terms and conditions of the
settlement offer include a release of claims against UBS and its
affiliates. The Company's management and outside legal counsel are in the
process of the reviewing the settlement offer, which expires on November
14, 2008.
On September 10, 2008, Bank of America Corporation issued a press release
announcing an agreement in principle with the Massachusetts Securities
Division under which Bank of America would offer to purchase at par auction
rate securities held by certain of its customers. The press release
indicates that under the terms of the agreement in principle, the
repurchase program applies to businesses with account values up to
$10,000,000. The Company holds $20,100,000 par value of auction rate
securities purchased through Banc of America Securities LLC. The Company
does not appear to be eligible, and has not received an offer, to
participate in the announced repurchase program, and has not otherwise
received a proposed liquidity solution from Bank of America to date.
Based on the Company's ability to access cash and other short-term
investments and its expected operating cash flows, the Company's management
does not anticipate the current lack of liquidity of its auction rate
securities holdings will affect the Company's ability to execute its
current operating plan.
For the third quarter of 2008, the tax provision is based on the estimated
annual effective tax rate for the full year, which includes estimated
federal, state and foreign income taxes on the Company's projected pre-tax
income and estimated federal and state income taxes for certain
minority-owned subsidiaries that are not part of the Company's consolidated
income tax returns, offset by the expected utilization of federal and
foreign net operating loss carryforwards. For the quarters ended September
30, 2008 and 2007, the Company reduced its tax reserves by $1,123,000 and
$1,517,000, respectively, due to closing tax periods in certain
jurisdictions. The 2008 tax provision also includes discrete items,
principally for increases in accrued interest for potential liabilities and
expense associated with a reduction in state income tax refunds receivable.
The 2007 tax provision also included discrete items for a reduction in tax
reserves in the second quarter of 2007 and by refunds of interest received
and recorded as a benefit during the first quarter of 2007 as final
settlement for the audit of its federal tax returns for tax periods 1994
though 2002 by the Internal Revenue Service.
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,
November 6, 2008, at 5:00 p.m. Eastern Time. Shareholders interested in
participating in the call should call 888-419-5570 at approximately 4:50
p.m. and use the Passcode 77355381. 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
November 21, 2008. The replay dial-in number is 888-286-8010 and the
Passcode is 63602476. 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 within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Any
statement in this press release that is not a statement of historical fact
is a forward-looking statement, and, the words "believes," "expects,"
"anticipates," "intend," "estimate," "plans," "assumes," "may," "will,"
"would," "should," "continue," "prospective," "project," and other similar
expressions identify forward-looking statements. Forward-looking
statements also include statements regarding bookings, shipments, the pace
of new design wins with early adopters and gaining broader product
acceptance within the Company's target markets, and plans to expand
capacity with incremental investments in equipment. These statements are
based upon the Company's current expectations and estimates as to the
prospective events and circumstances that may or may not be within the
Company's control and as to which there can be no assurance. Actual
results could differ materially from those projected in the forward-looking
statements as a result of various factors, including those economic,
business, operational and financial considerations set forth in the
Company's Annual Report on Form 10-K for the year ended December 31, 2007,
under Part I, Item I -- "Business," "--Competition," "--Patents," and "--
Licensing," under Part I, Item 1A -- "Risk Factors," under Part I, Item 3
-- "Legal Proceedings," and under Part II, Item 7 -- "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
The risk factors set forth in the Annual Report on Form 10-K may not be
exhaustive. Therefore, the information contained in Annual Report on Form
10-K should be read together with other reports and documents the Company
files with the Securities and Exchange Commission from time to time,
including Forms 10-Q, 8-K and 10-K, which may supplement, modify, supersede
or update those risk factors. The Company does not undertake any
obligation to update any forward-looking statements as a result of future
events or developments.
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 electronic data processing, industrial control,
military electronics and telecommunications markets.
VICOR CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Thousands except for per share amounts)
QUARTER ENDED NINE MONTHS ENDED
(Unaudited) (Unaudited)
-------------------- --------------------
SEPT 30, SEPT 30, SEPT 30, SEPT 30,
2008 2007 2008 2007
--------- --------- --------- ---------
Net revenues $ 51,278 $ 47,693 $ 154,044 $ 141,880
Cost of revenues 29,375 29,789 88,568 84,150
--------- --------- --------- ---------
Gross margin 21,903 17,904 65,476 57,730
Operating expenses:
Sales & administration 13,703 12,314 41,730 36,490
Research & development 7,801 7,735 23,392 22,802
Gain from litigation-
related settlement, net 0 0 (177) (1,353)
--------- --------- --------- ---------
Total operating
expenses 21,504 20,049 64,945 57,939
Income (loss) from operations 399 (2,145) 531 (209)
Other income (expense), net (230) 1,242 489 3,725
--------- --------- --------- ---------
Income (loss) before income
taxes 169 (903) 1,020 3,516
(Benefit) provision for income
taxes (527) (1,616) 65 (1,329)
Loss from equity method
investment, (net of tax) 87 170 1,049 1,007
--------- --------- --------- ---------
Net income (loss) $ 609 $ 543 ($ 94) $ 3,838
========= ========= ========= =========
Net income (loss) per share:
Basic $ 0.01 $ 0.01 ($ 0.00) $ 0.09
Diluted $ 0.01 $ 0.01 ($ 0.00) $ 0.09
Shares outstanding:
Basic 41,660 41,617 41,646 41,586
Diluted 41,685 41,715 41,646 41,657
VICOR CORPORATION
CONSOLIDATED BALANCE SHEET
(Thousands)
SEPT 30, DEC 31,
2008 2007
(Unaudited) (Unaudited)
============ ============
Assets
Current assets:
Cash and cash equivalents $ 25,436 $ 20,017
Restricted cash and cash equivalents 178 0
Short-term investments 1,964 57,490
Accounts receivable, net 28,877 32,054
Inventories, net 27,104 23,078
Deferred tax assets 741 741
Other current assets 2,977 2,539
------------ ------------
Total current assets 87,277 135,919
Restricted cash and cash equivalents 720 952
Long-term investments 36,540 0
Property and equipment, net 49,151 50,257
Other assets 5,333 5,330
------------ ------------
$ 179,021 $ 192,458
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 8,745 $ 10,062
Accrued compensation and benefits 6,476 6,003
Other accrued liabilities 4,348 3,989
Deferred revenue 854 941
------------ ------------
Total current liabilities 20,423 20,995
Long-term deferred revenue 1,124 42
Long-term income taxes payable 303 1,344
Deferred income taxes 1,637 1,597
Minority interests 4,400 4,040
Stockholders' equity:
Capital stock 161,346 159,834
Retained earnings 113,675 126,263
Accumulated other comprehensive (loss)
income (2,060) 170
Treasury stock (121,827) (121,827)
------------ ------------
Total stockholders' equity 151,134 164,440
------------ ------------
$ 179,021 $ 192,458
============ ============
Contact Information: For further information contact:
James A. Simms
Chief Financial Officer
or
Mark A. Glazer
Treasurer
Tel: 978-470-2900
Fax: 978-749-3439