Vicor Reports Results for the Second Quarter and Announces Declaration of Dividend
Vicor Corp. reported its financial results for the second quarter and six months ended June 30, 2011. The company also announced its Board of Directors has approved a cash dividend of $0.15 per share, payable on August 31, 2011, to shareholders of record at the close of business on August 9, 2011.
Revenues for the second fiscal quarter ended June 30, 2011, increased to $65,402,000, compared to $57,377,000 for the corresponding period a year ago, but decreased from $70,455,000 for the first quarter of 2011.
Gross margin increased to $27,309,000 for the second quarter of 2011, compared to $25,739,000 for the corresponding period a year ago, but decreased from $30,454,000 for the first quarter of 2011. Gross margin, as a percentage of revenue, decreased to 41.8% for the second quarter of 2011 compared to 44.9% for the second quarter of 2010, and decreased on a sequential basis from 43.2% for the first quarter of 2011.
Net income for the second quarter was $3,066,000, or $0.07 per diluted share, compared to a net income of $4,747,000, or $0.11 per diluted share, for the corresponding period a year ago and net income of $4,018,000, or $0.10 per diluted share, for the first quarter of 2011.
Revenues for the six months ended June 30, 2011, increased by 24.5% to $135,857,000 from $109,086,000 for the corresponding period a year ago. Net income for the six month period was $7,084,000, or $0.17 per diluted share, compared to net income of $6,699,000 or $0.16 per diluted share, for the corresponding period a year ago.
The 2011 provision for income taxes, which is based on an estimated annual effective tax rate for 2011, approximates a full statutory tax rate, as compared with the lower effective tax rate for 2010, due to the utilization by the end of 2010 of all Federal operating loss carry-forwards.
The consolidated book-to-bill ratio for the second quarter was 0.85, as compared to 0.94 for the first quarter of 2011. Total backlog at the end of the second quarter was $64,914,000, compared to $78,876,000, at the end of 2010.
Commenting on second quarter performance, Patrizio Vinciarelli, Chief Executive Officer, stated, "Vicor’s bookings and revenues during the second quarter were negatively impacted by curtailed demand for bricks and custom products because of continued deferral of funding for defense electronics projects. Brick Business Unit revenues declined approximately 12% sequentially. Weakness in the defense market was partially offset by progress in other markets, led by our V.I Chip and Picor business units. V.I Chip experienced approximately 10% revenue growth sequentially, and continued to improve gross margins with higher volumes and efficiency initiatives."
Dr. Vinciarelli concluded, "As discussed at the June Shareholders meeting, Vicor is in a period of considerable strategic and organizational transition, as we’ve entered an exciting phase of evolution of the company with new product platforms and new approaches to reaching customers. We expect this transition to lead to significant growth rates starting in 2012, when we anticipate our revenue will be driven by meaningful contributions from new sources. We are announcing new products, implementing a multi-tiered distribution model, and aggressively pursuing new markets. The defining characteristics of Vicor products, power density and conversion efficiency, are becoming customer priorities, not just for the high end applications we have traditionally served, but for a broader range of applications and customers. Our value proposition is well-suited for today’s increasingly power-conscious market, and we are adapting our strategy and organization to address these market opportunities with high performance, cost-effective solutions."
Depreciation and amortization for the second quarter of 2011 was approximately $2,773,000, and capital additions totaled $2,062,000. For the first six months of 2011, depreciation and amortization was $5,401,000, and capital additions were $5,035,000, compared to $4,957,000 and $4,814,000, respectively, for the first six months of 2010. Cash and cash equivalents increased by $13,379,000 to approximately $69,779,000 at the end of the second quarter of 2011 from $56,400,000 at the end of the first quarter of 2011. The cash dividend payable on August 31, 2011, will total approximately $6,300,000. There were no share repurchases during the quarter, and approximately $8,500,000 remains authorized for additional purchases under the company’s stock repurchase plan.
As of June 30, 2011, the company held approximately $11,175,000, at par value, of auction rate securities classified as long-term investments purchased though broker/dealer affiliates of Bank of America NA. As previously disclosed, conditions in the market for auction rate securities and the repeated failure of auctions by which such securities are priced have led the company to classify its holdings as long-term investments and reduce their carrying value to an estimated market value. Based on the company’s ability to access cash and other short-term investments and its expected operating cash flows, management does not anticipate the current lack of liquidity of holdings of auction rate securities will affect its ability to execute its current operating plan.