Vicor Corporation Announces Financial Results for Second Quarter 2006
Vicor Corp. reported its financial results for the second quarter ended June 30, 2006. Revenues for the quarter increased 10.4% to $49,210,000 compared to $44,579,000 for the corresponding period a year ago. Net income for Q2 was $2,874,000, or $.07 per diluted share compared to net income of $89,000, or $.00 per diluted share, in Q2 2005.
For the six months ended June 30, 2006 revenues increased to $97,082,000 from $87,759,000 for the same period of 2005. The company reported net income for the period of $5,950,000, or $.14 per diluted share compared to net income of $128,000 or $.00 per diluted share in 2005. Gross margin improved to 42.9% in Q2 2006 from 34.9% in Q2 2005. The book-to-bill ratio for Q2 2006 was 0.86:1 as compared to 1.17:1 in Q1 2006. Backlog at the end of Q2 2006 was $39.4 million as compared to $38.6 million at the end of 2005. In Q2 2006, the company recorded $172,000 for expensing stock-based compensation in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004) (FAS 123R).
Commenting on the second quarter, Vicor's CEO Patrizio Vinciarelli noted: "Demand slowed in Q2. Several significant orders due to be booked in Q2 were delayed and the base level business, consisting of smaller accounts and orders, also suffered from lackluster performance. This caused a disappointing book-to-bill ratio and shipment levels that were short of our expectations." Vinciarelli went on to say: "While customers are saying that their orders have only slipped by a few months, there is no denying that the level of economic activity and capital equipment spending has deteriorated. Given a highly volatile environment, time will tell if the sudden change of climate reflects a brief inventory correction or a more protracted slowdown."
"Aside from delayed orders, Q2 was also characterized by margins falling short of our expectations due to product mix. Subject to increasing demand, we expect planned productivity improvements to support a resumption of incremental quarterly expansion in margins and overall profitability. Given the potential that is enabled by our technology, we are continuing to invest in products and capacity for V-I Chip and Picor while also exploring new opportunities that will leverage Vicor's traditional products and channels."
