Vicor Corporation Announces 2nd Quarter Results.Business/Technology Editors ANDOVER, Mass.--(BUSINESS WIRE)--July 16, 2003 Vicor Corporation Vicor Corporation NYSE: VICR designs, manufactures and markets modular power components and complete power systems used primarily by original equipment manufacturers (OEMs) in the communications, data processing, industrial controls, test equipment, medical and defense (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : VICR VICR Virgin Islands Coral Reef National Monument (US National Park Service) ) today announced its financial results for the quarter ended June 30, 2003. Revenues for the quarter were $38,693,000 compared with $36,831,000 for the corresponding period a year ago. The Company reported a loss before taxes of $5,729,000 compared with a loss before taxes of $7,642,000 in 2002. The Company reported a net loss for the quarter of $5,958,000 compared with a net loss of $4,852,000 in 2002, and a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. loss per share of $.14 compared with a diluted loss per share of $.11 in 2002. Net loss for the quarter ended June 30, 2003 was higher than the comparable quarter in 2002 because of a tax rule change limiting the availability of tax loss carry-backs Loss Carry-Back (Carry-Forward) A tax provision that allows operating losses to be used as a tax shield to reduce taxable income in prior and future years. Losses can be carried backward for up to three years and forward for up to 15 years under current tax codes. in 2003 as discussed below. For the six months ended June 30, 2003 revenues increased to $76,433,000 from $71,451,000 for the same period of 2002. The Company reported a loss before taxes of $12,103,000 compared with a loss before taxes of $15,407,000 in 2002. The Company reported a net loss for the period of $12,587,000 compared with a net loss of $9,783,000 in 2002, and a diluted loss per share of $.30 compared with a diluted loss per share of $.23 in 2002. In the second quarter, revenues increased by 5.1% over the second quarter of 2002, and increased by 2.5% on a sequential basis from the first quarter of 2003. The overall book to bill for the second quarter was slightly below 1. The order pattern by most customers continued to be focused on filling short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. requirements and, consequently, visibility based on backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. remained limited. The Company finished the second quarter with approximately $31.8 million in backlog compared to $31.9 million at the end of 2002. In the second quarter, gross margin increased to 27.2%, compared with 23.6% in the second quarter of 2002. Gross margin increased by 3.6% sequentially from the first quarter of 2003. The gross margin improvement was due to a more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. product mix and to unit cost reductions due to productivity improvements. In consideration of the excess in factory capacity that has persisted for nearly three years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time potential for further improvements in productivity and the prospective lower labor content of its new V-I Chips, the Company will end the general furlough fur·lough n. 1. a. A leave of absence or vacation, especially one granted to a member of the armed forces. b. A usually temporary layoff from work. c. program for all of its hourly factory workers effective October 10, 2003. As of this date, approximately 74% of factory workers will return to full time, productive employment. Approximately 26% of the factory workers will be notified within the next week that the Company will not continue to employ them after October 10, 2003. Affected employees that are unable to obtain other employment will be provided with health benefits until the end of this year. Depreciation and amortization in the quarter was $5.6 million and capital additions were $1.4 million. For the first six months of 2003 depreciation and amortization was $11.3 million and capital additions were $3.3 million. Within the quarter, the Company recorded a loss of $387,000 for a decline in the value of an investment judged to be other than temporary, which was charged to other income (expense), net. The tax provision for the first six months of 2003 was 4%. During 2002, the Company recorded a tax benefit of 36.5% reducing pre-tax losses due to a carry-back provision allowed by a temporary change in the tax laws. Beginning in 2003, with tax rules reverting re·vert intr.v. re·vert·ed, re·vert·ing, re·verts 1. To return to a former condition, practice, subject, or belief. 2. Law To return to the former owner or to the former owner's heirs. to a carry-back limited to two years, any losses incurred will only be available to offset future taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. . A provision in 2003 is required as the Company operates in various state and international taxing jurisdictions, subject to a variety of income and related taxes. Cash and short-term investments were $110.9 million, an increase of $10.0 million from the end of 2002 and an increase of $13.0 million from the end of the first quarter of 2003. This increase is largely attributable to $11.7 million of tax refunds Tax refund Money back from the government when too much tax has been paid or withheld from a salary. received during the quarter. The Company did not repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. any shares during the quarter and has $26.0 million remaining on its authorized stock Authorized Stock The maximum number of shares that a corporation is legally permitted to issue, as specified in its articles of incorporation. This figure is usually listed in the capital accounts section of the balance sheet. buy-back plan. Inventories decreased by approximately $6.1 million to $24.2 million as compared with $30.3 million at the end of 2002 and decreased by $2.1 million from the end of the first quarter of 2003. During the quarter, the Company and Artesyn agreed to conditionally resolve a pending patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. case. The parties stipulated that certain of Artesyn's accused products infringed a Vicor patent based on claim interpretations handed down by the Massachusetts Federal District Court. This allows both parties to appeal these interpretations to the Federal Circuit, the appeals court that decides patent appeals in the U.S. The Company also reached agreement with Lambda, Power-One, Lucent and Tyco to allow appeal by these parties. Pending these appeals, the Massachusetts Federal District Court has stayed all of the pending cases. The Company anticipates that a decision by the Federal Circuit will likely be rendered in 2004. During the quarter, the Company received 146 new design wins for its second-generation modules via its proprietary VDAC VDAC Vaginal delivery after cesarean section, see there design system and 60 new design wins for its VIPAC VIPAC Virtual Israel Political Action Committee VIPAC VIbration, Pressure and Acoustics (Melbourne, Australia) customer-configurable power systems. The Company has recently introduced its first V-I Chip Bus Converter (1) A device that changes one set of codes, modes, sequences or frequencies to a different set. See A/D converter. (2) A device that changes current from 60Hz to 50Hz and vice versa. Modules (BCM BCM Baylor College of Medicine BCM Become BCM Business Communications Manager (Nortel) BCM Broadcom Corporation BCM Business Continuity Management BCM Business Contact Manager (Microsoft) ) for Intermediate Bus Architecture applications and its first V-I Chip Voltage Transformation Module (VTM VTM Variable Torque Management VTM Vampire the Masquerade VTM Visa Travel Money VTM Virtual Trade Mission VTM Vessel Traffic Management VTM Vlaamse Televisie Maatschappij (Flemish television company ) ) for Point of Load (POL) applications. These V-I Chips are the first products to form part of the Company's Factorized Power Architecture (FPA 1. (hardware) FPA - floating-point accelerator. 2. (programming) FPA - Function Point Analysis. ), a new power system paradigm that the Company believes will set new industry standards with respect to speed, density, efficiency and cost. The Company believes that select alternate sources of supply for V-I Chips will facilitate a more rapid adoption of these unique power components and encourage leading customers in major end markets to take advantage of V-I Chips to realize new and better O.E.M. products. Given the potentially large size and complexity of the available market for V-I Chips, the Company expects that licensing appropriate alternate sources of supply will amplify the overall market opportunity and enhance its total return on investment in V-I Chips and in the research and development of the underlying technologies. To this end, the Company is engaged in discussions with certain companies that have a recognized presence in Communications, IT, Industrial and Consumer Electronics end markets and that have approached the Company with an interest to enter into a license to manufacture and sell V-I Chips or to use V-I Chips within their O.E.M. products. 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, Wednesday, July 16, 2003 at 5:00 p.m. (EDST EDST Eastern Daylight Savings Time EDST Extended Daylight Saving Time EDST Enterprise Desktop Support Technician EDST Edge-Disjoint Spanning Tree EDST Engineering Design System Technology (San Jose, California) ). Shareholders interested in participating in the call, should call 1-800-901-5247 at approximately 4:50 p.m. and use the Passcode 14996495. Internet users Internet user n → internauta m/f Internet user Internet n → internaute m/f can listen to a real-time audio broadcast of the conference call on the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of Vicor's website at www.vicorpower.com/irwebcast. Please go to the website at least 15 minutes prior to the call to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary software. For those who cannot participate a replay will be available, shortly after the conclusion of the call, through 5:00 p.m. on July 23, 2003. The replay dial-in number is 1-888-286-8010 and the Passcode is 31647725. In addition, a webcast replay of the conference call will also be available on the Investor Relations section of Vicor's website at www.vicorpower.com/irwebcast beginning shortly after the conclusion of the call. This press release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as that term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. You can identify these statements by our use of the words "may," "will," "would," "plans," "expects," "anticipates," "believes," "continue," "estimate," "prospective," "project," "intend," and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. These risks and uncertainties include our ability to develop new products and the markets for such products cost-effectively and our ability to decrease manufacturing costs, as well as those risks and uncertainties identified in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . The risk factors contained in the Annual Report on Form 10-K may not be exhaustive. Therefore, the information contained in that Form 10-K should be read together with other reports and documents that the Company files with the SEC from time to time, which may supplement, modify, supersede To obliterate, replace, make void, or useless. Supersede means to take the place of, as by reason of superior worth or right. A recently enacted statute that repeals an older law is said to supersede the prior legislation. or update those risk factors. Vicor Corporation designs, develops, manufactures and markets modular power components and complete power systems based upon a portfolio of patented technologies. Headquartered in Andover, Massachusetts, Vicor sells its products primarily to the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , electronic data processing See EDP. (application) Electronic Data Processing - (EDP) data processing by electronic machines, i.e. computers. , industrial control and military electronics markets. For further information contact: Mark A. Glazer, Chief Financial Officer, Vicor Corporation, Tel: 978-470-2900/Fax: 978-749-3439
VICOR CORPORATION
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,
2003 2002 2003 2002
----------------------------------------------------------------------
Net revenues $38,693 $36,831 $76,433 $71,451
----------------------------------------------------------------------
Costs and expenses
Cost of sales 28,156 28,148 56,989 54,606
Sales &
administration 10,394 11,134 20,718 21,387
Research &
development 5,833 5,128 11,167 10,235
----------------------------------------------------------------------
44,383 44,410 88,874 86,228
Operating loss (5,690) (7,579) (12,441) (14,777)
----------------------------------------------------------------------
Other income (expense), net (39) (63) 338 (630)
----------------------------------------------------------------------
Loss before taxes (5,729) (7,642) (12,103) (15,407)
Benefit (provision) for
income taxes (229) 2,790 (484) 5,624
----------------------------------------------------------------------
Net loss ($ 5,958) ($ 4,852) ($ 12,587) ($ 9,783)
======================================================================
Net loss per share:
Basic ($ 0.14) ($ 0.11) ($0.30) ($0.23)
Diluted ($ 0.14) ($ 0.11) ($0.30) ($0.23)
----------------------------------------------------------------------
Shares outstanding:
Basic 41,799 42,416 41,926 42,410
Diluted 41,799 42,416 41,926 42,410
----------------------------------------------------------------------
VICOR CORPORATION
CONSOLIDATED BALANCE SHEET
(Thousands)
JUNE 30, DEC 31,
2003 2002
(Unaudited) (Unaudited)
----------------------------------------------------------------------
Assets
----------------------------------------------------------------------
Current Assets
Cash and cash equivalents $76,132 $72,120
Short-term investments 34,746 28,779
Accounts receivable 24,092 22,469
Inventories 24,192 30,325
Refundable income taxes 2,004 8,846
Deferred tax assets 7,526 8,126
Other current assets 2,246 2,399
----------------------------------------------------------------------
Total current assets 170,938 173,064
Property and equipment, net 91,012 98,738
Other assets 5,935 6,643
----------------------------------------------------------------------
$267,885 $278,445
======================================================================
Liabilities and Stockholders' Equity
----------------------------------------------------------------------
Current Liabilities
Accounts payable $5,906 $5,724
Accrued compensation and benefits 3,833 3,379
Other accrued liabilities 10,757 11,282
----------------------------------------------------------------------
Total current liabilities 20,496 20,385
Deferred income taxes - long term 14,312 10,027
Stockholders' Equity
Capital stock 146,626 146,433
Retained earnings 190,811 203,398
Treasury stock (104,360) (101,798)
----------------------------------------------------------------------
Total stockholders' equity 233,077 248,033
----------------------------------------------------------------------
$267,885 $278,445
======================================================================
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