Vicor Corporation Reports Results for the Second Quarter Ended June 30, 2024

Rhea-AI Summary

Vicor (NASDAQ: VICR) reported Q2 2024 financial results, showing a 19.6% year-over-year decrease in revenues to $85.9 million. The company experienced a net loss of $(1.2) million, or $(0.03) per diluted share, compared to net income of $17.1 million in Q2 2023. Gross margin decreased to 49.8% from 51.7% year-over-year.

Despite challenges, Vicor saw improvements in backlog, revenues, and cash flow compared to Q1 2024. Cash and cash equivalents increased 5.3% sequentially to $251.9 million. The company's CEO, Dr. Patrizio Vinciarelli, highlighted Vicor's focus on high current and power density requirements, expressing confidence in their competitive position and market opportunity.

Positive

• Sequential increase in revenues by 2.4% from Q1 2024
• Cash flow from operations improved to $15.6 million from $2.6 million in Q1 2024
• Cash and cash equivalents increased 5.3% sequentially to $251.9 million
• Backlog increased 2.3% sequentially to $153.8 million

Negative

• 19.6% year-over-year decrease in revenues to $85.9 million
• Net loss of $(1.2) million compared to net income of $17.1 million in Q2 2023
• Gross margin decreased to 49.8% from 51.7% year-over-year
• Operating expenses increased to $42.6 million from $37.3 million year-over-year
• 29.2% year-over-year decrease in backlog

Insights

Financial Analyst

The second-quarter financial results for Vicor Corporation show a mixed bag of performance indicators. From a revenue perspective, the company reported $85.9 million, a 19.6% decline year-over-year and a modest sequential increase of 2.4%. The year-over-year decline in revenues is significant and can raise concerns about the company's market presence and demand for its products. The gross margin also fell to 49.8% from 51.7% a year ago, indicating increased cost pressures or a less favorable product mix.

Operating expenses showed some fluctuation; they increased year-over-year but decreased substantially from the previous quarter. This reduction in sequential operating expenses is a positive sign, suggesting that the company is taking steps to control costs amidst declining revenues.

The most pressing concern is the net loss of $(1.2) million, a steep decline from net income of $17.1 million in the same quarter last year. However, it is an improvement from the first quarter's net loss of $(14.5) million. Investors should note that while the company is still in the red, there is a marginal recovery happening on a sequential basis.

Market Research Analyst

Vicor Corporation's backlog, which indicates future revenue potential, stood at $153.8 million, down 29.2% year-over-year but up 2.3% sequentially. The significant year-over-year drop in backlog may point to weakening future demand, which could be a critical concern for long-term growth. However, the slight sequential increase can be seen as an early sign of stabilization. This nuanced view on backlog is essential for retail investors to understand the potential trajectory of the company's future revenues.

The company's cash flow from operations improved to $15.6 million from $2.6 million in the first quarter, although it is lower than the $19.0 million reported a year ago. Improved cash flow sequentially indicates better operational efficiency or perhaps better collections, which is a positive aspect. Cash and cash equivalents also increased to $251.9 million, up 5.3% sequentially, providing the company with more liquidity to weather ongoing challenges.

From a market position perspective, Vicor's focus on high current and power density products aligns well with emerging technological requirements. This strategic focus could serve as a competitive advantage in the long run.

Tech Expert

Vicor Corporation’s emphasis on technology and fabrication methodology aimed at high current and power density indicates a strong R&D focus, which is beneficial in maintaining a competitive edge. However, the changes in product mix, which have impacted gross margins and profitability, suggest that new or existing products may not be as profitable as anticipated. This could be due to higher production costs or lower-than-expected sales volumes.

The CEO’s confidence in the company's technology and market opportunity is noteworthy and points toward a positive long-term outlook. However, the current financial struggles indicate that the transition to these new technologies and products may not be seamless. Investors should watch closely for any updates on product performance and market reception, as they will be critical for long-term success.

ANDOVER, Mass., July 23, 2024 (GLOBE NEWSWIRE) -- Vicor Corporation (NASDAQ: VICR) today reported financial results for the second quarter ended June 30, 2024. 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 second quarter ended June 30, 2024 totaled $85.9 million, a 19.6% decrease from $106.7 million for the corresponding period a year ago, and a 2.4% sequential increase from $83.9 million in the first quarter of 2024.

Gross margin decreased to $42.8 million for the second quarter of 2024, compared to $55.2 million for the corresponding period a year ago and $45.1 million for the first quarter of 2024. Gross margin, as a percentage of revenue, decreased to 49.8% for the second quarter of 2024, compared to 51.7% for the corresponding period a year ago and 53.8% for the first quarter of 2024. Operating expenses increased to $42.6 million for the second quarter of 2024, compared to $37.3 million for the corresponding period a year ago, and decreased sequentially from $61.2 million for the first quarter of 2024.

Net loss for the second quarter was $(1.2) million, or $(0.03) per diluted share, compared to net income of $17.1 million or $0.38 per diluted share, for the corresponding period a year ago and net loss of $(14.5) million, or $(0.33) per diluted share, for the first quarter of 2024.

Cash flow from operations totaled $15.6 million for the second quarter, compared to cash flow from operations of $19.0 million for the corresponding period a year ago, and cash flow from operations of $2.6 million in the first quarter of 2024. Capital expenditures for the second quarter totaled $6.1 million, compared to $8.5 million for the corresponding period a year ago and $7.3 million for the first quarter of 2024. Cash and cash equivalents as of June 30, 2024 increased 5.3% sequentially to approximately $251.9 million compared to approximately $239.2 million as of March 31, 2024.

Backlog for the second quarter ended June 30, 2024 totaled $153.8 million, a 29.2% decrease from $217.3 million for the corresponding period a year ago, and 2.3% sequential increase from $150.3 million at the end of the first quarter of 2024.

Commenting on second quarter performance, Chief Executive Officer Dr. Patrizio Vinciarelli stated: “Backlog, revenues and cash flow improved in Q2 while gross margins and profitability were impacted by changes in product mix and taxes.”

“Our technology, products and fabrication methodology are focused on satisfying emerging requirements for high current and power density. We are pleased with our competitive position and market opportunity.”

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 23, 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 Notified, the service provider hosting the conference call. Those registering on Notified’s website will receive dial-in info and a unique PIN to join the call as well as an email confirmation with the details. Registration may be completed at any time prior to 5:00 p.m. on July 23, 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, 2023, 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)
	JUN 30,				JUN 30,				JUN 30,				JUN 30,
		2024				2023				2024				2023
Net revenues	$	85,854			$	106,747			$	169,726			$	204,563
Cost of revenues		43,083				51,574				81,832				102,856
Gross margin		42,771				55,173				87,894				101,707
Operating expenses:
Selling, general and administrative		23,318				20,375				49,317				40,598
Research and development		16,939				16,935				34,978				32,804
Litigation-contingency expense		2,300				-				19,500				-
Total operating expenses		42,557				37,310				103,795				73,402
Income (loss) from operations		214				17,863				(15,901	)			28,305
Other income (expense), net		2,807				1,776				5,531				3,726
Income (loss) before income taxes		3,021				19,639				(10,370	)			32,031
Less: Provision for income taxes		4,216				2,537				5,287				3,678
Consolidated net (loss) income		(1,195	)			17,102				(15,657	)			28,353
Less: Net income attributable to noncontrolling interest		1				1				12				8
Net (loss) income attributable to Vicor Corporation	$	(1,196	)		$	17,101			$	(15,669	)		$	28,345
Net (loss) income per share attributable to Vicor Corporation:
Basic	$	(0.03	)		$	0.39			$	(0.35	)		$	0.64
Diluted	$	(0.03	)		$	0.38			$	(0.35	)		$	0.63
Shares outstanding:
Basic		44,855				44,230				44,686				44,196
Diluted		44,855				44,906				44,686				44,907

VICOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Thousands)
	JUN 30,				DEC 31,
		2024				2023
	(Unaudited)				(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	251,884			$	242,219
Accounts receivable, net		54,857				52,631
Inventories		109,084				106,579
Other current assets		19,510				18,937
Total current assets		435,335				420,366
Long-term deferred tax assets		258				296
Long-term investment, net		2,600				2,530
Property, plant and equipment, net		156,689				157,689
Other assets		18,352				14,006
Total assets	$	613,234			$	594,887
Liabilities and Equity
Current liabilities:
Accounts payable	$	12,269			$	12,100
Accrued compensation and benefits		12,109				11,227
Accrued expenses		6,170				5,093
Accrued litigation		26,212				6,500
Sales allowances		2,989				3,482
Short-term lease liabilities		1,757				1,864
Income taxes payable		3,674				746
Short-term deferred revenue and customer prepayments		2,656				3,157
Total current liabilities		67,836				44,169
Long-term deferred revenue		300				1,020
Long-term income taxes payable		1,917				2,228
Long-term lease liabilities		5,724				6,364
Total liabilities		75,777				53,781
Equity:
Vicor Corporation stockholders' equity:
Capital stock		396,744				384,395
Retained earnings		281,005				296,674
Accumulated other comprehensive loss		(1,583	)			(1,273	)
Treasury stock		(138,927	)			(138,927	)
Total Vicor Corporation stockholders' equity		537,239				540,869
Noncontrolling interest		218				237
Total equity		537,457				541,106
Total liabilities and equity	$	613,234			$	594,887

FAQ

What were Vicor's (VICR) Q2 2024 revenue results?

Vicor reported Q2 2024 revenues of $85.9 million, a 19.6% decrease from $106.7 million in Q2 2023, but a 2.4% sequential increase from Q1 2024.

How did Vicor's (VICR) profitability change in Q2 2024 compared to Q2 2023?

Vicor reported a net loss of $(1.2) million, or $(0.03) per diluted share, in Q2 2024, compared to net income of $17.1 million or $0.38 per diluted share in Q2 2023.

What was Vicor's (VICR) gross margin percentage in Q2 2024?

Vicor's gross margin percentage decreased to 49.8% in Q2 2024, compared to 51.7% in Q2 2023 and 53.8% in Q1 2024.

How much cash and cash equivalents did Vicor (VICR) have as of June 30, 2024?

Vicor reported cash and cash equivalents of approximately $251.9 million as of June 30, 2024, a 5.3% increase from $239.2 million at the end of Q1 2024.