-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KC2TJzZvlIMsHeTjUPhR8L+9cXzHUchW4FOIeBuS7qwAyLa1S+i9vdfxo7pXMjA4 vFT+qgfLss/fRGBcyuWyxg== 0000950135-96-003384.txt : 19960928 0000950135-96-003384.hdr.sgml : 19960928 ACCESSION NUMBER: 0000950135-96-003384 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960808 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: VICOR CORP CENTRAL INDEX KEY: 0000751978 STANDARD INDUSTRIAL CLASSIFICATION: 3679 IRS NUMBER: 042742817 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18277 FILM NUMBER: 96605571 BUSINESS ADDRESS: STREET 1: 23 FRONTAGE ROAD CITY: ANDOVER STATE: MA ZIP: 01810 BUSINESS PHONE: 5084702900 MAIL ADDRESS: STREET 2: 23 FRONTAGE RD CITY: ANDOVER STATE: MA ZIP: 01810 10-Q 1 VICOR CORPORATION 1 ============================================== SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ------------------------------ FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - - - --- EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 ------------------------------------------------ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - - - --- EXCHANGE ACT OF 1934 For the transition period from ----------------------------------------------- Commission File Number 0-18277 -------------------------------------------------- VICOR CORPORATION (Exact name of registrant as specified in its charter) Delaware 04-2742817 (State of Incorporation) (IRS Employer Identification Number) 23 Frontage Road, Andover, Massachusetts 01810 (Address of registrant's principal executive office) (508) 470-2900 (Registrant's telephone number) ------------------------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock as of June 30, 1996. Common Stock, $.01 par value ----------------29,555,252 Class B Common Stock, $.01 par value --------12,288,309 ============================================== 2 VICOR CORPORATION INDEX TO FORM 10-Q Page ---- Part I - Financial Information: Item 1 - Financial Statements (Unaudited) Condensed Consolidated Balance Sheet at 1 June 30, 1996 and December 31, 1995 Condensed Consolidated Statement of Income 2 for the quarters ended June 30, 1996 and 1995 and for the six months ended June 30, 1996 and 1995 Condensed Consolidated Statement of Cash Flows 3 for the six months ended June 30, 1996 and 1995 Notes to Condensed Consolidated Financial 4-5 Statements Item 2 - Management's Discussion and Analysis of 6-8 Financial Condition and Results of Operations Part II - Other Information: Item 1 - Legal Proceedings 9 Item 2 - Changes in Securities 9 Item 3 - Defaults Upon Senior Securities 9 Item 4 - Submission of Matters to a Vote of 9 Security Holders Item 5 - Other Information 9 Item 6 - Exhibits and Reports on Form 8-K 9 Signature(s) 10 3 FORM 10-Q PART I ITEM 1 PAGE 1 VICOR CORPORATION Condensed Consolidated Balance Sheet (In thousands) (Unaudited)
Assets June 30, 1996 December 31, 1995 - - - ------------------------------------------ --------------- ------------------ Current assets: Cash and cash equivalents $ 61,567 $ 65,244 Accounts receivable, net 25,751 26,171 Inventories 19,364 16,685 Other current assets 3,264 3,015 -------- -------- Total current assets 109,946 111,115 Property, plant and equipment, net 53,929 51,516 Notes receivable 3,662 2,500 Other assets 2,033 1,866 -------- -------- $169,570 $166,997 ======== ======== Liabilities and Stockholders' Equity - - - ------------------------------------------ Current liabilities: Accounts payable $ 5,074 $ 7,647 Accrued liabilities 6,819 7,568 -------- -------- Total current liabilities 11,893 15,215 Deferred income taxes 1,726 1,726 Commitments and contingencies - - Stockholders' equity: Preferred Stock - - Class B Common Stock 123 123 Common Stock 326 324 Additional paid-in capital 79,120 77,793 Retained earnings 112,578 99,200 Treasury stock, at cost (36,196) (27,384) -------- -------- Total stockholders' equity 155,951 150,056 -------- -------- $169,570 $166,997 ======== ========
Note: The balance sheet at December 31, 1995 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See accompanying notes. 4 FORM 10-Q PART I ITEM 1 PAGE 2 VICOR CORPORATION Condensed Consolidated Statement of Income (In thousands except per share data) (Unaudited)
Three Months Ended Six Months Ended ------------------ ---------------- June 30, June 30, 1996 1995 1996 1995 ------- ------- ------- ------- Net revenues $36,702 $35,125 $72,508 $68,911 Costs and expenses: Cost of sales 16,855 16,103 33,402 31,915 Selling, general and administrative 6,772 5,216 13,007 10,164 Research and development 3,306 2,927 6,748 5,488 ------- ------- ------- ------- 26,933 24,246 53,157 47,567 ------- ------- ------- ------- Income from operations 9,769 10,879 19,351 21,344 Other income 893 1,030 1,883 1,913 ------- ------- ------- ------- Income before income taxes 10,662 11,909 21,234 23,257 Provision for income taxes 3,944 4,526 7,856 8,838 ------- ------- ------- ------- Net income $ 6,718 $ 7,383 $13,378 $14,419 ======= ======= ======= ======= Net income per share $ 0.16 $ 0.17 $ 0.32 $ 0.34 ======= ======= ======= ======= Weighted average number of common shares and equivalents 42,567 43,350 42,437 42,928 ======= ====== ====== =======
See accompanying notes. 5 FORM 10-Q PART I ITEM 1 PAGE 3 VICOR CORPORATION Condensed Consolidated Statement of Cash Flows (In thousands) (Unaudited)
Six Months Ended ---------------------------------------------- June 30, 1996 June 30, 1995 ------------- ------------- Cash flows from operating activities: Net income $13,378 $14,419 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,082 4,059 (Gain) loss on disposal of equipment 3 (19) Change in current assets and liabilities, net (5,830) (6,714) ------- ------- Total adjustments (1,745) (2,674) ------- ------- Net cash provided by operating activities 11,633 11,745 Cash flows from investing activities: Additions to property, plant and equipment (6,445) (7,200) Proceeds from sale of equipment 16 31 Decrease (increase) in notes receivable (1,162) - Decrease (increase) in other assets (236) 24 ------- ------- Net cash used in investing activities (7,827) (7,145) Cash flows from financing activities: Payments on long-term debt - (51) Income tax benefit from stock option activity 850 2,472 Proceeds from issuance of Common Stock 479 8,058 Acquisition of treasury stock (8,812) - ------- ------- Net cash provided by (used in) financing activities (7,483) 10,479 ------- ------- Net (decrease) increase in cash and cash equivalents (3,677) 15,079 Cash and cash equivalents at beginning of period 65,244 43,201 ------- ------- Cash and cash equivalents at end of period $61,567 $58,280 ======= =======
See accompanying notes. 6 FORM 10-Q PART I ITEM 1 PAGE 4 VICOR CORPORATION Notes to Condensed Consolidated Financial Statements June 30, 1996 (Unaudited) 1. Basis of Presentation --------------------- The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three- and six-month periods ended June 30, 1996 are not necessarily indicative of the results that may be expected for the year ended December 31, 1996. For further information, refer to the consolidated financial statements and notes thereto included in the Company's audited financial statements for the year ended December 31, 1995, contained in the Company's annual report filed on Form 10-K (File #0-18277) with the Securities and Exchange Commission. 2. Net Income per Share -------------------- Net income per common share is based on the weighted average number of shares of common shares and common share equivalents. 3. Inventories ----------- Inventories are valued at the lower of cost (determined using the first-in, first-out method) or market. Costs associated with the long-term contract for the sale of automated manufacturing line equipment are included in inventories reduced by amounts identified with revenues recognized under the contract. Inventories were as follows (in thousands), as of June 30, 1996 and December 31, 1995:
June 30, 1996 December 31, 1995 ------------- ------------------- Raw materials .......................... $11,100 $10,396 Work-in-process ........................ 2,665 2,754 Finished goods ......................... 5,575 3,421 Unbilled costs ......................... 24 114 ------- ------- $19,364 $16,685 ======= =======
7 FORM 10-Q PART I ITEM 2 PAGE 5 VICOR CORPORATION Notes to Condensed Consolidated Financial Statements (continued) 4. Adoption of New Accounting Pronouncements ----------------------------------------- The Company has adopted Statement of Financial Accounting Standards No. 121 ("SFAS 121"), Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, which requires impairment losses to be recorded on the long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. SFAS 121 also addresses the accounting for long-lived assets that are expected to be disposed of. The adoption of SFAS 121 has no impact on the financial position or results of operations of the Company as no indicators of impairment currently exist. The Company has adopted the disclosure provisions of Financial Accounting Standards No. 123 ("SFAS 123"), Accounting and Disclosure of Stock-Based Compensation. The Company will continue to account for its stock-based compensation arrangements under the provisions of APB 25, Accounting for Stock Issued to Employees. 8 FORM 10-Q PART I ITEM 2 PAGE 6 VICOR CORPORATION Management's Discussion and Analysis of Financial Condition and Results of Operations June 30, 1996 Except for historical information contained herein, some matters discussed in this report constitute 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. Actual results could differ materially from those projected in the forward-looking statements as a result of the risk factors set forth in this report and in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. Reference is made in particular to the discussions set forth below in this Report under "Management's Discussion and Analysis of Financial Condition and Results of Operations," and set forth in the Annual Report on Form 10-K under Item 1 -- "Business -- Next-Generation Automated Manufacturing Line," "--Competition," "--Patents," and "--Licensing," and under Item 7 -- "Management's Discussion and Analysis of Financial Condition and Results of Operations." Results of Operations - - - --------------------- Quarter ended June 30, 1996, compared to quarter ended June 30, 1995 - - - -------------------------------------------------------------------- Net revenues for the second quarter of 1996 were $36,702,000, an increase of $1,577,000 (4.5%) as compared to $35,125,000 for the same period a year ago. The increase in net revenues was primarily due to an increase of unit shipments of standard products. Gross margin increased $825,000 (4.3%) to $19,847,000 from $19,022,000, but decreased slightly as a percentage of net revenues from 54.2% to 54.1%, primarily due to changes in the revenue mix. Selling, general and administrative expenses were $6,772,000 for the period, an increase of $1,556,000 (29.8%) over the same period in 1995. As a percentage of net revenues, selling, general and administrative expenses increased to 18.5% compared to 14.8% in 1995. The principal components of the $1,556,000 increase were $377,000 (18.3%) of increased compensation expense due to growth in staffing levels of selling and administrative personnel, primarily in the international sales offices; $296,000 (200.1%) of VIA related expense (see the discussion under "Liquidity and Capital Resources"); $229,000 (365.6%) of other international sales office expenses; $147,000 (339.8%) of increased legal expenses; and $102,000 (10.8%) of increased sales commission expense. Research and development expenses increased $379,000 (12.9%) to $3,306,000 and increased as a percentage of net revenues to 9.0% from 8.3%. The principal component of the $379,000 increase was $346,000 (21.7%) of increased compensation expense due to growth in staffing levels of engineering personnel. The Company continues work on its next-generation products. The Company does not expect revenues or earnings from this new product family to be material over the next several quarters. See also the discussion under "Liquidity and Capital Resources." Other income decreased $137,000 (13.3%) from the same period a year ago, to $893,000. Other income is primarily comprised of interest income derived from cash and cash equivalents, short-term investments, and notes receivable associated with the Company's real estate transactions in Andover, Massachusetts. This decrease primarily reflects a decrease in the market interest rates during the quarter as compared to the prior year. Income before income taxes was $10,662,000, a decrease of $1,247,000 (10.5%) compared to the same period in 1995. As a percentage of net revenues, income before income taxes decreased from 33.9% to 29.1% primarily due to the increase in operating expenses related to the Company's continued investment in international expansion and VIA related expenses. 9 PART I ITEM 2 PAGE 7 VICOR CORPORATION Management's Discussion and Analysis of Financial Condition and Results of Operations June 30, 1996 (continued) Net income per share for the second quarter of 1996 was $.16, compared to $.17 for the second quarter of 1995, a decrease of $.01 (5.9%). Six months ended June 30, 1996, compared to six months ended June 30, 1995 - - - -------------------------------------------------------------------------- Net revenues for the first six months of 1996 were $72,508,000, an increase of $3,597,000 (5.2%) as compared to $68,911,000 for the same period a year ago. The increase in net revenues was primarily due to an increase of unit shipments of standard products. Gross margin increased $2,110,000 (5.7%) to $39,106,000 from $36,996,000, and increased as a percentage of net revenues to 53.9% from 53.7%. The increase in gross margin resulted primarily from changes in the revenue mix. Selling, general and administrative expenses were $13,007,000 for the period, an increase of $2,843,000 (28.0%) over the same period in 1995. As a percentage of net revenues, selling, general and administrative expenses increased to 17.9% compared to 14.7% in 1995. The principal components of the $2,843,000 increase were $812,000 (20.4%) of compensation expense due to growth in staffing levels of selling and administrative personnel, primarily in the international sales offices; $648,000 (380.2%) of VIA related expense; $446,000 (379.1%) of other international sales office expenses; and $214,000 (136.6%) of increased legal expenses. Research and development expenses increased $1,260,000 (23.0%) to $6,748,000 and increased as a percentage of net revenues to 9.3% from 8.0%. The principal components of the $1,260,000 increase were $678,000 (21.7%) of compensation expense due to growth in staffing levels of engineering personnel; VIA related research and development costs of $180,000 (100.0%); and increased project material costs of $180,000 (18.3%). Other income decreased $30,000 (1.6%) to $1,883,000. Other income is primarily comprised of interest income derived from cash and cash equivalents, short-term investments, and notes receivable associated with the Company's real estate transactions in Andover, Massachusetts. Income before income taxes was $21,234,000, a decrease of $2,023,000 (8.7%) compared to the same period in 1995. As a percentage of net revenues, income before income taxes decreased from 33.7% to 29.3% primarily due to the increase in operating expenses related to the Company's continued investment in international expansion and VIA related expenses. Net income per share for the first six months of 1996 was $.32, compared to $.34 for the first six months of 1995, a decrease of $.02 (5.9%). Liquidity and Capital Resources - - - ------------------------------- At June 30, 1996 the Company had $61,567,000 in cash and cash equivalents. The ratio of current assets to current liabilities was 9.2:1 compared to 7.3:1 at December 31, 1995. Working capital increased $2,153,000, from $95,900,000 at December 31, 1995 to $98,053,000 at June 30, 1996. The principal component of the working capital increase was an increase in inventory of $2,679,000 during the first six months of 1996. The primary use of cash for the first six months of 1996, was for the acquisition of treasury stock of $8,812,000. 10 PART I ITEM 2 PAGE 8 VICOR CORPORATION Management's Discussion and Analysis of Financial Condition and Results of Operations June 30, 1996 (continued) The Company plans to make continuing investments in manufacturing equipment, much of which is built internally. The internal construction of manufacturing machinery is a practice which the Company expects to follow over the next several years. All machinery and equipment, whether purchased externally or built internally, are depreciated or amortized over five years after being placed into service. On June 27, 1996, the Company announced that it intends to begin introducing selected models of its next-generation 700, 800 and 900 Series product families for sale on September 3, 1996 and that it is planning a general introduction of the three product families in the fall of 1996. The Company also announced certain expected technical characteristics of the models to be introduced and described an interactive computer-aided design tool that the Company is creating to assist customers. In 1995, the Company had announced that it had started prototype production on a new automated manufacturing line designed to manufacture next-generation products. While management believes that the new manufacturing line and the anticipated introduction of selected models of its next-generation product families are important milestones, there can be no assurance that problems will not substantially delay the ultimate introduction of the products, require modification of product specifications or prevent attainment of the anticipated capacity of the new manufacturing line. In February, 1996, the Board of Directors of the Company authorized the repurchase of the Company's Common Stock up to an aggregate amount of approximately $19,500,000, including amounts remaining under a prior authorization. The plan authorized the Company to make such repurchases from time to time in the open market or through privately negotiated transactions. The timing of this program and the amount of the stock that may be repurchased is at the discretion of management based on its view of economic and financial market conditions. The Company spent $8,812,000 in the repurchase of its Common Stock in the quarter ended March 31, 1996. There were no repurchases in the quarter ended June 30, 1996. In 1995, the Company established a number of Vicor Integration Architects (VIAs), which are majority owned companies that seek to provide customers with local design and manufacturing support for turnkey custom power solutions. The Company has an unused line of credit with a bank under which the Company may borrow up to $4,000,000 on a revolving credit basis. The Company believes that cash generated from operations and the total of its cash and cash equivalents, together with other sources of liquidity, will be sufficient to fund planned operations and capital equipment purchases for the foreseeable future. At June 30, 1996, the Company had approximately $1,500,000 of capital expenditure commitments. The Company does not consider the impact of inflation on its business activities to have been significant to date. 11 FORM 10-Q PART II ITEM 1-6 PAGE 9 VICOR CORPORATION Part II - Other Information June 30, 1996 Item 1 - Legal Proceedings - - - -------------------------- The Company is involved in certain litigation incidental to the conduct of its business. While the outcome of lawsuits against the Company cannot be predicted with certainty, management does not expect any current litigation to have a material adverse impact on the Company. Item 2 - Changes in Securities - - - ------------------------------ Not applicable. Item 3 - Defaults Upon Senior Securities - - - ---------------------------------------- Not applicable. Item 4 - Submission of Matters to a Vote of Security-Holders - - - ------------------------------------------------------------ The Annual Meeting of Stockholders of the Company was held on June 27, 1996. All nominees of the Board of Directors of the Company were re-elected for a one year term. Votes were cast in the election of the directors as follows: Nominee Votes for Votes Withheld ------- --------- -------------- Patrizio Vinciarelli 143,863,572 167,867 Richard E. Beede 143,863,572 167,867 Estia J. Eichten 143,863,572 167,867 Jay M. Prager 143,863,572 167,867 David T. Riddiford 143,863,572 167,867 M. Michael Ansour 143,863,572 167,867 Item 5 - Other Information - - - -------------------------- Not applicable. Item 6 - Exhibits and Reports on Form 8-K - - - ----------------------------------------- a. Reports on Form 8-K - none. 12 FORM 10-Q PART II PAGE 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. VICOR CORPORATION Date: August 8, 1996 By: /s/ Patrizio Vinciarelli ------------------------ Patrizio Vinciarelli President and Chairman of the Board Date: August 8, 1996 By: /s/ Mark A. Glazer ------------------ Mark A. Glazer Vice President of Finance and Administration EX-27 2 F.D.S. FOR 2ND QUARTER
5 0000751978 VICOR CORP 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 61,567 0 25,751 0 19,364 109,946 91,658 37,729 169,570 11,893 0 449 0 0 155,502 169,570 72,508 72,508 33,402 33,402 0 0 0 21,234 7,856 13,378 0 0 0 13,378 .32 .32
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