Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 21, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | VICR | |
Entity Registrant Name | VICOR CORP | |
Entity Central Index Key | 751,978 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 27,097,656 | |
Class B Common Stock [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 11,758,218 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 55,066 | $ 62,980 |
Accounts receivable, less allowance of $154 in 2016 and $171 in 2015 | 28,026 | 25,982 |
Inventories, net | 26,562 | 23,442 |
Other current assets | 3,086 | 3,102 |
Total current assets | 112,740 | 115,506 |
Long-term deferred tax assets, net | 11 | 15 |
Long-term investments, net | 2,580 | 2,866 |
Property, plant and equipment, net | 37,535 | 37,450 |
Other assets | 2,172 | 1,708 |
Total assets | 155,038 | 157,545 |
Current liabilities: | ||
Accounts payable | 7,965 | 7,470 |
Accrued compensation and benefits | 8,649 | 8,349 |
Accrued expenses | 2,178 | 2,568 |
Accrued severance charges | 0 | 195 |
Income taxes payable | 23 | 31 |
Deferred revenue | 2,626 | 1,988 |
Total current liabilities | 21,441 | 20,601 |
Long-term deferred revenue | 392 | 468 |
Contingent consideration obligations | 288 | 144 |
Long-term income taxes payable | 182 | 192 |
Deferred income taxes payable | 55 | |
Total liabilities | 22,303 | 21,460 |
Commitments and contingencies (Note 12) | ||
Vicor Corporation stockholders' equity: | ||
Common Stock | 396 | 395 |
Additional paid-in capital | 174,881 | 174,337 |
Retained earnings | 96,126 | 99,685 |
Accumulated other comprehensive loss | (96) | (577) |
Treasury stock, at cost | (138,927) | (138,927) |
Total Vicor Corporation stockholders' equity | 132,498 | 135,031 |
Noncontrolling interest | 237 | 1,054 |
Total equity | 132,735 | 136,085 |
Total liabilities and equity | 155,038 | 157,545 |
Class B Common Stock [Member] | ||
Vicor Corporation stockholders' equity: | ||
Common Stock | $ 118 | $ 118 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 154 | $ 171 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Net revenues | $ 53,227 | $ 48,664 | $ 152,195 | $ 168,800 |
Cost of revenues | 27,304 | 27,378 | 82,485 | 92,113 |
Gross margin | 25,923 | 21,286 | 69,710 | 76,687 |
Operating expenses: | ||||
Selling, general and administrative | 13,312 | 13,383 | 41,643 | 43,331 |
Research and development | 10,338 | 10,121 | 31,824 | 31,171 |
Total operating expenses | 23,650 | 23,504 | 73,467 | 74,502 |
Income (loss) from operations | 2,273 | (2,218) | (3,757) | 2,185 |
Other income (expense), net: | ||||
Total unrealized gains on available-for-sale securities, net | 1 | 15 | 54 | 54 |
Portion of losses (gains) recognized in other comprehensive income (loss) | 2 | (11) | (44) | (42) |
Net credit gains recognized in earnings | 3 | 4 | 10 | 12 |
Other income (expense), net | 208 | (3) | 340 | (1) |
Total other income (expense), net | 211 | 1 | 350 | 11 |
Income (loss) before income taxes | 2,484 | (2,217) | (3,407) | 2,196 |
Less: Provision for income taxes | 133 | 174 | 168 | 374 |
Gain from sale of equity method investment, net of tax | 5,000 | 5,000 | ||
Consolidated net income (loss) | 2,351 | 2,609 | (3,575) | 6,822 |
Less: Net income (loss) attributable to noncontrolling interest | 15 | 106 | (16) | 143 |
Net income (loss) attributable to Vicor Corporation | $ 2,336 | $ 2,503 | $ (3,559) | $ 6,679 |
Net income (loss) per common share attributable to Vicor Corporation: | ||||
Basic | $ 0.06 | $ 0.06 | $ (0.09) | $ 0.17 |
Diluted | $ 0.06 | $ 0.06 | $ (0.09) | $ 0.17 |
Shares used to compute net income (loss) per common share attributable to Vicor Corporation: | ||||
Basic | 38,837 | 38,786 | 38,811 | 38,742 |
Diluted | 39,184 | 39,086 | 38,811 | 39,176 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Statement of Comprehensive Income [Abstract] | |||||
Consolidated net income (loss) | $ 2,351 | $ 2,609 | $ (3,575) | $ 6,822 | |
Foreign currency translation gains (losses), net of tax | [1] | 56 | 61 | 473 | (36) |
Unrealized (losses) gains on available-for-sale securities, net of tax | [2] | (2) | 11 | 44 | 45 |
Other comprehensive income | 54 | 72 | 517 | 9 | |
Consolidated comprehensive income (loss) | 2,405 | 2,681 | (3,058) | 6,831 | |
Less: Comprehensive income (loss) attributable to noncontrolling interest | 19 | 110 | 20 | 142 | |
Comprehensive income (loss) attributable to Vicor Corporation | $ 2,386 | $ 2,571 | $ (3,078) | $ 6,689 | |
[1] | Net of tax provision (benefit) of $0 for the three and nine months ended September 30, 2016 and 2015. | ||||
[2] | The deferred tax assets associated with cumulative unrealized losses on available-for-sale securities are completely offset by a tax valuation allowance as of September 30, 2016 and 2015. Therefore, there is no net income tax provision (benefit) recognized for the three and nine months ended September 30, 2016 and 2015. |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation gains (losses), tax provision (benefit) | $ 0 | $ 0 | $ 0 | $ 0 |
Recognized income tax provision (benefit) | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating activities: | ||
Consolidated net income (loss) | $ (3,575) | $ 6,822 |
Adjustments to reconcile consolidated net income (loss) to net cash provided by (used for) operating activities: | ||
Depreciation and amortization | 6,384 | 6,954 |
Gain from sale of equity method investment | (5,000) | |
Stock-based compensation expense, net | 171 | 1,392 |
Increase in other assets | (505) | |
Decrease in long-term deferred revenue | (76) | (103) |
Deferred income taxes | (51) | |
Benefit for doubtful accounts | (22) | (18) |
Loss (gain) on disposal of equipment | 4 | (54) |
Credit gain on available-for-sale securities | (10) | (12) |
(Decrease) increase in long-term income taxes payable | (10) | 8 |
Change in current assets and liabilities, net | (3,894) | 2,959 |
Net cash (used for) provided by operating activities | (1,584) | 12,948 |
Investing activities: | ||
Additions to property, plant and equipment | (6,368) | (5,596) |
Proceeds from sale of equity method investment | 5,000 | |
Sales and maturities of investments | 360 | |
Proceeds from sale of equipment | 2 | 54 |
Increase in other assets | (18) | (156) |
Net cash used for investing activities | (6,384) | (338) |
Financing activities: | ||
Proceeds from issuance of Common Stock | 455 | 781 |
Payment of contingent consideration obligations | (64) | |
Acquisition of noncontrolling interest | (372) | |
Net cash provided by financing activities | 19 | 781 |
Effect of foreign exchange rates on cash | 35 | (7) |
Net (decrease) increase in cash and cash equivalents | (7,914) | 13,384 |
Cash and cash equivalents at beginning of period | 62,980 | 55,187 |
Cash and cash equivalents at end of period | $ 55,066 | $ 68,571 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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. 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, 2016 are not necessarily indicative of the results that may be expected for any other interim period or the year ending December 31, 2016. The balance sheet at December 31, 2015 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, 2015 filed by the Company with the Securities and Exchange Commission on March 8, 2016. |
Long-Term Investments
Long-Term Investments | 9 Months Ended |
Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Long-Term Investments | 2. Long-Term Investments As of September 30, 2016 and December 31, 2015, the Company held one auction rate security that had experienced failed auctions of $3,000,000 at par value, which was purchased through and is held by a broker-dealer affiliate of Bank of America, N.A. (the “Failed Auction Security”). The Failed Auction Security held by the Company 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. Management is not aware of any reason to believe the issuer of the Failed Auction Security is presently at risk of default. Through September 30, 2016, the Company has continued to receive interest payments on the Failed Auction Security in accordance with the terms of its indenture. Management believes the Company ultimately should be able to liquidate the Failed Auction Security without significant loss primarily due to the overall quality of the issue held and the collateral securing the substantial majority of the underlying obligation. However, current conditions in the auction rate securities market have led management to conclude the recovery period for the Failed Auction Security exceeds 12 months. As a result, the Company continued to classify the Failed Auction Security as long-term as of September 30, 2016. The following is a summary of available-for-sale securities (in thousands): September 30, 2016 Cost Gross Gross Estimated Failed Auction Security $ 3,000 $ — $ 420 $ 2,580 December 31, 2015 Cost Gross Gross Estimated Failed Auction Security $ 3,000 $ — $ 474 $ 2,526 Brokered certificates of deposit 340 — — 340 $ 3,340 $ — $ 474 $ 2,866 As of September 30, 2016, the Failed Auction Security had been in an unrealized loss position for greater than 12 months. The amortized cost and estimated fair value of the Failed Auction Security on September 30, 2016, by contractual maturity, is shown below (in thousands): Cost Estimated Due in twenty-six years $ 3,000 $ 2,580 Based on the fair value measurements described in Note 3, the fair value of the Failed Auction Security on September 30, 2016, with a par value of $3,000,000, was estimated by the Company to be approximately $2,580,000. The gross unrealized loss of $420,000 on the Failed Auction Security consists of two types of estimated loss: an aggregate credit loss of $62,000 and an aggregate temporary impairment of $358,000. In determining the amount of credit loss, the Company compared the present value of cash flows expected to be collected to the amortized cost basis of the security, considering credit default risk probabilities and changes in credit ratings as significant inputs, among other factors (See Note 3). The following table represents a rollforward of the activity related to the credit loss recognized in earnings on the Failed Auction Security for the nine months ended September 30 (in thousands): 2016 2015 Balance at the beginning of the period $ 72 $ 84 Reductions in the amount related to credit gain for which other-than-temporary impairment was not previously recognized (10 ) (12 ) Balance at the end of the period $ 62 $ 72 At this time, the Company has no intent to sell the impaired Failed Auction Security and does not believe it is more likely than not the Company will be required to sell this security. If current market conditions deteriorate further, the Company may be required to record additional unrealized losses. If the credit rating of the security deteriorates, the Company may be required to adjust the carrying value of the investment through impairment charges recorded in the Condensed Consolidated Statements of Operations, and any such impairment adjustments may be material. Based on the Company’s ability to access cash and cash equivalents and its expected operating cash flows, management does not anticipate the current lack of liquidity associated with the Failed Auction Security held will affect the Company’s ability to execute its current operating plan. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. 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 measured at fair value on a recurring basis included the following as of September 30, 2016 (in thousands): Using Quoted Prices Significant Significant Total Fair Cash equivalents: Money market funds $ 9,989 $ — $ — $ 9,989 Long-term investments: Failed Auction Security — — 2,580 2,580 Liabilities: Contingent consideration obligations — — (288 ) (288 ) Assets measured at fair value on a recurring basis included the following as of December 31, 2015 (in thousands): Using Quoted Prices Significant Significant Total Fair Cash equivalents: Money market funds $ 10,412 $ — $ — $ 10,412 Long-term investments: Failed Auction Security — — 2,526 2,526 Brokered certificates of deposit — 340 — 340 Liabilities: Contingent consideration obligation — — (144 ) (144 ) The Company has classified its contingent consideration obligations as Level 3 because the fair value for these liabilities was determined using unobservable inputs. The liabilities were based on estimated sales of legacy products over the period of royalty payments at the royalty rate (see Note 8), discounted using the Company’s estimated cost of capital. The Company has classified its brokered certificates of deposit as Level 2 because the fair value for these investments was determined utilizing observable inputs from non-active markets. The fair values fluctuate with changes in market interest rates obtained from information available in publicly quoted markets. Management tested the reported fair values by comparing them to net present value calculations utilizing a discount rate based on U.S. Treasury bill and bond yields for similar maturities. As of September 30, 2016, there was insufficient observable auction rate security market information available to determine the fair value of the Failed Auction Security using Level 1 or Level 2 inputs. As such, the Company’s investment in the Failed Auction Security was deemed to require valuation using Level 3 inputs. Management, after consulting with advisors, valued the Failed Auction Security using analyses and pricing models similar to those used by market participants (i.e., buyers, sellers, and the broker-dealers responsible for execution of the Dutch auction pricing mechanism by which each issue’s interest rate was set). Management utilized a probability weighted discounted cash flow (“DCF”) model to determine the estimated fair value of this security as of September 30, 2016. The major assumptions used in preparing the DCF model included: estimates for the amount and timing of future interest and principal payments based on default probability assumptions used to measure the credit loss of 2.1%; the rate of return required by investors to own this type of security in the current environment, which management estimates to be 5.0% above the risk free rate of return; and an estimated timeframe of three to five years for successful auctions for this type of security to occur. In making these assumptions, management considered relevant factors including: the formula applicable to the security defining the interest rate paid to investors in the event of a failed auction (the “Penalty Rate”); forward projections of the interest rate benchmarks specified in such formulas; the likely timing of principal repayments; the probability of full repayment considering the guarantees by the U.S. Department of Education of the underlying student loans, guarantees by other third parties, and additional credit enhancements provided through other means; and publicly available pricing data for recently issued student loan asset-backed securities not subject to auctions. In developing its estimate of the rate of return required by investors to own the security, management compared the Penalty Rate of the Failed Auction Security with yields of actively traded long-term bonds with similar characteristics and, reflecting the limited liquidity for auction rate securities and the discounts to par value seen in recent tender offers by issuers and arm’s length market transactions between informed buyers and sellers, estimated the implied yield (i.e., the discount to par value) necessary to complete a sale of the Failed Auction Security. Management has calculated an increase or decrease in the liquidity risk premium of 5.0% referenced above of 1.0% (i.e., 100 basis points) as used in the model, would decrease or increase, respectively, the fair value of the Failed Auction Security by approximately $100,000. For purposes of the valuation process for the Failed Auction Security, “management” consists of senior members of the Company’s finance department. The fair value measurements for the Failed Auction Security are reviewed and updated on a quarterly basis. The calculations are prepared by the Company’s Corporate Controller, in conjunction with information provided by its valuation advisors, and include the development and substantiation of the unobservable inputs. The methodology, assumptions, and calculations are reviewed and approved by the Company’s Chief Financial Officer and Chief Accounting Officer. The significant unobservable inputs used in the fair value measurement of the Failed Auction Security are the cumulative probability of earning the maximum rate until maturity, the cumulative probability of principal return prior to maturity, the cumulative probability of default, the liquidity risk premium, and the recovery rate in default. Significant increases (decreases) in any of those inputs in isolation would result in changes in fair value measurement. Significant increases (decreases) in the cumulative probability of earning the maximum rate until maturity, the cumulative probability of principal return prior to maturity, and the recovery rate in default would result in a higher (lower) fair value measurement, while increases (decreases) in the cumulative probability of default and the liquidity risk premium would result in a lower (higher) fair value measurement. Generally, the interrelationships are such that a change in the assumption used for the cumulative probability of principal return prior to maturity is accompanied by a directionally similar change in the assumption used for the cumulative probability of earning the maximum rate until maturity and a directionally opposite change in the assumptions used for the cumulative probability of default and the liquidity risk premium. The recovery rate in default is somewhat independent and based upon the security’s specific underlying assets and published recovery rate indices. Quantitative information about Level 3 fair value measurements as of September 30, 2016 is as follows (dollars in thousands): Fair Value Valuation Unobservable Input Weighted Failed Auction Security $ 2,580 Discounted Cumulative probability of earning the maximum rate until maturity 0.03 % Cumulative probability of principal return prior to maturity 94.82 % Cumulative probability of default 5.15 % Liquidity risk premium 5.00 % Recovery rate in default 40.00 % 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, 2016 was as follows (in thousands): Balance at the beginning of the period $ 2,526 Credit gain on available-for-sale securities included in Other income (expense), net 10 Gain included in Other comprehensive income (loss) 44 Balance at the end of the period $ 2,580 The change in the estimated fair value calculated for the liabilities valued on a recurring basis utilizing Level 3 inputs (i.e., the Contingent consideration obligations) for the nine months ended September 30, 2016 was as follows (in thousands): Balance at the beginning of the period $ 144 Obligation incurred upon acquisition of noncontrolling interest (see Note 8) 208 Payments (64 ) Balance at the end of the period $ 288 There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the nine months ended September 30, 2016. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 4. Stock-Based Compensation The Company uses the Black-Scholes option pricing model to calculate the fair value of stock option awards as of their grant date. Stock-based compensation expense, net for the three and nine months ended September 30 was as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Cost of revenues $ (47 ) $ 51 $ 59 $ 170 Selling, general and administrative (327 ) 215 148 975 Research and development (124 ) 75 (36 ) 247 Total stock-based compensation $ (498 ) $ 341 $ 171 $ 1,392 On December 31, 2010, the Company granted 2,984,250 non-qualified stock options under the VI Chip 2007 Stock Option and Incentive Plan with performance-based vesting provisions tied to achievement of certain margin targets by VI Chip Corporation. As of December 31, 2010, the Company determined it was probable the margin targets could be achieved and, accordingly, began recording stock-based compensation expense relating to these options beginning January 1, 2011. During the third quarter of 2016, the Company determined the margin targets would not be met prior to the expiration date of the corresponding options, as VI Chip’s revenue growth has been below levels necessary to achieve the targets. As a result, in accordance with the accounting guidance for performance-based stock options, the Company reversed approximately $768,000 of previously recorded stock-based compensation expense in the third quarter of 2016, representing all expense taken for these performance-based options through June 30, 2016. This resulted in decreases in cost of revenues of $86,000, selling, general and administrative expense of $516,000, and research and development expense of $166,000 for the three and nine months ended September 30, 2016. |
Net Income (Loss) per Share
Net Income (Loss) per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Share | 5. Net Income (Loss) per Share The following table sets forth the computation of basic and diluted net income (loss) per share for the three and nine months ended September 30 (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Numerator: Net income (loss) attributable to Vicor Corporation $ 2,336 $ 2,503 $ (3,559 ) $ 6,679 Denominator: Denominator for basic net income (loss) per share-weighted average shares (1) 38,837 38,786 38,811 38,742 Effect of dilutive securities: Employee stock options (2) 347 300 — 434 Denominator for diluted net income (loss) per share – adjusted weighted-average shares and assumed conversions 39,184 39,086 38,811 39,176 Basic net income (loss) per share $ 0.06 $ 0.06 $ (0.09 ) $ 0.17 Diluted net income (loss) per share $ 0.06 $ 0.06 $ (0.09 ) $ 0.17 (1) Denominator represents weighted average number of shares of Common Stock and Class B Common Stock outstanding. (2) Options to purchase 449,464 and 1,845,289 shares of Common Stock for the three and nine months ended September 30, 2016, respectively, were not included in the calculation of net income (loss) per share as the effect would have been antidilutive. Options to purchase 533,689 and 141,971 shares of Common Stock for the three and nine months ended September 30, 2015, respectively, were not included in the calculation of net income per share as the effect would have been antidilutive. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | 6. Inventories Inventories are valued at the lower of cost (determined using the first-in, first-out method) or net realizable value. Fixed production overhead is allocated to the inventory cost per unit based on the normal capacity of the production facilities. Abnormal production costs, including fixed cost variances from normal production capacity, if any, are charged to cost of revenues in the period incurred. All shipping and handling costs incurred in connection with the sale of products are included in cost of revenues. The Company provides reserves for inventories estimated to be excess, obsolete or unmarketable. The Company’s estimation process for assessing net realizable value is based upon its known backlog, projected future demand, historical consumption and expected market conditions. If the Company’s estimated demand and/or market expectation were to change or if product sales were to decline, the Company’s estimation process may cause larger inventory reserves to be recorded, resulting in larger charges to cost of revenues. Inventories were as follows (in thousands): September 30, 2016 December 31, 2015 Raw materials $ 19,652 $ 16,257 Work-in-process 2,991 2,879 Finished goods 3,919 4,306 Net balance $ 26,562 $ 23,442 |
Other Investments
Other Investments | 9 Months Ended |
Sep. 30, 2016 | |
Text Block [Abstract] | |
Other Investments | 7. Other Investments In September 2015, Intersil Corporation (“Intersil”) acquired Great Wall Semiconductor Corporation (“GWS”). At that time, the Company’s gross investment in non-voting convertible preferred stock of GWS totaled $4,999,719, giving the Company an approximately 27% ownership interest in GWS. The Company received cash consideration of $4,999,719 for its investment from Intersil, representing full preference value of its shares of non-voting convertible preferred stock of GWS. Since the investment in GWS had previously been written down to zero, the full amount of the consideration was recorded as a gain from sale of equity method investment in the third quarter of 2015. |
Noncontrolling Interest Transac
Noncontrolling Interest Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest Transactions | 8. Noncontrolling Interest Transactions On March 30, 2016, the Company acquired 100% ownership of certain operating assets and cash of its consolidated subsidiary, Converpower Corporation (“Converpower”), in which it held a 49% ownership interest. The operating assets and cash were acquired in exchange for the Company’s common shares representing that 49% interest and the aggregate dollar amount of royalty payments to be made by the Company to Converpower. The transaction was executed through a newly-formed, wholly-owned subsidiary, Granite Power Technologies, Inc. (“GPT”), the business operations of which had formerly existed as a division of Vicor Corporation. The shares of Converpower common stock held by the Company were contributed to GPT prior to the transaction. At the same time that it entered into the Asset Purchase Agreement associated with this transaction, the Company and Converpower entered into a license agreement providing the Company the right to continue manufacturing certain Converpower products in exchange for payment of royalties, quarterly through June 30, 2021, equal to a percentage of the revenue generated by the manufacture and sale of these products by GPT. The estimated present value of total future royalties, included in “Contingent consideration obligations” in the accompanying Condensed Consolidated Balance Sheet as of September 30, 2016, is $185,000 (initially $208,000, as of March 31, 2016). Although the Company exchanged its shares representing its 49% equity interest in Converpower, it acquired 100% control of the business operations. Accordingly, this transaction was accounted for as an acquisition of a noncontrolling interest (i.e., an equity transaction). As such, the noncontrolling interest balance in equity associated with Converpower was reduced to zero, and the additional paid-in capital account was reduced by $208,000, the estimated present value of total future royalties as of March 31, 2016. As a result of the transactions associated with the consolidation of the Converpower operation into GPT, the Company’s aggregate balance of cash, short-term interest receivable, and long-term investments on its Condensed Consolidated Balance Sheet as of March 31, 2016, declined by approximately $718,000. No amounts were recorded in the Condensed Consolidated Statement of Operations related to these transactions. The respective noncontrolling interest holders of Converpower served as key employees of Converpower prior to the transactions described above. |
Severance and Other Charges
Severance and Other Charges | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Severance and Other Charges | 9. Severance and Other Charges A summary of the activity related to the accrued severance charges is as follows (in thousands): Balance as of December 31, 2015 $ 195 Payments (195 ) Balance as of September 30, 2016 $ — |
Product Warranties
Product Warranties | 9 Months Ended |
Sep. 30, 2016 | |
Guarantees [Abstract] | |
Product Warranties | 10. Product Warranties The Company generally offers a two-year warranty for all of its products, though it is party to a limited number of supply agreements with certain customers contractually committing the Company to warranty and indemnification requirements exceeding those to which the Company has been exposed in the past. The Company provides for the estimated cost of product warranties at the time product revenue is recognized. Factors influencing the Company’s warranty reserves include the number of units sold, historical and anticipated rates of warranty returns, and the cost per return. The Company periodically assesses the adequacy of warranty reserves and adjusts the amounts as necessary. Warranty obligations are included in “Accrued expenses” in the accompanying Condensed Consolidated Balance Sheets. Product warranty activity for the three and nine months ended September 30 was as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Balance at the beginning of the period $ 496 $ 332 $ 584 $ 204 Accruals for warranties for products sold in the period 61 280 291 465 Fulfillment of warranty obligations (106 ) (18 ) (374 ) (75 ) Revisions of estimated obligations (109 ) — (159 ) — Balance at the end of the period $ 342 $ 594 $ 342 $ 594 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes The tax provision is based on the estimated annual effective tax rate for the year, which includes estimated federal, state and foreign income taxes on the Company’s projected pre-tax income (loss) and, in 2015, for estimated federal and state income taxes for certain noncontrolling interest subsidiaries that were not part of the Company’s consolidated income tax returns . The provisions for income taxes and the effective income tax rates for the three and nine months ended September 30 were as follows (dollars in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Provision for income taxes $ 133 $ 174 $ 168 $ 374 Effective income tax rate 5.4 % 7.8 % 4.9 % 17.0 % The Company’s effective tax rate was lower than the statutory tax rate in each 2016 and 2015 period due to the utilization of net operating losses. The provisions for the three and nine months ended September 30, 2016 were primarily due to estimated state taxes in jurisdictions in which the Company does not have net operating loss carryforwards. No tax benefit could be recognized for the majority of the Company’s losses during the periods due to a full valuation allowance against all net domestic deferred tax assets. In addition, in connection with the Company’s acquisition of 100% ownership of certain operating assets and cash of Converpower, the related deferred tax liability for unremitted earnings of $55,000 was reversed and recorded as a discrete benefit in the first quarter of 2016 (see Note 8). The provisions for the three and nine months ended September 30, 2015 were primarily due to estimated federal and state taxes for one noncontrolling interest subsidiary, and for estimated state taxes in jurisdictions in which the Company does not have net operating loss carryforwards. As of September 30, 2016, the Company continues to maintain a valuation allowance of approximately $25,855,000 against all domestic net deferred tax assets and the majority of foreign net deferred tax assets, for which realization cannot be considered more likely than not at this time. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies At September 30, 2016, the Company had approximately $596,000 of capital expenditure commitments. On January 28, 2011, SynQor, Inc. (“SynQor”) filed a complaint for patent infringement against Ericsson, Inc. (“Ericsson”), Cisco Systems, Inc. (“Cisco”) and the Company in the U.S. District Court for the Eastern District of Texas (the “Texas Action”). Ericsson and Cisco subsequently settled with SynQor and are no longer parties to the Texas Action. With respect to the Company, SynQor’s complaint in the Texas Action alleged that the Company’s products, including but not limited to unregulated bus converters used in intermediate bus architecture power supply systems, infringe SynQor’s U.S. patent numbers 7,072,190, 7,272,021, and 7,564,702 (“the ‘190 patent”, “the ‘021 patent” and “the ‘702 patent”, respectively). SynQor’s complaint sought an injunction against further infringement and an award of unspecified compensatory and enhanced damages, interest, costs and attorney fees. On September 20, 2011, SynQor filed an amended complaint in the Texas Action that further alleged that the Company’s products, including, but not limited to, unregulated bus converters used in intermediate bus architecture power supply systems, infringe SynQor’s U.S. patent number 8,023,290 (“the ‘290 patent”). The Company responded to SynQor’s amended complaint in the Texas Action by denying that it infringes any of the SynQor patents, and asserting that the SynQor patents are invalid. The Company has further alleged that the SynQor ‘290 patent is unenforceable due to inequitable conduct by SynQor or its agents during the examination of the ‘290 patent at the United States Patent and Trademark Office (“USPTO”). The Company has also asserted counterclaims seeking damages against SynQor for deceptive trade practices and tortious interference with prospective economic advantage arising from SynQor’s attempted enforcement of its patents against the Company. The Company has initiated administrative review proceedings at the USPTO challenging the validity of certain claims of the SynQor patents asserted in the Texas Action, including all claims that were asserted against the Company by SynQor. Regarding the ‘190 patent, the Patent Trial and Appeal Board (“PTAB”) of the USPTO issued a decision upholding the validity of the ‘190 patent claims. That decision was appealed by the Company to the United States Court of Appeals for the Federal Circuit (“the Federal Circuit”), which issued a decision on March 13, 2015 reversing the PTAB, determining that certain claims were invalid, and remanding the matter to the PTAB for further proceedings. On May 2, 2016, the PTAB issued a decision determining that all but one of the remaining claims of the ‘190 patent were invalid and remanding the remaining claim to a patent examiner for further examination. In addition, on that date, the PTAB issued decisions finding all challenged claims of SynQor’s ‘021 patent invalid and upholding the validity of all challenged claims of SynQor’s ‘702 and ‘290 patents. The Company has filed an appeal with the Federal Circuit from the PTAB’s decision upholding the validity of the challenged claims of the ‘702 and ‘290 patents. SynQor has filed an appeal with the Federal Circuit from the PTAB’s decision that the challenged claims of the ‘021 patent are invalid. Decisions in these appeals are not expected until 2017. On May 23, 2016, the Texas Court issued an order staying the Texas Action until the completion of all of the administrative review proceedings concerning the asserted SynQor patents, including any appeals from such proceedings to the Federal Circuit. The Company continues to believe none of its products, including its unregulated bus converters, infringe any valid claim of the asserted SynQor patents, either alone or when used in an intermediate bus architecture implementation, including such use by Cisco. The Company believes SynQor’s claims lack merit and, therefore, continues to vigorously defend itself against SynQor’s patent infringement allegations. The Company does not believe a loss is probable for this matter. If a loss were to be incurred, however, the Company cannot estimate the amount of possible loss or range of possible loss at this time. In addition to the SynQor matter, the Company is involved in certain other litigation and claims incidental to the conduct of its business. While the outcome of lawsuits and claims against the Company cannot be predicted with certainty, management does not expect any current litigation or claims to have a material adverse impact on the Company’s financial position or results of operations. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | 13. Segment Information The Company has organized its business segments according to its key product lines. The Brick Business Unit segment (“BBU”) designs, develops, manufactures and markets the Company’s modular DC-DC converters and configurable products, and also includes the entities comprising Vicor Custom Power and the BBU operations of Vicor Japan Company, Ltd. (“VJCL”). The VI Chip segment includes VI Chip Corporation, which designs, develops, manufactures and markets many of the Company’s advanced power component products. The VI Chip segment also includes the VI Chip business conducted through VJCL. The Picor segment includes Picor Corporation, which designs, develops, manufactures and markets integrated circuits and related products for use in a variety of power management and power system applications. The Picor segment develops these products for use in the Company’s BBU and VI Chip modules, to be sold as complements to the Company’s BBU and VI Chip products, or for sale to third parties for separate (i.e., stand-alone) applications. The Company’s chief operating decision maker evaluates performance and allocates resources based on segment revenues and segment operating income (loss). The operating income (loss) for each segment includes selling, general and administrative and research and development expenses directly attributable to the segment. Certain of the Company’s indirect overhead costs, which include corporate selling, general and administrative expenses, are allocated among the segments based upon an estimate of costs associated with each segment. Assets allocated to each segment are based upon specific identification of such assets, which include accounts receivable, inventories, fixed assets and certain other assets. The Corporate segment consists of those operations and assets shared by all segments. The costs of certain centralized executive and administrative functions are recorded in this segment, as are certain shared assets, most notably cash and cash equivalents, deferred tax assets, long-term investments, the Company’s facilities in Massachusetts, real estate and other assets. The Company’s accounting policies and method of presentation for segments are consistent with that used throughout the Condensed Consolidated Financial Statements. The following table provides segment financial data for the three months ended September 30 (in thousands): BBU VI Chip Picor Corporate Eliminations Total 2016: Net revenues $ 38,518 $ 11,961 $ 5,320 $ — $ (2,572 ) $ 53,227 Income (loss) from operations 3,734 (1,915 ) 627 (173 ) — 2,273 Total assets 193,115 21,453 6,928 72,521 (138,979 ) 155,038 Depreciation and amortization 1,025 531 142 375 — 2,073 2015: Net revenues $ 41,119 $ 6,023 $ 2,791 $ — $ (1,269 ) $ 48,664 Income (loss) from operations 5,612 (6,564 ) (1,169 ) (97 ) — (2,218 ) Total assets 163,801 15,372 4,796 88,142 (108,836 ) 163,275 Depreciation and amortization 1,119 633 123 356 — 2,231 The following table provides segment financial data for the nine months ended September 30 (in thousands): BBU VI Chip Picor Corporate Eliminations Total 2016: Net revenues $ 115,963 $ 30,126 $ 12,596 $ — $ (6,490 ) $ 152,195 Income (loss) from operations 9,475 (12,131 ) (510 ) (591 ) — (3,757 ) Total assets 193,115 21,453 6,928 72,521 (138,979 ) 155,038 Depreciation and amortization 3,293 1,660 404 1,027 — 6,384 2015: Net revenues $ 131,396 $ 28,939 $ 13,870 $ — $ (5,405 ) $ 168,800 Income (loss) from operations 17,618 (15,336 ) 474 (571 ) — 2,185 Total assets 163,801 15,372 4,796 88,142 (108,836 ) 163,275 Depreciation and amortization 3,424 2,150 318 1,062 — 6,954 (1) The elimination for net revenues is principally related to inter-segment sales by Picor to BBU and VI Chip and for inter-segment sales by VI Chip to BBU. The elimination for total assets is principally related to inter-segment accounts receivable due to BBU for the funding of VI Chip and Picor operations. |
Impact of Recently Issued Accou
Impact of Recently Issued Accounting Standards | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Impact of Recently Issued Accounting Standards | 14. Impact of Recently Issued Accounting Standards In August 2016, the Financial Accounting Standards Board (“FASB”) issued guidance to clarify how certain cash receipts and cash payments should be presented in the statement of cash flows. These include debt prepayment, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees and beneficial interests in securitization transactions. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company has not yet determined the impact this new guidance will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued new guidance for employee share-based payment accounting, which makes several modifications to existing guidance related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. This new guidance also clarifies the statement of cash flows presentation for certain components of share-based awards. The standard is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. The Company has not yet determined the impact this new guidance will have on its consolidated financial statements and related disclosures. In February 2016, the FASB issued new guidance for lease accounting, which will require lessees to recognize all leases with a duration of greater than twelve months on the balance sheet. For lessors, the guidance modifies the classification criteria and accounting for sales-type and direct financing leases. The new standard is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company has not yet determined the impact this new guidance will have on its consolidated financial statements and related disclosures. In July 2015, the FASB issued new guidance for inventory accounting, which will require companies to measure in scope inventory at the lower of cost or net realizable value. Current guidance requires an entity to measure inventory at the lower of cost or market. The new guidance does not apply to inventory that is measured using last-in, first-out (“LIFO”) or retail inventory methods. The guidance applies to all other inventory, which includes inventory that is measured using first-in, first-out (“FIFO”), which the Company employs, or average cost methods. The new guidance will be effective for the Company on January 1, 2017, and is to be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company does not anticipate the new guidance will have a material impact on its consolidated financial statements and related disclosures. In May 2014, the FASB issued new guidance for revenue recognition, which will require an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new guidance will replace most existing revenue recognition guidance in U.S. Generally Accepted Accounting Principles when it becomes effective which, for the Company, will now be on January 1, 2018, as on July 9, 2015, the FASB voted to defer the effective date of the new standard by one year. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect the new guidance will have on its consolidated financial statements and related disclosures. While the Company has begun its assessment of the new standard and plans to utilize the cumulative effect transition method, it has not yet determined the effect the standard will have on its ongoing financial reporting. |
Long-Term Investments (Tables)
Long-Term Investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Available-for-Sale Securities | The following is a summary of available-for-sale securities (in thousands): September 30, 2016 Cost Gross Gross Estimated Failed Auction Security $ 3,000 $ — $ 420 $ 2,580 December 31, 2015 Cost Gross Gross Estimated Failed Auction Security $ 3,000 $ — $ 474 $ 2,526 Brokered certificates of deposit 340 — — 340 $ 3,340 $ — $ 474 $ 2,866 |
Amortized Cost and Estimated Fair Value of Failed Auction Securities by Contractual Maturities | The amortized cost and estimated fair value of the Failed Auction Security on September 30, 2016, by contractual maturity, is shown below (in thousands): Cost Estimated Due in twenty-six years $ 3,000 $ 2,580 |
Rollforward of Credit (Gain) Loss Recognized in Earnings on Failed Auction Security | The following table represents a rollforward of the activity related to the credit loss recognized in earnings on the Failed Auction Security for the nine months ended September 30 (in thousands): 2016 2015 Balance at the beginning of the period $ 72 $ 84 Reductions in the amount related to credit gain for which other-than-temporary impairment was not previously recognized (10 ) (12 ) Balance at the end of the period $ 62 $ 72 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets measured at fair value on a recurring basis included the following as of September 30, 2016 (in thousands): Using Quoted Prices Significant Significant Total Fair Cash equivalents: Money market funds $ 9,989 $ — $ — $ 9,989 Long-term investments: Failed Auction Security — — 2,580 2,580 Liabilities: Contingent consideration obligations — — (288 ) (288 ) Assets measured at fair value on a recurring basis included the following as of December 31, 2015 (in thousands): Using Quoted Prices Significant Significant Total Fair Cash equivalents: Money market funds $ 10,412 $ — $ — $ 10,412 Long-term investments: Failed Auction Security — — 2,526 2,526 Brokered certificates of deposit — 340 — 340 Liabilities: Contingent consideration obligation — — (144 ) (144 ) |
Quantitative Information about Level 3 Fair Value Measurements | Quantitative information about Level 3 fair value measurements as of September 30, 2016 is as follows (dollars in thousands): Fair Value Valuation Unobservable Input Weighted Failed Auction Security $ 2,580 Discounted Cumulative probability of earning the maximum rate until maturity 0.03 % Cumulative probability of principal return prior to maturity 94.82 % Cumulative probability of default 5.15 % Liquidity risk premium 5.00 % Recovery rate in default 40.00 % |
Change in Estimated Fair Values Calculated for Investment Valued on Recurring Basis Utilizing Level 3 Inputs | 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, 2016 was as follows (in thousands): Balance at the beginning of the period $ 2,526 Credit gain on available-for-sale securities included in Other income (expense), net 10 Gain included in Other comprehensive income (loss) 44 Balance at the end of the period $ 2,580 |
Change in Estimated Fair Value Calculated for Liabilities Valued on Recurring Basis Utilizing Level 3 Inputs | The change in the estimated fair value calculated for the liabilities valued on a recurring basis utilizing Level 3 inputs (i.e., the Contingent consideration obligations) for the nine months ended September 30, 2016 was as follows (in thousands): Balance at the beginning of the period $ 144 Obligation incurred upon acquisition of noncontrolling interest (see Note 8) 208 Payments (64 ) Balance at the end of the period $ 288 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense | Stock-based compensation expense, net for the three and nine months ended September 30 was as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Cost of revenues $ (47 ) $ 51 $ 59 $ 170 Selling, general and administrative (327 ) 215 148 975 Research and development (124 ) 75 (36 ) 247 Total stock-based compensation $ (498 ) $ 341 $ 171 $ 1,392 |
Net Income (Loss) per Share (Ta
Net Income (Loss) per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Computation Of Basic And Diluted Net Income (Loss) Per Share | The following table sets forth the computation of basic and diluted net income (loss) per share for the three and nine months ended September 30 (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Numerator: Net income (loss) attributable to Vicor Corporation $ 2,336 $ 2,503 $ (3,559 ) $ 6,679 Denominator: Denominator for basic net income (loss) per share-weighted average shares (1) 38,837 38,786 38,811 38,742 Effect of dilutive securities: Employee stock options (2) 347 300 — 434 Denominator for diluted net income (loss) per share – adjusted weighted-average shares and assumed conversions 39,184 39,086 38,811 39,176 Basic net income (loss) per share $ 0.06 $ 0.06 $ (0.09 ) $ 0.17 Diluted net income (loss) per share $ 0.06 $ 0.06 $ (0.09 ) $ 0.17 (1) Denominator represents weighted average number of shares of Common Stock and Class B Common Stock outstanding. (2) Options to purchase 449,464 and 1,845,289 shares of Common Stock for the three and nine months ended September 30, 2016, respectively, were not included in the calculation of net income (loss) per share as the effect would have been antidilutive. Options to purchase 533,689 and 141,971 shares of Common Stock for the three and nine months ended September 30, 2015, respectively, were not included in the calculation of net income per share as the effect would have been antidilutive. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories were as follows (in thousands): September 30, 2016 December 31, 2015 Raw materials $ 19,652 $ 16,257 Work-in-process 2,991 2,879 Finished goods 3,919 4,306 Net balance $ 26,562 $ 23,442 |
Severance and Other Charges (Ta
Severance and Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Summary of Activity Related to Accrued Severance Charges | A summary of the activity related to the accrued severance charges is as follows (in thousands): Balance as of December 31, 2015 $ 195 Payments (195 ) Balance as of September 30, 2016 $ — |
Product Warranties (Tables)
Product Warranties (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Guarantees [Abstract] | |
Product Warranty Activity | Product warranty activity for the three and nine months ended September 30 was as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Balance at the beginning of the period $ 496 $ 332 $ 584 $ 204 Accruals for warranties for products sold in the period 61 280 291 465 Fulfillment of warranty obligations (106 ) (18 ) (374 ) (75 ) Revisions of estimated obligations (109 ) — (159 ) — Balance at the end of the period $ 342 $ 594 $ 342 $ 594 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Provisions for Income Taxes and Effective Income Tax Rates | The provisions for income taxes and the effective income tax rates for the three and nine months ended September 30 were as follows (dollars in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Provision for income taxes $ 133 $ 174 $ 168 $ 374 Effective income tax rate 5.4 % 7.8 % 4.9 % 17.0 % |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Significant Segment Financial Data | The following table provides segment financial data for the three months ended September 30 (in thousands): BBU VI Chip Picor Corporate Eliminations Total 2016: Net revenues $ 38,518 $ 11,961 $ 5,320 $ — $ (2,572 ) $ 53,227 Income (loss) from operations 3,734 (1,915 ) 627 (173 ) — 2,273 Total assets 193,115 21,453 6,928 72,521 (138,979 ) 155,038 Depreciation and amortization 1,025 531 142 375 — 2,073 2015: Net revenues $ 41,119 $ 6,023 $ 2,791 $ — $ (1,269 ) $ 48,664 Income (loss) from operations 5,612 (6,564 ) (1,169 ) (97 ) — (2,218 ) Total assets 163,801 15,372 4,796 88,142 (108,836 ) 163,275 Depreciation and amortization 1,119 633 123 356 — 2,231 The following table provides segment financial data for the nine months ended September 30 (in thousands): BBU VI Chip Picor Corporate Eliminations Total 2016: Net revenues $ 115,963 $ 30,126 $ 12,596 $ — $ (6,490 ) $ 152,195 Income (loss) from operations 9,475 (12,131 ) (510 ) (591 ) — (3,757 ) Total assets 193,115 21,453 6,928 72,521 (138,979 ) 155,038 Depreciation and amortization 3,293 1,660 404 1,027 — 6,384 2015: Net revenues $ 131,396 $ 28,939 $ 13,870 $ — $ (5,405 ) $ 168,800 Income (loss) from operations 17,618 (15,336 ) 474 (571 ) — 2,185 Total assets 163,801 15,372 4,796 88,142 (108,836 ) 163,275 Depreciation and amortization 3,424 2,150 318 1,062 — 6,954 (1) The elimination for net revenues is principally related to inter-segment sales by Picor to BBU and VI Chip and for inter-segment sales by VI Chip to BBU. The elimination for total assets is principally related to inter-segment accounts receivable due to BBU for the funding of VI Chip and Picor operations. |
Long-Term Investments - Additio
Long-Term Investments - Additional Information (Detail) - USD ($) | 9 Months Ended | |||
Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |
Unrealized Losses On Short Term And Long Term Investments [Line Items] | ||||
Amortized cost of securities | $ 3,340,000 | |||
Minimum period for which failed auction securities been in unrealized loss position | 12 months | |||
Estimated Fair Value | 2,866,000 | |||
Gross unrealized losses | 474,000 | |||
Aggregate credit loss | $ 62,000 | 72,000 | $ 72,000 | $ 84,000 |
Failed Auction Security [Member] | ||||
Unrealized Losses On Short Term And Long Term Investments [Line Items] | ||||
Amortized cost of securities | $ 3,000,000 | 3,000,000 | ||
Period for which failed auction securities been in unrealized loss position | Exceeds 12 months | |||
Estimated Fair Value | $ 2,580,000 | 2,526,000 | ||
Gross unrealized losses | 420,000 | $ 474,000 | ||
Aggregate credit loss | 62,000 | |||
Aggregate temporary impairment loss | $ 358,000 |
Long-Term Investments - Summary
Long-Term Investments - Summary of Available-for-Sale Securities (Detail) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | $ 3,340,000 | |
Gross Unrealized Gains | 0 | |
Gross unrealized losses | 474,000 | |
Estimated Fair Value | 2,866,000 | |
Failed Auction Security [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | $ 3,000,000 | 3,000,000 |
Gross Unrealized Gains | 0 | 0 |
Gross unrealized losses | 420,000 | 474,000 |
Estimated Fair Value | $ 2,580,000 | 2,526,000 |
Brokered Certificates of Deposit [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 340,000 | |
Gross Unrealized Gains | 0 | |
Estimated Fair Value | $ 340,000 |
Long-Term Investments - Amortiz
Long-Term Investments - Amortized Cost and Estimated Fair Value of Failed Auction Securities by Contractual Maturities (Detail) $ in Thousands | Sep. 30, 2016USD ($) |
Available-for-sale Securities, Debt Maturities [Abstract] | |
Due in twenty-six years, Cost | $ 3,000 |
Due in twenty-six years, Estimated Fair Value | $ 2,580 |
Long-Term Investments - Rollfor
Long-Term Investments - Rollforward of Credit (Gain) Loss Recognized in Earnings on Failed Auction Security (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Available-for-sale Securities, Debt Maturities [Abstract] | ||
Balance at the beginning of the period | $ 72 | $ 84 |
Reductions in the amount related to credit gain for which other-than-temporary impairment was not previously recognized | (10) | (12) |
Balance at the end of the period | $ 62 | $ 72 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Estimated Fair Value | $ 2,866,000 | |
Failed Auction Security [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Estimated Fair Value | $ 2,580,000 | 2,526,000 |
Recurring [Member] | Contingent Consideration Obligations [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Liabilities, fair value on recurring basis | (288,000) | (144,000) |
Recurring [Member] | Failed Auction Security [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Estimated Fair Value | 2,580,000 | 2,526,000 |
Recurring [Member] | Long-Term Brokered Certificates of Deposit [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Estimated Fair Value | 340,000 | |
Recurring [Member] | Money Market Funds [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash equivalents | 9,989,000 | 10,412,000 |
Recurring [Member] | Quoted Prices in Active Markets (Level 1) [Member] | Money Market Funds [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash equivalents | 9,989,000 | 10,412,000 |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Long-Term Brokered Certificates of Deposit [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Estimated Fair Value | 340,000 | |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Contingent Consideration Obligations [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Liabilities, fair value on recurring basis | (288,000) | (144,000) |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Failed Auction Security [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Estimated Fair Value | $ 2,580,000 | $ 2,526,000 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Fair Value Disclosures [Abstract] | |
Percent of credit loss | 2.10% |
Rate of return required | 5.00% |
Estimated timeframe for auctions of securities minimum | 3 years |
Estimated timeframe for auctions of securities maximum | 5 years |
Percentage of liquidity risk premium | 5.00% |
Increase or decrease in the liquidity risk premium | 1.00% |
Increase or decrease, respectively, the fair value of the Failed Auction Securities | $ 100,000 |
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | $ 0 |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information about Level 3 Fair Value Measurements (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | $ 2,866 | |
Failed Auction Security [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated Fair Value | $ 2,580 | |
Valuation Technique | Discounted cash flow | |
Failed Auction Security [Member] | Significant Unobservable Inputs (Level 3) [Member] | Cumulative Probability of Earning Maximum Rate Until Maturity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | Cumulative probability of earning the maximum rate until maturity | |
Weighted Average Interest Rate | 0.03% | |
Failed Auction Security [Member] | Significant Unobservable Inputs (Level 3) [Member] | Cumulative Probability of Principal Return Prior to Maturity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | Cumulative probability of principal return prior to maturity | |
Weighted Average Interest Rate | 94.82% | |
Failed Auction Security [Member] | Significant Unobservable Inputs (Level 3) [Member] | Cumulative Probability of Default [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | Cumulative probability of default | |
Weighted Average Interest Rate | 5.15% | |
Failed Auction Security [Member] | Significant Unobservable Inputs (Level 3) [Member] | Liquidity Risk Premium [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | Liquidity risk premium | |
Weighted Average Interest Rate | 5.00% | |
Failed Auction Security [Member] | Significant Unobservable Inputs (Level 3) [Member] | Recovery Rate in Default [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | Recovery rate in default | |
Weighted Average Interest Rate | 40.00% |
Fair Value Measurements - Chang
Fair Value Measurements - Change in Estimated Fair Values Calculated for Investment Valued on Recurring Basis Utilizing Level 3 Inputs (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Fair Value Disclosures [Abstract] | |
Balance at the beginning of the period | $ 2,526 |
Credit gain on available-for-sale securities included in Other income (expense), net | 10 |
Gain included in Other comprehensive income (loss) | 44 |
Balance at the end of the period | $ 2,580 |
Fair Value Measurements - Cha39
Fair Value Measurements - Change in Estimated Fair Value Calculated for Liabilities Valued on Recurring Basis Utilizing Level 3 Inputs (Detail) - Significant Unobservable Inputs (Level 3) [Member] - Contingent Consideration Obligations [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance at the beginning of the period | $ 144 |
Obligation incurred upon acquisition of noncontrolling interest | 208 |
Payments | (64) |
Balance at the end of the period | $ 288 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ (498) | $ 341 | $ 171 | $ 1,392 |
Cost of Revenues [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | (47) | 51 | 59 | 170 |
Selling, General and Administrative [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | (327) | 215 | 148 | 975 |
Research and Development [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ (124) | $ 75 | $ (36) | $ 247 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - 2007 VI Chip Plan [Member] - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2010 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Non-qualified stock options | 2,984,250 | ||
Stock-based compensation expense reversed | $ (768,000) | ||
Cost of Revenues [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Decrease in costs and expenses due to reversal of share-based compensation expense | 86,000 | $ 86,000 | |
Selling, General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Decrease in costs and expenses due to reversal of share-based compensation expense | 516,000 | 516,000 | |
Research and Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Decrease in costs and expenses due to reversal of share-based compensation expense | $ 166,000 | $ 166,000 |
Net Income (Loss) per Share - C
Net Income (Loss) per Share - Computation Of Basic And Diluted Net Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Numerator: | ||||
Net income (loss) attributable to Vicor Corporation | $ 2,336 | $ 2,503 | $ (3,559) | $ 6,679 |
Denominator: | ||||
Denominator for basic net income (loss) per share-weighted average shares | 38,837 | 38,786 | 38,811 | 38,742 |
Effect of dilutive securities: | ||||
Employee stock options | 347 | 300 | 434 | |
Denominator for diluted net income (loss) per share - adjusted weighted-average shares and assumed conversions | 39,184 | 39,086 | 38,811 | 39,176 |
Basic net income (loss) per share | $ 0.06 | $ 0.06 | $ (0.09) | $ 0.17 |
Diluted net income (loss) per share | $ 0.06 | $ 0.06 | $ (0.09) | $ 0.17 |
Net Income (Loss) per Share -43
Net Income (Loss) per Share - Computation Of Basic And Diluted Net Income (Loss) Per Share (Parenthetical) (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Options to purchase shares of Common Stock not included in the computation of diluted income (loss) per share | 449,464 | 533,689 | 1,845,289 | 141,971 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 19,652 | $ 16,257 |
Work-in-process | 2,991 | 2,879 |
Finished goods | 3,919 | 4,306 |
Net balance | $ 26,562 | $ 23,442 |
Other Investments - Additional
Other Investments - Additional Information (Detail) - Great Wall Semiconductor Corporation (GWS) [Member] | 1 Months Ended |
Sep. 30, 2015USD ($) | |
Variable Interest Entity [Line Items] | |
Gross investment | $ 4,999,719 |
Ownership interest in investment | 27.00% |
Cash consideration received | $ 4,999,719 |
Noncontrolling Interest Trans46
Noncontrolling Interest Transactions - Additional Information (Detail) - USD ($) | Mar. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Noncontrolling Interest [Line Items] | ||||
Contingent consideration | $ 288,000 | $ 144,000 | ||
Converpower Corporation [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Ownership percentage by parent in certain operating assets and cash | 100.00% | 100.00% | ||
Minority interest percentage by non controlling interest | 49.00% | |||
Percentage of common shares exchanged | 49.00% | |||
Contingent consideration | $ 208,000 | $ 185,000 | ||
Royalty payment description | Through June 30, 2021 | |||
Noncontrolling interest | $ 0 | |||
Percentage of control of business operations acquired | 100.00% | |||
Reduction in cash, short-term interest receivable, and long-term investments | $ 718,000 | |||
Deconsolidation effect in statement of operations | 0 | |||
Converpower Corporation [Member] | Additional Paid-In Capital [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Noncontrolling interest | $ (208,000) |
Severance and Other Charges - S
Severance and Other Charges - Summary of Activity Related to Accrued Severance Charges by Segment (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Restructuring and Related Activities [Abstract] | |
Restructuring Reserve, Beginning Balance | $ 195 |
Payments | (195) |
Restructuring Reserve, Ending Balance | $ 0 |
Product Warranties - Additional
Product Warranties - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2016 | |
Guarantees [Abstract] | |
Product warranty period | 2 years |
Product Warranties - Product Wa
Product Warranties - Product Warranty Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Guarantees [Abstract] | ||||
Balance at the beginning of the period | $ 496 | $ 332 | $ 584 | $ 204 |
Accruals for warranties for products sold in the period | 61 | 280 | 291 | 465 |
Fulfillment of warranty obligations | (106) | (18) | (374) | (75) |
Revisions of estimated obligations | (109) | (159) | ||
Balance at the end of the period | $ 342 | $ 594 | $ 342 | $ 594 |
Income Taxes - Provisions for I
Income Taxes - Provisions for Income Taxes and Effective Income Tax Rates (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 133 | $ 174 | $ 168 | $ 374 |
Effective income tax rate | 5.40% | 7.80% | 4.90% | 17.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 9 Months Ended | ||
Sep. 30, 2016 | Mar. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Line Items] | |||
Net operating loss carryforwards | $ 0 | $ 0 | |
Tax benefit recognized | 0 | ||
Unremitted earnings reversed | 55,000 | ||
Valuation allowance, deferred tax assets | $ 25,855,000 | ||
Converpower Corporation [Member] | |||
Income Tax Disclosure [Line Items] | |||
Ownership percentage by parent in certain operating assets and cash | 100.00% | 100.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Sep. 30, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Capital expenditure commitments | $ 596,000 |
Segment Information - Significa
Segment Information - Significant Segment Financial Data (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||
Net revenues | $ 53,227 | $ 48,664 | $ 152,195 | $ 168,800 | |
Income (loss) from operations | 2,273 | (2,218) | (3,757) | 2,185 | |
Total assets | 155,038 | 163,275 | 155,038 | 163,275 | $ 157,545 |
Depreciation and amortization | 2,073 | 2,231 | 6,384 | 6,954 | |
Operating Segments [Member] | BBU [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 38,518 | 41,119 | 115,963 | 131,396 | |
Income (loss) from operations | 3,734 | 5,612 | 9,475 | 17,618 | |
Total assets | 193,115 | 163,801 | 193,115 | 163,801 | |
Depreciation and amortization | 1,025 | 1,119 | 3,293 | 3,424 | |
Operating Segments [Member] | VI Chip [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 11,961 | 6,023 | 30,126 | 28,939 | |
Income (loss) from operations | (1,915) | (6,564) | (12,131) | (15,336) | |
Total assets | 21,453 | 15,372 | 21,453 | 15,372 | |
Depreciation and amortization | 531 | 633 | 1,660 | 2,150 | |
Operating Segments [Member] | Picor [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 5,320 | 2,791 | 12,596 | 13,870 | |
Income (loss) from operations | 627 | (1,169) | (510) | 474 | |
Total assets | 6,928 | 4,796 | 6,928 | 4,796 | |
Depreciation and amortization | 142 | 123 | 404 | 318 | |
Operating Segments [Member] | Corporate [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Income (loss) from operations | (173) | (97) | (591) | (571) | |
Total assets | 72,521 | 88,142 | 72,521 | 88,142 | |
Depreciation and amortization | 375 | 356 | 1,027 | 1,062 | |
Eliminations [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | (2,572) | (1,269) | (6,490) | (5,405) | |
Total assets | $ (138,979) | $ (108,836) | $ (138,979) | $ (108,836) |