Vicor Corp (VICR) 2008 Q1 法說會逐字稿

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  • Operator

  • Good day, ladies and gentlemen.

  • Welcome to the Vicor 2008 First Quarter Earnings Results Conference Call.

  • My name is Eric and I'm your coordinator for today.

  • Now, at this time all participants are in listen-only mode.

  • We'll facilitate a question and answer session towards the end of the conference.

  • (OPERATOR INSTRUCTIONS) I would now like to turn your presentation over to Mr.

  • Mark Glazer, Vice President of Treasury Services.

  • Please, proceed sir.

  • Mark Glazer - VP, Treasury Services, IR

  • Thank you.

  • Good afternoon and welcome to Vicor's quarterly conference call.

  • I'm Mark Glazer, Vice President of Treasury Services and Investor Relations.

  • With me today is our CEO, PatrizioVinciarelli, and our newly appointed CFO, Jamie Simms.

  • Earlier this afternoon we issued a press release outlining our financial results for the first quarter ended March 31, 2008.

  • This press release is available on the investor page of our website at www.VicorPower.com.

  • We have also filed a Form 8K with the Securities and Exchange Commission in association with the issuing of this press release.

  • Before we begin, we'd like to remind all of you that today's conference call is being recorded and is the copyrighted property of Vicor Corporation.

  • Any rebroadcast, reproduction or other transmission of this conference call in whole or in part without the prior written consent of Vicor is prohibited.

  • In addition, we'd also like to remind you that various remarks that we may during this call about future expectations, trends, plans, and prospects for the Company and its business constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

  • Forward-looking statements are denoted by such words as "will", "would", "believe", "should", "expect", "outlook", "estimate", "plan", "anticipate", and similar expressions that look forward -- that look toward future events or performance.

  • These forward-looking statements merely reflect our current believes, expectations, and estimates, which we share with you during our quarterly conference calls.

  • Forward-looking statements are based on current information that is, by its nature, dynamic and subject to rapid and even abrupt changes.

  • Our forward-looking statements are subject to risks and uncertainties which may cause actual results to differ materially from those projected or implied in our statements.

  • Such risks and uncertainties are discussed in today's press release as well as our most recent reports on Forms 10K and 10Q filed with the SEC.

  • A replay of this conference call will be available beginning shortly upon its conclusion through May 23, 2008 by calling 888-286-8010 and using the pass code 50295683.

  • In addition, a webcast replay of the conference call will be available on the investor relations page of the Company's website beginning shortly upon its conclusion; however, the information we provide during this call is accurate only as of the date of this call.

  • We undertake no obligation to update any of the statement made during this call and you should not rely upon them after the conclusion of this call.

  • Patrizioand Jamie each have prepared remarks, after which we will take your questions.

  • Patrizio?

  • PatrizioVinciarelli - Chairman, President, CEO

  • Thank you, Mark.

  • Good afternoon and welcome to our First Quarter Conference Call.

  • I would like to start by introducing Jamie Simms who became our new CFO as of April 14.

  • Jamie has been an investment banker for 20 years, working with public technology companies, and brings a refreshing outsider's perspective to our Company.

  • He is also joining our board of directors.

  • As Vicor's initiatives with V-I Chip and Picor come to fruition, we expect Jamie to play a crucial role in driving our realization of the considerable value we believe these initiatives present for shareholders.

  • Jamie has quickly immersed himself in our financial operations and is already working closely with his new colleagues in engineering, manufacturing, and sales and marketing.

  • Welcome, Jamie.

  • I also want to stress my appreciation for the almost 20 years of service by Mark, including his decade of service as CFO.

  • Mark will be continuing with us in his Treasury role.

  • Mark Glazer - VP, Treasury Services, IR

  • Thank you, Patrizio.

  • Jamie Simms - CFO

  • Thank you as well, Patrizio.

  • I'm pleased to be a part of the Vicor team and in particular want to express my appreciation for the reception I've received from Mark, also Dick Nagel, and other members of the finance team.

  • PatrizioVinciarelli - Chairman, President, CEO

  • Let me start off by turning to the Company's performance in the first quarter and our outlook for each of our business units.

  • During the first quarter of 2008, Vicor continued to make progress with all our strategic and financial goals.

  • The accomplishments of the quarter were partially offset by a few disappointments.

  • We are quite confident the Company's positioned appropriately to successfully address challenges in its core brick business while continuing our considerable investment in the future of power systems.

  • Total revenue for the first quarter increased by approximately 14% to $50.5 million (sic -- see Press Release) compared to $47 million for the corresponding field a year ago.

  • From quarter to quarter sequentially, total revenue was flat, decreasing 0.9% from the $53.9 million derived in the fourth quarter 2007.

  • The Company's book to bill ratio for the first quarter 2008 was 0.99 to one, slightly better than our fourth quarter ratio of 0.96 to one but still below one.

  • Backlog at the end of the first quarter was $46.1 million as compared to $46.7 million at the end of the fourth quarter 2007.

  • Vicor's gross margins in dollars increased to $22.5 million for the first quarter of the year, compared to $20.2 million for the first quarter last year and $21.3 million for the fourth quarter 2007.

  • Our gross margin as a percentage of revenue for the first quarter was 42%, a slight decline from 43.1% for the first quarter 2007 or the promising sequential improvement over 39.4% for the fourth quarter 2007.

  • As has always been the case, product mix is a key determinant of quarterly gross margin.

  • Net income for the first quarter was $620,000 or approximately $0.01 per share compared to net income of $2.3 million or $0.06 per share for the first quarter of 2007 as we stated.

  • Net income for the first quarter was negatively impacted by our investment in Great Wall Semiconductor, a strategic partner to V-I Chip and Picor.

  • Since after an additional investment we now count our total investment in Great Wall using the equity method, net income for the quarter was reduced by recognition of our proportion of Great Wall loss for the period.

  • Combined with an impairment charge taken against a cumulative investment, our net income for the quarter was reduced by approximately $790,000.

  • Net income was also negatively impacted by a number of one-time, non-cash charges from items associated with certain compensation related accruals for international subsidiaries.

  • We generated cash from operations in the first quarter and we continue to enjoy a strong balance sheet.

  • We have no debt.

  • We believe we have more than adequate resources in liquidity to fund our operations while paying a dividend.

  • At the conclusion of my remarks, Jamie will specifically address our investment portfolio, how it has been impacted by conditions in the global credit markets.

  • Focusing on operations, I want to discuss the status of the three business units, brick business unit, V-I Chip, and Picor.

  • We remain a strong competitor in our core business, bricks and configurable power systems which generated approximately 92% of the Company's revenue for the quarter.

  • The brick business, in which Vicor was an early pioneer, shows many signs of maturity with numerous commoditized segments and often intense price competition.

  • The landscape has changed over the last several years within the customization and declining portions for many competitors.

  • Yet, Vicor has maintained its position as a leader both in terms of the unique attributes of our products and the performance of our customization.

  • Because of our commitment to technology and a lean mass customization model in the big business, we're able to meet customer requirements for bricks and configurable products profitably from a US manufacturing base.

  • Many competitors have not been able to match our financial performance, even though a significant portion of the design activities and manufacturing capacity has been moved offshore.

  • We design and manufacture our system products in Andover, Massachusetts and Sunnyvale, California.

  • We sell our products worldwide with export sales of approximately 40% of revenue.

  • Weak revenues of $49 million for Q1 representing a 6.8% quarter over quarter increase over Q1 of 2007 but a 1% decrease from Q4 of 2007.

  • Despite the revenue trend, we're pleased the brick product margins improved in Q1 as the brick business unit under the leadership of Barry Kelleher continued to make progress with lean manufacturing initiatives, experiencing incremental productivity from a new automatic line that was installed in the second half of 2007.

  • The brick business has strengthened its position with important customers requiring higher end solutions that often are uniquely customized to meet their specific requirements.

  • Many of these customers are in niche markets for which our mass customization model is well suited.

  • While our brick business is well positioned strategically and operationally, it is very efficient, its performance is understandably subject to the economic environment.

  • The softening of demand first seen in the second half of 2007 continues in 2008 as evidenced by book to bill ratio for Q1.

  • Despite our balanced mix of applications and end markets, weakness in our book to bill ratio within the last two quarters points to declining revenue in Q2.

  • Vicor's total revenues for 2008 will continue to largely consist of bricks and configurable power systems.

  • With a longer-term view, we're enthusiastic about the potential for synergy between our brick business unit and V-I Chip.

  • We've recently started to roll out the next generation of brick and configurable products based on our V-I Chip inside product platforms, high performance V-I Chip enabled bricks, ,called VIbricks.

  • These products should bring new vitality to Vicor's brick product brand with this well established and diversified customer base.

  • Given the longevity of the DC to DC brick paradigm and its multi-billion dollar magnitude, higher performance AC to DC and DC to DC bricks and configurable products with the connectivity and flexibility of factorized power components should optimally lead to a significant expansion of the brick market and Vicor's market share within it.

  • Turning to our V-I Chip business unit in which we've invested so much and for which we have such high hopes.

  • We made significant progress during Q1 in advancing our proprietary technology, refining our manufacturing capabilities, and developing important partner and customer relationships.

  • We believe that competitive advantages in computing speed, density, and efficiency enabled by factorized power production in V-I Chips support our expectations that factorized power bricks and V-I Chips will in time capture a significant share of power systems in demanding high end markets.

  • V-Chip revenues totaled $4.3 million for Q1, essentially unchanged from the prior quarter but representing a nearly four-fold increase over Q1 2007.

  • We shipped a record volume of units in Q1 that was 12% higher than the volumes shipped in Q4 2007.

  • We now have the capacity to produce twice this volume.

  • We continue to make progress with manufacturing efficiencies and cost reduction.

  • Working with our suppliers, partners, and licensees while aggressively pursuing a comprehensive supply chain to enable economies of scale in a low-cost structure.

  • While continuing to make substantial overall operational progress, gross margins for V-I Chip for Q1 were impacted by inefficiencies related to the qualification of new products that are now completing the development cycle and the selection of additional capacity.

  • We have been and continue to invest in expanding state of the art manufacturing capacity.

  • The V-I Chip operations team is positioned to support the volume growth that we've expected to be taking place at this time; however, a major customer informed us during Q1 that anticipated volume orders for one of its programs would be deferred until the second half of the year.

  • This customer decides holding out the promise of its revenue for years to come, should represent one high profile confirmation of the benefits of factorized power.

  • The proof of concept necessary to enable V-I Chip across the channels from innovators to grow their market adoption.

  • We intend to make the most of this delay in production volume ramp up by completing the margin, announcing implementation of significant product cost reduction activities, and preparing for record levels of throughput later this year and in 2009.

  • We're also working with one of our licensee partners to penetrate an important market for which we can rely on our partner's expertise and access.

  • I've discussed the settlement of our go to market strategy on prior earnings calls and are pleased with our continuing progress with key Asian partners.

  • One notable example of this progress, specifically in consumer electronics, has been our collaborative development with a licensee of a prototype power system for a one inch thin, 52 inch wide LCD screen TV.

  • Prototypes of such a thin large panel TV powered by V-I Chips were exhibited at the 2008 Las Vegas Consumer Electronics Show.

  • We have since then exhibited an even thinner, half-inch thin, 52 inch wide display at Tokyo's 2008 Techno Frontier Trade Show.

  • We have high hopes that this partner may begin high volume production within 12 months.

  • Finally, I would like to say a few words about our fabulous semiconductor affiliate, Picor.

  • In addition to being a strategic supplier of light performance ASICs to V-I Chip, Picor, under the leadership of [Claudia DeSalle] is executing a broader commercial strategy to leverage the intellectual property of V-I Chip technology in power management and low power products on a scale even smaller than V-I Chip.

  • While currently generating modest commercial revenue, we regard Picor as a key partner to V-I Chip in our effort to develop a comprehensive portfolio of advanced innovative power system solutions.

  • To conclude my prepared remarks, I want to emphasize again that we continue to make progress towards our strategic and financial goals during Q1 while acknowledging a few disappointments.

  • We remain quite confident that we're well positioned to successfully address opportunities for expanding our brick business while bringing into fruition our considerable investment in the future of power systems.

  • I will answer your questions after Jamie's remarks regarding investments.

  • Jamie Simms - CFO

  • Thank you, Patrizio.

  • As has been well publicized, global credit markets are unsettled and many investors, including Vicor, have been negatively affected.

  • We have for some invested a portion of our cash in auction rate securities, generally municipal or corporate debt obligations possessing the highest credit ratings and strong collateral support.

  • During the first quarter, the Dutch auction process by which these obligations were periodically reprised began to fail.

  • As a consequence, we must hold such securities until either the next successful auction or the redemption of the security by the issuer and the timing of either is unknown.

  • At March 31, the majority of the auction rate securities we held were AAA rated and most collateralized by student loans guaranteed by the US Department of Education.

  • As of this date, we held auction rate securities that have experience failed auctions totaling approximately $38.5 million at their par value, representing approximately half of our total investment portfolio.

  • In accordance with accounting guidelines, we have classified these securities as long-term and booked a temporary impairment charge of approximately $2 million.

  • Management considers this $2 million difference to be temporary and has recorded this amount as an unrealized loss net of taxes and accumulated other comprehensive loss or income in the stockholder's equity section of our balance sheet.

  • As such, the impairment was not a charge on our income statement for the quarter.

  • Management is not aware of any reason to believe any of the underlying issuers of these auction rate securities held are presently at risk of default.

  • We have continued to receive interest payment in accordance with the terms of the securities.

  • Management believes the Company ultimately should be able to liquidate all of its auction rate security investments without significant loss, primarily due to 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 these securities exceeds 12 months.

  • This concludes management's prepared remarks so we're now happy to take your question.

  • Mark, should we open the call?

  • Mark Glazer - VP, Treasury Services, IR

  • Yes.

  • We're now ready to begin the Q&A portion of our conference.

  • I would ask that you limit yourself to up to two questions at a time so that everyone gets a chance to ask his or her question.

  • You may, of course, get back in the queue to ask additional questions.

  • Eric, we will now take the first question.

  • Operator

  • (OPERATOR INSTRUCTIONS) Your first question comes from the line of Richard Baxter with Ardour Capital.

  • Please, proceed.

  • Richard Baxter - Analyst

  • Good evening.

  • I have a question on the auction rate securities.

  • What is the percentage that were rated AAA?

  • Jamie Simms - CFO

  • Substantially all of them.

  • There was one security that was AA.

  • Richard Baxter - Analyst

  • Okay.

  • I guess the second question is gross margins for the rest of 2008, how - do you have a feeling for how they're going to trend?

  • PatrizioVinciarelli - Chairman, President, CEO

  • We believe we have opportunities for continuing material and overall cost reductions on both the front of the big business unit and V-I Chip.

  • Obviously, in the short-term, margins may be affected by the short-term revenue trend which has suggested the operating marks based on the book to bill ratio for Q4 and Q1 isn't going to be positive.

  • But whether or not continuing cost reduction opportunities overcome that remains to be seen.

  • Overall, as we look at the year in its totality and the expectation of modest growth for the year with respect for the year improving margins overall.

  • Richard Baxter - Analyst

  • Thank you.

  • Operator

  • (OPERATOR INSTRUCTIONS) Your next question comes from the line of [John Dillon].

  • Please, proceed.

  • John Dillon - Analyst

  • Hi, Patrizio.

  • I was wondering, can you get into more, some color on the VIbrick activity and design activity since you made the announcement?

  • PatrizioVinciarelli - Chairman, President, CEO

  • It has been a relatively short time.

  • All that I can tell you up this point is that judging from marketing metrics such as hits on our website, it was reported to me to be by far the highest level of activity we've ever seen with any new product introduction.

  • I can't tell you to what extent it was competitive activity of genuine market interest, other people within the brick business unit -- what I read in their face was a sense of great optimism with respect to this product opportunity.

  • John Dillon - Analyst

  • What about some of the customers you were dealing with beforehand, before the announcement?

  • How are they embracing the technology?

  • PatrizioVinciarelli - Chairman, President, CEO

  • I think it's too early to comment on that.

  • This has been a very recent development in terms of initial product introduction.

  • I think to really get quantitative with respect to the timing of production opportunities, we should wait.

  • I can tell you though that we have already completed a design win that is significant that should go into production in October.

  • Beyond that, I think we have to wait to see how things develop.

  • I think to some extent we need to wait in order to give opportunity for additional VIbrick products and configurable products to be introduced which will happen as the year progresses.

  • John Dillon - Analyst

  • In October?

  • That's pretty good.

  • That's better than I was expecting on that.

  • Great.

  • How about -- do you still expect to see some kind of license revenue this year?

  • PatrizioVinciarelli - Chairman, President, CEO

  • Yes.

  • Modest.

  • John Dillon - Analyst

  • Modest?

  • Okay.

  • I'll get back in the queue.

  • Thanks.

  • Operator

  • (OPERATOR INSTRUCTIONS) Your next question comes from the line of [Daniel Gorman] with Vicor.

  • Please, proceed.

  • Daniel Gorman - Analyst

  • Yes.

  • There was an unrelated -- or there was a charge of $706,000 taken against investment in a related company and I thought I read at one point in time where that related company may have some potential in consumer electronics products.

  • I was wondering if there might be any light shed upon when you might receive some positive revenue from that party?

  • PatrizioVinciarelli - Chairman, President, CEO

  • The related entity is a supplier to V-I Chip.

  • It's a supplier to Picor.

  • We -- based on the accounting treatment that's triggered by the increased ownership, we'll be accounting under the equity method and based on that, there's going to be an ongoing interest in their financial statements, specifically their profitability or loss.

  • It's been a loss for some time.

  • These prospects of profitability over time, they have very exciting technology that is proprietary and highly leveraged in terms of its technological advantages.

  • There's obviously a reason why we're using it within V-I Chip.

  • And for that reason it's attractive to other customers as well.

  • Daniel Gorman - Analyst

  • Thank you.

  • Operator

  • Your next question comes from the line of Don McKenna with DB McKenna.

  • Please, proceed.

  • Don McKenna - Analyst

  • Yes.

  • I was just going to address the fact that last year, you very nicely broke out the revenues by business group, the brick, the V-I, and the Picor.

  • For three quarters.

  • And then in the fourth quarter when you did the annual, it wasn't there, nor could I find it in the end Q.

  • I noticed again, today, that you did not do that.

  • I think in the past we've hit upon certain metrics that we try to follow from time to time, only to have them changed.

  • I was wondering if we couldn't standardize on something like you were doing last year and get that back in to make it a little bit easier so we can see just where the revenues are coming from?

  • PatrizioVinciarelli - Chairman, President, CEO

  • Nothing has changed there.

  • In fact, the segment reporting is still taking place.

  • Jamie Simms - CFO

  • Segment report is taking place and you'll see it when we file our Q for the first quarter.

  • Don McKenna - Analyst

  • Okay.

  • It was not in the K, was it?

  • Jamie Simms - CFO

  • It's in the K on a year to date basis.

  • You would just have to take the K and subtract out the Q prior quarter because we also use the year to date.

  • Don McKenna - Analyst

  • I can do that.

  • I just don't remember seeing it and I looked quite hard for it.

  • PatrizioVinciarelli - Chairman, President, CEO

  • If you call us, we can guide you to the right place.

  • Jamie Simms - CFO

  • Yes.

  • Don McKenna - Analyst

  • Thank you.

  • Operator

  • Your next question is a question from the line of Steven Glass with STG Capital.

  • Please, proceed.

  • Steven Glass - Analyst

  • May I ask you to give us a bit more color on the differentiation and value proposition of the V-I Chips in terms of that density and power efficiency to help us understand the amount of difference versus the standard products that might be out there.

  • Any metrics you could give us to help us understand how powerful the value proposition is?

  • PatrizioVinciarelli - Chairman, President, CEO

  • It's very powerful.

  • Part of the reason why it is quite powerful is that it is in part enabling technology that has enabling attributes that go beyond front end value metrics of density, efficiency, or other standard attributions of conventional power converters.

  • What I mean by that is that in addition to V-I Chips being capable, for example, on a density perspective, to achieve unprecedented levels of power density or prong density -- power densities in excess of a kilowatt, densities in excess of 100 amps per square inch which are well beyond the capabilities of any competitive product.

  • Perhaps most significantly, because of the attributes of factorized power, they are technology enablers in terms of allowing customers to implement our systems that conventional technology does not support.

  • That's very leveraged in terms of the ability of customers in end markets such as high end servers or test equipment or other markets to make better products where some competitive advantage is conferred to products from their competitors that do not leverage factorized power.

  • It is a major advantage in terms of raw numbers, whether we're talking density efficiency or speed or in an architectural sense which is in many respects as important.

  • Jamie Simms - CFO

  • Steve, this is Jamie Simms.

  • I invite you to look on our website.

  • There are several web based white papers that actually set forth the sort of comparisons, metric based comparison on form factor, on performance, et cetera, that I think are exactly what you're looking for.

  • Steven Glass - Analyst

  • Thank you.

  • Operator

  • You currently have a follow-up question from the line of John Dillon.

  • Please, proceed.

  • John Dillon - Analyst

  • Patrizio, first of all, I did want to say thank you, by the way, for the introduction.

  • It was very helpful.

  • But the question is, the other questions are, do you expect the V-I Chip revenue to increase sequentially on a quarter to quarter basis for the rest of the year?

  • PatrizioVinciarelli - Chairman, President, CEO

  • We do not expect, as suggested in the earlier comments, to have increasing V-I Chip revenues in the second quarter.

  • We do expect that based on current forecast a significant increase in the second half of the year.

  • We're still expecting, in spite of the recent setback with one major program, an approximate double for the --

  • John Dillon - Analyst

  • Okay.

  • So you're expecting a double for the year on the V-I Chip revenue?

  • PatrizioVinciarelli - Chairman, President, CEO

  • Yes.

  • John Dillon - Analyst

  • Okay.

  • And the order that slipped, is there any chance that that's been lost or anything?

  • PatrizioVinciarelli - Chairman, President, CEO

  • No.

  • It's just the kind of thing we've seen in the past where perhaps, although not unexpectedly, programs are subject to vagaries, the vagaries of the marketplace.

  • So, I wouldn't read anything beyond that into it.

  • John Dillon - Analyst

  • Okay.

  • And then going to the AC to DC in the V-I Chip, I haven't been able to find much on your website in regard to that.

  • I'm wondering, how is that coming along?

  • Are you seeing some design wins?

  • Are you going to have some stuff on your website with regard to that?

  • PatrizioVinciarelli - Chairman, President, CEO

  • Once we introduce, release products, then you'd be able to find them in the website.

  • You can infer, as reported earlier, we have participated with our V-I Chips in some leading edge consumer electronic products.

  • They're powered from the AC wall plug.

  • We do have a AC to DC technology capability.

  • And I can tell you, it's with V-I Chips but at this point in time there's no released product that deals with AC to DC and once that happens, you'll be able to find it in our website.

  • John Dillon - Analyst

  • Do you have an approximation of when we might see that?

  • PatrizioVinciarelli - Chairman, President, CEO

  • I don't want to make a precise commitment with respect to that.

  • You can infer from the earlier comment with respect to expectations by our partner licensee that volume production for a consumer electronic product including AC to DC V-I Chip would be taking place within a year.

  • It will happen within that time frame.

  • We're working very hard to make it happen as soon as possible.

  • John Dillon - Analyst

  • I guess we can also infer that you already have engineering samples and you're working with the different companies on this?

  • PatrizioVinciarelli - Chairman, President, CEO

  • Yes.

  • John Dillon - Analyst

  • And did I hear you right?

  • You have demonstrated a V-I Chip technology in a half-inch thick 52 inch LCD TV?

  • PatrizioVinciarelli - Chairman, President, CEO

  • Yes.

  • And to be more specific with respect to that, as you might know, the V-I Chips themselves are only a quarter-inch thick.

  • And obviously, that's one of their many attributes.

  • Depending on the particular end market and unique needs of the end market are found to be very appealing by a growing number of customers in a growing number of end markets.

  • Specifically, the display that took place at Techno Frontier in Japan only a few weeks ago was of a power system solution which was actually using the VIbrick packaging architecture with V-I Chips inside, were a mechanical, thermal, and electrical solution competitive with a 52 inch wide screen, only half-inch thick.

  • It was displayed.

  • John Dillon - Analyst

  • Did that also include the AC to DC technology?

  • PatrizioVinciarelli - Chairman, President, CEO

  • That included both AC to DC and DC to DC.

  • There were two V-I Chips involved.

  • One was a frontend, AC to DC chip.

  • And then there was a point of load V-I Chip that included in one chip the capability to supply five different outputs with a great deal of flexibility.

  • For this, I'm not saying anything that is not in the public domain.

  • These devices were displayed to 2000 of visitors at Techno Frontier.

  • John Dillon - Analyst

  • That's incredible.

  • Were there only two chips in the whole display or were there more?

  • Were there only two Vicor chips in the whole display or were there more?

  • PatrizioVinciarelli - Chairman, President, CEO

  • This chip set represents the complete power system for this class of applications.

  • John Dillon - Analyst

  • Okay.

  • So it's a two chip set for the class of application.

  • That sounds great.

  • Sounds good.

  • Okay.

  • Thank you.

  • PatrizioVinciarelli - Chairman, President, CEO

  • Thank you.

  • Operator

  • Your next question is a follow-up question from the line of Steven Glass with STG Capital.

  • Please, proceed.

  • Steven Glass - Analyst

  • I know you don't like to make too specific forecasts, but you've alluded to several potential ramps coming in test equipments, in consumer and high end servers, some of which definitely sound like should be ramping this year and you've implied that the second half should be significantly higher than the first half and that the year should be two X for the V-I Chip versus last year which would imply a very nice ramp in the second half.

  • How many volume production ramps, how many different programs do you expect to be ramping this year or in the second half?

  • PatrizioVinciarelli - Chairman, President, CEO

  • Consistently with best practice, I'm not going to give you a very precise number with respect to that.

  • I can say that first of all, with respect to setting expectation with V-I Chip revenue growth, we should bear in mind, given the hockey stick that we had last year, that to get to approximately double the V-I Chip product revenue for 2008, it doesn't take a huge ramp within the year.

  • You can infer that from, obviously, the numbers, the segments reporting for last year with what we just reported for the first quarter.

  • But we do expect more programs going into production later in the year.

  • I can tell you that were seeing expanding opportunities in the server market, even though some of these opportunities are further out than this year and particularly when it comes to very significant revenues being even more further out.

  • Likewise, we see a growing number of opportunities with many customers in the equipment, test equipment market, A-V market, in addition to the very large potential opportunities in consumer electronics.

  • Steven Glass - Analyst

  • And the one consumer electronic product that sounds like it could be a very major ramp within 12 months is a best case -- it could be on the shelves for the holiday period potentially?

  • PatrizioVinciarelli - Chairman, President, CEO

  • I doubt it.

  • I think we're looking at the early part of 2009 assuming things stay on track.

  • Steven Glass; Thank you very much.

  • Operator

  • Your next question is a follow-up question from the line of Don McKenna with DB McKenna.

  • Please, proceed.

  • Don McKenna - Analyst

  • I wanted to ask you two things.

  • The first one is can you give me a number for the net income without the one-offs?

  • Mark Glazer - VP, Treasury Services, IR

  • No.

  • We can't disclose that at this point.

  • When we file our Q, then you'll see some of those numbers.

  • Don McKenna - Analyst

  • Okay.

  • That was Jamie responding, correct?

  • Mark Glazer - VP, Treasury Services, IR

  • That was Mark.

  • Don McKenna - Analyst

  • That was Mark.

  • Okay.

  • I can remember being on a conference call when the moderators had a question come from Peter Lynch and even though he was already out of the retail side of the business, there were a significant number of companies that were following Vicor at that point in time.

  • As I listen today, maybe we've got four people on the line here.

  • Is part of Jamie's role going to be to develop a greater or a broader interest in the Company?

  • PatrizioVinciarelli - Chairman, President, CEO

  • Before I let Jamie answer that question, I think at the start of the conference call, there were slightly over 70 people.

  • There's just a few people who are very vocal.

  • I believe there were over 70 in the conference call.

  • Jamie, do you want to - ?

  • Jamie Simms - CFO

  • Don, of course with my background I'm going to have a particular perspective on what value I bring to Vicor.

  • I believe that as Patriziostated, the challenges that the Company have are not limited to the technical.

  • They're also related to articulating the store and making sure that investors, potential investors understand the opportunity before us.

  • Yes.

  • I will be focused on that.

  • Don McKenna - Analyst

  • Thank you.

  • Operator

  • We are currently showing no more audio questions in queue at this time.

  • Mark Glazer - VP, Treasury Services, IR

  • Okay.

  • Thank you all for participating.

  • For those of you who will be attending our shareholders meeting on June 26, we look forward to seeing you there.

  • For those who cannot, we will be speaking with you at our next conference call at the end of the second quarter.

  • Thank you very much.

  • Operator

  • Thank you for your participation in today's conference.

  • This concludes our presentation.

  • You may now disconnect and have a good day.