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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
--------------------
---TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from
Commission File Number 0-18277
------------------------------
VICOR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-2742817
(State of Incorporation) (IRS Employer Identification Number)
25 Frontage Road, Andover, Massachusetts 01810
(Address of registrant's principal executive office)
(978) 470-2900
(Registrant's telephone number)
----------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of September 30, 1998.
Common Stock, $.01 par value ----------------29,785,707
Class B Common Stock, $.01 par value -----------12,124,309
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<PAGE>
<TABLE>
<CAPTION>
VICOR CORPORATION
INDEX TO FORM 10-Q
Page
------
<S> <C>
Part I - Financial Information:
Item 1 - Financial Statements (Unaudited)
Condensed Consolidated Balance Sheet at 1
September 30, 1998 and December 31, 1997
Condensed Consolidated Statement of Income 2
for the quarters ended September 30, 1998 and 1997 and
for the nine months ended September 30, 1998 and 1997
Condensed Consolidated Statement of Cash Flows 3
for the nine months ended September 30, 1998 and 1997
Notes to Condensed Consolidated Financial 4-5
Statements
Item 2 - Management's Discussion and Analysis of 6-9
Financial Condition and Results of Operations
Part II - Other Information:
Item 1 - Legal Proceedings 10
Item 2 - Changes in Securities 10
Item 3 - Defaults Upon Senior Securities 10
Item 4 - Submission of Matters to a Vote of 10
Security Holders
Item 5 - Other Information 10
Item 6 - Exhibits and Reports on Form 8-K 10
Signature(s) 11
</TABLE>
<PAGE>
FORM 10-Q
PART 1
ITEM 1
PAGE 1
<TABLE>
<CAPTION>
VICOR CORPORATION
Condensed Consolidated Balance Sheet
(In thousands)
(Unaudited)
Assets September 30, 1998 December 31, 1997
------ ------------------ -----------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 63,241 $ 84,859
Accounts receivable, net 28,012 35,258
Inventories, net 29,468 23,448
Other current assets 4,241 3,269
------- -------
Total current assets 124,962 146,834
Property, plant and equipment, net 106,883 69,802
Notes receivable 9,110 9,097
Other assets 7,527 3,110
---------- ---------
$ 248,482 $ 228,843
========= =========
Liabilities and Stockholders' Equity
- ------------------------------------
Current liabilities:
Accounts payable $ 20,916 $ 8,542
Accrued liabilities 13,030 10,025
------ ------
Total current liabilities 33,946 18,567
Deferred income taxes 1,852 1,852
Long term payables 5,333 --
Stockholders' equity:
Preferred Stock -- --
Class B Common Stock 121 122
Common Stock 342 340
Additional paid-in capital 100,181 97,980
Retained earnings 163,668 151,056
Treasury stock, at cost (56,961) (41,074)
------- -------
Total stockholders' equity 207,351 208,424
------- -------
$ 248,482 $ 228,843
========= =========
</TABLE>
Note: The balance sheet at December 31, 1997 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.
See accompanying notes.
<PAGE>
FORM 10-Q
PART I
ITEM 1
PAGE 2
<TABLE>
<CAPTION>
VICOR CORPORATION
Condensed Consolidated Statement of Income
(In thousands except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
------------------- -------------------
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues $ 39,318 $ 41,400 $124,228 $119,057
Costs and expenses:
Cost of revenue 22,085 19,967 67,408 57,146
Selling, general and administrative 9,057 7,398 25,950 22,328
Research and development 4,901 4,227 15,595 12,827
-------- -------- -------- --------
36,043 31,592 108,953 92,301
-------- -------- -------- --------
Income from operations 3,275 9,808 15,275 26,756
Other income 1,070 1,332 3,792 3,664
-------- -------- -------- --------
Income before income taxes 4,345 11,140 19,067 30,420
Provision for income taxes 1,303 4,010 6,455 10,951
-------- -------- -------- --------
Net income $ 3,042 $ 7,130 $ 12,612 $ 19,469
======== ======== ======== ========
Net income per common share:
Basic $ 0.07 $ 0.17 $ 0.30 $ 0.46
Diluted $ 0.07 $ 0.16 $ 0.29 $ 0.45
Shares used to compute net
income per share:
Basic 41,999 42,642 42,480 42,526
Diluted 42,358 43,527 43,025 43,234
</TABLE>
See accompanying notes.
<PAGE>
FORM 10-Q
PART I
ITEM 1
PAGE 3
<TABLE>
<CAPTION>
VICOR CORPORATION
Condensed Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
-----------------
September 30, 1998 September 30, 1997
------------------ ------------------
<S> <C> <C>
Operating activities:
Net income $ 12,612 $ 19,469
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 8,362 6,272
Gain on disposal of equipment (22) (8)
Change in current assets and
liabilities, net 3,116 (1,907)
-------- --------
Net cash provided by operating activities 24,068 23,826
Investing activities:
Additions to property, plant and equipment (29,101) (12,406)
Proceeds from sale of equipment 41 17
Increase in notes receivable (13) (5,261)
Assets acquired 1,850 --
Increase in other assets (4,778) (655)
-------- --------
Net cash used in investing activities (32,001) (18,305)
Financing activities:
Tax benefit relating to stock option plans 683 875
Proceeds from issuance of Common Stock 1,523 6,284
Acquisitions of treasury stock (15,887) --
Other (4) --
--------- --------
Net cash (used in) provided by financing
activities (13,685) 7,159
--------- --------
Net (decrease) increase in cash and cash equivalents (21,618) 12,680
Cash and cash equivalents at beginning of period 84,859 73,647
--------- --------
Cash and cash equivalents at end of period $ 63,241 $ 86,327
========= =========
Supplemental disclosure:
Liabilities assumed related to acquisition 16,000 --
</TABLE>
See accompanying notes.
<PAGE>
FORM 10-Q
PART I
ITEM 1
PAGE 4
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
September 30, 1998
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements 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. Accordingly, they 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 only normal
recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the three- and nine- months periods ended
September 30, 1998 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1998. For further information, refer to
the consolidated financial statements and notes thereto included in the
Company's audited financial statements for the year ended December 31, 1997,
contained in the Company's annual report filed on Form 10-K (File No. 0-18277)
with the Securities and Exchange Commission.
2. NET INCOME PER SHARE
The following table sets forth the computation of basic and diluted income per
share for the three and nine months ended September 30 (in thousands, except per
share amounts):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------- -------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Numerator:
Net Income $ 3,042 $ 7,130 $12,612 $19,469
======= ======= ======= =======
Denominator:
Denominator for basic income
per share-weighted average shares 41,999 42,642 42,480 42,526
Effect of dilutive securities:
Employee stock options 359 885 545 708
------- ------- -------- -------
Denominator for diluted income per share-
adjusted weighted-average shares and
assumed conversions 42,358 43,527 43,025 43,234
======= ======= ======= =======
Basic income per share $ 0.07 $ 0.17 $ 0.30 $ 0.46
======= ======= ======= =======
Diluted income per share $ 0.07 $ 0.16 $ 0.29 $ 0.45
======= ======= ======= =======
</TABLE>
<PAGE>
FORM 10-Q
PART I
ITEM 1
PAGE 5
VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
September 30, 1998
(Continued)
3. INVENTORIES
Inventories are valued at the lower of cost (determined using the first-in,
first-out method) or market. Inventories were as follows as of September 30,
1998 and December 31, 1997 (in thousands):
<TABLE>
<CAPTION>
September 30, 1998 December 31, 1997
------------------ -----------------
<S> <C> <C>
Raw materials................. $18,856 $16,715
Work-in-process............... 3,891 3,774
Finished goods................ 6,721 2,959
--------- --------
$29,468 $23,448
======== ========
</TABLE>
4. ACQUISITION
Effective July 1, 1998, the Company and its wholly-owned subsidiary, Vicor Japan
Company, Ltd. ("VJCL"), acquired the principal assets of the switching power
supply businesses owned by the Japan Tobacco, Inc. Group ("JT"). The assets
acquired included automated manufacturing equipment, existing raw material and
finished goods inventories, customer lists and certain intellectual property.
VJCL also assumed certain warranty obligations for products manufactured by JT
prior to the acquisition date and for a six month transition period ending
December 31, 1998. The total value of consideration given and liabilities
assumed aggregated $19.1 million. In addition to cash payments for inventories,
the Company has agreed to pay for the automated equipment in three equal
installments of $5.3 million at December 31, 1998, June 30, 1999 and December
31, 1999. The total cost of the purchase in excess of the net assets acquired of
approximately $1.5 million is being amortized over ten years. Pro forma
operating results for the period beginning January 1, 1998 have not been
presented, as the combined operating results of the acquired businesses and the
Company are not materially different from the Company's actual results.
<PAGE>
FORM 10-Q
PART I
ITEM 2
PAGE 6
VICOR CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 1998
Except for historical information contained herein, some matters discussed in
this report constitute 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. Actual results could differ materially from
those projected in the forward-looking statements as a result of the risk
factors set forth in this report and in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997. Reference is made in particular to the
discussions set forth below in this Report under "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and set forth in the
Annual Report on Form 10-K under Item 1 -- "Business -- Second-Generation
Automated Manufacturing Line," "--Competition," "--Patents," and "--Licensing,"
and under Item 7 -- "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1998, COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1997
Net revenues for the third quarter of 1998 were $39,318,000, a decrease of
$2,082,000 (5.0%) as compared to $41,400,000 for the same period a year ago. The
decrease in net revenues resulted primarily from a reduction in the sale of
automated manufacturing line equipment of approximately $1,800,000.
Gross margin decreased $4,200,000 (19.6%) from $21,433,000 to $17,233,000, and
decreased as a percentage of net revenues from 51.8% to 43.8%. The primary
components of the decrease in gross margin dollars and percentage were
attributable to depreciation on the second-generation automated production line
in the third quarter of 1998 of approximately $1,100,000, increases in the unit
cost of first generation product and changes in the revenue mix. Gross margins
for the remainder of 1998 may be negatively impacted by the depreciation of the
second-generation automated production line until higher production volumes and
higher yield levels are attained. The Company is continuing to introduce
selected models of its second-generation product families and increase
production on the new manufacturing line; however, there can be no assurance
that product development issues will not substantially delay the ultimate
general introduction of the complete product line, require continued
modification of product specifications, or prevent attainment of the anticipated
capacity of the new manufacturing line. Significant revenues from the sale of
any product in the Company's second-generation product line are not expected to
occur for several quarters.
Selling, general and administrative expenses were $9,057,000 for the period, an
increase of $1,659,000 (22.4%) over the same period in 1997. As a percentage of
net revenues, selling, general and administrative expenses increased to 23.0%
from 17.9%. The principal components of the $1,659,000 increase were $869,000
(259.4%) of increased legal costs (see Part II, Item 1--"Legal Proceedings") and
$618,000 (258.3%) of increased international expenses primarily associated with
the first quarter of operations for VJCL.
Research and development expenses increased $674,000 (15.9%) to $4,901,000 and
increased as a percentage of net revenues to 12.5% from 10.2%. The principal
components of the $674,000 increase were $721,000 (29.5%) of increased
compensation expense due to growth in staffing levels of engineering personnel,
primarily related to the research and development of the second-generation
product line and $292,000 (100%) of increased research and development expenses
due to the first quarter of operations for VJCL, which increases were offset by
a decrease of $340,000 (53.2%) of project materials costs.
Other income decreased $262,000 (19.7%) from the same period a year ago to
$1,070,000. Other income is primarily comprised of interest income derived from
invested cash and cash equivalents, as well as notes receivable associated with
the Company's real estate transactions. Interest income decreased primarily due
to a decrease in cash and cash equivalent balances.
<PAGE>
FORM 10-Q
PART I
ITEM 2
PAGE 7
VICOR CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 1998
(continued)
Income before income taxes was $4,345,000, a decrease of $6,795,000 (61.0%)
compared to the same period in 1997. As a percentage of net revenues, income
before income taxes decreased from 26.9% to 11.1% primarily due to the gross
margin decrease and the increase in operating expenses as discussed above.
The effective tax rate for the third quarter of 1998 was 30%, compared to 36%
for the same period in 1997. The decrease in the effective tax rate was due to
the impact of expected tax credits in 1998 on a lower level of income before
income taxes.
Net income per share (diluted) was $.07 for the third quarter of 1998, compared
to $.16 for the third quarter of 1997, a decrease of $.09 (56.3%).
NINE MONTHS ENDED SEPTEMBER 30, 1998, COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1997
Net revenues for the first nine months of 1998 were $124,228,000, an increase of
$5,171,000 (4.3%) as compared to $119,057,000 for the same period a year ago.
The growth in net revenues resulted primarily from a net increase of unit
shipments of standard and custom products of approximately $11,500,000, offset
by reductions in the sale of automated manufacturing line equipment and license
income of approximately $5,100,000 and $1,200,000, respectively.
Gross margin decreased $5,091,000 (8.2%) to $56,820,000 from $61,911,000, and
decreased as a percentage of net revenues from 52.0% to 45.7%. The primary
components of the decrease in gross margin dollars and percentage were
attributable to depreciation on the second-generation automated production line
in the second and third quarter of 1998 of approximately $2,200,000, and to
changes in the revenue mix. As discussed above, the gross margins for the
remainder of 1998 may be negatively impacted by the depreciation of the
second-generation automated production line until higher production volumes and
higher yield levels are attained.
Selling, general and administrative expenses were $25,950,000 for the period, an
increase of $3,622,000 (16.2%) over the same period in 1997. As a percentage of
net revenues, selling, general and administrative expenses increased to 20.9%
from 18.8%. The principal components of the $3,622,000 increase were $757,000
(8.7%) of increased compensation expense due to growth in staffing levels of
selling and administrative personnel; $716,000 (79.9%) of increased legal costs
(see Part II, Item 1--"Legal Proceedings"); $697,000 (555.6%) of increased costs
for training and consulting fees for the implementation of the new Enterprise
Resource Planning system; $414,000 (50.1%) of increased international office
expenses, primarily due to the first quarter of operations for VJCL; $253,000
(7.6%) of increased sales commission expense, and an increase in the Company's
Vicor Integration Architect subsidiaries' selling, general and administrative
expenses of $174,000 (14.3%).
Research and development expenses increased $2,768,000 (21.6%) to $15,595,000
and increased as a percentage of net revenues to 12.6% from 10.8%. The increase
was primarily related to the research and development of the second-generation
product line. The principal components of the $2,768,000 increase were
$2,254,000 (30.9%) of increased compensation expense due to growth in staffing
levels; $292,000 (100.0%) of increased international research and development
costs related to the first quarter of operations for VJCL, and $213,000 (18.4%)
of increased depreciation expense.
Other income increased $128,000 (3.5%) from the same period a year ago, to
$3,792,000. Other income is primarily comprised of interest income derived from
invested cash and cash equivalents, as well as notes receivable associated with
the Company's real estate transactions.
<PAGE>
FORM 10-Q
PART I
ITEM 2
PAGE 8
VICOR CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 1998
(continued)
Income before income taxes was $19,067,000, a decrease of $11,353,000 (37.3%)
compared to the same period in 1997. As a percentage of net revenues, income
before income taxes decreased from 25.6% to 15.3% primarily due to the gross
margin decrease and the increase in operating expenses as discussed above.
The effective tax rate for the nine months ended September 30, 1998 was 33.9%,
compared to 36% for the same period in 1997. The decrease in the effective tax
rate was due to the impact of expected tax credits in 1998 on a lower level of
income before income taxes.
Net income per share (diluted) was $.29 for the nine months ended September 30,
1998, compared to $.45 for the same period in 1997, a decrease of $.16 (35.6%).
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1998 the Company had $63,241,000 in cash and cash equivalents.
The ratio of current assets to current liabilities was 3.7:1 compared to 7.9:1
at December 31, 1997. Working capital decreased $37,251,000, from $128,267,000
at December 31, 1997 to $91,016,000 at September 30, 1998. The primary factors
affecting the working capital decrease were a decrease in cash of $21,618,000,
an increase in accounts payable and other accrued liabilities of $15,379,000 and
a decrease in accounts receivable of $7,246,000, offset by an increase in
inventories of $6,020,000. The primary uses of cash for the first nine months of
1998 were for additions to property and equipment of $29,101,000 and the
acquisition of treasury stock of $15,887,000, offset by cash provided by
operating activities of $24,068,000.
The Company plans to make continuing investments in manufacturing equipment,
much of which is built internally. The internal construction of manufacturing
machinery, in order to provide for additional manufacturing capacity, is a
practice which the Company expects to continue over the next several years.
The Company has an unused line of credit with a bank under which the Company may
borrow up to $4,000,000 on a revolving credit basis. The Company believes that
cash generated from operations and the total of its cash and cash equivalents,
together with other sources of liquidity, will be sufficient to fund planned
operations and capital equipment purchases for the foreseeable future. At
September 30, 1998, the Company had approximately $6,600,000 of capital
expenditure commitments, including approximately $5,500,000 related to the
construction of new and expanded facilities.
The Company does not consider the impact of inflation and changing prices on its
business activities or fluctuations in the exchange rates for foreign currency
transactions to have been material during the last three fiscal years.
YEAR 2000 READINESS DISCLOSURE
Vicor has formed an internal Year 2000 compliance team to evaluate its internal
facilities, engineering and manufacturing processes, and business information
systems with respect to Year 2000 compliance. Included in this evaluation are
the products and systems of the Company's significant suppliers. The Company has
initiated formal communications with all of its significant suppliers and large
customers to determine the extent to which the Company is vulnerable to those
third parties' failures to remediate their Year 2000 issues. The Company does
not believe that is has any exposure to contingencies related to the Year 2000
Issue for the products it has sold.
<PAGE>
FORM 10-Q
PART I
ITEM 2
PAGE 9
VICOR CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 1998
(continued)
Vicor's internal team is in the process of completing the inventory of all
internal applications and infrastructure to determine Year 2000 readiness, which
it expects to complete by the end of 1998. The compliance team is also in the
process of testing certain equipment and software systems known to have possible
Year 2000 compliance issues and is in the process of assessing possible
remediation options. This assessment phase is expected to be completed during
the first quarter of 1999.
Vicor's current primary business information system is known to be non-compliant
and a vendor has been selected to assist the Company in bringing this system
into compliance by the first quarter of 1999. The cost of this procedure will
not be material. In addition, the Company is proceeding with the phased
installation of a new Enterprise Resource Planning (ERP) system which will
replace the upgraded primary business information system. The installation of
the Year 2000 compliant ERP system should not be necessary for the Company to
achieve Year 2000 compliance with respect to its business information system and
such ERP system will not be fully installed by December 31, 1999.
The total external cost of the Year 2000 project, including the new ERP system,
is estimated to be $6.0 million. Internal costs are not considered to be
incremental, and are therefore not included in the amount. Of the total project
cost, approximately $2.2 million is attributable to the purchase of new software
and hardware enhancements, which will be capitalized. The remaining $3.8
million, which will be expensed as incurred, is not expected to have a material
effect on the results of operations. To date, the Company has incurred
approximately $2.5 million ($960,000 expensed and $1.6 million capitalized), of
which approximately $55,000 was incurred in the third quarter of 1998 ($43,000
expensed and $12,000 capitalized).
The Company presently believes that the Year 2000 issue will not pose
significant operational problems. However, the future compliance with Year 2000
processing within Vicor is dependent on certain key personnel, and on vendors'
equipment and internal systems. Therefore, unresolved Year 2000 issues remain a
possibility. As a result, Year 2000 issues could have a significant impact on
the Company's operations and its financial results if modifications cannot be
completed on a timely basis, unforeseen needs or problems arise, or if systems
operated by third parties (including municipalities and utilities) are not Year
2000 compliant. At present, the Company has not developed contingency plans but
intends to determine whether to develop any such plan early in fiscal 1999.
The estimates and conclusions set forth herein regarding Year 2000 compliance
contain forward-looking statements and are based on management's estimates of
future events and information provided by third parties. There can be no
assurance that such estimates and information will prove to be accurate. Risks
to completing the Year 2000 project include the availability of resources, the
Company's ability to discover and correct potential Year 2000 problems and the
ability of suppliers and other third parties to bring their systems into Year
2000 compliance.
<PAGE>
FORM 10-Q
PART II
ITEM 1-6
PAGE 10
VICOR CORPORATION
Part II - Other Information
September 30, 1998
Item 1 - LEGAL PROCEEDINGS
The Company is involved in certain litigation incidental to the
conduct of its business. While the outcome of lawsuits against the
Company cannot be predicted with certainty, management does not expect
any current litigation to have a material adverse impact on the
Company.
In Germany, a nullity Action was filed by an alleged infringer of
Vicor's German Reset Patent. This nullity Action came as a result of a
complaint filed by the Company in October 1996 in Munich District
Court, Federal Republic of Germany, citing an alleged infringer for
infringement of Vicor's German "reset" patent. In a hearing held in
Munich on September 30, 1998, the Patent Court identified a 1981
publication, which had not been considered in the original prosecution
of the patent application by the European Patent Office during the
early 1980s, as the "closest prior art." In view of the publication,
the Patent Court characterized the German Reset Patent as lacking
invention and declared all of the claims of the German Reset Patent
null and void. The decision of the Patent Court is not final under
German law. Management believes that the outcome of the final decision
will not have a material adverse impact on the Company.
The 1981 publication, as well as other relevant art, has been
considered by the U.S. Patent Office in the course of reissue
proceedings with respect to the U.S. Reset Patent which started in
September, 1995. The U.S. Patent Office has ruled on three separate
occasions, in response to submissions by the patentee (which included
prior art and related documents filed by opponents in related European
and U.S. proceedings) and a protest filed by a third party, that the
subject matter of the U.S. Reset Patent is novel and patentable over
the 1981 publication. In particular the U.S. Patent Office has allowed
for reissuance original claims 1 through 5 along with twenty-four
additional dependent claims. Vicor believes that at least claim 1 is
being widely infringed and has recently initiated U.S. infringement
litigation in Federal District Court in Boston.
Item 2 - CHANGES IN SECURITIES
Not applicable.
Item 3 - DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
Not applicable.
Item 5 - OTHER INFORMATION
Not applicable.
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits - 27.1 Financial Data Schedule
b. Reports on Form 8-K - none.
<PAGE>
FORM 10-Q
PART II
PAGE 11
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: November 10, 1998 By: /s/ Patrizio Vinciarelli
-----------------------------
Patrizio Vinciarelli
President and Chairman
of the Board
Date: November 10, 1998 By: /s/ Mark A. Glazer
-----------------------------
Mark A. Glazer
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000751978
<NAME> VICOR CORPORATION
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1.0
<CASH> 63,241
<SECURITIES> 0
<RECEIVABLES> 28,012
<ALLOWANCES> 0
<INVENTORY> 29,468
<CURRENT-ASSETS> 124,962
<PP&E> 164,142
<DEPRECIATION> 57,259
<TOTAL-ASSETS> 248,482
<CURRENT-LIABILITIES> 33,946
<BONDS> 0
0
0
<COMMON> 463
<OTHER-SE> 206,888
<TOTAL-LIABILITY-AND-EQUITY> 248,482
<SALES> 124,228
<TOTAL-REVENUES> 124,228
<CGS> 67,408
<TOTAL-COSTS> 67,408
<OTHER-EXPENSES> 0
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<INCOME-PRETAX> 19,067
<INCOME-TAX> 6,455
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VICOR CORP. QTR 3 1997 RESTATED TO REFLECT ADOPTION OF FAS 128
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<NAME> VICOR CORPORATION
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