e10vq
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2006
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o |
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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
Commission File Number 0-18277
VICOR CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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04-2742817 |
(State of Incorporation)
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(I.R.S. Employer Identification No.) |
25 Frontage Road, Andover, Massachusetts 01810
(Address of Principal Executive Office)
(978) 470-2900
(Registrants telephone number)
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 þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer
or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer o Accelerated Filer þ Non-accelerated filer o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes o No þ
The number of shares outstanding of each of the issuers classes of common stock as of April 30,
2006 was:
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Common Stock, $.01 par value
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30,317,578 |
Class B Common Stock, $.01 par value
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11,854,952 |
VICOR CORPORATION
INDEX TO FORM 10-Q
FORM 10-Q
PART 1
ITEM 1
PAGE 1
Item 1 Financial Statements
VICOR CORPORATION
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
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March 31, 2006 |
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December 31, 2005 |
Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
25,830 |
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$ |
34,024 |
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Short-term investments |
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96,486 |
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88,692 |
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Accounts receivable, less allowance of
$587 in 2006 and $635 in 2005 |
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31,053 |
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28,072 |
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Inventories, net |
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18,657 |
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17,168 |
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Deferred tax assets |
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2,673 |
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2,673 |
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Other current assets |
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2,786 |
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2,518 |
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Total current assets |
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177,485 |
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173,147 |
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Long-term investments |
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3,348 |
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Property, plant and equipment, net |
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56,890 |
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59,114 |
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Other assets |
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9,988 |
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10,146 |
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$ |
244,363 |
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$ |
245,755 |
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Liabilities and Stockholders Equity |
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Current liabilities: |
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Accounts payable |
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$ |
8,032 |
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$ |
8,741 |
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Accrued compensation and benefits |
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4,660 |
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4,583 |
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Accrued expenses |
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3,235 |
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3,016 |
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Income taxes payable |
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6,407 |
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6,279 |
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Deferred revenue |
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117 |
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143 |
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Total current liabilities |
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22,451 |
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22,762 |
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Deferred income taxes |
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3,199 |
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3,172 |
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Minority interests |
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3,184 |
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3,031 |
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Stockholders equity: |
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Preferred Stock |
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Class B Common Stock |
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119 |
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119 |
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Common Stock |
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379 |
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377 |
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Additional paid-in capital |
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154,348 |
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151,698 |
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Retained earnings |
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173,706 |
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175,660 |
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Accumulated other comprehensive loss |
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(33 |
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(72 |
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Treasury stock, at cost |
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(112,990 |
) |
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(110,992 |
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Total stockholders equity |
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215,529 |
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216,790 |
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$ |
244,363 |
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$ |
245,755 |
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See accompanying notes.
FORM 10-Q
PART I
ITEM 1
PAGE 2
VICOR CORPORATION
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
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Three Months Ended |
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March 31, 2006 |
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March 31, 2005 |
Net revenues |
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$ |
47,872 |
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$ |
43,180 |
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Cost of revenues |
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26,770 |
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26,135 |
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Gross margin |
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21,102 |
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17,045 |
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Operating expenses: |
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Selling, general and administrative |
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10,914 |
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10,104 |
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Research and development |
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7,542 |
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7,096 |
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Total operating expenses |
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18,456 |
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17,200 |
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Income (loss) from operations |
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2,646 |
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(155 |
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Other income (expense), net |
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1,060 |
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494 |
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Income before income taxes |
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3,706 |
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339 |
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Provision for income taxes |
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630 |
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300 |
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Net income |
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$ |
3,076 |
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$ |
39 |
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Net income per common share: |
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Basic |
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$ |
0.07 |
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$ |
0.00 |
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Diluted |
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$ |
0.07 |
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$ |
0.00 |
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Shares used to compute
net income per share: |
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Basic |
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41,948 |
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41,980 |
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Diluted |
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42,384 |
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42,115 |
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Cash dividends per share |
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$ |
0.12 |
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$ |
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See accompanying notes.
FORM 10-Q
PART I
ITEM 1
PAGE 3
VICOR CORPORATION
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
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Three Months Ended |
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March 31, 2006 |
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March 31, 2005 |
Operating activities: |
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Net income |
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$ |
3,076 |
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$ |
39 |
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Adjustments to reconcile net income to net
cash provided by operating activities: |
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Depreciation and amortization |
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3,995 |
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4,466 |
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Stock compensation expense |
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178 |
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Minority interest in net income of subsidiaries |
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153 |
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90 |
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Amortization of bond premium |
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83 |
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182 |
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(Gain) loss on disposal of equipment |
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(5 |
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3 |
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Change in current assets and liabilities, net |
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(5,046 |
) |
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(1,982 |
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Net cash provided by operating activities |
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2,434 |
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2,798 |
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Investing activities: |
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Purchases of short-term investments |
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(19,534 |
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(8,476 |
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Sales and maturities of short-term and long-term
investments |
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15,085 |
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9,381 |
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Additions to property, plant and equipment |
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(1,555 |
) |
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(1,372 |
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Increase in other assets |
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(53 |
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(190 |
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Net cash used in investing activities |
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(6,057 |
) |
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(657 |
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Financing activities: |
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Proceeds from issuance of Common Stock |
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2,474 |
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136 |
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Common Stock dividends |
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(5,030 |
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Acquisitions of treasury stock |
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(1,998 |
) |
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(1,902 |
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Net cash used in financing activities |
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(4,554 |
) |
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(1,766 |
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Effect of foreign exchange rates on cash |
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(17 |
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43 |
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Net (decrease) increase in cash and cash equivalents |
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(8,194 |
) |
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418 |
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Cash and cash equivalents at beginning of period |
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34,024 |
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36,277 |
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Cash and cash equivalents at end of period |
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$ |
25,830 |
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$ |
36,695 |
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See accompanying notes.
FORM 10-Q
PART I
ITEM 1
PAGE 4
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
March 31, 2006
(Unaudited)
The accompanying unaudited condensed consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim financial
information and pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating results for the
three months ended March 31, 2006 are not necessarily indicative of the results that may be
expected for any other interim period or the year ending December 31, 2006. The balance
sheet at December 31, 2005 has been derived from the audited financial statements at that
date but does not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. For further information,
refer to the consolidated financial statements and notes thereto contained in the Companys
annual report on Form 10-K for the year ended December 31, 2005 (File No. 0-18277) filed by
Vicor Corporation (the Company or Vicor) with the Securities and Exchange Commission.
2. |
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Stock-Based Compensation |
On January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123
(revised 2004), Share-Based Payment (FAS 123R), which is a revision of FAS No. 123,
Accounting for Stock-Based Compensation. FAS 123(R) supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees, and amends SFAS No. 95, Statement of Cash
Flows. Generally, the approach in FAS 123(R) is similar to the approach described in FAS
123. However, FAS 123(R) requires all share-based payments to employees, including grants
of employee stock options, to be recognized in the income statement based on their fair
values at the date of grant. Pro forma disclosure is no longer an alternative.
The Company is using the modified prospective method as permitted under FAS 123(R). Under
this transition method, compensation cost recognized in the first quarter of fiscal 2006
includes: (a) compensation cost for all share-based payments granted prior to but not yet
vested as of December 31, 2005, based on the grant-date fair value estimated in accordance
with the provisions of FAS 123, and (b) compensation cost for all share-based payments
granted subsequent to December 31, 2005, based on the grant-date fair value estimated in
accordance with the provisions of FAS 123(R). In accordance with the modified prospective
method of adoption, Vicors results of operations and financial position for prior periods
have not been restated.
FORM 10-Q
PART I
ITEM 1
PAGE 5
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements (Continued)
March 31, 2006
(Unaudited)
2. |
|
Stock-Based Compensation (Continued) |
Vicor currently grants stock options under the following equity compensation plans that are
shareholder-approved:
Amended and Restated 2000 Stock Option and Incentive Plan (the 2000 Plan) The 2000 Plan
as amended, permits the grant of share options to its employees and other key persons,
including non-employee directors, for up to 4 million shares of common stock.
1998 Stock Option and Incentive Plan (the 1998 Plan) The 1998 Plan permits the grant of
share options to its employees and other key persons, including non-employee directors for
up to 2 million shares of common stock.
1993 Stock Option Plan (the 1993 Plan) - The 1993 Plan permits the grant of share options
to its employees and non-employee directors for up to 4 million shares of common stock.
Picor Corporation (Picor), a privately held wholly owned subsidiary of Vicor, currently
grants stock options under the following equity compensation plan that has been approved by
its Board of Directors:
2001 Stock Option and Incentive Plan (the 2001 Picor Plan) The 2001 Picor Plan as
amended, permits the grant of share options to its employees and other key persons,
including non-employee directors and full or part-time officers, for up to 10 million shares
of common stock.
All option awards are granted at an exercise price equal to or greater than the market price
for Vicor and the fair market value for Picor of the respective companys stock at the date
of grant. Options vest at various periods of up to five years and may be exercised for up
to ten years from the date of grant, which is the maximum contractual term.
As a result of adopting the new standard, the Company recorded $178,000 of non-cash
stock-based compensation expense for the three months ended March 31, 2006. The stock-based
compensation included $30,000 in cost of revenues, $86,000 in selling, general and
administrative expense and $62,000 in research and development expense for the three months
ended March 31, 2006. The compensation expense did not have a material impact on basic or
diluted net income per share.
FORM 10-Q
PART I
ITEM 1
PAGE 6
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements (Continued)
March 31, 2006
(Unaudited)
2. |
|
Stock-Based Compensation (Continued) |
Had expense been recognized using the fair value method described in FAS 123, using the
Black-Scholes option pricing model, the following pro forma results of operations would have
been reported (in thousands except for per share information):
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Three Months |
|
|
|
|
Ended |
|
|
|
|
March 31, 2005 |
Net income as reported |
|
|
|
|
$ |
|
39 |
|
Stock-based employee compensation cost, net of related tax
effects |
|
|
|
|
|
|
(258 |
) |
|
|
|
|
|
|
|
|
|
Pro forma net loss |
|
|
|
|
$ |
|
(219 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share, as reported: |
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
$ |
|
0.00 |
|
Diluted |
|
|
|
|
$ |
|
0.00 |
|
|
|
|
|
|
|
|
|
|
Pro forma net loss per share: |
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
$ |
|
(0.01 |
) |
Diluted |
|
|
|
|
$ |
|
(0.01 |
) |
The above table includes compensation expense for Picor options of $26,000. The three
months ended March 31, 2005 expense has been revised to include this Picor amount. The fair
value of Picor common stock was estimated by obtaining an independent valuation of Picor.
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
Vicor |
|
Picor |
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk-free interest rate |
|
|
4.5 |
% |
|
|
4.0 |
% |
|
|
4.4 |
% |
|
|
4.4 |
% |
Expected dividend yield |
|
|
1.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Expected volatility |
|
|
.55 |
|
|
|
.66 |
|
|
|
.43 |
|
|
|
.43 |
|
Expected term |
|
4.1 years |
|
4.5 years |
|
6.5 years |
|
6.5 years |
Risk-free
interest rate:
Vicor The Company uses the yield on zero-coupon U.S. Treasury Strip securities for a
period that is commensurate with the expected term assumption for each vesting period.
FORM 10-Q
PART I
ITEM 1
PAGE 7
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements (Continued)
March 31, 2006
(Unaudited)
2. |
|
Stock-Based Compensation (Continued) |
Picor The Company uses the yield to maturity of a ten-year treasury bond, given the fact
that all of Picors options expire ten years after they are granted.
Expected
dividend yield:
Vicor The Company determines the expected dividend yield by annualizing the most recent
prior cash dividend declared by the Companys Board of Directors and dividing that result by
the closing stock price on the date of that dividend declaration. Because the Company
historically has not paid regular periodic dividends and has not committed to do so in the
future, the Company annualizes the most recent prior cash dividend based on its expectations
at the time regarding the frequency of dividends to be declared over the next twelve months.
Dividends are not paid on options.
Picor Picor has not and does not expect to declare and pay dividends in the foreseeable
future. Therefore, the expected dividend yield is not applicable.
Expected
volatility:
Vicor Under FAS 123, Vicor used historical volatility to estimate the grant-date fair
value of the options. Under FAS 123(R), Vicor has elected to continue to use historical
volatility, using the expected term for the period over which to calculate the volatility
(see below). The Company does not expect its future volatility to differ from its
historical volatility. The computation of the Companys volatility is based on a simple
average calculation of monthly volatilities over the expected term.
Picor As Picor is a nonpublic entity, historical volatility information is not available.
As permitted under FAS 123(R), an industry sector index of approximately 40 publicly traded
fabless semiconductor firms was developed for calculating historical volatility for Picor.
Historical prices for each of the companies in the index based on the
market price of the shares on each day of trading over a period of approximately ten years were used to
determine the historical volatility.
Expected
term:
Vicor The Company uses historical employee exercise and option expiration data to
estimate the expected term assumption for the Black-Scholes grant-date valuation. The
Company believes that this historical data is currently the best estimate of the expected
term of options, and that generally all groups of our employees exhibit similar exercise
behavior.
Picor Due to the lack of historical information, the simplified method prescribed by the
Securities and Exchange Commissions Staff Accounting Bulletin No. 107 was used to determine
the expected term.
FORM 10-Q
PART I
ITEM 1
PAGE 8
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements (Continued)
March 31, 2006
(Unaudited)
2. |
|
Stock-Based Compensation (Continued) |
Forfeiture
rate
Vicor The amount of stock-based compensation recognized during a period is based on the
value of the portion of the awards that are ultimately expected to vest. FAS 123(R)
requires forfeitures to be estimated at the time of grant and revised, if necessary, in
subsequent periods if actual forfeitures differ from those estimates. The term
forfeitures is distinct from cancellations or expirations and represents only the
unvested portion of the surrendered option. The Company currently expects, based on an
analysis of its historical forfeitures, that approximately 84% of its options will actually
vest, and therefore has applied an annual forfeiture rate of 9.4% to all unvested options as
of March 31, 2006. This analysis will be re-evaluated quarterly and the forfeiture rate
will be adjusted as necessary. Ultimately, the actual expense recognized over the vesting
period will only be for those shares that vest.
Picor Given the fact that the compensation expense for the three months ended March 31,
2006 was immaterial, the Company did not apply an estimated forfeiture rate to the
compensation expense. Picor will identify and apply a forfeiture rate beginning April 1,
2006.
A summary of the activity under Vicors stock option plans as of March 31, 2006 and changes
during the three-month period then ended, is presented below (in thousands except for share
and weighted-average data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted- |
|
|
|
|
|
|
|
|
Weighted- |
|
Average |
|
|
|
|
|
|
|
|
Average |
|
Remaining |
|
Aggregate |
|
|
Options |
|
Exercise |
|
Contractual |
|
Intrinsic |
|
|
Outstanding |
|
Price |
|
Life in Years |
|
Value |
Outstanding at December 31, 2005 |
|
|
2,260,248 |
|
|
$ |
18.14 |
|
|
|
|
|
|
|
|
|
Granted |
|
|
55,350 |
|
|
$ |
19.74 |
|
|
|
|
|
|
|
|
|
Forfeited and expired |
|
|
(64,675 |
) |
|
$ |
27.34 |
|
|
|
|
|
|
|
|
|
Exercised |
|
|
(193,967 |
) |
|
$ |
12.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at March 31, 2006 |
|
|
2,056,956 |
|
|
$ |
18.39 |
|
|
|
3.13 |
|
|
$ |
8,729 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at March 31, 2006 |
|
|
1,775,888 |
|
|
$ |
19.07 |
|
|
|
2.67 |
|
|
$ |
7,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested or expected to vest at
March 31, 2006 (1) |
|
|
2,021,124 |
|
|
$ |
18.45 |
|
|
|
.16 |
|
|
$ |
8,566 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
In addition to the vested options, the Company expects a portion of the
unvested options to vest at some point in the future. Options expected to vest is
calculated by applying an estimated forfeiture rate to the unvested options. |
FORM 10-Q
PART I
ITEM 1
PAGE 9
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements (Continued)
March 31, 2006
(Unaudited)
2. |
|
Stock-Based Compensation (Continued) |
A summary of the activity under Picors stock option plan as of March 31, 2006 and changes
during the three-month period then ended, is presented below (in thousands except for share
and weighted-average data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted- |
|
|
|
|
|
|
|
|
Weighted- |
|
Average |
|
|
|
|
|
|
|
|
Average |
|
Remaining |
|
Aggregate |
|
|
Options |
|
Exercise |
|
Contractual |
|
Intrinsic |
|
|
Outstanding |
|
Price |
|
Life in Years |
|
Value |
Outstanding at December 31, 2005 |
|
|
3,442,000 |
|
|
$ |
.45 |
|
|
|
|
|
|
|
|
|
Granted |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
Forfeited and expired |
|
|
(109,360 |
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
Exercised |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at March 31, 2006 |
|
|
3,332,640 |
|
|
$ |
.46 |
|
|
|
6.90 |
|
|
$ |
977 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at March 31, 2006 |
|
|
1,835,024 |
|
|
$ |
.37 |
|
|
|
6.46 |
|
|
$ |
694 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested or expected to vest at March 31, 2006 |
|
|
3,332,640 |
|
|
$ |
.46 |
|
|
|
0.67 |
|
|
$ |
977 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the three months ended March 31, 2006, under all plans, the total intrinsic value of
options exercised (i.e. the difference between the market price at exercise and the price
paid by the employee to exercise the options) was $1,246,000 and the total amount of cash
received from exercise of these options was $2,474,000. The total grant-date fair value of
stock options that vested during the three months ended March 31, 2006 was approximately
$582,000.
As of March 31, 2006, there was $915,000 and $277,000 of total unrecognized compensation
cost related to unvested share-based awards for Vicor and Picor, respectively. That cost is
expected to be recognized over a weighted-average period of 1.5 years for all Vicor and
Picor awards.
FORM 10-Q
PART I
ITEM 1
PAGE 10
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements (Continued)
March 31, 2006
(Unaudited)
The following table sets forth the computation of basic and diluted income per share for
the three months ended March 31 (in thousands, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2006 |
|
|
2005 |
|
Numerator: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
3,076 |
|
|
$ |
39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
Denominator for basic income
per share-weighted average shares |
|
|
41,948 |
|
|
|
41,980 |
|
|
|
|
|
|
|
|
|
|
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
Employee stock options |
|
|
436 |
|
|
|
135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted income per
share adjusted weighted-average shares
and assumed conversions |
|
|
42,384 |
|
|
|
42,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per share |
|
$ |
0.07 |
|
|
$ |
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per share |
|
$ |
0.07 |
|
|
$ |
0.00 |
|
|
|
|
|
|
|
|
Options to purchase 719,066 and 2,389,889 shares of Common Stock were outstanding for the
three months ended March 31, 2006 and March 31, 2005, respectively, but were not included
in the computation of diluted income per share because the options exercise prices were
greater than the average market price of the Common Stock and, therefore, the effect would
have been antidilutive.
Inventories are valued at the lower of cost (determined using the first-in, first-out
method) or market. The Company provides reserves for inventories estimated to be excess,
obsolete or unmarketable. The Companys estimation process for such reserves is based upon
its known backlog, projected future demand and expected market conditions. If the
Companys estimated demand and or market expectation were to change or if product sales
were to decline, the Companys estimation process may cause larger
FORM 10-Q
PART I
ITEM 1
PAGE 11
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements (Continued)
March 31, 2006
(Unaudited)
4. |
|
Inventories (Continued) |
inventory reserves to be recorded, resulting in larger charges to cost of revenues.
Inventories were as follows as of March 31, 2006 and December 31, 2005 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2006 |
|
|
|
|
December 31, 2005 |
Raw materials |
|
$ |
23,271 |
|
|
|
|
|
|
$ |
21,519 |
|
Work-in-process |
|
|
2,690 |
|
|
|
|
|
|
|
2,502 |
|
Finished goods |
|
|
3,493 |
|
|
|
|
|
|
|
3,838 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,454 |
|
|
|
|
|
|
|
27,859 |
|
Inventory reserves |
|
|
(10,797 |
) |
|
|
|
|
|
|
(10,691 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net balance |
|
$ |
18,657 |
|
|
|
|
|
|
$ |
17,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company generally offers a two-year warranty for all of its products. The Company
provides for the estimated cost of product warranties at the time product revenue is
recognized. Factors that affect the Companys warranty reserves include the number of
units sold, historical and anticipated rates of warranty returns and the cost per return.
The Company periodically assesses the adequacy of the warranty reserves and adjusts the
amounts as necessary. Warranty obligations are included in accrued expenses in the
accompanying condensed consolidated balance sheets.
Product warranty activity for the three months ended March 31, 2006 and 2005 were as
follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
2006 |
|
|
2005 |
|
Balance at the beginning of the period |
|
$ |
755 |
|
|
$ |
1,042 |
|
Accruals for warranties for products sold in the period |
|
|
50 |
|
|
|
39 |
|
Fulfillment of warranty obligations |
|
|
(16 |
) |
|
|
(66 |
) |
Revisions of estimated obligations |
|
|
(70 |
) |
|
|
|
|
|
|
|
|
|
|
|
Balance at the end of the period |
|
$ |
719 |
|
|
$ |
1,015 |
|
|
|
|
|
|
|
|
In the first quarter of 2006, the tax provision is based on an estimated effective tax rate
for 2006, which includes federal, state and foreign income taxes on the Companys projected
annual pretax income, estimated federal and state income taxes for certain minority-owned
subsidiaries that are not part of the Companys consolidated income tax returns, offset by
the expected utilization of remaining net operating loss carryforwards and certain tax
credit carryforwards. In 2005, the tax provision included estimated income taxes for
federal and state taxes for certain minority-owned subsidiaries that are not part of the
Companys consolidated income tax returns, for the Federal alternative minimum tax and for
estimated income taxes due in various state and international taxing jurisdictions.
FORM 10-Q
PART I
ITEM 1
PAGE 12
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements (Continued)
March 31, 2006
(Unaudited)
6. Income Taxes (Continued)
The Company operates in numerous taxing jurisdictions and is, therefore, subject to a
variety of income and related taxes. The Company has provided for potential tax liabilities
due in various jurisdictions which it judges to be probable and reasonably estimable in
accordance with Statement of Financial
Accounting Standards No. 5 Accounting for Contingencies. Judgment is required in
determining the income tax expense and related tax liabilities. In the ordinary course of
business, there are transactions and calculations where the ultimate tax outcome is
uncertain. The Company believes it has reasonably estimated its accrued taxes for all
jurisdictions for all open tax periods. The Company periodically assesses the adequacy of
its tax and related accruals on a quarterly basis and adjusts appropriately as events
warrant and open tax periods close. It is possible that the final tax outcome of these
matters will be different from managements estimate reflected in the income tax provisions
and accrued taxes. Such differences could have a material impact on the Companys income
tax provision and operating results in the period in which such determination is made.
The Company recently underwent an audit of its federal tax returns for tax periods 1994
through 2002 by the Internal Revenue Service (IRS). The conclusions reached by the IRS
based on their audit have been agreed to by the Joint Committee on Taxation of the U.S.
Department of the Treasury. While the Company is awaiting the final audit assessment from
the IRS, it believes that its tax accruals are adequate to cover the ultimate assessment.
7. |
|
Comprehensive Income (Loss) |
The following table sets forth the computation of comprehensive income (loss) for the three
months ended March 31 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2006 |
|
|
2005 |
|
Net income |
|
$ |
3,076 |
|
|
$ |
39 |
|
Foreign currency translation loss |
|
|
(8 |
) |
|
|
(41 |
) |
Unrealized
gains (losses) on available for sale securities |
|
|
47 |
|
|
|
(92 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) |
|
$ |
3,115 |
|
|
$ |
(94 |
) |
|
|
|
|
|
|
|
Vicor and VLT, Inc. (VLT), a wholly owned subsidiary of the Company, are pursuing Reset
Patent infringement claims directly against Artesyn Technologies, Lucent Technologies and
Tyco Electronics
Power Systems, Inc. in the United States District Court in Boston, Massachusetts. The
lawsuit against Lucent was filed in May 2000 and in April 2001, the Company added Tyco
Electronics as a defendant in
FORM 10-Q
PART I
ITEM 1
PAGE 13
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements (Continued)
March 31, 2006
(Unaudited)
8. |
|
Legal Proceedings (Continued) |
that lawsuit. The lawsuit against Artesyn was filed in February 2001. In January 2003, the
District Court issued a pre-trial decision in each of these patent infringement lawsuits
relating to claim construction of the Reset Patent. The District Courts decisions rejected
assertions that the Reset Patent claims are
invalid for indefiniteness; and affirmed Vicors interpretation of several terms used in the
Reset Patent claims. However, the District Court adopted interpretations of certain terms
of the Reset Patent claims that are contrary to Vicors position. On May 24, 2004, the
United States Court of Appeals for the Federal Circuit affirmed the decisions issued in
January 2003 by the District Court. Vicor believes that the District Courts decisions, and
the affirmation of these decisions by the Federal Circuit, strengthens
its position regarding validity of the patent, but reduces the cumulative amount of
infringing power supplies and the corresponding amount of potential damages. The Federal
Circuit has referred the proceedings back to the District Court for trials on validity of
the Reset Patent and infringement and damages by Lucent, Tyco and Artesyn.
In the second quarter of 2005, the Company entered into a settlement agreement with Lambda
Americas, Inc., successor to Lambda Electronics, Inc., under which the Company received a
payment of $2,500,000, net of a $250,000 contingency fee paid by the Company to its
litigation counsel, in full settlement of the Companys Reset Patent claims against Lambda
and which settled the lawsuit that the Company had filed against Lambda in June 2001. The
District Court has not yet set dates for the remaining trials. There can be no assurance
that Vicor and VLT will ultimately prevail with respect to any of these claims or, if they
prevail, as to the amount of damages that would be awarded.
In May 2004, Ericsson Wireless Communications, Inc. v. Vicor Corporation was filed in
Superior Court of the State of California, County of San Diego. The plaintiff has brought
an action against the Company claiming unspecified damages for failure of out-of warranty
products previously purchased by it from the Company. In November 2004, Ericsson filed a
First Amended Complaint adding claims against Exar Corporation, a former vendor of the
Company. The Company filed cross-claims against Exar, and third-party claims against Rohm
Device USA, LLC and Rohm Co., Ltd., the original manufacturer(s) of the component which Exar
sold to the Company. The Company has denied the claims made against it and intends to
vigorously defend the claims made against it.
On March 4, 2005, Exar filed a declaratory judgment action against Vicor in the Superior
Court of the State of California, County of Santa Clara, in which Exar seeks a declaration
by the Court that Exar is not obligated to reimburse or indemnify Vicor for any claims
brought against Vicor for alleged damages incurred as a result of the use of Exar components
in Vicor products. The Company has brought cross-claims against Exar, and third-party
claims against Rohm Device USA, LLC and Rohm Co., Ltd., for declaratory judgment. The
Company intends to vigorously assert its cross-claims against Exar.
On August 18, 2005, the Company filed an action in The Superior Court of the Commonwealth of
Massachusetts, County of Essex (the Court) against Concurrent Computer Corporation
(Concurrent) in response to a demand made by Concurrent in connection with breach of
contract and breach of product
FORM 10-Q
PART I
ITEM 1
PAGE 14
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements (Continued)
March 31, 2006
(Unaudited)
8. Legal Proceedings (Continued)
warranty claims against the Company. On September 22, 2005, Concurrent filed a Demand For
Arbitration with The American Arbitration Association. Concurrent is seeking $1,500,000 in
replacement costs, plus incidental, consequential and any other damages to be determined.
On March 8, 2006 the Court allowed Concurrents motion to compel arbitration. The Company has denied
the claims made against it and intends to vigorously defend the claims made against it.
In addition, the Company is involved in certain other litigation and claims incidental to
the conduct of its business. While the outcome of lawsuits and claims against the Company
cannot be predicted with certainty, management does not expect any current litigation or
claims to have a material adverse impact on the Companys financial position or results of
operations.
9. Impact of Recently Issued Accounting Standards
In November 2004, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards No. 151, Inventory Costs, an amendment of Accounting
Research Bulletin (ARB) No. 43, Chapter 4 (FAS 151). FAS 151 amends the guidance in ARB
No 43, Chapter 4, Inventory Pricing to clarify that abnormal amounts of idle facility
expense, freight, handling costs, and wasted material (spoilage) should be recognized as
current-period charges. In addition, FAS 151 requires that allocation of fixed production
overhead to the costs of conversion be based on the normal capacity of the production
facilities. The provisions of FAS 151 are effective for inventory costs incurred starting
January 1, 2006. The adoption of FAS 151 did not have a significant impact on the Companys
financial position or results of operations.
In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154,
Accounting Changes and Error Corrections (FAS 154). This statement establishes new
standards on accounting for changes in accounting principles. Pursuant to FAS 154, all such
changes must be accounted for by retrospective application to the financial statements of
prior periods unless it is impracticable to do so. FAS 154 replaces APB Opinion No. 20 and
SFAS No. 3, though it carries forward the guidance in those pronouncements with respect to
accounting for changes in estimates, changes in the reporting entity and the correction of
errors. The provisions of FAS 154 are effective for accounting changes and corrections of
errors incurred starting January 1, 2006. The adoption of FAS 154 did not have a
significant impact on the Companys financial position or results of operations.
10. Dividend
On February 4, 2006, the Companys Board of Directors approved a cash dividend of $.12 per
share of the Companys stock. The total dividend of approximately $5,030,000 was paid on
March 20, 2006 to shareholders of record at the close of business on February 28, 2006.
FORM 10-Q
PART I
ITEM 1
PAGE 15
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements (Continued)
March 31, 2006
(Unaudited)
10. Dividend (Continued)
Dividends are declared at the discretion of the Companys Board of Directors and depend on
actual cash from operations, the Companys financial condition and capital requirements and
any other factors the Companys Board of Directors may consider relevant. The Board of
Directors anticipates reviewing its dividend policy on a semi-annual basis.
FORM 10-Q
PART I
ITEM 2
PAGE 16
VICOR CORPORATION
Managements Discussion and Analysis of
Financial Condition and Results of Operations
March 31, 2006
Item 2 Managements Discussion and Analysis of Financial Condition and Results of
Operations
Except for historical information contained herein, some matters discussed in this report
constitute 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. The words
believes, expects, anticipates, intend, estimate, plans, assumes, may, will,
would, should, continue, prospective, project, and other similar expressions identify
forward-looking statements. These statements are based upon the Companys current expectations and
estimates as to the prospective events and circumstances which may or may not be within the
Companys control and as to which there can be no assurance. Actual results could differ
materially from those projected in the forward-looking statements as a result of various factors,
including our ability to develop and market new products and technologies cost effectively, to
leverage design wins into increased product sales, 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 build our business units, and to successfully
leverage the V I Chips in standard products to promote market acceptance of Factorized Power,
factors impacting the Companys various end markets, including Consumer Electronics,
Communications, Information Technology and Automotive, as well as those factors described in the
risk factors set forth in this report and in the Companys Annual Report on Form 10-K for the year
ended December 31, 2005. Reference is made in particular to the discussions set forth below in
this report under Managements Discussion and Analysis of Financial Condition and Results of
Operations, and set forth in the Annual Report on Form 10-K under Part I, Item 1 Business
Second-Generation Products, Competition, Patents, and Licensing, under Part I, Item 1A
Risk Factors, under Part I, Item 3 Legal Proceedings, and under Part II, Item 7
Managements Discussion and Analysis of Financial Condition and Results of Operations. 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 Securities and Exchange Commission from time to time, including
Forms 10-Q, 8-K and 10-K, which may supplement, modify, supersede or update those risk factors.
The Company does not undertake any obligation to update any forward-looking statements as a result
of future events or developments.
Critical Accounting Policies and Estimates
Please refer to the Companys Annual Report on Form 10-K for the year ended December 31, 2005 for a
complete summary of the critical accounting policies and estimates.
FORM 10-Q
PART I
ITEM 2
PAGE 17
VICOR CORPORATION
Managements Discussion and Analysis of
Financial Condition and Results of Operations
March 31, 2006
(Continued)
Results of Operations
Three months ended March 31, 2006 compared to three months ended March 31, 2005
Net revenues for the first quarter of 2006 were $47,872,000, an increase of $4,692,000, or 10.9%,
as compared to $43,180,000 for the same period a year ago, and an increase of 3.4% on a sequential
basis from the fourth quarter of 2005. The increase in net revenues from the prior year resulted
from an increase in shipments of standard and custom products. Orders during the quarter increased
by 27.4% compared with the fourth quarter of 2005. The book-to-bill ratio for the first quarter of
2006 was 1.17:1 as compared to 1.09:1 for the first quarter of 2005 and 0.95:1 in the fourth
quarter of 2005. The Company believes that, subject to continuing demand and productivity
improvements, revenue growth and incremental quarterly expansion in margins should enable
substantial profits in 2006.
Gross margin for the first quarter of 2006 increased $4,057,000, or 23.8%, to $21,102,000 from
$17,045,000 for the first quarter of 2005, and increased to 44.1% from 39.5% as a percentage of net
revenues. The primary components of the increase in gross margin dollars and percentage were due
to the increase in net revenues and an increase in manufacturing efficiencies resulting in lower
average unit costs.
Selling, general and administrative expenses were $10,914,000 for the period, an increase of
$810,000, or 8.0%, from the same period in 2005. As a percentage of net revenues, selling, general
and administrative expenses decreased to 22.8% from 23.4%. The principal components of the
$810,000 increase were $295,000, or 6.6%, of increased compensation expense primarily due to annual
compensation adjustments in May 2005, $199,000, or 62.3%, in increased legal fees due to the
litigation with Ericsson Wireless Communications, Inc. (see Part II Item 1 Legal Proceedings),
$189,000, or 21.4%, in increased commissions due to the increase in net revenues and $176,000, or
25.1%, of increased costs associated with the Vicor Integration Architects (VIAs). The increase
in compensation expense also includes $86,000 of non-cash stock-based compensation recorded under
newly adopted Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based
Payment (FAS 123R). See Note 2 to the condensed consolidated financial statements for further
discussion.
Research and development expenses increased $446,000, or 6.3%, to $7,542,000, and decreased as a
percentage of net revenues to 15.8% from 16.4%. The principal components of the $446,000 increase
were $591,000, or 13.6%, in increased compensation expense primarily due to annual
compensation adjustments in May 2005 and $69,000, or 20.1%, of increased costs associated with the
VIAs. The principal component partially offsetting the above increases were $256,000, or 26.1%, in
decreased project material costs due to the stabilization of development efforts associated with
the Companys new Factorized Power Architecture (FPA) products. The increase in compensation
expense also includes $62,000 of non-cash stock-based compensation recorded under FAS
123(R).
The Company has a long-term commitment to investing in new product design and development in order
to maintain and improve its competitive position.
FORM 10-Q
PART I
ITEM 2
PAGE 18
VICOR CORPORATION
Managements Discussion and Analysis of
Financial Condition and Results of Operations
March 31, 2006
(Continued)
The major changes in the components of the other income (expense), net were as follows (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase |
|
|
|
2006 |
|
|
2005 |
|
|
(decrease) |
|
Interest income |
|
$ |
1,141 |
|
|
$ |
635 |
|
|
$ |
506 |
|
Foreign currency gains (losses) |
|
|
54 |
|
|
|
(180 |
) |
|
|
234 |
|
Minority interest in net income of
subsidiaries |
|
|
(153 |
) |
|
|
(90 |
) |
|
|
(63 |
) |
Other |
|
|
18 |
|
|
|
129 |
|
|
|
(111 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,060 |
|
|
$ |
494 |
|
|
$ |
566 |
|
|
|
|
|
|
|
|
|
|
|
The increase in interest income is due to higher interest rates and higher average balances on the
Companys cash equivalents and short-term investments. The increase in foreign currency gains is
due to the favorable exchange rates in 2006 as compared to 2005.
Income before income taxes was $3,706,000 for the first quarter of 2006 compared to $339,000 for
the same period in 2005.
In the first quarter of 2006, the tax provision is based on an estimated effective tax rate for
2006, which includes federal, state and foreign income taxes on the Companys projected annual
pretax income, estimated federal and state income taxes for certain minority-owned subsidiaries
that are not part of the Companys consolidated income tax returns, offset by the expected
utilization of remaining net operating loss carryforwards and certain tax credit carryforwards. In
2005, the tax provision included estimated income taxes for federal and state taxes for certain
minority-owned subsidiaries that are not part of the Companys consolidated income tax returns, for
the Federal alternative minimum tax and for estimated income taxes due in various state and
international taxing jurisdictions.
Basic and diluted income per share was $0.07 for the first quarter of 2006 compared to $0.00 for
the first quarter of 2005.
Liquidity and Capital Resources
At March 31, 2006 the Company had $25,830,000 in cash and cash equivalents. The ratio of current
assets to current liabilities was 7.9:1 at March 31, 2006 compared to 7.6:1 at December 31, 2005.
Working capital
increased $4,649,000, from $150,385,000 at December 31, 2005 to $155,034,000 at March 31, 2006.
The primary factors affecting the working capital increase were increases in short-term investments
of $7,794,000, accounts receivable of $2,981,000 and inventory of $1,489,000. These increases were
partially offset by a decrease in cash and cash equivalents of $8,194,000. The primary sources of
cash for the three months ended March 31, 2006 were $2,474,000 in net proceeds from the issuance of
Common Stock upon the exercise of stock
FORM 10-Q
PART I
ITEMS 2 - 3
PAGE 19
VICOR CORPORATION
Managements Discussion and Analysis of
Financial Condition and Results of Operations
March 31, 2006
(Continued)
options and $2,434,000 from operating activities. The primary uses of cash for the three months
ended March 31, 2006 were for the payment of a Common Stock dividend of $5,030,000, $4,449,000 of
net purchases of
short-term investments, the acquisition of treasury stock for $1,998,000 and the acquisition of
equipment of approximately $1,555,000.
In November 2000, the Board of Directors of the Company authorized the repurchase of up to
$30,000,000 of the Companys Common Stock (the November 2000 Plan). The November 2000 Plan
authorizes the Company to make such repurchases from time to time in the open market or through
privately negotiated transactions. The timing and amounts of stock repurchases are at the
discretion of management based on its view of economic and financial market conditions. The
Company spent approximately $1,998,000 for the repurchase of 119,500 shares of Common Stock during
the three months ended March 31, 2006. As of March 31, 2006, the Company had approximately
$17,378,000 remaining under the plan.
On February 4, 2006, the Companys Board of Directors approved a cash dividend of $.12 per share
of the Companys stock. The total dividend of approximately $5,030,000 was paid on March 20, 2006
to shareholders of record at the close of business on February 28, 2006. The Board of Directors
anticipates reviewing its dividend policy on a semi-annual basis.
The Companys primary liquidity needs are for making continuing investments in manufacturing
equipment, particularly equipment for the Companys new FPA products. The Company believes that
cash generated from operations and the total of its cash and cash equivalents, together with other
sources of liquidity, will be sufficient to fund planned operations and capital equipment
purchases for the foreseeable future. At March 31, 2006, the Company had approximately $998,000
of capital expenditure commitments, principally for manufacturing equipment.
The Company does not consider the impact of inflation and changing prices on its business
activities or fluctuations in the exchange rates for foreign currency transactions to have been
significant during the last three fiscal years.
Item 3 Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to a variety of market risks, including changes in interest rates affecting
the return on its cash and cash equivalents, short-term and long-term investments and fluctuations
in foreign currency exchange rates.
As the Companys cash and cash equivalents consist principally of money market securities, which
are short-term in nature, the Companys exposure to market risk on interest rate fluctuations for
these investments is not significant. The Companys short-term and long-term investments consist
mainly of corporate debt securities.
These debt securities are all highly rated investments, in which a significant portion have
interest rates reset at auction at regular intervals. As a result, the Company believes there is
minimal market risk to these investments.
FORM 10-Q
PART I
ITEMS 3 4
PAGE 20
VICOR CORPORATION
March 31, 2006
The Companys exposure to market risk for fluctuations in foreign currency exchange rates relates
primarily to the operations of Vicor Japan Company, Ltd. (VJCL) and changes in the dollar/yen
exchange rate. In addition, the functional currency of the Companys subsidiaries in Europe and
Hong Kong is the U.S. Dollar. Therefore, the Company believes that market risk is mitigated since
these operations are not materially exposed to foreign exchange fluctuations.
Item 4 Controls and Procedures
(a) Disclosure controls and procedures.
As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the Exchange
Act), the Companys management conducted an evaluation with the participation of the Companys
Chief Executive Officer (CEO) and Chief Financial Officer (CFO), regarding the effectiveness of
the Companys disclosure controls and procedures, as of the end of the last fiscal quarter. In
designing and evaluating the Companys disclosure controls and procedures, the Company and its
management recognize that any controls and procedures, no matter how well designed and operated,
can provide only a reasonable assurance of achieving the desired control objectives, and management
necessarily was required to apply its judgment in evaluating and implementing possible controls and
procedures. Based upon that evaluation, the CEO and CFO concluded that they believe the Companys
disclosure controls and procedures are reasonably effective to ensure that information required to
be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the Securities and Exchange
Commissions rules and forms. We intend to continue to review and document our disclosure controls
and procedures, including our internal controls and procedures for financial reporting, and we may
from time to time make changes to the disclosure controls and procedures to enhance their
effectiveness and to ensure that our systems evolve with our business.
The Companys management, including the CEO and CFO, does not expect that our disclosure controls
or our internal control over financial reporting will prevent or detect all error and all fraud. A
control system, no matter how well designed and operated, can provide only reasonable, not
absolute, assurance that the control systems objectives will be met. The design of a control
system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs. Further, because of the
inherent limitations in all control systems, no evaluation of controls can provide absolute
assurance that misstatements due to error or fraud will not occur or that all control issues and
instances of fraud, if any, within the Company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty and that breakdowns can occur
because of simple error or mistake. Controls can also be circumvented by the individual acts of
some persons, by collusion of two or more people, or by management override of the controls. The
design of any system of controls is based in part on certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions.
Projections of any evaluation of controls effectiveness to future periods are subject to risks.
Over time, controls may become inadequate because of changes in conditions or deterioration in the
degree of compliance with policies or procedures.
FORM 10-Q
PART I
ITEM 4
PAGE 21
VICOR CORPORATION
March 31, 2006
(b) Changes in internal control over financial reporting.
There were no changes in the Companys internal control over financial reporting identified in
connection with the Companys evaluation of internal control over financial reporting that occurred
during the Companys last fiscal quarter that have materially affected, or are reasonably likely to
materially affect, the Companys internal control over financial reporting.
FORM 10-Q
PART II
ITEMS 1 5
PAGE 22
VICOR CORPORATION
Part II Other Information
March 31, 2006
Item 1 Legal Proceedings
Not applicable.
Item 1A Risk Factors
There have been no material changes in the risk factors described in Item 1A (Risk
Factors) of the Companys Annual Report on Form 10-K for the year ended December 31, 2005.
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum Number |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(or Approximate |
|
|
|
|
|
|
|
|
|
|
Total Number of |
|
Dollar Value) of |
|
|
|
|
|
|
|
|
|
|
Shares (or Units) |
|
Shares (or Units) |
|
|
|
|
|
|
|
|
|
|
Purchased as Part |
|
that May Yet Be |
|
|
Total Number of |
|
|
|
|
|
of Publicly |
|
Purchased Under |
|
|
Shares (or Units) |
|
Average Price Paid |
|
Announced Plans |
|
the Plans or |
Period |
|
Purchased |
|
per Share (or Unit) |
|
or Programs |
|
Programs |
January 1 31, 2006 |
|
|
108,700 |
|
|
|
$16.72 |
|
|
|
108,700 |
|
|
|
$17,558,000 |
|
February 1 28, 2006 |
|
|
10,800 |
|
|
|
16.66 |
|
|
|
10,800 |
|
|
|
$17,378,000 |
|
March 1 31, 2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$17,378,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
119,500 |
|
|
|
$16.72 |
|
|
|
119,500 |
|
|
|
$17,378,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In November 2000, the Board of Directors of the Company authorized the repurchase of up to
$30,000,000 of the Companys Common Stock.
Item 3 Defaults Upon Senior Securities
Not applicable.
Item 4 Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5 Other Information
Not applicable.
FORM 10-Q
PART II
ITEM 6
PAGE 23
Item 6 Exhibits
|
|
|
|
|
|
|
|
|
Exhibit Number |
|
Description |
|
|
10.1 |
|
|
Vicor Corporation Brick Business Unit and Corporate Support Functions
Incentive Compensation Plan(1) |
|
|
|
|
|
|
|
|
31.1 |
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934(2) |
|
|
|
|
|
|
|
|
31.2 |
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934(2) |
|
|
|
|
|
|
|
|
32.1 |
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(2) |
|
|
|
|
|
|
|
|
32.2 |
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(2) |
|
|
|
(1) |
|
Filed as an exhibit to the Companys Form 8-K filed on April 27, 2006 and incorporated
herein by reference. |
|
(2) |
|
Filed herewith. |
FORM 10-Q
PART II
PAGE 24
SIGNATURES
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 thereunto duly authorized.
|
|
|
|
|
|
|
VICOR CORPORATION |
|
|
|
|
|
Date: May 9, 2006
|
|
By:
|
|
/s/ Patrizio Vinciarelli |
|
|
|
|
Patrizio Vinciarelli
President, Chief Executive Officer
and Chairman of the Board
(Principal Executive Officer) |
|
|
|
|
|
Date: May 9, 2006
|
|
By:
|
|
/s/ Mark A. Glazer |
|
|
|
|
Mark A. Glazer
Chief Financial Officer
(Principal Financial Officer
and Principal Accounting Officer) |
exv31w1
Exhibit 31.1
CERTIFICATIONS
I, Patrizio Vinciarelli, certify that:
|
1. |
|
I have reviewed this quarterly report on Form 10-Q of Vicor Corporation; |
|
|
2. |
|
Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report; |
|
|
3. |
|
Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report; |
|
|
4. |
|
The registrants other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have: |
|
a) |
|
Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared; |
|
|
b) |
|
Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles; |
|
|
c) |
|
Evaluated the effectiveness of the registrants disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and |
|
|
d) |
|
Disclosed in this report any change in the registrants internal
control over financial reporting that occurred during the registrants most recent
fiscal quarter (the registrants fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrants internal control over financial reporting; and |
|
5. |
|
The registrants other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrants auditors and the audit committee of the registrants board of directors
(or persons performing the equivalent functions): |
|
a) |
|
All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably likely
to adversely affect the registrants ability to record, process, summarize and
report financial information; and |
|
|
b) |
|
Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal control over
financial reporting. |
|
|
|
Dated: May 9, 2006
|
|
/s/ Patrizio Vinciarelli |
|
|
Patrizio Vinciarelli
Chief Executive Officer |
exv31w2
Exhibit 31.2
CERTIFICATIONS
I, Mark A. Glazer, certify that:
|
1. |
|
I have reviewed this quarterly report on Form 10-Q of Vicor Corporation; |
|
|
2. |
|
Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report; |
|
|
3. |
|
Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report; |
|
|
4. |
|
The registrants other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have: |
|
a) |
|
Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared; |
|
|
b) |
|
Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles; |
|
|
c) |
|
Evaluated the effectiveness of the registrants disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and |
|
|
d) |
|
Disclosed in this report any change in the registrants internal
control over financial reporting that occurred during the registrants most recent
fiscal quarter (the registrants fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrants internal control over financial reporting; and |
|
5. |
|
The registrants other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrants auditors and the audit committee of the registrants board of directors
(or persons performing the equivalent functions): |
|
a) |
|
All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably likely
to adversely affect the registrants ability to record, process, summarize and
report financial information; and |
|
|
b) |
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Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal control over
financial reporting. |
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Dated: May 9, 2006
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/s/ Mark A. Glazer |
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Mark A. Glazer
Chief Financial Officer |
exv32w1
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Vicor Corporation (the Company) on Form 10-Q for the
period ending March 31, 2006 as filed with the Securities and Exchange Commission on the date
hereof (the Report), I, Patrizio Vinciarelli, Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
|
(1) |
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and |
|
|
(2) |
|
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company. |
|
/s/ Patrizio Vinciarelli |
Patrizio Vinciarelli
President, Chairman of the Board and
Chief Executive Officer |
|
May 9, 2006 |
A signed original of this written statement required by Section 906 has been provided to the
Company and will be retained by the Company and furnished to the Securities and Exchange
Commission or its staff upon request.
exv32w2
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Vicor Corporation (the Company) on Form 10-Q for the
period ending March 31, 2006 as filed with the Securities and Exchange Commission on the date
hereof (the Report), I, Mark A. Glazer, Chief Financial Officer of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:
|
(1) |
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and |
|
|
(2) |
|
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company. |
|
/s/ Mark A. Glazer |
Mark A. Glazer
Chief Financial Officer |
|
May 9, 2006 |
A signed original of this written statement required by Section 906 has been provided to the
Company and will be retained by the Company and furnished to the Securities and Exchange
Commission or its staff upon request.