ANDOVER, MA--(Marketwire - August 9, 2007) - July 30, 2007, updated August 9, 2007 for
certain financial statement revisions. Vicor Corporation (
NASDAQ:
VICR)
today updated its preliminary financial results for the second quarter of
2007 ended June 30, 2007, previously reported on July 30, 2007.
Revenues for the quarter decreased to $47,522,000 compared to $49,210,000
for the corresponding period a year ago. Net income for Q2, on a
preliminary basis, as currently reported is $1,705,000, or $.04 per
diluted share, compared to net income of $2,874,000, or $.07 per diluted
share, in Q2 2006.
For the six months ended June 30, 2007 revenues decreased to $94,503,000
from $97,082,000 for the same period of 2006. The Company currently
reports net income for the period, on a preliminary basis, of $4,107,000,
or $.10 per diluted share, compared to net income of $5,950,000 or $.14 per
diluted share in 2006.
Gross margin decreased to 41.8% in Q2 2007 from 42.9% in Q2 2006 and
decreased on a sequential basis from 43.1% in Q1 2007 due, in part, to a
write off of certain manufacturing equipment and product mix. The
book-to-bill ratio for Q2 2007 was 1.08:1 as compared to 1.00:1 in Q1 2007.
Backlog at the end of Q2 2007 was $40.4 million as compared to $36.4
million at the end of 2006.
During the second quarter, the Company settled its reset patent litigation
action against the remaining defendants for $1,593,000, net of settlement
expenses, which is reported in Gain from litigation-related settlement,
net. The reset patent expired in 2002.
The Company's financial results are considered preliminary and subject to
change based upon the final accounting for investments made by the Company
in a related party entity. During Q2 2007, the Company made an additional
investment of $1 million in the related party and agreed to a further
investment of $1 million if certain conditions are met. The additional
investment made in Q2 2007 requires the Company to account for this
investment under the equity method of accounting and to retroactively
restate its previously issued consolidated financial statements to reflect
the equity method of accounting in prior periods. The preliminary
financial results presented herein include an additional charge to Other
income (expense), net of $840,000 during Q2 2007 to reflect the Company's
preliminary estimate of the decline in value related to its additional $1
million investment. After taking this charge into account, the Company's
total investment in the related party at June 30, 2007 is currently valued
at $2.16 million. The Company is waiting for certain financial information
from the related party in order to properly record its investment under the
equity method of accounting and the Company is performing additional
valuation analyses to determine if any further adjustment in its investment
is required due to other than temporary declines in value.
On August 1, 2007, the Company reached an agreement in principle to settle
the lawsuit with Concurrent Computer Corporation ("Concurrent") for
$2,350,000, all of which will be paid by the Company's insurance carriers.
Both the liability to Concurrent and the receivable from the insurance
carriers have been recorded in the accompanying consolidated balance sheet,
reported as Accrual for litigation settlement and Insurance receivable for
litigation, respectively. There was no impact on the consolidated
statement of operations for the second quarter of 2007 as a result of the
settlement. The Company had previously reported on July 30, 2007, on a
preliminary basis, an estimated loss of $2,350,000 related to this
litigation.
Commenting on the second quarter, Vicor's CEO Patrizio Vinciarelli noted:
"Brick bookings improved approximately 6% sequentially while VI Chip
bookings grew over 100%. We also achieved record VI Chip shipments with
essentially 100% on time delivery and manufacturing yields."
Vinciarelli went on to say: "VI Chip is accelerating its pace of new
design wins with early adopters and gaining broader acceptance within its
target markets. Bookings have been ahead of plan and we are expanding
capacity with incremental investments in equipment."
Depreciation and amortization in Q2 2007 was approximately $2.9 million and
capital additions were $1.0 million. For the first six months of 2007
depreciation and amortization was $6.0 million and capital additions were
$3.1 million. This compares to $7.3 million and $3.0 million,
respectively, for the first six months of 2006. Cash and short-term
investments increased by $6.0 million to approximately $82.7 million at the
end of Q2 2007 from $76.7 million at the end of the first quarter of 2007.
There were no share repurchases during Q2 2007 and at the end of the
quarter there was approximately $8.5 million remaining in the authorized
stock buy-back plan.
In 2007, the tax provision is based on the estimated effective tax rate for
2007, which includes estimated federal and state income taxes for certain
minority-owned subsidiaries that are not part of the Company's consolidated
income tax returns, estimated income taxes due in various state and
international taxing jurisdictions and increases in accrued interest for
potential liabilities. The expense was partially offset by a discrete item
representing refunds of interest received and recorded as a benefit during
the first quarter of 2007 as final settlement related to the audit of the
Company's federal tax returns for tax years 1994 though 2002 by the
Internal Revenue Service.
On July 25, 2007, Vicor's Board of Directors approved a cash dividend of
$.15 per share payable on August 30, 2007 to shareholders of record at the
close of business on August 14, 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.
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. Forward-looking statements also include statements regarding
VI Chip bookings, shipments, the pace of new design wins with early
adopters and gaining broader acceptance within its target markets and our
plans to expand capacity with incremental investments in equipment. 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 VI Chips in standard products to promote market
acceptance of Factorized Power, factors impacting the company's various end
markets, the impact of write-downs in the value of assets, the effects of
equity accounting with respect to certain affiliates, 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 - PRELIMINARY
(Thousands except for per share amounts)
QUARTER ENDED SIX MONTHS ENDED
(Unaudited) (Unaudited)
------------------ -------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2007 2006 2007 2006
-------- -------- -------- ---------
Net revenues $ 47,522 $ 49,210 $ 94,503 $ 97,082
Cost of revenues 27,650 28,101 54,404 54,871
-------- -------- -------- ---------
Gross margin 19,872 21,109 40,099 42,211
Operating expenses:
Sales & administration 12,164 11,657 24,177 22,571
Research & development 7,589 8,028 14,989 15,570
Gain from litigation-
related settlement, net (1,593) 0 (1,593) 0
-------- -------- -------- ---------
Total operating expenses 18,160 19,685 37,573 38,141
Income from operations 1,712 1,424 2,526 4,070
-------- -------- -------- ---------
Other income (expense), net 131 1,409 1,708 2,469
-------- -------- -------- ---------
Income before income taxes 1,843 2,833 4,234 6,539
Provision (benefit) for income taxes 138 (41) 127 589
-------- -------- -------- ---------
Net income $ 1,705 $ 2,874 $ 4,107 $ 5,950
======== ======== ======== =========
Net income per share:
Basic $ 0.04 $ 0.07 $ 0.10 $ 0.14
Diluted $ 0.04 $ 0.07 $ 0.10 $ 0.14
Shares outstanding:
Basic 41,576 42,144 41,570 42,046
Diluted 41,641 42,482 41,628 42,433
VICOR CORPORATION
CONSOLIDATED BALANCE SHEET - PRELIMINARY
(Thousands)
JUNE 30, DEC 31,
2007 2006
(Unaudited) (Unaudited)
============ ============
Assets
Current assets:
Cash and cash equivalents $ 30,574 $ 36,185
Short-term investments 52,100 82,401
Accounts receivable, net 27,668 30,399
Insurance receivable for litigation 2,350 12,800
Inventories, net 23,583 22,001
Deferred tax assets 3,648 3,702
Other current assets 2,852 2,181
------------ ------------
Total current assets 142,775 189,669
Property and equipment, net 48,865 51,573
Other assets 6,719 6,865
------------ ------------
$ 198,359 $ 248,107
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 7,037 $ 7,273
Accrued compensation and benefits 5,583 5,192
Other accrued liabilities 5,989 6,314
Accrual for litigation settlement 2,350 50,000
------------ ------------
Total current liabilities 20,959 68,779
Deferred income taxes 4,315 4,389
Minority interests 3,529 3,593
Stockholders' equity:
Capital stock 159,024 158,594
Retained earnings 132,359 134,579
Treasury stock (121,827) (121,827)
------------ ------------
Total stockholders' equity 169,556 171,346
------------ ------------
$ 198,359 $ 248,107
============ ============
Contact Information: For further information contact:
Mark A. Glazer
Chief Financial Officer
Vicor Corporation
Tel: 978-470-2900
Fax: 978-749-3439