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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
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(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1997
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to
Commission file number 0-18277
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VICOR CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 04-2742817
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(State or other jurisdiction of (IRS employer
incorporation or organization) identification no.)
23 FRONTAGE ROAD, ANDOVER, MASSACHUSETTS 01810
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (978) 470-2900
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Securities registered pursuant to Section 12(b) of the Act: None
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Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
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(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately $574,400,301 as of February 27, 1998.
On February 27, 1998, there were 30,731,728 shares of Common Stock outstanding
and 12,169,309 shares of Class B Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's definitive proxy statement (the "Definitive Proxy
Statement") to be filed with the Securities and Exchange Commission pursuant to
Regulation 14A and relating to the Company's 1998 annual meeting of stockholders
are incorporated by reference into Part III.
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PART I
This Annual Report on Form 10-K contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Actual results
could differ materially from those projected in the forward-looking statements
as a result, among other factors, of the risk factors set forth in this report.
Reference is made in particular to the discussions set forth under Item 1 -
"Business - Second-Generation Automated Manufacturing Line," "Competition," "-
Patents," and "- Licensing," and under Item 7 - "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
ITEM 1 - BUSINESS
THE COMPANY
Vicor Corporation was incorporated in Delaware in 1981. Unless the context
indicates otherwise, the term "Company" means Vicor Corporation and its
consolidated subsidiaries. The Company designs, develops, manufactures and
markets modular power components and complete power systems using an innovative,
patented, high frequency electronic power conversion technology called "zero
current switching." Power systems, a central element in any electronic system,
convert power from a primary power source (e.g., a wall outlet) into the stable
DC voltages that are required by most contemporary electronic circuits.
In 1987, the Company formed VLT Corporation as its licensing subsidiary. In
1990, the Company established a Technical Support Center in Germany and a
foreign sales corporation. In 1995, the Company established Technical Support
Centers in France, Italy, Hong Kong, and England. Also in 1995, the Company
established Vicor Integration Architects (VIAs), which are majority owned
subsidiaries. VIAs provide customers with local design and manufacturing
services for turnkey custom power solutions. At December 31, 1997 there were
five (5) VIAs operating in the United States. In 1996, the Company established
Vicor B.V., a Netherlands company, which will serve as a European Distribution
Center. The Company became publicly traded on the NASDAQ National Market System
in April, 1990.
PRODUCTS
Power systems are incorporated into virtually all electronic products, such
as computers and telecommunication equipment, to convert electric power from a
primary source, for example a wall outlet, into the stable DC voltages required
by electronic circuits. Since power systems are configured in a myriad of
application-specific configurations, the Company's basic strategy is to exploit
the density and performance advantages of its technology by offering
comprehensive families of economical, component-level building blocks which can
be applied by users to easily configure a power system specific to their needs.
In addition to component-level power converters, which serve as modular power
system building blocks, the Company also manufactures and sells complete
configurable power systems, accessory products, and custom power solutions. The
Company's principal product lines include:
Modular Power Converters
The Company currently offers five first generation families of
component-level DC-DC power converters: the VI-100, VI-200, VI-J00, MI-200, and
MI-J00 families. Designed to be mounted directly on a printed circuit board
assembly and soldered in place using contemporary manufacturing processes, each
family comprises a comprehensive set of products which are offered in a wide
range of input voltage, output voltage and power ratings. This allows end users
to select products appropriate to their individual applications.
The product families differ in maximum power ratings, performance
characteristics, package size and, in the case of the "MI" families, in target
market (the MI families are designed specifically to meet many of the
performance requirements of the military markets).
In September of 1996, the Company introduced two models of its second
generation of high power density, component-level DC-DC converters. The first
model delivers 600 watts and is designed for telecommunications and distributed
power systems. The second model delivers 5 volts at 80 amps and is designed for
the industrial,
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automatic test equipment and computer markets. Both models are packaged in the
Company's "full size" format. In November of 1996 the Company introduced a third
model in a new package, the "Micro", one-third the size of VI-200 converters.
This model delivers 150 watts and is designed for telecommunications and
distributed power systems.
Configurable Products
Utilizing its standard converters as core elements, the Company has
developed several product families which provide complete power solutions
configured to a customer's specific needs. These products exploit the benefits
of the component-level approach to offer higher performance, higher power
densities, lower costs, greater flexibility and faster delivery than traditional
competitive offerings.
Most EDP and industrial electronic products operate directly off of AC
lines. "Off-line" power systems require "front end" circuitry to convert AC line
voltage into DC voltage for the core converters. The Company's off-line AC-DC
products incorporate a set of modular front end subassemblies to offer a
complete power solution from AC line input to highly regulated DC output. The
product selection includes a low-profile modular design in various sizes and
power levels, and a choice of alternatives to conventional "box switchers"--high
power, off-line bulk supplies in industry-standard packages. Voltage and power
levels are either factory or field configurable.
Many telecommunications, military and industrial electronic products are
powered off of central DC sources (battery plants or generators). The Company's
DC-DC power system choices include a low-profile modular design similar to the
corresponding AC-DC system, and a rugged, compact assembly for chassis-mounted,
bulk power applications.
Accessory Power System Components
Accessory power system components, used with the Company's component-level
power converters, integrate other important functions of the power system,
facilitating the design of complete power systems by interconnecting several
modules. In general, accessory products are used to condition the inputs and
outputs of the Company's modular power components.
VI-HAMs (Harmonic Attenuator Modules) are universal-AC-input,
power-factor-correcting front ends for use with compatible power converters.
VI-AIMs (AC Input Modules) provide input filtering, transient protection and
rectification of the AC line. VI-IAMs (Input Attenuator Modules) provide the DC
input filtering and transient protection required in industrial and
telecommunications markets. VI-RAMs (Ripple Attenuator Modules) condition
converter module outputs for extremely low noise systems. In 1996 the Company
introduced a new component-level AC front end, the VI-ARM (AC Rectifier Module).
This front end product is packaged in the Company's new "Micro" package and
includes a controller that tracks the AC line to ensure correct operation for
domestic or international line voltages.
Customer Specific Products
Since its inception, the Company has accepted a certain amount of "custom"
power supply business. In most cases, the customer was unable to obtain a
conventional solution which could achieve the desired level of performance in
the available space. By utilizing its component-level power products as core
elements in developing most of these products, the Company was able to meet the
customer's needs with a reliable, high power density, total solution. However,
in keeping with the Company's strategy of focusing on sales of standard families
of component-level power building blocks, custom product sales have not been
directly pursued. The Company has traditionally pursued these custom
opportunities through Value-Added-Resalers ("VARs"). The Company has also put in
place a network of Vicor Integration Architects ("VIAs") (see "The Company,"
above in Item 1 - "Business"). VIAs are majority owned by the Company, while
VARs are independent businesses. Both VIAs and VARs are distributed
geographically and are in close proximity to customers.
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SALES AND MARKETING
The Company sells its products through a network of 31 independent sales
representative organizations in North and South America; internationally, 38
independent distributors are utilized. Sales activities are managed by a staff
of Regional and Industry Sales Managers and sales personnel based at the
Company's world headquarters in Andover, Massachusetts, its Westcor division in
Sunnyvale, California, a sales office in Lombard, Illinois, and in its Technical
Support Center subsidiaries in Munich, Germany; Camberley Surrey, England;
Milano, Italy; Paris, France; and Hong Kong.
Export sales, as a percentage of total net revenues, were approximately 29%,
29%, and 32%, in 1997, 1996, and 1995, respectively. The decrease in export
sales during 1997 and 1996 as compared to 1995 is due to a decrease in revenue
earned from the sale of automated manufacturing line equipment.
Because of the technical nature of the Company's product lines, the Company
engages a staff of Customer Applications Engineers to support the Company's
sales activities. Customer Applications Engineers provide direct technical sales
support worldwide to review new applications and technical matters with existing
and potential customers. In 1995 the Company significantly expanded its staff of
Customer Applications Engineers by opening Technical Support Centers in Italy,
France, United Kingdom and Hong Kong, complementing its existing Technical
Support Center in Germany. The Company generally warrants its standard products
for a period of two years.
The Company also sells directly to customers through Vicor Express, an
in-house distribution group. Through space advertising and periodic mailing of
its catalogs, Vicor Express generally offers customers rapid delivery on small
quantities of many standard products. The Company, through Vicor B.V., has
expanded its Vicor Express operation to include locations in Germany, France and
Italy.
CUSTOMERS AND APPLICATIONS
The Company's customer base is comprised of large Original Equipment
Manufacturers (OEMs) and smaller, lower volume users which are broadly
distributed across several major market areas. Some examples of the diverse
applications of the Company's products are:
Telecommunications: EDP:
Central Office Systems Workstations
Fiber Optic Systems Supercomputers
Cellular Telecommunications Fault Tolerant Computers
Microwave Communications Data Storage Systems
Voice Processing Multiplexers ATM Switches
Paging Equipment Networking Equipment
Broadcast Equipment LAN/WAN Systems
File Servers
RAID Systems
Measurement and Control: Military:
Process Control Equipment Communications
Medical Equipment Airborne Radar and Displays
Seismic Equipment Aircraft/Weapons Test Equipment
Test Equipment Ruggedized Computers
Transportation Systems Electro-Optical Systems
Agricultural Equipment IR Reconnaissance/Targeting Systems
Marine Products
For the years ended December 31, 1997, 1996 and 1995, no single customer
accounted for more than 10% of net revenues.
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BACKLOG
As of December 31, 1997, the Company had a backlog of approximately $48
million compared to $44 million at December 31, 1996. Backlog is comprised of
orders for products which have a scheduled shipment date within the next twelve
months. The Company maintains most standard converter products in inventory and
manufactures other standard, modified standard and custom products pursuant to
firm orders from customers. The Company believes that due to its increased
production capacity and its ability to respond quickly to customers'
requirements, a substantial portion of sales in each quarter is, and will
continue to be, derived from orders booked in the same quarter.
RESEARCH AND DEVELOPMENT
As a basic element of its long term strategy, the Company is committed to
the continued advancement of power conversion technology and power component
product development. The Company's research and development efforts are focused
in three areas: continued enhancement of the Company's patented technology;
expansion of the Company's families of component level DC-DC converter products;
and continued development of configurable products based upon market
opportunities. The Company invested approximately $17.7 million, $14.3 million,
and $11.6 million, in research and development in 1997, 1996 and 1995,
respectively. Investment in research and development represented 10.9%, 9.9%,
and 8.0%, of net revenues in 1997, 1996 and 1995. The Company plans to continue
to invest a significant percentage of revenues into research and development.
MANUFACTURING
The Company's principal manufacturing processes are assembly of electronic
components onto printed circuit boards, automatic testing of components, wave,
reflow and infrared soldering of assembled components, encapsulation of
converter subassemblies, final "burn-in" of certain products and product test
using automatic test equipment.
The Company continues to execute on its strategy to minimize manual assembly
processes, reduce manufacturing costs, increase product quality and reliability
and ensure its ability to rapidly and effectively expand capacity. The strategy
is based upon the phased acquisition and/or fabrication, qualification and
integration of automated manufacturing equipment. In accordance with this
strategy, the Company purchased a building in December 1994, with approximately
136,000 square feet. The Company is in the process of expanding this building by
approximately 70% (see Item 2 - Properties). The Company continues the process
of installing its automated manufacturing lines in these premises (see
"Second-Generation Automated Manufacturing Line," below).
Components used in the Company's products are purchased from a variety of
vendors. Most of the components are available from multiple sources. In
instances in which single source items do exist, the Company maintains what it
considers to be appropriate levels of inventories. Incoming components,
assemblies and other parts are subjected to several levels of inspection
procedures.
Compliance by the Company with applicable environmental laws has not had any
material effect on the financial condition or operations of the Company.
SECOND-GENERATION AUTOMATED MANUFACTURING LINE
In 1995, the Company started prototype production on a new automated
manufacturing line specifically designed to manufacture second-generation
products. In the fourth quarter of 1996, the Company began introducing selected
models of its second-generation product families which had been produced on this
line. During 1997, the Company shipped a limited number of second-generation
products, while continuing to make modifications to the designs, processes,
equipment and parts associated with second-generation products. While management
believes that the initiation of limited production on the new manufacturing line
and the introduction of selected models of its second-generation product
families are important milestones, there can be no assurance that problems will
not substantially delay the ultimate general introduction of the complete
product line, require continued modification of product specifications, or
prevent attainment of the anticipated
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capacity of the new manufacturing line. Significant revenues from the sale of
any products in the Company's second-generation product line are not expected to
occur for several quarters. The Company plans to begin depreciation on a
significant portion, approximately $32.5 million, of this product line in the
second quarter of 1998. Approximately $2.5 million of this line will be
depreciated on a straight-line basis over a period of five years, and
approximately $30 million will be depreciated on a straight-line basis over a
period of eight years. Consequently, this depreciation and other fixed and
variable costs associated with the ramp-up of production are not expected to be
fully absorbed until higher production volumes and higher yield levels are
achieved. As a result, gross margins during 1998 may be negatively impacted
until higher production volumes and higher yield levels are attained.
COMPETITION
Many power supply manufacturers target market segments similar to those of
the Company. Representative examples are: Lambda Electronics, a subsidiary of
Siebe, plc; Lucent Technologies; Artesyn Technologies (formerly Computer
Products, Inc. and Zytec Corporation); Astec America; and RO Associates.
Although certain of the Company's competitors have significantly greater
financial and marketing resources and longer operating histories than the
Company, the Company believes that it has a strong competitive position,
particularly with customers who need small, high density power system solutions
requiring a variety of input-output configurations.
PATENTS
The Company believes that its patents afford significant advantages by
erecting fundamental and multilayered barriers to competitive encroachment upon
key features and performance benefits of its principal product families. The
Company's patents cover the fundamental conversion topologies used to achieve
the performance attributes of its converter product lines; converter array
architectures which are the basis of the products' "parallelability"; product
packaging design; product construction; high frequency magnetic structures; and
automated equipment and methods for circuit and product assembly. The Company
believes in vigorously protecting its rights under its patents (see "Item 3 -
Legal Proceedings," below).
The Company has been issued thirty-six patents in the United States (which
expire between 2001 and 2016), ten in Europe (which expire between 2002 and 2013
and which comprise a total of forty issued patents in eleven countries), and
eleven in Japan (which expire between 2002 and 2015). The Company also has a
number of patent applications pending in the United States, Europe and the Far
East. Although the Company believes that patents are an effective way of
protecting its technology, there can be no assurances that the Company's patents
will prove to be enforceable. While some of the Company's patents are deemed
materially important to the Company's operations, the Company believes that no
one patent is essential to the success of the Company.
LICENSING
In addition to generating revenue, licensing is an element of the Company's
strategy for building worldwide product and technology acceptance and market
share. In granting licenses, the Company retains the right to use its patented
technologies, and manufacture and sell its products, in all licensed geographic
areas and fields of use. Licenses are granted and administered through the
Company's wholly owned subsidiary, VLT Corporation, which owns the Company's
patents.
Revenues from licensing arrangements have not exceeded 10% of the Company's
consolidated revenues in any of the last three fiscal years. The Company is
involved in litigation with a former licensee relating to the Company's
termination of the license arrangement for the licensee's failure to accurately
report revenues and make royalty payments and certain other related matters.
Management does not believe that the ultimate outcome of this litigation will be
materially adverse to the Company's financial condition or results of
operations.
On March 31, 1997, Japan Tobacco, Inc. ("JT"), the Company's exclusive
licensee in Japan, notified the Company of its decision to convert its license
into a non-exclusive license. Under the terms of the license agreement, JT is
nonetheless obligated to make certain minimum royalty payments relating to its
exclusive
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rights through early 1999. The Company is currently formulating plans for the
expansion of its power supply business in Japan.
On September 17, 1997, the Company announced that it had entered into a
license agreement with Delta Electronics, Inc., ("Delta"), under which Delta
acquired non-exclusive rights to use the Company's patented "reset" technology
in its power conversion products. Reset technology (which has also become known
in the power conversion industry as "active clamp" technology) enables design of
"zero-voltage switching" power converters which are smaller and more energy
efficient than conventional power supplies.
EMPLOYEES
As of December 31, 1997, the Company employed approximately 1,118 full time
and 247 part time people. The Company believes that its continued success
depends, in part, on its ability to attract and retain qualified personnel.
Although there is strong demand for qualified technical personnel, the Company
has not to date experienced difficulty in attracting and retaining sufficient
engineering and technical personnel to meet its needs.
None of the Company's employees is subject to a collective bargaining
agreement. The Company has not experienced any work stoppages and believes that
its employee relations are good.
ITEM 2 - PROPERTIES
The Company currently leases approximately 64,000 square feet of office and
manufacturing space for its corporate headquarters and manufacturing operations
at 23 Frontage Road, Andover, Massachusetts pursuant to a lease which expires in
1999.
During 1997, the Company began construction of a new corporate headquarters
building on a site adjacent to its current headquarters building in Andover,
Massachusetts. The building will provide approximately 90,000 square feet of
office space for its sales, marketing, engineering and administration personnel.
The building is expected to be completed in the second quarter of 1998.
The Company also owns a building of approximately 136,000 square feet, in
Andover, Massachusetts. During 1997, the Company began construction of a 94,000
square foot expansion of this building, which will provide additional capacity
for manufacturing. Completion of the expansion is expected in the third quarter
of 1998.
The Company's Westcor division owns and occupies a building of approximately
31,000 square feet, in Sunnyvale, California.
ITEM 3 - LEGAL PROCEEDINGS
On October 17, 1996, the Company filed a complaint in Munich District Court,
Federal Republic of Germany, citing Nemic-Lambda of Japan and Lambda Electronics
GmbH for infringement of Vicor's German "reset" patent. Vicor seeks injunctive
relief and damages. On June 9, 1997 Lambda Electronics GmbH filed a nullity
action in the German Patent Court seeking to have the Company's German reset
patent declared null and void.
The Company is involved in certain litigation incidental to the conduct of
its business. While the outcome of lawsuits against the Company cannot be
predicted with certainty, management does not expect any current litigation to
have a material adverse impact on the Company (see "Licensing," above).
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Common Stock of the Company is listed on the National Market System of
the National Association of Securities Dealers Automated Quotation ("NASDAQ")
System and is traded in the over-the-counter market under the NASDAQ symbol
"VICR". The Class B Common Stock of the Company is not traded on any market and
transfer is restricted by the Company's Restated Certificate of Incorporation.
The following table sets forth the quarterly high and low sales prices for the
Common Stock as reported by NASDAQ for the periods indicated:
1996 High Low
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First Quarter 21 1/4 12 1/2
Second Quarter 23 5/8 14 1/2
Third Quarter 25 3/4 18
Fourth Quarter 25 1/8 16 1/2
1997
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First Quarter 19 13 1/8
Second Quarter 23 3/8 13 1/8
Third Quarter 30 1/8 21
Fourth Quarter 36 1/4 24 1/8
As of February 27, 1998, there were approximately 570 holders of record of the
Company's Common Stock and approximately 34 holders of record of the Company's
Class B Common Stock. These numbers do not reflect persons or entities who hold
their stock in nominee or "street name" through various brokerage firms.
DIVIDEND POLICY
The Company has not paid cash dividends on its common equity and it is the
Company's present intention to retain earnings to finance the expansion of the
Company's business.
ITEM 6 - SELECTED FINANCIAL DATA
The following selected consolidated financial data with respect to the
Company's statements of income for the years ended December 31, 1997, 1996 and
1995 and with respect to the Company's balance sheets as of December 31, 1997
and 1996 are derived from the Company's consolidated financial statements, which
appear elsewhere in this report and which have been audited by Ernst & Young
LLP, independent auditors. The following selected consolidated financial data
with respect to the Company's statements of income for the years ended December
31, 1994 and 1993 and with respect to the Company's balance sheets as of
December 31, 1995, 1994 and 1993 are derived from the Company's audited
consolidated financial statements, and which are not included herein. The data
should be read in conjunction with the consolidated financial statements,
related notes and other financial information included herein.
Year Ended December 31
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(in thousands except per share data)
Income Statement Data
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1997 1996 1995 1994 1993
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Net revenues $162,243 $144,983 $144,022 $115,444 $ 84,034
Income from operations 35,950 36,532 42,632 33,340 21,674
Net income 26,217 25,639 29,498 22,135 15,131
Net income per share -diluted .60 .60 .68 .52 .35
Weighted average shares 43,344 42,764 43,295 42,963 43,458
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The income per share amounts prior to 1997 have been restated as required to
comply with Statement of Financial Accounting Standards No. 128, "Earnings per
Share." For further discussion of earnings per share and the impact of Statement
No. 128, see Notes 1 and 7 of the Notes to the Consolidated Financial Statements
which appear elsewhere in this report.
At December 31
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(in thousands)
Balance Sheet Data 1997 1996 1995 1994 1993
- ------------------ ---- ---- ---- ---- ----
Working capital $128,267 $108,551 $ 95,900 $ 65,015 $ 62,850
Total assets 228,843 186,443 166,997 126,492 114,813
Total liabilities 20,419 15,699 16,941 13,014 12,416
Long-term debt - - - - 104
Stockholders' equity 208,424 170,744 150,056 113,478 102,397
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following table sets forth certain items of selected consolidated
financial information as a percentage of net revenues for the periods indicated.
This table and the subsequent discussion should be read in conjunction with the
selected financial data and the Consolidated Financial Statements of the Company
contained elsewhere in this report.
Year ended December 31
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1997 1996 1995
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Net revenues 100.0% 100.0% 100.0%
Gross margin 51.8% 53.9% 52.7%
Selling, general and administrative expenses 18.7% 18.8% 15.0%
Research and development expenses 10.9% 9.9% 8.0%
Income before income taxes 25.2% 27.9% 32.5%
YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996:
Net revenues for fiscal 1997 were $162,243,000, an increase of $17,260,000
(11.9%) as compared to $144,983,000 for fiscal 1996. The growth in revenues
resulted primarily from a net increase in unit shipments of standard and custom
products of approximately $22,800,000, offset by reductions in license income
and the sale of automated manufacturing line equipment of approximately
$3,200,000 and $2,300,000, respectively.
Gross margin increased $5,904,000 (7.6%) from $78,105,000 to $84,009,000,
but decreased as a percentage of net revenues from 53.9% to 51.8%. The primary
component of the fluctuations in gross margin dollars and percentage was changes
in the revenue mix.
Selling, general, and administrative expenses were $30,327,000 for the year,
an increase of $3,095,000 (11.4%) over fiscal 1996. As a percentage of net
revenues, selling, general and administrative expenses decreased from 18.8% to
18.7%. The principal components of the $3,095,000 increase were $1,795,000
(17.9%) of compensation expense due to growth in staffing levels of sales and
administrative personnel, increased sales commission expense of $758,000 (19.4%)
and increased legal expenses of $354,000 (43.3%).
Research and development expenses increased $3,391,000 (23.6%) to
$17,732,000, and increased as a percentage of net revenues to 10.9% from 9.9%.
The principal components of the $3,391,000 increase were $2,068,000 (25.6%) of
compensation expense due to growth in staffing levels of engineering personnel,
an increase in project materials of $366,000 (13.0%), $334,000 (26.7%) of
increased depreciation expense, and an increase in the Company's VIA
subsidiaries' research and development expenses of $266,000 (60.4%). The
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Company has a long-term commitment to reinvesting its profits in new product
design and development in order to maintain and improve its competitive
position.
Other income increased $1,154,000 (29.9%) to $5,014,000. Other income is
primarily comprised of interest income which was derived from invested cash and
cash equivalents, as well as notes receivable associated with the Company's real
estate transactions. Interest income increased primarily due to an increase in
these balances.
Income before income taxes was $40,964,000, an increase of $572,000 (1.4%)
compared to 1996. As a percentage of net revenues, income before income taxes
decreased from 27.9% in 1996 to 25.2% in 1997.
The provision for income taxes totaled $14,747,000 in 1997 compared to
$14,753,000 in 1996. The Company's overall tax rate was 36.0% and 36.5% for 1997
and 1996, respectively.
Net income in 1997 increased by $578,000 to $26,217,000. Diluted earnings
per share were $.60 in 1997 and 1996.
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995:
Net revenues for fiscal 1996 were $144,983,000, an increase of $961,000
(.7%) as compared to $144,022,000 for fiscal 1995. The growth in revenues
resulted primarily from an increase in unit shipments of standard and custom
products of $5,468,000, offset by a decrease in revenue recognized under the
Company's long-term contract for the sale of automated manufacturing line
equipment of $5,128,000.
Gross margin increased $2,253,000 (3.0%) from $75,852,000 to $78,105,000,
and increased as a percentage of net revenues to 53.9% from 52.7%. The primary
component of the increase in gross margin was changes in the revenue mix.
Selling, general, and administrative expenses were $27,232,000 for the year,
an increase of $5,564,000 (25.7%) over fiscal 1995. As a percentage of net
revenues, selling, general and administrative expenses increased to 18.8% as
compared to 15.0% in 1995. The principal components of the $5,564,000 increase
were $1,645,000 (19.7%) of compensation expense due to growth in staffing levels
of sales and administrative personnel, international office expenses of $954,000
(239.0%), VIA related expenses of $799,000 (88.1%) (see the discussion under
Item 1 - "Business"), and legal expense of $517,000 (175.3%). The increase in
international office expenses and VIA related expenses reflects a full year of
expenses for the Company's international Technical Support Centers and in the
Company's VIA subsidiaries that had been established in 1995.
Research and development expenses increased $2,789,000 (24.1%) to
$14,341,000, and increased as a percentage of net revenues to 9.9% from 8.0%.
The principal components of the $2,789,000 increase were $1,560,000 (23.9%) of
compensation expense due to growth in staffing levels of engineering personnel,
an increase in project materials of $497,000 (24.4%) and an increase in VIA
related research and development expenses of $262,000 (142.0%).
Other income decreased $331,000 (7.9%) to $3,860,000. Other income is
primarily comprised of interest income which was derived from cash and cash
equivalents, as well as the notes receivable associated with the Company's real
estate transactions. This decrease is primarily due to a reduction in interest
income earned on lower average balances from an escrow account maintained in
connection with the Company's long-term contract for the sale of automated
manufacturing line equipment and from an overall decrease in market interest
rates during the twelve months ended December 31, 1996, as compared with the
same period a year ago.
Income before income taxes was $40,392,000, a decrease of $6,431,000 (13.7%)
compared to 1995. As a percentage of net revenues, income before income taxes
decreased from 32.5% in 1995 to 27.9% in 1996.
The provision for income taxes totaled $14,753,000 in 1996 compared to
$17,325,000 in 1995. The Company's overall tax rate was 36.5% and 37% for 1996
and 1995, respectively.
9
11
Net income in 1996 decreased by $3,859,000 to $25,639,000. Diluted earnings
per share in 1996 were $.60 compared to $.68 in 1995, a decrease of $.08
(11.8%).
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1997, the Company had $84,859,000 in cash and cash
equivalents. Working capital increased $19,716,000 during the year ended
December 31, 1997. This increase was due primarily to an increase in cash and
cash equivalents of $11,212,000 and accounts receivable of $10,257,000.
Cash used in investing activities during fiscal 1997 was $26,387,000, an
increase of $10,026,000 (61.3%) compared to fiscal 1996. This increase was
primarily due to net additions to property and equipment of $5,882,000 and a net
change in notes receivable of $4,007,000. Cash provided by financing activities
was $11,463,000 compared to cash used in financing activities of $4,951,000 in
1996, a net change of $16,414,000. This change is primarily attributed to a net
decrease in the acquisition cost of treasury stock of $12,324,000 in 1997, and
an increase in the net proceeds from the issuance of Common Stock upon the
exercise of stock options, and the related income tax benefit derived from such
issuance, of $4,090,000.
The Company plans to continue its investments in manufacturing equipment,
much of which is built internally. The internal construction of manufacturing
machinery, in order to provide for additional manufacturing capacity, is a
practice which the Company expects to follow over the next several years.
In November, 1997, the Board of Directors of the Company authorized the
repurchase of the Company's Common Stock up to an aggregate amount of
$30,000,000, including amounts remaining under a prior authorization. The plan
authorizes the Company to make such repurchases from time to time in the open
market or through privately negotiated transactions. The timing of this program
and the amount of the stock that may be repurchased is at the discretion of
management based on its view of economic and financial market conditions. In
1997, the Company spent $683,000 in the repurchase of its Common Stock.
The Company has an unused line of credit with a bank under which the Company
may borrow up to $4,000,000 on a revolving credit basis. The Company believes
that cash generated from operations and its cash and cash equivalents will be
sufficient to fund planned operations and capital equipment purchases for the
foreseeable future. At December 31, 1997, the Company had approximately
$7,600,000 of capital expenditure commitments, including $6,400,000 related to
the construction of new facilities.
The Company does not consider the impact of inflation on its business
activities or fluctuations in the exchange rates for foreign currency
transactions to have been significant to date.
OTHER
In 1995, the Company started prototype production on a new automated
manufacturing line specifically designed to manufacture second-generation
products. In the fourth quarter of 1996, the Company began introducing selected
models of its second-generation product families which had been produced on this
line. During 1997, the Company shipped a limited number of second-generation
products, while continuing to make modifications to the designs, processes,
equipment and parts associated with second-generation products. While management
believes that the initiation of limited production on the new manufacturing line
and the introduction of selected models of its second-generation product
families are important milestones, there can be no assurance that problems will
not substantially delay the ultimate general introduction of the complete
product line, require continued modification of product specifications, or
prevent attainment of the anticipated capacity of the new manufacturing line.
Significant revenues from the sale of any products in the Company's
second-generation product line are not expected to occur for several quarters.
The Company plans to begin depreciation on a significant portion, approximately
$32.5 million, of this product line in the second quarter of 1998. Approximately
$2.5 million of this line will be depreciated on a straight-line basis over a
period of five years, and approximately $30 million will be depreciated on a
straight-line basis over a period of eight years. Consequently, this
depreciation and other fixed and variable costs associated with the ramp-up of
production are not expected to be fully absorbed until higher production volumes
and higher yield levels are achieved. As a result, gross margins during 1998 may
be negatively impacted until higher production volumes and higher yield levels
are attained.
10
12
Impact of Year 2000
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of the Company's
computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
The Company has determined that it will be required to modify or replace
significant portions of its software so that its computer systems will function
properly with respect to dates in the year 2000 and thereafter. The Company is
in the process of installing a new Enterprise Resource Planning (ERP) system
which will replace its current information system. The Company presently
believes that with modifications to existing software and conversions to new
software, the Year 2000 Issue will not pose significant operational problems for
its computer systems. However, if such modifications and conversions are not
made, or are not completed timely, the Year 2000 Issue could have a material
impact on the operations of the Company.
The Company has initiated formal communications with all of its significant
suppliers and large customers to determine the extent to which the Company's
interface systems are vulnerable to those third parties' failure to remediate
their own Year 2000 Issues. The Company's total Year 2000 project cost and
estimates to complete include the estimated costs and time associated with the
impact of third party Year 2000 Issues based on presently available information.
However, there can be no guarantee that the systems of other companies on which
the Company's systems rely will be timely converted and would not have an
adverse effect on the Company's systems. The Company does not believe that it
has any exposure to contingencies related to the Year 2000 Issue for the
products it has sold.
The Company is utilizing both internal and external resources to reprogram,
or replace, and test the software for Year 2000 modifications, including the
installation of the new ERP system. The Company anticipates completing the
date-critical elements of the Year 2000 project no later than December 31, 1998,
which is prior to any anticipated impact on its operating systems, and other
non-critical elements during 1999. The total external cost of the Year 2000
project is estimated at $6.1 million and is being funded through operating cash
flows. Internal costs are not considered to be incremental, and therefore are
not included in this amount. Of the total project cost, approximately $2.2
million is attributable to the purchase of new software and hardware
enhancements, which will be capitalized. The remaining $3.9 million, which will
be expensed as incurred, is not expected to have a material effect on the
results of operations. To date, the Company has incurred approximately $1.6
million ($160,000 expensed and $1.4 million capitalized for new systems),
principally related to the purchase of the software licenses for the new ERP
system.
The costs of the project and the date on which the Company believes it will
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events, including
the continued availability of certain resources, third party modification plans
and other factors. However, there can be no guarantee that these estimates will
be achieved and actual results could differ materially from those anticipated.
Specific factors that might cause such material differences include, but are not
limited to, the availability and cost of personnel trained in this area, the
ability to locate and correct all relevant computer codes, and similar
uncertainties.
11
13
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX
FINANCIAL STATEMENTS
Report of Independent Auditors
Consolidated Balance Sheets at December 31, 1997 and 1996
Consolidated Statements of Income For the Years Ended December 31, 1997, 1996
and 1995
Consolidated Statements of Cash Flows For the Years Ended December 31, 1997,
1996 and 1995
Consolidated Statements of Stockholders' Equity For the Years Ended December 31,
1997, 1996 and 1995
Notes to the Consolidated Financial Statements
SCHEDULE (Refer to Item 14)
12
14
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
VICOR CORPORATION
We have audited the accompanying consolidated balance sheets of Vicor
Corporation as of December 31, 1997 and 1996, and the related consolidated
statements of income, stockholders' equity, and cash flows for each of the three
years in the period ended December 31, 1997. Our audits also included the
financial statement schedule listed in the Index at Item 14(a). These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Vicor Corporation at December 31, 1997 and 1996, and the consolidated results of
its operations and its cash flows for each of the three years in the period
ended December 31, 1997, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
Ernst & Young LLP
Boston, Massachusetts
January 26, 1998
13
15
VICOR CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31, 1997 and 1996
1997 1996
---- ----
(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents $ 84,859 $ 73,647
Accounts receivable, less allowance of $971 in 1997 and
$879 in 1996 35,258 25,001
Inventories, net 23,448 21,129
Other current assets 3,269 2,765
-------- --------
Total current assets 146,834 122,542
Property, plant and equipment, net 69,802 57,613
Notes receivable 9,097 3,795
Other assets 3,110 2,493
-------- --------
$228,843 $186,443
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,542 $ 5,558
Accrued compensation and benefits 2,154 2,129
Accrued expenses 2,741 2,184
Income taxes payable 5,110 3,594
Deferred revenue 20 526
-------- --------
Total current liabilities 18,567 13,991
Deferred income taxes 1,852 1,708
Commitments and contingencies - -
Stockholders' equity:
Preferred Stock, $.01 par value, 1,000,000 shares
authorized; 360,001 issued and none outstanding in 1997 and 1996 - -
Class B Common Stock: 10 votes per share, $.01 par value, 14,000,000
shares authorized, 12,173,809 issued and outstanding
(12,264,809 in 1996) 122 123
Common Stock: 1 vote per share, $.01 par value, 62,000,000 shares
authorized, 33,958,142 shares issued and 30,674,748 outstanding
(33,134,135 issued and 29,876,741 outstanding in 1996) 340 331
Additional paid-in capital 97,980 85,842
Retained earnings 151,056 124,839
Treasury stock at cost: 3,283,394 shares (3,257,394 shares in 1996) (41,074) (40,391)
-------- --------
Total stockholders' equity 208,424 170,744
-------- --------
$228,843 $186,443
======== ========
See accompanying notes
14
16
VICOR CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31, 1997, 1996 and 1995
1997 1996 1995
---- ---- ----
(in thousands, except per share amounts)
Net revenues $162,243 $144,983 $144,022
Costs and expenses:
Cost of revenue 78,234 66,878 68,170
Selling, general and administrative 30,327 27,232 21,668
Research and development 17,732 14,341 11,552
-------- -------- --------
126,293 108,451 101,390
-------- -------- --------
Income from operations 35,950 36,532 42,632
Other income 5,014 3,860 4,191
-------- -------- --------
Income before income taxes 40,964 40,392 46,823
Provision for income taxes 14,747 14,753 17,325
-------- -------- --------
Net income $ 26,217 $ 25,639 $ 29,498
======== ======== ========
Net income per common share:
Basic $ .62 $ .61 $ .70
======== ======== ========
Diluted $ .60 $ .60 $ .68
======== ======== ========
Shares Outstanding:
Basic 42,595 41,947 42,343
======== ======== ========
Diluted 43,344 42,764 43,295
======== ======== ========
See accompanying notes
15
17
VICOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 1997, 1996 and 1995
1997 1996 1995
---- ---- ----
(in thousands)
Operating activities:
Net income $ 26,217 $ 25,639 $ 29,498
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 8,289 8,338 8,232
(Gain) loss on disposal of equipment (10) 4 (20)
Deferred income taxes (201) (28) 1,049
Change in current assets and liabilities, net (8,159) (4,238) (9,024)
-------- -------- --------
Net cash provided by operating activities 26,136 29,715 29,735
Investing activities:
Additions to property, plant and equipment (20,177) (14,295) (15,593)
Proceeds from sale of equipment 20 16 33
Decrease (increase) in notes receivable (5,302) (1,295) 1,473
Increase in other assets (928) (787) (581)
-------- -------- --------
Net cash used in investing activities (26,387) (16,361) (14,668)
Financing activities:
Tax benefit relating to stock option plans 2,950 2,844 3,516
Proceeds from issuance of Common Stock 9,196 5,212 8,662
Payments on long-term debt - - (104)
Acquisitions of treasury stock (683) (13,007) (5,098)
-------- -------- --------
Net cash provided by (used in)
financing activities 11,463 (4,951) 6,976
-------- -------- --------
Net increase in cash and cash equivalents 11,212 8,403 22,043
Cash and cash equivalents at beginning of year 73,647 65,244 43,201
-------- -------- --------
Cash and cash equivalents at end of year $ 84,859 $ 73,647 $ 65,244
======== ======== ========
Continued on following page
16
18
VICOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Years ended December 31, 1997, 1996 and 1995
1997 1996 1995
---- ---- ----
(in thousands)
Change in current assets and liabilities:
Accounts receivable $(10,257) $ 1,170 $(8,877)
Inventories (2,319) (4,444) (3,007)
Other current assets (159) 260 (482)
Accounts payable and other accrued items 3,566 (1,378) 3,805
Income taxes payable 1,516 (122) (463)
Deferred revenue (506) 276 -
-------- ------- -------
$ (8,159) $(4,238) $(9,024)
======== ======= =======
Supplemental disclosures:
Cash paid during the year for income taxes,
net of refunds $ 9,520 $10,911 $12,794
See accompanying notes
17
19
VICOR CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended December 31, 1997, 1996 and 1995
(in thousands, except share amounts)
CLASS B
COMMON STOCK COMMON STOCK ADDITIONAL TOTAL
------------ ------------ PAID-IN RETAINED TREASURY STOCKHOLDERS'
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS STOCK EQUITY
------ ------ ------ ------ ------- -------- ----- ------
Balance at December 31, 1994 6,199,711 $ 62 15,616,914 $156 $65,844 $ 69,702 $(22,286) $113,478
Sales of Common Stock 548,770 6 8,656 8,662
Conversion of Class B Common
Stock to Common Stock (77,500) (1) 77,500 1 -
Income tax benefit from
transactions involving stock
options 3,516 3,516
Two-for-one stock split, effected
in the form of a dividend, at
par value 6,197,098 62 16,147,675 161 (223) -
Purchase of treasury stock (5,098) (5,098)
Net income 29,498 29,498
---------- ---- ---------- ---- ------- -------- -------- --------
Balance at December 31, 1995 12,319,309 123 32,390,859 324 77,793 99,200 (27,384) 150,056
Sales of Common Stock 688,776 7 5,205 5,212
Conversion of Class B Common
Stock to Common Stock (54,500) 54,500 -
Income tax benefit from
transactions involving stock
options 2,844 2,844
Purchase of treasury stock (13,007) (13,007)
Net income 25,639 25,639
---------- ---- ---------- ---- ------- -------- -------- --------
Balance at December 31, 1996 12,264,809 123 33,134,135 331 85,842 124,839 (40,391) 170,744
Sales of Common Stock 733,007 8 9,188 9,196
Conversion of Class B Common
Stock to Common Stock (91,000) (1) 91,000 1 -
Income tax benefit from
transactions involving stock
options 2,950 2,950
Purchase of treasury stock (683) (683)
Net income 26,217 26,217
---------- ---- ---------- ---- ------- -------- -------- --------
Balance at December 31, 1997 12,173,809 $122 33,958,142 $340 $97,980 $151,056 $(41,074) $208,424
========== ==== ========== ==== ======= ======== ======== ========
See accompanying notes
18
20
VICOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS
Vicor Corporation (the "Company") designs, develops, manufactures and
markets modular power converters, power system components, and power systems
using a patented, high frequency power conversion technology designated "zero
current switching." The Company also licenses certain rights to its technology
in return for ongoing royalties. The principal markets for the power converters
and systems are large Original Equipment Manufacturers and smaller, lower volume
users which are broadly distributed across several major market areas.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its subsidiaries. All intercompany transactions and balances have been
eliminated upon consolidation.
REVENUE RECOGNITION
Revenue is recognized generally when a product is shipped. License fees are
recognized ratably over the period of exclusivity or as additional royalty
payments would have been required, if greater. Revenue from the long-term
contract entered into in 1993 for the sale of automated manufacturing line
equipment is being recognized under the percentage of completion accounting
method until the fabrication, qualification and production support processes are
completed, which will continue over a period of time determined by the amount of
support activity requested. Revenues recognized from this contract were less
than 10% of net revenues in 1997, 1996 and 1995.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes funds held in checking and money market
accounts with banks and certificates of deposit with maturities of less than
three months when purchased. Cash and cash equivalents are valued at cost which
approximates market value. The Company's short-term investments, which are
classified as cash equivalents on the balance sheet, consist principally of
money market securities which are purchased and redeemed at par. The estimated
fair value is equal to the cost of the securities and due to the nature of the
securities there are no unrealized gains or losses at the balance sheet dates.
As of December 31, 1997, the Company has approximately $81 million of
available-for-sale securities ($71 million as of December 31, 1996). The Company
has no trading securities or held-to-maturity securities.
CONCENTRATIONS OF CREDIT RISK
Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of cash investments and trade
accounts receivable. The Company maintains cash and cash equivalents and certain
other financial instruments with various financial institutions. Concentrations
of credit risk with respect to trade accounts receivable are limited due to the
large number of entities comprising the Company's customer base. Credit losses
have consistently been within management's expectations and have not been
material.
INTANGIBLE ASSETS
Intangible assets consist primarily of values assigned to patents and are
amortized using the straight-line method over a period of five to fifteen years.
WARRANTY COSTS
Costs related to product warranty are expensed as incurred.
NET INCOME PER COMMON SHARE
In 1997, the Financial Accounting Standards Board issued Statement No. 128,
"Earnings per Share." Statement No. 128 replaced the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per share.
Unlike primary earnings per share, basic earnings per share excludes any
dilutive effects of options, warrants and convertible securities. Diluted
earnings per share is very similar to the
19
21
VICOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
previously reported fully diluted earnings per share. All income per share
amounts for all periods have been presented, and where appropriate, restated to
conform to the Statement No. 128 requirements.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the FASB issued Statement No. 130, "Reporting Comprehensive
Income," and Statement No. 131, "Disclosures About Segments of an Enterprise and
Related Information." Statement No. 130 establishes standards for the reporting
and display of comprehensive income and its components. Statement No. 131
establishes standards for the way that public companies report information about
operating segments in financial statements. This Statement supersedes Statement
No. 14, "Financial Reporting for Segments of a Business Enterprise," but retains
the requirements to report information about major customers. Statements 130 and
131 are effective for the Company in fiscal 1998. The Company does not believe
that the adoption of these Statements will have a material effect on the
Company's financial statements.
2. INVENTORIES
Inventories are valued at the lower of cost (determined using the first-in,
first-out method) or market. Inventories were as follows (in thousands):
December 31
1997 1996
---- ----
Raw materials $16,715 $12,627
Work-in-process 3,774 2,290
Finished goods 2,959 6,212
------- -------
$23,448 $21,129
======= =======
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost and are depreciated and
amortized over a period of 3 to 31.5 years generally under the straight-line
method for financial reporting purposes and accelerated methods for income tax
purposes. Property, plant and equipment was as follows (in thousands):
December 31
1997 1996
---- ----
Land $ 2,089 $ 2,076
Buildings and improvements 11,644 11,644
Machinery and equipment 58,563 52,625
Furniture and fixtures 3,720 3,505
Leasehold improvements 2,335 2,240
Building construction-in-progress 3,160 -
Construction-in-progress 37,841 27,327
-------- -------
119,352 99,417
Less accumulated depreciation and amortization 49,550 41,804
-------- -------
$ 69,802 $57,613
======== =======
20
22
VICOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
At December 31, 1997, the Company had approximately $7,600,000 of capital
expenditure commitments, including $6,400,000 related to the construction of new
facilities.
4. NOTES RECEIVABLE
In May 1997, the Company received a promissory note in the amount of
$7,500,000 from an unrelated third party in exchange for $5,000,000 in cash plus
the termination of an existing note in the amount of $2,500,000. The note bears
interest at 9% and is due in May 2002. The note is secured by a mortgage on
certain real estate and by the assignment of certain leases and other contracts.
The Company's President has borrowed a total of $1,425,393 from the Company
pursuant to a series of unsecured term notes. The notes have terms of five years
and are due at various dates through August 2002. The notes bear interest at the
higher of the Company's prime borrowing rate less 1%, or the applicable federal
rate under the Internal Revenue Code of 1986, as amended. As of December 31,
1997, the notes and interest receivable balance was approximately $1,601,000
($1,245,000 as of December 31, 1996) and the applicable interest rate at
December 31, 1997 was 7.50%.
Two Vice-Presidents of the Company have borrowed a total of $111,000 from
the Company pursuant to term notes. One note for $35,000 is secured by a
mortgage on certain real estate, while the remaining notes are unsecured. The
notes bear interest at the Company's prime borrowing rate less 1%. As of
December 31, 1997, the notes and interest receivable balance was approximately
$87,000 ($54,000 as of December 31, 1996). The applicable interest rate at
December 31, 1997 was 7.50%.
5. FINANCING ARRANGEMENTS
The Company has an unused line of credit with a bank under which the Company
may borrow up to $4,000,000 on a revolving credit basis. Borrowings under this
line would bear interest at the Company's option of an interest rate equal to
the Lender's base rate, 30 day LIBOR + 1.75% or the 30 day Banker's Acceptance
(BA) rate + 2.25%.
6. STOCKHOLDERS' EQUITY
In November 1997, the Board of Directors of the Company authorized the
repurchase of the Company's Common Stock up to an aggregate amount of
approximately $30,000,000, including amounts remaining under a prior
authorization. The plan authorizes the Company to make such repurchases from
time to time in the open market or through privately negotiated transactions.
The timing of this program and the amount of the stock that may be repurchased
is at the discretion of management based on its view of economic and financial
market conditions. In 1997, the Company spent $683,000 in the repurchase of its
Common Stock.
Common Stock
Each share of Common Stock entitles the holder thereof to one vote on all
matters submitted to the shareholders. Each share of Class B Common Stock
entitles the holder thereof to ten votes on all such matters.
Shares of Class B Common Stock are not transferable by stockholders except
to or among such stockholder's spouse, certain of such stockholder's relatives,
and certain other defined transferees. Class B Common Stock is not listed or
traded on any exchange or in any market. Class B Common Stock is convertible at
all times and without cost to the shareholder into shares of Common Stock on a
share-for-share basis.
21
23
VICOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. INCOME PER SHARE
The following table sets forth the computation of basic and diluted income
per share:
1997 1996 1995
---- ---- ----
Numerator:
Net income $26,217 $25,639 $29,498
======= ======= =======
Denominator:
Denominator for basic income per share -
weighted average shares 42,595 41,947 42,343
Effect of dilutive securities:
Employee stock options 749 817 952
------- ------- -------
Denominator for diluted income per share -
adjusted weighted-average shares and
assumed conversions 43,344 42,764 43,295
======= ======= =======
Basic income per share $ .62 $ .61 $ .70
======= ======= =======
Diluted income per share $ .60 $ .60 $ .68
======= ======= =======
Options to purchase 20,615 shares of Common Stock at prices ranging from
$30.00 to $30.19 per share were outstanding during 1997 but were not included in
the computation of diluted income per share because the options' exercise price
was greater than the average market price of the common shares and, therefore,
the effect would be antidilutive.
8. EMPLOYEE BENEFIT PLANS
Stock Options
The Company has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" (APB 25) and related
Interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under FASB
Statement No. 123, "Accounting for Stock-Based Compensation," requires use of
option valuation models that were not developed for use in valuing employee
stock options. Under APB 25, because the exercise price of the Company's
employee stock options equals the market price of the underlying stock on the
date of grant, no compensation expense is recognized.
Under the 1993 Stock Option Plan (the "1993 Plan"), the Board of
Directors or the Compensation Committee may grant stock options to employees and
non-employee directors to purchase shares of Common Stock at a price at least
equal to the fair market value per share of the outstanding Common Stock at the
time the option is granted. Both incentive stock options intended to qualify
under Section 422 of the Internal Revenue Code and non-qualified stock options
have been authorized to be granted. Incentive stock options may be granted to
employees, including employees who are directors of the Company, and
non-qualified options may be granted to non-employee directors. Both employee
directors and non-employee directors automatically receive stock options upon
election or re-election as a director. A total of 4,000,000 shares of Common
Stock have been reserved for issuance under the 1993 Plan. Stock options are
typically granted with vesting periods and become exercisable over various
periods of time, ranging from six months to five years from the date of grant,
and expire over various periods of time, ranging from one to ten years from the
date of grant.
22
24
VICOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. EMPLOYEE BENEFIT PLANS (CONTINUED)
Under the Company's 1984 Stock Option Plan, as amended (the "1984 Plan"),
the Board of Directors or the Compensation Committee granted stock options to
employees to purchase shares of Common Stock at a price at least equal to the
fair market value per share of the outstanding Common Stock at the time the
option was granted. Stock options under the 1984 Plan were typically granted
with vesting periods and became exercisable over various periods of time,
ranging from six months to five years from the date of grant, and expire over
various periods of time, ranging from one to thirteen years from the date of
grant. In connection with the adoption of the 1993 Plan, the Board of Directors
terminated the granting of options under the 1984 Plan upon approval of the 1993
Plan, discussed above.
Activity as to stock options is as follows:
1997 1996 1995
---- ---- ----
Outstanding at beginning of year 2,022,005 2,354,480 2,949,108
Granted 1,106,302 943,426 709,977
Cancelled (197,448) (587,125) (227,688)
Exercised (733,007) (688,776) (1,076,917)
--------- --------- ----------
Outstanding at end of year 2,197,852 2,022,005 2,354,480
========= ========= ==========
Exercisable at end of year 1,336,125 1,552,672 1,886,035
========= ========= ==========
Weighted - average exercise price:
Outstanding at beginning of year $ 8.97 $ 8.01 $ 5.87
Granted $16.92 $14.97 $17.41
Cancelled $15.49 $16.73 $ 9.25
Exercised $12.55 $ 7.56 $ 8.04
Outstanding at end of year $11.15 $ 8.97 $ 8.01
Exercisable at end of year $ 7.60 $ 7.24 $ 6.78
Weighted - average fair value of
options granted during the year $ 6.74 $ 4.38 $ 5.21
Price range per share of outstanding options $ .84-30.19 $ .84-24.50 $ .15-23.88
============ ============ ============
Price range per share of options granted $13.38-30.19 $14.38-24.50 $12.50-23.75
============ ============ ============
Price range per share of options exercised $ 1.00-24.38 $ .15-19.56 $ .15-19.19
============ ============ ============
Available for grant at end of year 1,088,996 2,002,247 2,375,510
========= ========= =========
The weighted - average contractual life for options outstanding as of
December 31, 1997 is 5.98 years.
23
25
VICOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. EMPLOYEE BENEFIT PLANS (CONTINUED)
The following table summarizes information about stock options outstanding as of
December 31, 1997:
Range of Exercise Prices
----------------------------------------------------------------------------
$.84-$3.16 $3.38-$11.13 $11.25-$14.50 $14.88-$30.19
---------- ------------ ------------- -------------
Options Outstanding:
- --------------------
Number Outstanding 601,241 388,813 114,584 1,093,214
Weighted-Average Remaining
Contractual Life 3.64 5.51 6.58 7.38
Weighted-Average
Exercise Price $ 1.64 $ 7.94 $ 13.18 $ 17.33
Options Exercisable:
- --------------------
Number Exercisable 601,241 324,416 51,759 358,709
Weighted-Average
Exercise Price $ 1.64 $ 7.60 $ 12.92 $ 16.83
Pro forma information regarding net income and earnings per share is
required by Statement 123, which also requires that the information be
determined as if the Company had accounted for its employee stock options
granted subsequent to December 31, 1994 under the fair value method of that
Statement. The fair value for these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted-average
assumptions for 1997, 1996 and 1995, respectively: risk-free interest rates of
6.1%, 5.4% and 6.3%; dividend yields of zero; volatility factor of the expected
market price of the Company's common stock of .52, .54 and .54; and a
weighted-average expected life of the option of 3.3, 1.7 and 1.7 years.
The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.
For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information follows (in thousands except for earnings per share
information):
1997 1996 1995
---- ---- ----
Pro forma net income $23,947 $23,658 $27,932
Pro forma net income per share:
Basic $ .56 $ .56 $ .66
Diluted $ .55 $ .55 $ .65
The effects on 1997, 1996 and 1995 pro forma net income and net income per
share of expensing the fair value of stock options issued are not necessarily
representative of the effects on reporting the pro forma results of operations
for future years as the periods presented include only three, two and one years,
respectively, of option grants under the Company's plans.
24
26
VICOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. EMPLOYEE BENEFIT PLANS (CONTINUED)
401(k) Plan
The Company sponsors a savings plan available to all domestic employees
which qualifies under Section 401(k) of the Internal Revenue Code. Employees may
contribute to the plan from 1% to 20% of their pre-tax salary subject to
statutory limitations. The Company does not make contributions to this plan.
Stock Bonus Plan
Under the Company's 1985 Stock Bonus Plan, as amended, shares of Common
Stock may be awarded to employees from time to time as determined by the Board
of Directors. At December 31, 1997, 109,964 shares were available for further
award. All shares awarded to employees under this plan have vested in full. No
further awards are contemplated under this plan at present.
9. INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets are as follows (in thousands):
December 31
1997 1996
---- ----
Deferred tax assets:
Inventory reserves $ 1,058 $ 883
Vacation 544 379
Bad debt 400 357
Other 337 375
------- -------
Total deferred tax assets (current) 2,339 1,994
Deferred tax liabilities:
Patent amortization (1,170) (904)
Depreciation (682) (804)
------- -------
Total deferred tax liabilities (noncurrent) (1,852) (1,708)
------- -------
Net deferred tax assets $ 487 $ 286
======= =======
Significant components of the provision for income taxes attributable to
continuing operations are as follows (in thousands):
1997 1996 1995
---- ---- ----
Federal:
Current $12,877 $12,662 $13,463
Deferred (prepaid) (201) (28) 1,049
------- ------- -------
12,676 12,634 14,512
State:
Current 2,071 2,119 2,813
------- ------- -------
$14,747 $14,753 $17,325
======= ======= =======
25
27
VICOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
9. INCOME TAXES (CONTINUED)
The reconciliation of income tax attributable to continuing operations
computed at the federal statutory rate to income tax expense is:
1997 1996 1995
---- ---- ----
Statutory federal tax rate 35.0% 35.0% 35.0%
State income taxes, net of federal income tax benefit 3.3 3.5 4.0
Foreign Sales Corporation benefit (1.5) (1.4) (1.5)
Tax credits (0.8) (0.6) (0.5)
---- ---- ----
36.0% 36.5% 37.0%
==== ==== ====
10. COMMITMENTS AND CONTINGENCIES
The Company leases certain of its office, warehousing and manufacturing
space, as well as certain equipment. The future minimum rental commitments under
noncancelable operating leases with remaining terms in excess of one year are as
follows (in thousands):
Year
----
1998 $1,182
1999 1,052
2000 360
2001 199
2002 130
Rent expense was approximately $1,383,000, $1,329,000, and $1,016,000 in
1997, 1996 and 1995, respectively. The Company also pays executory costs such as
taxes, maintenance and insurance.
The Company is involved in certain litigation incidental to the conduct of
its business. While the outcome of lawsuits against the Company cannot be
predicted with certainty, management does not expect any current litigation to
have a material adverse impact on the Company.
11. SEGMENT INFORMATION
The Company operates in one industry segment: the development, manufacture
and sale of power conversion components and systems. During 1997, 1996 and 1995,
no customer constituted more than 10% of net revenues. Export sales, as a
percentage of total sales, were approximately 29%, 29%, and 32% in 1997, 1996
and 1995, respectively. Sales and receipts are recorded and received in U.S.
dollars. Foreign exchange variations have little or no effect on the Company at
this time.
12. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following table sets forth certain unaudited quarterly financial data
(in thousands, except per share amounts):
First Second Third Fourth Total
----- ------ ----- ------ -----
1997: Net revenues $37,939 $39,718 $41,400 $43,186 $162,243
Gross profit 20,062 20,416 21,433 22,098 84,009
Net income 5,976 6,363 7,130 6,748 26,217
Net income per share - diluted .14 .15 .16 .15 .60
26
28
VICOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
12. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (CONTINUED)
First Second Third Fourth Total
----- ------ ----- ------ -----
1996: Net revenues $35,806 $36,702 $35,673 $36,802 $144,983
Gross profit 19,259 19,847 19,320 19,679 78,105
Net income 6,660 6,718 6,235 6,026 25,639
Net income per share - diluted .16 .16 .15 .14 .60
The 1996 and first three quarters of 1997 income per share amounts have been
restated to comply with Statement of Financial Accounting Standards No. 128,
"Earnings per Share."
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated by reference from the Company's Definitive Proxy Statement for
its 1998 annual meeting of stockholders.
ITEM 11 - EXECUTIVE COMPENSATION
Incorporated by reference from the Company's Definitive Proxy Statement for
its 1998 annual meeting of stockholders.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated by reference from the Company's Definitive Proxy Statement for
its 1998 annual meeting of stockholders.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated by reference from the Company's Definitive Proxy Statement for
its 1998 annual meeting of stockholders.
ITEM 14 - FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS, AND REPORTS ON FORM 8-K
(a) (1) FINANCIAL STATEMENTS
See index in Item 8
(a) (2) SCHEDULES
Schedule II Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.
27
29
ITEM 14 - FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS, AND REPORTS ON FORM 8-K
(continued)
(a) (3) EXHIBITS
Exhibits Description of Document
3.1 - Restated Certificate of Incorporation*
3.2 - Bylaws, as amended*
4.1 - Specimen Common Stock Certificate*
10.1 - 1984 Stock Option Plan of the Company, as amended*
10.2 - Lease dated December 30, 1989, by and between the Company
and David J. Carlberg and Paul Bruk, Jr., as Trustees of
Frontage Road Realty Trust, relating to the corporate
offices and manufacturing facilities at 23 Frontage Road, as
amended*
10.3 - Military/Aerospace License Agreement dated as of March 1,
1985, by and between the Company and Kollmorgen Corporation*
10.4 - Western Europe License Agreement dated as of March 1, 1985,
by and between the Company and Kollmorgen Corporation*
10.5 - Switching Power Supply Patents and Know-How Agreement dated
as of December 2, 1986, by and between the Company and
Reliance Electric Company*
10.6 - Switching Power Supply Patent and Information Agreement
dated as of June 29, 1988, by and between VLT Corporation
and Integran, Inc.*
10.7 - Vicor Corporation Employee Stock Bonus Plan*
10.8 - Vicor Corporation 401(k) Plan*
10.9 - Amendment to Switching Power Supply Patents and Know-How
Agreement dated as of May 17, 1990, by and among the
Company, VLT Corporation and Reliance Comm/Tec Corporation**
10.10 - $1,500,000 Promissory Note (Lot 3) to Vicor Corporation from
Andover Park Realty Trust dated September 14, 1992***
10.11 - $1,500,000 Promissory Note (Lot 2) to Vicor Corporation from
Andover Park Realty Trust dated September 14, 1992***
10.12 - $1,000,000 Promissory Note (Lot 6A) to Vicor Corporation
from Andover Park Realty Trust dated September 14, 1992***
10.13 - Mortgage and Security Agreement (Lot 6A) to Vicor
Corporation from Andover Park Realty Trust dated September
14, 1992***
10.14 - 1993 Stock Option Plan****
10.15 - $7,500,000 Promissory Note to Vicor Corporation from Andover
Park Realty Trust dated May 29, 1997*****
10.16 - Loan Agreement between Vicor Corporation and Andover Park
Realty Trust dated May 29, 1997*****
10.17 - Mortgage and Security Agreement to Vicor Corporation from
Andover Park Realty Trust dated May 29, 1997*****
11.1 - The computation of per share earnings is incorporated by
reference from Note 7 of the Company's consolidated
financial statements (1)
21.1 - Subsidiaries of the Company (1)
23.1 - Consent of Independent Auditors (1)
27.1 - Financial Data Schedule for 1997 (1)
27.2 - Restated Financial Data Schedule for 1996 (1)
* Filed as an exhibit to the Company's Registration Statement
on Form 10, as amended, under the Securities Exchange Act of
1934 (File No. 0-18277), and incorporated herein by
reference.
** Filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1990 and
incorporated herein by reference.
*** Filed as an exhibit to the Company's Current Report on Form
8-K dated September 14, 1992 and incorporated herein by
reference.
**** Filed as an exhibit to the Company's Registration Statement
on Form S-8, as amended, under the Securities Act of 1933
(No. 33-65154), and incorporated herein by reference.
***** Filed as an exhibit to the Company's Form 10-Q dated June
30, 1997 and incorporated herein by reference.
(1) Filed herewith
(b) REPORTS ON FORM 8-K
None.
28
30
VICOR CORPORATION
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
Years ended December 31, 1997, 1996 and 1995
(Credit)
Balance at Charge to Other Balance at
Beginning Costs and Changes End
Of Period Expenses Deductions (1) Of Period
--------- -------- -------------- ---------
1997
ALLOWANCE FOR DOUBTFUL
ACCOUNTS $ 879,000 $ 5,000 $ 87,000 $971,000
1996
Allowance for doubtful
accounts $ 786,000 $ 10,000 $ 83,000 $879,000
1995
Allowance for doubtful
accounts $1,172,000 $(650,000) $264,000 $786,000
(1) Reflects amounts for recoveries of uncollectible accounts receivable.
29
31
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: March 24, 1998 Vicor Corporation
By: /s/Mark A. Glazer
----------------------------
Mark A. Glazer
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.
Signature Title Date
/s/Patrizio Vinciarelli President and Chairman March 24, 1998
- ----------------------------- of the Board (Principal
Patrizio Vinciarelli Executive Officer)
/s/Mark A. Glazer Chief Financial Officer March 24, 1998
- -----------------------------
Mark A. Glazer
/s/Estia J. Eichten Director March 24, 1998
- -----------------------------
Estia J. Eichten
/s/David T. Riddiford Director March 24, 1998
- -----------------------------
David T. Riddiford
/s/Richard E. Beede Director March 24, 1998
- -----------------------------
Richard E. Beede
/s/Jay M. Prager Director March 24, 1998
- -----------------------------
Jay M. Prager
/s/M. Michael Ansour Director March 24, 1998
- -----------------------------
M. Michael Ansour
30
1
Exhibit 21.1
SUBSIDIARIES OF THE COMPANY
Name State or jurisdiction of incorporation
---- --------------------------------------
VLT Corporation Texas, USA
Vicor GmbH Germany
Vicor International Inc. U.S. Virgin Islands
VICR Securities Corporation Massachusetts, USA
Vicor France SARL France
Vicor Italy SRL Italy
Vicor Hong Kong Ltd. Hong Kong
Vicor U.K. Ltd. United Kingdom
Vicor B.V. Netherlands
Vicor Development Corporation Delaware, USA
Aegis Power Systems, Inc. Delaware, USA
Mission Power Solutions, Inc. Delaware, USA
Northwest Power Integrations, Inc. Delaware, USA
Converpower Corporation Delaware, USA
Freedom Power Systems, Inc. Delaware, USA
31
1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8, No. 33-37491) pertaining to the Vicor Corporation 1984 Stock
Option Plan and in the Registration Statement (Form S-8, No. 33-65154)
pertaining to the Vicor Corporation 1993 Stock Option Plan of our report
dated January 26, 1998 with respect to the consolidated financial statements
and schedule of Vicor Corporation included in the Annual Report (Form 10-K)
for the year ended December 31, 1997.
Ernst & Young LLP
Boston, Massachusetts
March 20, 1998
32
5
1,000
YEAR
DEC-31-1997
JAN-01-1997
DEC-31-1997
84,859
0
35,258
0
23,448
146,834
119,352
49,550
228,843
18,567
0
0
0
462
207,962
228,843
162,243
162,243
78,234
78,234
0
0
0
40,964
14,747
26,217
0
0
0
26,217
.62
.60
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5
0000751978
VICOR CORPORATION
1,000
U.S. DOLLARS
YEAR
DEC-31-1996
JAN-01-1996
DEC-31-1996
0
73,647
0
25,001
0
21,129
122,542
99,417
41,804
186,443
13,991
0
0
0
454
170,290
186,443
144,983
144,983
66,878
66,878
0
0
0
40,392
14,753
25,639
0
0
0
25,639
.61
.60
Restated 1996 EPS to reflect adoption of FAS 128.
