ANDOVER, MA--(Marketwire - August 11, 2008) - Vicor Corporation (
NASDAQ:
VICR) today reported
its financial results for the second quarter of 2008 ended June 30, 2008.
Revenues for the second quarter increased by 4.4% to $49,297,000, compared
to $47,206,000 for the corresponding period a year ago, and decreased 7.8%
on a sequential basis from $53,469,000 for the first quarter of 2008.
Gross margin increased to $21,113,000 for the second quarter of 2008,
compared to $19,599,000 for corresponding period a year ago, but decreased
on a sequential basis from $22,460,000 for the first quarter of 2008.
Gross margin, as a percentage of revenue, increased to 42.8% for the second
quarter of 2008 compared to 41.5% for the second quarter of 2007, and
increased on a sequential basis from 42.0% for the first quarter of 2008.
Net loss for the second quarter was $1,323,000, or $0.03 per diluted share,
compared to net income of $974,000, or $0.02 per diluted share, for the
corresponding period a year ago and net income of $620,000, or $0.01 per
diluted share, for the first quarter of 2008.
For the six months ended June 30, 2008 revenues increased by 9.1% to
$102,766,000 from $94,187,000 for the corresponding period a year ago, and
increased 1.1% on a sequential basis from $101,640,000 for the six months
ended December 31, 2007. Net loss for the six month period was $703,000,
or $0.02 per diluted share, compared to net income of $3,295,000 or $0.08
per diluted share, for the corresponding period a year ago and net income
of $2,040,000, or $0.05 per diluted share, for the six months ended
December 31, 2007.
The book-to-bill ratio for the second quarter of 2008 was 1.01:1, as
compared to 1.09:1 for the second quarter of 2007 and 0.99:1 for the first
quarter of 2008. Backlog at the end of the second quarter of 2008 was
$46.3 million, as compared to $46.7 million at the end of the fourth
quarter of 2007.
Commenting on the second quarter, Patrizio Vinciarelli, Chief Executive
Officer, noted, "Vicor continues to be strategically well-positioned,
despite worldwide economic uncertainty. As anticipated due to booking
trends in Q1 and early Q2, Vicor's revenue for the second quarter declined
as the global economy softened. Revenue from our brick business unit
experienced a roughly six percent decline sequentially. However, bookings
in July, including a first $3.2 million order for 'V-I Chip inside'
VIBricks, came in 35% ahead of April levels, pointing to improving demand
for our expanding brick product line. Also, despite the decline in Q2
revenue, the brick unit's gross margin as a percentage of revenue actually
increased from the Q1 level."
"As previously discussed, anticipated volume shipments of a major V-I Chip
program were pushed out early this year. As such, revenue for V-I Chip
declined roughly 27% from the prior quarter. We had planned higher levels
of V-I Chips shipments in Q2, but now forecast ramping in Q3 and Q4.
Because we had put infrastructure in place to meet greater demand, V-I Chip
continues to absorb the costs of underutilized production capacity.
Accordingly, V-I Chip generated a higher operating loss for the quarter.
We remain confident V-I Chip will essentially double its top line in 2008,
experience robust growth in 2009 and improve its gross margin with
economies of scale. Our confidence is based on progress being made with
early adopters and the ongoing expansion of relationships with licensees
and partners bringing about a global presence and facilitating adoption of
V-I Chips and Factorized Power."
"Picor, our fabless semiconductor unit, recently announced its first family
of Cool-ORing™ Power Path Management products addressing the
requirements of redundant power architectures for high-availability systems
such as high end computing, telecom, communication and wireless
infrastructure. Cool-ORing power management products reduce power
dissipation, eliminate the need for costly thermal management and reduce
board level real estate versus conventional Active ORing solutions. The
introduction of this product family is a significant first step in Picor's
synergistic product roadmap."
Dr. Vinciarelli concluded, "Of course, we are disappointed to have
experienced a net loss for the second quarter. However, temporarily high
R&D expenses, applications engineering and marketing expenses, and the
margin drag caused by underutilized capacity represent appropriate
investments in the development of our products and markets. As discussed
last quarter, we expect overall revenue growth may remain modest until the
first half of 2009. However, early adopters have embraced our ability to
address their power needs with high performance power components as
building blocks of efficient power distribution and power systems. Vicor
is well-capitalized and, with our brick business model and the momentum we
are seeing in disruptive technology products pioneered by V-I Chip and
Picor, well-positioned for the future."
Depreciation and amortization for the second quarter of 2008 was
approximately $2.6 million, and capital additions totaled $1.8 million.
For the first six months of 2008 depreciation and amortization was $5.2
million and capital additions were $4.2 million. This compares to $6.2
million and $3.1 million, respectively, for the first six months of 2007.
Cash and cash equivalents and short-term investments decreased by $4.1
million to approximately $35.7 million at the end of the second quarter of
2008 from $39.8 million at the end of the first quarter of 2008. The
sequential decrease in cash and cash equivalents and short-term investments
was attributable to the payment of a dividend, during the second quarter,
of approximately $6.2 million. There were no share repurchases during the
first six months of 2008, and approximately $8.5 million remains authorized
for additional purchases under the Company's stock repurchase plan.
As of June 30, 2008, the Company held approximately $38.5 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 June 30,
2008, was approximately $36.25 million. This approximately $2.25 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. 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 second 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. 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 was offset
principally by 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.
The Company's Board of Directors has approved a cash dividend of $0.15 per
share payable on September 10, 2008 to shareholders of record at the close
of business on August 25, 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, August
11, 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 93288958. 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 August
26, 2008. The replay dial-in number is 888-286-8010 and the Passcode is
44989156. 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 communications, information technology,
industrial control and military electronics markets.
VICOR CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Thousands except for per share amounts)
QUARTER ENDED SIX MONTHS ENDED
(Unaudited) (Unaudited)
-------------------- --------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2008 2007 2008 2007
--------- --------- --------- ---------
Net revenues $ 49,297 $ 47,206 $ 102,766 $ 94,187
Cost of revenues 28,184 27,607 59,193 54,361
--------- --------- --------- ---------
Gross margin 21,113 19,599 43,573 39,826
Operating expenses:
Sales & administration 13,975 12,163 28,027 24,176
Research & development 8,080 7,667 15,591 15,067
Gain from litigation-related
settlements, net (177) (1,353) (177) (1,353)
--------- --------- --------- ---------
Total operating expenses 21,878 18,477 43,441 37,890
--------- --------- --------- ---------
Income (loss) from operations (765) 1,122 132 1,936
Other income (expense), net (36) 906 719 2,483
--------- --------- --------- ---------
Income (loss) before income
taxes (801) 2,028 851 4,419
Provision for income taxes 350 298 592 287
Loss from equity method
investment, net of tax 172 756 962 837
--------- --------- --------- ---------
Net income (loss) ($ 1,323) $ 974 ($ 703) $ 3,295
========= ========= ========= =========
Net income (loss) per share:
Basic ($ 0.03) $ 0.02 ($ 0.02) $ 0.08
Diluted ($ 0.03) $ 0.02 ($ 0.02) $ 0.08
Shares outstanding:
Basic 41,643 41,576 41,640 41,570
Diluted 41,643 41,641 41,640 41,628
VICOR CORPORATION
CONSOLIDATED BALANCE SHEET
(Thousands)
JUNE 30, DEC 31,
2008 2007
(Unaudited) (Unaudited)
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 33,000 $ 20,017
Short-term investments 2,663 57,490
Accounts receivable, net 27,181 32,054
Inventories, net 26,025 23,078
Deferred tax assets 741 741
Other current assets 3,121 2,539
------------ ------------
Total current assets 92,731 135,919
Restricted cash and cash equivalents 919 952
Long-term investments 36,250 0
Property and equipment, net 49,322 50,257
Other assets 5,397 5,330
------------ ------------
$ 184,619 $ 192,458
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 8,260 $ 10,062
Accrued compensation and benefits 7,082 6,003
Other accrued liabilities 3,621 3,749
Deferred revenue 534 941
Accrual for litigation settlements 162 240
------------ ------------
Total current liabilities 19,659 20,995
Long-term deferred revenue 924 42
Long-term income taxes payable 1,399 1,344
Deferred income taxes 1,649 1,597
Minority interests 4,991 4,040
Stockholders' equity:
Capital stock 160,515 159,834
Retained earnings 119,315 126,263
Accumulated other comprehensive
(loss) income (2,006) 170
Treasury stock (121,827) (121,827)
------------ ------------
Total stockholders' equity 155,997 164,440
------------ ------------
$ 184,619 $ 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