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Vicor Corp. Reports Operating Results (10-Q)

November 03, 2010 | About:
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10qk

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Vicor Corp. (VICR) filed Quarterly Report for the period ended 2010-09-30.

Vicor Corp. has a market cap of $737 million; its shares were traded at around $18 with a P/E ratio of 36.8 and P/S ratio of 3.7. The dividend yield of Vicor Corp. stocks is 3.4%.

Highlight of Business Operations:

Revenues for the third quarter increased by 43.8% to $68,672,000, compared to $47,746,000 for the corresponding period a year ago, and increased 19.7% on a sequential basis from $57,377,000 for the second quarter of 2010. Gross margin increased to $32,473,000 for the third quarter of 2010, compared to $20,668,000 for the corresponding period a year ago, and increased on a sequential basis from $25,739,000 for the second quarter of 2010. Gross margin, as a percentage of revenue, increased to 47.3% for the third quarter of 2010 compared to 43.3% for the third quarter of 2009 and increased on a sequential basis from 44.9% for the second quarter of 2010. Net income attributable to Vicor Corporation for the third quarter was $15,819,000, or $0.38 per diluted share, compared to net income attributable to Vicor Corporation of $1,691,000, or $0.04 per diluted share, for the corresponding period a year ago and net income attributable to Vicor Corporation of $4,747,000, or $0.11 per diluted share, for the second quarter of 2010. During the third quarter of 2010, the Company recorded a non-recurring, non-cash tax benefit of $5,158,000, or approximately $0.12 per diluted share, due to releasing a portion of its deferred tax valuation allowance (See Note 10).

Revenues for the nine months ended September 30, 2010 increased by 19.4% to $177,758,000, compared to $148,821,000 for the corresponding period a year ago. Gross margin increased to $81,536,000 for the nine months ended September 30, 2010, compared to $65,097,000 for the corresponding period a year ago. Gross margin, as a percentage of revenue, increased to 45.9% for the nine months ended September 30, 2010, compared to 43.7% for the corresponding period a year ago. Net income attributable to Vicor Corporation for the nine months ended September 30, 2010 was $22,518,000, or $0.54 per diluted share, compared to net income attributable to Vicor Corporation of $489,000, or $0.01 per diluted share, for the corresponding period a year ago. The operating results for the nine months ended September 30, 2009, were negatively impacted by aggregate pre-tax charges of $4,083,000 for the cost of severance and other employee-related costs in connection with the Companys workforce reductions implemented during the nine months ended September 30, 2009, partially offset by a settlement payment discussed below.

Operating expenses for the three months ended September 30, 2010, increased $2,355,000, or 12.6%, to $21,091,000 from $18,736,000 in 2009, principally due to an increase in research and development expenses of $1,094,000, selling, general and administrative expenses of $541,000, and a decrease in gain from litigation-related and other settlements, net of $846,000. The key increases in research and development expenses were in compensation expenses of $718,000, outside services of $136,000, sub-contract labor of $61,000, facilities expenses of $57,000, employee recruitment expenses of $48,000, and depreciation and amortization of $44,000, partially offset by a decrease in project materials of $153,000. The key increases in selling, general and administrative expenses were in commissions expense of $249,000, compensation expenses of $166,000, outside services of $80,000, and travel expenses of $75,000.

Operating expenses for the nine months ended September 30, 2010, increased $40,000, or 0.1%, to $62,937,000 from $62,897,000 in 2009, principally due to an increase in research and development expenses of $3,637,000 and a decrease in the gain from litigation-related and other settlements, net of $846,000, partially offset by decreases in severance charges of $4,083,000 and selling, general and administrative expenses of $360,000. The key increases in research and development expenses were in compensation expenses of $1,638,000, outside services of $538,000, deferred costs of $336,000, project materials of $328,000, employee recruitment expenses of $138,000, sub-contract labor of $112,000, facilities expenses of $100,000, and set-up and tooling expense of $93,000. The key decreases in selling, general and administrative expenses were in compensation expenses of $817,000, legal expense of $318,000, partially offset by increases in advertising expenses of $263,000, outside services of $244,000, commission expenses of $150,000, and travel expenses of $120,000.

Other income, net for the nine months ended September 30, 2010 increased $17,000 to $579,000 from $562,000 in 2009. The primary reasons for the increase was a decrease in credit losses on available-for-sale securities of $356,000 and an increase in gain on disposals of equipment of $223,000, partially offset by an increase in loss on trading securities of $286,000 and decreases in interest income of $218,000 and gains on foreign currency of $99,000.

Inventories increased by approximately $8,521,000 or 39.9% to $29,878,000 as compared with $21,357,000 at December 31, 2009 in order to meet the increase in demand, across all three segments. V*I Chip, BBU and Picor inventories increased approximately $4,261,000, $3,674,000, $586,000, respectively.

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