Vicor Corporation Reports Results for the Second Quarter Ended June 30, 2019

ANDOVER, Mass., July 25, 2019 (GLOBE NEWSWIRE) -- Vicor Corporation (NASDAQ:VICR) today reported financial results for the second quarter and six months ended June 30, 2019.  These results will be discussed later today at 5:00 p.m. Eastern Time, during management's quarterly investor conference call.  The details for the call are presented below. 

Revenues for the second quarter ended June 30, 2019 totaled $63.4 million, a 14.6% decrease from $74.2 million for the corresponding period a year ago, and a 3.6% sequential decrease from $65.7 million the first quarter of 2019. 

Gross margin decreased to $29.1 million for the second quarter of 2019, compared to $35.9 million for the corresponding period a year ago, and decreased sequentially from $31.1 million for the first quarter of 2019.  Gross margin, as a percentage of revenue, decreased to 46.0% for the second quarter of 2019, compared to 48.4% for the corresponding period a year ago, and decreased from 47.3% for the first quarter of 2019. 

Net income for the second quarter was $2.6 million, or $0.06 per diluted share, compared to net income of $7.9 million or $0.19 per diluted share, for the corresponding period a year ago and net income of $4.3 million, or $0.10 per diluted share, for the first quarter of 2019. 

Revenues for the six months ended June 30, 2019, decreased 7.4% to $129.1 million from $139.5 million for the corresponding period a year ago.  Net income for the six month period was $6.8 million, or $0.17 per diluted share, compared to net income of $11.8 million, or $0.29 per diluted share, for the corresponding period a year ago.          
    
Cash and cash equivalents sequentially increased by $4.9 million to approximately $71.5 million at the end of the second quarter of 2019, from $66.6 million at the end of the first quarter of 2019.  Capital expenditures for the second quarter of 2019 totaled $2.5 million, down from $3.3 million for the first quarter of 2019 and up from $1.7 million for the corresponding period a year ago.

Second quarter bookings decreased 31.1% to $60.2 million, from $87.4 million for the corresponding period a year ago, and decreased sequentially 9.6% from $66.7 million for the first quarter of 2019.  Total backlog at the end of the second quarter of 2019 was $100.7 million, down 3.1 % from $103.8 million at the end of the first quarter of 2019, and down 2.2% from $103.0 million at the end of 2018.

Commenting on the second quarter, Dr. Patrizio Vinciarelli, Chief Executive Officer, stated: "Second quarter financial performance reflected challenges similar to those experienced in the first quarter, as shipment delays requested by contract manufacturers limited revenue from the datacenter market. Growing hyperscale infrastructure spending and design wins for next generation 48V servers, AI accelerators, and supercomputers are keys to near term revenue growth from Advanced Products. Resolution of the Chinese trade dispute would reopen Chinese order flow which has slowed significantly and undo the impact of inbound tariffs on gross margins."

Dr. Vinciarelli continued, "Despite challenging conditions, our outlook is bright. The 12V to 48V transition in datacenter and automotive applications is underway and we are winning every demanding AI ASIC application with lateral or vertical Power-on-Package solutions.  Our domestic business is healthy, customer design activity with Advanced Products is robust, and our opportunity pipeline across major segments continues to expand. In coming weeks, we expect to close the purchase of land abutting our Andover manufacturing facility to facilitate capacity expansion. Our outlook for the second half reflects steady demand for Brick Products and a resumption of strong demand for Advanced Products from an expanding list of AI applications for which there is no viable competitive alternative."

For more information on Vicor and its products, please visit the Company's website at www.vicorpower.com.

Earnings Conference Call

Vicor will be holding its investor conference call today, Tuesday, July 25, 2019 at 5:00 p.m. Eastern Time.  Shareholders interested in participating in the call should call 888-339-2688 at approximately 4:50 p.m. and use the Passcode 50342172.  Internet users may listen to a real-time audio broadcast of the conference call on the Investor Relations section of Vicor's website at www.vicorpower.com.  Please go to the website at least 15 minutes prior to the call to register, download and install any necessary software.  For those who cannot participate in the conference call, a replay will be available, shortly after the conclusion of the call, through August 9, 2019.  The replay dial-in number is 888-286-8010 and the Passcode is 91303034.  In addition, a webcast replay of the conference call will also be available on the Investor Relations section of Vicor's website at www.vicorpower.com beginning shortly after the conclusion of the call.

This press release contains certain 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.  Any statement in this press release that is not a statement of historical fact is a forward-looking statement, and, the words "believes," "expects," "anticipates," "intends," "estimates," "plans," "assumes," "may," "will," "would," "should," "continue," "prospective," "project," and other similar expressions identify forward-looking statements.  Forward-looking statements also include statements regarding bookings, shipments, revenue, profitability, targeted markets, increase in manufacturing capacity and utilization thereof, future products and capital resources. These statements are based upon management's current expectations and estimates as to the prospective events and circumstances that may or may not be within the company's 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 those economic, business, operational and financial considerations set forth in Vicor's Annual Report on Form 10-K for the year ended December 31, 2018, under Part I, Item I — "Business," under Part I, Item 1A — "Risk Factors," under Part I, Item 3 — "Legal Proceedings," and under Part II, Item 7 — "Management's Discussion and Analysis of Financial Condition and Results of Operations."  The risk factors set forth in the Annual Report on Form 10-K may not be exhaustive.  Therefore, the information contained in the Annual Report on Form 10-K should be read together with other reports and documents filed 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.  Vicor does not undertake any obligation to update any forward-looking statements as a result of future events or developments.

Vicor Corporation designs, develops, manufactures and markets modular power components and complete power systems based upon a portfolio of patented technologies.  Headquartered in Andover, Massachusetts, Vicor sells its products primarily to customers in the higher-performance, higher-power segments of the power systems market, including aerospace and defense electronics, enterprise and high performance computing, industrial equipment and automation, telecommunications and network infrastructure, and vehicles and transportation markets.

For further information contact:
                                                     
James A. Simms, Chief Financial Officer
Voice: 978-470-2900
Facsimile: 978-749-3439
invrel@vicorpower.com

VICOR CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Thousands except for per share amounts)
	QUARTER ENDED		SIX MONTHS ENDED
	(Unaudited)		(Unaudited)
	JUNE 30,		JUNE 30,		JUNE 30,		JUNE 30,
	2019		2018		2019		2018
Net revenues	$	63,355			$	74,196			$	129,080		$	139,465
Cost of revenues		34,238				38,313				68,877			73,371
Gross margin		29,117				35,883				60,203			66,094
Operating expenses:
Selling, general and administrative		15,030				15,814				30,403			31,213
Research and development		11,706				11,403				22,926			22,529
Severance charge		-				350				-			350
Total operating expenses		26,736				27,567				53,329			54,092
Income from operations		2,381				8,316				6,874			12,002
Other income (expense), net		288				(44	)			527			386
Income before income taxes		2,669				8,272				7,401			12,388
Less:  Provision for income taxes		113				363				539			497
Consolidated net income		2,556				7,909				6,862			11,891
Less:  Net income (loss) attributable to
noncontrolling interest		(7	)			49				13			88
Net income  attributable to
Vicor Corporation	$	2,563			$	7,860			$	6,849		$	11,803
Net income per share attributable
to Vicor Corporation:
Basic	$	0.06			$	0.20			$	0.17		$	0.30
Diluted	$	0.06			$	0.19			$	0.17		$	0.29
Shares outstanding:
Basic		40,275				39,709				40,252			39,594
Diluted		41,081				40,646				41,055			40,406

VICOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Thousands)
	JUNE 30,		DEC 31,
	2019		2018
	(Unaudited)		(Unaudited)
Assets
Current  assets:
Cash and cash equivalents	$	71,482			$	70,557
Accounts receivable, net		38,537				43,673
Inventories, net		54,572				47,370
Other current assets		5,054				3,460
Total current assets		169,645				165,060
Long-term deferred tax assets		241				265
Long-term investment, net		2,565				2,526
Property, plant and equipment, net		55,285				50,432
Other assets		2,867				2,785
Total assets	$	230,603			$	221,068
Liabilities and Equity
Current liabilities:
Accounts payable	$	10,819			$	16,149
Accrued compensation and benefits		11,144				10,657
Accrued expenses		2,228				2,631
Operating lease liabilities		1,660				-
Sales allowances		640				548
Accrued severance and other charges		-				234
Income taxes payable		85				710
Deferred revenue		6,581				5,069
Total current liabilities		33,157				35,998
Long-term deferred revenue		196				232
Contingent consideration obligations		306				408
Long-term income taxes payable		236				238
Long-term lease payable		2,392				102
Total liabilities		36,287				36,978
Equity:
Vicor Corporation stockholders' equity:
Capital stock		197,219				193,977
Retained earnings		135,849				129,000
Accumulated other comprehensive loss		(278	)			(394	)
Treasury stock		(138,927	)			(138,927	)
Total Vicor Corporation stockholders' equity		193,863				183,656
Noncontrolling interest		453				434
Total equity		194,316				184,090
Total liabilities and equity	$	230,603			$	221,068