UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K CURRENT REPORT
Pursuant to Section 13 or 15(d) of the |
Date of Report: February 22, 2007
(Date of earliest event reported)
Vicor Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation)
0-18277
(Commission File Number)
04-2742817
(IRS Employer
Identification Number)
25 Frontage Road, Andover, Massachuesetts
(Address of principal executive offices)
01810
(Zip Code)
(978) 470-2900
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if changed since last report)
Item 2.02. Results of Operations and Financial Condition On February 22, 2007, Vicor Corporation issued a press release announcing its financial results for the fourth quarter of 2006. The full text of that press release is attached as Exhibit 99.1 hereto and incorporated by reference herein. The information furnished under this Item 2.02, including the Exhibit attached hereto, shall not be deemed "filed" for any purpose, including for purposes of Section 18 of the Securities and Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01. Financial Statements and Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Dated: February 22, 2007 |
VICOR CORPORATION
By: /s/ Mark A. Glazer |
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Exhibit No. | Description |
99.1 | Press Release of Vicor Corporation dated February 22, 2007 |
ANDOVER, MA -- 02/22/2007 -- Vicor Corporation (NASDAQ: VICR) today reported its financial results for the fourth quarter and fiscal year ended December 31, 2006.
Revenues for the quarter increased to $48,033,000 compared to $46,294,000 for the corresponding period a year ago. Net loss for Q4 was $38,150,000, or $.92 per diluted share compared to net income of $2,080,000, or $.05 per diluted share, in Q4 2005. The net loss in Q4 2006 was primarily due to a loss from a litigation-related settlement described below.
For the year ended December 31, 2006 revenues increased by 7.1% to $192,047,000 from $179,351,000 for the same period of 2005. The Company reported a net loss for 2006 of $29,738,000, or $.71 per diluted share compared to net income of $3,916,000 or $.09 per diluted share in 2005.
Gross margin declined to 41.0% in Q4 2006 from 42.7% in Q4 2005 and decreased on a sequential basis from 42.5% in Q3 2006. The book-to-bill ratio for Q4 2006 was 0.94:1 as compared to 1.00:1 in Q3 2006. Backlog at the end of 2006 was $36.4 million as compared to $38.6 million at the end of 2005.
In Q4 2006, the Company recorded $200,000 for expensing stock-based compensation in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004) (FAS 123R).
Commenting on the fourth quarter, Vicor's CEO Patrizio Vinciarelli noted: "Demand fell short of expectations as we continued to experience delays in significant orders projected to be booked in Q4. As in Q3, these delays caused disappointing book-to-bill and revenue levels. While demand for Vicor bricks was relatively soft, there was progress with key V-I Chip engagements, leading to record bookings and shipment of V-I Chips. Margins were lower than expected because of non-recurring factors."
"For 2007, we are anticipating revenue growth at a rate slightly higher than 2006 with a small expansion in operating margins. Revenues for 2007 will largely consist of bricks experiencing low year-over-year growth and expanding V-I Chip sales. Given the low starting point, V-I Chip's contribution to total revenues should become significant to overall revenue growth in 2008. Picor product introductions slated for 2007 should begin to make a significant contribution to top line growth in 2009."
The Company announced that it has reached an agreement in principle with Ericsson, Inc., to settle a lawsuit brought by Ericsson against the Company in California state court. Under the terms of the settlement agreement, reached on February 16 after a Court ordered mediation, the Company will pay $50 million to Ericsson, of which $12.8 million will be paid by the Company's insurance carriers. The Company's decision to enter into the settlement followed an adverse ruling by the court in January in connection with a settlement between Ericsson and co-defendants Exar Corporation and Rohm Device USA, LLC, two of the Company's component suppliers prior to 2002. The Company strongly disagrees with the ruling, which it is appealing. Although a successful appeal would enable the Company to seek recoveries from Exar and Rohm, there is no assurance that it will be successful in the appeal. In light of this ruling and after taking into consideration the possibility of further recoveries from the insurance carriers, the Company decided to settle the Ericsson case at this time. Accordingly, the Company recorded a net loss of $37.2 million from litigation-related settlement in the fourth quarter of 2006.
Within the quarter, the Company recorded a loss of $1.0 million for a decline in the value of an investment judged to be other than temporary, which was charged to other income (expense), net.
Depreciation and amortization in Q4 was $3.5 million and capital additions were $1.3 million. In 2006, depreciation and amortization was $14.2 million and capital additions were $5.5 million. This compares to $17.1 million and $8.9 million, respectively for 2005. Prior to any payment related to the aforementioned settlement which is anticipated to occur in 2007, cash and short and long-term investments increased by $2.3 million to approximately $118.6 million at the end of Q4 2006 from $116.3 million at the end of Q3 2006. For the year, cash and short and long-term investments decreased by $7.5 million from $126.1 million at the end of 2005. During 2006 the Company has paid approximately $11.3 million in dividends and repurchased 825,700 shares, for approximately $10.8 million. There were no share repurchases during Q4 2006. At the end of 2006 there was approximately $8.5 million remaining in the authorized stock buy-back plan.
In 2006, the tax provision included estimated income taxes for federal and state taxes for certain minority-owned subsidiaries that are not part of the Company's consolidated income tax returns, for the Federal alternative minimum tax and for estimated income taxes due in various state and international taxing jurisdictions. In the third quarter of 2006, the Company reduced its tax reserves by $468,000 due to closing tax periods in certain jurisdictions.
Vicor's Board of Directors has approved a cash dividend of $.15 per share payable on March 27, 2007 to shareholders of record at the close of business on March 9, 2007. The Board of Directors anticipates reviewing its dividend policy on a semi-annual basis. Dividends are declared at the discretion of the Board and depend on actual cash from operations, the Company's financial condition, capital requirements and any other factors the Company's Board of Directors may consider relevant.
For more information on Vicor and its products, please visit the Company's website at www.vicorpower.com.
Earnings Conference Call
Vicor will be holding its investor conference call, today, Thursday, February 22, 2007 at 5:00 p.m. Eastern Time. Shareholders interested in participating in the call, should call 866-800-8648 at approximately 4:50 p.m. and use the Passcode 57814111. Internet users can listen to a real-time audio broadcast of the conference call on the Investor Relations section of Vicor's website at www.vicorpower.com/irwebcast. Please go to the website at least 15 minutes prior to the call to register, download and install any necessary software. For those who cannot participate a replay will be available, shortly after the conclusion of the call, through March 8, 2007. The replay dial-in number is 888-286-8010 and the Passcode is 53235272. In addition, a webcast replay of the conference call will also be available on the Investor Relations section of Vicor's website at www.vicorpower.com/irwebcast beginning shortly after the conclusion of the call.
This press release contains certain forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. You can identify these statements by our use of the words "may," "will," "would," "should," "plans," "expects," "anticipates," "believes," "continue," "estimate," "prospective," "project," "intend," and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. These risks and uncertainties include our ability to develop and market new products and technologies cost-effectively, to leverage design wins into increased product sales, to continue to make progress with key customers and prospects, to decrease manufacturing costs, to enter into licensing agreements that amplify the market opportunity and accelerate market penetration, to realize significant royalties under license agreements, to achieve a sustainable increased bookings rate over a longer period, to hire key personnel and to continue to build our three business units, and to successfully leverage the V-I Chips in standard products to promote market acceptance of Factorized Power, factors impacting the company's various end markets, as well as those risks and uncertainties identified in the Company's Annual Report on Form 10-K. The risk factors contained in the Annual Report on Form 10-K may not be exhaustive. Therefore, the information contained in that Form 10-K should be read together with other reports and documents that the Company files with the SEC from time to time, which may supplement, modify, supersede or update those risk factors.
Vicor Corporation designs, develops, manufactures and markets modular power components and complete power systems based upon a portfolio of patented technologies. Headquartered in Andover, Massachusetts, Vicor sells its products primarily to the communications, information technology, industrial control and military electronics markets.
VICOR CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (Thousands except for per share amounts) QUARTER ENDED TWELVE MONTHS ENDED (Unaudited) (Unaudited) --------- ---------- --------- --------- DEC 31, DEC 31, DEC 31, DEC 31, 2006 2005 2006 2005 --------- ---------- --------- --------- Net revenues $ 48,033 $ 46,294 $ 192,047 $ 179,351 Cost of revenues 28,359 26,525 110,211 107,944 --------- ---------- --------- --------- Gross margin 19,674 19,769 81,836 71,407 Operating expenses: Sales & administration 12,641 10,426 46,437 40,811 Research & development 7,850 7,400 31,381 29,466 Loss (gain) from litigation-related settlement, net 37,200 0 37,200 (2,250) --------- ---------- --------- --------- Total operating expenses 57,691 17,826 115,018 68,027 (Loss) income from operations (38,017) 1,943 (33,182) 3,380 --------- ---------- --------- --------- Other income (expense), net 305 562 4,092 1,500 --------- ---------- --------- --------- Income (loss) before income taxes (37,712) 2,505 (29,090) 4,880 Provision for income taxes 438 425 648 964 --------- ---------- --------- --------- Net income (loss) ($ 38,150) $ 2,080 ($ 29,738) $ 3,916 ========= ========== ========= ========= Net income (loss) per share: Basic ($ 0.92) $ 0.05 ($ 0.71) $ 0.09 Diluted ($ 0.92) $ 0.05 ($ 0.71) $ 0.09 Shares outstanding: Basic 41,563 42,004 41,839 41,923 Diluted 41,563 42,211 41,839 42,089 VICOR CORPORATION CONSOLIDATED BALANCE SHEET (Thousands) DEC 31, DEC 31, 2006 2005 (Unaudited) (Unaudited) ============ ============ Assets Current assets: Cash and cash equivalents $ 36,185 $ 34,024 Short-term investments 82,401 88,692 Accounts receivable, net 30,399 28,072 Insurance receivable for litigation 12,800 0 Inventories, net 22,001 17,168 Deferred tax assets 3,702 2,673 Other current assets 2,181 2,518 ------------ ------------ Total current assets 189,669 173,147 Long-term investments 0 3,348 Property and equipment, net 51,573 59,114 Other assets 6,865 10,146 ------------ ------------ $ 248,107 $ 245,755 ============ ============ Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 7,273 $ 8,741 Accrued compensation and benefits 5,192 4,583 Other accrued liabilities 6,314 9,438 Accrual for litigation settlement 50,000 0 ------------ ------------ Total current liabilities 68,779 22,762 Deferred income taxes 4,389 3,172 Minority interests 3,593 3,031 Stockholders' equity: Capital stock 158,594 152,122 Retained earnings 134,579 175,660 Treasury stock (121,827) (110,992) ------------ ------------ Total stockholders' equity 171,346 216,790 ------------ ------------ $ 248,107 $ 245,755 ============ ============
For further information contact: Mark A. Glazer Chief Financial Officer Vicor Corporation Tel: 978-470-2900 Fax: 978-749-3439