美國
證券交易委員會
華盛頓特區20549
表格
根據證監會第13條或第15(d)條進行的季度報告。 1934年證券交易所法案 |
截至2024年6月30日季度結束
根據證券交易法第13或15(d)條的過渡報告 1934年證券交易所法案 |
為過渡期從__________________________
委員會檔案編號
（依憑章程所載的完整登記名稱）
（註冊地） |
（聯邦稅號） |
（主要執行辦公室地址）
(
(申報人的電話號碼)
根據法案第12(b)條規定註冊的證券：
每種類別的名稱 |
|
交易標的（s） |
|
每個註冊交易所的名稱 |
$0.01每股 |
|
|
|
請勾選以下項目，以判定在過去12個月(或更短期間，該註冊人被要求提交報告)內所有根據1934年證券交易法第13條或第15(d)條要求提供報告的報告是否已經提交，並且該註冊人在過去90天中是否受到提交報告的要求。
在過去十二個月內，註冊人是否已經以電子方式提交所有根據《規例 S-t》第 405 條（本章第 232.405 條）所需提交的互動數據檔案（或在較短的時間內，註冊人須提交該等檔案），以勾選標記表示。
請勾選指示登記者是否為大型快速提交人、快速提交人、非快速提交人、較小的報告公司或新興成長型公司。請參閱交易所法規120億2條，了解「大型快速提交人」、「快速提交人」、「較小的報告公司」和「新興成長型公司」的定義。
☑ |
|
小型報告公司 |
||
加速歸檔人 |
☐ |
|
新興成長型企業 |
|
非加速歸檔人 |
☐ |
|
|
|
如果是新興成長公司，請用勾選表示該註冊人已選擇不使用根據《交易所法》第13(a)條提供的任何新的或修訂的財務會計標準的擴展過渡期來遵守。 ☐
請勾選是否註冊人屬於外殼公司（根據交易所法案120億2條所定義）。是 ☐ 否
截至2024年10月22日，發行人各種普通股類別的流通股數分別為：
普通股，面值 .01 美元 |
|
B 類普通股，面值 0.01 美元 |
vicor電子公司
工業前
|
頁面 |
|
|
|
|
1 |
|
2 |
|
3 |
|
4 |
|
5 |
|
7 |
|
16 |
|
26 |
|
27 |
|
28 |
|
28 |
|
28 |
|
項目2 — 未註冊的股權銷售和款項用途 |
28 |
28 |
|
29 |
|
30 |
|
vicor電子公司
Pa第I部分 - 財務資訊
項目 1 – 財務報表財務報表
綜合綜合賬目表綜合賬目賬目表
（單位：千元，股份數據除外）
(未經查核)
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||
資產 |
|
|
|
|
|
|
||
流動資產: |
|
|
|
|
|
|
||
現金及現金等價物 |
|
$ |
|
|
$ |
|
||
應收帳款淨額 |
|
|
|
|
|
|
||
存貨 |
|
|
|
|
|
|
||
其他流動資產 |
|
|
|
|
|
|
||
全部流動資產 |
|
|
|
|
|
|
||
長期递延税款資產，淨值 |
|
|
|
|
|
|
||
長期投資淨額 |
|
|
|
|
|
|
||
不動產、廠房及設備淨值 |
|
|
|
|
|
|
||
其他資產 |
|
|
|
|
|
|
||
資產總額 |
|
$ |
|
|
$ |
|
||
負債及股東權益 |
|
|
|
|
|
|
||
流動負債： |
|
|
|
|
|
|
||
應付賬款 |
|
$ |
|
|
$ |
|
||
應計的薪資和福利費用 |
|
|
|
|
|
|
||
應計訴訟 |
|
|
|
|
|
|
||
應計費用 |
|
|
|
|
|
|
||
短期租賃負債 |
|
|
|
|
|
|
||
銷售津貼 |
|
|
|
|
|
|
||
應納所得稅款 |
|
|
|
|
|
|
||
短期递延收入和客户预付款 |
|
|
|
|
|
|
||
流動負債合計 |
|
|
|
|
|
|
||
长期递延收益 |
|
|
|
|
|
|
||
長期應付所得稅 |
|
|
|
|
|
|
||
長期租賃負債 |
|
|
|
|
|
|
||
總負債 |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
股權： |
|
|
|
|
|
|
||
vicor電子股東權益: |
|
|
|
|
|
|
||
B類普通股： |
|
|
|
|
|
|
||
普通股： |
|
|
|
|
|
|
||
資本公積額額外增資 |
|
|
|
|
|
|
||
保留收益 |
|
|
|
|
|
|
||
累積其他全面損失 |
|
|
( |
) |
|
|
( |
) |
購入的庫藏股股本: |
|
|
( |
) |
|
|
( |
) |
vicor電子公司股東權益總額 |
|
|
|
|
|
|
||
非控制權益 |
|
|
|
|
|
|
||
總股本 |
|
|
|
|
|
|
||
負債加股東權益總額 |
|
$ |
|
|
$ |
|
||
請參閱附註。
-1-
vicor電子公司
縮編合併 經營報告
(以千為單位，每股金額除外)
(未經查核)
|
|
結束於三個月的期間 |
|
|
九個月結束了 |
|
||||||||||
|
|
九月三十日， |
|
|
九月三十日， |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
淨收入 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
銷售成本 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
毛利率 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
營業費用： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
銷售，一般及行政費用 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
研發費用 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
訴訟-應計費用 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
營業費用總計 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
營業利益（損失） |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
其他收益（支出），淨額： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
可供出售金融資產未實現增（減）盈餘總額 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
減：在其他項目中確認的損益部分 |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
凈信貸收盈額在收益中確認 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
其他收入（費用），淨額 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
其他綜合損益數額，淨額 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
稅前收入（虧損） |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
減：所得稅的（利益）提列 |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
合併淨利（損） |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
減少：歸屬於凈利潤 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
凈利潤（虧損）歸屬於vicor電子 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
每股基本盈（虧）損歸屬於 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
基礎 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
稀釋 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
用於計算每股基本盈（虧）損的股份 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
基礎 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
稀釋 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
請參閱附註。
-2-
vicor電子公司
股東權益簡明綜合報表完整收益（損失）要素
(以千為單位)
(未經查核)
|
|
結束於三個月的期間 |
|
|
九個月結束了 |
|
||||||||||
|
|
九月三十日， |
|
|
九月三十日， |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
合併淨利（損） |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
外幣翻譯收益（損失），稅後净利潤（1） |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
可供出售金融資產未實現收益（損失），稅後净利潤（1） |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
其他全面收益（損失） |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
綜合損益（損失）合併 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
扣除後歸屬於綜合收益（損失） |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
歸屬於綜合收益（損失） |
|
|
|
|
|
|
|
|
|
|
|
|
||||
vicor電子公司 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
請參閱附註。
-3-
vicor電子公司
縮編合併 現金流量表
(以千為單位)
(未經查核)
|
|
九個月結束了 |
|
|||||
|
|
九月三十日， |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
|
|
|
|
|
||
營業活動： |
|
|
|
|
|
|
||
合併淨（虧損）收益 |
|
$ |
( |
) |
|
$ |
|
|
調整合併淨（虧損）收益以符合提供現金的淨額 |
|
|
|
|
|
|
||
折舊與攤提 |
|
|
|
|
|
|
||
以股份為基礎之報酬支出 |
|
|
|
|
|
|
||
呆帳費用 |
|
|
|
|
|
|
||
訴訟及賠償費用 |
|
|
|
|
|
|
||
(長期) 遞延營業收入減少(增加) |
|
|
( |
) |
|
|
|
|
其他資產減少（增加） |
|
|
|
|
|
( |
) |
|
推延所得稅 |
|
|
|
|
|
( |
) |
|
長期應付所得稅減少 |
|
|
( |
) |
|
|
( |
) |
流動資產及負債之淨變動 |
|
|
|
|
|
( |
) |
|
經營活動產生的淨現金流量 |
|
|
|
|
|
|
||
投資活動： |
|
|
|
|
|
|
||
物業、廠房及設備及內部使用軟體的增加 |
|
|
( |
) |
|
|
( |
) |
投資活動中的淨現金流出 |
|
|
( |
) |
|
|
( |
) |
融資活動: |
|
|
|
|
|
|
||
員工股票計畫收益 |
|
|
|
|
|
|
||
普通股票的回購 |
|
|
( |
) |
|
|
|
|
籌資活動提供的淨現金 |
|
|
|
|
|
|
||
匯率的影響 |
|
|
( |
) |
|
|
( |
) |
現金及現金等價物淨增加 |
|
|
|
|
|
|
||
期初現金及現金等價物餘額 |
|
|
|
|
|
|
||
期末現金及現金等價物 |
|
$ |
|
|
$ |
|
||
補充披露: |
|
|
|
|
|
|
||
購買資產、廠房和設備以及內部使用的軟體支出 |
|
$ |
|
|
$ |
|
||
請參閱附註。
-4-
vicor電子公司
綜合總表股本變動報告書
(以千為單位)
(未經查核)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
總計 |
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
累計 |
|
|
|
|
|
vicor電子 |
|
|
|
|
|
|
|
|||||||||
|
|
B級股 |
|
|
|
|
|
額外的 |
|
|
|
|
|
其他 |
|
|
|
|
|
公司 |
|
|
|
|
|
|
|
|||||||||
|
|
Common |
|
|
Common |
|
|
資本剩餘 |
|
|
保留收益 |
|
|
綜合 |
|
|
金融部門 |
|
|
股東权益 |
|
|
非控制權益 |
|
|
總計 |
|
|||||||||
|
|
股票 |
|
|
股票 |
|
|
資本 |
|
|
累積盈餘 |
|
|
收入（損失） |
|
|
股票 |
|
|
股權 |
|
|
利息 |
|
|
股權 |
|
|||||||||
2024年9月30日結束的三個月 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2024年6月30日的結餘 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
發行普通股票 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
以股份為基礎之報酬支出 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
普通股票的回購 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
||||||
綜合的元件 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
凈利潤 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
其他綜合收益 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
累計綜合收益 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2024年9月30日結餘 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
總計 |
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
累計 |
|
|
|
|
|
vicor電子 |
|
|
|
|
|
|
|
|||||||||
|
|
B級股 |
|
|
|
|
|
額外的 |
|
|
|
|
|
其他 |
|
|
|
|
|
公司 |
|
|
|
|
|
|
|
|||||||||
|
|
Common |
|
|
Common |
|
|
資本剩餘 |
|
|
保留收益 |
|
|
綜合 |
|
|
金融部門 |
|
|
股東权益 |
|
|
非控制權益 |
|
|
總計 |
|
|||||||||
|
|
股票 |
|
|
股票 |
|
|
資本 |
|
|
累積盈餘 |
|
|
收入（損失） |
|
|
股票 |
|
|
股權 |
|
|
利息 |
|
|
股權 |
|
|||||||||
2024年9月30日結束的九個月 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2023年12月31日結餘 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
股票公開發行下 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
以股份為基礎之報酬支出 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
普通股票的回購 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
||||||
綜合元件 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
淨（虧損）收益 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||||
其他全面收益（損失） |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||||||
總綜合(損失)收益 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||||||
2024年9月30日結餘 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
-5-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
Vicor |
|
|
|
|
|
|
|
|||||||||
|
|
Class B |
|
|
|
|
|
Additional |
|
|
|
|
|
Other |
|
|
|
|
|
Corporation |
|
|
|
|
|
|
|
|||||||||
|
|
Common |
|
|
Common |
|
|
Paid-In |
|
|
Retained |
|
|
Comprehensive |
|
|
Treasury |
|
|
Stockholders’ |
|
|
Noncontrolling |
|
|
Total |
|
|||||||||
|
|
Stock |
|
|
Stock |
|
|
Capital |
|
|
Earnings |
|
|
Loss |
|
|
Stock |
|
|
Equity |
|
|
Interest |
|
|
Equity |
|
|||||||||
Three Months Ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance on June 30, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Issuance of Common Stock under |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock-based compensation expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Components of comprehensive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|||||
Total comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||||||
Balance on September 30, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
Vicor |
|
|
|
|
|
|
|
|||||||||
|
|
Class B |
|
|
|
|
|
Additional |
|
|
|
|
|
Other |
|
|
|
|
|
Corporation |
|
|
|
|
|
|
|
|||||||||
|
|
Common |
|
|
Common |
|
|
Paid-In |
|
|
Retained |
|
|
Comprehensive |
|
|
Treasury |
|
|
Stockholders’ |
|
|
Noncontrolling |
|
|
Total |
|
|||||||||
|
|
Stock |
|
|
Stock |
|
|
Capital |
|
|
Earnings |
|
|
Loss |
|
|
Stock |
|
|
Equity |
|
|
Interest |
|
|
Equity |
|
|||||||||
Nine Months Ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance on December 31, 2022 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Issuance of Common Stock under |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock-based compensation expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Components of comprehensive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|||||
Total comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||||||
Balance on September 30, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
See accompanying notes.
-6-
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
September 30, 2024
(unaudited)
1. Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements of Vicor Corporation and its consolidated subsidiaries (collectively, the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for any other interim period or the year ending December 31, 2024. The balance sheet at December 31, 2023 presented herein has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed by the Company with the SEC on February 28, 2024.
2. Inventories
Inventories were as follows (in thousands):
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Work-in-process |
|
|
|
|
|
|
||
Finished goods |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
3. Investments
As of September 30, 2024 and December 31, 2023, the Company held one auction rate security with a par value of $
-7-
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
September 30, 2024
(unaudited)
Details of our investments are as follows (in thousands):
|
|
September 30, 2024 |
|
|||||
|
|
Cash and Cash |
|
|
Long-Term |
|
||
|
|
Equivalents |
|
|
Investment |
|
||
Measured at fair value: |
|
|
|
|
|
|
||
Available-for-sale securities: |
|
|
|
|
|
|
||
Money market funds |
|
$ |
|
|
$ |
— |
|
|
Failed Auction Security |
|
|
— |
|
|
|
|
|
Total |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Other measurement basis: |
|
|
|
|
|
|
||
Cash on hand |
|
|
|
|
|
— |
|
|
Total |
|
$ |
|
|
$ |
|
||
|
|
December 31, 2023 |
|
|||||
|
|
Cash and Cash |
|
|
Long-Term |
|
||
|
|
Equivalents |
|
|
Investment |
|
||
Measured at fair value: |
|
|
|
|
|
|
||
Available-for-sale securities: |
|
|
|
|
|
|
||
Money market funds |
|
$ |
|
|
$ |
— |
|
|
Failed Auction Security |
|
|
— |
|
|
|
|
|
Total |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Other measurement basis: |
|
|
|
|
|
|
||
Cash on hand |
|
|
|
|
|
— |
|
|
Total |
|
$ |
|
|
$ |
|
||
The following is a summary of the available-for-sale securities (in thousands):
|
|
|
|
|
Gross |
|
|
Gross |
|
|
Estimated |
|
||||
|
|
|
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair |
|
||||
September 30, 2024 |
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Value |
|
||||
Failed Auction Security |
|
$ |
|
|
|
— |
|
|
|
|
|
$ |
|
|||
|
|
|
|
|
Gross |
|
|
Gross |
|
|
Estimated |
|
||||
|
|
|
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair |
|
||||
December 31, 2023 |
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Value |
|
||||
Failed Auction Security |
|
$ |
|
|
|
— |
|
|
|
|
|
$ |
|
|||
As of September 30, 2024, the Failed Auction Security had been in an unrealized loss position for greater than
The amortized cost and estimated fair value of the available-for-sale securities on September 30, 2024, by type and contractual maturities, are shown below (in thousands):
|
|
|
|
|
Estimated |
|
||
|
|
Cost |
|
|
Fair Value |
|
||
Failed Auction Security: |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Due in nineteen years |
|
$ |
|
|
$ |
|
||
-8-
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
September 30, 2024
(unaudited)
4. Fair Value Measurements
The Company accounts for certain financial assets at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions market participants would use in pricing an asset or liability. A three-level hierarchy is used to show the extent and level of judgment used to estimate fair value measurements.
Assets and liabilities measured at fair value on a recurring basis included the following as of September 30, 2024 (in thousands):
|
|
Using |
|
|
|
|
||||||||||
|
|
|
|
|
Significant |
|
|
|
|
|
|
|
||||
|
|
Quoted Prices |
|
|
Other |
|
|
Significant |
|
|
|
|
||||
|
|
in Active |
|
|
Observable |
|
|
Unobservable |
|
|
Total Fair |
|
||||
|
|
Markets |
|
|
Inputs |
|
|
Inputs |
|
|
Value as of |
|
||||
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
September 30, 2024 |
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Long-term investment: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Failed Auction Security |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Assets and liabilities measured at fair value on a recurring basis included the following as of December 31, 2023 (in thousands):
|
|
Using |
|
|
|
|
||||||||||
|
|
|
|
|
Significant |
|
|
|
|
|
|
|
||||
|
|
Quoted Prices |
|
|
Other |
|
|
Significant |
|
|
|
|
||||
|
|
in Active |
|
|
Observable |
|
|
Unobservable |
|
|
Total Fair |
|
||||
|
|
Markets |
|
|
Inputs |
|
|
Inputs |
|
|
Value as of |
|
||||
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
December 31, 2023 |
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Long-term investment: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Failed Auction Security |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
The change in the estimated fair value calculated for the investment valued on a recurring basis utilizing Level 3 inputs (i.e., the Failed Auction Security) for the nine months ended September 30, 2024 was as follows (in thousands):
Balance at the beginning of the period |
|
$ |
|
|
Gain included in |
|
|
|
|
Balance at the end of the period |
|
$ |
|
Management utilized a probability weighted discounted cash flow model to determine the estimated fair value as of September 30, 2024.
-9-
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
September 30, 2024
(unaudited)
5. Revenues
The following tables present the Company’s net revenues disaggregated by geography based on the location of the customer, by product line (in thousands):
|
|
Three Months Ended September 30, 2024 |
|
|||||||||
|
|
Brick Products |
|
|
Advanced Products |
|
|
Total |
|
|||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Europe |
|
|
|
|
|
|
|
|
|
|||
Asia Pacific |
|
|
|
|
|
|
|
|
|
|||
All other |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
Nine Months Ended September 30, 2024 |
|
|||||||||
|
|
Brick Products |
|
|
Advanced Products |
|
|
Total |
|
|||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Europe |
|
|
|
|
|
|
|
|
|
|||
Asia Pacific |
|
|
|
|
|
|
|
|
|
|||
All other |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
Three Months Ended September 30, 2023 |
|
|||||||||
|
|
Brick Products |
|
|
Advanced Products |
|
|
Total |
|
|||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Europe |
|
|
|
|
|
|
|
|
|
|||
Asia Pacific |
|
|
|
|
|
|
|
|
|
|||
All other |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
Nine Months Ended September 30, 2023 |
|
|||||||||
|
|
Brick Products |
|
|
Advanced Products |
|
|
Total |
|
|||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Europe |
|
|
|
|
|
|
|
|
|
|||
Asia Pacific |
|
|
|
|
|
|
|
|
|
|||
All other |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
The following tables present the Company’s net revenues disaggregated by the category of revenue, by product line (in thousands):
|
|
Three Months Ended September 30, 2024 |
|
|||||||||
|
|
Brick Products |
|
|
Advanced Products |
|
|
Total |
|
|||
Direct customers, contract manufacturers and |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Stocking distributors, net of sales allowances |
|
|
|
|
|
|
|
|
|
|||
Non-recurring engineering |
|
|
|
|
|
( |
) |
|
|
|
||
Royalties |
|
|
|
|
|
|
|
|
|
|||
Other |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
-10-
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
September 30, 2024
(unaudited)
|
|
Nine Months Ended September 30, 2024 |
|
|||||||||
|
|
Brick Products |
|
|
Advanced Products |
|
|
Total |
|
|||
Direct customers, contract manufacturers and |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Stocking distributors, net of sales allowances |
|
|
|
|
|
|
|
|
|
|||
Non-recurring engineering |
|
|
|
|
|
|
|
|
|
|||
Royalties |
|
|
|
|
|
|
|
|
|
|||
Other |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
Three Months Ended September 30, 2023 |
|
|||||||||
|
|
Brick Products |
|
|
Advanced Products |
|
|
Total |
|
|||
Direct customers, contract manufacturers and |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Stocking distributors, net of sales allowances |
|
|
|
|
|
|
|
|
|
|||
Non-recurring engineering |
|
|
|
|
|
|
|
|
|
|||
Royalties |
|
|
|
|
|
|
|
|
|
|||
Other |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
Nine Months Ended September 30, 2023 |
|
|||||||||
|
|
Brick Products |
|
|
Advanced Products |
|
|
Total |
|
|||
Direct customers, contract manufacturers and |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Stocking distributors, net of sales allowances |
|
|
|
|
|
|
|
|
|
|||
Non-recurring engineering |
|
|
|
|
|
|
|
|
|
|||
Royalties |
|
|
|
|
|
|
|
|
|
|||
Other |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
The following table presents the changes in certain contract liabilities (in thousands):
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
|
Change |
|
|||
Short-term deferred revenue and customer prepayments |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Long-term deferred revenue |
|
|
|
|
|
( |
) |
|
|
|
||
Sales allowances |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
The Company records deferred revenue, which represents a contract liability, when cash payments are received or due in advance of performance under a contract with a customer. The Company recognized revenue of approximately $
-11-
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
September 30, 2024
(unaudited)
6. Stock-Based Compensation
The Company uses the Black-Scholes option pricing model to calculate the fair value of stock option awards, whether they possess time-based vesting provisions or performance-based vesting provisions, and awards granted under the Vicor Corporation 2017 Employee Stock Purchase Plan (“ESPP”), as of their grant date.
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Cost of revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total stock-based compensation |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Compensation expense by type of award was as follows (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Stock options |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
ESPP |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total stock-based compensation |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
7. Rental Income
Income, net under the Company’s operating lease agreement, for its owned facility leased to a third party in California, was approximately $
8. Income Taxes
The (benefit) provision for income taxes includes estimated federal, state and foreign income taxes.
The (benefit) provision for income taxes and the effective income tax rates were as follows (dollars in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
(Benefit) provision for income taxes |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Effective income tax rate |
|
|
( |
)% |
|
|
% |
|
|
( |
)% |
|
|
% |
||
For the three months ended September 30, 2024, the Company calculated the U.S. income tax provision using the discrete method as this was more appropriate given the facts and circumstances. The Company determined that the application of the estimated annual effective tax rate method generally required by Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740, Income Taxes, results in a disproportionate tax provision (benefit) for income taxes for the quarter relative to the expected provision for the full year.
The effective tax rates differ from the statutory tax rates for the three and nine months ended September 30, 2024 and 2023 primarily due to the Company’s full valuation allowance position against domestic deferred tax assets. The (benefit) provision for
-12-
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
September 30, 2024
(unaudited)
income taxes for the three and nine months ended September 30, 2024 and 2023 included estimated federal, state and foreign income taxes in jurisdictions in which the Company does not have sufficient tax attributes.
The Company’s tax expense and rate for the three months and nine months ended September 30, 2024 continues to be negatively impacted by the capitalization of research and development expenses under Section 174 in the U.S., which given the Company’s close to breakeven performance, is having an outsized impact on the rate by effectively moving from a book loss to a taxable income position, which causes a significant tax expense. This is further compounded by the Company not recording a deferred tax benefit from temporary differences due to the full valuation allowance on domestic deferred tax assets.
As of September 30, 2024, the Company had a valuation allowance of approximately $
The Company was informed in September 2021 by the Internal Revenue Service of their intention to examine the Company’s 2019 Federal income tax return. The IRS has closed examination of the 2019 tax year with no material adjustments. There are no other audits or examinations in process in any other jurisdiction.
9. Net Income (Loss) per Share
The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share amounts):
-13-
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
September 30, 2024
(unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to Vicor Corporation |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator for basic net income (loss) per share-weighted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Employee stock options (2) |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Denominator for diluted net income (loss) per share – adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic net income (loss) per share |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Diluted net income (loss) per share |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
10. Commitments and Contingencies
At September 30, 2024, the Company had approximately $
As previously reported in its Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K, the Company is the defendant in a patent infringement lawsuit originally filed on January 28, 2011 by SynQor, Inc. (“SynQor”) in the U.S. District Court for the Eastern District of Texas (the “District Court”). SynQor alleged that certain Vicor products infringed certain United States Patents owned by SynQor.
On October 26, 2022, after a trial in the District Court, the jury returned a verdict finding that the Company willfully infringed one SynQor patent, and awarding SynQor damages in the amount of $
On May 20, 2024, the District Court issued an Amended Corrected Final Judgment, awarding SynQor actual damages of $
On May 22, 2024, the Company filed an appeal of the District Court’s judgment to the United States Court of Appeals for the Federal Circuit. That appeal remains pending.
In accordance with applicable accounting standards, the Company recorded a litigation related accrual of $
-14-
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
September 30, 2024
(unaudited)
awarded judgments, including enhanced damages, pre-judgment interest, costs and attorney fees. The final determination of the litigation related accrual amount will be subject to appeal and could differ from the recorded liability.
Consistent with the court order, post-judgment interest will accrue on the pre-judgment amount until paid and the Company has recorded post judgment interest of approximately $
On July 11, 2024, purported stockholders of the Company filed a putative class action lawsuit in the U.S. District Court for the Northern District of California against the Company and the Company’s Chief Executive Officer, President and Chairman. The plaintiffs allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), due to allegedly false and misleading statements during earnings calls in 2023 about the Company’s commercial relationship with an existing customer. The complaint seeks damages, interest and attorneys’ fees and costs. The plaintiffs were appointed lead plaintiffs on October 24, 2024. The Company believes the plaintiffs’ claims are without merit and intends to vigorously defend against the lawsuit.
On July 25, 2024, a purported stockholder of the Company filed a putative class action lawsuit in the U.S. District Court for the District of Massachusetts against the Company; the Company’s Chief Executive Officer, President and Chairman; the Company’s Chief Financial Officer, Treasurer, Secretary and Director; and the Company’s Vice President of Global Sales and Marketing and Director. The plaintiffs alleged violations of Sections 10(b) and 20(a) of the Exchange Act, due to allegedly false and misleading statements during earnings calls in 2023 about the Company’s commercial relationship with an existing customer. The complaint sought damages, interest and attorneys' fees and costs. On September 24, 2024, the class action lawsuit in the U.S. District Court for the District of Massachusetts was voluntarily dismissed, without prejudice.
In addition, the Company is involved in certain other litigation and claims incidental to the conduct of its business, both as a defendant and a plaintiff. While the outcome of such other lawsuits and claims against the Company cannot be predicted with certainty, management does not expect such litigation or claims will have a material adverse impact on the Company’s financial position or results of operations.
11. Impact of Recently Issued Accounting Standards
On November 27, 2023, the FASB issued Accounting Standards (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances segment disclosures and requires additional disclosures of segment expenses. This ASU is effective for annual periods in fiscal years beginning after December 15, 2023, and interim periods thereafter. Early adoption is permitted. The Company expects this ASU to impact disclosures with no impact to the Company’s consolidated financial results.
In December 2023, FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid. ASU No. 2023-09 requires a public business entity (PBE) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. For PBEs, the new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all period presented. The Company expects this ASU to impact disclosures with no impact to the Company’s consolidated financial statements.
Other new pronouncements issued but not effective until after September 30, 2024 are not expected to have a material impact on the Company’s consolidated financial statements.
-15-
VICOR CORPORATION
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2024
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
The Company’s consolidated operating results are affected by a wide variety of factors that could materially and adversely affect revenues and profitability, including the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. As a result of these and other factors, the Company may experience material fluctuations in future operating results on a quarterly or annual basis, which could materially and adversely affect its business, consolidated financial condition, and operating results, and the share price of its Common Stock. This document and other documents filed by the Company with the Securities and Exchange Commission (“SEC”) include forward-looking statements regarding future events and the Company’s future results that are subject to the safe harbor afforded under the Private Securities Litigation Reform Act of 1995 and other safe harbors afforded under the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Forward-looking statements are based on our current beliefs, expectations, estimates, forecasts, and projections for the future performance of the Company and are subject to risks and uncertainties. Forward-looking statements are identified by the use of words denoting uncertain, future events, such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “future,” “goal,” “if,” “intend,” “may,” “plan,” “potential,” “project,” “prospective,” “seek,” “should,” “target,” “will,” or “would,” as well as similar words and phrases, including the negatives of these terms, or other variations thereof. Forward-looking statements also include, but are not limited to, statements regarding: our ability to address certain supply chain risks; our ongoing development of power conversion architectures, switching topologies, materials, packaging, and products; the ongoing transition of our business strategically, organizationally, and operationally from serving a large number of relatively low-volume customers across diversified markets and geographies to serving a small number of relatively large volume customers; our intent to enter new market segments; the levels of customer orders overall and, in particular, from large customers and the delivery lead times associated therewith; anticipated new and existing customer wins; the financial and operational impact of customer changes to shipping schedules; the derivation of a portion of our sales in each quarter from orders booked in the same quarter; our intent to expand the percentage of revenue associated with licensing our intellectual property to third parties; our plans to invest in expanded manufacturing capacity, including the introduction of new manufacturing processes, and the timing, location, and funding thereof; our belief that cash generated from operations together with our available cash and cash equivalents will be sufficient to fund planned operational needs and capital equipment purchases, for the foreseeable future; our outlook regarding tariffs and the impact thereof on our business; our belief that we have limited exposure to currency risks; our intentions regarding the declaration and payment of cash dividends; our intentions regarding protecting our rights under our patents; and our expectation that no current litigation or claims will have a material adverse impact on our financial position or results of operations. These forward-looking statements are based upon our current expectations and estimates associated with prospective events and circumstances that may or may not be within our control and as to which there can be no assurance. Actual results could differ materially from those implied by forward-looking statements as a result of various factors, including but not limited to those described above, as well as those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 under Part I, Item 1 — “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” and those described in this Quarterly Report on Form 10-Q, particularly under Part I, Item 2 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The discussion of our business contained herein, including the identification and assessment of factors that may influence actual results, may not be exhaustive. Therefore, the information presented should be read together with other documents we file with the SEC from time to time, including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K, which may supplement, modify, supersede, or update the factors discussed in this Quarterly Report on Form 10-Q. Any forward-looking statement made in this Quarterly Report on Form 10-Q is based on information currently available to us and speaks only as of the date on which it is made. We do not undertake any obligation to update any forward-looking statements as a result of future events or developments, except as required by law.
-16-
VICOR CORPORATION
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2024
Overview
We design, develop, manufacture, and market modular power components and power systems for converting electrical power for use in electrically-powered devices. Our competitive position is supported by innovations in product design and achievements in product performance, largely enabled by our focus on the research and development of advanced technologies and processes, often implemented in proprietary semiconductor circuitry, materials, and packaging. Many of our products incorporate patented or proprietary implementations of high-frequency switching topologies enabling power system solutions that are more efficient and much smaller than conventional alternatives. Our strategy emphasizes demonstrable product differentiation and a value proposition based on competitively superior solution performance, advantageous design flexibility, and a compelling total cost of ownership. While we offer a wide range of alternating current (“AC”) and direct current (“DC”) power conversion products, we consider our core competencies to be associated with 48V DC distribution, which offers numerous inherent cost and performance advantages over lower distribution voltages. However, we also offer products addressing other DC voltage standards (e.g., 380V for power distribution in data centers, 110V for rail applications, 28V for military and avionics applications, and 24V for industrial automation).
Based on design, performance, and form factor considerations, as well as the range of evolving applications for which our products are appropriate, we categorize our product portfolios as either “Advanced Products” or “Brick Products.” The Advanced Products category consists of our more recently introduced products, which are largely used to implement our proprietary Factorized Power Architecture™ (“FPA”), an innovative power distribution architecture enabling flexible, rapid power system design using individual components optimized to perform a specific conversion function.
The Brick Products category largely consists of our broad and well-established families of integrated power converters, incorporating multiple conversion stages, used in conventional power systems architectures. Given the growth profiles of the markets we serve with our Advanced Products line and our Brick Products line, our strategy involves a transition in organizational focus, emphasizing investment in our Advanced Products line and targeting high growth market segments with a low-mix, high-volume operational model, while maintaining a profitable business in the mature market segments we serve with our Brick Products line with a high-mix, low-volume operational model.
The applications in which our Advanced Products and Brick Products are used are typically in the higher-performance, higher-power segments of the market segments we serve. With our Advanced Products, we generally serve large Original Equipment Manufacturers (“OEMs”), Original Design Manufacturers (“ODMs”), and their contract manufacturers, with sales currently concentrated in the data center and hyperscaler segments of enterprise computing, in which our products are used for power delivery on server motherboards, in server racks, and across datacenter infrastructure. We have established a leadership position in the emerging market segment for powering high-performance processors used for acceleration of applications associated with artificial intelligence (“AI”). Our customers in the AI market segment include the leading innovators in processor and accelerator design, as well as early adopters in cloud computing and high performance computing. We also serve applications in aerospace and aviation, defense electronics, satellites, factory automation, instrumentation, test equipment, transportation, telecommunications and networking infrastructure, and vehicles (notably in the autonomous driving, electric vehicle, and hybrid vehicle niches of the vehicle segment). With our Brick Products, we generally serve a fragmented base of large and small customers, concentrated in aerospace and defense electronics, industrial equipment, instrumentation and test equipment, and transportation (notably in rail and heavy equipment applications). With our strategic emphasis on larger, high-volume customers, we expect to experience over time a greater concentration of sales among relatively fewer customers.
Our quarterly consolidated operating results can be difficult to forecast and have been subject to significant fluctuations. We plan our production and inventory levels based on management’s estimates of customer demand, customer forecasts, and other information sources. Customer forecasts, particularly those of OEM, ODM, and contract manufacturing customers to which we supply Advanced Products in high volumes, are subject to scheduling changes on short notice, contributing to operating inefficiencies and excess costs. In addition, external factors such as supply chain uncertainties, which are often associated with the cyclicality of the electronics industry, regional macroeconomic and trade-related circumstances, and force majeure events (most recently evidenced by the COVID-19 pandemic), have caused our operating results to vary meaningfully. Supply chain disruptions, including those associated with our reliance on outsourced package process steps that are essential in the production of some of our Advanced Products, and those relating, for example, to the procurement of raw material, have in the past negatively impacted and may in the future negatively impact our operating results. We have taken steps to mitigate the impact of supply chain disruptions by, among other things and in varying degrees, moving outsourced manufacturing steps in-house to the Company, ordering supplies with extended lead times, paying higher prices for certain supplies or outsourced production, and expediting deliveries at a cost premium. The resulting
-17-
VICOR CORPORATION
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2024
impact of the steps taken to mitigate supply chain disruptions have, to varying degrees and at different times, reduced our revenue, gross margin, operating profit and cash flow and may continue to do so in the future. Our quarterly gross margin as a percentage of net revenues may vary, depending on production volumes, average selling prices, average unit costs, the mix of products sold during that quarter, and the level of importation of raw materials subject to tariffs. Our quarterly operating margin as a percentage of net revenues also may vary with changes in revenue and product level profitability, but our operating costs are largely associated with compensation and related employee costs, which are not subject to sudden or significant changes.
Summary of Third Quarter 2024 Financial Performance Compared to Second Quarter 2024 Financial Performance
The following summarizes our financial performance for the third quarter of 2024, compared to the second quarter of 2024:
Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
Net revenues for the third quarter of 2024 were $93,166,000, a decrease of $14,678,000, or 13.6%, as compared to $107,844,000 for the third quarter of 2023. Net revenues, by product line, for the three months ended September 30, 2024 and 2023 were as follows (dollars in thousands):
|
|
|
|
|
|
|
|
|
Decrease |
|
|||||||
|
|
2024 |
|
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
Advanced Products |
|
$ |
49,402 |
|
|
|
$ |
58,412 |
|
|
$ |
(9,010 |
) |
|
|
(15.4 |
)% |
Brick Products |
|
|
43,764 |
|
|
|
|
49,432 |
|
|
|
(5,668 |
) |
|
|
(11.5 |
)% |
Total |
|
$ |
93,166 |
|
|
|
$ |
107,844 |
|
|
$ |
(14,678 |
) |
|
|
(13.6 |
)% |
-18-
VICOR CORPORATION
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2024
The decrease in net revenues for Advanced Products was primarily due to continued softness in underpenetrated markets, partially offset by increased royalty revenue in the quarter. The decrease in net revenues for Brick Products was primarily due to reduced market demand.
Gross margin for the third quarter of 2024 decreased $10,134,000, or 18.1%, to $45,744,000, from $55,878,000 for the third quarter of 2023. Gross margin, as a percentage of net revenues, decreased to 49.1% for the third quarter of 2024, compared to 51.8% for the third quarter of 2023. The decrease in gross margin dollars and gross margin percentage was primarily attributable to lower sales volume and unfavorable sales mix on that volume, offset by higher royalty revenue and improved production efficiencies and supply chain costs, including lower freight-in and tariff spending of $430,000 (net of approximately $56,000 in duty drawback recovery in the third quarter of 2024 and $0 in duty drawback recovery in the third quarter of 2023 of previously paid tariffs).
Selling, general and administrative expenses were $23,398,000 for the third quarter of 2024, an increase of $976,000, or 4.4%, from $22,422,000 for the third quarter of 2023. Selling, general and administrative expenses as a percentage of net revenues increased to 25.1% for the third quarter of 2024 from 20.8% for the third quarter of 2023. The components of the $976,000 increase in selling, general and administrative expenses for the third quarter of 2024 from the third quarter of 2023 were as follows (dollars in thousands):
|
|
Increase (decrease) |
|
|||||||||
Legal |
|
$ |
1,312 |
|
|
|
44.1 |
% |
|
|
(1 |
) |
Compensation |
|
|
440 |
|
|
|
3.6 |
% |
|
|
(2 |
) |
Litigation, other |
|
|
377 |
|
|
|
100.0 |
% |
|
|
(3 |
) |
Project Materials |
|
|
149 |
|
|
|
100.0 |
% |
|
|
|
|
Outside services |
|
|
(474 |
) |
|
|
(33.9 |
)% |
|
|
(4 |
) |
Commissions |
|
|
(963 |
) |
|
|
(100.0 |
)% |
|
|
(5 |
) |
Other, net |
|
|
135 |
|
|
|
2.6 |
% |
|
|
|
|
|
|
$ |
976 |
|
|
|
4.4 |
% |
|
|
|
|
-19-
VICOR CORPORATION
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2024
Research and development expenses were $16,960,000 for the third quarter of 2024, a decrease of $792,000, or 4.5%, compared to $17,752,000 for the third quarter of 2023. As a percentage of net revenues, research and development expenses increased to 18.2% for the third quarter of 2024 from 16.5% for the third quarter of 2023. The components of the $792,000 decrease in research and development expenses for the third quarter of 2024 from the third quarter of 2023 were as follows (dollars in thousands):
|
|
Increase (decrease) |
|
|
|
|
||||||
Project and pre-production materials |
|
$ |
(1,343 |
) |
|
|
(41.8 |
)% |
|
|
(1 |
) |
Supplies |
|
|
(448 |
) |
|
|
(58.1 |
)% |
|
|
(2 |
) |
Deferred costs |
|
|
129 |
|
|
|
100.0 |
% |
|
|
|
|
Facilities allocations |
|
|
179 |
|
|
|
22.5 |
% |
|
|
|
|
Overhead absorption |
|
|
207 |
|
|
|
77.1 |
% |
|
|
(3 |
) |
Compensation |
|
|
325 |
|
|
|
3.0 |
% |
|
|
(4 |
) |
Other, net |
|
|
159 |
|
|
|
6.6 |
% |
|
|
|
|
|
|
$ |
(792 |
) |
|
|
(4.5 |
)% |
|
|
|
|
The significant components of ''Other income (expense), net'' for the three months ended September 30, 2024 and 2023 and the changes between the periods were as follows (in thousands):
|
|
2024 |
|
|
2023 |
|
|
Increase (decrease) |
|
|||
Interest income, net |
|
$ |
3,032 |
|
|
$ |
1,989 |
|
|
$ |
1,043 |
|
Rental income |
|
|
284 |
|
|
|
198 |
|
|
|
86 |
|
Foreign currency gains (losses), net |
|
|
404 |
|
|
|
(273 |
) |
|
|
677 |
|
Other, net |
|
|
(7 |
) |
|
|
3 |
|
|
|
(10 |
) |
|
|
$ |
3,713 |
|
|
$ |
1,917 |
|
|
$ |
1,796 |
|
Our exposure to market risk fluctuations in foreign currency exchange rates relates to the operations of Vicor Japan Company, Ltd. (“VJCL”), for which the functional currency is the Japanese Yen, and all other subsidiaries in Europe and Asia, for which the functional currency is the U.S. Dollar. These subsidiaries in Europe and Asia experienced favorable foreign currency exchange rate fluctuations in the third quarter of 2024 compared to the third quarter of 2023. Interest income for the three months ended September 30, 2024 increased due to higher balances of cash and cash equivalents held by the Company.
Income before income taxes was $9,099,000 for the third quarter of 2024, as compared to $17,621,000 for the third quarter of 2023.
The (benefit) provision for income taxes and the effective income tax rates for the three months ended September 30, 2024 and 2023 were as follows (dollars in thousands):
|
|
2024 |
|
|
2023 |
|
||
(Benefit) provision for income taxes |
|
$ |
(2,455 |
) |
|
$ |
1,038 |
|
Effective income tax rate |
|
|
(27.0 |
)% |
|
|
5.9 |
% |
-20-
VICOR CORPORATION
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2024
For the three months ended September 30, 2024, the Company calculated the income tax provision using the discrete method as this was more appropriate given the facts and circumstances. The Company determined that the application of the estimated annual effective tax rate method generally required by FASB ASC 740, Income Taxes, results in a disproportionate tax provision (benefit) for income taxes for the quarter relative to the expected provision for the full year.
The effective tax rates differ from the statutory tax rates for the three months ended September 30, 2024 and 2023 primarily due to the Company’s full valuation allowance position against domestic deferred tax assets. The (benefit) provision for income taxes for the three months ended September 30, 2024 and 2023 included estimated federal, state and foreign income taxes in jurisdictions in which the Company does not have sufficient tax attributes.
The Company’s tax expense and rate for the three months ended September 30, 2024 continues to be negatively impacted by the capitalization of research and development expenses under Section 174 in the U.S., which given the Company’s close to breakeven performance, is having an outsized impact on the rate by effectively moving from a book loss to a taxable income position, which causes a significant tax expense. This is further compounded by the Company not recording a deferred tax benefit from temporary differences due to the full valuation allowance on domestic deferred tax assets.
See Note 8 to the Condensed Consolidated Financial Statements for disclosure regarding our current assessment of the valuation allowance against all domestic deferred tax assets, and the possible release (i.e., reduction) of the allowance in the future.
We reported net income for the third quarter of 2024 of $11,552,000, or $0.26 per diluted share, compared to net income of $16,582,000, or $0.37 per diluted share, for the third quarter of 2023.
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Net revenues for the nine months ended September 30, 2024 were $262,892,000, a decrease of $49,515,000, or 15.8%, from $312,407,000 for the nine months ended September 30, 2023. Net revenues, by product line, for the nine months ended September 30, 2024 and the nine months ended September 30, 2023 were as follows (dollars in thousands):
|
|
|
|
|
|
|
|
Decrease |
|
|||||||
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
Advanced Products |
|
$ |
139,050 |
|
|
$ |
177,216 |
|
|
$ |
(38,166 |
) |
|
|
(21.5 |
)% |
Brick Products |
|
|
123,842 |
|
|
|
135,191 |
|
|
|
(11,349 |
) |
|
|
(8.4 |
)% |
Total |
|
$ |
262,892 |
|
|
$ |
312,407 |
|
|
$ |
(49,515 |
) |
|
|
(15.8 |
)% |
The decrease in net revenues for Advanced Products was primarily due to continued softness in underpenetrated markets, partially offset by increased royalty revenue. The decrease in net revenues for Brick Products was primarily due to reduced market demand.
Gross margin for the nine months ended September 30, 2024 decreased $23,947,000, or 15.2%, to $133,638,000 from $157,585,000 for the nine months ended September 30, 2023. Gross margin, as a percentage of net revenues, increased to 50.8% for the nine-month period ended September 30, 2024, as compared to 50.4% for the nine-month period ended September 30, 2023. The decrease in gross margin dollars was primarily the result of lower sales volume in the first nine months of 2024, with the increase in gross margin percentage primarily attributable to higher royalty revenue and improved production efficiencies compared to the first nine months of 2023 along with certain reductions in supply chain costs, including a reduction of $2,108,000 in outsourced manufacturing costs partially offset by incremental costs of bringing production in-house for certain Advanced Products, offset by slightly unfavorable sales mix and an increase in freight-in and tariff spending of $1,502,000 (net of approximately $717,000 in duty drawback recovery in the first nine months of 2024 and $5,715,000 in duty drawback recovery in the first nine months of 2023 of previously paid tariffs).
Selling, general and administrative expenses were $72,715,000 for the nine months ended September 30, 2024, an increase of $9,695,000, or 15.4%, compared to $63,020,000 for the nine months ended September 30, 2023. Selling, general and administrative expenses as a percentage of net revenues increased to 27.7% for the nine months ended September 30, 2024 from 20.2% for the nine
-21-
VICOR CORPORATION
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2024
months ended September 30, 2023. The components of the $9,695,000 increase in selling, general and administrative expenses for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 were as follows (dollars in thousands):
|
|
Increase (decrease) |
|
|||||||||
Legal fees |
|
$ |
9,772 |
|
|
|
188.3 |
% |
|
|
(1 |
) |
Compensation |
|
|
1,325 |
|
|
|
3.6 |
% |
|
|
(2 |
) |
Litigation, other |
|
|
615 |
|
|
|
100.0 |
% |
|
|
(3 |
) |
Advertising |
|
|
140 |
|
|
|
3.9 |
% |
|
|
|
|
Consultants |
|
|
109 |
|
|
|
205.1 |
% |
|
|
|
|
Commissions |
|
|
(2,531 |
) |
|
|
(92.6 |
)% |
|
|
(4 |
) |
Other, net |
|
|
265 |
|
|
|
1.8 |
% |
|
|
|
|
|
|
$ |
9,695 |
|
|
|
15.4 |
% |
|
|
|
|
Research and development expenses were $51,938,000 for the nine months ended September 30, 2024, an increase of $1,382,000, or 2.7%, from $50,556,000 for the nine months ended September 30, 2023. As a percentage of net revenues, research and development expenses increased to 19.8% for the nine months ended September 30, 2024 from 16.2% for the nine months ended September 30, 2023. The components of the $1,382,000 increase in research and development expenses for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 were as follows (dollars in thousands):
|
|
Increase (decrease) |
|
|
|
|
||||||
Overhead absorption |
|
$ |
1,530 |
|
|
|
81.3 |
% |
|
|
(1 |
) |
Compensation |
|
|
803 |
|
|
|
2.4 |
% |
|
|
(2 |
) |
Facilities allocations |
|
|
293 |
|
|
|
12.6 |
% |
|
|
(3 |
) |
Depreciation and amortization |
|
|
261 |
|
|
|
12.6 |
% |
|
|
(4 |
) |
Outside services |
|
|
202 |
|
|
|
29.7 |
% |
|
|
(5 |
) |
Gases |
|
|
189 |
|
|
|
28.1 |
% |
|
|
|
|
Supplies |
|
|
(964 |
) |
|
|
(47.9 |
)% |
|
|
(6 |
) |
Project and pre-production materials |
|
|
(1,161 |
) |
|
|
(13.2 |
)% |
|
|
(7 |
) |
Other, net |
|
|
229 |
|
|
|
8.0 |
% |
|
|
|
|
|
|
$ |
1,382 |
|
|
|
2.7 |
% |
|
|
|
|
-22-
VICOR CORPORATION
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2024
Litigation-contingency expense was $19,500,000 for the nine months ended September 30, 2024 which related to the SynQor litigation, as compared to $0 for the nine months ended September 30, 2023. See Note 10 to the Condensed Consolidated Financial Statements for additional information regarding the SynQor litigation.
The significant components of ''Other income (expense), net'' for the nine months ended September 30, 2024 and the nine months ended September 30, 2023 and the changes from period to period were as follows (in thousands):
|
|
|
|
|
|
|
|
Increase |
|
|||
|
|
2024 |
|
|
2023 |
|
|
(decrease) |
|
|||
Interest income, net |
|
$ |
8,625 |
|
|
$ |
5,500 |
|
|
$ |
3,125 |
|
Rental income |
|
|
708 |
|
|
|
594 |
|
|
|
114 |
|
Foreign currency losses, net |
|
|
(60 |
) |
|
|
(466 |
) |
|
|
406 |
|
Other, net |
|
|
(29 |
) |
|
|
15 |
|
|
|
(44 |
) |
|
|
$ |
9,244 |
|
|
$ |
5,643 |
|
|
$ |
3,601 |
|
Our exposure to market risk fluctuations in foreign currency exchange rates relates to the operations of VJCL, for which the functional currency is the Japanese Yen, and all other subsidiaries in Europe and Asia, for which the functional currency is the U.S. Dollar. These subsidiaries in Europe and Asia experienced less unfavorable foreign currency exchange rate fluctuations in the first nine months of 2024 compared to the first nine months of 2023. Interest income for the nine months ended September 30, 2024 increased due to higher balances of cash and cash equivalents held by the Company.
(Loss) income before income taxes was $(1,271,000) for the nine months ended September 30, 2024, as compared to $49,652,000 for the nine months ended September 30, 2023.
The provision for income taxes and the effective income tax rates for the nine months ended September 30, 2024 and 2023 were as follows (dollars in thousands):
|
|
2024 |
|
|
2023 |
|
||
Provision for income taxes |
|
$ |
2,832 |
|
|
$ |
4,716 |
|
Effective income tax rate |
|
|
(222.8 |
)% |
|
|
9.5 |
% |
The effective tax rates differ from the statutory tax rates for the nine months ended September 30, 2024 and 2023 primarily due to the Company’s full valuation allowance position against domestic deferred tax assets. The provision for income taxes for the nine months ended September 30, 2024 and 2023 included estimated federal, state and foreign income taxes in jurisdictions in which the Company does not have sufficient tax attributes.
The Company's tax expense and the rate for the nine months ended September 30, 2024 continues to be negatively impacted by the capitalization of research and development expenses under Section 174 in the U.S., which given the Company's nine month performance, is having an outsized impact on the rate by effectively moving from a book loss to a taxable income position, which causes a significant tax expense. This is further compounded by the Company not getting a deferred tax benefit from temporary differences due to the full valuation allowance on domestic deferred tax assets.
See Note 8 to the Condensed Consolidated Financial Statements for disclosure regarding our current assessment of the valuation allowance against all domestic deferred tax assets, and the possible release (i.e., reduction) of the allowance in the future.
We reported a net loss for the nine months ended September 30, 2024 of $(4,117,000), or $(0.09) per diluted share, as compared to net income of $44,927,000, or $1.00 per diluted share, for the nine months ended September 30, 2023.
-23-
VICOR CORPORATION
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2024
Liquidity and Capital Resources
As of September 30, 2024, we had $267,605,000 in cash and cash equivalents. The ratio of total current assets to total current liabilities was 6.4:1 as of September 30, 2024 and 9.5:1 as of December 31, 2023. Working capital, defined as total current assets less total current liabilities, increased $4,256,000 to $380,453,000 as of September 30, 2024 from $376,197,000 as of December 31, 2023.
The changes in working capital from December 31, 2023 to September 30, 2024 were as follows (in thousands):
|
|
Increase |
|
|
Cash and cash equivalents |
|
$ |
25,386 |
|
Accounts receivable |
|
|
5,894 |
|
Inventories |
|
|
(818 |
) |
Other current assets |
|
|
(4 |
) |
Accounts payable |
|
|
(3,624 |
) |
Accrued compensation and benefits |
|
|
(1,214 |
) |
Accrued expenses |
|
|
(1,344 |
) |
Accrued litigation |
|
|
(20,050 |
) |
Short-term deferred revenue |
|
|
(1,041 |
) |
Other |
|
|
1,071 |
|
|
|
$ |
4,256 |
|
The primary sources of cash for the nine months ended September 30, 2024 were $40,725,000 generated from operations and $7,047,000 received in connection with the exercise of options to purchase our Common Stock awarded under our stock option plans and the issuance of Common Stock under our 2017 Employee Stock Purchase Plan. The primary uses of cash during the nine months ended September 30, 2024 were for the purchase of property and equipment of $21,866,000.
In November 2000, our Board of Directors authorized the repurchase of up to $30,000,000 of our Common Stock (the “November 2000 Plan”). In July 2024, our Board of Directors authorized the repurchase of up to $100,000,000 of our Common Stock (the “New Repurchase Authorization”). The New Repurchase Authorization replaces the November 2000 Plan in its entirety and no further repurchases will be made pursuant to the November 2000 Plan. As of September 30, 2024, we had approximately $99,503,000 remaining available for repurchases of our Common Stock under the New Repurchase Authorization.
The timing and amounts of Common Stock repurchases under the New Repurchase Authorization are at the discretion of the Company’s President and Chief Executive Officer based upon economic and financial market conditions.
As of September 30, 2024, we had a total of approximately $14,073,000 of cancelable and non-cancelable capital expenditure commitments, principally for manufacturing and production equipment, which we intend to fund with existing cash, and approximately $2,976,000 of capital expenditure items and internal-use software which had been received and included in Property, plant and equipment, net in the accompanying Condensed Consolidated Balance Sheets, but not yet paid for. Our primary needs for liquidity are for making continuing investments in manufacturing and production equipment. We believe cash generated from operations together with our available cash and cash equivalents will be sufficient to fund planned operational needs and capital equipment purchases, for both the short and long term.
We do not consider the impact of inflation or fluctuations in the exchange rates for foreign currency transactions to have been significant during the last three fiscal years.
-24-
VICOR CORPORATION
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2024
Critical Accounting Policies and Estimates
There have been no material changes in our judgments and assumptions associated with the development of our critical accounting estimates during the period ended September 30, 2024. Refer to the section entitled “Critical Accounting Policies and Estimates” in Part II, Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
-25-
Vicor Corporation
September 30, 2024
Item 3 — Quantitative and Qualitative Disclosures About Market Risk
We are exposed to a variety of market risks, including changes in interest rates affecting the return on our cash and cash equivalents, our short-term investments and fluctuations in foreign currency exchange rates. As our cash and cash equivalents and short-term investments consist principally of cash accounts, money market securities, and U.S. Treasury securities, which are short-term in nature, we believe our exposure to market risk on interest rate fluctuations for these investments is not significant. As of September 30, 2024, our long-term investment portfolio, recorded on our Condensed Consolidated Balance Sheet as “Long-term investment, net”, consisted of a single auction rate security with a par value of $3,000,000, purchased through and held in custody by a broker-dealer affiliate of Bank of America, N.A., that has experienced failed auctions (the “Failed Auction Security”) since February 2008. While the Failed Auction Security is Aaa/AA+ rated by major credit rating agencies, collateralized by student loans and guaranteed by the U.S. Department of Education under the Federal Family Education Loan Program, continued failure to sell at its periodic auction dates (i.e., reset dates) could negatively impact the carrying value of the investment, in turn leading to impairment charges in future periods. Periodic changes in the fair value of the Failed Auction Security attributable to credit loss (i.e., risk of the issuer’s default) are recorded through earnings as a component of “Other income (expense), net”, with the remainder of any periodic change in fair value not related to credit loss (i.e., temporary “mark-to-market” carrying value adjustments) recorded in “Accumulated other comprehensive loss”, a component of Stockholders’ Equity. Should we conclude a decline in the fair value of the Failed Auction Security is other than temporary, such losses would be recorded through earnings as a component of “Other income (expense), net”. We do not believe there was an “other-than-temporary” decline in value in this security as of September 30, 2024.
Our exposure to market risk for fluctuations in foreign currency exchange rates relates to the operations of VJCL, for which the functional currency is the Japanese Yen, and changes in the relative value of the Yen to the U.S. Dollar. The functional currency of all other subsidiaries in Europe and other subsidiaries in Asia is the U.S. Dollar. While we believe the risk of fluctuations in foreign currency exchange rates for these subsidiaries is generally not significant, they can be subject to substantial currency changes, and therefore foreign exchange exposures.
-26-
Vicor Corporation
September 30, 2024
Item 4 — Controls and Procedures
As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), management, with the participation of our Chief Executive Officer (“CEO”) (who is our principal executive officer) and Chief Financial Officer (“CFO”) (who is our principal financial officer), conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the last fiscal quarter (i.e., September 30, 2024). The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure information required to be disclosed by a company in the reports it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2024, our CEO and CFO concluded, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Accordingly, management, including the CEO and CFO, recognizes our disclosure controls or our internal control over financial reporting may not prevent or detect all errors and all fraud. The design of a control system must reflect the fact there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any control’s effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
-27-
Vicor Corporation
Part II – Other Information
September 30, 2024
Item 1 — Legal Proceedings
See Note 10. Commitments and Contingencies in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 – “Financial Statements.”
Item 1A — Risk Factors
There have been no material changes in the risk factors described in Part I, Item 1A – “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
Third Quarter 2024 |
|
Total |
|
|
Average Price |
|
|
Total Number of |
|
|
Approximate Dollar |
|
||||
July 1 - 31, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
100,000,000 |
|
August 1 - 31, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
100,000,000 |
|
September 1 - 30, 2024 |
|
|
14,304 |
|
|
$ |
34.84 |
|
|
|
14,304 |
|
|
$ |
99,502,521 |
|
Total |
|
|
14,304 |
|
|
$ |
34.84 |
|
|
|
14,304 |
|
|
$ |
99,502,521 |
|
In November 2000, our Board of Directors authorized the repurchase of up to $30,000,000 of our Common Stock (the “November 2000 Plan”). In July 2024, our Board of Directors authorized the repurchase of up to $100,000,000 of our Common Stock (the “New Repurchase Authorization”). The New Repurchase Authorization replaces the November 2000 Plan in its entirety and no further repurchases will be made pursuant to the November 2000 Plan. The timing and amounts of Common Stock repurchases pursuant to the New Repurchase Authorization are at the discretion of the Company’s President and Chief Executive Officer based upon economic and financial market conditions. The New Repurchase Authorization does not expire.
Item 5 — Other Information
During the three months ended September 30, 2024, no director or Section 16 officer of the Company
-28-
Item 6 — Exhibits
Exhibit Number |
|
Description |
3.1 |
|
Restated Certificate of Incorporation, dated February 28, 1990 (1) |
|
|
|
3.2 |
|
|
|
|
|
3.3 |
|
Certificate of Amendment of Restated Certificate of Incorporation, dated May 10, 1991 (1) |
|
|
|
3.4 |
|
Certificate of Amendment of Restated Certificate of Incorporation, dated June 23, 1992 (1) |
|
|
|
3.5 |
|
|
|
|
|
31.1 |
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act. |
|
|
|
31.2 |
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act. |
|
|
|
32.1 |
|
|
|
|
|
32.2 |
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document. |
|
|
|
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
|
|
|
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document. |
|
|
|
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document. |
|
|
|
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
|
|
|
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
|
|
|
|
|
(1) Filed as an exhibit to the Company’s Annual Report on Form 10-K filed on March 29, 2001 (File No. 000-18277) and incorporated herein by reference. |
|
|
|
|
|
(2) Filed as an exhibit to the Company’s Current Report on Form 8-K filed on June 4, 2020 (File No. 000-18277) and incorporated herein by reference. |
-29-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
VICOR CORPORATION |
||
|
|
|
|
|
Date: October 30, 2024 |
|
By: |
|
/s/ Patrizio Vinciarelli |
|
|
|
|
Patrizio Vinciarelli |
|
|
|
|
Chairman of the Board, President and |
|
|
|
|
Chief Executive Officer |
|
|
|
|
(Principal Executive Officer) |
|
|
|
|
|
Date: October 30, 2024 |
|
By: |
|
/s/ James F. Schmidt |
|
|
|
|
James F. Schmidt |
|
|
|
|
Vice President, Chief Financial Officer |
|
|
|
|
(Principal Financial Officer) |
-30-