Vicor Announces Its Financial Results for the Second Quarter and Six Months Ended June 30, 2009
Andover, MA, August 4, 2009 — Vicor Corporation (NASDAQ: VICR) today reported its financial
results for the second quarter and six months ended June 30, 2009.
Revenues for the second quarter increased to $50,627,000, compared to $49,297,000 for the
corresponding period a year ago and $50,448,000 for the first quarter of 2009. Gross margin increased to
$22,598,000 for the second quarter of 2009, compared to $21,113,000 for the corresponding period a year
ago and $21,831,000 for the first quarter of 2009. Gross margin, as a percentage of revenue, increased to
44.6% for the second quarter of 2009 compared to 42.8% for the second quarter of 2008, and increased on
a sequential basis from 43.3% for the first quarter of 2009. Net income for the second quarter was
$1,341,000, or $0.03 per diluted share, compared to a net loss of $(1,323,000), or $(0.03) per diluted
share, for the corresponding period a year ago and a net loss of $(2,543,000), or $(0.06) per diluted share,
for the first quarter of 2009. During the second quarter, the Company recorded a pre-tax charge of
$859,000 for the cost of severance and other employee-related costs in connection with reductions to its
workforce, which were completed in June 2009.
Revenues for the six months ended June 30, 2009 decreased by 1.6% to $101,075,000 from $102,766,000
for the corresponding period a year ago. Net loss for the six month period was $(1,202,000), or $(0.03)
per diluted share, compared to a net loss of $(703,000) or $(0.02) per diluted share, for the corresponding
period a year ago. The net loss for the six month period was primarily due to an aggregate pre-tax charge
of $3,957,000 for the cost of severance and other employee-related costs in connection with the
Company’s workforce reductions implemented in the first and second quarters of 2009.
The book-to-bill ratio for the second quarter of 2009 was 0.79:1, as compared to 0.99:1 for the first
quarter of 2009. Backlog at the end of the second quarter of 2009 was $41,515,000, as compared to
$52,068,000 at the end of the first quarter of 2009.
Commenting on the Company’s second quarter performance, Patrizio Vinciarelli, Chairman of the Board,
President and Chief Executive Officer, stated: “During the second quarter, Vicor’s gross margin and
profitability improved reflecting, in part, recent expense reductions. While encouraged by improvements
in operational efficiency, we continue to pursue performance improvements throughout the organization.”
Dr. Vinciarelli continued, “Consolidated revenue for the second quarter was essentially unchanged from
the corresponding quarter of 2008. This relative stability in the midst of a double digit slump in the global
market for electronic products may be comforting. However, our book-to-bill ratio for the second quarter
was disappointing and we remain cautious about the Company’s near-term outlook, in light of continued
weakness in the global economy. Our quarterly book-to-bill ratio has been volatile, and we have
cautioned that the ratio is not always an accurate indicator of future revenue. However, given the
magnitude of the ratio’s decline for the second quarter, and our quarter-end backlog, we anticipate that the
Company is likely to experience a sequential decline in revenue for the third quarter.”
“We remain focused on the longer-term growth prospects of our considerable investments in Picor, V•I
Chip™ and VI BRICK™ product lines. We have initiated a significant expansion of V•I Chip
manufacturing capacity to be completed by Q1 2010 in anticipation of higher demand in 2010. We
believe that Vicor remains well-capitalized and capable of making the investments necessary to facilitate
future growth in the face of a severe recession.”
Depreciation and amortization for the second quarter of 2009 was approximately $2,609,000, and capital
additions totaled $1,720,000. For the first six months of 2009, depreciation and amortization was
$5,234,000 and capital additions were $2,749,000, compared to $5,211,000 and $4,169,000, respectively,
for the first six months of 2008. Cash, restricted cash equivalents and short-term investments increased
by $4,985,000 to approximately $31,450,000 at the end of the second quarter of 2009 from $26,465,000
at the end of the first quarter of 2009. There were no share repurchases during the quarter, and
approximately $8,500,000 remains authorized for additional purchases under the Company’s stock
repurchase plan. The Company previously announced an indefinite suspension of its semi-annual
dividend.
As of June 30, 2009, the Company held approximately $38,275,000, at par value, of auction rate
securities. As previously disclosed, conditions in the market for auction rate securities and the repeated
failure of auctions by which such securities are priced have led the Company to continue to classify its
holdings as long-term investments. Based on the Company’s ability to access cash and other short-term
investments and its expected operating cash flows, management does not anticipate the current lack of
liquidity of holdings of auction rate securities will affect the Company’s ability to execute its current
operating plan.
The tax provision in 2009 provides for estimated income taxes due in various state and international
taxing jurisdictions for which losses incurred by the Company cannot be offset, and for estimated federal
and state income taxes for certain minority-owned subsidiaries that are not part of the Company’s
consolidated income tax returns. The 2009 tax provision also includes discrete items, including a benefit
for the receipt of a refund for a net operating loss carryback claim and expense for certain state
assessments, each of which involved a minority-owned subsidiary, and for increases in accrued interest
for potential liabilities. In 2008, the tax provision was based on the estimated annual effective tax rate for
2008, which includes estimated federal, state and foreign income taxes on the Company’s projected
annual 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.
For further information contact: James A. Simms, Chief Financial Officer
Tel: 978-470-2900/Fax: 978-749-3439
For more information on Vicor and its products, please visit the Company’s website at
www.vicorpower.com.
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 forwardlooking
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, revenue, profitability, and the Company’s capital resources. 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, 2008, under
Part I, Item I — “Business,” 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 the 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 electronic data processing, industrial control,
military electronics and telecommunications markets.
