EX-99.1 2 a4932504ex991.txt EXHIBIT 99.1 Exhibit 99.1 Vicor Corporation Second Quarter Results ANDOVER, Mass.--(BUSINESS WIRE)--July 18, 2005--Vicor Corporation (NASDAQ: VICR) today reported its financial results for the second quarter ended June 30, 2005. Revenues for the quarter were $47,079,000 compared to $45,374,000 for the corresponding period a year ago. Revenues for the quarter included a non-recurring royalty payment under a settlement agreement of $2,500,000, as discussed below. Net income for Q2 was $89,000, or $.00 per diluted share, after inventory charges of $2,764,000 and a contingency fee of $250,000, as discussed below, compared to net income of $61,000, or $.00 per diluted share, in Q2 2004. For the six months ended June 30, 2005 revenues increased to $90,259,000 from $87,895,000 for the same period of 2004. The Company reported net income for the period of $128,000, or $.00 per diluted share compared to a net loss of $1,129,000 or ($.03) per diluted share in 2004. The book-to-bill ratio for Q2 was 0.99:1. The backlog at the end of Q2 was $39.9 million compared to $36.3 million at the end of 2004. Gross margin was 38.4%, compared to 38.3% in Q2 2004. During the quarter, the Company concluded a settlement agreement with Lambda Electronics, Inc., one of the defendants in the reset patent litigation, under which the Company received a payment of $2.5 million. A $250,000 contingency fee was paid by the Company to its litigation counsel and is reported under Sales and Administration expenses. During the quarter, the Company provided additional reserves of approximately $1.6 million for potential obsolete inventory arising primarily from the European Union Restriction of Hazardous Substances ("RoHS") initiative and the conversion of 2nd Gen. products to the FasTrak platform. In addition, the Company identified other slow-moving and potential obsolete inventory of approximately $1.2 million, of which $0.3 million related to raw material inventories in support of pilot production of V-I Chips. Commenting on the quarter and 2005, Vicor's CEO Patrizio Vinciarelli noted: "The Q2 book-to-bill ratio reflects a drive by customers to minimize inventory levels and lead times. This trend reduces visibility for near term demand. Assuming a favorable resolution of uncertainties clouding the economic outlook for capital equipment, we expect modest revenue growth for the balance of 2005." "Continued efficiencies and productivity improvements in our Brick business unit yielded improved gross margins, exclusive of the inventory reserve adjustments, in Q2. Assuming sustained demand levels, further improvement in gross margin and profitability should result from completing the transition of all 2nd Gen. products to the FasTrak platform." Vinciarelli went on to say: "During the second quarter, the V-I Chip and Picor business units advanced their respective product plans and nurtured relationships with major OEM customers in the Automotive, Consumer Electronics, Communications and Information Technology markets. V-I Chip and Picor are actively recruiting key individuals to contribute to the next phase of their evolution." Depreciation and amortization in the quarter was $4.2 million and capital additions were $1.2 million. For the first six months of 2005 depreciation and amortization was $8.7 million and capital additions were $2.6 million. This compares to $10.6 million and $2.2 million, respectively for the first six months of 2004. Cash and short-term investments were $119.7 million, an increase of $6.9 million from the end of the first quarter. During the quarter, Vicor repurchased 134,300 shares of its Common Stock for approximately $1.4 million. Approximately $21.6 million remains available in the authorized stock buy-back plan. Vicor's Board of Directors has approved an annual cash dividend for 2005 of $.12 per share of the Company's stock. The dividend is payable on August 31, 2005 to shareholders of record at the close of business on August 11, 2005. Dividends are declared at the discretion of the Company's Board of Directors and depend on actual cash from operations, the Company's financial condition and 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, July 18, 2005 at 5:00 p.m. Eastern Daylight Time. Shareholders interested in participating in the call, should call 888-339-2688 at approximately 4:50 p.m. and use the Passcode 50416412. 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 1, 2005. The replay dial-in number is 888-286-8010 and the Passcode is 27208467. 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. 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 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 build our business units, and to successfully leverage the V-I Chips in standard products to promote market acceptance of Factorized Power, factors impacting the company's various end markets, including Consumer Electronics, Communications, Information Technology and Automotive, 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 SIX MONTHS ENDED (Unaudited) (Unaudited) ----------------- ----------------- JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2005 2004 2005 2004 -------- -------- -------- -------- Net revenues: Product $44,579 $45,374 $87,759 $87,520 License 2,500 0 2,500 375 -------- -------- -------- -------- 47,079 45,374 90,259 87,895 Cost of sales 29,000 27,994 55,135 55,515 -------- -------- -------- -------- Gross margin 18,079 17,380 35,124 32,380 Operating expenses: Sales & administration 10,387 10,607 20,491 20,785 Research & development 7,380 6,505 14,476 12,448 -------- -------- -------- -------- Total operating expenses 17,767 17,112 34,967 33,233 Income (loss) from operations 312 268 157 (853) -------- -------- -------- -------- Other income (expense), net 183 94 677 309 -------- -------- -------- -------- Income (loss) before income taxes 495 362 834 (544) Provision for income taxes (406) (301) (706) (585) -------- -------- -------- -------- Net income (loss) $89 $61 $128 ($1,129) ======== ======== ======== ======== Net income (loss) per share: Basic $0.00 $0.00 $0.00 ($0.03) Diluted $0.00 $0.00 $0.00 ($0.03) Shares outstanding: Basic 41,795 42,049 41,888 41,983 Diluted 41,938 42,344 42,027 41,983 VICOR CORPORATION CONSOLIDATED BALANCE SHEET (Thousands) JUNE 30, DEC 31, 2005 2004 (Unaudited) (Unaudited) ----------- ----------- Assets Current assets: Cash and cash equivalents $55,423 $36,277 Short-term investments 64,282 77,371 Accounts receivable, net 26,285 23,359 Inventories, net 20,763 26,229 Deferred tax assets 2,497 2,497 Other current assets 3,112 2,245 ----------- ----------- Total current assets 172,362 167,978 Property and equipment, net 61,129 67,001 Other assets 10,136 9,903 ----------- ----------- $243,627 $244,882 =========== =========== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $6,723 $5,806 Accrued compensation and benefits 4,577 4,265 Other accrued liabilities 9,094 9,488 ----------- ----------- Total current liabilities 20,394 19,559 Deferred income taxes 3,113 3,173 Minority interests 1,848 1,527 Stockholders' equity: Capital stock 150,100 149,302 Retained earnings 176,897 176,769 Treasury stock (108,725) (105,448) ----------- ----------- Total stockholders' equity 218,272 220,623 ----------- ----------- $243,627 $244,882 =========== =========== CONTACT: Vicor Corporation Mark A. Glazer, 978-470-2900 Chief Financial Officer