10-Q 1 d373442d10q.htm 10-Q 10-Q
falseQ20000751978--12-31The deferred tax assets associated with foreign currency translation losses and unrealized losses on available-for-sale securities are completely offset by a tax valuation allowance as of June 30, 2022 and 2021. Therefore, there is no income tax benefit (provision) recognized for the three and six months ended June 30, 2022 and 2021. Denominator represents weighted average number of shares of Common Stock and Class B Common Stock outstanding. Options to purchase 898,640 and 658,014 shares of Common Stock for the three and six months ended June 30, 2022, respectively, and options to purchase 138,125 and 90,339 shares of Common Stock for the three and six months ended June 30, 2021, respectively, were not included in the calculations of net income per share as the effect would have been antidilutive. 0000751978 2022-06-30 0000751978 2021-12-31 0000751978 2022-04-01 2022-06-30 0000751978 2021-04-01 2021-06-30 0000751978 2022-01-01 2022-06-30 0000751978 2021-01-01 2021-06-30 0000751978 2022-03-31 0000751978 2021-03-31 0000751978 2020-12-31 0000751978 2021-06-30 0000751978 us-gaap:USTreasurySecuritiesMember 2022-06-30 0000751978 us-gaap:AuctionRateSecuritiesMember 2022-06-30 0000751978 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2022-06-30 0000751978 us-gaap:MoneyMarketFundsMember 2022-06-30 0000751978 us-gaap:USTreasurySecuritiesMember 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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
 
FORM
10-Q
 
 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________________
Commission File Number
0-18277
 
 
VICOR CORPORATION
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
 
04-2742817
(State of Incorporation)
 
(I.R.S. Employer Identification No.)
25 Frontage Road, Andover
, Massachusetts 01810
(Address of Principal Executive Office)
(978)
470-2900
(Registrant’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, par value
$0.01 per share
 
VICR
 
The NASDAQ Stock Market LLC
 
 
Indicate by
check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes
  ☑    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes
  ☑    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
 
Large accelerated filer  

   Accelerated filer  
       
Non-accelerated filer      Smaller reporting company  
       
         Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act).    Yes  ☐    No  
The number of shares outstanding of each of the issuer’s classes of Common Stock as of July 25, 2022 was:
 
Common Stock, $.01 par value
     32,225,594  
Class B Common Stock, $.01 par value
     11,758,218  
 
 
 

VICOR CORPORATION
INDEX
 
 
  
Page
 
Part I — Financial Information:
  
Item 1—Financial Statements (Unaudited)
  
  
 
1
 
  
 
2
 
  
 
3
 
  
 
4
 
  
 
5
 
  
 
7
 
  
 
19
 
  
 
31
 
  
 
31
 
Part II — Other Information:
  
  
 
33
 
  
 
33
 
  
 
33
 
  
 
34
 
  
  
  
  

VICOR CORPORATION
Part I – Financial Information
Item 1 – Financial Statements
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
 
 
  
June 30, 2022
 
 
December 31, 2021
 
Assets
  
 
Current assets:
                
Cash and cash equivalents
   $ 187,677     $ 182,418  
Short-term investments
     19,921       45,215  
Accounts receivable, net
     54,536       55,097  
Inventories
     83,055       67,322  
Other current assets
     7,142       6,708  
    
 
 
   
 
 
 
Total current assets
     352,331       356,760  
Long-term deferred tax assets, net
     266       208  
Long-term investment, net
     2,552       2,639  
Property, plant and equipment, net
     156,815       115,975  
Other assets
     1,392       1,623  
    
 
 
   
 
 
 
Total assets
   $ 513,356     $ 477,205  
    
 
 
   
 
 
 
Liabilities and Equity
                
Current liabilities:
                
Accounts payable
   $ 32,032     $ 21,189  
Accrued compensation and benefits
     13,128       12,660  
Accrued expenses
     4,011       4,158  
Short-term lease liabilities
     1,572       1,551  
Sales allowances
     1,006       1,464  
Accrued severance and other charges
     —         93  
Income taxes payable
     2       66  
Short-term deferred revenue and customer prepayments
     7,702       7,912  
    
 
 
   
 
 
 
Total current liabilities
     59,453       49,093  
Long-term deferred revenue
     270       413  
Long-term income taxes payable
     577       569  
Long-term lease liabilities
     7,952       3,225  
    
 
 
   
 
 
 
Total liabilities
     68,252       53,300  
Commitments and contingencies (Note 10)
                
Equity:
                
Vicor Corporation stockholders’ equity:
                
Class B Common Stock: 10 votes per share, $.01 par value, 14,000,000 shares authorized, 11,758,218 shares issued and outstanding in 2022 and 2021
     118       118  
Common Stock: 1 vote per share, $.01 par value, 62,000,000 shares authorized 43,885,382 shares
issued and 32,220,576 shares outstanding in 2022; 43,789,528 shares issued and 32,154,722 shares outstanding in 2021
     440       439  
Additional
paid-in
capital
     352,253       345,664  
Retained earnings
     233,225       217,633  
Accumulated other comprehensive loss
     (2,246     (1,328
Treasury stock at cost: 11,634,806 shares in 2022 and 2021
     (138,927     (138,927
    
 
 
   
 
 
 
Total Vicor Corporation stockholders’ equity
     444,863       423,599  
Noncontrolling interest
     241       306  
    
 
 
   
 
 
 
Total equity
     445,104       423,905  
    
 
 
   
 
 
 
Total liabilities and equity
   $ 513,356     $ 477,205  
    
 
 
   
 
 
 
See accompanying notes.
 
-1-

VICOR CORPORATION
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
 
     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2022     2021     2022     2021  
Net revenues
   $ 102,186     $ 95,376     $ 190,468     $ 184,172  
Cost of revenues
     55,337       45,505       106,018       89,601  
    
 
 
   
 
 
   
 
 
   
 
 
 
Gross margin
     46,849       49,871       84,450       94,571  
Operating expenses:
                                
Selling, general and administrative
     20,035       16,589       38,603       33,543  
Research and development
     15,516       13,273       29,769       26,299  
    
 
 
   
 
 
   
 
 
   
 
 
 
Total operating expenses
     35,551       29,862       68,372       59,842  
    
 
 
   
 
 
   
 
 
   
 
 
 
Income from operations
     11,298       20,009       16,078       34,729  
Other income (expense), net:
                                
Total unrealized gains (losses) on
available-for-sale
securities, net
     16       20       (87     44  
Less: portion of (gains) losses recognized in other comprehensive income
     (15     (19     89       (42
    
 
 
   
 
 
   
 
 
   
 
 
 
Net credit gains recognized in earnings
     1       1       2       2  
Other income (expense), net
     83       372       244       603  
    
 
 
   
 
 
   
 
 
   
 
 
 
Total other income (expense), net
     84       373       246       605  
    
 
 
   
 
 
   
 
 
   
 
 
 
Income before income taxes
     11,382       20,382       16,324       35,334  
Provision for income taxes
     802       999       754       856  
    
 
 
   
 
 
   
 
 
   
 
 
 
Consolidated net income
     10,580       19,383       15,570       34,478  
Less: Net loss attributable to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
noncontrolling interest
     (13     (11     (22     (8
    
 
 
   
 
 
   
 
 
   
 
 
 
Net income attributable to Vicor Corporation
   $ 10,593     $ 19,394     $ 15,592     $ 34,486  
    
 
 
   
 
 
   
 
 
   
 
 
 
Net income per common share attributable to Vicor Corporation:
                                
Basic
   $ 0.24     $ 0.45     $ 0.35     $ 0.79  
Diluted
   $ 0.24     $ 0.43     $ 0.35     $ 0.77  
Shares used to compute net income per common share attributable to Vicor Corporation:
                                
Basic
     43,973       43,553       43,963       43,504  
Diluted
     44,866       44,841       44,910       44,841  
See accompanying notes.
 
-2-

VICOR CORPORATION
Condensed Consolidated Statements of Comprehensive Income
(In thousands)
(Unaudited)
 
     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2022     2021     2022     2021  
Consolidated net income
   $ 10,580     $ 19,383     $ 15,570     $ 34,478  
Foreign currency translation losses, net of tax (1)
     (385     (10     (579     (271
Unrealized losses on
available-for-sale
securities, net of tax (1)
     (66     (231     (382     (359
    
 
 
   
 
 
   
 
 
   
 
 
 
Other comprehensive loss
     (451     (241     (961     (630
    
 
 
   
 
 
   
 
 
   
 
 
 
Consolidated comprehensive income
     10,129       19,142       14,609       33,848  
Less: Comprehensive loss attributable to noncontrolling interest
     (42     (12     (65     (29
    
 
 
   
 
 
   
 
 
   
 
 
 
Comprehensive income attributable to Vicor Corporation
   $ 10,171     $ 19,154     $ 14,674     $ 33,877  
    
 
 
   
 
 
   
 
 
   
 
 
 
 
(1)
The deferred tax assets associated with foreign currency translation losses and unrealized losses on
available-for-sale
securities are completely offset by a tax valuation allowance as of
June 30,
 
2022 
and 2021. Therefore, there is no income tax benefit (provision) recognized for the three and six months ended
June 30,
 
2022 and 2021.
See accompanying notes.
 
-3-

VICOR CORPORATION
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
     Six Months Ended
June 30,
 
     2022     2021  
Operating activities:
                
Consolidated net income
   $ 15,570     $ 34,478  
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
                
Depreciation and amortization
     6,665       5,618  
Stock-based compensation expense
     4,616       3,138  
Decrease in long-term deferred revenue
     (143     (160
Decrease in contingent consideration obligations
              (74
Gain on disposal of equipment
              106  
Increase in other assets
     133       37  
Increase in long-term income taxes payable
     8       6  
Deferred income taxes
     (58     5  
Credit gain on
available-for-sale
securities
     (2     (2
Change in current assets and liabilities, net
     (11,381     (13,037
    
 
 
   
 
 
 
Net cash provided by operating activities
     15,408       30,115  
Investing activities:
                
Purchases of short-term investments
              (50,706
Sales or maturities of short-term investments
     25,000       30,000  
Additions to property, plant and equipment
     (36,878     (15,782
Other
              (106
    
 
 
   
 
 
 
Net cash used for investing activities
     (11,878     (36,594
Financing activities:
                
Proceeds from employee stock plans
     1,974       4,751  
Payment of contingent consideration obligations
              (107
    
 
 
   
 
 
 
Net cash provided by financing activities
     1,974       4,644  
Effect of foreign exchange rates on cash
     (245     (144
    
 
 
   
 
 
 
Net increase (decrease) in cash and cash equivalents
     5,259       (1,979
Cash and cash equivalents at beginning of period
     182,418       161,742  
    
 
 
   
 
 
 
Cash and cash equivalents at end of period
   $ 187,677     $ 159,763  
    
 
 
   
 
 
 
See accompanying notes.
 
-4-

VICOR CORPORATION
Condensed Consolidated Statements of Equity
(In thousands)
(Unaudited)
 
 
  
Class B
Common
Stock
 
  
Common
Stock
 
  
Additional
Paid-In

Capital
 
  
Retained
Earnings
 
  
Accumulated
Other
Comprehensive
Loss
 
 
Treasury
Stock
 
 
Total
Vicor
Corporation
Stockholders’
Equity
 
 
Noncontrolling
Interest
 
 
Total
Equity
 
Three months ended June 30, 2022
  
  
  
  
  
 
 
 
 
Balance on March 31, 2022
   $ 118      $ 440      $ 349,467      $ 222,632      $ (1,824   $ (138,927   $ 431,906     $ 283     $ 432,189  
Issuance of Common Stock under employee stock plans
                       164                                 164               164  
Stock-based compensation expense
                       2,622                                 2,622               2,622  
Components of comprehensive income
(loss), net of tax:
                                                                            
Net income (loss)
                                10,593                        10,593       (13     10,580  
Other comprehensive loss
                                         (422             (422     (29     (451
                                                        
 
 
   
 
 
   
 
 
 
Total comprehensive income (loss)
                                                         10,171       (42     10,129  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance on June 30, 2022
   $ 118      $ 440      $ 352,253      $ 233,225      $ (2,246   $ (138,927   $ 444,863     $ 241     $ 445,104  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
 
 
  
Class B
Common
Stock
 
  
Common
Stock
 
  
Additional
Paid-In

Capital
 
  
Retained
Earnings
 
  
Accumulated
Other
Comprehensive
Loss
 
 
Treasury
Stock
 
 
Total
Vicor
Corporation
Stockholders’
Equity
 
 
Noncontrolling
Interest
 
 
Total
Equity
 
Six months ended June 30, 2022
  
  
  
  
  
 
 
 
 
Balance on December 31, 2021
   $ 118      $ 439      $ 345,664      $ 217,633      $ (1,328   $ (138,927   $ 423,599     $ 306     $ 423,905  
Issuance of Common Stock under employee stock plans
              1        1,973                                 1,974               1,974  
Stock-based compensation expense
                       4,616                                 4,616               4,616  
Components of comprehensive income (loss), net of tax:
                                                                            
Net income (loss)
                                15,592                        15,592       (22     15,570  
Other comprehensive loss
                                         (918             (918     (43     (961
                                                        
 
 
   
 
 
   
 
 
 
Total comprehensive income (loss)
                                                         14,674       (65     14,609  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance on June 30, 2022
   $ 118      $ 440      $ 352,253      $ 233,225      $ (2,246   $ (138,927   $ 444,863     $ 241     $ 445,104  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
 
 
  
Class B
Common
Stock
 
  
Common
Stock
 
  
Additional
Paid-In

Capital
 
  
Retained
Earnings
 
  
Accumulated
Other
Comprehensive
Loss
 
 
Treasury
Stock
 
 
Total
Vicor
Corporation
Stockholders’
Equity
 
 
Noncontrolling
Interest
 
 
Total
Equity
 
Three months ended June 30, 2021
  
  
  
  
  
 
 
 
 
Balance on March 31, 2021
   $ 118      $ 435      $ 333,011      $ 176,100      $ (573   $ (138,927   $ 370,164     $ 318     $ 370,482  
Issuance of Common Stock under employee stock plans
              1        1,700                                 1,701               1,701  
Stock-based compensation expense
                       1,567                                 1,567               1,567  
Components of comprehensive income (loss), net of tax:
                                                                            
Net income (loss)
                                19,394                        19,394       (11     19,383  
Other comprehensive loss
                                         (240             (240     (1     (241
                                                        
 
 
   
 
 
   
 
 
 
Total comprehensive income (loss)
                                                         19,154       (12     19,142  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance on June 30, 2021
   $ 118      $ 436      $ 336,278      $ 195,494      $ (813   $ (138,927   $ 392,586     $ 306     $ 392,892  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
 
-5-

VICOR CORPORATION
Condensed Consolidated Statements of Equity
(In thousands)
(Unaudited)
 
 
  
Class B
Common
Stock
 
  
Common
Stock
 
  
Additional
Paid-In

Capital
 
  
Retained
Earnings
 
  
Accumulated
Other
Comprehensive
Loss
 
 
Treasury
Stock
 
 
Total
Vicor
Corporation
Stockholders’
Equity
 
 
Noncontrolling
Interest
 
 
Total
Equity
 
Six months ended June 30, 2021
  
  
  
  
  
 
 
 
 
Balance on December 31, 2020
   $ 118      $ 433      $ 328,392      $ 161,008      $ (204   $ (138,927   $ 350,820     $ 335     $ 351,155  
Issuance of Common Stock under employee stock plans
              3        4,748                                 4,751               4,751  
Stock-based compensation expense
                       3,138                                 3,138               3,138  
Components of comprehensive income (loss), net of tax:
                                                                            
Net income (loss)
                                34,486                        34,486       (8     34,478  
Other comprehensive loss
                                         (609             (609     (21     (630
                                                        
 
 
   
 
 
   
 
 
 
Total comprehensive income (loss)
                                                         33,877       (29     33,848  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance on June 30, 2021
   $ 118      $ 436      $ 336,278      $ 195,494      $ (813   $ (138,927   $ 392,586     $ 306     $ 392,892  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
See accompanying notes.
 
-6-

VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
June 30, 2022
(unaudited)
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 (the “SEC”). 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 six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for any other interim period or the year ending December 31, 2022. The balance sheet at December 31, 2021 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, 2021 filed by the Company with the SEC on March 1, 2022 (“2021 Form
10-K”).
2.
Inventories
Inventories were as follows (in thousands):
 
 
  
June 30, 2022
 
  
December 31, 2021
 
Raw materials
   $ 64,978      $ 51,289  
Work-in-process
     12,735        12,514  
Finished goods
     5,342        3,519  
    
 
 
    
 
 
 
     $ 83,055      $ 67,322  
    
 
 
    
 
 
 
3.
Short-Term and Long-Term Investments
As of
June 30, 2022 and December 31, 2021, the Company held $19,921,000 and $45,215,000, respectively, of short-term investments, consisting of obligations of the U.S. Treasury, all of which were debt securities with original maturities greater than three months but less than one year at the time of purchase.
As of
June 30, 2022 and December 31, 2021, the Company held one auction rate security with a par value of $3,000,000 and an estimated fair value of approximately $2,552,000 and $2,639,000, respectively, purchased through and held in custody by a broker-dealer affiliate of Bank of America, N.A., that has experienced failed auctions (the “Failed Auction Security”) since February 2008. The Failed Auction Security held by the Company is Aaa/AA+ rated by major credit rating agencies, is collateralized by student loans, and is 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 June 30, 2022, 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 June 30, 2022.
 
-7-

VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
June 30, 2022
(unaudited)

Details of our investments are as follows (in thousands):
 
 
  
June 30, 2022
 
 
  
Cash and
Cash
Equivalents
 
  
Short-Term
Investments
 
  
Long-Term

Investment
 
Measured at fair value:
  
  
  
Available-for-sale
debt securities:
  
  
  
Money market funds
   $ 119,736      $ —        $ —    
U.S. Treasury Obligations
     —          19,921        —    
Failed Auction Security
     —          —          2,552  
    
 
 
    
 
 
    
 
 
 
Total
     119,736        19,921        2,552  
Other measurement basis:
                          
Cash on hand
     67,941        —          —    
    
 
 
    
 
 
    
 
 
 
Total
   $ 187,677      $ 19,921      $ 2,552  
    
 
 
    
 
 
    
 
 
 
 
 
  
December 31, 2021
 
 
  
Cash and
Cash
Equivalents
 
  
Short-Term
Investments
 
  
Long-
Term
Investment
 
Measured at fair value:
  
  
  
Available-for-sale
debt securities:
  
  
  
Money market funds
   $ 94,282      $ —        $ —    
U.S. Treasury Obligations
     —          45,215        —    
Failed Auction Security
     —          —          2,639  
    
 
 
    
 
 
    
 
 
 
Total
     94,282        45,215        2,639  
Other measurement basis:
                          
Cash on hand
     88,136        —          —    
    
 
 
    
 
 
    
 
 
 
Total
   $ 182,418      $ 45,215      $ 2,639  
    
 
 
    
 
 
    
 
 
 
The following is a summary of the
available-for-sale
securities (in thousands):
 
June 30, 2022
  
Cost
 
  
Gross
Unrealized
Gains
 
  
Gross
Unrealized
Losses
 
  
Estimated
Fair
Value
 
U.S. Treasury Obligations
   $ 20,083      $         $ 162      $ 19,921  
Failed Auction Security
     3,000        —          448        2,552  
 
-8-

VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
June 30, 2022
(unaudited)

 
December 31, 2021
  
Cost
 
  
Gross
Unrealized
Gains
 
  
Gross
Unrealized
Losses
 
  
Estimated
Fair
Value
 
U.S. Treasury Obligations
   $ 45,238      $         $ 23      $ 45,215  
Failed Auction Security
     3,000        —          361        2,639  
As of June 
30, 2022, 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
available-for-sale
securities on June 30, 2022, by type and contractual maturities, are shown below (in thousands):
 
 
  
Cost
 
  
Estimated
Fair Value
 
U.S. Treasury Obligations:
  
  
                                       
Maturities greater than three months but less than one year
  
$
20,083
    
$
19,921
 
    
 
 
    
 
 
 
 

 
  
Cost
 
  
Estimated
Fair Value
 
Failed Auction Security:
                 
Due in twenty years
  
$
3,000
    
$
2,552
 
    
 
 
    
 
 
 
4.
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.
 
-9-

VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
June 30, 2022
(unaudited)

Assets and liabilities measured at fair value on a recurring basis included the following as of June 30, 2022 (in thousands):
 
 
  
Using
 
  
 
 
 
  
Quoted Prices
in Active
Markets
(Level 1)
 
  
Significant
Other
Observable
Inputs
(Level 2)
 
  
Significant
Unobservable
Inputs
(Level 3)
 
  
Total Fair
Value as of
June 30, 2022
 
Cash equivalents:
  
  
  
  
Money market funds
   $ 119,736      $ —        $ —        $ 119,736  
Short-term investments:
                                   
U.S. Treasury Obligations
     19,921        —          —          19,921  
Long-term investment:
                                   
Failed Auction Security
     —          —          2,552        2,552  
Assets and liabilities measured at fair value on a recurring basis included the following as of December 31, 2021 (in thousands):
 
 
  
Using
 
  
 
 
 
  
Quoted Prices
in Active
Markets
(Level 1)
 
  
Significant
Other
Observable
Inputs
(Level 2)
 
  
Significant
Unobservable
Inputs
(Level 3)
 
  
Total Fair
Value as of
December 31, 2021
 
Cash equivalents:
  
 
 
 
 
  
  
Money market funds
   $ 94,282      $ —        $ —        $ 94,282  
Short-term investments:
                                   
U.S. Treasury Obligations
     45,215        —          —          45,215  
Long-term investment:
                                   
Failed Auction Security
     —          —          2,639        2,639  
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 six months ended June 30, 2022 was as follows (in thousands):
 
Balance at the beginning of the period
   $ 2,639  
Credit gain on
available-for-sale
security included in Other income (expense), net
     2  
Loss included in Other comprehensive income
     (89
    
 
 
 
Balance at the end of the period
   $ 2,552  
    
 
 
 
Management utilized
a probability weighted discounted cash flow model to determine the estimated fair value as of June 30, 2022.
 
-10-

VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
June 30, 2022
(unaudited)

5.
Revenues
The following tables present the Company’s net revenues disaggregated by geography based on the location of the customer, by product line (in thousands):
 
 
  
Three Months Ended June 30, 2022
 
 
  
Brick Products
 
  
Advanced Products
 
  
Total
 
United States
  
$
18,668
    
$
12,782
    
$
31,450
 
Europe
  
 
5,041
    
 
2,229
    
 
7,270
 
Asia Pacific
  
 
9,846
    
 
52,550
    
 
62,396
 
All other
  
 
968
    
 
102
    
 
1,070
 
    
 
 
    
 
 
    
 
 
 
    
$
34,523
    
$
67,663
    
$
102,186
 
    
 
 
    
 
 
    
 
 
 
 
 
  
Six Months Ended June 30, 2022
 
 
  
Brick Products
 
  
Advanced Products
 
  
Total
 
                                                                            
United States
  
$
32,729
    
$
23,408
    
$
56,137
 
Europe
  
 
12,083
    
 
4,997
    
 
17,080
 
Asia Pacific
  
 
23,367
    
 
92,045
    
 
115,412
 
All other
  
 
1,701
    
 
138
    
 
1,839
 
    
 
 
    
 
 
    
 
 
 
    
$
69,880
    
$
120,588
    
$
190,468
 
    
 
 
    
 
 
    
 
 
 
 
 
  
Three Months Ended June 30, 2021
 
 
  
Brick Products
 
  
Advanced Products
 
  
Total
 
                                                                            
United States
  
$
19,708
    
$
14,356
    
$
34,064
 
Europe
  
 
10,224
    
 
1,285
    
 
11,509
 
Asia Pacific
  
 
24,045
    
 
25,339
    
 
49,384
 
All other
  
 
375
    
 
44
    
 
419
 
    
 
 
    
 
 
    
 
 
 
    
$
54,352
    
$
41,024
    
$
95,376
 
    
 
 
    
 
 
    
 
 
 
 
 
  
Six Months Ended June 30, 2021
 
 
  
Brick Products
 
  
Advanced Products
 
  
Total
 
                                                                            
United States
  
$
38,291
    
$
22,905
    
$
61,196
 
Europe
  
 
18,420
    
 
2,280
    
 
20,700
 
Asia Pacific
  
 
51,373
    
 
49,992
    
 
101,365
 
All other
  
 
727
    
 
184
    
 
911
 
    
 
 
    
 
 
    
 
 
 
    
$
108,811
    
$
75,361
    
$
184,172
 
    
 
 
    
 
 
    
 
 
 
 
-11-

VICOR CORPORATION
Notes to Condensed Consolidated Financial Statements
June 30, 2022
(unaudited)

The following tables present the Company’s net revenues disaggregated by the category of revenue, by product line (in thousands):
 
 
  
Three Months Ended June 30, 2022
 
 
  
Brick Products
 
  
Advanced Products
 
  
Total
 
Direct customers, contract manufacturers and
non-stocking
distributors
  
$
23,566
    
$
61,979
    
$
85,545
 
Stocking distributors, net of sales allowances
  
 
10,908
    
 
3,102
    
 
14,010
 
Non-recurring
engineering
  
 
49
    
 
1,908
    
 
1,957
 
Royalties
  
 
—  
    
 
656
    
 
656
 
Other
  
 
—  
    
 
18
    
 
18
 
    
 
 
    
 
 
    
 
 
 
    
$
34,523
    
$
67,663
    
$
102,186
 
    
 
 
    
 
 
    
 
 
 
 
 
  
Six Months Ended June 30, 2022
 
 
  
Brick
 
Products
 
  
Advanced
 
Products
 
  
Total
 
Direct customers, contract manufacturers and
non-stocking
distributors
  
$
47,967
    
$
109,450
    
$
 
157,417
 
Stocking distributors, net of sales allowances
  
 
21,672
    
 
6,846
    
 
28,518
 
Non-recurring
engineering
  
 
241
    
 
3,294
    
 
3,535
 
Royalties
  
 
—  
    
 
962
    
 
962
 
Other
  
 
—