ANDOVER, MA--(Marketwire - May 8, 2008) - Vicor Corporation (
NASDAQ:
VICR) today reported
its financial results for the first quarter of 2008 ended March 31, 2008.
Revenues for the first quarter increased by 13.8% to $53,469,000, compared
to $46,981,000 for the corresponding period a year ago, and decreased 0.9%
on a sequential basis from $53,947,000 for the fourth quarter of 2007.
Gross margin increased to $22,460,000 for the first quarter of 2008,
compared to $20,227,000 for the first quarter of 2007. Gross margin, as a
percentage of revenue, decreased to 42.0% for the first quarter of 2008
from 43.1% for the first quarter of 2007, but increased on a sequential
basis from 39.4% for the fourth quarter of 2007. Net income for the first
quarter was $620,000, or $.01 per diluted share, compared to net income of
$2,321,000, or $.06 per diluted share for the first quarter of 2007, as
restated. Net income for the first quarter was impacted by an impairment
charge of $706,000 taken against the Company's investment in a related
party.
The book-to-bill ratio for the first quarter of 2008 was 0.99:1, as
compared to 1.00:1 for the first quarter of 2007 and 0.96:1 for the fourth
quarter of 2007. Backlog at the end of the first quarter of 2008 was $46.1
million, as compared to $46.7 million at the end of the fourth quarter of
2007.
Commenting on the first quarter, Chief Executive Officer Patrizio
Vinciarelli noted, "While revenues for our Brick and V*I Chip segments were
appreciably ahead of revenues for the first quarter of 2007, bookings in Q1
were short of expectations, leading to flat sequential quarter over quarter
comparisons. Continued weakness in the book to bill ratio for the last two
quarters points to the likelihood of a decline in revenues in Q2. Given the
current economic outlook, the time to revenue from VIBrick and configurable
products currently being rolled out, and the time to achieve production
volumes resulting from recent V*I Chip design wins, we expect revenue
growth for the full year 2008 may be modest."
"Brick revenues totaled $49,010,000 for the first quarter, representing a
6.8% increase over the first quarter of 2007. Brick product margins
improved in Q1 as the Brick Business Unit continued to make progress with
lean manufacturing initiatives, experiencing incremental productivity from
a new automated line installed in the second half of 2007. However,
because of softness in bookings, we believe brick revenue more than likely
will decline sequentially in Q2. "
"V*I Chip product sales to third parties totaled approximately $4.3 million
for the first quarter, representing more than a fourfold increase over the
first quarter of 2007. We have been investing in expanded, state of the
art, manufacturing capacity to support our anticipated growth in V*I Chip
revenue. Margins for the quarter were negatively impacted by
inefficiencies related to the installation of this additional equipment
during the quarter. However, just as this additional capacity was being
installed, anticipated purchases from a major V*I Chip customer were
delayed. Having kept pace with a marked increase in demand in 2007, our
V*I Chip operation now has some breathing room to complete implementation
of significant product cost reduction activities and prepare for record
levels of throughput later this year and into 2009."
Depreciation and amortization for the first quarter of 2008 was
approximately $2.6 million, and capital additions totaled $2.4 million.
For the same period of 2007, depreciation and amortization was $3.1
million, and capital additions totaled $2.1 million. Cash, restricted cash
and short-term investments decreased by $37.6 million to approximately
$40.9 million at the end of the first quarter of 2008 from $78.5 million at
the end of the fourth quarter of 2007. The decrease in cash, restricted
cash and short-term investments was attributable to the reclassification of
a significant portion of our auction rate securities holdings from
short-term investments to long-term investments, as discussed below. There
were no share repurchases during the first quarter of 2008, and
approximately $8.5 million remains authorized for additional purchases
under the Company's stock repurchase plan.
As of March 31, 2008, the Company held approximately $42.1 million, at par
value, of auction rate securities, down from $55.2 million, at par value,
of such holdings as of December 31, 2007. Of this total, issues of auction
rate securities totaling approximately $38.5 million, at par value,
experienced repeated failed auctions during the first quarter of 2008. For
each unsuccessful auction, the interest rate is reset to a rate defined in
that particular debt security's indenture. While the Company continues to
receive interest on these auction rate securities, the principal associated
with such securities will not be accessible to the Company until a
successful auction occurs, a buyer is found outside of the auction process,
the security is called, or the underlying securities have matured. As a
result, these auction rate securities were reclassified to long-term
investments as of March 31, 2008. Further, the Company determined the
fair value of its investments in such failed auction rate securities at
March 31, 2008, was approximately $36.5 million. This approximately $2.0
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.
These auction rate securities, consisting of municipal and corporate debt
issues, have their interest rates reset at auction at regular intervals
ranging from seven to 90 days. In mid-February, liquidity issues in the
global credit markets resulted in the failure of auctions for the majority
of such securities. Substantially all of the Company's auction rate
securities are fully collateralized by pools of student loans guaranteed by
the U.S. Department of Education, and the Company believes the credit
quality of these securities is high based on this collateral and underlying
government guarantee. As of March 31, 2008, the majority of these
securities were rated AAA/Aaa by the major credit rating agencies. 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 will affect the Company's ability
to execute its current operating plan.
For the first 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. The 2007 tax provision was offset principally 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, May 8,
2008 at 5:00 p.m. Eastern Time. Shareholders interested in participating
in the call should call 866-713-8307 at approximately 4:50 p.m. and use the
Passcode 76169176. 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 May 23, 2008.
The replay dial-in number is 888-286-8010 and the Passcode is 50295683. 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
(Unaudited)
------------------------
MAR 31, MAR 31,
2008 2007
------------ -----------
(As Restated)
Net revenues $ 53,469 $ 46,981
Cost of revenues 31,009 26,754
------------ -----------
Gross margin 22,460 20,227
Operating expenses:
Sales & administration 14,052 12,013
Research & development 7,511 7,400
------------ -----------
Total operating expenses 21,563 19,413
Income from operations 897 814
Other income (expense), net 755 1,577
------------ -----------
Income before income taxes 1,652 2,391
Provision (benefit) for income taxes 242 (11)
Loss from equity method investment (net of tax) 790 81
------------ -----------
Net income $ 620 $ 2,321
============ ===========
Net income per share:
Basic $ 0.01 $ 0.06
Diluted $ 0.01 $ 0.06
Shares outstanding:
Basic 41,636 41,565
Diluted 41,675 41,614
VICOR CORPORATION
CONSOLIDATED BALANCE SHEET
(Thousands)
MAR 31, DEC 31,
2008 2007
(Unaudited) (Unaudited)
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 34,093 $ 20,017
Restricted cash 1,024 952
Short-term investments 5,750 57,490
Accounts receivable, net 29,114 32,054
Inventories, net 25,528 23,078
Deferred tax assets 741 741
Other current assets 3,358 2,629
----------- -----------
Total current assets 99,608 136,961
Long-term investments 36,500 0
Property and equipment, net 50,049 50,257
Other assets 5,469 5,240
----------- -----------
$ 191,626 $ 192,458
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 9,338 $ 10,062
Accrued compensation and benefits 5,609 6,003
Other accrued liabilities 5,309 4,732
Dividends payable 6,245 0
Accrual for litigation settlements 240 240
----------- -----------
Total current liabilities 26,741 21,037
Long term income taxes payable 1,372 1,344
Deferred income taxes 1,725 1,597
Minority interests 4,485 4,040
Stockholders' equity:
Capital stock 160,139 159,834
Retained earnings 120,638 126,263
Accumulated other comprehensive (loss)
income (1,647) 170
Treasury stock (121,827) (121,827)
----------- -----------
Total stockholders' equity 157,303 164,440
----------- -----------
$ 191,626 $ 192,458
=========== ===========
Contact Information: For further information contact:
James A. Simms
Chief Financial Officer
or
Mark A. Glazer
Investor Relations
Tel: 978-470-2900
Fax: 978-749-3439