Vicor Releases Preliminary Financial Results for the Second Quarter 2007
Vicor Corp. reported its preliminary financial results for the second quarter of 2007 ended June 30, 2007. Revenues for the quarter decreased to $47,522,000 compared to $49,210,000 for the corresponding period a year ago. Net loss for Q2 was $519,000, or $.01 per diluted share, compared to net income of $2,874,000, or $.07 per diluted share, in Q2 2006.
For the six months ended June 30, 2007 revenues decreased to $94,503,000 from $97,082,000 for the same period of 2006. The company reported net income for the period of $1,883,000, or $.05 per diluted share, compared to net income of $5,950,000 or $.14 per diluted share in 2006. Gross margin decreased to 41.8% in Q2 2007 from 42.9% in Q2 2006 and decreased on a sequential basis from 43.1% in Q1 2007 due, in part, to a write off of certain manufacturing equipment and product mix. The book-to-bill ratio for Q2 2007 was 1.08:1 as compared to 1.00:1 in Q1 2007. Backlog at the end of Q2 2007 was $40.4 million as compared to $36.4 million at the end of 2006.
During the second quarter, the company settled its reset patent litigation action against the remaining defendants for $1,593,000, net of settlement expenses. This gain is reported in Loss (gain) from litigation-related settlement, net. The reset patent expired in 2002.
The company’s financial results are considered preliminary and subject to change based upon the final accounting of investments made by the company in a related party, and the accounting for a potential loss related to the Concurrent Computer Corp. ("Concurrent") litigation. During Q2 2007, the company made an additional investment of $1 million in the related party and agreed to a further investment of $1 million if certain conditions are met. The additional investment will require the company to account for this investment under the equity method of accounting and to retroactively restate its previously issued consolidated financial statements to reflect the equity method of accounting in prior periods. The preliminary financial results presented include an additional charge to Other income (expense), net of $840,000 during Q2 2007 to reflect the company’s preliminary estimate of the decline in value related to its additional $1 million investment. The company is waiting for certain financial information from the related party in order to properly record its investment under the equity method of accounting and the company is performing additional valuation analyses to determine if any further adjustment in its investment is required due to other than temporary declines in value.
During the second quarter, the company accrued $2.35 million for a potential loss related to its ongoing litigation with Concurrent, which is reported in Loss (gain) from litigation-related settlement, net. The company is currently in mediation with Concurrent and is seeking potential recovery from its insurance carriers for any loss sustained from this litigation. As a result of the uncertainties surrounding this matter, the $2.35 million estimated loss recorded by the company is considered preliminary and may change prior to the company filing its Form 10-Q for the quarter ended June 30, 2007 with the Securities and Exchange Commission.
