##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2010
 o
    
    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
  Delaware
(State of Incorporation)
    
    04-2742817
(I.R.S. Employer Identification No.)
 
 
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  Common Stock, $.01 par value
    
    
    29,921,267Class B Common Stock, $.01 par value
    
    
    11,767,052




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##### 



PagePart I  Financial Information:Item 1 - Financial Statements (Unaudited)Condensed Consolidated Balance Sheets at June 30, 2010 and December 31, 2009
    
    
    1Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2010 and 2009
    
    
    2Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2010 and 2009
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2 - Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 3 - Quantitative and Qualitative Disclosures About Market Risk
    
    
    28Item 4 - Controls and Procedures
    
    
    28Part II  Other Information:Item 1 - Legal Proceedings
    
    
    30Item 1A  Risk Factors
    
    
    30Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    30Item 3 - Defaults Upon Senior Securities
    
    
    30Item 5 - Other Information
    
    
    30Item 6  Exhibits
    
    
    31Signature(s)
    
    
    32EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



Item 1. Financial Statements
 June 30, 2010
    
    December 31, 2009AssetsCurrent assets:Cash and cash equivalents
    
    
    
    
    
    $
    46,604
    
    
    
    
    
    
    $
    40,224Restricted cash equivalents
    
    
    
    
    
    
    -
    
    
    
    
    
    
    
    192Short-term investments
    
    
    
    
    
    
    9,097
    
    
    
    
    
    
    
    2,583Accounts receivable, less allowance of $286 in 2010 and $260 in 2009
    
    
    
    
    
    
    34,435
    
    
    
    
    
    
    
    26,565Inventories, net
    
    
    
    
    
    
    25,686
    
    
    
    
    
    
    
    21,357Deferred tax assets
    
    
    
    
    
    
    181
    
    
    
    
    
    
    
    181Other current assets
    
    
    
    
    
    
    5,237
    
    
    
    
    
    
    
    4,345Total current assets
    
    
    
    
    
    
    121,240
    
    
    
    
    
    
    
    95,447Restricted cash and cash equivalents
    
    
    
    
    
    
    -
    
    
    
    
    
    
    
    223Long-term investments, net
    
    
    
    
    
    
    18,380
    
    
    
    
    
    
    
    29,995Auction rate securities rights
    
    
    
    
    
    
    -
    
    
    
    
    
    
    
    962Property, plant and equipment, net
    
    
    
    
    
    
    48,775
    
    
    
    
    
    
    
    49,009Other assets
    
    
    
    
    
    
    4,828
    
    
    
    
    
    
    
    4,941$
    193,223
    
    
    
    
    
    
    $
    180,577Liabilities and EquityCurrent liabilities:Accounts payable
    
    
    
    
    
    $
    11,613
    
    
    
    
    
    
    $
    9,458Accrued compensation and benefits
    
    
    
    
    
    
    7,128
    
    
    
    
    
    
    
    5,740Accrued expenses
    
    
    
    
    
    
    3,164
    
    
    
    
    
    
    
    2,618Accrued severance charges
    
    
    
    
    
    
    -
    
    
    
    
    
    
    
    259Income taxes payable
    
    
    
    
    
    
    427
    
    
    
    
    
    
    
    60Dividends payable
    
    
    
    
    
    
    12,506
    
    
    
    
    
    
    
    -Deferred revenue
    
    
    
    
    
    
    4,076
    
    
    
    
    
    
    
    2,521Total current liabilities
    
    
    
    
    
    
    38,914
    
    
    
    
    
    
    
    20,656Long-term deferred revenue
    
    
    
    
    
    
    2,064
    
    
    
    
    
    
    
    2,196Long-term income taxes payable
    
    
    
    
    
    
    434
    
    
    
    
    
    
    
    384Deferred income taxes
    
    
    
    
    
    
    1,355
    
    
    
    
    
    
    
    1,275Equity:Vicor Corporation stockholders equity:Class B Common Stock
    
    
    
    
    
    
    118
    
    
    
    
    
    
    
    118Common Stock
    
    
    
    
    
    
    384
    
    
    
    
    
    
    
    384Additional paid-in capital
    
    
    
    
    
    
    162,273
    
    
    
    
    
    
    
    161,746Retained earnings
    
    
    
    
    
    
    107,165
    
    
    
    
    
    
    
    112,972Accumulated other comprehensive loss
    
    
    
    
    
    
    (1,711
    )
    
    
    
    
    
    
    (1,608
    )Treasury stock, at cost
    
    
    
    
    
    
    (121,827
    )
    
    
    
    
    
    
    (121,827
    )Total Vicor Corporation stockholders equity
    
    
    
    
    
    
    146,402
    
    
    
    
    
    
    
    151,785Noncontrolling interest
    
    
    
    
    
    
    4,054
    
    
    
    
    
    
    
    4,281Total equity
    
    
    
    
    
    
    150,456
    
    
    
    
    
    
    
    156,066$
    193,223
    
    
    
    
    
    
    $
    180,577
  -1-




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Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2010
    
    2009
    
    2010
    
    2009Net revenues
    
    $
    57,377
    
    
    $
    50,627
    
    
    $
    109,086
    
    
    $
    101,075Cost of revenues
    
    
    31,638
    
    
    
    28,029
    
    
    
    60,023
    
    
    
    56,646Gross margin
    
    
    25,739
    
    
    
    22,598
    
    
    
    49,063
    
    
    
    44,429Operating expenses:Selling, general and administrative
    
    
    12,061
    
    
    
    12,019
    
    
    
    23,941
    
    
    
    24,842Research and development
    
    
    9,037
    
    
    
    7,611
    
    
    
    17,905
    
    
    
    15,362Severance charges
    
    
    -
    
    
    
    859
    
    
    
    -
    
    
    
    3,957Total operating expenses
    
    
    21,098
    
    
    
    20,489
    
    
    
    41,846
    
    
    
    44,161Income from operations
    
    
    4,641
    
    
    
    2,109
    
    
    
    7,217
    
    
    
    268Other income, net:Total other than temporary impairment gains
(losses) on available-for-sale securities
    
    
    121
    
    
    
    869
    
    
    
    (358
    )
    
    
    703Portion of (gain) loss recognized in other
comprehensive income (loss)
    
    
    (120
    )
    
    
    (1,342
    )
    
    
    316
    
    
    
    (1,176
    )Net impairment gains (losses) recognized
in earnings
    
    
    1
    
    
    
    (473
    )
    
    
    (42
    )
    
    
    (473
    )Other income, net
    
    
    424
    
    
    
    666
    
    
    
    534
    
    
    
    784Total other income, net
    
    
    425
    
    
    
    193
    
    
    
    492
    
    
    
    311Income before income taxes
    
    
    5,066
    
    
    
    2,302
    
    
    
    7,709
    
    
    
    579Provision for income taxes
    
    
    319
    
    
    
    544
    
    
    
    957
    
    
    
    972Consolidated net income (loss)
    
    
    4,747
    
    
    
    1,758
    
    
    
    6,752
    
    
    
    (393
    )Less: Net income attributable to
noncontrolling interest
    
    
    -
    
    
    
    417
    
    
    
    53
    
    
    
    809Net income (loss) attributable to Vicor Corporation
    
    $
    4,747
    
    
    $
    1,341
    
    
    $
    6,699
    
    
    $
    (1,202
    )Net income (loss) per common share attributable to
Vicor Corporation:Basic
    
    $
    0.11
    
    
    $
    0.03
    
    
    $
    0.16
    
    
    $
    (0.03
    )Diluted
    
    $
    0.11
    
    
    $
    0.03
    
    
    $
    0.16
    
    
    $
    (0.03
    )Shares used to compute net income (loss) per share
attributable to Vicor Corporation:Basic
    
    
    41,686
    
    
    
    41,665
    
    
    
    41,676
    
    
    
    41,665Diluted
    
    
    41,752
    
    
    
    41,665
    
    
    
    41,726
    
    
    
    41,665Cash dividends declared per share
    
    $
    0.30
    
    
    $
    -
    
    
    $
    0.30
    
    
    $
    -
  -2-




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##### Table of Contents



Six Months EndedJune 30, 2010
    
    June 30, 2009Operating activities:Consolidated net income (loss)
    
    
    
    
    
    $
    6,752
    
    
    
    
    
    
    $
    (393
    )Adjustments to reconcile consolidated net income (loss)
to net cash provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    4,957
    
    
    
    
    
    
    
    5,234Unrealized gain on trading securities
    
    
    
    
    
    
    (970
    )
    
    
    
    
    
    
    (425
    )Unrealized loss on auction rate security rights
    
    
    
    
    
    
    962
    
    
    
    
    
    
    
    145Stock compensation expense
    
    
    
    
    
    
    298
    
    
    
    
    
    
    
    363Gain on disposals of equipment
    
    
    
    
    
    
    (248
    )
    
    
    
    
    
    
    (25
    )(Decrease) increase in long-term deferred revenue
    
    
    
    
    
    
    (132
    )
    
    
    
    
    
    
    196Deferred income taxes
    
    
    
    
    
    
    44
    
    
    
    
    
    
    
    94Credit loss on available for sale securities
    
    
    
    
    
    
    42
    
    
    
    
    
    
    
    473Severance charges
    
    
    
    
    
    
    -
    
    
    
    
    
    
    
    3,957Change in current assets and liabilities, net
    
    
    
    
    
    
    (7,158
    )
    
    
    
    
    
    
    1,788Net cash provided by operating activities
    
    
    
    
    
    
    4,547
    
    
    
    
    
    
    
    11,407Investing activities:Purchases of investments
    
    
    
    
    
    
    (538
    )
    
    
    
    
    
    
    (1,515
    )Sales and maturities of investments
    
    
    
    
    
    
    6,314
    
    
    
    
    
    
    
    1,549Additions to property, plant and equipment
    
    
    
    
    
    
    (4,814
    )
    
    
    
    
    
    
    (2,749
    )Proceeds from sale of equipment
    
    
    
    
    
    
    420
    
    
    
    
    
    
    
    5Change in restricted cash
    
    
    
    
    
    
    415
    
    
    
    
    
    
    
    173Decrease (increase) in other assets
    
    
    
    
    
    
    49
    
    
    
    
    
    
    
    (435
    )Net cash provided by (used in) investing activities
    
    
    
    
    
    
    1,846
    
    
    
    
    
    
    
    (2,972
    )Financing activities:Proceeds from exercise of stock options
    
    
    
    
    
    
    229
    
    
    
    
    
    
    
    -Noncontrolling interest dividends paid
    
    
    
    
    
    
    (297
    )
    
    
    
    
    
    
    (612
    )Net cash used in financing activities
    
    
    
    
    
    
    (68
    )
    
    
    
    
    
    
    (612
    )Effect of foreign exchange rates on cash
    
    
    
    
    
    
    55
    
    
    
    
    
    
    
    (33
    )Net increase in cash and cash equivalents
    
    
    
    
    
    
    6,380
    
    
    
    
    
    
    
    7,790Cash and cash equivalents at beginning of period
    
    
    
    
    
    
    40,224
    
    
    
    
    
    
    
    22,639Cash and cash equivalents at end of period
    
    
    
    
    
    $
    46,604
    
    
    
    
    
    
    $
    30,429
  -3-




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Basis of Presentation
   Short-Term and Long-Term Investments
    Gross
    
    Gross
    
    EstimatedUnrealized
    
    Unrealized
    
    FairJune 30, 2010
    
    Cost
    
    Gains
    
    Losses
    
    ValueAuction rate securities - student loans
    
    $
    19,300
    
    
    $
    -
    
    
    $
    2,892
    
    
    $
    16,408Certificates of deposit
    
    
    2,428
    
    
    
    41
    
    
    
    -
    
    
    
    2,469$
    21,728
    
    
    $
    41
    
    
    $
    2,892
    
    
    $
    18,877
 -4-




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Gross
    
    Gross
    
    EstimatedUnrealized
    
    Unrealized
    
    FairDecember 31, 2009
    
    Cost
    
    Gains
    
    Losses
    
    ValueAuction rate
securities - student loans
    
    $
    19,700
    
    
    $
    -
    
    
    $
    2,590
    
    
    $
    17,110Certificates of deposit
    
    
    2,504
    
    
    
    34
    
    
    
    -
    
    
    
    2,538$
    22,204
    
    
    $
    34
    
    
    $
    2,590
    
    
    $
    19,648All
of the auction rate securities - student loans as of June 30, 2010 have been in an
unrealized loss position for greater than 12 months.The amortized cost and estimated fair value of available-for-sale securities on June 30, 2010, by contractual maturities, are shown
below (in thousands):EstimatedCost
    
    Fair ValueDue in one year or less
    
    $
    1,128
    
    
    $
    1,135Due in two to ten years
    
    
    1,350
    
    
    
    1,384Due in ten to twenty years
    
    
    -
    
    
    
    -Due in twenty to forty years
    
    
    19,250
    
    
    
    16,358$
    21,728
    
    
    $
    18,877The following is a summary of trading securities (in thousands):Gross
    
    Gross
    
    EstimatedUnrealized
    
    Unrealized
    
    FairJune 30, 2010
    
    Cost
    
    Gains
    
    Losses
    
    ValueAuction rate
securities - student loans
    
    $
    8,600
    
    
    $
    -
    
    
    $
    -
    
    
    $
    8,600December 31, 2009Auction rate
securities - student loans
    
    $
    13,900
    
    
    $
    -
    
    
    $
    970
    
    
    $
    12,930The amortized cost and estimated fair value of trading securities on June 30, 2010 by contractual maturities, are shown
below (in thousands):EstimatedCost
    
    Fair ValueDue in one year or less
    
    $
    -
    
    
    $
    -Due in two to ten years
    
    
    -
    
    
    
    -Due in ten to twenty years
    
    
    -
    
    
    
    -Due in twenty to forty years
    
    
    8,600
    
    
    
    8,600$
    8,600
    
    
    $
    8,600
 -5-




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-6-




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Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2010
    
    
    2010Balance at the beginning of the period
    
    
    
    
    
    $
    507
    
    
    
    
    
    
    
    
    
    
    $
    464Reductions for securities sold during the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12
    )Reduction for accretion of subsequent credit loss recoveryAdditions for the amount related to credit (gain) loss for which
other-than-temporary impairment was
not previously recognized
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    54Balance at the end of the period
    
    
    
    
    
    $
    506
    
    
    
    
    
    
    
    
    
    
    $
    506
    Fair Value Measurements
   -7-




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Fair Value Measurements at June 30, 2010UsingSignificantQuoted Prices
    
    Other
    
    Significantin Active
    
    Observable
    
    Unobservable
    
    Total FairMarkets
    
    Inputs
    
    Inputs
    
    Value as of(Level 1)
    
    (Level 2)
    
    (Level 3)
    
    June 30, 2010Cash Equivalents:Money market funds
    
    $
    22,729
    
    
    $
    
    
    
    $
    
    
    
    $
    22,729Restricted money market
    
    
    -
    
    
    
    
    
    
    
    
    
    
    
    -Short term investments:Certificate of deposit
    
    
    447
    
    
    
    
    
    
    
    
    
    
    
    447Auction rate securities
    
    
    
    
    
    
    8,650
    
    
    
    
    
    
    
    8,650Long term investments:Auction rate securities
    
    
    
    
    
    
    
    
    
    
    16,358
    
    
    
    16,358Auction rate security rights
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -Certificate of deposit
    
    
    2,022
    
    
    
    
    
    
    
    
    
    
    
    2,022Restricted long term investment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -
  -8-




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Level 3Balance at the beginning of the period
    
    $
    28,852Redemptions
    
    
    (3,550
    )Transfers into Level 2 categorization (1)
    
    
    (8,650
    )Unrealized gain on trading securities included in Other income, net
    
    
    8Credit losses on available for sales securities included in Other income, net
    
    
    (42
    )Unrealized gain (loss) included in Other comprehensive (loss) income
    
    
    (260
    )Balance at the end of the period
    
    $
    16,358
 (1)
    
    Transfers into Level 2 categorization represent redemptions of the Companys auction rate
securities subsequent to June 30, 2010. Stock Based Compensation
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2010
    
    2009
    
    2010
    
    2009Cost of revenues
    
    $
    2
    
    
    $
    4
    
    
    $
    6
    
    
    $
    8Selling, general and administrative
    
    
    121
    
    
    
    112
    
    
    
    206
    
    
    
    261Research and development
    
    
    50
    
    
    
    48
    
    
    
    86
    
    
    
    94Total stock based compensation
    
    $
    173
    
    
    $
    164
    
    
    $
    298
    
    
    $
    363
 -9-




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Net Income (Loss) per Share
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2010
    
    2009
    
    2010
    
    2009Numerator:Net income (loss) attributable to Vicor Corporation
    
    $
    4,747
    
    
    $
    1,341
    
    
    $
    6,699
    
    
    $
    (1,202
    )Denominator:Denominator for basic income (loss) per share-weighted
    
    
    41,686
    
    
    
    41,665
    
    
    
    41,676
    
    
    
    41,665average shares (1)Effect of dilutive securities:Employee stock options (2)
    
    
    66
    
    
    
    -
    
    
    
    50
    
    
    
    -Denominator for diluted income (loss) per share  adjustedweighted-average shares and assumed conversions
    
    
    41,752
    
    
    
    41,665
    
    
    
    41,726
    
    
    
    41,665Basic income (loss) per share
    
    $
    0.11
    
    
    $
    0.03
    
    
    $
    0.16
    
    
    $
    (0.03
    )Diluted income (loss) per share
    
    $
    0.11
    
    
    $
    0.03
    
    
    $
    0.16
    
    
    $
    (0.03
    )
 
   Inventories
  -10-




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##### Table of Contents



June 30, 2010
    
    December 31, 2009Raw materials
    
    
    
    
    
    $
    23,122
    
    
    
    
    
    
    
    
    
    
    $
    18,675Work-in-process
    
    
    
    
    
    
    3,398
    
    
    
    
    
    
    
    
    
    
    
    3,434Finished goods
    
    
    
    
    
    
    4,587
    
    
    
    
    
    
    
    
    
    
    
    5,19131,107
    
    
    
    
    
    
    
    
    
    
    
    27,300Inventory reserves
    
    
    
    
    
    
    (5,421
    )
    
    
    
    
    
    
    
    
    
    
    (5,943
    )Net balance
    
    
    
    
    
    $
    25,686
    
    
    
    
    
    
    
    
    
    
    $
    21,357
 Other Investments
    Severance Charges
  -11-




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##### Table of Contents



BBU
    
    
    V*I Chip
    
    
    TotalBalance as of December 31, 2009
    
    $
    255
    
    
    $
    4
    
    
    $
    259Payments
    
    
    (255
    )
    
    
    (4
    )
    
    
    (259
    )Balance as of June 30, 2010
    
    $
    -
    
    
    $
    -
    
    
    $
    -
 Product Warranties
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2010
    
    2009
    
    2010
    
    2009Balance at the beginning of the period
    
    
    
    
    
    $
    720
    
    
    
    
    
    
    $
    904
    
    
    
    
    
    
    $
    772
    
    
    
    
    
    
    $
    896Accruals for warranties for products
sold in the period
    
    
    
    
    
    
    371
    
    
    
    
    
    
    
    72
    
    
    
    
    
    
    
    418
    
    
    
    
    
    
    
    103Fulfillment of warranty obligations
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    (40
    )
    
    
    
    
    
    
    (17
    )
    
    
    
    
    
    
    (82
    )Revisions of estimated obligations
    
    
    
    
    
    
    (45
    )
    
    
    
    
    
    
    (37
    )
    
    
    
    
    
    
    (135
    )
    
    
    
    
    
    
    (18
    )Balance at the end of the period
    
    
    
    
    
    $
    1,038
    
    
    
    
    
    
    $
    899
    
    
    
    
    
    
    $
    1,038
    
    
    
    
    
    
    $
    899
 Income Taxes
   -12-




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Three Months Ended
    
    Six Months EndedJune 30
    
    June 302010
    
    2009
    
    2010
    
    2009Provision for income taxes
    
    $
    319
    
    
    $
    544
    
    
    $
    957
    
    
    $
    972Effective income tax rate
    
    
    6.3%
    
    
    
    23.6%
    
    
    
    12.4%
    
    
    
    167.9%
    -13-




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##### Table of Contents



Comprehensive Income (Loss)
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Consolidated net income (loss)
    
    $
    4,747
    
    
    $
    1,758
    
    
    $
    6,752
    
    
    $
    (393
    )Foreign currency translation gains (losses)
    
    
    135
    
    
    
    50
    
    
    
    168
    
    
    
    (95
    )Unrealized gains (losses) (net of tax) on
available-for-sale securities
    
    
    119
    
    
    
    1,342
    
    
    
    (254
    )
    
    
    1,176Comprehensive income
    
    
    5,001
    
    
    
    3,150
    
    
    
    6,666
    
    
    
    688Less: comprehensive income
attributable to noncontrolling interest
    
    
    13
    
    
    
    415
    
    
    
    70
    
    
    
    813Comprehensive income (loss) attributable to
Vicor Corporation
    
    $
    4,988
    
    
    $
    2,735
    
    
    $
    6,596
    
    
    $
    (125
    )
 Commitments and Contingencies
    Segment Information
  -14-




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##### Table of Contents



BBU
    
    V*I Chip
    
    Picor
    
    Corporate
    
    Eliminations
    
    Total2010:Net revenues
    
    $
    51,857
    
    
    $
    6,024
    
    
    $
    2,873
    
    
    $
    -
    
    
    $
    (3,377
    )
    
    $
    57,377Income (loss) from operations
    
    
    12,034
    
    
    
    (6,804
    )
    
    
    (297
    )
    
    
    (146
    )
    
    
    (146
    )
    
    
    4,641Total assets
    
    
    213,636
    
    
    
    23,358
    
    
    
    8,564
    
    
    
    97,479
    
    
    
    (149,814
    )
    
    
    193,223Depreciation and amortization
    
    
    1,155
    
    
    
    890
    
    
    
    98
    
    
    
    382
    
    
    
    -
    
    
    
    2,5252009:Net revenues
    
    $
    47,622
    
    
    $
    3,711
    
    
    $
    1,614
    
    
    $
    -
    
    
    $
    (2,320
    )
    
    $
    50,627Income (loss) from operations
    
    
    8,379
    
    
    
    (5,470
    )
    
    
    (1,075
    )
    
    
    (171
    )
    
    
    446
    
    
    
    2,109Total assets
    
    
    187,022
    
    
    
    14,330
    
    
    
    9,244
    
    
    
    95,667
    
    
    
    (131,677
    )
    
    
    174,586Depreciation and amortization
    
    
    1,391
    
    
    
    728
    
    
    
    96
    
    
    
    394
    
    
    
    -
    
    
    
    2,609
  BBU
    
    V*I Chip
    
    Picor
    
    Corporate
    
    Eliminations
    
    Total2010:Net revenues
    
    $
    99,034
    
    
    $
    11,304
    
    
    $
    4,683
    
    
    $
    -
    
    
    $
    (5,935
    )
    
    $
    109,086Income (loss) from operations
    
    
    21,868
    
    
    
    (13,247
    )
    
    
    (987
    )
    
    
    (283
    )
    
    
    (134
    )
    
    
    7,217Total assets
    
    
    213,636
    
    
    
    23,358
    
    
    
    8,564
    
    
    
    97,479
    
    
    
    (149,814
    )
    
    
    193,223Depreciation and amortization
    
    
    2,310
    
    
    
    1,688
    
    
    
    213
    
    
    
    746
    
    
    
    -
    
    
    
    4,9572009:Net revenues
    
    $
    96,382
    
    
    $
    6,962
    
    
    $
    2,899
    
    
    $
    -
    
    
    $
    (5,168
    )
    
    $
    101,075Income (loss) from operations
    
    
    13,833
    
    
    
    (11,873
    )
    
    
    (2,299
    )
    
    
    (339
    )
    
    
    946
    
    
    
    268Total assets
    
    
    187,022
    
    
    
    14,330
    
    
    
    9,244
    
    
    
    95,667
    
    
    
    (131,677
    )
    
    
    174,586Depreciation and amortization
    
    
    2,808
    
    
    
    1,463
    
    
    
    188
    
    
    
    775
    
    
    
    -
    
    
    
    5,234
   -15-




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##### Table of Contents



Impact of Recently Issued Accounting Standards
   Dividends
    -16-




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##### Table of Contents



Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations
 *
 Overview
   -17-




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##### Table of Contents



-18-




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##### Table of Contents



Critical Accounting Policies and Estimates
  Three months ended June 30, 2010, compared to three months ended June 30, 2009
   Three Months EndedJune 30,
    
    Increase (decrease)2010
    
    2009
    
    $
    
    %BBU
    
    $
    51,857
    
    
    $
    47,621
    
    
    $
    4,236
    
    
    
    8.9
    %V*I Chip
    
    
    4,322
    
    
    
    2,431
    
    
    
    1,891
    
    
    
    77.8
    %Picor
    
    
    1,198
    
    
    
    575
    
    
    
    623
    
    
    
    108.3
    %Total
    
    $
    57,377
    
    
    $
    50,627
    
    
    $
    6,750
    
    
    
    13.3
    %
    -19-




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##### Table of Contents



Increase (decrease)Advertising expenses
    
    $
    262
    
    
    
    45.5
    %
    
    
    (1
    )Commissions expense
    
    
    197
    
    
    
    12.6
    %
    
    
    (2
    )Outside services
    
    
    74
    
    
    
    102.3
    %Audit and tax fees
    
    
    (227
    )
    
    
    (61.1)
    %
    
    
    (3
    )Compensation
    
    
    (134
    )
    
    
    (2.1)
    %
    
    
    (4
    )Legal fees
    
    
    (94
    )
    
    
    (32.8)
    %Depreciation and amortization
    
    
    (60
    )
    
    
    (7.4)
    %Other, net
    
    
    24
    
    
    
    1.2
    %$
    42
    
    
    
    0.3
    %
 
 (1)
    
    Increase attributed due to increased trade publication advertising and increased participation in trade
shows, primarily by V*I Chip.(2)
    
    Increase primarily attributed to changes in the mix of revenues subject to commissions.(3)
    
    Decrease is primarily attributed to differences in the timing of services rendered in 2010 compared to
2009.(4)
    
    Decrease primarily attributable to the workforce reductions completed in the first and second quarters of
2009, partially offset by annual compensation adjustments in May 2010 and an increase in fringe expense
due to increases in premiums for employee health benefits.  -20-




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##### Table of Contents



Increase (decrease)Compensation
    
    $
    498
    
    
    
    8.9
    %
    
    
    (1
    )Project materials
    
    
    294
    
    
    
    35.3
    %
    
    
    (2
    )Outside services
    
    
    228
    
    
    
    113.5
    %
    
    
    (3
    )Deferred costs
    
    
    166
    
    
    
    49.0
    %
    
    
    (4
    )Engineering manufacturing supplies
    
    
    53
    
    
    
    301.7
    %
    
    
    (5
    )Other, net
    
    
    187
    
    
    
    14.3
    %$
    1,426
    
    
    
    18.7
    %
 
 (1)
    
    Increase primarily attributed to an increase in research and development personnel for the BBU
and V*I Chip business units, annual compensation adjustments in May 2010, and an increase in
fringe expense due to increases in premiums for employee health benefits.(2)
    
    Increase primarily attributed to an increase in project materials associated with the development of V*I Chip and Picor
products.(3)
    
    Increase primarily attributed to increased use of outside services due to increased activity at one of the Vicor Custom
subsidiaries, in lieu of hiring permanent employees.(4)
    
    Increase primarily attributed to a decrease, as compared to the prior year, in deferred costs capitalized
for certain non-recurring engineering projects for which the related revenues have been deferred.(5)
    
    Increase primarily attributed to an increase in manufacturing engineering supplies for new V*I Chip products.  Increase2010
    
    
    2009
    
    
    (decrease)Interest income
    
    $
    145
    
    
    $
    216
    
    
    $
    (71
    )Gain on disposals of equipment
    
    
    247
    
    
    
    20
    
    
    
    227Foreign currency gains
    
    
    27
    
    
    
    63
    
    
    
    (36
    )Unrealized loss on auction rate securities
rights
    
    
    (929
    )
    
    
    (145
    )
    
    
    (784
    )Unrealized gain on trading securities
    
    
    933
    
    
    
    494
    
    
    
    439Credit loss on available for sale securities
    
    
    1
    
    
    
    (473
    )
    
    
    474Other
    
    
    1
    
    
    
    18
    
    
    
    (17
    )$
    425
    
    
    $
    193
    
    
    $
    232
 -21-




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##### Table of Contents



Three Months EndedJune 30,2010
    
    2009Provision for income taxes
    
    $
    319
    
    
    $
    544Effective income tax rate
    
    
    6.3%
    
    
    
    23.6%
     Six months ended June 30, 2010 compared to Six months ended June 30, 2009
  -22-




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##### Table of Contents



Six Months EndedJune 30,
    
    Increase (decrease)2010
    
    2009
    
    $
    
    %BBU
    
    $
    99,035
    
    
    $
    96,382
    
    
    $
    2,653
    
    
    
    2.8
    %V*I Chip
    
    
    8,206
    
    
    
    3,707
    
    
    
    4,499
    
    
    
    121.4
    %Picor
    
    
    1,845
    
    
    
    986
    
    
    
    859
    
    
    
    87.1
    %Total
    
    $
    109,086
    
    
    $
    101,075
    
    
    $
    8,011
    
    
    
    7.9
    %
    -23-




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##### Table of Contents



Increase (decrease)Compensation
    
    $
    (761
    )
    
    
    (5.8)
    %
    
    
    (1
    )Legal fees
    
    
    (228
    )
    
    
    (37.7)
    %
    
    
    (2
    )Commissions expense
    
    
    (145
    )
    
    
    (4.2)
    %
    
    
    (3
    )Depreciation and amortization
    
    
    (131
    )
    
    
    (8.0)
    %Audit and tax fees
    
    
    (68
    )
    
    
    (9.2)
    %Advertising expenses
    
    
    298
    
    
    
    26.8
    %
    
    
    (4
    )Outside services
    
    
    139
    
    
    
    69.0
    %Travel expenses
    
    
    43
    
    
    
    5.6
    %Other, net
    
    
    (48
    )
    
    
    (1.5)
    %$
    (901
    )
    
    
    (3.6)
    %
 
 (1)
    
    Decrease primarily attributable to the workforce reductions completed in the first and second quarters of
2009, partially offset by an increase in fringe expense due to increases in premiums for employee health
benefits.(2)
    
    Decrease primarily attributed to a decrease in activity associated with the Companys litigation brought
against certain of its insurance carriers with respect to the Ericsson, Inc. settlement of product
liability litigation in 2010 compared to 2009.(3)
    
    Decrease primarily attributed to changes in the mix of revenues subject to commissions.(4)
    
    Increase attributed due to increased trade publication advertising and increased participation in trade
shows, primarily by V*I Chip.  -24-




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##### Table of Contents



Increase (decrease)Compensation
    
    $
    962
    
    
    
    8.5
    %
    
    
    (1
    )Project materials
    
    
    471
    
    
    
    30.6
    %
    
    
    (2
    )Outside services
    
    
    453
    
    
    
    117.2
    %
    
    
    (3
    )Deferred costs
    
    
    324
    
    
    
    56.2
    %
    
    
    (4
    )Personnel expenses
    
    
    102
    
    
    
    122.6
    %
    
    
    (5
    )Tooling expenses
    
    
    99
    
    
    
    122.9
    %
    
    
    (6
    )Engineering manufacturing supplies
    
    
    83
    
    
    
    261.4
    %
    
    
    (7
    )Other, net
    
    
    49
    
    
    
    1.9
    %$
    2,543
    
    
    
    16.6
    %
 
 (1)
    
    Increase primarily attributed to an increase in research and development personnel for the BBU
and V*I Chip business units, annual compensation adjustments in May 2010, and an increase in fringe
expense due to increases in premiums for employee health benefits.(2)
    
    Increase primarily attributed to an increase in project materials associated with the development of V*I Chip and Picor
products.(3)
    
    Increase primarily attributed to increased use of outside services due to increased activity at Vicor Custom subsidiaries, in
lieu of hiring permanent employees.(4)
    
    Increase primarily attributed to a decrease, as compared to the prior year, in deferred costs capitalized
for certain non-recurring engineering projects for which the related revenues have been deferred.(5)
    
    Increase primarily attributed to relocation costs for newly hired research and development personnel for the
V*I Chip business unit.(6)
    
    Increase primarily attributed to an increase in tooling expenses for new V*I Chip products.(7)
    
    Increase primarily attributed to an increase in manufacturing engineering supplies for new V*I Chip products. -25-




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##### Table of Contents



Increase2010
    
    
    2009
    
    
    (decrease)Interest income
    
    $
    257
    
    
    $
    446
    
    
    $
    (189
    )Gain on disposals of equipment
    
    
    247
    
    
    
    25
    
    
    
    222Foreign currency losses
    
    
    (40
    )
    
    
    (2
    )
    
    
    (38
    )Unrealized loss on auction rate securities
rights
    
    
    962
    
    
    
    (145
    )
    
    
    1,107Unrealized gain on trading securities
    
    
    (970
    )
    
    
    425
    
    
    
    (1,395
    )Credit loss on available for sale securities
    
    
    (42
    )
    
    
    (473
    )
    
    
    431Other
    
    
    78
    
    
    
    35
    
    
    
    43$
    492
    
    
    $
    311
    
    
    $
    181
    Six Months EndedJune 30,2010
    
    2009Provision for income taxes
    
    $
    957
    
    
    $
    972Effective income tax rate
    
    
    12.4%
    
    
    
    167.9%
    Liquidity and Capital Resources
  -26-




---



##### Table of Contents



-27-




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##### Table of Contents



Item 3  Quantitative and Qualitative Disclosures About Market Risk
   
 Item 4  Controls and Procedures
 (a)
    
    Disclosure regarding controls and procedures.
   -28-




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##### Table of Contents



(b)
    
    Changes in internal control over financial reporting.
  -29-




---



##### Table of Contents



Item 1  Legal Proceedings
 Commitments and Contingencies
 
 Item 1A  Risk Factors
  
 Item 2  Unregistered Sales of Equity Securities and Use of Proceeds
 Issuer Purchases of Equity SecuritiesMaximum Number(of ApproximateTotal Number of
    
    
    Dollar Value) ofShares (or Units)
    
    
    Shares (or Units)Total Number
    
    
    Average Price
    
    
    Purchased as Part
    
    
    that May Yet Beof Shares
    
    
    Paid
    
    
    of Publicly
    
    
    Purchased Under(or Units)
    
    
    per Share
    
    
    Announced Plans
    
    
    the Plans orPeriod
    
    Purchased
    
    
    (or Unit)
    
    
    or Programs
    
    
    ProgramsApril 1 - 30, 2010
    
    
    -
    
    
    $
    -
    
    
    
    -
    
    
    $
    8,541,000May 1 - 31, 2010
    
    
    -
    
    
    $
    -
    
    
    
    -
    
    
    $
    8,541,000June 1 - 30, 2010
    
    
    -
    
    
    $
    -
    
    
    
    -
    
    
    $
    8,541,000Total
    
    
    -
    
    
    $
    -
    
    
    
    -
    
    
    $
    8,541,000
  
 Item 3  Defaults Upon Senior Securities
  
 Item 5  Other Information
  -30-




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##### Table of Contents



Item 6  Exhibits
 Exhibit Number
    
    Description31.1
    
    Certification of Chief Executive Officer pursuant to Rule
13a-14(a) of the Securities Exchange Act of 193431.2
    
    Certification of Chief Financial Officer pursuant to Rule
13a-14(a) of the Securities Exchange Act of 193432.1
    
    Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
 -31-




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##### Table of Contents



SIGNATURES
  VICOR CORPORATIONDate: August 3, 2010
    By:
    /s/ Patrizio VinciarelliPatrizio VinciarelliChairman of the Board, President and
Chief Executive Officer
(Principal Executive Officer)Date: August 3, 2010
    By:
    /s/ James A. SimmsJames A. SimmsVice President, Chief Financial Officer
(Principal Financial Officer) -32-