ANDOVER, MA--(Marketwire - March 17, 2008) - Vicor Corporation (
NASDAQ:
VICR) today reported
its financial results for the fourth quarter and year ended December 31,
2007. The Company will be filing a Form 12b-25, Notification of Late
Filing, with the Securities and Exchange Commission relating to its Annual
Report on Form 10-K for the year ended December 31, 2007, which
automatically extends the March 17, 2008 filing due date for up to 15
calendar days under SEC rules.
The Company noted that, due to an additional investment in a related party
in May 2007, the Company changed its method of accounting for its
investment in the related party from the cost method to the equity method.
As a result, the financial statements for the three and twelve months ended
December 31, 2006 and as of December 31, 2006 have been retroactively
restated to reflect the equity method of accounting, in accordance with
Accounting Principles Board Opinion No. 18, "The Equity Method of
Accounting for Investments in Common Stock." In February 2008, the Company
made an additional $1,000,000 investment in the related party, increasing
its ownership to 30%, for which the Company expects to take an impairment
charge of approximately $700,000 in the first quarter of 2008.
Revenues for the fourth quarter increased by 12.3% to $53,947,000 compared
to $48,033,000 for the corresponding period a year ago and increased on a
sequential basis from $47,693,000 in Q3 2007. Net income for Q4 was
$1,497,000, or $.04 per diluted share, compared to a net loss of
$37,229,000, or $.90 per diluted share in Q4 2006, as restated. In 2007
the Company made a $50.0 million payment and recovered $12.8 million from
the Company's insurance carriers in settlement of a claim for which the
Company had recorded a net loss of $37.2 million in Q4 2006.
For the year ended December 31, 2007 revenues increased to $195,827,000
from $192,047,000 for the same period of 2006. The Company reported net
income for the period of $5,335,000, or $.13 per diluted share, compared to
a net loss of $29,059,000, or $.69 per diluted share in 2006, as restated.
Gross margin decreased to 39.4% in Q4 2007 from 41.0% in Q4 2006 and
increased on a sequential basis from 37.5% in Q3 2007. The book-to-bill
ratio for Q4 2007 was 0.96:1 as compared to 0.94:1 in Q4 2006. For 2007
the book-to-bill ratio was 1.05:1 compared to 0.99:1 in 2006. Backlog at
the end of 2007 was $46.7 million as compared to $36.4 million at the end
of 2006.
Commenting on 2007, Vicor's CEO Patrizio Vinciarelli noted: "Demand for
bricks softened at the onset of the economic slowdown. Demand for V-I Chips
was ahead of expectations as a V-I Chip application ramped faster than
forecast. Brick product revenues were short of plan and V-I Chip product
revenues were ahead of plan. Margins were below expectations due to product
mix and a temporary setback in yields."
"For the entire year in 2008, we are anticipating revenue growth at a rate
higher than annual revenues in 2007 with limited expansion in operating
margins. Revenues for 2008 will still largely consist of legacy bricks and
configured power systems. Rollout in 2008 of high performance, 'V-I
Chip-inside,' Factorized Power bricks and configurable product families
should bring new vitality to the Vicor brick product brand with its well
established and diversified customer base."
"Having more than quadrupled in 2007, V-I Chip product sales are projected
to double in 2008 based on a few high end server applications. To broaden
its business base, V-I Chip is expanding penetration of the server market
with advanced Factorized Power applications and making inroads into
automated test equipment and consumer electronics. A prototype thin, large
panel LCD-TV powered by V-I Chips has been exhibited. Factorized Power
systems may enable 52" displays as thin as 1/2". V-I Chip manufacturing
capacity to support flat panel display applications is being planned with a
second Japanese licensee. V-I Chip, Picor and a related party entity, in
which Vicor has a 30% interest, have thus far granted a collection of IP
rights to three separate licensees and are entertaining other partners to
more rapidly expand penetration of major electronic markets with Factorized
Power components and systems. While such business development initiatives
have characteristically long gestation periods, we believe we are building
a solid foundation for long term, profitable growth. In anticipation of
greater demand, we are expanding capacity in Andover in addition to
planning capacity in Asia."
Depreciation and amortization in Q4 2007 was approximately $2.7 million and
capital additions were $2.4 million. In 2007 depreciation and amortization
was $11.6 million and capital additions were $9.9 million. This compares
to $14.2 million and $5.6 million, respectively for 2006. Cash, restricted
cash and short-term investments decreased by $0.6 million to approximately
$78.5 million at the end of 2007 from $79.1 million at the end of Q3 2007.
Cash, restricted cash and short-term investments decreased by approximately
$40.1 million from $118.6 million at the end of 2006. The primary reason
for this decrease was the settlement of a claim and net payment of
approximately $37.2 million as referenced above. There were no share
repurchases during 2007 and at the end of the year there was approximately
$8.5 million remaining in the authorized stock buy-back plan.
Through March 14, 2008, auctions held for the Company's auction rate
securities with a total aggregate value of approximately $38 million
failed. As of March 14, 2008, the Company was holding a total of
approximately $43 million in auction rate securities, the significant
majority of which are student loan backed securities. These municipal and
corporate debt securities have their interest rates reset at auction at
regular intervals ranging from 7 to 90 days. These securities are all
highly rated investments, generally with AAA/Aaa ratings. The Company is
closely monitoring this matter in order to determine the impact, if any, on
the investments' liquidity and/or carrying value. Based on its ability to
access cash and other short-term investments and expected operating cash
flows, the Company does not anticipate the current lack of liquidity of
auction rate securities to impact its ability to execute its operating
plan.
In 2007, the tax provision includes estimated federal, state and foreign
income taxes on the Company's pre-tax income, estimated federal and state
income taxes for certain minority-owned subsidiaries that are not part of
the Company's consolidated income tax returns, and increases in accrued
interest for potential liabilities, offset by the expected utilization of
foreign net operating loss carryforwards and the release of certain
valuation allowances related to temporary book versus tax differences. For
the years ended December 31, 2007 and 2006, the Company reduced its tax
reserves by $1,817,000 and $468,000, respectively, due to closing tax
periods in certain jurisdictions and other tax reserves no longer
considered necessary. The decreases in 2007 and 2006 were partially offset
by increases in tax reserves during the year of approximately $205,000 and
$133,000, respectively.
Vicor's Board of Directors has approved a cash dividend of $.15 per share
payable on April 18, 2008 to shareholders of record at the close of
business on April 2, 2008. 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, Monday, March
17, 2008 at 5:00 p.m. Eastern Time. Shareholders interested in
participating in the call should call 800-688-0796 at approximately 4:50
p.m. and use the Passcode 94979761. 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 April
1, 2008. The replay dial-in number is 888-286-8010 and the Passcode is
27098301. 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. Forward-looking statements also include
statements regarding revenue growth and expansion in operating margins in
2008, what products revenues in 2008 will consist of, the rollout and
impact of "V-I Chip-inside" products, V-I Chip product sales in 2008,
penetration of the sever market by V-I Chip and its inroads into automatic
test equipment and consumer electronics, and statements regarding our solid
foundation for long term, profitable growth and anticipation of greater
demand. 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, to successfully enforce our intellectual property rights, to
successfully defend outstanding litigation, to successfully leverage the
V-I Chips in standard products to promote market acceptance of Factorized
Power, to develop or maintain an effective system of internal controls, to
obtain required financial information for certain investments on a timely
basis, and 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, the failure of auction rate securities
to sell at their reset dates 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 YEAR ENDED
(Unaudited) (Unaudited)
-------------------- --------------------
DEC 31, DEC 31, DEC 31, DEC 31,
2007 2006 2007 2006
---------- --------- --------- ---------
(As (As
Restated) Restated)
Net revenues $ 53,947 $ 48,033 $ 195,827 $ 192,047
Cost of revenues 32,668 28,359 116,818 110,211
---------- --------- --------- ---------
Gross margin 21,279 19,674 79,009 81,836
Operating expenses:
Sales & administration 12,429 12,641 48,919 46,437
Research & development 7,570 7,850 30,372 31,381
(Gain) loss from
litigation-related
settlements, net 0 37,200 (1,353) 37,200
---------- --------- --------- ---------
Total operating expenses 19,999 57,691 77,938 115,018
Income (loss) from operations 1,280 (38,017) 1,071 (33,182)
Other income (expense), net 663 1,305 4,388 5,092
---------- --------- --------- ---------
Income (loss) before income
taxes 1,943 (36,712) 5,459 (28,090)
Provision (benefit) for income
taxes 314 438 (1,015) 648
Loss from equity method
investment (net of tax) 132 79 1,139 321
---------- --------- --------- ---------
Net income (loss) $ 1,497 ($ 37,229) $ 5,335 ($ 29,059)
========== ========= ========= =========
Net income (loss) per share:
Basic $ 0.04 ($ 0.90) $ 0.13 ($ 0.69)
Diluted $ 0.04 ($ 0.90) $ 0.13 ($ 0.69)
Shares outstanding:
Basic 41,631 41,563 41,597 41,839
Diluted 41,777 41,563 41,687 41,839
VICOR CORPORATION
CONSOLIDATED BALANCE SHEET
(Thousands)
DEC 31, DEC 31,
2007 2006
(Unaudited) (Unaudited)
============ ============
(As Restated)
Assets
Current assets:
Cash and cash equivalents $ 20,017 $ 35,860
Restricted cash 952 1,045
Short-term investments 57,490 81,681
Accounts receivable, net 32,054 30,399
Insurance receivable for litigation 0 12,800
Inventories, net 23,078 22,001
Deferred tax assets 741 3,702
Other current assets 2,629 2,709
------------ ------------
Total current assets 136,961 190,197
Property and equipment, net 50,257 51,573
Other assets 5,240 5,691
------------ ------------
$ 192,458 $ 247,461
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 10,062 $ 7,273
Accrued compensation and benefits 6,003 5,192
Other accrued liabilities 4,732 4,265
Accrual for litigation settlements 240 50,000
------------ ------------
Total current liabilities 21,037 66,730
Long term income taxes payable 1,344 2,577
Deferred income taxes 1,597 4,389
Minority interests 4,040 3,593
Stockholders' equity:
Capital stock 160,004 158,594
Retained earnings 126,263 133,405
Treasury stock (121,827) (121,827)
------------ ------------
Total stockholders' equity 164,440 170,172
------------ ------------
$ 192,458 $ 247,461
============ ============
Contact Information: For further information contact:
Mark A. Glazer
Investor Relations
Vicor Corporation
Tel: 978-470-2900
Fax: 978-749-3439