Vicor Corporation (VICR)

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Vicor Corporation (VICR)

Q1 2013 Earnings Call

April 25, 2013 05:00 pm ET


James A. Simms – Secretary and Chief Financial Officer

Patrizio Vinciarelli – Chairman, President and Chief Executive Officer


John Dillon – JB Associates



Good day, ladies and gentlemen. And welcome to the Vicor Earnings Results for the First Quarter ended March 31, 2013 Conference Call hosted by James Simms, CFO and Dr. Patrizio Vinciarelli, CEO. My name is Sheila and I’m your event coordinator. You are in the presentation. Your lines will remain on listen-only. (Operator Instructions) I’d like to advice all parties this conference is being recorded for replay purposes.

And now I’d like to hand over to James. Please go ahead.

James A. Simms

Thank you, Sheila. Good afternoon everyone and welcome to our conference call for the first quarter ended March 31, 2013. I’m Jamie Simms, Chief Financial Officer and with me here in Andover is Patrizio Vinciarelli, Chief Executive Officer, as well as Rich Nagel, our Chief Accounting Officer. Today we issued a press release summarizing our financial results for the quarter. This press release is available on the investor page of our website

We have also filed a Form 8-K with the Securities and Exchange Commission in association with issuing this press release. I remind all of you today’s conference call is being recorded and is the copyrighted property of Vicor Corporation. I also remind you various remarks we may make during this call may constitute forward-looking statements for purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995.

Our forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those explicitly set forth or implied in our statements. Such risks and uncertainties are discussed in our most recent forms 10-K and 10-Q filed with the SEC. Please note the information provided during this conference call is accurate only as of the date of the call.

Vicor undertakes no obligation to update any of the statements made during this call, and you should not rely upon them after the conclusion of the call. A replay of the call will be available beginning at midnight tonight through May 10, 2013. The replay dial-in number is 888-286-8010 and the listener passcode is for 44260860. In addition a web cast replay of the conference call will be available on the investor relations page of our website beginning shortly upon it’s conclusion.

I'll start this evening’s call with a review of our financial performance for the first quarter and Patrizio will follow with his comments after which we will take your questions. As was the case last quarter we have chosen not to present non-GAAP pro forma financials that we have require a non-GAAP pro forma presentation in our filings in associated reconciliation to our GAAP financial. This is because we do not believe that fourth quarter non-cash charges as described below will be recurring. However we do want to provide investors an apples-to-apples comparison of actual operating performance and my comments today reflect this instead.

As set forth in this afternoon's press release, Vicor reported an after-tax loss for the first quarter of just under $5 million, representing a net loss of $0.12 per share. First quarter reported net loss and EPS are very close to the net loss of $4.8 million or $0.12 reported for the fourth quarter of 2012, but the prior loss reflected certain year-end charges for inventory reserves and goodwill impairment, totaling on a pre-tax basis approximately $3.4 million, a gain of approximately $2 million associated with the settlement of insurance litigation and the write-off of deferred tax assets associated with the state level activity of 1.5 million, which was reflected in our fourth quarter provision for income taxes.

As such the first quarter’s loss was much more related to operational inefficiencies brought about out by much lower production activity and fewer shipments during the period rather than the non-cash accounting charges that impacted fourth quarter results.

Likewise, consolidated revenue for the first quarter of 2013 declined 16.8% sequentially to approximately $42 million from the $50.4 million recorded for the fourth quarter of 2012.

The first quarter figure compares to revenue of $59.7 million for the first quarter of 2012, representing a year-over-year quarterly decline of 29.7%. The first quarter’s revenue decline was expected as we have stated in prior communications, given the prior quarter’s sharp decline in bookings across all business units.

The Brick Business Unit, our largest experienced a 12% sequential decline while V*I Chip, which has much greater customer concentration experienced a 49% sequential decline.

Turns revenue, meaning those orders booked and shipped within the quarter increased to 47% of the first quarter, the highest level in recent memory, but we believe this reflects an increase in urgent orders postponed by customers during the fourth quarter.

While as stated, consolidated revenue declined 16.8%, our domestic shipments fell more than our international shipments on an absolute basis and relative basis, reflecting pronounced uncertainty in important industrial transportation and defense electronics markets during the fourth quarter.

International revenue decreased 11.5% quarter-to-quarter and represented 54.1% of total revenue, an increase from 50.8% for the fourth quarter of 2012, and 53% for the first quarter of 2012. Keep in mind, for financial reporting purposes, we segregate customers by the address to which we ship. With the exception of Vicor Japan, all of our subsidiaries sell in U.S dollars, and all of our products again with the exception of those manufactured by Vicor Japan are exported from the U.S. As our customer base shifts to domestically based OEMs that use offshore contract manufacturers, international bookings and shipments are increasing. Because such OEM orders typically are much larger and vary in frequency, the ratio of international activity to total activity will bounce around as it has over recent quarters.

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