Vicor Corp. 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 V·I Brick 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. 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.
