Vicor Corporation Reports Results for the Second Quarter Ended June 30, 2020

Rhea-AI Summary

Vicor Corporation (NASDAQ: VICR) reported second-quarter 2020 revenues of $70.7 million, an 11.7% increase year-over-year. Gross margin reached $30.3 million, but the margin percentage declined to 42.8% compared to 46.0% a year earlier. Net income slightly rose to $2.7 million, maintaining a diluted share of $0.06. The quarter also saw significant bookings of $87.5 million, up 45.4% year-over-year, while cash and equivalents increased to $196.7 million. Despite challenges from COVID-19, management remains optimistic about future growth and revenue expectations for Q3.

Positive

• Revenues increased by 11.7% year-over-year to $70.7 million.
• Net income rose to $2.7 million, compared to $2.6 million in the previous year.
• Bookings grew by 45.4% to $87.5 million, indicating strong demand.
• Cash and cash equivalents significantly increased by $114.0 million to $196.7 million.

Negative

• Gross margin percentage declined to 42.8%, down from 46.0% year-over-year.
• COVID-19 impacted production efficiency and caused a 16% sequential decline in U.S. shipments.

ANDOVER, Mass., July 23, 2020 (GLOBE NEWSWIRE) -- Vicor Corporation (NASDAQ: VICR) today reported financial results for the second quarter ended June 30, 2020.  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, 2020 totaled $70.7 million, an 11.7% increase from $63.4 million for the corresponding period a year ago, and an 11.6% sequential increase from $63.4 million for the first quarter of 2020. 

Gross margin increased to $30.3 million for the second quarter of 2020, compared to $29.1 million for the corresponding period a year ago, and increased sequentially from $27.3 million for the first quarter of 2020.  Gross margin, as a percentage of revenue, decreased to 42.8% for the second quarter of 2020, compared to 46.0% for the corresponding period a year ago, and decreased from 43.1% for the first quarter of 2020. 

Net income for the second quarter was $2.7 million, or $0.06 per diluted share, compared to net income of $2.6 million or $0.06 per diluted share, for the corresponding period a year ago and a net loss of ($1.7) million, or ($0.04) per basic share, for the first quarter of 2020.

Results for the second quarter of 2020 included a non-cash charge of $1.2 million associated with the accelerated recognition of equity-based compensation expenses resulting from stock option awards made during the period. 
      
Cash and cash equivalents sequentially increased by $114.0 million to approximately $196.7 million at the end of the second quarter of 2020, from $82.7 million at the end of the first quarter of 2020.  The Company completed an underwritten public offering of its common stock in June, resulting in net proceeds of approximately $109.7 million.  Incremental capital expenditures for the second quarter of 2020 totaled $5.7 million, as compared with $2.5 million for the corresponding period a year ago and $3.0 million for the first quarter of 2020.

Second quarter bookings increased 45.4% to $87.5 million, from $60.2 million for the corresponding period a year ago, and increased sequentially 24.9% from $70.1 million for the first quarter of 2020.  Total backlog at the end of the second quarter of 2020 was $127.5 million, representing an increase of 15.1% from  backlog of $110.8 million at the end of the first quarter of 2020 and 22.4 % from $104.2 million at the end of 2019.

Commenting on the second quarter, Dr. Patrizio Vinciarelli, Chief Executive Officer, stated, “Second quarter bookings reflected accelerating demand for Advanced Products. Second quarter revenue recovered sequentially reflecting ramping shipments of lateral power system solutions for AI accelerators and recovery of Asian demand, which had been impacted during the first quarter by COVID-19.  For the second quarter, the impact of the pandemic shifted from Asia to other regions, notably the United States, which experienced a 16% sequential decline in shipments, as non-essential manufacturing slowed considerably. COVID-19 continued to have an influence on our supply chain during the second quarter, causing production inefficiencies.” 

Dr. Vinciarelli concluded, “Despite the continuing effects of COVID-19 on the global economy, Vicor’s outlook remains positive, and our confidence in our long-term opportunity is high.  Expansion of our manufacturing facilities is underway, and we have placed substantial orders for additional equipment to expand manufacturing capacity and enable us to manufacture high volume products with high efficiency. Our outlook for the third quarter is for a sequential increase in revenue and earnings per share.”

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, July 23, 2020 at 5:00 p.m. Eastern Time.  Shareholders interested in participating in the call who have not pre-registered should call 800-219-3192 at approximately 4:30 p.m. and use the Passcode 25071226.  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 7, 2020.  The replay dial-in number is 888-286-8010 and the Passcode is 41685203.  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, 2019, 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

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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,
	2020		2019		2020		2019
34%; width:34%; min-width:34%;">Net revenues	15%; width:15%; min-width:15%;">$ 70,761	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	15%; width:15%; min-width:15%;">$ 63,355	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	15%; width:15%; min-width:15%;">$ 134,162	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	15%; width:15%; min-width:15%;">$ 129,080
Cost of revenues	40,443			34,238			76,513			68,877
Gross margin	30,318			29,117			57,649			60,203
Operating expenses:
Selling, general and administrative	15,455			15,030			31,824			30,403
Research and development	12,830			11,706			26,165			22,926
Total operating expenses	28,285			26,736			57,989			53,329
Income (loss) from operations	2,033			2,381			(340	)		6,874
Other income (expense), net	233			288			381			527
Income before income taxes	2,266			2,669			41			7,401
Less: (Benefit) provision for income taxes	(406	)		113			(900	)		539
Consolidated net income	2,672			2,556			941			6,862
Less: Net income (loss) attributable to noncontrolling interest	5			(7	)		9			13
Net income attributable to Vicor Corporation	$2,667			$2,563			$932			$6,849
Net income per share attributable to Vicor Corporation:
Basic	$0.06			$0.06			$0.02			$0.17
Diluted	$0.06			$0.06			$0.02			$0.17
Shares outstanding:
Basic	41,643			40,275			41,140			40,252
Diluted	43,385			41,081			42,980			41,055

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VICOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Thousands)
	JUNE 30,		DEC 31,
	2020		2019
	(Unaudited)		(Unaudited)
Assets
Current assets:
66%; width:66%; min-width:66%;">Cash and cash equivalents	15%; width:15%; min-width:15%;">$ 196,704	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	15%; width:15%; min-width:15%;">$ 84,668	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">
Accounts receivable, net	48,502			38,115
Inventories, net	55,630			49,187
Other current assets	7,842			7,096
Total current assets	308,678			179,066
Long-term deferred tax assets	188			205
Long-term investment, net	2,555			2,510
Property, plant and equipment, net	59,475			56,952
Other assets	1,838			1,994
Total assets	$ 372,734			$ 240,727
Liabilities and Equity
Current liabilities:
Accounts payable	$ 15,647			$ 9,005
Accrued compensation and benefits	13,687			10,410
Accrued expenses	2,689			2,690
Sales allowances	867			741
Short-term lease liabilities	1,156			1,520
Income taxes payable	56			57
Short-term deferred revenue and customer prepayments	7,817			5,507
Total current liabilities	41,919			29,930
Long-term deferred revenue	894			1,054
Contingent consideration obligations	307			451
Long-term income taxes payable	571			567
Long-term lease liabilities	2,400			2,855
Total liabilities	46,091			34,857
Equity:
Vicor Corporation stockholders' equity:
Capital stock	321,537			201,774
Retained earnings	144,030			143,098
Accumulated other comprehensive loss	(316	)		(383	)
Treasury stock	(138,927	)		(138,927	)
Total Vicor Corporation stockholders' equity	326,324			205,562
Noncontrolling interest	319			308
Total equity	326,643			205,870
Total liabilities and equity	$ 372,734			$ 240,727

FAQ

What were Vicor's revenues for the second quarter of 2020?

Vicor reported revenues of $70.7 million for the second quarter of 2020.

How did Vicor's net income change in Q2 2020 compared to Q2 2019?

Vicor's net income slightly increased to $2.7 million in Q2 2020, compared to $2.6 million in Q2 2019.

What was the percentage increase in bookings for Vicor in Q2 2020?

Bookings for Vicor increased by 45.4% year-over-year to $87.5 million in Q2 2020.

How much cash did Vicor have at the end of the second quarter of 2020?

Vicor had approximately $196.7 million in cash and cash equivalents at the end of Q2 2020.

What challenges did Vicor face during the second quarter of 2020?

Vicor faced production inefficiencies and a decline in U.S. shipments due to COVID-19 impacts.