Vicor(US:VICR)2025-03-03 18:43Financial Performance - Total net revenues for 2024 were $359,058, a decrease of 11.3% from $405,059 in 2023[212]. - Product revenue declined to $312,463 in 2024, down 19.7% from $389,187 in 2023[212]. - Consolidated net income for 2024 was $6,139, a significant decrease of 88.5% from $53,600 in 2023[212]. - The company reported a basic net income per share of $0.14 for 2024, down from $1.21 in 2023[212]. - The company’s net income attributable to Vicor Corporation for the year ended December 31, 2024, was $6,129,000, compared to $53,595,000 in 2023 and $25,446,000 in 2022, indicating a significant decline in profitability[267]. - In 2024, the Company reported income before income taxes of $10,487,000, a decrease of 82.6% from $60,244,000 in 2023[338]. Revenue Sources - Revenues from the United States increased to $185,834,000 in 2024, up 24.3% from $149,456,000 in 2023[305]. - Revenues from Asia Pacific decreased to $129,981,000 in 2024, down 32.4% from $192,267,000 in 2023[305]. - Approximately 12.6% of total net revenues in 2024 came from customers in China, down from 17.7% in 2023[309]. Expenses and Liabilities - Operating expenses increased to $185,308 in 2024, up 20.6% from $153,571 in 2023, primarily due to litigation-contingency expenses of $19,500[212]. - The effective income tax rate for 2024 was 41.5%, significantly higher than 11.0% in 2023, primarily due to an increase in valuation allowance[336]. - The Company recorded a litigation-related accrual of $26,000,000 in 2024 due to a patent infringement lawsuit, including enhanced damages and attorney fees[351]. Assets and Investments - Total assets increased to $641,118 in 2024, up 7.8% from $594,887 in 2023[210]. - Cash and cash equivalents at the end of 2024 were $277,273, an increase of 14.5% from $242,219 at the end of 2023[219]. - The company has a valuation allowance of $61.5 million against domestic deferred tax assets, indicating potential challenges in realizing these assets[205]. - The Company’s total deferred tax assets increased to $81,541,000 in 2024 from $71,052,000 in 2023, with a net deferred tax asset of $20,010,000[338]. Inventory and Production - Approximately 74% or $78.9 million of the company's total inventory balance is comprised of raw materials, indicating a significant reliance on these materials for operations[201]. - As of December 31, 2024, inventories totaled $106,032,000, a slight decrease from $106,579,000 in 2023, with raw materials at $78,934,000 and finished goods at $10,709,000[274]. - Vicor's inventory is valued at the lower of cost or net realizable value, with production overhead allocated based on normal capacity, ensuring accurate cost management[239]. Foreign Currency and Interest Rates - A 10% unfavorable movement in the value of the Japanese Yen relative to the U.S. Dollar would increase the company's foreign currency loss by approximately $49,000[191]. - The company estimates that its annual interest income would change by approximately $30,000 for each 100 basis point increase or decrease in interest rates[190]. - The company reported net interest income of $11.47 million in 2024, an increase from $8.22 million in 2023[335]. Business Strategy and Market Focus - The company is transitioning its business model to serve a smaller number of larger volume customers, which may impact future revenue streams[1]. - The company plans to expand the percentage of revenue associated with licensing its intellectual property to third parties[1]. - Vicor's principal markets include large OEMs and ODMs, indicating a focus on high-volume users in the power components sector[224]. Research and Development - Research and development expenses were $68,922 in 2024, slightly up from $67,857 in 2023, indicating continued investment in innovation[212]. - The Company has federal and state research and development tax credit carryforwards of $12,344,000 and $21,892,000, expiring in 2039 and 2025, respectively[341]. Stock and Compensation - Stock-based compensation expense rose from $12.869 million in 2022 to $15.302 million in 2023, marking an increase of 18.9%[221]. - The total grant-date fair value of stock options granted was approximately $19.28 million in 2024, up from $17.96 million in 2023[323]. - The company had approximately $26.27 million of total unrecognized compensation cost related to unvested awards as of December 31, 2024, expected to be recognized over a weighted-average period of 2.0 years[324]. Legal and Regulatory Matters - The company is involved in ongoing litigation, including a class action lawsuit related to alleged misleading statements during earnings calls in 2023[355]. - The Company faces uncertainties in forecasting operating results due to unpredictability in customer orders and product transitions[340].