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Single page V I C O R C O R P O R AT I O N
2005
A N N U A L R E P O R T P R E S I D E N T S
L E T T E R
Productivity improvements restored
profitability in 2005: net income of $3,916,000,
or $.09 per diluted share compared to a net loss of
$3,723,000 or ($.09) in 2004. Gross margin improved
to 39.8% in 2005 from 36.9% in 2004 on an increase
in revenues to $179,351,000 from the prior years
$171,580,000.
Since the burst of the telecom bubble, our margins have
improved from a quarterly low of 23.6% in Q2, 2002 to
44.1% in Q1, 2006 on modest revenue growth. More signifi-
cantly, we believe that the Company is now well positioned for
future revenue growth and increased profitability.
Our Brick business unit has completed the transition of 2
nd
Gen products to the FasTrak platform. This has already deliv-
ered major improvements in yields, costs and margins,
as we had anticipated. And while some of these steps have
already made an initial contribution to improved financial per-
formance, the remaining opportunity is substantial.
By streamlining our brick manufacturing operations and
increasing productivity, we have created additional capacity
with existing equipment in a large factory that is largely depre-
ciated. Even though the brick technology foundation is
mature, recent revenue growth is demonstrating that there is
still opportunity for growth and strong financial performance.
Moreover, beyond the life left in our brick power conversion
technology, now 25 years old, there is great vitality in our Brick
business model. With unique mass customization flexibility,
we can offer greater value to a broad range of customers and
applications. This high mix business model is bringing about
increasing demand and, we believe, will enjoy a profitable
future even after bricks give way to new generations of mass
customized, configurable power products.
While expanding our customers outside of our telecom base
and overcoming the technical challenges of transitioning bricks
into a more cost-effective platform, we also reinvented the
Company into 3 business units: Vicor, Picor and V I Chip.
With the burst of the telecom bubble, as the limits of our core
technology and brick product strategy became clear, Picor and
V I Chip were conceived to enable new dimensions for growth
based on a new, proprietary, disruptive technology platform:
Factorized Power.
In its formative years, Picors support mission has been to
develop Application Specific Integrated Circuits (ASICs) that
enable factorized power components, specifically Voltage
Transformation Modules (VTMs) and Pre-Regulator Modules
(PRMs). Picors ASICs are the chips that perform the essential
control functions within VTMs and PRMs. Having performed its
support mission, Picor is turning its focus to its primary mis-
sion; to leverage a shared foundation of control, power semi-
conductor and power processing technologies into the Picor
brand of power management path and low power conversion
products. Picors planned products for the future are exciting
and we expect them to be capable of supporting
a substantial enterprise in power management.
With Picors ASICs, we have developed a broad range of capa-
bilities for DC input and AC input V I Chips. These include low
and high input voltage VTMs, low input voltage PRMs, VRMs
(Voltage Regulator Modules) and PFMs (Power Factor
Modules). Their performance has attracted the interest of blue
chip customers and licensees in major electronic markets.
Having completed the initial development of V I Chips and
transitioned into initial production, we are now combining a
significant contingent of Vicor veterans with select talent hired
from industries with complementary core competencies to
form a new subsidiary: V I Chip. V I Chips planned products
for the future are exciting, and we expect them to be capable
of supporting a substantial enterprise in power components.
By overcoming the limitations of bricks the first manifesta-
tion of power components V I Chips products have the
potential of being the universal standard building blocks of
future power systems.
In Vicor, Picor and V I Chip we see independent prospects for
an exciting future. We have strengthened the ranks of these
organizations to make the most of business opportunities
enabled by a shared, proprietary technological foundation.
And, to achieve operational excellence, we have empowered
leadership teams capable of tackling their respective tasks.
While much remains to be done, we have built solid founda-
tions for an exciting and prosperous future.
Patrizio Vinciarelli
President and Chairman of the Board
April 30, 2006 Vicor Corporation designs, develops, manufactures
and markets modular power components and
complete power systems used primarily by original
equipment manufacturers (OEMs) in the communi-
cations, data processing, industrial control, test
equipment, medical and defense electronics
markets. Built into virtually all electronic products,
power systems convert electric power from a
primary source a wall outlet, for example into
low, stable voltages required by electronic circuits.
At the heart of Vicors product line are high density
DC-DC converters that come in thousands of combi-
nations of input voltage, output voltage, and power
levels. Accessory components integrate other power
system functions. Together, these products allow
users to meet their unique power requirements by
selecting and interconnecting standard, modular
parts. The benefits include rapid, flexible design of
complete power systems at any power level; the
high performance and reliability of Vicors field-
proven technology; and low cost associated with
automated component manufacture and simplified
power system design.
Engineers use the combined advantages of Vicor
component power to create compact, highly
functional, economical products with streamlined
development cycles that minimize time to market.
C O R P O R AT E
P R O F I L E 2001
2002 2003
2004
2005
Net Revenues
$195,910
$152,591
$151,421
$171,580
$179,351
Income (Loss) from Operations
(5,017)
(24,502)
(25,703)
(4,035)
3,380
Net Income (Loss)
(559)
(15,942)
(19,535)
(3,723)
3,916
Net Income (Loss) Per Share, Diluted
(0.01)
(0.38)
(0.47)
(0.09)
0.09
Weighted Average Shares, Diluted
42,342
42,337
41,896
42,022
42,089
Working Capital
153,478
153,167
141,547
148,419
150,385
Total Assets
289,622
278,445
251,464
244,882
245,755
Total Liabilities
24,785
30,412
24,806
24,259
28,965
Stockholders Equity
$264,837
$248,033
$226,658
$220,623
$216,790
Return on Average Equity
(0.2%)
(6.2%)
(8.2%)
(1.7%)
1.8%
2 0 0 1 - 2 0 0 5
F I N A N C I A L H I G H L I G H T S
Net Revenues
Net Income (Loss) per Share
2001
2002
2003
2004
2005
2001
2002
2003
2004
2005
$0.25
$0
$-0.25
$-0.50
$200M
$150M
$100M
$50M
$0
(In thousands, except per share amounts) Mark A. Glazer
Chief Financial Officer, Treasurer and Secretary
H. Allen Henderson
Vice President, Vicor Corporation
President, Westcor Division
Barry Kelleher
Senior Vice President, Global Operations and
General Manager of the Brick Business Unit
Douglas W. Richardson
Vice President, Chief Information Officer
Patrizio Vinciarelli
Chairman of the Board,
President and Chief Executive Officer
Richard E. Zengilowski
Vice President, Human Resources
Samuel J. Anderson
President and Chief Executive Officer,
Great Wall Semiconductor
M. Michael Ansour
a,c
Managing Member, March Partners LLC
Estia J. Eichten
a,c
Senior Scientist,
Fermi National Accelerator Laboratory
Barry Kelleher
Senior Vice President, Vicor Corporation
Joseph W. Kelly
a
General Partner, Shanghai Venture Partners
Chief Financial Officer, Ivrea Pharmaceuticals, Inc.
Jay M. Prager
Independent Consultant, Product Development
and Intellectual Property and formerly Senior Vice
President, Technology of Vicor Corporation
David T. Riddiford
a,c
General Partner, PR Venture Partners, L.P.
Patrizio Vinciarelli
Chairman of the Board,
President and Chief Executive Officer
a Audit Committee
c Compensation Committee
C O M M O N S T O C K
Vicor shares are traded on
The NASDAQ Stock Market
®
under the symbol VICR.
T R A N S F E R A G E N T
Computershare Trust Co., N.A.
Canton, Massachusetts
1-877-282-1169
C O U N S E L
Goodwin Procter LLP
Boston, Massachusetts
A U D I T O R S
Ernst & Young LLP
Boston, Massachusetts
F O R M 1 0 - K
A copy of the Companys
Form 10-K, filed with the
Securities and Exchange
Commission, is enclosed.
Additional copies are
available by contacting
Investor Relations.
C O R P O R AT E
O F F I C E R S
B O A R D O F
D I R E C T O R S 25 Frontage Road, Andover, MA 01810
1-978-470-2900
v i c o r p o w e r. c o m
VCRCM-AR-06
This report contains certain forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. You can identify these statements by
our use of the words "may," "will," "would," "should," "plans," "expects,"