Vicor Corp (VICR)
Q2 2013 Earnings Conference Call
July 23, 2013 17:00 ET
Jamie Simms - Chief Financial Officer
Patrizio Vinciarelli - Chief Executive Officer
Dick Nagel - Chief Accounting Officer
Jim Bartlett - Bartlett Investors
John Dillon - DB Capital
Don McKenna - D.B. McKenna
Previous Statements by VICR
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I would now like to turn the conference over to your host for today. We have Jamie Simms, CFO of Vicor Corporation and Dr. Patrizio Vinciarelli, CEO of Vicor Corporation. Please proceed.
Jamie Simms - Chief Financial Officer
Thank you. Good afternoon and welcome to Vicor Corporation’s conference call for the second quarter ended June 30, 2013. I am Jamie Simms, Chief Financial Officer and with me here in Andover are Patrizio Vinciarelli, CEO and Dick 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, vicorpower.com.
Also, we have also filed a Form 8-K with the SEC in association with issuing this press release. As always, 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 provisions 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 will be available beginning at midnight tonight through August 7, 2013. The replay dial-in number is 888-286-8010 and the pass code is for 73361295. In addition, a webcast replay of the conference call will be available on the Investor Relations page of our website shortly upon our conclusion this afternoon.
I will start this evening’s call with a review of our financial performance for the second quarter and Patrizio will follow with his comments after which we will take your questions. As set forth in this afternoon’s press release, Vicor reported an after-tax loss for the second quarter of $4.6 million, representing a net loss of $0.12 per share. This compares to the first quarter after-tax loss of $5 million, which also represented a net loss of $0.12 per share. Keep in mind, we incurred during the second quarter certain non-cash charges associated with our option exchange offer, and we completed the second tender offer for our shares, which also reduced the number of shares in the denominator of our EPS calculation.
In the first quarter, we recorded a severance charge of $1.4 million associated with our reduction enforced during that period. As such, direct quarter-to-quarter EPS comparisons without taking these circumstances into consideration might be misleading. Vicor’s consolidated revenue for the second quarter of 2013 increased 11.7% sequentially to $46.9 million from the $41.9 million recorded for the first quarter. The second quarter figure compares to revenue of $55.5 million for the second quarter of 2012, representing a year-over-year quarterly decline of 15.5%.
The Brick Business Unit, our largest, experienced a 5.3% sequential increase in revenue, while V*I Chip saw near doubling of revenue from the first quarter’s very low level. While this rebound is encouraging, V*I Chip’s second quarter revenue at $6 million was approximately two-thirds of the $9 million recorded during the second quarter of 2012 and less than half of the level of the first quarter of 2012. We are encouraged by the reversal of trend in V*I Chip and are committed to further broadening the V*I Chip’s customer base, but until we achieved such diversification V*I Chip remains vulnerable to sharp swings in both bookings and revenue associated with a few large customers. Patrizio will address V*I Chip’s current and expected performance in his remarks in a moment.
Turns revenue, meaning those orders booked and shipped within the quarter declined to approximately 41% of revenue for the second quarter, down from 47% for the first quarter which was the highest level in recent memory. This decline largely reflects the increase in V*I Chip’s shipments of orders placed during the first quarter and what appears to be a return to long-term trend for the Brick Business Unit. Recognized sell-through revenue for the quarter associated with shipments by our stocking distributors Future Electronics and DigiKey increased over 56% to $1.5 million recovering from the very weak first quarter. Our shipments to these distributors also rose sharply increasing over 78% to almost $1.8 million.
International revenue rose to 57.8% of total revenue for the second quarter, up from 54.1% for the first quarter. The increase in V*I Chip shipments which primarily go to Asian contract manufacturers working on behalf of our OEM customers was the primary contributor to the increased percentage of total consolidated revenue represented by international activities. Aside from shipments to Asian contract manufacturers, Asia-Pacific markets including India, but excluding Japan continued to be a source of double-digit revenue growth reflecting the robust booking activity of the first quarter. Our liaison office in Bangalore, India is up and running and we are pleased with the pace at which bookings and shipments are expanding.