Vicor Corporation reported financial results for the fourth quarter and year ended December 31, 2018. Revenues for the fourth quarter of 2018 totaled $73.7 million, a 25.4% increase from $58.8 million for the corresponding period a year ago, and a 5.5% sequential decrease from $78.0 million for the third quarter of 2018.
Gross margin increased to $33.9 million for the quarter compared to $26.9 million for the corresponding period a year ago and decreased sequentially from $39.0 million for the third quarter of 2018. Gross margin, as a percentage of revenue, increased to 45.9% for the quarter, compared to 45.8% for the corresponding period a year ago and decreased from 50.0% for the third quarter of 2018.
Net income for the quarter was $6.9 million, or $0.17 per diluted share, compared to net income of $1.6 million, or $0.04 per share, for the corresponding period a year ago. Net income was $13.0 million, or $0.32 per diluted share, for the third quarter of 2018.
Net income for 2018 was $31.7 million, or $0.78 per diluted share, compared to net income of $167,000, or $0.00 per diluted share, for the prior year.
Revenues for the year ended December 31, 2018 were $291.2 million, an increase of 27.8% from $227.8 million the prior year.
Cash and cash equivalents sequentially increased by $2.4 million to about $70.6 million at the end of the fourth quarter of 2018, from $68.2 million at the end of the third quarter of 2018. Capital expenditures for the fourth quarter totaled $11.3 million, up from $3.3 million for the third quarter and $2.4 million for the corresponding period a year ago.
Fourth quarter bookings decreased 15.2% to $60.5 million, from $71.3 million for the corresponding period a year ago, and decreased sequentially 33.6% from $91.1 million for the third quarter of 2018.
Despite the soft quarter in terms of bookings, the total backlog at the end of the fourth quarter and the year 2018 was $103.0 million, up 41% from $73.1 million at the end of 2017.
Dr. Patrizio Vinciarelli, Vicor Chief Executive Officer, assessed the company’s fourth-quarter results stating, “Our Q4 results reflect sudden headwinds including temporary softness in data center spending and the impact of tariffs on imports by China. Our revenue was lower than forecast as orders were delayed and deliveries rescheduled. Lower production volumes and inefficiency caused by shifting mix caused a sequential decline in gross margins. Nevertheless, year-over-year Vicor recorded a 28% increase in revenue and a 41% increase in backlog.”
Dr. Vinciarelli continued, “AI ASICs and GPUs drawing hundreds of Amperes below 1 Volt are adopting Vicor’s Power-on-Package™ (“PoP”) solutions. PoP design-in activity using MCMs recently took on a new dimension with design wins leveraging Geared MCMs, or “GCMs”. By providing efficient Vertical Power Delivery, GCMs support peak currents in the thousands of Amperes fueling the computational power necessary to make AI even smarter. Advanced solutions are extending Vicor’s lead over competition anchored by legacy 12V infrastructure or confused by misinformed claims about GaN.”
“In automotive, Vicor is getting significant traction with OEMs and Tier 1 suppliers challenged by electrification and the advent of the 48V bus. Our value proposition importantly includes the high density and modular flexibility needed by advanced autonomous driving systems. Based on the trajectory of early engagements, we expect that within a few years our growth in the automotive segment will be comparable to the growth we are now experiencing powering AI and servers in datacenters.”
“In general, across key growth markets, Vicor is recognized for unrivaled technological leadership in high-performance power system solutions. We are addressing major opportunities and scaling up capacity to support forecast production requirements.”