News

Vicor Reports Fourth Quarter Financial Results

March 19, 2008 by Jeff Shepard

Vicor Corp. reported its financial results for the fourth quarter and year ended December 31, 2007. The company will be filing a Form 12b-25, Notification of Late Filing, with the Securities and Exchange Commission relating to its Annual Report on Form 10-K for the year ended December 31, 2007, which automatically extends the March 17, 2008 filing due date for up to 15 calendar days under SEC rules.

The company noted that, due to an additional investment in a related party in May 2007, the company changed its method of accounting for its investment in the related party from the cost method to the equity method. As a result, the financial statements for the three and twelve months ended December 31, 2006 and as of December 31, 2006 have been retroactively restated to reflect the equity method of accounting, in accordance with Accounting Principles Board Opinion No. 18, "The Equity Method of Accounting for Investments in Common Stock." In February 2008, the company made an additional $1,000,000 investment in the related party, increasing its ownership to 30%, for which the company expects to take an impairment charge of approximately $700,000 in the first quarter of 2008.

Revenues for the fourth quarter increased by 12.3% to $53,947,000 compared to $48,033,000 for the corresponding period a year ago and increased on a sequential basis from $47,693,000 in Q3 2007. Net income for Q4 was $1,497,000, or $.04 per diluted share, compared to a net loss of $37,229,000, or $.90 per diluted share in Q4 2006, as restated. In 2007 the company made a $50.0 million payment and recovered $12.8 million from the company’s insurance carriers in settlement of a claim for which the company had recorded a net loss of $37.2 million in Q4 2006.

For the year ended December 31, 2007 revenues increased to $195,827,000 from $192,047,000 for the same period of 2006. The company reported net income for the period of $5,335,000, or $.13 per diluted share, compared to a net loss of $29,059,000, or $.69 per diluted share in 2006, as restated.

Gross margin decreased to 39.4% in Q4 2007 from 41.0% in Q4 2006 and increased on a sequential basis from 37.5% in Q3 2007. The book-to-bill ratio for Q4 2007 was 0.96:1 as compared to 0.94:1 in Q4 2006. For 2007 the book-to-bill ratio was 1.05:1 compared to 0.99:1 in 2006. Backlog at the end of 2007 was $46.7 million as compared to $36.4 million at the end of 2006.

Commenting on 2007, Vicor’s CEO Patrizio Vinciarelli noted, "Demand for bricks softened at the onset of the economic slowdown. Demand for V-I Chips was ahead of expectations as a V-I Chip application ramped faster than forecast. Brick product revenues were short of plan and V-I Chip product revenues were ahead of plan. Margins were below expectations due to product mix and a temporary setback in yields. For the entire year in 2008, we are anticipating revenue growth at a rate higher than annual revenues in 2007 with limited expansion in operating margins. Revenues for 2008 will still largely consist of legacy bricks and configured power systems. Rollout in 2008 of high performance, ‘V-I Chip-inside,’ Factorized Power bricks and configurable product families should bring new vitality to the Vicor brick product brand with its well established and diversified customer base."