Non-Recurring Items Boost Vicor’s Q3 Earnings
Vicor Corporation reported financial results for the third quarter and nine months ended September 30, 2016. Revenues for the third quarter ended September 30, 2016 increased to $53,227,000, compared to $48,664,000 for the corresponding period a year ago, and increased from $52,941,000 for the second quarter of 2016. Third quarter bookings increased to $53,846,000 from $50,368,000 for the corresponding period a year ago, and increased from $52,514,000 for the second quarter of 2016.
Gross margin increased to $25,923,000 for the third quarter of 2016, compared to $21,286,000 for the corresponding period a year ago, and increased from $24,471,000 for the second quarter of 2016. Gross margin, as a percentage of revenue, increased to 48.7% for the third quarter of 2016, compared to 43.7% for the third quarter of 2015, and increased from 46.2% for the second quarter of 2016.
Net income for the third quarter was $2,336,000, or $0.06 per diluted share, compared to net income of $2,503,000, or $0.06 per diluted share, for the corresponding period a year ago and a net loss of ($544,000), or ($0.01) per share, for the second quarter of 2016. Included in net income for the third quarter of 2016 was the reversal of approximately $768,000 of previously recorded stock-based compensation expense for certain performance-based stock options, as Management concluded the related performance targets would not be met.
Also included in net income for the third quarter of 2015 was a gain from equity method investment of $5,000,000, representing cash consideration received for the Company's investment in Great Wall Semiconductor Corporation (GWS), following the acquisition of GWS by Intersil Corporation in September 2015.
Revenues for the nine months ended September 30, 2016, decreased 9.8% to $152,195,000 from $168,800,000 for the corresponding period a year ago. Net loss for the nine month period was ($3,559,000), or ($0.09) per share, compared to net income of $6,679,000, or $0.17 per diluted share, for the corresponding period a year ago.
Cash provided by operations totaled $2,421,000 for the third quarter of 2016, compared to cash provided by operations of $5,673,000 for the corresponding period a year ago. Cash and cash equivalents sequentially increased by $913,000 to approximately $55,066,000 at the end of the third quarter of 2016 from $54,153,000 at the end of the second quarter of 2016.
Total backlog at the end of the third quarter of 2016 was $42,124,000, compared to $41,674,000 at the end of the second quarter, and $39,073,000 at the end of 2015.
Commenting on third quarter financial performance, Dr. Patrizio Vinciarelli, Chief Executive Officer, stated, "Approximately $0.04 out of $0.06 per share in recorded earnings was due to non-recurring items and seasonal influences on operating expenses. Nevertheless, we are encouraged by Q3 results, as lower shipments of legacy products were offset by higher shipments of ChiP VTM and SiP PRM modules. Higher volumes of ChiPs and SiPs contributed to improved gross margins."
Dr. Vinciarelli continued, "Ongoing weakness led to lower bookings of legacy Brick products. However, interest in ChiPs, VIAs and advanced new products continues to grow, as evidenced by an accelerating rate of projects funded by customers awarding us design wins. We are globally engaged with OEMs driven to our modular power solutions to achieve higher performance and a lower Total Cost of Ownership in Enterprise Computing (inclusive of Datacenters and Supercomputing), Instrumentation, LED Lighting, Networking, Wireless Telecom, Autonomous Driving and Aerospace applications.
"With a five-fold reduction in size relative to competing alternatives, power systems leveraging Vicor converters from the power source to the Point-of-Load enable superior end products. While conditions in certain markets continue to negatively influence our legacy business, demand from new customers has been escalating and supports our confidence in reaching an inflection point in revenues and profitability," Dr. Vinciarelli concluded.