Vicor Corporation Reports Results for the Fourth Quarter and Year Ended December 31, 2023
- Revenue for Q4 2023 was $92.7 million, a 12.2% decrease from the previous year.
- Gross margin for Q4 was $47.3 million, with a net income of $8.7 million.
- Cash flow from operations in Q4 was $22.1 million, and backlog decreased to $160.8 million.
- For the year ended December 31, 2023, revenues increased to $405.1 million, with a net income of $53.6 million.
- CEO Dr. Patrizio Vinciarelli emphasized product demand, IP protection, and market expansion strategies.
- Backlog for Q4 decreased by 47.2% compared to the previous year.
- Sequentially, there was a 14.1% decrease in revenues from Q3 to Q4 2023.
- Capital expenditures for Q4 were $7.7 million, lower than the previous year.
- Despite revenue growth for the year, there was a decrease in backlog and sequential revenue.
- The decrease in gross margin from Q3 to Q4 2023 may raise concerns about profitability.
Insights
The reported financial results of Vicor Corporation highlight a mixed performance, with a notable year-over-year decline in quarterly revenue by 12.2% and a sequential decrease of 14.1%. This contraction could be indicative of a challenging market environment or internal operational issues. The increase in gross margin percentage despite lower revenues suggests improved cost efficiency or a shift towards higher-margin products. However, the sharp decrease in backlog by 47.2% year-over-year raises concerns about future revenue streams and could signal a potential slowdown in demand for Vicor's products.
From a liquidity standpoint, the increase in cash and cash equivalents is a positive sign, providing the company with a buffer to navigate short-term challenges. The substantial increase in cash flow from operations year-over-year is particularly noteworthy, indicating strong operational cash generation capabilities. This financial health could provide Vicor with strategic flexibility for investments or to weather potential downturns. Investors should closely monitor the company's next steps to mitigate the impact of a shrinking backlog on future performance.
The statements from Vicor's CEO regarding the strategic decision to turn down certain deals in favor of long-term strategy suggest a focus on sustainable growth rather than short-term revenue maximization. This approach could be appealing to investors looking for companies with prudent management practices. Furthermore, the emphasis on their 5G product line and ChiP foundry positions Vicor as a forward-thinking player in the power systems market, particularly for AI applications requiring high current density and Vertical Power Delivery (VPD).
However, the competitive landscape in AI power systems is rapidly evolving and Vicor's ability to protect its intellectual property from 'NBM copycat makers' could be crucial for maintaining a competitive edge. The reference to OEM licensing as a strategy to mitigate risks associated with IP infringement is a significant point, as it underscores the importance of strategic partnerships and licensing agreements in the tech industry. Investors should consider the potential implications of IP disputes on Vicor's market position and the effectiveness of their strategies to safeguard their proprietary technology.
The company's efforts to protect its intellectual property (IP) against infringement by 'NBM copycat makers and users' is a critical legal matter. The pursuit to exclude importation of unlicensed servers and AI processors using infringing NBMs demonstrates Vicor's commitment to enforcing its IP rights. The outcome of such legal actions can have significant financial implications, either through potential damages awarded or through securing a competitive advantage by limiting the availability of competing products.
The mention of an OEM license providing access to NBMs and VPD from otherwise infringing sources is an interesting legal strategy. It suggests that Vicor is willing to leverage its IP to create revenue streams through licensing, while simultaneously de-risking market reliance on unauthorized suppliers. This dual approach of aggressive IP protection combined with strategic licensing could serve as a deterrent against infringement and establish Vicor as a key IP holder in the power systems domain for AI applications.
ANDOVER, Mass., Feb. 22, 2024 (GLOBE NEWSWIRE) -- Vicor Corporation (NASDAQ: VICR) today reported financial results for the fourth quarter and year ended December 31, 2023. 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 below.
Revenues for the fourth quarter ended December 31, 2023 totaled
Gross margin decreased to
Net income for the fourth quarter was
Cash flow from operations totaled
Backlog for the fourth quarter ended December 31, 2023 totaled
Revenues for the year ended December 31, 2023 increased
Commenting on fourth quarter performance, Chief Executive Officer Dr. Patrizio Vinciarelli stated: “As our products and applications pipeline create demand to fill our vertically integrated foundry, we have turned down deals that would have been inconsistent with our long term strategy.”
“Competitive AI platforms require higher current density and Vertical Power Delivery (“VPD”). PoL systems with a large multiplicity of phases have inadequate current density. Our 5G product line and ChiP foundry put us well ahead of AI power system requirements, providing superior performance and scalable capacity to expand the market opportunity.”
“We are also making progress protecting our IP from NBM copycat makers and users. Our initial action seeks to exclude importation of unlicensed servers and AI processors using infringing NBMs. Our OEM license provides access to NBMs and VPD from otherwise infringing sources, de-risking reliance on an ecosystem of copycat suppliers lacking the requisite power system IP. ”
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, Thursday, February 22, 2024 at 5:00 p.m. Eastern Time. Vicor encourages investors and analysts who intend to ask questions via the conference call to register with BT Conferencing, the service provider hosting the conference call. Those registering on BT Conferencing’s website will receive a webinar link and dial-in numbers. Registration may be completed at any time prior to 5:00 p.m. on February 22, 2024. Telephone participants who are unable to register should dial 833-954-8887, followed by access code 26312760358 and passcode 39424573, before 5:00 p.m. (Eastern) on February 22, 2024. For those parties interested in listen-only mode, the conference call will be webcast via a link that will be posted on the Investor Relations page of Vicor's website prior to the conference call. Please access the website at least 15 minutes prior to the conference call to register and, if necessary, download and install any required software. For those who cannot participate in the live conference call, a webcast replay of the conference call will also be available on the Investor Relations page of Vicor's website.
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, 2022, 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 to the power systems market, including enterprise and high performance computing, industrial equipment and automation, telecommunications and network infrastructure, vehicles and transportation, and aerospace and defense electronics.
For further information contact:
James F. Schmidt, Chief Financial Officer
Office: (978) 470-2900
Email: invrel@vicorpower.com
| VICOR CORPORATION | ||||||||||||||
| CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||||
| (Thousands except for per share amounts) | ||||||||||||||
| QUARTER ENDED | YEAR ENDED | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||
| DEC 31, | DEC 31, | DEC 31, | DEC 31, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||
| Net revenues | $ | 92,652 | $ | 105,493 | $ | 405,059 | $ | 399,079 | ||||||
| Cost of revenues | 45,308 | 56,354 | 200,130 | 218,520 | ||||||||||
| Gross margin | 47,344 | 49,139 | 204,929 | 180,559 | ||||||||||
| Operating expenses: | ||||||||||||||
| Selling, general and administrative | 22,694 | 24,942 | 85,714 | 86,264 | ||||||||||
| Research and development | 17,301 | 16,078 | 67,857 | 60,594 | ||||||||||
| Litigation-contingency expense | - | - | - | 6,500 | ||||||||||
| Total operating expenses | 39,995 | 41,020 | 153,571 | 153,358 | ||||||||||
| Income from operations | 7,349 | 8,119 | 51,358 | 27,201 | ||||||||||
| Other income (expense), net | 3,243 | 1,808 | 8,886 | 1,486 | ||||||||||
| Income before income taxes | 10,592 | 9,927 | 60,244 | 28,687 | ||||||||||
| Less: Provision for income taxes | 1,928 | 1,866 | 6,644 | 3,261 | ||||||||||
| Consolidated net income | 8,664 | 8,061 | 53,600 | 25,426 | ||||||||||
| Less: Net (loss) income attributable to noncontrolling interest | (4 | ) | (1 | ) | 5 | (20 | ) | |||||||
| Net income attributable to Vicor Corporation | $ | 8,668 | $ | 8,062 | $ | 53,595 | $ | 25,446 | ||||||
| Net income per share attributable to Vicor Corporation: | ||||||||||||||
| Basic | $ | 0.19 | $ | 0.18 | $ | 1.21 | $ | 0.58 | ||||||
| Diluted | $ | 0.19 | $ | 0.18 | $ | 1.19 | $ | 0.57 | ||||||
| Shares outstanding: | ||||||||||||||
| Basic | 44,455 | 44,062 | 44,320 | 44,005 | ||||||||||
| Diluted | 45,017 | 44,859 | 45,004 | 44,894 | ||||||||||
| VICOR CORPORATION | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEET | |||||||
| (Thousands) | |||||||
| DEC 31, | DEC 31, | ||||||
| 2023 | 2022 | ||||||
| (Unaudited) | (Unaudited) | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 242,219 | $ | 190,611 | |||
| Accounts receivable, net | 52,631 | 65,429 | |||||
| Inventories | 106,579 | 101,410 | |||||
| Other current assets | 18,937 | 5,154 | |||||
| Total current assets | 420,366 | 362,604 | |||||
| Long-term deferred tax assets | 296 | 280 | |||||
| Long-term investment, net | 2,530 | 2,622 | |||||
| Property, plant and equipment, net | 157,689 | 166,009 | |||||
| Other assets | 14,006 | 5,386 | |||||
| Total assets | $ | 594,887 | $ | 536,901 | |||
| Liabilities and Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 12,100 | $ | 22,207 | |||
| Accrued compensation and benefits | 11,227 | 10,849 | |||||
| Accrued expenses | 5,093 | 8,613 | |||||
| Accrued litigation | 6,500 | 6,500 | |||||
| Sales allowances | 3,482 | 1,661 | |||||
| Short-term lease liabilities | 1,864 | 1,450 | |||||
| Income taxes payable | 746 | 72 | |||||
| Short-term deferred revenue and customer prepayments | 3,157 | 13,197 | |||||
| Total current liabilities | 44,169 | 64,549 | |||||
| Long-term deferred revenue | 1,020 | 145 | |||||
| Long-term income taxes payable | 2,228 | 862 | |||||
| Long-term lease liabilities | 6,364 | 7,009 | |||||
| Total liabilities | 53,781 | 72,565 | |||||
| Equity: | |||||||
| Vicor Corporation stockholders' equity: | |||||||
| Capital stock | 384,395 | 360,924 | |||||
| Retained earnings | 296,674 | 243,079 | |||||
| Accumulated other comprehensive loss | (1,273 | ) | (988 | ) | |||
| Treasury stock | (138,927 | ) | (138,927 | ) | |||
| Total Vicor Corporation stockholders' equity | 540,869 | 464,088 | |||||
| Noncontrolling interest | 237 | 248 | |||||
| Total equity | 541,106 | 464,336 | |||||
| Total liabilities and equity | $ | 594,887 | $ | 536,901 | |||
FAQ
What was Vicor Corporation's (VICR) revenue for Q4 2023?
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What did CEO Dr. Patrizio Vinciarelli highlight in the press release?
